LAWMAKERS TOOK action on several bills of interest to Illinois Farm Bureau before adjourning for spring break. .......................2
PRESIDENT OBAMA last week open parts of the Atlantic coast, the Gulf, and Alaskan waters to oil drilling and exploration. ......3
SOUTHERN ILLINOIS University’s College of Agricultural Sciences is well positioned to face future challenges. ............................9
Monday, April 5, 2010
Two sections Volume 38, No. 14
Health package to prep industry for change? BY MARTIN ROSS FarmWeek
Sweeping health care reforms include measures designed to initially buffer Medicaid costs for the states, offset an anticipated shortage in primary care physicians, and address the needs of rural hospitals and their patients. That’s according to National Rural Health Association (NRHA) policy representative Ali Renner, who sees “overall, a lot of very good provisions” for rural hospitals. While mandating health insurance coverage, the package creates a system of insurance exchanges to extend consumer options (see details on page 4). “Any time you have more coverage, you’re going to have less uncompensated (provider) care,” Renner told FarmWeek. Health care reforms drew fire from states worried about
forthcoming Medicaid expansion projected to cost Illinois alone $1.8 billion over a fiveyear period. Renner noted the federal government will shoul-
“So many providers already refuse to see Medicaid patients, but if they’re getting paid Medicare rates, that hopefully will be enough incentive (to
‘There will be higher Medicaid costs overall, so they’ll give states a buffer at least in the beginning.’ — Ali Renner National Rural Health Association
der costs of new Medicaid-eligible consumers for the first few years of the program. “There will be higher Medicaid costs overall, so they’ll give states a buffer at least in the beginning,” she said. “Additionally, for the first two years, they’ll (the government) pay providers who see Medicaid patients at (federal) Medicare rates.
retain patients). “And I wouldn’t be surprised if, at the end of two years, they decided to extend that bump in Medicaid payments,” said Renner. Congress also added funding for hospitals in counties with the lowest per-beneficiary Medicare spending rates. Lawmakers expanded the Medicare 340B program — which allows
“safety net” hospitals to purchase outpatient drugs at discounted rates — to include smaller “critical access” and sole-community hospitals and rural health referral centers. Congress rejected a proposal to expand 340B to inpatient drugs, but greater access to discounts “should actually help with drug availability for lowincome folks,” Renner said. Amid studies suggesting a shortfall of 40,000 primary care physicians over the next decade, NRHA continues to analyze the impact of new reforms on medical manpower. A temporary 5 percent increase in Medicaid payment
rates for primary care doctors “should be good for increasing the numbers in the workforce,” Renner said. A new “workforce commission” will study provider needs and guide help for states. Congress encouraged students to choose primary care over medical specialties and expanded resources for “rural-focused” curricula at medical schools. “It takes time to produce providers, and whether we can keep up with this influx of new covered persons remains to be seen,” Renner said nonetheless. “There will be some level of crisis before we are fully at the level of capacity.”
CONSERVATION PROMOTER
Funding woes at heart of pension reform BY KAY SHIPMAN FarmWeek
Periodicals: Time Valued
State lawmakers took up the controversial topic of pension reform and surprisingly in less than 12 hours passed legislation to initiate change.
Legislators are on the second of a two-week break this week and are scheduled to return to the Capitol April 13. When lawmakers return, they will face passage of a state budget and hearing bills that passed in their chamber of origin. However, legislators will have a hard time topping their whirlwind action on 13 pension systems. “That was a rarity,” Kevin Semlow, Illinois Farm Bureau director of state legislation, said of the rapid passage of pension reform legislation. Semlow attributed the General Assembly’s quick action and the governor’s positive response to the legislation to the financial industry’s concerns about Illinois’ fiscal problems. State officials have been exploring the sale of $1 billion in bonds and were warned the state’s bond rating would be downgraded if they continued
to ignore Illinois’ budget problems, according to Semlow. Semlow based some of his assessment on budget discussions with key administration staff. “It was obvious the governor’s budget office was extremely concerned with how Wall Street was viewing the continuing financial failings of the state,” Semlow said. That was confirmed last week when Fitch Ratings, a bond rating agency, downgraded the state’s bond rating, he added. Fitch officially lowered the state’s rating, but two other credit rating agencies have yet to follow suit. Moody’s Investors Services is predicting a negative outlook on the state, and Standard & Poor’s began reviewing the state’s rating for a potential downgrade, according to Illinois State-
Kevin Green, a Vermilion County farmer from Fithian, inspects a wildlife food plot of Imperial White Tail clover and chicory that he planted between rows of persimmon tree seedlings. Green, who has implemented a wide variety of conservation practices on land he farms, frequently promotes the federal conservation stewardship program to fellow farmers and Farm Bureau leaders. More information on his practices appears on page 4. (Photo by Ken Kashian)
See Pension, page 2
FarmWeek on the web: FarmWeekNow.com
Illinois Farm Bureau®on the web: www.ilfb.org
FarmWeek Page 2 Monday, April 5, 2010
GOVERNMENT
Quick Takes GREEN LIGHT FOR GREENHOUSE RULES — The nation’s first-ever direct regulation of greenhouse gas (GHG) emissions emerged last week and will require carmakers to pipe down tailpipe gases emitted from U.S. models. Last week’s U.S. Environmental Protection Agency (EPA)-Department of Transportation announcement spurred concerns about potential new producer requirements down the road. The cost of auto industry compliance over a four-year period was projected at $52 billion, adding about $950 to the price of a car. Ag groups fear the move could pose future permitting and related costs particularly for livestock producers. “This sets in motion EPA’s plan to regulate carbon dioxide and greenhouse gas emissions,” Illinois Farm Bureau National Legislative Director Adam Nielsen said Thursday. IFB supports bipartisan House and Senate “disapproval” resolutions aimed at pre-empting EPA authority in regulating GHGs under the federal Clean Air Act. Meanwhile, a new study by the Affordable Power Alliance warns EPA regulation of greenhouse gas emissions would hit minorities, middle-income families, and the working poor the hardest. ETHANOL EMISSIONS — A new study from the Rochester Institute of Technology indicates use of 20 percent ethanol fuel (E20) significantly reduces tailpipe emissions of hydrocarbons and carbon monoxide (CO) compared with traditional gasoline or E10 blends. The research found no measurable impact to vehicle drivability or maintenance in conventional internal combustion engines from using E20. The study showed a fleet of 10 cars experienced an average 23 percent decrease in CO emissions, a 2.4 percent decrease in nitrogen oxide emissions, a 13.7 percent reduction in total hydrocarbon emissions, and a 3.6 percent decrease in carbon dioxide emissions. Not every vehicle running on E20 experienced a decrease in all emissions, although the study noted all the vehicle emissions were below EPA emissions standards. ROCKFORD PLANT TAPPING WIND INDUSTRY — Gov. Pat Quinn last week announced a $5 million grant for a Rockford machine plant to develop wind turbine components. The federal stimulus grant is expected to create 87 jobs and retain another 69. Ingersoll Machine Tools Inc. will use the grant to purchase and retrofit equipment, giving it the ability to produce wind turbine parts. Ingersoll previously supplied composite manufacturing systems for the aviation industry. Illinois currently ranks third in installation of new wind farms behind Texas and Colorado. In Illinois, wind energy projects have attracted investments of more than $1.3 billion and created more than 3,500 jobs.
(ISSN0197-6680) Vol. 38 No. 14
April 5 , 2010
Dedicated to improving the profitability of farming, and a higher quality of life for Illinois farmers. FarmWeek is produced by the Illinois Farm Bureau. FarmWeek is published each week, except the Mondays following Thanksgiving and Christmas, by the Illinois Agricultural Association, 1701 Towanda Avenue, P.O. Box 2901, Bloomington, IL 61701. Illinois Agricultural Association assumes no responsibility for statements by advertisers or for products or services advertised in FarmWeek. FarmWeek is published by the Illinois Agricultural Association for farm operator members. $3 from the individual membership fee of each of those members go toward the production of FarmWeek.
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STAFF Editor Dave McClelland (dmcclelland@ilfb.org) Legislative Affairs Editor Kay Shipman (kayship@ilfb.org) Agricultural Affairs Editor Martin Ross (mross@ilfb.org) Senior Commodities Editor Daniel Grant (dgrant@ilfb.org) Editorial Assistant Linda Goltz (Lgoltz@ilfb.org) Business Production Manager Bob Standard Advertising Sales Manager
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Some IFB priorities move forward, others stymied BY KAY SHIPMAN FarmWeek
Lawmakers took action on several bills of interest to Illinois Farm Bureau before adjourning for spring break. The General Assembly is scheduled to return to session April 13. An IFB priority continues to move forward. HB 6094, sponsored by Rep. Emily McAsey (D-Lockport), and SB 2566, sponsored by Sen. John Sullivan (D-Rushville), both passed in their respective chambers are and awaiting committee assignments. Both bills would restore farmers’ ability to drive allterrain vehicles and utility-terrain vehicles on roads for farming purposes and also to cross roads with the vehicles. Similar legislation, HB 4904, sponsored by Rep. Rich Myers (R-Colchester), did not move out of the House Rules Committee. IFB supports all the bills. Strong opposition from the Illinois Trial Lawyers Association (ITLA) stymied HB 5895, sponsored by Rep. Bill Black (R-Danville.) The bill would have restored limited liability to landowners who allow invited guests to use their property at no charge for different recreational activities. “We continue to work with Representative Black and ITLA to come up with agreed
language. ITLA’s philosophical opposition to limiting liability continues to be the largest hurdle. IFB has provided alternative language to ITLA for its consideration,” said Kevin Semlow, IFB director of state legislation. The ITLA also fought fervently against legislation, also sponsored by Myers, which addresses nuisance lawsuits filed against farms. Myers
did not call his bill, HB 6142, for vote in the House Judiciary Criminal Law Committee because of a commitment from the lawyers association to work on the measure after the spring session, according to Bart Bittner, IFB associate director of state legislation. “IFB staff will work with the involved parties in an attempt to reach an agreement,” Bittner said.
Pension Continued from page 1 house News. A lower bond rating means Illinois would have to pay more in interest on its construction bond authorization, Semlow noted. Gov. Pat Quinn’s plan to address the state’s funding crisis includes a 1 percent income tax increase that would be dedicated to funding education, Semlow added. The new state pension provisions will apply only to employees who were hired after the legislation became law. Those provisions include raising the retirement age of impacted employees to 67 and reducing benefits for those who retire earlier.
Keep emergency numbers handy
Fertilizer firm, EPA settle spill reporting violation A Southern Illinois fertilizer company and U. S. Environmental Protection Agency (EPA) Region 5 recently settled a case involving a reporting violation of an anhydrous ammonia release. In September 2008, emergency personnel responding to an anhydrous release prevented Handy Fertilizer Inc. officials from reaching the company facility in Millstadt where emergency telephone numbers were located, according to a company spokesman. Later, law enforcement found evidence of illegal tampering with a valve that caused the release of 4,096 pounds of anhydrous. Officials theorized the release was caused by someone attempting to steal the anhydrous for methamphetamine production. Handy Fertilizer was fined $5,500 for failing to report the release to the National Response Center (NRC) within 15 minutes. The company also installed a $22,855 security system to resolve the case, according to EPA. Federal law requires immediate notification of anhydrous releases of more than 100 pounds. Handy has now installed locks on all its nurse tanks and programmed emergency numbers into all company cell phones, the spokesman said.
