FarmWeek December 21 2009

GROWMARK and the National Council of Farmer Cooperatives will comment when USDA and the Department of Justice review the role of cooperatives in March. ......5

SEVERAL MILLION people around the world plant and harvest crops and care for livestock each month by playing FarmVille, a computer game. .........................6

WINNING PHOTOS from the Illinois Farm Bureau photo contest for members will be published in a two-page spread in the Jan. 4 issue of FarmWeek.

Monday, December 21, 2009

Two sections Volume 37, No. 50

Judge rules in favor of Jo Daviess County dairy

BY DANIEL GRANT FarmWeek

Periodicals: Time Valued

Construction of a largescale dairy in Jo Daviess County will resume after a circuit court last week ruled in favor of the new dairy.

Tradition Dairy, which is permitted to house 4,500 milking cows once the facilities are operational, was 50 to 60 percent complete before an injunction halted construction.

The facility, which will be located near the Wisconsin border in Northwestern Illinois near Nora, is owned by California dairyman A.J. Bos and his wife, Kate.

A not-for-profit group, Helping Others Maintain Environmental Standards (HOMES), sued Bos, Tradition Investments, and the Illinois Department of Agriculture (IDOA) claiming the operation would be a nuisance.

The group reportedly wanted to have the project shut down.

But Jo Daviess County Circuit Judge Kevin Ward ruled the plaintiffs “did not prove, by a preponderance of the evidence, that it is highly probable that the operation of the defendants’ livestock manage-

Nora

ment facility will lead to a public nuisance, a private nuisance, or a trespass.”

Bos told FarmWeek con-

struction of the facility will resume as soon as possible.

“I was very relieved and happy (with the ruling). Hopefully, we’re finished with the legal battle,” Bos said. “I plan to continue construction and hopefully be milking cows in the summer of 2010 and be at capacity by the beginning of 2011.”

Bos chose the site in Northwestern Illinois because of its ample feed availability and the diversity of the milk market.

“We want to build a nice state-of-the-art, family facility that operates in an environmentally friendly manner and is profitable,” Bos said.

Nic Anderson, business developer for the Illinois Livestock Development Group,

Climate policy: The third option

BY MARTIN ROSS FarmWeek

Faced with sweeping regulation of greenhouse gases (GHGs) from farm and other sources or a “cap-and-trade” system that boosts ag costs but exempts and possibly rewards producers, cap and trade

appears the lesser of two evils.

But American Farm Bureau Federation regulatory specialist Rick Krause notes a third option open to Congress — “putting the brakes” on U.S. Environmental Protection Agency (EPA) greenhouse regs.

University of Illinois econ-

FarmWeek on the web: FarmWeekNow.com

omist Bryan Endres warns EPA’s new greenhouse “endangerment finding” explicitly targets the nation’s larger livestock operations and could trigger a “domino effect” that impacts an even larger agricultural swath.

believes the ruling is a positive step for the state’s livestock industry.

“It sets a tremendous precedent,” he said. “I hope it educates other groups who don’t like animal agriculture and shows them we do things the right way.”

IDOA approved the permit for the facility in 2008. Tradition Dairy, just like all other livestock facilities in the state, must abide by the rules of the Livestock Management Facilities Act. “I think it’s a milestone for agriculture in Illinois,” Nick Tranel, president of the Jo Daviess County Farm Bureau, said of the ruling. “I think the judge made a fair ruling based on the facts presented.

See Bos, page 2

No FarmWeek next week There will be no FarmWeek published next week.

FarmWeek is published 50 times a year, with no issues on the Mondays following Thanksgiving and Christmas.

The next issue you receive will be dated Jan. 4, 2010.

See Option, page 4 Illinois Farm Bureau®on the web: www.ilfb.org

FarmWeek Page 2 Monday, December 21, 2009

Quick Takes ESTATE TAX LIMBO — It appears farm estate planners will end 2009 on a note of confusion and concern. The Senate last week rejected a bill that would have extended the estate tax for two months while lawmakers sought a permanent solution to a problem plaguing both Democrats and Republicans.

Under current law, the tax will disappear next year before returning in 2011 at a 55 percent rate. In addition, during the year without an estate tax, some estates would be subject to a 15 percent capital gains tax they now can avoid.

The House had voted straight extension of the current $3.5 million estate tax exemption and 45 percent top rate, but the Senate didn’t followed suit. The American Farm Bureau Federation has joined a coalition of 41 small business groups urging senators to quickly approve a $5-million-per-person exemption indexed for inflation and a 35 percent top rate.

Democrats vowed to come back from holiday break early in 2010 and pass an estate tax extension, purportedly retroactive to the start of the year. “First, we were told (lawmakers) couldn’t do it retroactively,” Illinois Far m Bureau National Legislative Director Adam Nielsen said Friday. “Then they said it could be done retroactively. If I were planning an estate right now, I would be completely confused.”

NO GM OFFER IN 2010 — General Motors announced last week that it would not be extending the member discount/private offer to Farm Bureau members in 2010.

A company spokesman indicated the company is moving in a different direction and, currently, no other company or association discount program has been approved.

The current program will end Jan. 4, 2010, so qualifying members must take delivery by that date to receive the discount.

More information about the program is available at {www.gmfleet.com/ilfb} or by calling 1-888-273-7596.

MASSAC COUNTY GETS PORT AUTHORITY — Southern Illinois gained a new port authority last week when Gov. Pat Quinn signed legislation to create the Massac-Metropolis Port District. The new district will be able to construct new river ports along the Ohio River and expand an existing airport in the county.

Quinn expressed hope the port authority would increase economic development in the area by making it easier for Southern Illinois companies to export their products.

To build and maintain facilities, the port district will be allowed to issue bonds, obtain loans, and levy selected taxes. It also will be able to create and participate in taxexempt trading companies to export Illinois goods, such as coal and agricultural products.

(ISSN0197-6680) Vol. 37 No. 50 December 21, 2009 Dedicated to improving the profitability of farming, and a higher quality of life for Illinois farmers.

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RISK MANAGEMENT

Economist: ACRE, insurance complementary ‘coverages’ rather than perfarm yields.

