CALIFORNIA FARMERS are attempting to get a clarification of what Proposition 2 in that state will mean to them. .........................2
THE USDA ACREAGE report released last week had some stunning figures. It put soybean acres at 77.483 million acres, a record. .........7
A PORK ANALY ST says it may take a 10 percent reduction in the sow herd before profits can return to the hog industry. ..........14
Monday, July 6, 2009
Two sections Volume 37, No. 27
A new look for FarmWeek When Congress approved the wording of the Declaration of Independence on July 4, 1776, the founding fathers set in motion the beginnings of a new, sovereign nation whose 233rd birthday we celebrated this past weekend. It seems a fitting time for us to launch something that if not exactly new is at least different — the look of FarmWeek. FarmWeek, which had its beginnings on June 10, 1974, has gone through a few updates over the years, but has had the same basic format and appearance since 1998. Some changes you see today are subtle: A somewhat larger text type and a few more graphics. Some are more noticeable: There are now two profitability pages — pages 14 and 15 of this issue — and the Perspectives page is now on the final page of the publication. I hope you find the publication a little easier to read and somewhat more pleasing to the eye. Either way, I would appreciate hearing from you. My e-mail address is dmcclelland@ilfb.org. — Dave McClelland, editor of FarmWeek.
WELL ABOVE THE KNEES
While many Illinois farmers were dealing with corn that was less than ankle high when July 4 arrived, some were far more fortunate. FarmWeek Cropwatcher and Carroll County dairyman Leroy Getz last Friday searched for the tassel in corn measuring 94 inches tall in a 30-acre field in rural Mt. Carroll. The field, on Getz’ cousin’s farm, was planted April 24, although most farmers started planting corn the first part of May. An update on the USDA crop acreage estimate is on page 7. (Photo by Ken Kashian)
Does climate plan enhance or erode bottom line? BY MARTIN ROSS FarmWeek
Despite projections of soaring energy and input costs under House-approved “cap-andtrade” measures, U.S. Ag Secretary Tom Vilsack sees domestic agriculture adapting and even flourishing under a new climate management agenda. Speaking before the Chicago Council on Global Affairs last
week, Vilsack hailed passage of the measure, which would cap nationwide greenhouse gas (GHG) emissions, even while acknowledging producer concerns about “exactly how this bill’s going to impact the way we do business.” He called on the Senate to pass
At a glance Sweeping climate ‘cap-and-
Periodicals: Time Valued
trade’ legislation has cleared the House. Senate Majority Leader Harry Reid hopes for full Senate debate by fall.
it and the president to sign it. The House Energy and Commerce plan, which includes compromise measures that exempt agriculture from GHG caps and recognize farm and forestry contributions to emissions reductions, cleared the House 219-212. Under the plan, USDA would determine ag practices eligible to earn emissions “offsets” that could be sold to capped industries. The American Farm Bureau Federation (AFBF) nonetheless was disappointed by House pas-
sage and is committed to defeating the overall measure in the Senate. Rick Krause, AFBF senior director of congressional relations, sees the tight House vote as a challenge for supporters, who must garner 60 Senate votes to head off a potentially fatal Republican filibuster. Vilsack stressed the need to “think differently” amid a rapidly aging producer population. He noted the average U.S. farmer’s age has risen from 55 to 57 over the past five years, while it has been reported nearly 50 percent of producers today must work 200 days a year off the farm “in order to be able to keep the farm.” “We’re going to see further consolidation on the large farm side, and we’ll see more of these small farm operations, but you won’t see anything in the middle,” he predicted. “What we want for rural America, for all of America, is to have a healthy percentage in all of those three categories. “I think this climate change bill and the complementary energy aspects of it enhance bottom line opportunities for mid-sized and smaller operations.”
FarmWeek on the web: FarmWeekNow.com
Health care reform is expected to take priority in the Senate, and Krause believes many senators may be reluctant immediately to tackle another controversial, costly bill. Without further revisions, Illinois Farm Bureau President Philip Nelson warns the climate change bill could cost farmers $5 billion per year in increased electricity, fuel, and fertilizer costs starting in 2020 and would “reduce farm income, damage our ability to compete, and create an energy deficit that we will not be able to simply wish away.” Energy and Commerce member John Shimkus, a Collinsville Republican, warns the bill could boost gas prices by 77 cents per gallon and hurt air travel and shipping industries. Amid estimates that annual personal income could drop $471 million in 2012 in his district alone, he questioned measures that would fuel “higher unemployment and huge costs to consumers.” The U.S. Environmental Protection Agency predicts the bill would encourage development of “clean” coal, biomassfired, power plants which
sequester carbon dioxide emissions underground, as well as emissions-free nuclear power. Nelson argued “we don’t live in that world,” and if coal and nuclear critics spur a push toward natural gas to generate electricity, that would restrict supplies for fertilizer and grain drying. During a recent Agribusiness Roundtable in Bloomington, IFB Vice President Rich Guebert Jr. suggested a shift to gasgenerated power could double or triple anhydrous prices. If “huge problems” with fertilizer costs or availability appear imminent under GHG regulation, “we will have to make some adjustments,” Vilsack assured. However, he believes ag carbon offset opportunities will “equal or exceed those input costs,” providing producers a “substantially greater” source of green income than existing ag conservation programs. He anticipates a “dynamic energy” being applied to agronomic and nutrient strategies under a climate-driven regime: See Climate, page 4
Illinois Farm Bureau®on the web: www.ilfb.org
FarmWeek Page 2 Monday, July 6, 2009
Quick Takes ALL IN THE (AG) FAMILY — Ag Secretary Tom Vilsack last week defended federal support for “all types of farms,” arguing “I love ’em all.” At a meeting in Chicago, Vilsack took issue with a suggestion that USDA does not adequately support “locally grown food.” The new USDA ag census identified 108,000 new farming operations with annual sales of less than $10,000 — according to Vilsack, “a great message” for “communitysupported agriculture.” “You’re still going to need production agriculture,” he emphasized. “In reality, the top 5 percent of farms in this country produce 75 percent of what we consume in this country. That’s not going to change overnight. “We don’t want to discourage any aspect of agriculture, in my opinion. It’s like asking me which of my sons I love the most. I love ’em all. I want everybody to succeed.” MICHIGAN SUPPORTS ANIMAL CARE BILLS — The Michigan Farm Bureau Federation is supporting proposed state legislation which would require producers to adopt science-based animal care standards. The standards are based on existing ones that are accepted nationally by food companies and retailers. The two bills establish the Michigan Department of Agriculture and the Michigan Agriculture Commission as the sole authorities to regulate livestock health and welfare, require standards to be implemented by 2020, and create an animal care advisory council. The council would be comprised of farmers, veterinarians, and individuals representing an animal welfare agency, animal welfare research, restaurants, and the state’s food processing and retail food industries. It would make recommendations and changes to existing standards. MIDWEST HIGH-SPEED RAIL ADVANCING — Illinois and Missouri are pledging to work together for part of the $8 billion in federal stimulus funding available for high-speed rail. States must preapply for funding by Friday and submit final applications by Aug. 24. A new study commissioned by a non-profit high-speed rail group recommends a high-speed rail corridor between Chicago and St. Louis that would pass through Champaign, Decatur, and Springfield, but bypass Normal and other current stops on the Amtrak route. The study was released last week. Eight Midwestern states, including Missouri and Illinois, are cooperating for a high-speed rail network that would have Chicago as a hub and link 12 metropolitan areas within 400 miles. In its study, the Midwest High Speed Rail Association is recommending a corridor that would allow trains to travel between Chicago and St. Louis at up to 220 mph, more than 100 mph faster than the plans recommended by the eight Midwestern governors. The group’s proposal calls for upgrading tracks and bridges and electrifying the line.
(ISSN0197-6680) Vol. 37 No. 27
July 6, 2009
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.
Address subscription and advertising questions to FarmWeek, P.O. Box 2901, Bloomington, IL 61702-2901. Periodicals postage paid at Bloomington, Illinois, and at an additional mailing office. POSTMASTER: Send change of address notices on Form 3579 to FarmWeek, P.O. Box 2901, Bloomington, IL 61702-2901. Farm Bureau members should send change of addresses to their local county Farm Bureau. © 2009 Illinois Agricultural Association
GOVERNMENT
California farmers seek clarification of mandates BY DANIEL GRANT FarmWeek
Illinois farmers who want to see an example of what can happen when new mandates are placed on existing ag production practices should review the situation unfolding out west. California farmers seem to be walking on eggshells as they attempt to get a clarification of the requirements of Proposition 2, a ballot measure Californians approved last November. The initiative requires that all farm animals “for all or the majority of any day” not be confined in a manner that prevents them from turning around or extending their limbs without touching another animal or enclosure. Prop 2, which appears to target cage systems, becomes effective in 2015. The problem, according to the Association of California Egg Farmers (ACEF), is the mandates aren’t specific about space requirements. Furthermore, the mandates don’t specifically ban the use
of cages to house egg-laying hens, and they could be applied to current cage and cage-free systems because the natural behavior of poultry is to seek social contact with other poultry, according to a commentary in Feedstuffs newspaper.
‘The language doesn’t state what type of housing would be compliant.’ — Ria de Grassi California Farm Bureau livestock director
“The language doesn’t state what type of housing would be compliant,” said Ria de Grassi, livestock director for the California Farm Bureau Federation. “Egg producers (as a result) don’t know what to expect or what 2015 will look like.” ACEF has called on the
California state legislature to enact clear standards for housing egg-laying hens. “Our farmers need clearcut housing standards to determine how they can comply with the law and to continue to humanely produce fresh, local, and affordable eggs in California under Proposition 2,” said Debbie Murdock, executive director of ACEF. Otherwise, an industry that produces 4.9 billion eggs worth $300 million annually could be at stake in California. Some critics of Prop 2 argue that if the mandates outlaw cage and cage-free production systems, there will be little or no egg production allowed in California. Overall, de Grassi said Prop 2 and other efforts to eliminate animal agriculture in California have created an “elevated awareness” among farmers that they may be a target of such future campaigns. She will discuss Prop 2 with Illinois farmers July 29 at the IFB commodities conference in Springfield.