Other changes were made to calculations for annual costof-living increases and to the definition of high-risk employees who qualify for higher benefits. Some state officials estimate the state will save $300 million in fiscal year 2011, while others estimate the savings could range from $500 million up to $1 billion, according to Semlow. The state will save an estimated $100 billion over the next 50 years in payouts to future employees compared to what it would have paid using the current system, he said. The state’s total pension liability is $126.5 billion, $77.8 billion of which is unfunded.
U of I receives pledge for ag communications The University of Illinois has received a pledge for $200,000 from DuPont for an innovative program in agricultural communications. The College of Agricultural, Consumer, and Environmental Sciences (ACES) and the College of Media will work together on the initiative. DuPont businesses, Pioneer Hi-Bred and Crop Protection, will pay the grant as the university reaches milestones to raise $2 million for the initiative. The U of I is planning a joint agricultural communications program with an endowed chair in agricultural communications. It also plans to have at least three teaching positions and include initiatives in environmental and consumer communications.
FarmWeek Page 3 Monday, April 5, 2010
GOVERNMENT
Obama open to offshore drilling; Energy and climate decouplable? While he acknowledged new domestic supplies are “good to have,” Cooney noted past Domestic energy and ag interests were Gulf oil “finds” have generated relatively minor guardedly optimistic last week as President market ripples. Anticipation of last Friday’s fedObama partially opened the long-blocked door eral employment figures appeared to spur more to new offshore oil drilling. excitement in financial markets than the presiObama last week stressed a proposal to open dent’s announcement, Cooney told FarmWeek. parts of the Atlantic coast, the Gulf, and “(Obama) opened certain areas, but he didn’t Alaskan waters to oil drilling and exploration open up all areas,” Cooney noted. “When you look “was not a decision I made lightly.” at the whole global supply-and-demand, how much He labeled the plan “part of a broader strate- does this really amount to? Down the road, we may gy that will move us from an economy that runs get some definitive, actual numbers regarding on fossil fuels and foreign oil to one that relies how much would really be added.” more on The White homegrown House announcefuels and ment came amid clean energy.” ‘When you look at the whole global sup- anticipation of a American ply-and-demand, how much does this new Senate cliFarm Bureau mate control bill really amount to?’ Federation aimed at regulatanalyst Rick ing greenhouse Krause agreed gases (GHGs). — Harry Cooney domestic Legislators GROWMARK drilling was smarting from “essential if last year’s rejecyou want to tion of House clihave an enermate “cap-andgy independence policy.” trade” measures have suggested tying greenIllinois Farm Bureau National Legislative house regs to comprehensive energy measures Director Adam Nielsen said the announcement as a way to garner bipartisan support. itself was a “good sign” for broad-based new Whether the two can be married is up in the energy legislation, even if the president’s conair. A North Carolina environmentalist mused cession is aimed largely at “trying to get support that “the administration is willing to expand the for climate change legislation.” very substance (oil) that causes those emissions The plan provides a major eastern Gulf in the first place,” while ag groups fear the “buffer zone” free of exploration, reportedly to impact of emissions standards on future eneraddress concerns of Florida Democrat Sen. Ben gy/input prices. Nelson. The proposal would open drilling from Nielsen feels the benefits of “a bill that focusDelaware to central Florida, but would leave the es on domestic sources of energy” ultimately North Atlantic closed, per the wishes of biparcould be decoupled from climate proposals. tisan New England lawmakers. House Energy and Commerce Committee But based on details of the president’s plan member John Shimkus, a Collinsville Republiand market reaction to it, GROWMARK energy can who favors extension of both biofuels tax analyst Harry Cooney was unsure what impact credits and offshore drilling, told FarmWeek new drilling prospects would have for U.S. colleagues who insist energy and climate legislaoil/natural gas supplies and prices. tion must be linked “are wrong.”
BY MARTIN ROSS FarmWeek
Insurance agreement of concern to farmers? Proposed federal cuts threaten crop insurers’ ability “to continue to offer muchneeded risk-management products in many areas of the country,” bipartisan senators warned USDA’s Risk Management Agency (RMA) last week. U.S. Senate Ag Committee Chairman Blanche Lincoln (D-Ark.), ranking committee Republican Saxby Chambliss (R-Ga.), and 28 colleagues challenged a revised draft RMA standard reinsurance agreement (SRA) with insurers. The SRA reimburses private companies for administrative costs in offering federal crop policies. RMA has agreed to pare back proposed cuts in insurer reimbursements, but senators warned even modified cuts “may undermine the (insurance) program, reduce the quality of service and availability of the program,
and harm rural America through job loss.” They questioned RMA proposing significant cuts prior to its completion of a study of program delivery costs. The recent White House budget recommended reducing program costs by $7 billion over a 10-year period. Proposed reductions would be in addition to $6 billion trimmed from the program in the 2008 farm bill. Kevin Johnson, an aide to Urbana Republican House Ag Committee member Tim Johnson, noted some 15 companies currently market crop insurance. He questioned how well some companies could weather a “bad year” with devastating losses if forced to channel financial reserves into business costs. Some fear reduced reimbursements could ripple down to reductions in claims and other staffing that ultimately could impact customer services and costs.
Further, Illinois Farm Bureau risk management specialist Doug Yoder suggested potential failure of or corporate absorption of smaller insurers could translate into “fewer options for producers.” Smaller companies often are innovators in new insurance “products” that fill gaps in farm risk protection or extend protections for minor crops or activities. Crop insurance plays an increasingly key role in producer loan access and ability to cover rapidly increasing input costs, Country Financial advised in a letter to lawmakers. “We have some pretty good risk management programs out there, and agriculture really needs those,” Dave Kohl, professor emeritus of ag economics at Virginia Tech University, told FarmWeek. “I hope we don’t throw out the baby with the bathwater.” — Martin Ross
The new health care: exchanges and tradeoffs The new health care reform legislation: Creates state-based American Health Benefit Exchanges and Small Business Health Options Program (SHOP) Exchanges through which individuals and small businesses with up to 100 employees may purchase coverage. States may allow businesses with more than 100 employees to buy coverage in the SHOP exchange beginning in 2017, and funding is available to states to establish exchanges through Jan. 1, 2015. States may form regional exchanges or allow more than one exchange to operate in a state. Creates four benefit categories of plans, plus a separate catastrophic plan to be offered through the exchange and in individual and small group markets. At least two multi-state plans must be included in each exchange, and each multi-state plan must be licensed in each state. A Consumer Operated and Oriented Plan (CO-OP) program will help foster non-profit, member-run insurance companies. Congress appropriated $6 billion to finance the program and award loans and grants to establish CO-OPs by July 1, 2013. States may form health care choice compacts and allow insurers to sell policies in any state in a compact subject to the laws and regulations of the state in which the policy is written or issued. Rules are to be issued by July 1, 2013; compacts may not take effect before Jan. 1, 2016. Requires U.S. citizens and legal residents to have qualifying health coverage. Those without coverage pay a tax penalty of the greater of either $695 per year per individual up to three times that amount ($2,085) per family; or 2.5 percent of household income. The penalty will be phased in beginning in 2014. Exemptions will be granted for financial hardship, those without coverage for less than three months, those for whom the lowest cost plan option exceeds 8 percent of individual income, and those with incomes below tax-filing thresholds. Refundable and “premium” credits will be available to eligible low-income individuals and families to buy insurance through the exchanges. Premium credits will be set on a sliding scale for those between 133 percent and 400 percent of the federal poverty level, effective Jan. 1, 2014. Requires guaranteed coverage and renewability, with no restrictions for pre-existing conditions. The new program provides dependent coverage for children up to age 26 and prohibits lifetime limits on the dollar value of coverage. The new law limits deductibles for plans in the small group coverage market to $2,000 for individuals and $4,000 for families. Requires employers with more than 50 employees (full-time employees with an average 30 hours or more a week and cumulative full-time equivalents) to offer coverage or face possible fees. Seasonal workers who are employed in a small business for 120 days or less during the calendar year are not included in full-time equivalent calculations. Employers may delay covering employees for 60 days without penalty or pay a $600 penalty to delay coverage for 60 to 90 days. Offers a tax credit for small employers with no more than 25 employees and average annual wages of less than $40,000 who purchase health insurance for employees. Again, seasonal workers employed for 120 days or less are not included in employee calculations. For tax years 2010 through 2013, the law provides a tax credit of up to 35 percent of the employer’s contribution toward employee premiums. For employers with 10 or fewer employees and average wages under $25,000, the credit phases down as the number of employees and average wages rise. For tax years 2014 and 2015, employers with 10 employees or fewer with average wages of $25,000 or less would receive a tax credit of up to 50 percent of their contribution toward employee health insurance premiums. The credit phases out as the number of employees and average wage increases. Increases the tax on distributions from a health savings account (HSA) or an Archer medical savings account (MSA) that is not used for qualified medical expenses from 10 percent for HSAs and from 15 percent for Archer MSAs to 20 percent of the account disbursements, effective Jan. 1, 2011. The new law increases the threshold for the itemized tax deduction for unreimbursed medical expenses from 7.5 percent of adjusted gross income to 10 percent of adjusted gross income for regular tax purposes and waives the increase for individuals age 65 and older for tax years 2013 through 2016, effective Jan. 1, 2013. At the same time, the Medicare Part A (hospital insurance) tax rate will increase from 1.45 percent to 2.35 percent on earnings over $200,000 for individual taxpayers and $250,000 for married couples filing jointly.
FarmWeek Page 4 Monday, April 5, 2010
ENVIRONMENT
Conservation Vermilion County farmer’s calling BY KAY SHIPMAN FarmWeek
Kevin Green’s farm reflects his passion for conservation from the wind breaks and buffer strips to the prairie plants and woodlands. The Vermilion County Farm Bureau member not only practices conservation, but he also uses every opportunity to promote it. “Kevin uses those practices on his own farm, and he promotes those practices from an agricultural perspective, not an agency perspective,” said Nancy Erickson, Illinois Farm Bureau director of natural and environmental resources. Lately Green has worked overtime to sell other farmers on the government Conservation Stewardship Program (CSP), including pitching an idea for a CSP story in FarmWeek. In March, he discussed CSP with government officials as one of the Farm Bureau Leaders to Washington. Green also used meetings of IFB’s Natural Resources Grassroots Issue Team, which he chaired this year, to raise awareness of CSP. “Any farmer who has waterways in place where they should be and buffer zones along creeks, follows university guidelines on fertilizer applications, and keeps records of that should have no problem (with CSP),” Green said.