FarmWeekNow.com ACRE without crop insurance is a potentially However, he A d d i t i o n a l i n f o r m a t i o n o n risky proposition for producers, University of Illi- found key varia- ACRE and crop insurance can nois economist Nick Paulson warned at last tions between be be found at FarmWeekNow. week’s Illinois Farm Economics Summit. county and state Based on analysis of how ACRE (the average (ACRE) yields crop revenue election program) and insurance cov- especially in Southern Illinois. In Central Illinois’ erage might have performed for Illinois producers McLean County, known for high productivity and over a 31-year period, Paulson concludes ACRE — low risk and where annual yields more closely folconceived to address dual price and production low state averages, GRP would have paid on corn risks — is no substitute for insurance. At the same in five of 31 years but in only three of the 10 time, ACRE in some cases could help fill gaps in years when ACRE payments would have been crop coverage. triggered. GRIP would have paid in nine of 31 In 1980 and 1995, for example, roughly half years but in only six ACRE-triggered years. the Illinois farms included in the In south-central Williamson study would have received payCounty, where productivity generments for corn losses under either ally is lower, individual risk is production-based actual crop his‘ I t ’ s k i n d o f a higher, and county yields correlate tory (APH) coverage or a crop less with state yields, GRIP would risky decision to have paid losses for corn in seven revenue coverage (CRC) policy not do both.’ with 85 percent yield guarantees, of 31 years and three of 10 but no ACRE payments.

ACRE-triggered years, while More than half the farms — Nick Paulson GRP would have paid in six of 31 would have received APH or CRC years but in none of the years U of I economist payments but no ACRE payments when ACRE would have paid for soybeans in 1983, 1988, and corn losses.

2003.

Further, Paulson notes a “It’s kind of a risky decision to potentially significant difference not do both,” Paulson told between the futures-based price FarmWeek and RFD Radio. “Despite what people risk covered under farm or county-based policies perceive in terms of overlapping coverage between and ACRE’s season-average cash price guarantee. the programs, there maybe isn’t that much overlap.

Based on USDA’s November crop report and “The danger in just enrolling in ACRE and not its December world ag supply and demand estipurchasing insurance is that there are situations mates projections, Illinois soybean producers where the insurance would have paid off on loss- would appear unlikely to receive ACRE payments es at the farm level when the ACRE program for 2009, Poulson said. would not make payments, and vice versa.

Some corn growers could see payments in the “The fact that the programs do overlap at $18-per-acre area, while wheat producers could some levels but don’t completely overlap suggests receive an $80 to 90 ACRE payment depending that farmers use a combination of both if they on their region and yield relative to statewide proare enrolled in ACRE.” duction, he suggested.

Paulson originally assumed payouts under Given declines in prices for all three crops — “area” policies — the yield-based Group Risk especially those for wheat — Paulson sees a Program (GRP) and the Group Risk Income Pro- greater probability of payments across the board tection (GRIP) — would more closely follow in 2010. However, individual payment levels may ACRE payouts than individual revenue policies be smaller than those received for 2009, he because GRP-GRIP coverage is based on county advised.

BY MARTIN ROSS FarmWeek

Bos Continued from page 1 “Dairymen as a whole feel it will be a plus,” said Tranel, because Tradition Dairy is expected to buy large amounts of local feed, sell manure to area farmers as an alternative to commercial fertilizer, and help retain infrastructure — such as veterinary services — to maintain the industry.

The Jo Daviess County Farm Bureau supported the project from the beginning and will continue to support it, according to Tranel.

He also noted the new dairy will be an opportunity for the county to rebuild its dairy herd.

Jo Daviess County in 1988 was home to 20,500 dairy cows, but as of last year its herd totaled 7,300.

Tradition Dairy not only will add to that total but once

at capacity (4,500 milking cows), it will be the largest dairy in the state.

Stone Ridge Dairy in McLean County as of last year

milked 3,100 Holsteins.

David Albee, an attorney for the plaintiffs, said his clients may appeal the decision, the Chicago Tribune reported.

Kate and A.J. Bos

FarmWeek Page 3 Monday, December 21, 2009

STATE

State to crack down on drivers who text Cell calls banned in certain areas

BY KAY SHIPMAN FarmWeek

Illinois police and transportation officials last week urged drivers to start changing how they use their cell phones now and not wait for two new laws to take effect Jan. 1.

One law will prohibit all drivers from sending text messages, writing or reading email, and accessing the Internet while driving. That ban covers cell phones, personal digital assistants, and portable computers.

The other law will allow motorists to use only handsfree or voice-activated cell phones when driving through school zones when reduced speed limits apply or construction zones. Use of hand-held cell phones will be banned in the above situations.

Illinois drivers 18 and younger already are prohibited from using cell phones while driving.

“Taking your eyes off the

road — even for a few seconds — can end in tragedy,” Illinois State Police Capt. Jim Wolf said in a Statehouse news conference last week.

State officials noted the National Highway Traffic Safety Administration estimates 6,000 people died and another 500,000 were injured nationwide last year in accidents caused by distracted drivers.

Illinois officials didn’t know the number of deaths or injuries in Illinois.

Drivers who violate either new law will have the violation recorded on their driving record and also face fines and penalties.

Illinois is among 19 states to ban texting by drivers.

To date, 111 fewer people have died in traffic accidents in Illinois compared to the same period last year, state officials noted. The goal is to reduce 2009 traffic fatalities by at least 100, which would set a record for the fewest traffic deaths since 1921. There were 1,043 traffic deaths in Illinois last year.

STAR LIGHT, STAR BRIGHT

A star shines brightly this holiday season on an old dairy barn belonging to Susan and David Oldham of rural Bluff City in Fayette County. The Oldhams have 12 donkeys and grow a pasture mix of hay on 30 acres as feed for the donkeys, who find shelter in the old barn. The star is in memory of Susan’s father, Lyle Belcher, who died before he could finish plans to make such a star for the Oldhams. (Photo by Ken Kashian)

OMB asks agencies to prepare for cuts; Quinn to seek March budget proposal Under direction to make further cuts, state agencies are preparing smaller budgets, while the Quinn administration is seeking to delay when the governor delivers his proposed budget.

Illinois is facing a current budget deficit of more than $10 billion, according to the governor’s Office of Management and Budget (OMB).

Recently, OMB asked small- to medium-size state agencies to prepare fiscal year 2011 budgets that are 14 percent

less, while large agencies individually are being asked for reasonable budget reductions, OMB spokesman Kelly Kraft, told FarmWeek. Fiscal year 2011 will start July 1.

The Illinois Department of Agriculture is among the small- to medium-size agencies.

Kraft added the 14 percent cut “is just a number; it’s not what they (agencies) must do.”

“They (agencies) will let us know

what is feasible,” Kraft said.

As of early last week, OMB had not received any information from the agencies and did not have a “firm date” for agency responses, according to Kraft. “I think it’s a work in progress,” she added.