TEACHING THE TEACHERS
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
Richard Verdery Classified sales coordinator
Nan Fannin Director of News and Communications
Dennis Vercler Advertising Sales Representatives
Hurst and Associates, Inc. P.O. Box 6011, Vernon Hills, IL 60061 1-800-397-8908 (advertising inquiries only) Gary White - Northern Illinois Doug McDaniel - Southern Illinois Editorial phone number: 309-557-2239 Classified advertising: 309-557-3155 Display advertising: 1-800-676-2353
Nicky Geisler, right, agriculture literacy coordinator for Brown County, shows Paula Marques, sixth grade teacher from Salt Lake City, Utah, how to play the game, “Growing Your Name,” at the 2009 National Agriculture in the Classroom (AITC) Conference late last month in St Louis. In the exercise, students spell out their names in glue, then plant seeds in the glue so the growing plants form their names. More than 580 participants from 43 states and three Canadian provinces participated in four days of exploring agriculture literacy and agribusiness programs. The national conference was hosted by the AITC programs in Illinois and Missouri. Geisler was one of 40 presenters who helped participants learn new ways to encourage students to learn more about agriculture. (Photo by Cyndi Cook)
FarmWeek Page 3 Monday, July 6, 2009
GOVERNMENT
New fiscal year starts without a budget BY KAY SHIPMAN FarmWeek
State government is operating without a budget, and legislators aren’t scheduled to return until July 14. “This is a fight worth fighting,” Gov. Pat Quinn told reporters shortly after he vetoed SB1197, one of the budget bills. Quinn offered little information on what is next for state government beyond his plans to continue working
FarmWeekNow.com Listen to Speaker Madigan’s reaction to the governor’s veto of the state budget at FarmWeekNow.com.
with the General Assembly for a “balanced” budget. As for anyone owed money by the state, “We can’t pay that bill until we get a budget,” the governor said. House Speaker Michael Madigan told reporters he recommends the governor not shut down state government until a budget is approved.
‘I’m confident we’ll get a budget that is balanced and decent.’ — Gov. Pat Quinn
When lawmakers return to Springfield, they will consider the governor’s veto and any other action he has taken on bills, Madigan said. The speaker added he will vote to override the veto. A vote of 71 House members and 36 senators is needed to override the veto. The governor and speaker offered different views on the budget passed by the legislature. Quinn described the bill he vetoed as targeting social services and said it “fails to meet the basic needs of the state” by cutting funding for those
services in half. Madigan countered the governor misrepresented the budget and said legislators had approved spending authority “for the amount of money expected to be available to be spent.” Revenue is projected to be down 25 percent, and that estimate has been on target, Madigan noted. “The governor is complaining the budget is not balanced. The governor wants more money to spend,” the speaker said. “We (legislators) have done several things to make more money available. All those things were
done at the request of the governor.” Madigan’s list of steps to provide additional money included sweeps of funds collected for special purposes and refinancing of state debt. He said the budget that was vetoed covered spending for grant programs for all types of state services — not just social services. “There’s enough funding to manage the government under the spending authority appropriated,” Madigan said. The governor stressed he plans to continue working with lawmakers. “I’m confident we’ll get a budget that is balanced and decent,” he told reporters. The speaker said he plans to continue working with the governor. Asked about the potential for an income tax increase to pass in the General Assembly, Madigan answered, “Either they (the Quinn administration) persuade 71 (members) in the House and 36 (members) in the Senate to support it, or they don’t.”
DEPICTING FARMING OF YORE
Eighteen murals depicting various scenes or people, including this one commemorating the Central States Threshermen’s Reunion, now adorn the sides of Pontiac businesses after artists plied their trade as part of the city’s recent Heritage Days event. Mural painters shown here are, from left, Michael Clark, Aledo; Scott Lindley, Mt. Pulaski; and Sam Staffon, Mackinaw City, Mich. The mural, named “A Tradition of Farming in Livingston County,” was begun during the Heritage Days event and completed last week (see inset at lower left for the finished product). The Threshermen’s Reunion will be Sept. 3-7 this year in Pontiac. All the murals can be seen at {http://pontiacwalldogs.wordpress.com/the-murals/}. (Photos by Ken Kashian)
Easter named interim provost, ACES seeks interim dean Robert Easter, dean of the College of Agricultural, Consumer, and Environmental Sciences (ACES) at the University of Illinois, will serve the U of I as interim provost if the U of I Board of Trustees approves his appointment at its July 22 meeting. Easter told FarmWeek he does not intend to apply for the permanent provost position. In the meantime, Easter said he is working Robert Easter with the ACES faculty and college supporters about naming someone to serve as interim ACES dean. If approved as interim provost, Easter will officially assume the campuswide post on Aug. 16. “I look forward to my new role,” Easter recently told members of the Illinois Agricultural Legislative Roundtable. A national search is under way for a permanent provost, and Easter speculated a new provost might be named by January. Easter joined the U of I faculty as professor of swine nutrition and management in 1976 and has served as ACES dean since July 2002.
FarmWeek Page 4 Monday, July 6, 2009
AG & THE PLANET
USDA focuses on helping world produce more BY MARTIN ROSS FarmWeek
USDA is launching a sweeping more cost-conscious approach to global food security aimed at equipping the world to feed itself, according to Ag Secretary Tom Vilsack. Last week in Chicago, Vilsack outlined “a more comprehensive, holistic” U.S. strategy for shifting from a largely food aid-driven global agenda to efforts at improving ag productivity in lower-income regions. With U.S. technology and support, developing country farmers will be “in a better position to help their own people,” he said. The program also seeks to improve foreign infrastructure (Vilsack linked transportation/distribution issues with food shortages that can lead to sociopolitical unrest) and proper storage, refrigeration, handling, and preparation of locally produced food. “If we can help them be more productive, they might also be able to generate sur-
plus product, which in turn could be used for trade to create wealth opportunities,” Vilsack said. That could create export potential for U.S. farmers, he suggested. USDA unveiled principles of the program, which will be spearheaded by a team that includes U.S. Agency for International Development and Gates Foundation representatives, during recent discussions with Afghani and Pakistani ag ministers. Vilsack is to meet with ministers of 28 countries this summer. He outlined seven “keys” crucial to the initiative: • Transferring of U.S. technology and productivity practices to needy regions. According to Vilsack, one major challenge lies in adapting “agriculture as we see it” — large production tracts — to the smaller subsistence farms of sub-Saharan Africa and other regions. • Developing post-harvest infrastructure. “You can be as productive as you possibly can be, but if you have no place to
store what you’ve grown, much of it’s wasted,” Vilsack said. • Preserving natural resources. Vilsack noted “new” technologies can “tax” delicate soils or water supplies. “Water is a serious issue in those countries.” • Expanding local knowledge and training. • Creating solid agricultural “trade flows.” That includes both market development and development of regulations that “make sure trade happens.” • Helping assure “good governance and reform” to ensure producers and the market can function. • Ensuring policy support for women and children around the world. Women today constitute “the vast majority of those who are farming and providing for their families,” Vilsack related. Underlying the new strategy is a focus on making better use of ever-tighter international aid funds. “We have to be smarter with the dollars we use,” Vilsack acknowledged.
Vilsack: WTO partners must make equal moves U.S. Ag Secretary Tom Vilsack last week refuted suggestions that the U.S. and Europe are alone in what one Chicago questioner characterized as protectionist trade “sins.” Vilsack stressed developing countries that challenge U.S. farm subsidies must respond in kind to any American concessions offered in World Trade Organization (WTO) Doha Round talks. Chicago Council on Global Affairs President Marshall Bouton noted there are “real tensions between our domestic agricultural interests and activities and those internationally.” The U.S. is perceived as “highly protective” — a “sin” it shares with the European Union and Japan, Bouton said during a council outlook on global agriculture. Vilsack refuted Bouton’s claim that federal “biofuels mandates” have contributed significantly to global food prices (see page 7), and noted concerns about ongoing
Climate Continued from page 1 “We’re going to learn a lot more about fertilizer in the next 10 years.” Seed technologies should boost yields while reducing input needs, and new livestock feeds should generate less digestive methane for herds to emit, he said. “This is a really comprehensive bill — it really has lots of challenges and lots of unanswered questions, and maybe we shouldn’t do it,” Vilsack admitted. “What we do know is that if we do nothing, the problem’s not going to go away.”