Kevin Green, a Vermilion County farmer from Fithian, looks over spruce windbreaks on his farm. He also planted white oaks, white pines, and walnuts in this area.
“Any farmer who has been conscientious in the protection of farmland that he controls ... and who farms by those ethics should have no problem,” he added.
FarmWeekNow.com Visit FarmWeekNow.com to view Ken Kashian’s photo gallery of Vermilion County farmer Kevin Green.
But Green, whose busy schedule includes serving on the Vermilion County Board, is practical in choosing conservation practices that work for his farm. For example, he opted to plant more field borders instead of no-till farming his cornfields as part of his CSP plan. Erickson noted Green’s
knowledge stems from his broad experiences with conservation programs. “He’s been involved with a lot of conservation programs — not just one or two. The management of his farms reflects his interests,” Erickson added. Oakwood’s Dollar General store soon will be surrounded by prairie plants and other flowering plants, more testament to Green’s conservation ethics. As part of his CSP plan, Green is widening to 60 feet a 30-foot buffer strip on ground he farms bordering the store that was enrolled in the Conservation Reserve Program. Another spot of Vermilion County is destined to simultaneously benefit, and promote, conservation, thanks to Kevin Green.
Green uses fencing to keep deer away from young persimmon trees on his farm. A conservation advocate, Green has planted a variety of trees and prairie plants and implemented other conservation practices on land that he farms. (Photos by Ken Kashian)
NRCS offers farmers incentives with Conservation Stewardship Program Farmers who are conscientious about conservation can be rewarded by participating in the Conservation Stewardship Program (CSP). Through CSP, the Natural Resources Conservation Service (NRCS) works with farmers to address natural resource issues. Signup is open and offered continuously. Farmers must either own enrolled farmland or,
as in Kevin Green’s case, have a signed agreement with their landowner that they will farm the land for the next five years. Unlike other conservation programs, farmers may receive technical assistance and payments for conservation practices on the cropland. Per-acre payment levels vary, depending on the conservation practices and other factors. However, Green noted he receives CSP payments on 800-some acres from which he also harvests corn and soybean crops. “I’m satisfied with the payments that I’m receiv-
ing in addition to my crop income,” he said. Farmers are encouraged to go online to {www.nrcs.usda.gov/new_csp} and click on the “Conservation Stewardship Self-Screening Checklist.” Green said the list helped him determine if he was eligible and prepared him for the next step of making an appointment with his local NRCS district conservationist. “Farmers are really reluctant to look into CSP or to sign up. Some think it’s too much paperwork, but if you’re prepared, it’s easy to do,” Green said. “This is an incentive program to assist you.” — Kay Shipman
Illinois equine promotion board awards $83,000 in grants The Illinois Equine Industry Research and Promotion Board (EPB) recently awarded more than $83,000 in grants, according to Karen Freese, EPB chairman. The grants are funded by the equine checkoff program that assesses a nickel per 50pound bag of horse feed sold at retail. Eleven grant recipients were: Southern Illinois University’s equine science program, directed by Sheryl King, received $15,740 to help rebuild barns and fences damaged by a May 2009
inland hurricane. Kendall County Horse Show Association, Yorkville, received $3,900 for improvements to its arena announcer stand in the Harris Forest Preserve, Yorkville. Macoupin County Wild Riders, Gillespie, received $7,920 for improvements to its show grounds. The Decatur Park District received $9,000 to buy materials for an underground drainage system for an outdoor arena. The Pekin Riding Club received $2,000 to help improve lighting and seating
at its club grounds south of Pekin. Country Club Hills received a $1,500 for planning to develop an urban park into an equestrian center on five acres of farm property within the city border. Francis Field Foundation, New Lenox, received $16,300 to help stabilize and rehabilitate its 50-year-old barn on 18 acres in Will County. East Fork Arena and Trails, Claremont, received $10,000 toward construction of an arena on land provided by the City of Olney.
King City Saddle Club, Mt. Vernon, received $10,000 to help build a facility with stalls on its site. University of Illinois’ Kevin Kline and co-investigators received $7,200 for two studies. The objective of one study to strengthen the statistical database related to surgical treatment for osteochondrosis in young performances horses. This would help veterinarians with decisions on treatment recommendations. The second study will investigate whether total
mixed rations with hay/grain cubes are effective for healthy and efficient development in young, growing horses. Any group, individual, company, or institution may apply for checkoff grants. Preference will be given to projects benefiting the largest number of people and/or horses. Grant applications are available at {www.Horsemens Council.org} or from the EPB, 3085 Stevenson Drive, Suite 308, Springfield, Ill., 62703. The telephone number is 217585-1600.
FarmWeek Page 5 Monday, April 5, 2010
PRODUCTION
USDA projects farmers will plant more corn, beans BY DANIEL GRANT FarmWeek
What seems to be an annual battle for acres each spring likely won’t materialize this year. USDA last week in its prospective plantings report projected plantings of corn and soybeans will increase this spring, indicating there are plenty of acres to satisfy the demand for both crops. U.S. farmers this spring are expected to plant 88.79 million acres of corn (up 3 percent from last year) and a recordhigh 78.09 million acres of beans (up 1 percent from last year). In Illinois, corn plantings were projected to increase 5 percent to 12.6 million acres and soy plantings were projected to rise by 1 percent to 9.5 million acres. “I don’t know a year like this year where farmers had more of a wide open opportunity of what to plant than they do now,” said Dale Durchholz, market analyst with AgriVisor, during a teleconference hosted last week by the CME Group. The planting flexibility for corn and soybean producers
developed due to a sharp decline in wheat acres, a lack of fall fieldwork that kept farmers from applying anhydrous ammonia on would-be corn acres, and the expiration last fall of Conservation Reserve Program contracts that totaled roughly 2.75 million acres. USDA last week actually projected a 5 percent increase in spring wheat plantings (13.9 million acres). However, all wheat acres (53.83 million) are down 9 percent from last year as seedings of winter wheat plummeted 13 percent. In Illinois, farmers last fall seeded a record-low 350,000 acres of winter wheat compared to 850,000 acres the previous year. Durchholz and Joe Victor, market analyst with Allendale Inc., predicted farmers this spring could plant even more corn than the current estimate. “Right now farmers can make more money on 160bushel corn than they can with 42-bushel soybeans,” Victor said. But regardless of economics, the key factor that will influence planting decisions in
Angel: Warm-up could continue The old saying “if March comes in like a lion, it will go out like a lamb” certainly rang true last month. The average statewide temperature on March 1 was 31.6 degrees (4.6 degrees below normal) compared to 58.1 degrees (10.7 degrees above normal) on March 31. “We started out very cold and ended up very warm (last month),” said Jim Angel, state climatologist with the Illinois State Water Survey. “Twenty-seven degrees is a pretty significant warm-up.” And that trend could continue this month. The National Weather Service forecast for April called for an increased chance of above-normal temperatures in Illinois and much of the Midwest. High temperatures on Thursday and Friday were well above normal and exceeded 80 degrees across a large portion of the state. “With the soils being so wet, this (warm and Jim Angel windy weather) was about the best we can ask for,” Angel said on Friday prior to a chance of weekend showers. “A warm and dry March also helped dry things out. Soil moisture levels are getting closer to normal.” The statewide temperature for March averaged 43.6 degrees (2.5 degrees above normal) while the average precipitation (2.8 inches) actually was four-tenths of an inch below normal. “We started a trend of being on the dry side this year,” Angel said. “January, February, and March all had below-normal precipitation.” The start of a new weather pattern could be good news to Illinois farmers as 2009 was the fourth-wettest year on record with 50.3 inches of precipitation (11 inches above normal). The persistent cool and wet pattern created major planting and harvest delays. In fact, Illinois farmers through April 27 had planted just 4 percent of the corn crop in 2009 and 5 percent in 2008 compared to the five-year average of 43 percent. “I’m cautiously optimistic we’re not on the same path as last year,” Angel said. “We might be closer to a normal planting season. But it’s still going to take awhile” before soils are in optimal condition for planting. Soil moisture in the state last week was rated 55 percent surplus and 45 percent adequate. — Daniel Grant
coming weeks is the weather. “We need an open window to get nitrogen down and get the crops in the ground, in addition to fieldwork that didn’t get done last fall,” Durchholz said. “I think farmers still are in position to look at the weather and decide what to do with acres.” A warm, dry stretch of weather last week allowed some farmers to apply anhydrous ammonia and begin field preparations.
Cupboards are stocked; USDA grain report bearish There is an ample supply of grain in storage to meet current demands. USDA last week in its grain stocks report estimated corn stocks in all positions as of March 1 totaled 7.69 billion bushels, up 11 percent from the previous year. Wheat stocks as of the same date totaled 1.35 billion bushels, a 30 percent increase from a year ago. Meanwhile, soybean stocks (1.27 billion bushels) were down 2 percent from last year, but a record South American crop is expected to weigh heavily on that market. “The big story (of the USDA prospective plantings and grain stocks reports released last week) is the stock numbers were larger than people expected them to be,” said Dale Durchholz, market analyst with AgriVisor. He spoke during a teleconference hosted by the CME Group. “That takes the pressure off the need to produce a great new crop,” he said. It also is expected to take pressure off endusers to bid up grain prices in the near future despite planted acreage estimates that were slightly smaller than anticipated by traders.
“The bearishness of the stocks numbers offset somewhat friendly acreage numbers,” said Durchholz, who described old-crop numbers as comfortable for beans but burdensome for corn. Who is storing the old crops? USDA reported on-farm storage as of March 1 totaled 4.55 billion bushels of corn (up 11 percent), 609 million bushels of beans (down 7 percent), and 348 million bushels of wheat (up 24 percent). The rest is off-farm stocks. The combination of large grain stocks and the possibility of planted acres growing if spring weather cooperates could create some “downside issues” for the market, according to Durchholz. He predicted futures prices could tumble to as low as $3 per bushel for December corn and $8.75 for November beans if this planting season goes smoothly. Joe Victor, market analyst with Allendale Inc., recommended farmers hedge a portion of their crop production once they have 60 percent of their crops in the ground this spring to protect against a downturn in prices. — Daniel Grant
FarmWeek Page 6 Monday, April 5, 2010
LIVESTOCK Dairy financially, environmentally vulnerable?