The administration is seeking more time to craft its proposed budget and has legislation in the works that would set March 24 as the date for Gov. Pat Quinn’s budget address to the General

Assembly, Kraft said.

In October, the House defeated a bill to delay the budget address by five weeks.

Currently, the governor is scheduled to deliver his budget proposal in midFebruary. In 2009, only weeks after succeeding Rod Blagojevich as governor, Quinn was permitted to present his budget in March. The date for the governor’s proposal is set by law under the state Constitution. — Kay Shipman

IFB working group hears legislative redistricting proposal An Illinois Farm Bureau panel will continue to explore proposals on how to change the state’s method of redrawing legislative districts before giving a

recommendation to the IFB board.

Last week Jan Czarnik, executive director of the League of Women Voters, discussed a citi-

Great Lakes initiative to spend $13 million to stop Asian carp Uncle Sam will spend $13 million to prevent Asian carp from migrating further toward the Great Lakes, U.S. Environmental Protection Agency (EPA) Administrator Lisa Jackson announced last week.

President Barack Obama has made restoring the Great Lakes a national priority and proposed $475 million for a Great Lakes Restoration Initiative, which includes funding for immediate carp control.

The U.S. Army Corps of Engineers has identified mea-

sures to stop Asian carp from moving closer to Lake Michigan. Most of the money will be used to close conduits and shore up low-lying lands between the Chicago Sanitary Ship Canal and adjacent waterways.

Some of the funding will be used for more genetic testing to pinpoint where the carp may be in Chicago area waterways.

Federal and state agencies will continue to identify other mechanisms to keep Asian carp out of the Great Lakes.

zens’ initiative, the Illinois Fair Map Amendment, with members of the IFB Redistricting Working Group.

“We have a unique moment in history,” Czarnik said. “A lot of voters are paying attention to what the General Assembly does.”

Group members questioned Czarnik on the proposal’s details and on plans to collect at least 500,000 signatures of registered voters by mid-April to get the proposal on the November 2010 ballot.

Working group members decided to study other redistricting proposals along with the Fair Map initiative. They plan to meet again in January to discuss what would be in the IFB membership’s best interest on redistricting.

“This is a unique opportunity for Illinois to look at this complex issue,” said Working Group

Chairman and IFB Director Terry Pope.

“It is clear from the discussion at this year’s annual meeting that rural residents are very concerned how legislative districts have been drawn in the past. The voters need a map that is drawn in a transparent and fair way.”

At the IFB annual meeting,

county Farm Bureau delegates passed policy to support a redistricting process that would be conducted by an unbiased third party, would not be based on political affiliation and prior election results, and would create districts that are compact, contiguous, and impartial to party or incumbency. — Kay Shipman

Quinn appoints four to IFA board Gov. Pat Quinn recently appointed four members to the Illinois Finance Authority (IFA) Board of Directors. IFA offers several programs dedicated to agriculture and agri-business.

New IFA board members are: • Roderick Bashir is vice president and director of human resources of Service Employees International Union, Local 1, Chicago.

• John Durburg is executive managing director of CB Richard Ellis Inc., Chicago.

• Joseph McInerney is the chief executive officer of Banner Capital Corp., Chicago.

• Roger Poole recently retired after 30 years of service and was the directing business representative for Machinists District No. 9 in the St. Louis area.

FarmWeek Page 4 Monday, December 21, 2009

ENVIRONMENT Farm Bureau analyst:

VP’s energy update lacking in high-powered alternatives

BY MARTIN ROSS FarmWeek

The administration’s latest energy “progress” update fails to emphasize resources needed to power a potential carbon economy, a Farm Bureau analyst told FarmWeek.

In a memorandum to the White House, Vice President Joe Biden’s office touted efforts aimed at “laying the foundation for a clean energy economy that will create a new generation of jobs, reduce dependence on oil, and enhance national security.”

According to the memo, $23 billion in “renewable generation” and advanced energy production “investments” under federal recovery legislation could create 253,000 jobs and leverage more than $43 billion in added investment.

That should “(put) us on track to meet the goal of doubling our renewable energy generation, including solar, wind, and geothermal, in just three years,” the report stated.

By 2011, the government will have committed to supporting more than 15 gigawatts of new wind, solar,

geothermal, and other renewable energy — “enough energy to power 4 million to 5 million homes per year” — it projected.

However, American Farm Bureau Federation regulatory specialist Rick Krause noted the vice president’s update focused on energy strategies that “are probably not going to be useful in the long run” in meeting overall energy demand.

Proposed greenhouse gas limits under cap-and-trade legislation reportedly would hit coal-powered utilities especially hard, forcing the Midwest to look to natural gas, nuclear power, or other options. “(The report) talked about all the stuff that was going to be tough to do,” Krause noted. “It talked about renewables, but it didn’t say anything really about ethanol, and it didn’t talk about nuclear. Those seem to me to be the most promising cleanenergy developments out there.

“They talked a little bit about cellulosics (biomass), which is good, but biomass,

Option Continued from page 1 EPA asserts carbon dioxide, methane, and other gases threaten human health and welfare and thus should be regulated under the federal Clean Air Act (CAA).

On the other hand, U.S. House cap-and-trade legislation would limit emissions by utilities, manufacturers, and other sectors while exempting agriculture and offering farmers and foresters marketable credits for reducing or trapping GHGs. At last week’s Illinois Farm Economics Summit, Endres warned “something is going to happen in 2010” and argued that despite its likely impact on energy and input costs, the House plan would pre-empt forthcoming EPA rules. Given that, “Cap and trade is a better deal for agriculture,” he maintained.

However, Krause told FarmWeek lawmakers have regulatory review authority and could delay CAA permit requirements for existing businesses or new or changing enterprises.

Sen. Lisa Murkowski (R-Alaska) reportedly plans to offer a measure to halt EPA greenhouse regulation. She argued EPA’s “backdoor” approach to climate change would strengthen neither the environment nor the economy, and wants more time “to focus on more responsible approaches.”

“Legislation’s certainly preferable to EPA: No one really wants EPA to regulate,” Krause said. “But we’re in a bit of a quandary here. Obviously, (legislation) isn’t going to be done by the time EPA regulates.

“If you’re really concerned about EPA, you ought to give (legislative debate) more time, or at least stop the bad stuff from happening. EPA’s really overtaken Congress with the speed at which it’s going.”

EPA already has set a new reporting requirement for facilities that emit more than 25,000 tons of carbon dioxide equivalent per year. Monitoring begins in January; industries are expected to report 2010 emissions by March 31, 2011.