trade practices and protections across the globe. “The United States is prepared to be cooperative in (Doha) discussions, but the hope is that in exchange for very specific steps the United States has indicated a potential willingness to take, there’s as much specificity and as much detail from developing nations as they expect from us in terms of market access,” Vilsack said. This week in Rome, leaders of the G8 — which includes the U.S., Canada, France, Japan, and other key industrialized nations — are expected to push for renewed Doha talks. Beyond Doha issues, Vilsack targeted continuing non-tariff barriers to U.S. goods often based on questionable food safety or health concerns. China and Russia banned U.S. pork from their markets amid an outbreak of the H1N1 virus — referred to by some as “swine flu.” Russia has insisted on inspecting U.S. slaughterhouses prior to importing product. Amid reports of public fears about pork consumption in the government-controlled China Daily newspaper, the H1N1 issue has further complicated debate over China’s refusal to buy pigs treated with ractopamine, a feed additive designed to keeps pigs lean. “I would make a strong case today that our Chinese and Russian friends, particularly as it relates to pork with H1N1, have created some problems that are in a sense designed to protect their own markets as opposed to being open to science-based information about what the nature of this flu was and the fact that it’s not transmitted through the consumption of food,” Vilsack said. — Martin Ross
U.S. Ag Secretary Tom Vilsack discusses global food needs with Adele Simmons, vice president of Chicago Metropolis 2020, during last week’s Chicago Council on Global Affairs forum on global sustainability and food security. Simmons served on President Jimmy Carter’s Commission on World Hunger in the late 1970s. (Photo by Martin Ross)
Acting locally: USDA explores ‘food desert’ They’re called “food deserts” — large patches in the urban landscape devoid of grocers, supermarkets, and, often, sound nutrition for neighborhood residents. U.S. Ag Secretary Tom Vilsack suggests USDA literally can help green up these metropolitan deserts and, hopefully, provide an oasis for lower-income consumers and regional producers alike. USDA has asked Walter FarmWeekNow.com Robb, co-president of the Whole Foods chain, to study Listen to Secretary Vilsack’s comments about local foods how grocers might be able to at FarmWeekNow.com. respond to the challenge of meeting food and nutritional needs within food deserts served largely by convenience stores and fast-food restaurants. Vilsack sees urban nutrition as a health care/economic development issue and emphasizes “the moral responsibility we have to feed our children.” Toward that end, he is encouraging “more local production and more local consumption,” through cooperation with state ag departments, non-profit groups, resources for food banks (including recent federal stimulus funds) and farm market development. Just as Chicago farmers’ markets have given Illinois growers a new market outlet, especially among upscale consumers, introducing full-service markets into poorer neighborhoods could boost per capita consumption of fruits and vegetables, potentially including locally grown produce. “It doesn’t have to be fresh fruit and vegetables — it can be frozen fruits and vegetables or canned fruits and vegetables, as well,” Vilsack told FarmWeek during a Chicago visit last week. “The reality is that when you go into a convenience store, you have chip and dip and pretzel options, but you don’t have frozen food options or canned food options or fresh food options, for that matter.” Vilsack also was in Chicago to help launch the administration’s “United We Serve” initiative, serving lunch to children at St. Agatha’s Family Empowerment facility. The initiative emphasizes volunteerism and community service, and he argued “there is no better place to start than working toward the goal of ending childhood hunger.” Vilsack hoped the program would encourage greater participation in USDA’s Summer Food Service Program, which is designed to ensure that children have access to healthy, nutritious food when school is out. Meanwhile, the ag secretary stressed the need for continued local education and outreach, noting “young people are disconnected from where our food is produced.” Equipped with “a small pack of seeds and some sweat equity,” community organizations could help establish gardens in every school throughout their district, he suggested. — Martin Ross
FarmWeek Page 5 Monday, July 6, 2009
RISK MANAGEMENT
Crop report may make ACRE more attractive BY MARTIN ROSS FarmWeek
As of last week, the ACRE decision may be easier for farm fence-riders. But ag analysts nonetheless urge producers to run the numbers and ask the right question. University of Illinois ag economist Darrel Good suggests USDA’s latest acreage report could spur greater interest in the ACRE (average crop revenue election) program. USDA projections suggest 2009-10 marketing year corn prices may be significantly lower than previously believed — possibly 20 to 30 cents per
bushel off original estimates and lower than the previous two-year national average price upon which ACRE revenue guarantees are based, Good said. According to the economist, that may put ACRE “in a much more favorable light,” especially with Illinois and the eastern Corn Belt producers anticipating a weather-related yield penalty that could trigger both state- and farm-level “payment opportunities.” Deadline for ACRE signup is Aug. 14, and while he agreed with current price projections, Illinois Farm Bureau risk man-
agement specialist Doug Yoder noted price projections “could obviously turn around between now and deadline.” Equipped with newly released USDA guidelines for production evidence that can be used to certify five-year Olympic average ACRE yields (see accompanying details in graphs below), producers can tap ACRE “calculators” and other decisionmaking tools at {www.fsa.usda.gov/dcp} or U of I’s farmdoc website {www.farmdoc.uiuc.edu/fasttools/index.asp}. Given price projections and the farm program tradeoffs
necessary to participate in ACRE Ohio State University economist Carl Zulauf argues the decision ultimately comes down to one basic — if complex — question. ACRE enrollment extends for the life of the 2008 farm bill and requires sacrificing 20 percent of annual direct payments and 30 percent of market loan gains. “Is the ACRE state revenue program worth an annual risk management fee of 20 percent of your direct payment plus any potential benefits that the marketing loan and countercyclical payment program would offer you?” Zulauf
posed during a DTN-sponsored ACRE “webinar” last week. “Which program is going to pay more? My answer to that is, call me in 2013, and I will tell you which program has paid you more. I don’t think that’s a question you can answer. “You have to predict prices for 2009, 2010, 2011, and 2012 if you’re going to predict payments not only for the ACRE program, but also for the marketing loan and the countercyclical program. The ability to predict prices is held by very few, if any, people.”
• Loan deficiency payment (LDP) or marketing assistance loan records • Warehouse receipts, ledgers, or load summaries • Scale tickets or weight slips • Computer-generated documents from a licensed warehouse • Risk Management Agency (RMA) yield production records or records of loss appraisals • Measured quantities of farm-stored production
• Measured quantities performed by uninterested third parties
producer’s own use is acceptable if both of the following apply: • Producer provides written certification, indicating disposition was for planting; production is not included in LDP, loan, or any other record; seeding rate; and acreage planted • FSA determines the quantity used is reasonable, evidence submitted is satisfactory, and using farm-raised seed is customary in the producer’s area.
is available If the current owners and operators of a farm are unable to obtain acceptable production records from a previous producer, an ACRE county plug yield will be assigned, provided: • Existing FSA or crop insurance records clearly document the planted acreage of the crop on the farm • The current owner or producer did not have an interest in the crop The use of similar farms is not authorized in assigning production.
CRUCIAL EVIDENCE: PROGRAM PROOF USDA recently dropped the last major piece of the ACRE (average crop revenue election) decision-making puzzle into place — production evidence producers must submit to the Farm Service Agency (FSA) to certify yields. Listed here is ACRE production evidence under a variety of cropping/post-harvest scenarios that FSA will accept: Commodities sold or stored off-farm • Settlement sheets
Crops remaining in storage • Measured quantities, if measurements were completed and documented by an FSA or crop insurance representative • LDP and/or loan records Production fed to livestock (see accompanying chart) Production used for seed Production used for the
Grazed, silaged, or hayed acres • Acceptable documentation to prove acreage was grazed, silaged, or hayed, including FSA, LDP, or NAP (non-insured crop disaster assistance program) records or an FSA-578 acreage report, documented during the applicable crop year or by the final date to request an LDP. • Crop insurance records, including loss adjustment records or appraisal records, documented during the applicable crop year or by the final date to file claims. • If existing records do not indicate the acreage was grazed, silaged, or hayed, no production will be credited. Hybrid seed (see accompanying chart) Silage production Acceptable records of silage production will be converted from tons to bushels by multiplying the tonnage times the following factors: • Corn: 7.94 • Soybeans: 5 • Wheat: 6.99 • Grain sorghum: 3.114 • Barley: 6.47 • Oats: 4.08 No production evidence
Commingled production • Basic option, planted acres. FSA is authorized to apportion commingled production from various farms, but only if it is represented by acceptable records that can’t be identified with a specific farm or year If commingled production can’t be separated by year or farm, FSA will apportion production based on planted acres in each applicable year or farm. If production is commingled between crop years and farms, FSA will apportion production to applicable crop years before apportioning it to farms. • Alternative methods. FSA may allow apportioning of acceptable production evidence based on harvested acres in each applicable year or each applicable farm, crop insurance records for each year, or other available records FSA determines can reasonably be used, such as custom harvesting records, producer load summaries, or weight tickets. FSA will only allow alternative methods to be used if it is satisfied the method used will result in yields comparable to other similar farms.
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CROPWATCHERS Bernie Walsh, Durand, Winnebago County: Cool, cloudy, and no rain for the week. This is the first time this year that I have had no rain to report, but everything still looks good because of good soil moisture. Everyone is pretty well caught up on fieldwork because of the drier weather. Just in time for the holiday weekend. The early-planted corn is shoulder high and the late-planted corn is catching up. The beans are starting to flower and the wheat is getting very close to harvest. The weather has been good, but the markets have not been good at all. Hope everyone had a good fourth of July. Leroy Getz, Savanna, Carroll County: Rain for the week, 0.55 of an inch. Total for June, 5.65. Strong storms on Saturday evening (June 27) ripped trees and flattened cornfields in the southern part of Carroll County. Most of that corn has recovered. Rainfall during the storm was up to 1.5 inches. Cool days at 65 degrees have slowed the growth of the crop, although we do have corn plants ranging up to 7.5 feet tall. Livestock love this cooler weather. Hay-making drags on and small grains look great and are changing color. Ron Frieders, Waterman, DeKalb County: It’s been a couple of weeks since our last substantial rain. The ducks have to fly farther to find ponds in the fields. Most corn is knee- to waist-high with some shoulderhigh. The condition of the crop is very poor to excellent. The majority of the fields have compaction and water damage, as well as areas where the nitrogen leeched away. Don’t take me wrong, there are some really nice fields of corn. But I am having trouble figuring out where is all the extra corn the government is reporting. Soybeans are from not emerged to 10 inches tall. I just saw a field being planted. This has been a long spring. Most soybean fields have good populations. There is a lot of post-spraying being done. Wheat is turning. I think it will be a week later than normal for harvest. I hope everyone had an enjoyable Fourth of July. Larry Hummel, Dixon, Lee County: Two storms were on the horizon last week. One in the skies and the other in USDA’s planted acreage report. Both caused a lot of damage and cooled things down. Mother Nature’s storm brought high winds and anywhere from 0.75 to 4 inches of rain. No real damage to the crops, but we were without electricity for 26 hours as ComEd crews worked to replace a string of high-line poles just west of my home. We finally finished spraying the last of the corn for broadleaves on Tuesday. One more trip across the bean fields and we will have all the weeds taken care of except for a few fields with burr cucumber that emerged later in the summer. Joe Zumwalt, Warsaw, Hancock County: Finally a week with comfortable temps and no rainfall. It has allowed area producers to catch up and finish up soybean planting. One word can sum up the crops in the area: variable. Corn ranges from knee high to tasseling and soybeans range from not emerged to six and seven trifoliate. A lot of hay is being cut, along with the wheat, which surprisingly has been pretty good. I have heard of yields as high as in the 80s, but most has had a rather light test weight. I am just about to wrap up post spraying. I hope everyone had a fun and safe holiday. Ken Reinhardt, Seaton, Mercer County: An inch of rain was common since last report. The Soil and Water Conservation District transect survey of the county had a record 19 fields not planted a couple of weeks ago. Some bottom fields are still being planted to soybeans. The firstplanted corn is near tasseling, the last didn’t make knee-high by the Fourth. Some of the corn on corn is going to take a real yield hit this year. It is very uneven and much of it stunted and yellow. Soybeans in 15-inch rows are closing in and looking good.