Producer ‘sensitivity’ a growing lender consideration
BY MARTIN ROSS FarmWeek
Surviving in dairy production will be “extremely challenging” in coming years, in part due to increasingly rigid regulatory requirements, Virginia Tech economist and East Coast dairyman Dave Kohl warns. Regulatory challenges are closing in on two fronts as Congress and the U.S. Environmental Protection Agency (EPA) eye expanded livestock water and air quality Dave Kohl rules and bank and farm credit regulators push for greater scrutiny of producer loans, said Kohl, who last week counseled county Farm Bureau managers in Illinois on changing ag market and risk dynamics. Industry regulators consulting with Kohl stressed the need for ag lenders “to step up their financials,” he told FarmWeek. Kohl sees an “earthquake effect” as bank examiners and regulators watch for rural rip-
ples in the wake of East and West Coast housing and commercial real estate debacles. “When an agricultural producer comes in — whether it’s a
FarmWeekNow.com Listen to David Kohl’s comments about stricter regulations ahead for the dairy industry at FarmWeekNow.com.
dairyman or a grain producer — he’s going to have to have better quality information; he’s going to have to know his financial metrics,” Kohl advised. “One of the things regulatory agencies are really looking at is borrower ‘sensitivity’ — what happens if milk price does this or that. It’s not going to be business as usual.” That yardstick likely will be applied to interest rates, as well. Kohl believes ag interest rates are near or at a floor, and he sees greater analysis to gauge how a 2 to 4 percent bump in rates might affect borrower margins. He argues “cash and liquidity will be king” in assuring loan viability, warning of possible challenges for Illinois
farmers “with a lot of land but not a lot of liquidity.” Kohl is a partner in Homestead Creamery, a “value-added” dairy based in Roanoke, Va. Homestead operates in the shadow of Chesapeake Bay, the focus of EPA proposals to regulate ag nutrient management practices. Plus, prospective new watershed requirements are a “major, major issue” from Virginia’s Shenandoah Valley to southeast Pennsylvania, he said. He anticipates Homestead spending $200,000 in compliance costs over the next three years “to be able to assure highquality water.” U.S. Rep. James Oberstar (DMinn.) soon may revive a proposal to greatly expand EPA’s water jurisdiction — according to Kohl, potentially adding more costs for producers. In an attempt to rein in federal water regulation, the American Farm Bureau Federation is suing the U.S. Army Corps of Engineers for practices that reportedly subject landowners to federal control if they take prior converted cropland out of production for non-crop use.
Clinton County producer and banker Steven Becker sees “immense” consequences if EPA expands permitting and other requirements for livestock operations in his area. Beyond regulatory costs, bureaucratic delays in obtaining permits for dairy expan-
sion would be “insurmountable,” he maintained. “The margins in the dairy industry are even thinner in many cases than in the cash grain industry,” Becker said. “They (dairymen) don’t have the capital resources to afford these six-figure permit fees.”
Milk and margins: Economist Dave Kohl is partner and “business coach” with Homestead Creamery, a 9-year-old Virginia company that annually markets roughly 37,000 gallons of milk, eggnog, custard, and 32 flavors of ice cream. In an era of superstores and not-always-so-super service, Homestead boasts 1,400 home-delivery customers and a list of college clients that soon could include Duke University. The producer/processor continues to bottle milk in retro glass, but has used social media to expand its menu of ice cream selections. Kohl knows and relishes his place in a diverse industry. While “small business drives the economy,” he sees market differentiation as key to sectorwide survival. “I see a place for local/natural/organic, I see a place for the traditional farm, and I see a place for the large, complex farm,” he told FarmWeek. “It’s not going to be one size fits all: We have to be careful about fractionizing agriculture, pitting one group against the other.” Kohl offered Illinois county Farm Bureau managers several insights into producer survival in the 21st Century: The three-legged stool. Kohl recommends a three-part marketing plan that included revenue protections such as crop insurance, options, or hedging; a diversified “risk management program for inputs;” and measures to adjust for fluctuating interest rates. Homestead determined a mere 2 percent interest rate increase would “knock out 16 percent of our margin,” and developed strategies to lock in its rates. Identity, integrity, and identification. In search of “local, natural” products, mega-retailer Wal-Mart offered Homestead a lucrative deal. But Kohl stressed “we built our market on glass bottles,” and when the chain asked Homestead to switch to plastic containers, it rejected the offer. Instead, Homestead focused on building a clientele for oldfashioned doorstep delivery. Reading consumer preferences and economic shifts has guided company practice: Homestead saw a recent 27 percent spike in eggnog/custard sales amid demand for “comfort food in recessionary times.” Catching the buzz: With 28 premium ice cream flavors in hand, Kohl’s “conservative” partners reluctantly agreed to develop Homestead’s social media presence in conjunction with “natural” chain Whole Foods. Internet input led to four new flavors, including blueberry — now, a runaway favorite. Partnering for profit: Homestead built on its delivery trade by contracting with “a couple of old hippies” for locally produced eggs, as well as with area produce growers. When the company put out feelers for weekly “vegetable packs,” 823 college and home customers signed up. — Martin Ross
IMPB seeks candidates The Illinois Milk Promotion Board (IMPB) is seeking individuals actively engaged in dairy production to serve on the IMPB. The IMPB administers collection and distribution of milk checkoff funds (10 cents per hundredweight) from Illinois dairy producers. Board terms are three years. The board is seeking candidates for District 1 and District 3, which include the following counties: District I: Carroll, Jo Daviess, Ogle, Stephenson, Winnebago, and Whiteside. District III: Bond, Calhoun, Christian, Clark, Clay, Coles, Crawford, Cumberland, Douglas, Edgar, Edwards, Effingham, Fayette, Franklin, Gallatin, Greene, Hamilton, Hardin, Jasper, Jefferson, Jersey, Lawrence, Macoupin, Madison, Marion, Monroe, Montgomery, Moultrie, Pope, Richland, Saline, Shelby, St. Clair, Wabash, Wayne, and White. Those interested in becoming a candidate for board membership in either District should contact Lowell Lenschow, manager, at 309-557-3662, 309-557-3729 (fax), or l e n s ch ow @ i l f b. o r g ( e - m a i l ) for a petition. Completed petitions require at least 25 signatures from 25 different milk permits. Completed petitions must be postmarked by June 11. The election will be conducted by mail-in ballots during the month of July.
FarmWeek Page 7 Monday, April 5, 2010
RESEARCH
Orr Research Center draws strength from broad support BY KAY SHIPMAN FarmWeek
The Orr Research Center casts a wide net of support for its unique role in Western Illinois. Consider the people who attended the center’s recent anniversary celebration. Attendees included administrators from John Wood Community College (JWCC) and the University of Illinois College of Agricultural, Consumer, and Environmental Sciences (ACES). Several state legislators also attended along with area farmers and agribusinessmen, many of whom also serve on the Orr Research Center Corp. board. “This is my first time here, and I am impressed with the support for this center,” Interim ACES Dean Robert Hauser told the crowd. The Orr Center, near Perry in Pike County, was established as a 278-acre agronomy center in 1978. The U of I later bought an additional 191
acres adjacent to the original tract and developed an animal sciences component. The Orr corporation’s board has representatives from 11 counties: Adams, Brown, Calhoun, Cass, Greene, Jersey Macoupin, Morgan, Pike, Schuyler, and Scott. Despite the state’s financial difficulties resulting in reduced support for ag research, the research results from the Orr Center are a good return on a solid investment, according to farmer Eric Rabe, the board’s president. “It’s reliable, in-depth research in all areas of production with an eye on the environmental impact (of agriculture),” Rabe told FarmWeek. “It’s not just (about) increasing profits for farmers. It’s about (enhancing) soil and air quality and (reducing) greenhouse gases.” Area farmers aren’t the only ones who benefit from
Biotech startup firm expanding at the U of I’s research park The University of Illinois last week announced the expansion of a biotechnology company that has been housed in the U of I’s Research Park since 2005 and has made significant progress in commercializing its technology. Chromatin Inc. will expand into a 5,000-square-foot facility, a newly constructed area in the Research Park’s Graduation Building. With a larger laboratory and office space, Chromatin will continue to expand its research and development effort, enabling the development of new seed products and delivery of multiple-genetic traits in plants through gene stacking. Chromatin also plans to pursue new applications, such as improved feedstocks that target the bioenergy sector. The Vision for Illinois Agriculture has made advancement of intellectual and innovation resources one of its strategies. Support for startup companies is part of the Vision’s Smart Agenda. Avijit Ghosh, U of I vice president of technology and business development, said Chromatin’s commercialization success is a model for biotechnology startups in Illinois. “Chromatin is graduating from our EnterpriseWorks incubator where the Research Park provided laboratories, equipment, and greenhouse space,” Ghosh explained. “IllinoisVentures, the university-affiliated venture capital firm, was an early Chromatin investor.” The U of I also provided early support by funding student employees to work as researchers for Chromatin, master of business administration students to do commercialization consulting, and entrepreneurship support services with regular events and training. “The (U of I Research Park) incubator has been the ideal place to launch our R&D programs in crops, such as corn, cotton and sugar cane,” said Otto Folkerts, Chromatin director of transgenic programs. “By expanding the scale of our operations within the Research Park, we can further develop our existing programs and broaden our focus into new areas, such as bioenergy feedstocks,” Folkerts added. Chromatin was founded in 2000 and is based in Chicago. It has licensed technology through commercial agreements with such agbiotech companies as Syngenta, Monsanto, Dow AgroSciences, and Bayer CropScience.
John Wood Community College agriculture students, shown here, benefit from classes, hands-on experiences, and interactions with researchers at the University of Illinois Orr Research Center, near Perry. The unique research and education center has engendered a broad base of support in the area. (File photo courtesy Orr Center)
Orr Center research. John Wood agriculture students also gain, said Jeff Galle, director of JWCC’s agricultural programs. “By putting research and education in one location, we’re able to take advantage of all the synergy,” Galle said. “From a taxpayer’s perspective, this is a tremendous model (of a university-community-college partnership) that is unique from anywhere
else in the world,” Galle added. Still, the state’s current financial situation is dire, given the budget deficit — a point not lost on several lawmakers and others at the Orr Center celebration. However, Sen. Deanna Demuzio (DCarlinville) reminded the audience the economy wasn’t the best 32 years ago when her late husband, Sen. Vince Demuzio, worked to obtain
state funding to start the Orr Center. “Through hard work, a group of local people was able to raise the local match to get this center started,” Demuzio said. “It shows what can be done — even in tough times.” The center’s backers believe a can-do attitude combined with strong local support will help the center weather the current financial difficulties.
FarmWeek Page 8 Monday, April 5, 2010
LIVESTOCK
Revamping animal traceability system a tall task? BY DANIEL GRANT FarmWeek
Livestock industry leaders at the recent National Institute for Animal Agriculture (NIAA) annual meeting in Kansas City held some of the first discussions about livestock identification since USDA announced it will revamp its animal tracking system. USDA earlier this year put its controversial National Animal Identification System (NAIS) out to pasture and in its place will attempt to implement an animal traceability system that is less burdensome for producers. The new system is expected to apply only to animals moved in interstate commerce; be administered by the states and Tribal Nations to provide more flexibility; and encourage the use of lowercost technology. USDA requested the livestock industry provide recommendations to achieve the new goals. However, industry leaders
could struggle with some of the same problems that dogged NAIS — such as how to get the majority of producers to participate in the program and how to coordinate the entire system at a low cost and still maintain the ability to track animal disease outbreaks within 48 hours. The federal government pumped an estimated $120 million into the failed NAIS program which managed a participation level of just 36 percent. “All of this is still up in the air,” said Jim Kunkle, animal identification administrator with the Illinois Department of Agriculture, who attended the NIAA meeting.