According to Endres, EPA’s threshold covers 107 of the largest U.S. concentrated animal feeding operations. Under CAA provisions, EPA could lower the threshold to 10,000 or conceivably even 100 tons — the output of an operation with 25 dairy cows, 50 beef cows, or 500 acres or corn, he warned.

“Once one greenhouse gas is regulated under one part of the Clean Air Act, it triggers greenhouse regulation under all other parts,” Endres warned.

solar, wind are not going to make a whole lot of difference

cap-and-trade legislation could “help transition some of this

‘It was a good propaganda piece, essentially.’

— Rick Krause American Farm Bureau Federation

in the energy supply if we’re taking coal away. It was a good propaganda piece, essentially.”

Construction of 260 new nuclear plants as proposed in

Midwestern coal use,” University of Illinois ag economist Bryan Endres argued.

However, while states are pushing the concept of a

“renewable portfolio” (biomass, wind, solar) to generate more electricity, Krause noted continued Democrat resistance to nuclear power, and Endres admitted coal power replacement remains a “difficult issue.”

Illinois Farm Bureau this month approved support for building a “new generation” of nuclear facilities and pledged efforts to repeal Illinois’ moratorium on new plants.

The last nuclear power plant to go online in the U.S. began operation in 1996. The newest nuclear plant in Illinois went online in 1988.

Obama seeks Copenhagen accord as talks falter As global climate policy talks in Copenhagen faltered Friday, President Obama urged world leaders to put aside differences and agree on a plan of action.

Despite a congressional stalemate over “cap-and-trade” measures, Obama spelled out his proposals for U.S. action to reduce greenhouse gas (GHG) emissions, “transparent” standards to verify greenhouse compliance, and funding to help poor and affected countries adapt to climate change.

“After months of talk, after two weeks of negotiations, after innumerable side meetings, bilateral meetings, endless hours of discussion among negotiators, I believe that the pieces of that accord should now be clear,” he said.

Obama offered to reduce emissions by 17 percent by 2020 and by more than 80 percent by 2050 and to help establish a $100-billionper-year global fund to help developing nations by 2020.

American Farm Bureau Federation (AFBF) analyst Rick Krause told FarmWeek the U.S. Environmental Protection Agency’s GHG “endangerment finding” (see story lower left) may have been designed in part to “spur the Copenhagen talks.”

FarmWeek’s Jan. 4 issue will provide details of the Copenhagen conference, which ended this weekend. AFBF and National Corn Growers Association representatives were among those attending the two-week Danish summit.

FARMERS FEEDING THE HUNGRY

From left, Mike Meece, administrator with the Midwest Food Bank in Bloomington; Matt Hughes of the Illinois Soybean Association; Donna Jeschke, past chairman of the Illinois Corn Marketing Board; and Mike Haag of the Illinois Pork Producers Association, view a package of pork recently donated to the food bank. The three Illinois commodity organizations last week donated $7,500 to the food bank as part of Pork Power — a program in which partners donate pork and money to food banks of Illinois.

The most recent donation was made to support Gridley Meats’ continued processing of hogs donated by local producers. Pork Power last year provided more than 100,000 pounds of donated pork to food banks throughout the state. (Photo courtesy of Tricia Braid Terry, communications director for the Illinois Corn Growers Association/Marketing Board).

FarmWeek Page 5 Monday, December 21, 2009

GOVERNMENT Co-ops under the microscope?

Justice official eyes ag antitrust issues

BY MARTIN ROSS FarmWeek

While times have changed, the need for producer co-ops has not, argues GROWMARK governmental affairs director Chuck Spencer.

USDA and the Department of Justice (DOJ) will consider the role of cooperatives as part of a series of nationwide ag concentration “workshops” beginning in March. GROWMARK and the National Council of Farmer Cooperatives currently are developing comments to guide agency review.

At issue is the Capper-Volstead Act of 1922, which provides a federal antitrust exemption for farm co-ops.

According to Spencer, questions about whether co-ops have “changed enough over time” to justify changes in the law.

At a recent Senate hearing, U.S. Assistant Attorney General Christine Varney suggested Capper-Volstead “might not be the right law for the state of the industry at this time.”

“It’s vital we continue the exemption we have under Capper-Volstead, that we go to these workshops and have producers emphasize the value cooperatives bring to them — how they can band together, purchase inputs or collectively work together to sell products, and then receive benefits back from the very cooperatives

they’ve established,” Spencer told FarmWeek.

“It’s a system that’s worked very well in the United States.

I think that’s something that will come out of these hearings. I’m sure some concerns will arise, but I’m confident we’ll see the benefits outweigh the concerns.”

According to USDA, more than 29,000 co-ops generate $654 million-plus in annual revenue and employ more than 2 million workers nationwide.

GROWMARK reported roughly $6.1 billion in sales and $75 million in net income for fiscal 2008-09, with more than $62 million in patronage refunds to member co-ops.

A focus of Varney’s concern is the dairy sector, especially in Vermont, where farm prices dropped to $11 per hundredweight in June from $19 in 2008 while production costs remained near $17. In October, eastern dairymen launched a class action suit charging Kansas City-based Dairy Farmers of America coop and Dean Foods had monopolized the market.

Varney stressed DOJ would “continue to look very carefully at developments in dairy markets,” and pledged to “take whatever action we find warranted” as a result of concentration workshops. Spencer stressed the importance of coops assuring “transparency in pricing” and services.

“As cooperatives, we have to band together on public policy issues, work together to

make sure we deliver a very clear product and a very transparent process to the farmer-

owners, and minimize any concerns people have,” he added.

Conner: Co-op exemption vital to farmers, consumers Producers and consumers alike would suffer under removal or “dilution” of longstanding federal protection of co-ops, according to National Council of Farmer Cooperatives (NCFC) CEO and former Deputy Ag Secretary Chuck Conner.

That’s the message NCFC Chuck Conner hopes to impress upon USDA and the U.S. Department of Justice (DOJ) as those two entities review the 1922 Capper-Volstead Act and its cooperative antitrust exemption.

Conner recognizes there have been “changes in agriculture and in farm co-ops in the last 70 to 80 years.” But while co-ops are “doing things they weren’t doing 25 years ago,” such as investing in offshore input production and renewable energy and increasing sales of nationally branded products, they “continue to function just as they originally were envisioned” — as farmerowned and controlled entities, he said.

Conner stressed the co-op exemption does not provide “open-ended immunity”: The ag department monitors co-op activities, and, like the DOJ, may step in to investigate any reportedly “anti-competitive situation.”