Ron Moore, Roseville, Warren County: We received 1 inch of rain on June 26. It came in about an hour. The ponded area in the fields filled up with water again. After the rain, it cooled off considerably. That was the only rain last week. The corn that looks good (and there is not much of that) is now fence-post high, and I saw two tassels on July 1. The beans are looking better every day. I am glad they got sprayed earlier because the weeds were starting to outgrow them. Most of the first cutting of hay is harvested now. Pasture conditions are excellent with all of the rain we have had. Jacob Streitmatter, Princeville, Peoria County: Well over 90 degrees two weeks ago had corn growing good with plenty of moisture. Rain which totaled from 0.8 to 1.3 inches brought the cold weather. Highs in the low 70s and corn doesn’t seem to do anything. The earlyplanted corn is knee-high, but the last-planted corn will have to grow fast to be knee high by the Fourth of July. I think corn would look halfway decent if it were June 4. Hope everybody had a great Fourth. Mark Kerber, Chatsworth, Livingston County: Corn spraying is complete and now soybean post herbicide spraying is in full swing. Spraying can be a challenge because it is usually too wet, too dry, too cold, too hot, too windy, or too early. Those disgusting Japanese beetles are starting to show up. Maybe they will be gone by the time pollination takes place. The Fourth of July has come and gone, so let’s get the timely summer rains we need to produce a good crop. Markets have reacted to a surprise USDA report. Which will we see first, $3 or $5 corn? The weather will tell us.
Harry Schirding, Petersburg, Menard County: Rainfall last week, 1.35 inches. Rainfall for June, 6.68 inches. Normal rainfall for July, 3.53 inches. Wheat harvest is well under way, with early yields at 70 to 90 bushels. Some of the straw is green and wet, but a number of samples were 12 to 13 percent moisture before the rains on June 27. Harvest is 60 to 70 percent complete, but cloudy weather has slowed progress. Japanese beetles are visible, but the damage does not seem to be as dramatic as in previous years. Corn and soybean fields are surprisingly free of insect pests and growing rapidly. Some of the early-planted fields have started to tassel. Hay harvest is in full swing on a very mature crop. Corn nearby, $3.39, down 28 cents; soybeans nearby, $12.47, up 49 cents; corn for January, $3.47, down 37 cents; soybeans for January, $10, up 12 cents. Todd Easton, Charleston, Coles County: I think I can safely say planting for 2009 is almost wrapped up. After a long wait for the wettest fields to dry out, work resumed over the past week as planters, sprayers, and side-dress applicators started catching up. The corn crop is looking good on the high ground and poor in the low spots. Maturity is extremely varied with fields ranging from V5 to V15. It is an odd sight when these fields are next to each other. Soybeans are ranging from V2 to just been planted in the wet fields and ponds. The bean planters finished just in time to start planting double-crop beans. Wheat harvest also is about wrapped up. Yields reported, so far, are in the 60- to 70-bushel range, which is a bit better than I expected. Hope everyone enjoyed the holiday weekend and finally being able to breathe a sigh of relief after this exceptionally stressful planting season.
Brian Schaumburg, Chenoa, McLean County: Tight profit margins just got tighter this past week with the USDA report. Still, there is a lot that can happen between now and harvest. All your marketing tools need to be at the ready. Don’t forget to look at 2010 crop prices. Growing degree units are slightly ahead of the 30-year average and last year. Corn is sprayed and soybeans are wrapping up. Japanese beetles arrived but not in great numbers. Wheat is a few days away. Corn, $3.45; fall, $3.29; soybeans, $12.35; $9.75, fall; wheat, $4.30.
Ted Kuebrich, Jerseyville, Jersey County: Last Sunday morning (June 28) we received 0.2 to 0.9 of an inch of rain. Most of the beans are planted by now. The early-planted corn has started to tassel. Wheat harvest is still under way with yields running in the mid-60s. With all the rain in the past couple of weeks, beans fields are starting to get some weeds popping up and are being sprayed. Japanese beetles are back, and they are eating leaves on ornamental trees and plants in the garden. Cash corn, $3.56; new corn, $3.40; January corn, $3.53; cash beans, $11.92; new beans, $9.92; January beans, $10.10; July wheat, $4.42.
Steve Ayers, Champaign, Champaign County: How can we be having fall-like temperatures when we just finished planting? Crops continue to be highly variable in both condition and height. Early corn is tasseling and some is knee-high, so our tassel period may be five weeks long. Beans are growing well and weed control has been challenging this year. I heard a wheat yield of the low 60s, but the field was hail damaged. I saw a few Japanese beetles last week but nothing like the previous years when they were swarming. The Fisher Community Fair and Horse Show and the Historic Farm Days at Penfield are this week.
Dan Meinhart, Montrose, Jasper County: An entire week without rain! The last several days the humidity was low and the temperatures were cooler, which made working conditions very pleasant. A lot of seed went into the ground. Farmers were busy replanting corn and beans and planting a lot of first-time beans, spraying, side-dressing corn, baling hay and straw, and planting double-crop beans. Wheat harvest has wrapped up. The crops could use a nice shower, but there are several fields that still need to be planted.
Wilfred Dittmer, Quincy, Adams County: What a difference a few drying days can make. Since last report, we have had no rainfall in our little neck of the woods but some did to our south and northeast. So, our total for June still stands at 4.15 inches of rain. Corn is picking up and looking better and some are sidedressing NH3. Later corn is playing catch-up. Soybeans that went in the ground two weeks ago are poking their necks up already. A scattered few have started in wheat, and one fellow was to try his oats last Wednesday. The hay guys are finally getting a chance to put some away with no rain. Hope you all had a safe July 4 weekend.
Bob Biehl, Belleville, St. Clair County: Nothing like doing serious farming in July. I hope next year is different. First-crop bean planting is about wrapped up, but there are still a few first-crop beans going in. Wheat harvest is nearly wrapped up. Yields were anywhere from 50 to 70 bushels an acre, but test weight and vomitoxin dockages have taken close to $1 a bushel off the price. Lots of double-crop beans are yet to be planted. Some people are done and some people haven’t even started.
Reports received Friday morning.
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CROPWATCHERS Kevin Raber, Browns, Wabash County: Wheat harvest is complete. I had some good yields and some poor yields. Where I had a good stand and sprayed a fungicide, yields were good. Where there was a poor stand and no fungicide applied, the yield was not so good. I have some corn close to tassel and other fields not close to the knee high by the Fourth of July. I still have some double-crop beans to plant.
Dean Shields, Murphysboro, Jackson County: No rain last week, which is a change. Temperatures cooled down on Sunday (June 28) when a front went through, so we had a pleasant week temperature wise. A lot of catch-up work was done with the last of the planting and the double-cropping of the wheat acres. We’ve got corn that is tasseling right now and we have corn that is barely knee high, so we have all sizes. The same with the soybeans. We got some with pretty good size and some just barely out of the ground, so a real mixed bag. Believe it or not, we would like to have a little shower here anytime soon.
Ken Taake, Ullin, Pulaski County: It was another dry week here in deep Southern Illinois. That’s two in a row — I think a first for this planting season. We did manage to finish planting beans. We finished on June 27, so we got our beans planted and our corn sidedressed and now we are down to spraying and the other usual summer jobs. Things are finally slowing down a little bit. I think just about everyone is finished planting. The last I heard, there are just a few people trying to finish up planting beans. The crop is really pretty spotty. There is a lot of uneven corn and beans were planted awfully late.
Acreage report negative to prices but subject to change BY DANIEL GRANT FarmWeek
The USDA acreage report released last week was negative to crop prices with estimates of corn and wheat plantings well above prereport projections. The current estimate of acres planted to corn (87.035 million) is up more than 2 million acres compared to the March estimate and would be the secondlargest amount of corn acres planted in the U.S. since 1946. Meanwhile, USDA’s estimate of all wheat acres this year (59.775 million) came in about 1.5 million acres above trade expectations. The soybean acreage estimate (77.483 million acres) was below trade expectations but still up 2 percent
compared to last year and would be a new record. “The corn acreage number defies a lot of conventional thinking as it was almost a full 3 million acres above trade expectations,” said Greg Wagner of AgResource during a teleconference hosted by the CME Group. Brian Basting of Advance Trading said the report confirmed the idea that farmers west of the Mississippi River took advantage of ideal planting conditions and seeded more corn. Corn acreage exceeded planting intentions by 600,000 acres in Nebraska and 500,000 acres in Iowa. Stocks of corn (4.266 billion bushels) and soybeans (597 million bushels) as of June 1 subsequently were above trade expectations due
to the large acreage estimates. “The grain stocks and acreage reports exceeded expectations and were generally very negative for corn price prospects,” said Darrel Good, University of Illinois
Extension economist. “Estimates were closer to expectations for soybeans but point to ample supplies during the year ahead.” However, the crop estimates are subject to change. Dale Durchholz, AgriVisor
market analyst, noted USDA last year trimmed corn acreage by about 1 million acres in October compared to its June estimate. Crop prospects also are at risk due to late planting and poor growing conditions in some parts of the Corn Belt. “It does lead up to a weather market,” Basting said. “These crops are lagging in maturity.” Durchholz agreed: “The crop still has vulnerability, so I don’t see downside risk being very big at this point. “The odds are very small that we’ll go through the growing season like last year without any hiccups,” Durchholz continued. High heat in July would reduce yield potential, particularly for crops with shallow root systems, he said.