“We’re going to try to bring the commodity groups together” this spring to offer input on the new system. The administration has set aside $14 million to fund the traceability system. “I’m hopeful we’ll get a system that contains disease outbreaks and allows us to continue to aggressively market our products,” Ag Secretary Tom Vilsack told FarmWeek recently. The traceability system will allow state control, but there could be minimum standards set by USDA, according to Kunkle. “The overriding message is (USDA) is asking states to
develop a tracking system, but what that will be, who knows,” said Jim Fraley, Illinois Farm Bureau livestock program director who also attended the NIAA meeting. “USDA also (said) it doesn’t want 50 different tracking systems. So there’s got to be some state coordination.” The American Farm Bureau Federation (AFBF) and other farm groups have a goal to have all cattle 18 months of age or older identified by 2015. Farm Bureau also called for a traceability system that is voluntary and confidential. “The pressure really is on the beef industry,” said Fraley, who noted that only about
one-third of beef producers took part in NAIS compared to 87 percent of producers in the swine industry and 90-plus percent of sheep producers. Kelli Ludlum, AFBF spokesperson who spoke at the NIAA meeting, said a key concern for beef producers is minimizing the cost of the system. Metal tags could be used to identify cattle as opposed to more expensive radio frequency identification (RFID) tags, according to Fraley. USDA also is seeking a standardized certificate of veterinary inspection to improve record-keeping, particularly for interstate commerce, Kunkle reported.
Herd reduction good for producers, bad for consumers? Steve Meyer, livestock economist and president of Paragon Economics, in recent years predicted losses in the hog industry would force a significant herd reduction that likely would be felt at the retail meat counter. That prediction seems to be
coming true, based on recent USDA projections. USDA last month shocked many traders when it estimated U.S. pork producers in the last quarter reduced the inventory of hogs and pigs by nearly 3 percent and the breeding herd by nearly 4 percent compared
to the same time last year. The breeding herd, at 5.76 million head, is the smallest since USDA began the quarterly hogs and pigs report in the early 1970s, according to the CME Group’s Daily Livestock Steve Meyer Report. Meyer is the coauthor of that publication. USDA last month also projected a sharp drop (3 percent) in the number of cattle and calves on feed in the U.S. Meyer believes the reduction of the swine and cattle herds could boost livestock prices. He predicted cash hog prices in the second and third quarters this year could reach the upper$70 range and possibly peak above $80 per hundredweight. The price projection would provide much-needed relief to pork producers who, from October 2007 through February 2010, lost an estimated aggregate $6.2 billion.
“This hole we’re in is pretty deep,” Meyer said. “It’s going to take awhile for producers to get out of it financially.” Meyer recommended hog producers take advantage of futures prices, which last week were above $80, and hedge a portion of their hog sales on the futures market. Pork producers as of last week could lock in close to $30 per head profit for the summer and a profit of $15 to $20 per head for the fall, according to the economist. Producers in Illinois could be in even better shape to take advantage of the bullish hog market. USDA last month projected Illinois’ market hog inventory was up 3 percent compared to last year. “If the value goes up and you have more pigs ready to sell, that would be a great thing,” Meyer said. The overall situation might put U.S. consumers at a disadvantage, though. Meyer predicted tighter meat supplies this summer could push retail meat prices to record highs. — Daniel Grant
Baconfest inspires sizzling new creations Bacon apparently is more than just a breakfast side or something you can add to a sandwich these days. A new bevy of offerings that incorporate the delicacy will be available to sample Saturday (April 10) at Baconfest Chicago. Some of the new bacon-based products include chocolate-covered bacon, bacon jellybeans, and bacon desserts. When people are done sampling some of the bacon creations, they can wash it down with bacon-flavored vodka or bacon beer and then clean their teeth with bacon-flavored toothpicks. “If you can dream it up, it will probably be there,” said Erin Cleary, director of marketing and education for the Illinois Pork Producers Association (IPPA), a sponsor of Baconfest. “This event and the focus of Illinois Pork is an obvious dream team,” Cleary continued. “We have an audience who can’t get enough of a product our members are proud to provide them.” The event, which is expected to attract at least 750 “bacon-crazed fanatics,” according IPPA, will be held at the Stan Mansion in Logan Square, Chicago. More details about the event are available online at {www.baconfestchicago.com}.
FarmWeek Page 9 Monday, April 5, 2010
EDUCATION
SIU ag college faces challenges, gets new leadership BY KAY SHIPMAN FarmWeek
Southern Illinois University’s (SIU) College of Agricultural Sciences is well positioned to face challenges on campus and within the ag industry, thanks to changes during the tenure of Dean Gary Minish. Minish recently retired after six years as ag dean. Interim Ag Dean Todd Winters said Minish left the college in a strong position, including three consecutive years of increased student enrollment. Winters, an animal reproTodd Winters ductive physiologist, had served as the college’s associate dean since 2008 when the board of trustees approved him as interim dean in mid-February. Last week Winters was directed to develop a 10-percent cut scenario for the college’s budget. “That’s not to say that (cut) is going to happen,” he added. Winters said action by Minish not to fill some vacant positions will
make addressing possible cuts easier because elimination of those positions would reduce the budget by nearly 6 percent. In addition, the ag college’s enrollment growth has not gone unnoticed by the administration, Winters noted. “I think campus (administration) is more aware of the quality of the college,” Minish agreed. Minish puts the turnaround in undergraduate student enrollment high on his list of accomplishments. “One of the best compliments I received was when a department head said, ‘You’re running us like a business,’” Minish remembered. “I said, ‘It’s education and research, but it’s like a business. You’ve got to grow or you’re going to get swallowed up.’” Minish also pointed out the growth in the college’s research funding to more than $10 million, which is about $350,000 per faculty member. Another of Minish’s goals was to strengthen the college’s ties to the agricultural industry and to raise the college’s profile on campus and in the state. Today the college leadership board is comprised of 100 leaders, and the college
SIU Ag Industry Day April 16 Southern Illinois University’s College of Agricultural Sciences will host its annual Agriculture Industry Day April 16 on the SIU Farms, 599 Rowden Road, Carbondale. The event will start at 8:30 a.m. with livestock judging contests. Exhibits will open at 9 a.m. with demonstrations throughout the morning. The formal program will begin at 11 a.m. with a welcome from Interim Dean Todd Winters. Speakers will include Illinois Farm Bureau Vice President Richard Guebert Jr., an SIU alumnus, and National FFA Southern Region Vice President Chelsea Doss. Sponsors this year include IFB, GROWMARK Inc., Prairie Farms Dairy Inc., Archer Daniels Midland, Farm Credit Services of Illinois, Green View Companies, Helitech, the Illinois Beef Association, the Illinois Corn Marketing Board, the Illinois Fertilizer and Chemical Association, the Illinois Milk Producers Association, the Illinois Pork Producers Association, the Illinois Soybean Association, Potash Corp., Scates Farms, and The Maschhoffs. For more information, call 618-453-2469.
Auction Calendar Mon., Apr. 5. 1 p.m. 80.5 Ac. Adams Co. Schreacke Family Trust, QUINCY, IL. Sullivan Auctioneers, LLC. www.sullivanauctioneers.com Tues., Apr. 6. Woodford Co. Farmland. Soy Capital Ag Services. www.soycapitalag.com Tues., Apr. 6. 9 a.m. Consignment Auction. EL PASO, IL. Wilkey & Pearson Auction Services. www.pearsonauction.com or www.terrywilkey.com Thurs., Apr. 8. 10 a.m. Truck Tractors, Straight Trucks and Trailers. BETTENDORF, IA. US Auctioneers, Inc. www.usauctioneers.com Thurs., Apr. 8. 7 p.m. 160 Ac. Wayne Co. Farmland. Mildred Fehrenbacher, CISNE, IL. Carson Auction, Realty, Appraisal Co. www.carsonauctionandrealty.com Sat., Apr. 10. 9 a.m. Consignment Auction. CONGERVILLE, IL. Brent Schmidgall and Jim Miller,
Auctioneers. www.reellivestock.blogspot.com or www.brentschmidgallauction.com Sat., Apr. 10. 10 a.m. Milling Eq., Tools, Tractors and Misc. Rolen and Selma Rogers, MARION, IL. Joe Ollis Auction Service, LLC. Sat., Apr. 10. 10 a.m. Train and Toy Auction. Estate of Glenn (Sox) Stocking, ROCHELLE, IL. Espe Auctioneering. www.espeauctions.com Mon., Apr. 12. 10 a.m. 192 Ac. Warren Co. Conrad and Liberta Taylor, ROSEVILLE, IL. Van Adkission Auction Service. Sat., Apr. 17. 9:30 a.m. Construction Eq. and Real Estate. Fern and Rex Daily d.b.a. R.A.D. Excavators, DAHLGREN, IL. Jamie Scherrer Auction Co. www.jamiescherrerauction.com Sat., Apr. 17. 12 p.m. Fulton Co. Land Auction. The White Property, CUBA, IL. Lowderman Auction Co. www.lowderman.com
launched Ag Industry Day that drew then-Sen. Barack Obama as the 2005 keynote speaker. “We did a good job of showcasing the college,” Minish said. “It’s just a matter of getting the faculty and students out front. It’s a really good college.” As for the near future, SIU soon will gain a new chancellor and will start searching for a provost. Winters speculated a search for a permanent ag dean may start in the fall, but estimated he may be the interim dean for a year or two. Winters said he is interested in the dean’s position, but hadn’t made a final decision on whether to apply for the post. Minish also is weighing his options, including some involving the cattle business. “It’s a good possibility I’ll be in Illinois,” he added. “We hadn’t planned to come to Illinois (from Virginia) and do this, but it was one of the best things that happened to me in my career. It’s been nice to be a part of it for six years.”