But by its essential structure, Conner argued, agriculture is a highly “competitive industry — it’s our strength and our weakness.” Given projected market and policy

impacts on energy prices, the ability to collectively buy inputs is “absolutely going to be essential,” he said.

And farmers still frequently must sell what they produce at below cost of production, noted Conner, who served at USDA from 2005 to 2009.

In the absence of Capper-Volstead, two or more farmers could not legally price their joint production, said Marlis Carson, NCFC vice president for legal issues.

Should Congress remove the co-op exemption, existing co-ops likely would be absorbed by private concerns and “we definitely would be looking at more consolidation” of ag sellers and buyers, Carson advised.

“We obviously are very concerned about some of the comments coming out of our Department of Justice against Capper-Volstead,” Conner told FarmWeek. “When you look at an individual farmer’s purchasing power and clout in the marketplace, it’s as small today as it was back in the 1920s.

“One individual producer’s ability to compete, to have enough volume to make an impact in today’s marketplace, is really very limited.

“They (farmers) are more profitable, they are able to purchase at a lower cost — and ultimately, that means a better deal for our consumers — when they are able to purchase inputs together and market their crops and livestock together without fear of being penalized.” — Martin Ross

Corps re-education crucial to floodplain effort?

After years of negotiating and educating federal officials on the need for improved Illinois flood protection, Illinois Farm Bureau hopes to re-educate U.S. Army Corps of Engi-

neers officials as well as lawmakers.

Corps support is viewed as crucial in securing 2010 congressional approval for comprehensive floodplain protec-

THE PLAN Illinois Farm Bureau producer-delegates recently reiterated support for a comprehensive flood management plan for the Upper Mississippi River basin under the following conditions: • The plan would include reconstruction of existing levees and other flood-reduction structures to ensure they continue functioning at their approved design capacity.

• Existing levees within the reach of the plan that are of sufficient height but lack features such as seepage wells and federally prescribed slope would be allowed improvements to qualify for Federal Emergency Management Agency certifiable 100-year flood frequency protection. Levee decertification imperils flood insurance coverage and raises area development costs.

• The Len Small Levee and Drainage District would be incorporated into the plan. The district is located inside the plan’s study area but south of Thebes, where a narrow rock passage limits area flood-protection options.

• All acres currently protected by levees should maintain at least their current level of protection.

Noting interagency confusion experienced during 2008 Illinois floods, IFB also recommended the Corps be charged with coordinating future flood-fighting efforts. — Martin Ross

tion measures.

M and several other options to benefits. Corps support may However, with a transition Congress, where U.S. Rep. Phil be needed to convince Conin agency leadership under a Hare, a Rock Island Democgress of area needs. new administration, the Corps rat, has advocated adoption “We need to move forward may require reorientation on and funding for M-style with this plan that’s been its own proposals and reimprovements. done, this plan that’s been emphasis of IFB’s proposed At that point, Corps activity studied,” Koeller told conditions for FarmWeek.

Mississippi levee “All this monimprovements. ey’s already The Corps ‘We came up with a plan, and just to let been spent on developed “Plan identifying M” in 2007 after it die at this point is not what we want.’ what would some Southern work best.

— James Koeller We’ve asking Illinois levee Pike County producer districts (the Corps) to expressed conhelp us out. cern about earli“We came up er proposals to locate a major “kind of stopped,” Pike County with a plan, and just to let it die floodwater storage area south producer and Upper Mississippi, at this point is not what we want. of St. Louis.

Illinois, and Missouri River There will be another flood.

The plan would enable disAssociation (UMIMRA) board “There’s been just a phetricts north of St. Louis to raise member James Koeller reported. nomenal amount of money protections to a maximum 500None of the Corps’ more spent on emergency flood year level (there is a 0.2 of a extensive flood control fighting. It would be good if percent chance of flooding at options met nationwide ecowe could just get the process that level every year) while nomic benefits criteria tradistarted for the places that can allowing districts south of St. tionally required of Corps have a better levee system Louis to raise levees to current- projects, despite evidence that without hurting their (neighly existing protection levels. improvements would spur sigboring districts).” — Martin The Corps submitted Plan nificant regional economic Ross

FarmWeek Page 6 Monday, December 21, 2009

SOCIAL MEDIA

Down on Networking game taps global farm nostalgia

BY KAY SHIPMAN FarmWeek

Twenty million people are planting and harvesting crops and caring for livestock each day without ever leaving the comfort of their homes or classrooms.

They’re virtual farmers in FarmVille, a computer game that simulates farming and has swept the social-networking website Facebook.

Zynga, a California-based gaming company that created the game, estimates millions of people around the world play FarmVille each month.

“It taps into a fantasy of having your own farm that obviously resonates well with a rural audience ... and with people across the world,” Bill Mooney, general manager of FarmVille and a Zynga vice president, said in a

FarmWeek-RFD Radio interview.

“I joke, ‘It’s farming without the hard part.’”

The game’s creators, mostly Midwesterners, focused on developing a family-friendly experience and “charming game,” according to Mooney.

“We wanted to capture the ideal rural life,” he added.

“Our Midwestern roots appear in how we looked at this game.”

Mooney has rural connections, including living in Iowa for several years.

His father-in-law raises corn, soybeans, and hogs on an Iowa farm and, it was he who first suggested Mooney create a farm game five years ago.

Players plow, plant, and harvest crops from among the 100 crop offerings. They also

DATEBOOK Jan. 6 University of Illinois Corn and Soybean Classics. 9 a.m. to 3:30 p.m. Holiday Inn, Mt. Vernon.

Jan. 6-8 Illinois Specialty Crops, Agritourism, and Organic Conference, Crowne Plaza, Springfield.

Jan. 8 U of I Corn and Soybean Classics. 9 a.m. to 3:30 p.m. I Hotel and Conference Center, Champaign.

Jan. 11 U of I Corn and Soybean Classics. 9 a.m. to 3:30 p.m.

Crowne Plaza, Springfield.

Jan. 12 U of I Corn and Soybean Classics. 9 a.m. to 3:30 p.m.

Doubletree Hotel, Bloomington.

Jan. 13 U of I Corn and Soybean Classics. 9 a.m. to 3:30 p.m.

I Wireless Center, Moline.

Certified livestock manager and manure management workshop. 8:15 a.m. to 12:30 p.m. Knox County Extension office, Galesburg.

Jan. 14 U of I Corn and Soybean Classics. 9 a.m. to 3;30 p.m. I Kishwaukee College, Malta.