Vilsack: President ‘insistent’ on biofuels success BY MARTIN ROSS FarmWeek
Last week, Ag Secretar y Tom Vilsack reiterated the administration’s commitment to a str uggling ethanol industr y and stressed the need for further education of consumers who still link food prices to biofuels demand. In remarks following his address before the Chicago Council on Global Affairs, Vilsack said he hoped the U.S. Environmental Protection Agency (EPA) ultimately would determine that raising the ethanol blend rate is “the right thing to do.” EPA is eyeing a proposed bump up in the maximum conventional gasoline blend from 10 percent ethanol to 15 percent ethanol (E15). EPA through July 20 is accepting comments on proposals to increase the ethanol in gasoline blends. To submit a comment, visit {www.GoE15.com}. “I think it will send an important message to the
industry,” the ag secretary said. “The president is very insistent on this industry doing well. We want to break our addiction to foreign oil — one way we can do that is maintaining the health of the existing biofuels industry. “We’re not only looking at the blend rate but also taking a look at how we might be able to help (the industry) transition from a credit standpoint from bad times to better times.” Vilsack noted a variety of USDA-supported pilot “next generation” ethanol
projects are under way. Based on discussions with project coordinators and researchers, he suggested “tangible results” may be available within the next year or so. USDA’s Biorefinery Assistance Program promotes development of technologies for production of fuels from noncornstarch sources, offering loan guarantees to help build or retrofit commercial-scale biorefineries for so-called “advanced biofuels.” However, Vilsack vigor-
ously defended the existing corn-based industry, arguing recent food price increases were due primarily to fossil fuel prices, weather, and changing dietary habits linked to middle income growth in China, India, and other regions. Growing global affluence has resulted in accelerated livestock production and thus competition for grain, he said. Vilsack noted food prices have not dropped significantly despite sagging biofuels profits and
construction activity. He insisted “we have to do a better job of educating people about precisely what did cause food price increases.” “There are many reasons beyond the fact that we began to focus on creating a far more independent America when it comes to energy sources,” Vilsack said. “Frankly, over time, that’s a good thing for the country. I think we have to break our addiction to foreign oil; we have to move away from our reliance on fossil fuels.”
IPPA to host visioning session July 14 The Illinois Pork Producers Association (IPPA) will host a visioning session on Tuesday, July 14, at Northfield Inn and Suites in Springfield. The visioning session is open to all pork producers and pork industry partners. The event is an opportunity for participants to provide input and direction on IPPA programs and activities. Training workshops for the industry’s Transportation Quality Assurance and Pork Quality Assurance (PQA)
Plus programs will be provided at the event. Dennis DiPietre, an economist with KnowledgeVentures, will give a presentation titled “Ethical Foundations of the Animal Welfare Issue.” The visioning session also will feature the Pork Act Election, which is the election of pork producer delegate candidates for the 2010 National Pork Act annual meeting. “I hope producers will make plans to attend this important meeting to
help prioritize IPPA’s programs and resources to best meet the needs of Illinois pork producers and address the many issues facing the pork industry,” said Phil Borgic, IPPA president and pork producer from Nokomis. Advance registration for the visioning session is requested by July 8 to allow for the preparation of meals. To register or for more information, contact the IPPA office at 217-5293100 or visit the website {www.ilpork.com}.
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CONFERENCES
State wind power conference set WIU to host alternative crops field day July 16 The Illinois Wind Working Group (IWWG) will host the Advancing Wind Power in Illinois Conference July 15-16 at the Interstate Center, Bloomington. IWWG is a coalition of 130 groups interested in wind energy and is administered by Illinois State University’s Center for Renewable Energy. The conference will cover various wind energy topics, including small wind projects, community wind projects, and large wind farms. In eight breakout seminars and 14 panel sessions, 50 speakers will share their expertise. Topics include wind assessment methods, economic development, sizing and zoning, net metering, constr uction issues, wind far ms and aerial application, wind energ y for school districts, wildlife
and environmental issues, and jobs in the wind energ y industr y. Conference infor mation is designed for landowners interested in wind turbines or leasing their land, county board members, zoning board administrators, elected officials, policymakers, economic development officials, and officials with schools and universities interested in wind energ y. Cost for the conference is $75. An optional wind farm tour and dinner also are offered for an additional $25. To register, or for more information about the conference or IWWG, go online to {www.renewableenergy.ilstu.edu/wind/conferences} or call 309-438-7919. Conference sponsors include Illinois Farm Bureau.
Western Illinois University (WIU) will have its alternative crops field day from 2 to 4 p. m . T h u r s d ay, Ju l y 1 6 , a t WIU’s Agriculture Field Laboratory, Macomb. The program will include a guided tour through alternative crop plots with time allowed f o r p h o t o s a n d i n d iv i d u a l questions. Demonstration plots i n c l u d e b i o e n e r g y c r o p s, oilseeds, and general alternative crops. Research updates will be presented on milkweed, cuphea, and biomass crops. Terry Isbell, research leader
of the new crops and processing technology research unit with USDA, will discuss commercialization of pennycress production. Peter Johnsen, chief technolog y officer of Biofuels Manufacturers of Illinois, will t a l k a b o u t h i s c o m p a n y ’s effor ts to develop a new biodiesel plant. T he event is free to the public and registration is not required. The Agriculture Field Laboratory is located north of the Harry Mussatto Golf Course on Tower Road. For more information, contact Win Phippen, associate professor, at 309-298-1251 or WB-Phippen@wiu.edu. More information also is available online at {www.wiu.edu/altcrops}.
WIU bull test accepting entries Western Illinois University (WIU) is accepting entries for its 38th annual bull test program. Entries for the 112-day test are open to any breed and are due Aug. 31, according to program co-directors, Ken Nimrick and Bruce Engnell. Nimrick noted bulls must be weaned and have started on a preconditioning program no later than Aug. 22 to qualify for the test. “The WIU bull test offers breeders the opportunity to compare their bulls against bulls from other breeders when fed and managed in the same environment,” Engnell said. In addition to average daily gain and feed efficiency, the WIU bull test program provides information on scrotal circumference, pelvic area, ribeye area, fat depth, and marbling. At the conclusion of the test, a sale of the top bulls will be held March 19, 2010. For more information, contact Nimrick at 309-2981288 or Engnell at 309-2982613 (daytime) or 309-2981276 (evenings). Entry packets should be requested from the WIU school of agriculture at 309298-1080. Inquiries may be mailed to Ken Nimrick, School of Agriculture, 1 University Circle, Macomb, IL 614551390. Entry forms also are available online {www.wiu.edu/bulltest}
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RURAL DEVELOPMENT $7.2 billion available
Illinois preparing to vie for broadband funds
BY KAY SHIPMAN FarmWeek
Illinois will be ready to compete for $7.2 billion in federal broadband funds, members of the state’s Broadband Deployment Council learned last week. “We’ve worked collaborately among agencies to prepare for (federal) broadband funds when they become available,” reported Ryan Croke with Gov. Pat Quinn’s staff. Last week, USDA and the
Department of Commerce released guidelines for $7.2 billion in broadband stimulus funding. The guidelines will provide details about the broadband initiative and outline how much money will be used in communities without broadband services or those that are underserved. Croke said Quinn’s staff would distill guideline information and then share the information with those who have project proposals. “That’s always been our goal — to share what we
Callahan named state director of Illinois Rural Development Colleen Callahan Burns, Kickapoo, has been named director of USDA’s Rural Development in Illinois by President Barack Obama. Her appointment does not require Senate confirmation. Callahan is expected to start her new position early this month. Callahan has worked as a farm broadcaster on television and radio in Central Illinois. She grew up on a purebred Hampshire hog, Angus cattle, and grain farm near Milford and graduated from the University of Illinois with a degree in agricultural communications. Her family raises purebred Angus cattle on Colleen Callahan the Kickapoo farm. She has owned a communiBurns cations company, based in Peoria, since 2003. Callahan, the current president of Chicago Farmers, was a candidate for the 18th Congressional District of Illinois in the last election. Rural Development provides financial assistance through guaranteed loans, direct loans, and grants in rural areas. As state director, Callahan will coordinate with local, regional, state, and other federal agencies and groups on business, community, or housing needs. Rural Development programs include those dealing with housing, water and wastewater treatment, and renewable energy and energy efficiency. Gridley farmer Doug Wilson was the immediate past Rural Development state director.
know. Broadband (access) is a means to an end,” Croke said. The governor’s staff won’t be ready to assess project proposals until the federal guidelines have been reviewed, Croke noted. Of the $7.2 billion, $4.7 billion is earmarked for a new grant program run by the Department of Commerce’s National Telecommunications and Information Administration (NTIA). An additional $2.5 billion is allocated for existing programs administered by USDA’s Rural Utilities Service. States may submit
project applications from July 14 through Aug. 14. Rural residents may use high-speed broadband to access government services, educational opportunities, health care services, and marketing and other business prospects. Many rural Internet users have slow dial-up services as their only option. In rural areas where high-speed Internet is available, it often is too expensive compared to urban Internet services. More than two dozen Internet and Internet-related projects, primarily in rural parts of
the state, were highlighted during last week’s Broadband Deployment Council meeting. For example, one proposal would connect rural firehouses to the University of Illinois Fire Service Institute and provide online training for rural firefighters. Another project would provide fiber optic cable to 19 counties in Northwestern Illinois. For information about broadband projects in the state or the Broadband Deployment Council, go online to {illinoisbroadbanddeployment.pbworks.com}.