Gary Minish, who recently retired as dean of the Southern Illinois University College of Agricultural Sciences, lists three years of increased ag student enrollment as a major accomplishment during his tenure. He is shown here welcoming students back to campus. (Southern Illinois University file photo)
FarmWeek Page 10 Monday, April 5, 2010
ENERGY
Celebrity hopes to remake livestock’s image BY MARTIN ROSS FarmWeek
John O’Hurley’s a familiar face to many Americans — as eccentric fashion peddler J. Peterman on the sitcom Seinfeld, as host of the game show Family Feud, and as a firstseason contestant on Dancing with the Stars. O’Hurley also is a proud “venture capitalist” who revived the real-life J. Peterman Co. after Seinfeld left the air. As a partner in Nevadabased Energy-Inc., he hopes to change the public face of hog production through technology that turns animal wastes into “an asset rather than a liability,” thus helping beleaguered producers “get rid of one of their largest PR and environmental issues.” Energy-Inc. has signed a multimillion-dollar contract with North Carolina’s High Ridge Farm to convert wastes
from 3,000 hogs into electricity. The company’s advanced thermal conversion technology (ATCT) John O’Hurley applies pyrolysis (superheating manure, biomass, and other carbon-based materials) to produce a synthetic gas that can be used for power or liquid fuels. O’Hurley believes his company’s “waste-to-energy template” offers solutions for a livestock industry that has “come under such scrutiny from this particular administration.” Under ATCT, swine effluent is processed onsite in “a 100 percent contained environment” roughly the size of an 18-wheel storage container, reducing hog odor as well as
Fooling Mother Nature:
Smarter spuds and better biofuels Using a variation of natural genetic “inspection and repair” systems, scientists hope to “trick Mother Nature” into making better biodiesel from existing crops. San Diego-based Cibus Global has partnered with a major Idaho co-op to improve pest resistance and reduce bruising in potatoes using Cibus’ rapid trait development system (RTDS), a so-called “natural smart breeding” technology. Cibus President Keith Walker also is looking to employ RTDS in developing “a more superior biofuel” for diesel, aviation, home heating, or even camp stove use. Soy and other vegetable oils used in biodiesel have generally poor low-temperature properties, presenting some winter performance challenges at higher blends. One answer is to use processed polyunsaturated oils with lower freezing points, but that can cause oil oxidation, shortening biodiesel storage life and affecting engine performance. Fuel additives can address cold weather issues in blends of up to 20 percent. Cibus proposes a different approach — producing modified vegetable oils closer in chemical composition to palm kernel and coconut oils, with a far lower freezing point. RTDS mimics natural gene repair processes to essentially redirect the way plants manufacture oils. Tropical oils are sought largely for lauric acid, a fatty acid used in soaps and cosmetics and costly in the volumes needed for biofuels production. Hoping to incorporate colder-weather traits into “temperategrown” crops such as soybeans, Cibus has formulated an oil “performance map” as a roadmap for RTDS use and subsequent crop breeding. “Plants all have the same ‘factory floor’ for making vegetable oils,” Walker told FarmWeek. “They do everything the same way; it’s just the machines on that factory floor — (plant) enzymes — are structured slightly differently. “By using our technology right in the plant, we can change those oils to effectively turn a canola plant into an oil composition you’d otherwise get out of palm kernel or coconut. In theory, you could do that in soybeans or canola or sunflowers or in any oilseed crop.” Because no outside genes are used in RTDS technology, it avoids potential for “unintended consequence possibilities” that can occur in advanced biotechnology, Walker maintained. The process is not subject to federal or global GMO crop regulations or approvals, and new biofuels-friendly oilseed varieties thus could reach the market sooner, he said. — Martin Ross
addressing area groundwater concerns. “It (the effluent) will never see the light of day again: It goes right into the unit and is converted into large amounts of energy,” O’Hurley told FarmWeek. “But the best part is, it’s done with near-zero emissions. (Livestock operations) go from being ‘the worst polluters’ to neighborhood-friendly businesses. “This is what attracted me to waste energy: It really is one of the great ‘Wow!’ stories. When I was speaking about this on Capitol Hill last year, every congressman’s jaw dropped. No one knew this technology existed.” High Ridge Farm contacted Energy-Inc. after O’Hurley and company approached High Ridge-affiliated hog giant Premium Standard. The project’s first phase will focus on
energy generation: EnergyInc. anticipates selling excess power from the North Carolina farm into the regional electric grid. The second phase will involve channeling excess heat from the system to provide year-round climate control for hog houses. O’Hurley argues removing waste and weatherrelated stress from the swine environment should improve herd health and address another public hot-button — humane animal care. Hog manure was targeted initially as “the most complicated substance that can be introduced to this technology,” O’Hurley said. He sees ATCT easily being adapted to beef and dairy farms and, ultimately, crop biomass. Unlike current ethanol production, the technique does not require microbial or chemical treatment to convert
plants into biofuel and thus can be used with a broad blend of ag feedstocks. Further, residual “biochar” left after processing animal/crop wastes can be used as a highnitrogen fertilizer. Tires, medical wastes, timber, and other materials also provide ATCT fodder, and Energy-Inc. is finalizing a deal with Elkhart, Ind., to produce energy and biodiesel fuel from a local landfill. In addition to ATCT, the company is fine-tuning methane recapture technology in England to convert landfill gases into liquid “biomethane” fuel. “Once we’ve established that waste is used for energy, we’ll never put waste in landfills again,” O’Hurley envisions. “We’ll never spray hog manure over acreage again; we’ll never use lagoons. It will be used solely to produce energy.”
U of I Vet College to host open house The University of Illinois College of Veterinary Medicine will have its annual open house from 10 a.m. to 4 p.m. Sunday at several locations in the Vet Med College complex in Urbana.
The event is free and open to the public. The day’s activities include demonstrations, exhibits, and presentations. A variety of activities and exhibits will be located in the Large Animal
Clinic, the Small Animal Clinic, the Surgery and Obstetrics Building, the Basic Sciences Building, and the north lawn. For directions, a schedule, or more information, go online to {vetmed.illinois.edu/openhouse}
Extension offers online crop, pest news University of Illinois Extension crop sciences specialists recently launched the first issue of “The Bulletin” for 2010 with the latest Extension news. This year, the publication will be offered online only. “Our goal for ‘The Bulletin’ is to provide information that will be useful for making crop and pest management decisions,” said Vince Davis, U of I Extension soybean specialist and the publication’s editor. Davis added he encourages readers to provide feedback on articles and information about what they’re encountering in their fields. He is planning 25 issues of The Bulletin this year. Issue 2 will be available April 8 followed by issue 3 on April 22. Following this, it will be published weekly until Aug. 12. To subscribe, go online to {http://ipm.illinois.edu/bullet in/subscribe.html}. Davis recommended new readers sign up for e-mail notifications or use the RSS feed feature. For more information, go to {ipm.illinois.edu/bulletin/} or contact Davis at 217-2447497 or e-mail him at vdavis@illinois.edu.
Milk price slips again The Class III price for milk adjusted to 3.5 percent butterfat for the month of March was $12.78. This is a $1.50 decrease from the previous month and the second month in a row prices have been lower. Production numbers are starting to creep up both in production per cow and numbers of cows being milked. These factors, coupled with the upcoming “spring flush,” have started to pressure prices just as they were beginning to show improvement.
FarmWeek Page 11 Monday, April 5, 2010
FARMING HISTORY
Museum mission: preserve farm history, educate BY DAVE MCCLELLAND FarmWeek
Showing how farm life was when “children walked five miles to school, uphill both ways” is but one mission for the proposed Illinois Rural Heritage Museum in Pinkneyville. The museum, which has purchased existing buildings and four acres of land just north of Perry County Fairgrounds, is expected to open in spring of 2011. The existing buildings formerly housed a mobile home manufacturing company, and plans are to renovate that building and build new structures on the site. “Once the renovation of the museum is finished and we are ready for exhibits, we will fill the building with interesting equipment,” said Charlie Greer, president of the museum board and a long-time antique tractor enthusiast. He also is president of the American Thresherman Association, a separate entity which holds its shows adjacent to the museum site. The museum board has obtained grants and donations for the majority of the nearly $1.1 million cost of Phase I of the project and is looking for donations for the remaining nearly $400,000. Another mission of the museum is to educate the public about farm life from 1850 to 1950, when real horse
This schematic shows how the Illinois Rural Heritage Museum will appear when it opens, tentatively in spring of 2011. The large existing building in the
background once housed a mobile home manufacturing company. The museum will be located on four acres just north of the Perry County Fairgrounds.
power transitioned to steam tractors and then gas- and diesel-powered equipment. “The life lessons exhibited by Illinois farmers, such as honesty, ingenuity, and hard work, will be key features of the museum,” said Greer. Once open, visitors will enter the museum through a barn for horses that is to be erected between two existing buildings. “It will contain tack for horses, old horse-drawn wagons and horse-powered equipment,” said Greer. “It will create the atmosphere and pro-
and early gas tractors also will be featured. The renovation is expected to take about a year. Once open, the museum will employ four part-time and two fulltime employees and will be
April seminars to focus on sheep and goat health University of Illinois Extension will host two seminars on sheep and goat issues Thursday, April 15, in the McDonough Extension office, Macomb, and Thursday, April 22, in the Moultrie-Douglas Extension office, Arthur. Both seminars will be from 7 to 9 p.m. Extension educators will discuss sheep and goat health issues and describe practical year-round health management. Educators also
Clarification A cutline in the March 29 FarmWeek indicated the 60 cents participants paid for a meal served by the Peoria County Farm Bureau represented the farmer’s share of the food dollar. The meal actually would have cost about $10 at a restaurant, and the 60 cents represented the farmer’s share of that amount.
will explore nontraditional market opportunities, such as ethnic markets, for producers. The registration fee is $7 per person or $10 per family or farm. Reservations are due April 8 for the April 15 seminar. Checks should be made payable to U of I Extension and mailed to: McDonough Extension Unit, 3022 W. Jackson, Macomb, IL 61455. For more information, contact Lisa Fulkerson at 309837-3939 or e-mail her at lfulkers@illinois.edu. Reservations are due April 15 for the April 22 seminar. Checks should be made payable to U of I Extension and mailed to: Moultrie-Douglas Extension Unit, 122 S. Walnut St., Arthur, IL 61911. For more information, contact Cheri Burcham at 217-5433755 or e-mail her at cburcham@illinois.edu.
vide a benchmark for measuring the progress to be viewed in later exhibits.” An old-time farmhouse, a one-room school, a general store, and, of course, many pieces of steam equipment
open Thursday through Sunday with an admission fee. More information about the museum is available by emailing irhmuseum@gmail.com or by calling 618-5212245.
FarmWeek Page 12 Monday, April 5, 2010
FarmWeek Page 13 Monday, April 5, 2010
FB IN ACTION
Two trailer loads of animals help educate city youngsters BY ELAINE STONE
Members of the Fulton County Farm Bureau traveled to St. Germaine School in Cook County’s Oak Lawn last week with two trailer loads of animals to set up a barnyard on the parking lot at the school. Over the past two school years, the two first grades and two fourth grades at the school have been adopted by the county Farm Bureau. The board of directors has used “Farmer Stanley,” a two-foot-high cutout that goes home with a different board member every month, as an educational tool. The directors take pictures of Farmer Stanley “helping” them with various activities on the farm. They also take pictures of their families, showing the students how they live, what their spouses and family members do on the farm, and what the farm family does in the community and for fun. The barnyard event at the school allowed students from the entire school (about 330 pre-K through eighth grade) to see animals up close and hear about how farmers care
for them. Farm Bureau members also had the opportunity to visit with teachers and parents about responsible livestock production. “We were able to reach future consumers, as well as a few current consumers. We helped these young minds form accurate, educated opinions about how farmers raise the food that ends up on their lunch tray,” said Fulton County Farm Bureau President Randy Farr. He noted that one parent mentioned the controversial movie Food Inc. “This gave us a perfect opportunity to counter some of the extreme claims made by groups like PETA (People for the Ethical Treatment of Animals), the HSUS (Humane Society of the U.S.), and socalled documentaries like Food Inc.,” Farr said. “These kids and their parents form their opinions based on what they are told. This was our chance to tell the real story.” Elaine Stone is manager of Fulton County Farm Bureau. She can be reached at 309-547-3001.