Certified livestock manager and manure management workshop. 8:15 a.m. to 12:30 p.m. Adams-Brown County Extension office, Quincy.

FarmVille players tend their crops and livestock on their virtual farms. (Image courtesy of Zynga)

care for livestock on their Facebook pages. Players may add a farmhouse, farm buildings, machinery, and other features.

To keep the game fresh, new options are added frequently.

“We added a bull.

When you put him in a barn, baby calves are born a day later, which is fun,” Mooney said with a chuckle.

Since its launch at the end of June, FarmVille has grown so popular it surpassed its developers’ expectations. About half of Farm Ville’s farmers are in the U.S.; the remainder resides around the world. Sixty percent are women. Players range in age from 8 to 80 with a large percent between ages 35 and 44.

As for real farmers’ reactions, Mooney said he had

heard FarmVille is a “guilty pleasure” for university ag students.

“It really does bring home for people the connection that their food comes from

(FarmVille) audience.”

Teachers have contacted the company for permission to develop lesson plans related to FarmVille. “We’re exploring it,” Mooney said. “We like the idea; we’re sorting the ideas of ‘It really does bring home for how to do p e o p l e t h e c o n n e c t i o n t h a t it. We’d love be sort of their food comes from people to a gateway to growing it on the land.’ farming.”

In the near future, — Bill Mooney FarmVille FarmVille general manager farmers may experience people growing it on the other traditions of farm life land,” Mooney said. virtually, such as working The Animal Agriculture together to raise a barn or Alliance, an industry coaliaccomplish a goal. tion, recently released a video “You harvest your crops, to help online farmers learn and you understand how much about agriculture online at hard work goes into each and {www.youtube.com/animalag every bushel,” Mooney said. alliance}.

“We really want to give “How many people have people an experience to conever been on a farm?” said nect to their roots,” he conSarah Hubbart, the cluded. “Almost everybody — alliance’s communication you go back a couple of gencoordinator. “It would be erations — has connections to great to connect with that a farm.”

Jimenez named 2010 IAITC teacher of year Debbie Jimenez of St. Albert the Great School at Burbank in Cook County is the 2010 Illinois Agriculture in the Classroom (IAITC) teacher of the year.

Jimenez will represent Illinois in competition for the National Excellence in Debbie Jimenez Teaching Agriculture Award.

She will receive a plaque and a trip to the 2010 National Agriculture in the Classroom Conference in Baltimore, Md., in June.

For the past 10 years, Jimenez has integrated new lessons, field trips, and activities involving agriculture into her classroom. Her students receive hands-on experience from many different lessons relating to agriculture.

They also learn about economic factors related to agriculture, such as weather, soil conditions, and transportation of goods that relate to the nation’s economy.

In addition, her students have been involved in the IAITC Adopt-a-Classroom program for many years.

Jimenez recently started a pen pal exchange with students in a southern state. Both groups of

students correspond about their state’s agriculture.

Jimenez has attended many ag-related workshops and Summer Ag Institutes and volunteers at the Children’s Farm, working with farm animals.

The runner-up for the teacher of the year is Linda Bush, a teacher at Tri-County Christian School at Freeport in Stephenson County.

Award finalists include: Dr. Kammie Richter, Oakwood Junior High, Oakwood, Vermilion County; Kelly Hall, Denning Elementary, West Frankfort, Franklin County; and Carol Schnaiter, Amboy Central Elementary, Amboy, Lee County.

FarmWeek Page 7 Monday, December 21, 2009

PRODUCTION

Home for the holidays? Some farmers still in the field

BY DANIEL GRANT FarmWeek

If Santa’s reindeer need to stop for a snack Thursday night, Illinois would be a good place to do it.

There still is a fair amount of corn standing in fields that

“The snow melted down enough we could get rolling again,” he said.

Overall, 10 percent of Illinois’ corn crop remained in the field as of the first of last week, the National Agricultural Statistics Service state office

‘There will be some harvest in 2010.’

— Nick Tranel Jo Daviess County

likely will remain unharvested prior to Christmas or even the first of the year, according to two Northern Illinois farmers.

“I’ve got to park the combine to go shopping,” Steve Ruh, a farmer from Sugar Grove, joked last week.

Ruh, who farms ground in DeKalb, Kane, and Kendall counties, as of Thursday had about 300 acres of corn left to harvest. His harvest was delayed earlier this month by 5 inches of snow, but he returned to the field late last week.

reported.

Nationwide, 8 percent of the crop was not harvested as of the first of last week, which meant there still was about 1 billion bushels of corn in the field as of that time (see Corn Strategy on page 11).

“The snow (earlier this month) halted any harvest,” said Nick Tranel, a farmer from East Dubuque in Jo Daviess County, who last week estimated there still was 4 to 8 inches of snow on the ground in his area. “There

Better crop, livestock prices may be ahead Crop and livestock producers may see slightly better pricing opportunities in the year ahead.

Darrel Good, University of Illinois Extension marketing specialist, last week predicted prices next year could increase compared to 2009 for corn, wheat, cattle, and hogs while soybean prices should at least hold steady.

Good’s average price estimates for next year were about $4 per bushel for corn, $10 for beans, and $4-plus for wheat.

Meanwhile, he reported USDA estimates suggest average livestock prices could improve from about $40 to $45-plus for hogs while cattle prices could inch closer to the $90 mark after spending much of this year in the low- to mid-$80s.

“My expectations (for slightly higher commodity prices) are based on a modest rate of economic recovery continuing through 2010 and an accelerating rate of inflation by mid-2010 continuing into 2011,” Good said last week at the 2009 Illinois Farm Economics Summit in Bloomington.

The corn market in the coming year should be supported by increased use by the ethanol industry, which is expected to consume an additional 500 million to 600 million bushels. USDA currently is projecting the ethanol industry will use 4.2 billion bushels of corn this year, and Good thinks it could be more.

“The market continues to focus on the demand side, and there is strong demand right now on the processing side led by ethanol,” he said.

The soybean market is being supported by record exports, which could exceed the current projection of 1.34 billion bushels, according to Good.

But upside potential could be limited this spring in the soybean market as South America is expected to harvest a large crop.

In the wheat market, Good believes ending stocks at 900 million bushels are “more than enough supply,” but prices could post a modest recovery this spring due to the possibility of a sharp reduction in U.S. production.

Finally, the futures market is offering much higher prices for hogs in the spring and summer while demand strength could give a slight boost to cattle prices from recent levels, Good said.