Giamanco named FSA state director The Obama administration has named Scherrie Giamanco, a 15-year Illinois USDA veteran, as the first woman to serve as executive director for the Illinois Farm Service Agency (FSA). U.S. Sen. Dick Durbin, a Springfield Democrat, nominated Giamanco for the position formerly occupied by Bill Graff. She has served as price support program chief with the Illinois FSA since 1997, overseeing delivery of commodity loan proScherrie gram benefits and providGiamanco ing program guidance to 93 FSA county offices throughout the state.
She has worked with USDA in Illinois since 1994, and has received several awards for outstanding performance with the agency. Prior to joining USDA, Giamanco worked for U.S. Sen. Paul Simon, coordinating with federal departments on flood relief efforts and directing special projects. The Mount Vernon native earned a master’s degree in organizational communication and a bachelor’s degree in marketing from Southern Illinois University at Carbondale. “Her lifelong experience, more than 35 years in agriculture and rural development related fields, in many facets of Illinois agriculture will allow her to be an effective leader within the Department of Agriculture,” Durbin stated.
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ENVIRONMENT
AISWCD giving water quality practices urban twist BY KAY SHIPMAN FarmWeek
Soil and Water Conservation Districts (SWCDs) help landowners tackle stor mwater r unoff and water quality issues, especially in r ural areas. And on a daily basis, their state association headquarters demonstrates practices designed to control urban stor mwater r unoff, which also will help r ural areas downstream. “We’ll get less stor mwater r unoff from urban areas into r ural areas, especially in those areas with drains coming from urban areas,” said Rich Nichols, executive director of the Association of Illinois Soil
and Water Conser vation Districts (AISWCD). Last week, AISWCD and the Illinois Environmental Protection Agency (IEPA) discussed water quality
‘We’ll get less stormwater runoff from urban a r e a s i n t o r u ra l areas.’ — Rich Nichols executive director AISWCD
practices funded by IEPA and installed at the AISWCD office, 4285 N. Walnut St. Road, Springfield. Water from a garden hose immediately drained through the site’s per vious concrete driveway, which overwintered well and reduced r unoff, according to Nichols. Likewise, the per meable pavers used in the parking lot control surface r unoff and allow rain to soak into the ground. Rain collects in gravel underneath both the driveway and parking lot before the moisture seeps into the soil.
Randy Kraus of Randy Kraus Landscaping puts finishing touches on bricks honoring Soil and Water Conservation District leaders and districts at the new state headquarters, Springfield. Behind Kraus, a special porous concrete driveway, described on the small sign behind him, allows stormwater to drain into the ground and prevents runoff. (Photo by Kay Shipman)
AISWCD also is collecting water in rain barrels and growing a rain garden with wetland plants, which receive water from the building’s downspouts. “We bought this site to demonstrate water quality practices with an urban flavor,” Nichols said.
Farm Bureau show to feature Illinois farmers
Three Illinois farm families will discuss how they’re battling Mother Nature this spring on Farm Bureau Today’s “Voices of Agriculture.” The program will be broadcast at 5:30 p.m. Wednesday, July 15, on channel 231 on the Dish Network; channel 345 on Direct TV; or check your local cable channel listings for RFD-TV. The program will be repeated at 3:30 p.m. Thursday, July 16, and at 2:30 p.m. Saturday, July 18. The featured farm families are: Steve and Merry Pitstick of Kane County, Erich and Kim Schott of Kankakee County, and Mark and Leslie Doty of McLean County. The program was produced by Illinois Farm Bureau’s multimedia department.
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FROM THE COUNTIES
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UREAU — The Farmers’ Market family night will be from 3:30 to 6:30 p.m. Tuesday at Darius Miller Park. Farm Bureau will have an educational agriculture activity for children. Chef Monika from the Chestnut Street Inn, Sheffield, will prepare sample dishes made from the market’s produce. The market is open Tuesday afternoons and Saturday mornings through September, with the first Tuesday being family night. HAMPAIGN — Farm Bureau will sponsor three toolshed meetings Monday, July 13. The first meeting will be at 8 a.m. at the Philo Tavern. A lunch meeting will start at 10:30 a.m. at Chris Hausman’s farm in Pesotum. An afternoon meeting will be at 3 p.m. at Joe Burke’s farm in Thomasboro. Hausman, Illinois Farm Bureau District 12 director, and Mark Gebhards, Illinois Farm Bureau executive director of governmental affairs and commodities, will be the speakers. Call the Farm Bureau office for more information. • Farm Bureau and Vermilion County Farm Bureau will sponsor a local government conference from 9 a.m. to noon Friday, July 17, at the Farm Bureau office. Lunch will be served. The program will focus on local funding of rural roads, development, and emergency medical services. Call the Farm Bureau office at 217-352-5235 by Friday for reservations or more information. RUNDY — Farm Bureau and Grundy County Soil and Water Conservation District will sponsor a free ice cream social from 4 to 7 p.m. Thursday, July 16, at the Farm Bureau office. • Farm Bureau will sponsor a bus trip Friday, July 17, to the John Deere Harvester facility and Pavilion, Moline. The group will leave from the Farm Bureau office at 7 a.m. and return by 6 p.m. Cost is $15 for members and $20 for non-members. You must be 13 years of age to attend. Call the Farm Bureau office at 815-942-6400 for reservations or more information. • Farm Bureau will sponsor a blood drive from 11:30 a.m. to 3:30 p.m. Monday, July 20, at the Farm Bureau office. All donors will receive a free Heartland barbecue set and apron along with a coupon for a free pint of Ben & Jerry’s ice cream. The Grundy County Farm Bureau Foundation will receive a
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$2.50 donation per donor to its scholarship fund. Call the Farm Bureau office at 815942-6400 for reservations. Walk-ins are welcome. ANCOCK — The Hancock County 4-H Fair will be today (Monday) through Friday at the 4-H grounds. The horse show will be at the Carthage Saddle Club. The 4-H barbecue and Foundation silent auction will be at 5 p.m. Wednesday, followed by the general exhibit awards and fashion revue. Call the Extension office at 217-357-2150 for more information. EFFERSON — Deadline to return scholarship applications is Friday. Applicants must be Jefferson County Farm Bureau members or dependents. Call the Farm Bureau office at 2424510 for more information. NOX — The Kids Farm Safety Camp Committee will meet at noon Monday, July 20, at the Knox Agri Center. Those interested in joining the committee should contact the Farm Bureau office at 342-2036. ASALLE — Farm Bureau has discounted theme park tickets available to its members. Call the Farm Bureau office at 815-433-0371 for a listing of parks or more information. • The LaSalle County 4-H and Junior Fair will be Wednesday through Sunday. Season tickets are $12, which provide entrance to the fair, rodeo, tractor pull, demolition derby, and truck pull. Tickets are available at the Farm Bureau office. Call the Farm Bureau office at 815-433-0371 for more information. EE — The Lee County Farm Bureau Foundation’s cookbook Country Kitchen Delights is available at the Farm Bureau office. Cost is $15. Call the Farm Bureau office at 815-433-0371 for more information. EORIA — Farm Bureau has 5-pound boxes of blueberries for sale for $10. Deadline for payment and orders is Wednesday, July 22. Orders may be picked up from 8:30 a.m. to 5 p.m. Friday, July 24, at the Farm Bureau office. • A Farm Bureau exhibit will be at the Heart of Illinois Fair Friday through Saturday, July 18, at Exposition Gardens, Peoria. Volunteers will be working the booth, which will feature a “spin the wheel” game for fairgoers to answer questions about agriculture. T. CLAIR — Farm Bureau and Country Financial will sponsor the
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annual ice cream social at 7 p.m. Thursday, July 16, at Scheve Park, Mascoutah. The pool is reserved for 8 p.m. There will be attendance prizes for adults and children. Call the Farm Bureau office at 618-233-6800 for reservations or more information. ERMILION — Farm Bureau is taking orders for Southern Illinois peaches from Rendleman Orchards. Cost for a 25-pound box is $24 for members and $28 for non-members. Deadline to order is Monday, July 13. Delivery will be the end of July or the first of August. Call the Farm Bureau office at 217-442-8713 for more information. • Farm Bureau and Champaign County Farm Bureau will sponsor a local government conference from 9 a.m. to noon Friday, July 17, at the Champaign County Farm Bureau office. Lunch will be served. The program will focus on local funding of rural roads, development, and emergency medical services.
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County, township, and fire department officials are invited to attend. Call the Farm Bureau office at 217-442-8713 by Tuesday, July 14, for reservations or more information. HITESIDE — Farm Bureau will host the Whiteside County Barn Tour from 9 a.m. to 5 p.m. Saturday and from 9 a.m. to 3 p.m. Sunday. The tour will start at the Farm Bureau office. Admission is $15 per vehicle. Call the Farm Bureau office at 815772-2165 or go online to {wcfb@frontier.net} for a tour map and booklet. INNEBAGO — The Winnebago and Boone County Farm Bureaus
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will sponsor a defensive driving course at 9 a.m. Tuesday and Wednesday, July 21-22, at the Farm Bureau office. The course is for those 55 years of age and older who are Farm Bureau members and Country insured. Cost is $15. Lunch will be provided. Those who complete the two-day course will receive a discount on their auto insurance. Call the Farm Bureau office at 815-962-0653 for reservations or more information. “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.