FROM THE COUNTIES
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UREAU — Bureau, Henry, and Stark County Farm Bureaus, Country Financial, and the Illinois Fire Service Institute will sponsor a training session for grain bin rescue May 1 at the Kewanee Fire Department. The program will involve an eighthour combination of instruction and hands-on farm accident extractions. Cost is $10. Registration deadline is April 15. Call the Bureau County Farm Bureau office at 815875-6468, Stark County Farm Bureau at 309-286-7481 or Henry County Farm Bureau at 309-937-2411 for more information. OOK — The Commodities and Marketing Team will sponsor a Farming on Your Balcony seminar from 9 to 11 a.m. Saturday at the Farm Bureau office. Call the Farm Bureau office at 708354-3276 for reservations or more information. • The Member Relations Team and University of Illinois Extension will sponsor a workshop on preparing wills and trusts and transferring non-titled property from 7 to 9 p.m. Tuesday, April 13, at the Farm Bureau office. Call the Farm Bureau office at 708354-3276 for reservations or
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more information. ANCOCK — The Hancock County Farm Bureau Foundation has three $1,000 scholarships available for students who plan to major in an ag-related course. Applications are available from each high school’s guidance counselor, ag teacher, and principal, as well as the Farm Bureau office. Deadline to return applications to the Farm Bureau office is April 15. Call the Farm Bureau at 217-357-3141 for more information. ERMILION — The Vermilion County Farm Bureau Commodity Challenge games are up and running. This free online interactive commodity trading exercise is designed to help farmers practice their marketing skills in a risk-free environment. The top-scoring members signing up before June 30 are eligible to win cash from the pool donated by sponsors. Call the Farm Bureau office at 217-442-8713 for login 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.
Francisco Martinez feeds hay to a pony to the delight of Grace La Mantia. Both children are fifth grade students at St. Germaine School in Oak Lawn. The pony and several other species of animals were transported to the school by the Fulton County Farm Bureau last week for sharing with the Farm Bureau’s adopted classroom. (Photo by Ken Kashian. More photos are available at Ken Kashian’s photo gallery at {www.ilfb.org}.
FarmWeek Page 14 Monday, April 5, 2010
PROFITABILITY
Springing into an exciting new technology BY SID PARKS
The calendar says spring is here, and the recent weather has everyone feeling it. A little fieldwork, and soon it will be time to get the planters rolling. For some producers, the 2010 planting season means technology purchased over the winter will be Sid Parks used for the first time. One of these is the ability to variably control planting rate through the field. This technology presents an exciting potential. The variable control system provides the ability to read a field prescription map for rate and adjust the planted population accordingly. Given the cost of the seed and other inputs, the potential of improved performance appears to make sense. One caution is to make sure you have accurate field boundaries for basing the recommendation. Older maps, perhaps digitized from imagery or collected with lower-quality GPS receivers, may not meet the needs of the newer system. Waterways and other field irregularities may not match up to the actual field, causing the system to shut off if not
This graphic illustrates the seeding rate variability that can exist within a field. The example is based on soil type and is typical of what a farmer would receive from a GROWMARK crop specialist. The rates shown are thousands of seeds per acre, and the white denotes a farmstead.
programmed properly. Second, while I’m happy to say this technology works quite effectively, the “agronomy” upon which to base these variable recommendations is
BY DANIEL GRANT FarmWeek
Farmers who are concerned they didn’t buy enough crop insurance or those who are worried about weather risk still have options to protect themselves this season. Rob Huston, general manager of AgriVisor, said a number of risk-management tools are available to help protect farmers from adverse weather conditions. AgriVisor, through its
Feeder pig prices reported to USDA*
Weight 10 lbs. 40 lbs. 50 lbs. Receipts
Range Per Head Weighted Ave. Price $35.00-$41.00 $38.54 $69.50-$74.00 $71.83 n/a n/a This Week Last Week 11,056 22,367 *Eastern Corn Belt prices picked up at seller’s farm
Eastern Corn Belt direct hogs (plant delivered) (Prices $ per hundredweight) This week Prev. week $69.63 $66.04 $51.53 $48.87
Change 3.59 2.66
range of Crossover products, is offering rain-delayed planting protection through the use of weather derivatives (a derivative is a contract between two parties in which the value of the contract is linked to the price of another financial instrument or by a specified event or condition). Farmers in this case can purchase an over-the-counter derivative (a contract that is traded directly between two parties without going through an exchange) that pays out if they’re unable to plant their crops in a specified window of time due to a specified event or condition, such as a rain delay. “It’s not crop insurance. There is no claims process,” said Huston, who recently discussed risk-management tools with the Illinois Farm Bureau Profitability Advisory Team.
‘It’s another way to protect their far ms against adverse weather conditions.’ —Rob Huston AgriVisor
“It’s another way to protect their farms against adverse weather conditions.” So how does it work? Farmers, through a product offered by Weatherbill {www.weatherbill.com/plant}, can choose the optimal planting dates on their farm and the level of protection they want to protect that planting window from rain delays. The contract must be purchased at least two weeks prior to planting.
USDA five-state area slaughter cattle price Steers Heifers
This week $96.12 $96.08
optimum yield goal isn’t static and to keep good records of what was done. Every field is a potential test site, and should be considered as an evaluation of the appropriate rates when the yield monitor is used at harvest. Your FS crop specialist is available to help you by making sound agronomic recommendations, including evaluating and implementing new technologies. Contact them for potential FS GREEN PLAN Solutions, On-Farm Discovery guidance before you pull into the field this spring. Sid Parks is GROWMARK’S manager of precision farming. His e-mail address is sparks@growmark.com.
Farmers can protect themselves against weather risk
M A R K E T FA C T S
Carcass Live
lacking much research beyond a simple, “it should work this way.” Should rates be based on actual yield history or a productivity rating? How many
years should be included in the index? How about fertility levels or soil type? Should field landscape or topography matter? Those are some of the questions, and while the equipment answers the how question, the industry doesn’t have a consensus on why. Should lower yielding areas be pushed harder or reduce the rates to save input costs? How comfortable are you really pushing the population in higher-yielding areas? There are many variables to consider, and in my opinion, few people with the credibility or experience to state how it is to be done. I don’t want to discourage the use of technology, but producers must realize the
(Thursday’s price) Prv. week Change $95.19 0.93 $94.96 1.12
CME feeder cattle index — 600-800 Lbs. This is a composite price of feeder cattle transactions in 27 states. (Prices $ per hundredweight) This week Prev. week Change 107.43 106.32 1.11
Lamb prices Confirmed lamb and sheep sales This week 1,587 Last week 1,167 Last year 936 Wooled Slaughter Lambs: Choice and prime 2-3: 90-110 lb., $123. Good and choice 1-2: 30-60 lbs., $175-$180; 60-90 lbs., $158-$169. Slaughter Ewes: Utility and good 1-3: $45-$48. Cull and utility 1-2: $32-$40.
Export inspections (Million bushels)
Week ending Soybeans Wheat Corn 03-25-10 29.3 14.8 37.9 03-18-10 32.6 20.0 45.1 Last year 26.4 15.8 37.6 Season total 1236.2 688.2 967.3 Previous season total 926.8 843.0 926.0 USDA projected total 1420 825 1900 Crop marketing year began June 1 for wheat and Sept. 1 for corn and soybeans.
Rob Huston, general manager of AgriVisor, discusses historical volatility in the corn and wheat markets — illustrated by the chart — during a presentation last month at the CME Group exhibit at the Commodity Classic. AgriVisor has a variety of risk-management tools available to help farmers protect their profit margins. (Photo by Daniel Grant)
Then, if they’re unable to plant during the specified time period due to rain, the contract pays out based on the level of coverage. For instance, Huston provided one example to FarmWeek in which an investment of $8.68 per acre would provide $50 per acre in coverage for rain/planting protection. A farmer could lower his or her premium to $5.69 per acre by choosing $30-per-acre coverage. “Last year, (the investment of $8.68 per acre) would’ve paid out $33 per acre,” Huston said. Farmers also can purchase contracts that protect against low heat units, drought/corn pollination heat protection, and fall freeze protection. “These tools have been around for several years but just recently were introduced to the ag community,” Huston said. “I’ve heard some people say it’s like gambling, but I look at it as a good supplement to crop insurance.” AgriVisor also offers contracts that provide price protection for crops and inputs. “With Crossover solutions we can guarantee a minimum (grain) price with upside potential for about the cost of a hedge-toarrive” contract, Huston said. The purpose of the various risk-management products offered by AgriVisor is to protect profit margins, Huston added. For more information, contact AgriVisor at 1-800676-5799 or visit its website {www.agrivisor.com}.
FarmWeek Page 15 Monday, April 5, 2010
PROFITABILITY Corn Strategy
C A S H S T R AT E G I S T
Grain stocks surprise We commented at different times this winter that we felt the March USDA grain stocks report was going to be as important as, if not more so than, the prospective plantings report. We were not disappointed. Still, we were not expecting to see the extremely negative numbers for corn and soybeans USDA reported. The discrepancy between calculated and actual soybean stocks on Dec. 1, hinted the numbers might come in a little “tight.” For corn, anecdotal indications that farmer-stored inventories might have been overestimated and the lowerquality/higher-demand implications did not suggest a March 1 corn stocks close to what the government reported. The corn stocks number implied feed/residual usage in the quarter just completed was 10 percent less than it was last year. That’s a huge swing from the implied fall feed/residual number that was just above last year. Hog slaughter was down, but cattle and poultry slaughter were slightly higher. Distillers grain supplies are growing and making increasing inroads in feed rations. On the other hand, we had one of the coldest winters on record. Clearly, the corn numbers don’t necessarily “add up,” but
Basis charts
one cannot ignore the fact that we’ve now had two consecutive stocks reports indicate the supply is out there. We could see some adjustments to numbers on subsequent reports, especially the “on farm” inventories, to make the stocks numbers fit the overall structure better. But still, one cannot make the fact go away that supplies are ample, enough to even affect new-crop corn prices. The 190-million-bushel “miss” is the equivalent of finding 2 bushels per acre for the new crop, or finding a little over 1 million acres of production at the 160-bushel trend yield. The implication of the stocks number is that ending stocks could approach 2 billion bushels. We don’t expect USDA to forecast that on the April 9 supply/demand report, but we expect to see something near 1.9 billion. With soybeans, though, clearly the numbers still do not fit unless the Dec. 1 stocks were underestimated. When that report was released in January, we couldn’t account for 90 million bushels of soybeans. At the time, we felt 40 million to 50 million of them might have been missed because they were “in transit” to accommodate the huge export program. The March 1 stocks give the impression the crop was undercounted, but that would make the differential between the numbers on the Dec. 1 stocks even larger. We do know that exports should be revised slightly upward on the April 9 supply/demand report. The crush forecast may not be changed, but it’s not likely to be increased. At a minimum, the stocks numbers take away the possibility of ending stocks dropping below 150 million bushels and maybe not even below 170 million bushels. For now, though, the industry will go forward with the idea that there won’t be any extraordinary tightness. And with South American supplies flowing into the world pipeline, soybean prices, along with corn, will have a downward bias as long as weather cooperates. AgriVisor endorses crop insurance by
AgriVisor LLC 1701 N. Towanda Avenue PO Box 2500 Bloomington IL 61702-2901 309-557-3147 AgriVisor LLC is not liable for any damages which anyone may sustain by reason of inaccuracy or inadequacy of information provided herein, any error of judgment involving any projections, recommendations, or advice or any other act of omission.