“There should be some recovery of livestock prices in 2010, which should help feed demand,” he added. — Daniel Grant

will be some harvest in 2010.”

Ruh on Thursday hoped to finish his harvest over the weekend and estimated most farmers in his area should wrap it up this week.

But logistical problems still exist and are slowing harvest activity.

“The elevators are still full

(and shutting down early),” said Ruh, who reported a recent dryer fire at a grain facility in Steward.

He also noted some farmers had to stop harvest because of too much snow.

The snow “freezes up and turns (the combine) into one big ice cube,” he said.

And it appears the situa-

tion won’t improve much. A chance of snow and/or rain showers was predicted for the weekend and into this week.

“Some of the corn is still coming in at higher moisture (levels) than we’d like,” Tranel added. “But, at this point, there’s not much you can do but go get it.”

Economist: Farm risks will remain high in 2010 The new year will be an extremely risky one for producers, according to Scott Irwin, University of Illinois ag economist.

Crop and input prices likely will remain highly volatile. Meanwhile, producers must pin their hopes for improved profitability on a shaky economy that hopefully will improve in 2010 and increase the demand for their products.

“If we are looking at a scale of one to 10 (to gauge the amount of risk in farming), if in 2005 we were at a five, then we’d be at 10 today,” Irwin told FarmWeek at the 2009 Illinois Farm Economics Summit.

Irwin believes the markets will remain highly volatile until crop stock levels consistently are built back up to a stocks-to-use ratio of at least 15 percent. The ratio has struggled to surpass 10 percent in recent years despite large crops, according to Irwin.

“With the usage we have booked, we’re still operating with a very low margin in terms of the stocks level,” he said.

Prospects for a large range in price move-

ments suggest producers may find more value in the use of futures options contracts to protect profitable levels and maintain flexibility to capture higher prices, according to Irwin.

Price volatility also may continue to limit forward pricing opportunities typically offered by grain dealers.

“Fewer pricing opportunities from merchandisers may require producers to manage price risk directly with the use of futures and options contracts,” Irwin said.

Producers also can manage risk by contracting with grain users, such as ethanol plants, or increasing crop revenue insurance coverage, which may be viewed as a form of hedging.

However, no strategy is a guarantee for success. For example, contracting with an end-user carries default risk.

“Each farming operation is unique and different,” Irwin added. “As much as anything, it’s about having the mindset about the volatile environment and how does that impact how you approach managing risk.” — Daniel Grant

FarmWeek Page 8 Monday, December 21, 2009

TRANSPORTATION

Illinois uniform truck weight limits take effect Jan. 1

BY KAY SHIPMAN FarmWeek

The General Assembly passed and Gov. Pat Quinn signed legislation that included authorization for uniform truck weight limits up to 80,000 pounds. The change takes effect Jan. 1, 2010.

Kevin Rund, Illinois Farm Bureau senior director of local government, has provided answers to common questions about the new law:

FarmWeekNow.com For more about Illinois’ uniform truck weight limits, go to FarmWeekNow.com.

Will 80,000-pound trucks be allowed on every road?

Rund: No. State and local road jurisdictions retain the authority to temporarily and/or permanently post roads and bridges with lower weight limits. Some roads will be posted at lower limits; many bridges already have been posted.

How am I supposed to know

what limit applies?

Rund: The 80,000-pound gross vehicle weight limit applies unless a lower weight limit has been posted on signs along that road.

Will limits be uniform on all roads in 2010?

Rund: The state will have uniform default weight and width limits on all roads starting in 2010. Any variations must be posted. However, allowable truck length differences will exist still. Generally they are 65 feet on state roads but 55 feet on local roads.

Does this mean all roads have to be rebuilt to handle 80,000-pound trucks?

Rund: No. There is no mandate to re-engineer road systems. Many local roads, when dry or frozen, easily can accommodate the heavier trucks.

What about width restrictions?

Rund: Legislation also established a uniform truck width of 102 inches on all roads starting Jan. 1, 2010.

What about vehicle lengths?

Rund: Allowable lengths

for truck and trailer combinations were not changed. Combinations on non-designated local roads still are limited to 55 feet in overall length.

After Jan. 1, if a road is posted at a maximum limit of 73,280 pounds of gross vehicle weight, will lower axle weight limits also apply?

Rund: No. The 2009 legislation eliminates the old formula. Unless reduced axle weight limits are posted on a road, the federal bridge formula limits for axles apply regardless of the posted maximum gross weight limit.

What is the bridge formula?

Rund: It is an engineering

equation used to calculate the maximum gross and axle weight for trucks and trailers.

The calculated weight limits apply to both bridges and pavement.

Will overweight permits still be available?

Rund: Yes. However, they can be issued for only nondivisible loads and are not typically issued for roads that have a weight limit posting.

Will harvest season permits still be available?

Rund: Yes. These can be issued for loads of grain.

Remember they provide only for increased axle weights — not gross weights — and they must be obtained from each road jurisdiction on whose roads the driver will be traveling.

Will bridges and roads be treated uniformly or differently?

Rund: The limit posted for a road might be higher or lower than the limit posted for a bridge along the same route.

On state routes, drivers should see advance warnings of bridge weight limits, giving

them a chance to take a different route. Local roads authorities are not required to provide advance notice of bridge weight postings, so drivers will need to scout local routes in advance to know what weights are allowed.

How will overweight violations be treated?

Rund: The 2,000-pound tolerance provision will remain in effect, but the overweight fines will double in 2010.

Will weight limits change for farm equipment?

Rund: No. Implements of husbandry, other than cargo units, generally remain exempt from standard weight limits.

Farm wagons, fertilizer buggies, sprayers, and nurse tanks are all limited to 36,000 pounds gross vehicle weight.

Have speed limits for trucks been affected?

Rund: Yes. In 2010, the maximum speed limit for big trucks on interstate highways will be 65 mph. However, as long as the lower speed limit signs remain posted, that lower limit will apply.

UCR renewal notices delayed The federal government has not sent out renewal notices for the Unified Carrier Registration (UCR) because the 2010 fee schedule has not been determined, according to Kevin Rund, Illinois Farm Bureau senior director of local government.

However, the UCR Plan Board of Directors was expected to meet soon and settle on a schedule of fees, Rund added. Only after a fee schedule for 2010 is established will the Illinois Commerce Commission (ICC) send out renewal notices, he said.

Enforcement for 2010 UCR enrollment also will be delayed.