Do you know a lot about ALOT?
In 2009, Illinois Farm Bureau’s Agricultural Leaders of Tomorrow (ALOT) will mark 30 years of fostering leaders for the agricultural industry and Farm Bureau. Test your knowledge about ALOT and ALOT graduates with the questions and answers below: **** What were the original age restrictions for ALOT participants and when did that change? Originally, ALOT was limited to Farm Bureau members who were 25 to 42 years old. The age limit was lifted in 1990.
FarmWeek Page 12 Monday, July 6, 2009
FarmWeek Page 13 Monday, July 6, 2009
PRODUCTION
Forecast somewhat favorable for corn pollination BY DANIEL GRANT FarmWeek
The National Weather Service projected the cool and wet pattern that prevailed much of this spring likely will continue during the first full month of summer. The July forecast released last week called for an
increased chance of abovenormal rainfall and below-normal temperatures throughout much of the state. That’s good news for farmers because mild weather conditions could help shallowrooted corn prosper through the critical pollination season. “That’s the kind of forecast
Livestock remain big part of Illinois State Fair Much has changed in the 156-year history of the Illinois State Fair as a large portion of the population during that time shifted from agrarian to an urban-based lifestyle. However, one aspect of the fair that remains true to form is a focus on agriculture — particularly livestock. The 157th Illinois State Fair, which will be held Aug. 14-23 in Springfield, once again will showcase one of the state’s top industries, according to Amy Bliefnick, fair manager. “Agriculture is one of the largest industries in Illinois, and the fair is a perfect place to showcase the great things ag does for the state,” Bliefnick told FarmWeek. This year’s event will feature everything from cowmilking and horse competitions to culinary contests, the commodity auction, and harness racing. Agriculture Day will be Tuesday, Aug. 18. But the top ag-related event as always will be the livestock shows which culminate in the Governor’s Sale of Champions. Last year, the sale of champions set a new record by generating more than $190,000. Many of the contestants who show livestock at the fair have made it a tradition throughout the years and generations. The presence of livestock and activity in the barns also provides an opportunity for city kids to see farm animals up close. Bliefnick noted the fair annually attracts about 800,000 visitors. The Illinois Pork Producers Association (IPPA) will take that idea a step further at the fair by showcasing modern pork production practices. IPPA, in conjunction with the University of Illinois department of animal sciences, will coordinate the popular “Piglets on Parade” birthing center that allows fairgoers to see live animals in a simulated farm setting. More information about the fair, including entry forms for competitions and livestock shows, is available online at {www.agr.state.il.us/isf}. More information about
the livestock shows also may be obtained by contacting the Land of Lincoln Purebred Livestock Breeders Association at 217-682-5739 or online at {www.LOLPurebredlivestock.com}. — Daniel Grant
FarmWeekNow.com Check the latest outlook for the upcoming corn pollination season at FarmWeekNow.com
you want to see. You don’t want to see something scorching hot during pollination,” Jim Angel, state climatologist with the Illinois State Water Survey, told FarmWeek. “That’s one of the bullets we dodged last year. We had very few days in the mid- to upper 90s.” Crops in Illinois still have a long way to go: Just 58 percent of corn and 55 percent of beans in the state last week were rated good to excellent com-
pared to the national averages of 72 percent good to excellent for corn and 68 percent good to excellent for beans. June was the fifth consecutive month in which precipitation was above average in the state. Rainfall last month averaged 5.3 inches statewide, which was 1.3 inches above normal, according to Angel. Rainfall in June totaled 8-plus inches at a number of locations around the state including Belvidere (8.75), Tuscola (8.6), Farmer City (8.4), and Oregon (8.3). “Pretty much the whole state was on the wet side in June,” Angel said. The bright side is wet soils
often keep a lid on temperatures. “Kind of the rule of thumb is if we get a wet spring and early summer, the wet soils tend to hold down high temperatures,” said Angel, who believes current conditions will make it difficult for temperatures in coming weeks to sustain much of a run in the mid-to high 90s. Angel described the reversal in temperatures last month as a “Jekyll and Hyde situation.” The temperature the first half of June averaged 3 degrees below normal before the heat wave set in and temperatures the second half of June averaged 4 degrees above normal.
FarmWeek Page 14 Monday, July 6, 2009
PROFITABILITY
Now is the time to be scouting, evaluating your crop BY MATT HYNES
This planting season has been a challenge and far from normal. Rain, rain, and more rain, not to mention the cool temperatures, made this spring difficult. The temperatures in recent weeks came back to normal and most of the crop has been planted. With all the Matt Hynes rain and cool temperatures, our corn and soybean crops are at the very least a month behind normal, so the warm temperatures are welcome to help catch up on growing degree units (GDUs). Now is a great time to start-
ing checking fields and evaluating the crop. Population checks of both corn and soybeans are a must. It’s best to know now so you can plan for the fall. While taking population checks, look for other things that may affect the crop, such as insects, diseases, color, and soil conditions. Being proactive could make a difference in the profitability of the farm. Now also is the time to scout for rootworm larvae because they are just starting to hatch. Corn rootworm digs are an excellent way to evaluate the effectiveness of your rootworm management strategy. Another common problem to look for this year is side-wall compaction. In many cases, fields had a little more mois-
ture than normal, causing the side of the seed furrow to compact. That made it difficult for the roots to expand. Symptoms of this problem, which can hinder growth of the corn plant, will start to appear as the soil dries. Hot, humid conditions also favor disease development. Look for anything unusual on the leaves or stalks. Early detection is critical to treatment options. Soybeans should be checked for uniformity in stands. As you are evaluating the stands, look for other issues, diseases, insects, and soil conditions. Right now is the time to evaluate for the first post application of herbicides. It is critical to spray the
weeds at the right size with the right rate of product. Do not wait to try and save a second application — apply now. A dead weed cannot become resistant. Scouting your fields and knowing what is going on are critical to maintaining profitability. Your local FS crop specialist has the agronomic knowledge to assist you in diagnosing problems, presenting alternatives, and helping to make the best agronomic decision possible for your farm. Contact your local FS crop specialist for assistance in evaluating your program. Matt Hynes is GROWMARK’s seed sales and marketing manager. His e-mail address is mhynes@growmark.com.
Plain: Hard management decisions loom in hog industry BY DANIEL GRANT FarmWeek
The 2 percent reduction in the U.S. hog and pig inventory reported last month by USDA isn’t nearly enough to bring hog prices in line with production costs, according to an industry expert. In fact, pork production this year is up compared to last year as record slaughter weights and increased productivity offset a 2.7 percent reduction in the breeding herd. “We need to downsize the swine herd to get higher prices,” said Ron Plain, ag economist at the University of
Missouri, during a teleconference hosted by the National Pork Board. “And we are cutting back
litter in the most recent quarter was a record-high 9.61 (see graphic) compared to 9.38 last year. Productivity
‘We need to downsize the swine herd to get higher prices.’ — Ron Plain University of Missouri ag economist
(the size of the breeding herd and farrowing fewer sows), but productivity is offsetting a big chunk of that.” The average pigs saved per
increases so far this year have averaged 2.5 percent compared to the historical average of 1 percent. Part of the increase in pro-
M A R K Feeder E T pigFA CTS prices reported to USDA* Weight 10 lbs. 40 lbs. 50 lbs. Receipts
Range Per Head Weighted Ave. Price $9.00-$33.26 $24.70 n/a n/a n/a n/a This Week Last Week 22,374 18,180 *Eastern Corn Belt prices picked up at seller’s farm
Eastern Corn Belt direct hogs (plant delivered) Carcass Live
(Prices $ per hundredweight) This week Prev. week $52.90 $54.81 $39.15 $40.56
Change -1.91 -1.41
USDA five-state area slaughter cattle price (Thursday’s price) Steers Heifers
This week 81.00 82.13
Prv. week 80.78 80.66
ductivity may be the result of producers getting rid of their least-productive sows and overall herd management,
Change 0.22 1.47
Lamb prices Confirmed lamb and sheep sales This week 649 Last week 746 Last year 825 Wooled Slaughter Lambs: Choice and Prime 2-3: 90-110 lbs, $103; 110-130 lbs., $105.25. Good and Choice 1-2: 60-90 lbs., $110. Slaughter Ewes: Utility and Good 1-3: $25-$29. Cull and Utility 1-2: $25.
Export inspections (Million bushels)
Week ending Soybeans Wheat 06-18-09 13.4 13.3 06-11-09 12.8 14.0 Last year 11.7 18.3 Season total 1115.2 38.7 Previous season total 1006.2 50.8 USDA projected total 1210 980 Crop marketing year began June 1 for wheat and Sept. 1 for corn and soybeans.
Corn 38.1 32.1 39.7 1349.3 1955.5 1700
FarmWeek first used this “Eye on Profitability” graphic in December 2006 to designate information designed to enhance profitability by managing input expenses. Occasional feature stories grew to a full page of profitability information. Beginning with this issue, FarmWeek will feature these two pages of information, combining commodity marketing information and input management — the two co-equal parts of the profit equation.
according to Plain. Meanwhile, the structure of the industry makes it even more difficult to reduce the size of the swine herd compared to five or 10 years ago, the economist noted. “In the past whenever we cut back the sow herd, it largely was smaller producers who did the cutting,” Plain explained. “But small-
er-sized operations don’t have a whole lot of market share these days, so if they do cut back, it doesn’t have the impact it used to.” Producers with small operations also likely grow crops, which provide a feed source and income, so they can afford to keep raising hogs, Plain said. What will it take for producers to reduce the swine herd to a point that hog prices cover input costs? “I’m afraid at this point we may end up relying on bankers to make hard decisions for producers because it’s clear we haven’t had enough producers step forward voluntarily to downsize the sow herd,” said Plain. He said he believes it may take as much as a 10 percent reduction in the sow herd before profit returns to the hog industry.