Policies issued by COUNTRY Mutual Insurance Company®, Bloomington, Illinois AgriVisor Hotline Number
309-557-2274
Cents per bu.
2009 crop: The USDA stocks report last week reinforced the contraseasonal trend down. If planting goes reasonably well, rallies will be muted. When May futures broke below $3.50, you should have boosted sales to 60 percent. Use rallies above $3.65 on July futures to increase sales to 75 percent. Check the Cash Strategist Hotline occasionally; we could wrap up sales in the next two to three weeks. 2010 crop: Use a rally to $3.89 on December futures to get new-crop sales to 40 percent. Check the Cash Strategist Hotline frequently as we’d like to be 50 percent priced by early May. Fundamentals: T he corn planting forecast at 88.798 million acres was a little less than expected. However, March 1 corn stocks were significantly more negative than the plantings were positive. Cheap wheat and low quality continue to be a drag on export interest as well.
Soybean Strategy 2009 crop: The quarterly soybean stocks added to the negatives of the outside market, capping upside potential. If you didn’t make the sale ahead of the report, use a rally to $9.60 on July to make catchup sales and to increase sales to 75 percent. We may wrap up old-crop sales quickly; check the Cash Strategist Hotline frequently. 2010 crop: A 20 percent sale was triggered ahead of the reports. Use rallies above $9.25 to get sales up to 30 percent. Plan to have 50 percent priced by early May. Fundamentals: The negative quarterly stocks number ensured ending stocks won’t get tight this year. The Argentine strike was settled, allowing soybeans and products from there to star t entering the world pipeline. If planting goes well, the trade will start to envision more than adequate supplies for next year. Fail-safe: Get old- and new-crop sales made if July futures drop below $9.25.
Wheat Strategy 2009 crop: The downtrend in wheat was reinforced when Chicago May futures put in a fresh contract low. That being the case, prices likely will drift lower through spring. Prices took initial support at $4.55. Secondary levels come in at $4.29. We are not recommending selling weakness, but would use a rally to $4.70 on the May contract to wrap up sales. 2010 crop: Use a rally t o $ 4 . 9 0 o n C h i c a g o Ju l y
futures to make an initial 25 p e r c e n t s a l e. C h e ck C a s h Strategist Hotline daily as this target could change at any time. Fundamentals: None of the wheat numbers on the USDA reports was a big surprise. Still, wheat plantings at 53.9 million acres were at the upper end of expectations. Potential for larger plantings and larger-than-expected output next year only adds to the downward drag because of large U.S. and world old-crop supplies.
FarmWeek Page 16 Monday, April 5, 2010
PERSPECTIVES
Challenging times ahead for pesticide uses As a representative of the agricultural input suppliers, I see vividly the serious challenges facing the crop protection industry. Let me tell you what is going on in our federal government, and then ask you to take a proactive role in the stewardship of pesticide use. Did you know that agrichemicals contribute $450.5 million dollars of value to Illinois crops every year by protecting them from damaging insects, weeds, and fungal diseases? I’ll break it down for you. Protection provided by herbicides contributes $1.8 million; fungicides, $23.5 million; and insecticides, a substantial $425.2 million every year, to Illinois grain, fruit, and vegetable crops, according to the Crop Life Foundation, Crop Protection Research Institute. As the value of the crops increase, the protection afforded by pesticides becomes even more valuable. JEAN But there’s uncertainty right now for the crop PAYNE protection industry, for commercial applicators and private applicators alike. As early as April 2011 — next spring! — the federal government will enact regulations requiring applicators of pesticides to obtain a National Pollutant Discharge Elimination System (NPDES) permit. The U.S. Environmental Protection Agency (EPA) intends for the permit to apply initially to applicators who apply pesticides directly to water. This includes applicators who treat water bodies for mosquito larvae and aquatic weeds as well as widespread aerial application to control outbreaks, such as those of gypsy moths. Agriculture may be next. The agrichemical industry expects within several years that the NPDES requirement will expand as a result of activist lawsuits to include agricultural applicators who apply pesticides near water bodies, streams, ditches, or any tributary that could lead to a water of the United States. As is the case with federal regulations, once rules get a foothold, they flourish in size and scope and are almost impossible to undo. Annual-use reporting also is a requirement of the NPDES permit. Applicators with permits will have to report to EPA where, when, and what pesticides they applied. This information likely will become part of the “right to know” laws that are always a hotbed for frivolous lawsuits. So what do we do? Only an act of Congress can change the outcome. This all began when a handful of judges in an Ohio fed-
Proposed legislation would save many jobs
eral court ruled in favor of the activist groups that filed this case. The judges ruled that pesticide application is a “point source” and subject to regulation under the Clean Water Act. Despite appeals by American Farm Bureau Federation, the crop protection industry, and state departments of agriculture, the U.S. Supreme Court declined to review the case. Will Congress intervene before the 2011 effective date? Unfortunately, it’s more likely that demand for mosquito repellant will increase. At the state level, the scrutiny on the application of agricultural pesticides is equally serious. The Illinois General Assembly held a special Senate Agriculture and Conservation Committee hearing on pesticide drift last September. Even though 2009 saw fewer pesticide misuse claims and penalties than previous years, the perception among some people is that pesticide use and drift are growing problems. We have successfully argued the facts — pesticide use is down significantly thanks to biotechnology, and GPS and computerized-flow systems facilitate more precise application. Facts are facts, but we all know that it is how people perceive agrichemical use that drives policy and regulation. And so I make this request of all commercial and private applicators as you head out this season to apply pre- and post-emergence products. Please take extra care to assure the products you apply go only where you intend for them to go. We must respect the rights and reasonable expectations of homeowners, specialty growers, organic farmers, and operators of nurseries and vineyards to not incur damage from drift. You have strong associations representing agriculture and defending the necessary and judicious use of agrichemicals; however, the best defense against attacks on pesticide use is the patience and care you take to ensure on-target application. Jean Payne is the president of the Illinois Fertilizer and Chemical Association Inc. Her e-mail address is jeanp@ifca.com.
Why is America fat? Art, science offer clues A recent effort by scholars to uncover the origins of America’s obesity problem turned up some interesting findings. Their research, while unorthodox, yet highly entertaining, TRACY examined 52 TAYLOR GRONDINE artists’ paintings of The Last Supper from the year 1,000 A.D. to the year 2,000 A.D. The results? Portion size has been increasing for 1,000 years. The researchers argue that enlarged portions are not a recent phenomenon, as critics suggest. Instead, they say it’s been a trend for the past millennium. Looking at the 52 paintings of The Last Supper, the meal entrees gradually grew by about 70 percent and the bread by 23 percent. Furthermore, the size
of the apostles’ plates increased by nearly 66 percent. While some critics blame modern farming and the advent of takeout food in the last 40 years for America’s fat problem, the authors instead suggest it’s a natural consequence of “dramatic socio-historic increases in the production, availability, safety, abundance, and affordability of food” that started more than 1,000 years ago. Yet, why now is obesity becoming such a prominent issue socially, commercially, and even politically? Everywhere you look, attention is being drawn to America’s eating habits. First Lady Michelle Obama recently launched a campaign urging children to eat healthy and get moving. Celebrity chef Jamie Oliver, whose hard-line diligence paid off in reforming the United Kingdom’s school lunch program, has now set his sights on America’s students.
LETTER TO THE EDITOR
One can argue that food portions have grown significantly over the last 20 years. The super-size trend continues in everything from bagels to burgers to pasta dishes to desserts. What used to be considered an extra-large soda is now deemed a medium. Unfortunately, America’s waistbands have reacted accord ingly. Approximately 65 percent of U.S. adults are overweight or obese. It’s not just food portions that have increased. The size of plates, bowls and cups have, as well. In the early 1990s, the standard size of a dinner plate increased from 10 to 12 inches. Correlating studies find that the larger the container, the more people consume, whether they are hungry or not. So, what is the right portion size? Think of it this way. Your hamburger should be the size of a deck of cards, a slice of bread the size of a cassette tape, a baked potato the size of
a computer mouse, and a portion of pasta should be the size of a tennis ball. But portion size is not the only factor playing a role in our weight problem. A sedentary lifestyle, coupled with stress — arguably America’s No. 1 health problem — and personal food choices are all culprits. Unfortunately, we don’t have statistics reaching back to the date of the original Last Supper to correlate the affordability and safety of our food supply with growing portion size. But that would be too black and white anyway. America’s obesity problem can’t be pinpointed to one industry or one lifestyle habit. Like Leonardo da Vinci’s brilliant masterpiece, it has many layers and can’t be simplified in one brushstroke. It requires thorough examination. Tracy Taylor Grondine is director of media relations for the American Farm Bureau Federation. Her email address is tracyg@fb.org.
Editor: There is a bill that may be considered in Springfield that, if passed, would help save thousands of agribusiness jobs in Illinois. As a grain farmer, horse breeder and trainer, and a member of the Illinois Harness Horseman’s Association and the Illinois Farm Bureau, I support the proposed legislation and the revenue it would generate for the horse industry in Illinois. At stake is the livelihood of veterinarians, hay farmers, blacksmiths, equipment and seed dealers, trainers, and breeders — the list goes on. And all of them — more than 30,000 — benefit from a robust horse industry. Currently, Illinois is losing horses, breeding programs, and trainers to other states that provide more lucrative racing incentives because they allow video gaming at their racetracks. That means our state suffers countless millions in lost tax revenue. Harness racing, a longtime staple of county and state fairs, is threatened with extinction. Already, Illinois has lost the prestigious honor of hosting the World Trotting Derby at the Du Quoin State Fair, and other losses are on the horizon. Purses, the backbone of racing, pale in comparison to other states, and breeders, trainers, and drivers are leaving Illinois in droves. Along with them, go thousands of crucial agricultural jobs. The proposal provides a way to raise purse values and put Illinois back in competition as one of the oldest and strongest horse states in the union. The bill essentially takes slot machines from municipalities that have opted out of the video poker capital program and puts them in more suitable venues at racetracks where gaming has existed for more than 100 years. Men and women are fighting for their agricultural jobs. They are fighting to compete fairly with other states that have an advantage over the Illinois horse industry. Our goal is to save jobs. It is an effective and easy solution. MICHAEL KNICLEY, Newton