FarmWeek Page 15 Monday, July 6, 2009
PROFITABILITY Corn Strategy
C A S H S T R AT E G I S T
USDA delivers corn shock Not only did USDA surprise the trade with a higher-thananticipated corn planting number, but it also projected a larger planting than had been forecast on the March report and larger than last year’s plantings. No one was expecting the latter, although there was one estimate calling for plantings to be the same as last year. In light of the extremely slow pace of planting again this year, it’s important to review how the picture unfolded last year. Like last year, USDA projected larger corn plantings than were anticipated. Ironically, this year’s 87 million-acre projection was very close to last year’s June projection. When USDA got access to the Farm Service Agency (FSA) acreage data in October, it revised its corn planted and harvested acreage numbers down 1.1 million.
Basis charts
A total of 600,000 acres of the October acreage revision came in Iowa and Nebraska, with modest changes noted in many of the other states. Interestingly, this year those same two states accounted for more than half of the increase from the March projections. Nebraska’s plantings were projected very close to 2007’s record, with Iowa’s the largest other than that year. We are not implying those two states will see a reduction like they did last year when FSA data became available, but it is possible that lower numbers could occur in eastern and southern Corn Belt states where planting was delayed the most this year. A half-millionacre reduction would not be “out of the question.” More important, though, is the weather through the rest of the growing season. You’ll remember that last year’s late planting was followed by generally benign summer weather and an extended fall allowing crops to continue developing later than normal. The question we keep asking ourselves is: What are the odds of that happening two years in a row? The last time we had back-to-back extremely late planting was 1973 and 1974. While 1973’s yield was the second largest on record, 1974’s was a disaster. That was the infamous “triple whammy” year — late planting, summer drought, and early frost. While we don’t necessarily believe that will be the case this year, it illustrates the fact that a good crop is not yet “in the bin.” There’s still risk of yield problems. AgriVisor endorses crop insurance by
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✓2008 crop: With the market in the window to post the 10-week cycle low, we’ll wait for prices to rebound before wrapping up this year’s sales. Still, check the Cash Strategist Hotline if prices drop through key support at $3.49 on December futures to see if we recommend a sale. ✓2009 crop: With prices due to make a cycle low and near critical support at $3.49 on December futures, we advise against making sales. Use rallies back toward $3.90 for making catch-up sales. At this time, we plan to wait to see if a rebound can carry December above $4 before adding to sales. ❖Fundamentals: The unexpectedly large corn planting number helps ensure adequate supplies this growing season, but doesn’t ensure it. The crop still has important yield hurdles to cross yet this growing season. If weather is less than ideal, yields could still fall enough from the current USDA estimate to tighten supplies moderately this growing season. And late planting has made the crop more vulnerable to problems this summer.
Soybean Strategy
✓2008 crop: Given the post-report response, if you still have inventories, we’d be patient to see if the situation can carry prices to new highs before pricing soybeans. ✓2009 crop: Because November futures held key support, hold off on sales for now, even catch-up sales. If November futures close above $10.22, they should at least challenge the recent high. If that occurs, use the rally to make catch-up sales. If November futures close above $11, set your sights on using a move above $11.50 to add sales. We’d still like to get sales up to 50 percent before harvest. ❖Fundamentals: The planting number came in above the last report and last year, but was still below expectations. Even with the larger area, if weather would impinge on yield, demand could easily outstrip supply. China’s return to the market last week was a sign
it saw the moderately lower prices as a buying opportunity.
Wheat Strategy
✓2009 crop: Wheat remains in a strong bear trend with prices breaking through the $5.12 major support in the July contract after the USDA acreage numbers. We aren’t advising additional new-crop sales at this time with seasonal harvest pressure peaking. But if sales are behind the recommended 55 percent, use rallies to get caught up. All of the bushels you plan to sell directly off the combine should have been priced.
❖Fundamentals: USDA’s June wheat acreage number was a surprise coming in at 59.775 million acres, 1.5 million higher than expected. The pace of winter harvest, 40 percent, is a little behind normal. But with the generally good weather on tap for the next week, it should be close to a peak. Export demand has been sluggish for various reasons so far this spring, but with the seasonal low at hand, we expect business to pick up. Egypt’s purchase last week may have been a signal that better demand lies ahead.
FarmWeek Page 16 Monday, July 6, 2009
PERSPECTIVES
Oh the economic problems we wish we had We’re trying to shorten the recession with rapid growth in the money supply and with federal tax cuts and spending increases. But that means once the recovery is well under way, we’ll have two new problems to deal with: the potential for inflation and the consequences of big budget deficits. The Federal Reserve has reduced the main interest rate it controls to near zero. It does this by buying Treasury bonds from banks, which then have more money to lend. To attract customers, the banks reduce their interest rates. Businesses LARRY and consumers borrow money and DEBOER spend it, and people are hired to produce these added goods and services. Where does the Fed get the money to buy bonds? The Fed creates the money. The money supply increases when the Fed cuts interest rates. Or it would, if banks would lend the money. Banks have become very conservative with their lending. The Fed has been shoving money out the door, but banks have been locking it in the vault. Bank reserves are at record levels. If banks don’t lend, the Fed’s new money doesn’t get into circulation, and the money supply doesn’t grow very much. With the recovery, though, bank lending will loosen up. Banks will start lending, and the money supply will grow. With so many reserves, the money supply could grow a lot. That’s where the potential for inflation comes in. Prices will rise if the money supply grows faster than the production of goods and services. The old saying is true: too much money chasing too few goods causes inflation. Ben Bernanke, the chair of the Fed, recognizes this coming inflation problem. In a Feb. 18 speech to the National Press Club, he said, “When credit markets and the economy have begun to recover, the Federal Reserve will have to moderate growth in the money supply... .” (You can read this speech online at {www.federalreserve.gov}. Click on News and Events, then scroll down to Testimony and Speeches.)
In other words, when the time comes, the Fed will reverse the growth in the money supply to prevent inflation. That could be a tricky business. Tighten policy too slowly and we get inflation. Tighten too fast and we could return to recession. The Federal government’s 2009 budget deficit will be 13 percent of gross domestic product (GDP), according to Congressional Budget Office (CBO) estimates. That’s the biggest percentage since World War II. The recession has depressed tax revenue, and the stimulus bill cut tax rates and will increase spending. Lower taxes give people more after-tax income to spend. The government buys goods and services, and pays wages to its new employees. This stimulates the economy, because businesses hire more people to produce what consumers and the government want to buy. Lower taxes won’t pay for the new spending. The Treasury borrows the difference. That’s not such a problem during recession. Businesses are reluctant to borrow, and lenders are reluctant to lend, so government borrowing doesn’t “crowd out” borrowing by businesses. Come the recovery, the budget deficit is expected
to get smaller. The CBO projects that the deficit will drop to 3.9 percent of GDP by 2013. But, under the proposed budget, it will grow from there to 5.5 percent by 2019. You’ll find these numbers on the CBO’s website {www.cbo.gov}. That much borrowing during an expansion is a problem. Businesses will want to borrow for new buildings and equipment, but the government will be first in line at the bank. Government borrowing will crowd out business investment. Less investment means a smaller stock of buildings and equipment to work with, and that can slow down economic growth over the long haul. The solution to a deficit, of course, is lower spending and higher taxes. Congress often has trouble enacting those policies, though. Inflation’s not a problem now. Prices are actually lower today than they were a year ago. The deficit is not a problem now. The Treasury is borrowing money that would not be lent otherwise, so it’s not crowding out private investment. These things won’t be problems until the economy recovers. Since we really want the economy to recover, they’re the problems we wish we had. Larry DeBoer is a professor of agricultural economics at Purdue University, West Lafayette, Ind. His e-mail address is ldeboer@purdue.edu.
Venezuela is lesson in what not to do
‘We’re in the American ag biz, Charlie, we do not eat rice snacks.’
I read a very interesting article in the “Washington Post” recently. There is a lesson to be learned, if you think about it. The headline read, “In Venezuela, Land “Rescue” Hopes Unmet.” President Hugo Chavez is systematically confiscating the farms and ranches of the families who have operated them for more than 100 years. He then divides the farms into many small parcels for small farmers to operate. This land redistribution is termed “rescue” and the objective is food sovereignty — to JOHN BLOCK reduce food imports. However, five years after the process was first launched, imports are six times higher than they were before — $7.5 billion worth of food was imported last year. Hugo Chavez, to this day, is still in the process of stealing land from families who were operating efficient commercial farms and ranches. Just weeks ago, the government took 20 farms in Aragua. One 33,000-acre ranch produced 3.3 million pounds of beef per year. Today, the 13,000 cattle that once roamed the fields are gone. The replacement farmers operating the land have just a few cattle and a little corn. Most of the productive land is wasted. Chavez stated just a few weeks ago, “I say to
all who say they own land: In the first place, that land is not yours. The land is not private. It is the property of the state.” Think about this. The countries around the world that have failed miserably are those in which the state has stolen the land from the rightful owners. We can begin with Robert Mugabe’s Zimbabwe. That dictator stole the land, redistributed it, and now the people are starving. The former communist countries all over the world are in the process of privatizing their farms because that’s necessary to increase production. Ukraine and Russia are important examples. I was in Cuba in March. The government controls everything there, and — not surprising — they have to import 80 percent of their food. We have people here in the United States who rail against commercial farms. They want more regulation, government control. Private property rights are not in their vocabulary. They think little one-donkey farms are the way to go. If we keep an eye on Venezuela, we can see what not to do. John Block, former U.S. secretary of agriculture from Gilson, is a senior policy adviser with the Washington, D.C., firm of Olson, Frank, Weeda, and Terman, which specializes in ag issues. His e-mail address is jblock@fwlaw.com.