According to earlier information from the ICC, “Since applications will be going out late, UCR enforcement will begin approximately 60 days from the application mailing date, which we hope will occur around the end of November. Until that time, the 2009 UCR receipt will stand as proof of compliance.”

Dairy farmers to receive loss assistance payment USDA last week announced it will implement the new Dairy Economic Loss Assistance Program (DELAP) in the coming year.

Congress passed legislation in October that provided $350 million in relief for the dairy industry.

About $60 million of the assistance was for the purchase of cheese and other dairy products to reduce market surplus.

The remaining $290 million will be divvied up among eligible dairy farmers as a one-time direct payment.

Each payment will be based on the amount of milk produced and commercially marketed between February and July 2009. The payment

rate is approximately 32 cents per hundredweight.

Producers to be eligible for the one-time payment must have produced milk in the U.S. and marketed milk commercially at any time from February through July.

They also must have milk production data for those months.

Any dairy producer who has an annual average adjusted gross nonfarm income of more than $500,000 for calendar years 2006 through 2008 is not eligible for DELAP. For more information about eligibility requirements or the new program, visit your local Farm Service Agency office or go online to {www.fsa.usda.gov}

FarmWeek Page 9 Monday, December 21, 2009

FROM THE COUNTIES

‘Disappointing’ cattle market looks toward 2010 rebound

BY DANIEL GRANT FarmWeek

Most cattle producers probably won’t view 2009 as one of their better years from a marketing standpoint.

Cattle prices, which struggled to get above the mid-$80 range

FarmWeekNow.com Visit FarmWeekNow.com for full details of the cattle on feed report.

for much of the year, recently limped toward the year-end finish line and dipped into the high $70s.

“The market as a whole for the year tended to be on the disappointing side,” said Dale Durchholz, AgriVisor market analyst. “Placements tended to be light, but we could never get any traction in the market.”

Durchholz believes the economic recession, which likely cut into beef exports and overall beef demand, is the main culprit for the poor prices.

“I think it was just the economic situation we were thrown in” that limited the cattle market in 2009, he said.

However, the tide may turn after the holidays. The analyst predicted higher prices later this winter and into spring.

The USDA December cattle on feed report Friday showed some positive signs as placements in feedlots (1.85 million head) were about 3 percent lighter than traders expected.

Meanwhile, marketings of fed cattle (1.63 million) were up 4 percent and provided evidence that, despite weak prices the past month, the industry continued to move cattle into the pipeline.

“All in all, the report has

C

HAMPAIGN — The annual Illini Farm Toy Show will be from 5 to 9 p.m.

Friday, Jan. 8; from 9 a.m. to 5 p.m. Saturday, Jan. 9; and from 9 a.m. to 2 p.m. Sunday, Jan. 10, at the Hanford Inn & Suites, I-74 and U.S. 45, Urbana. Special events include a silent auction and a kiddie tractor pull on Saturday.

The event is sponsored by Champaign, Douglas, and Vermilion County Young Farmers.

Cost for Friday and Saturday is $3 at the door, $2 for youth ages 6-12, and free for children under 6. Sunday is Family Day with free admission.

ANCOCK — Nadine Blair, Hancock County Farm Bureau membership secretary and bookkeeper, will retire Thursday, Dec. 31. Send her a note of congratulations to 110 N Madison St., Carthage, Ill., 62321.

EORIA — Cathy Ekstrand, StewartPeterson Group, will be the speaker at a Women to Women Marketing seminar from 6:30 to 8:30 p.m. Monday, Jan. 11 and 25, at the Farm Bureau office. Call the Farm Bureau office at 6867070 for reservations or more information.

• Farm Bureau will sponsor a Stroke Detection Plus health screening from 9 a.m. to 4:30 p.m. Wednesday, Jan. 13, at the Farm Bureau office. Call 877-

H

some positives,” Durchholz said.

“The nearby supply of cattle should be tighter, which would be supportive.”

The report also showed the inventory of cattle and calves on feed for the U.S. slaughter market as of Dec. 1 (11.3 million head) was down 1 percent compared to the same time last year.

“If we start seeing signs of (economic) stability, you’d think at this point, looking at 2010, the cattle market arguably will be a little better as a whole than we went through this past year,” Durchholz said.

The analyst predicted cattle prices, which as of Friday were hovering in the low $80s, in coming months could push into the high-$80 range.

In the near-term, though, cash prices could remain in a sideways pattern due to the holidays.

“We’re looking at two holiday-curtailed slaughter weeks,” Durchholz added. “Once we get by the holidays, we should see the cash market start to show a definitive firming trend.”

P

Omissions Gold stars awarded to the Jackson and Jefferson county Farm Bureaus for quota achievement were not reported in the county awards on the banner or in the brochure at the Illinois Farm Bureau annual meeting or on the back page of the awards section of last week’s FarmWeek.

Bob Hall is manager of Jackson County FB; Chris Bunting is the manager of Jefferson County FB.

732-8258 for reservations or more information.

• A two-day bus trip to the John Deere engine and tractor assembly plant in Waterloo, Iowa, will be Jan. 28-29. Participants also will tour the Herbert Hoover Presidential Museum and Library and Duffy’s Collectible Cars. Call the Farm Bureau office for reservations or more information.

ERMILION — The annual Illini Farm Toy Show will be from 5 to 9 p.m.

Friday, Jan. 8; from 9 a.m. to 5 p.m. Saturday, Jan. 9; and from 9 a.m. to 2 p.m. Sunday, Jan. 10, at the Hanford Inn & Suites, I-74 and U.S. 45, Urbana. Special events include a silent auction and a kiddie tractor pull on Saturday.

The event is sponsored by the District 12 Young Leaders Committee. E-mail illinifarmtoyshow@yahoo.com for more information or call the Farm Bureau office at 217442-8713.

V

“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.

Auction Calendar Tues., Dec. 22. 10 a.m. Farm machinery and shop equip. George Guidish Jr., PALMYRA, IL. Rick Stewart, Auctioneer.

Tues., Jan. 5. 9:30 a.m. Late Model JD Machinery. Matt and MaryAnn McDonald, TAYLORVILLE, IL. Micenheimer Auction Service.

Wed., Jan. 6. 11 a.m. Farm machinery.

Phil and Teresa Underwood, NEWMAN, IL. Bauer Auction Service.

Fri., Jan. 8. 10 a.m. 68.86 Ac. Knox Co. John W. Hanlon Estate, GALESBURG, IL. Van Adkisson Auction Service, LLC. Sat., Jan. 9. 10 a.m. Farm machinery. Ed and Marge Allen Farm, CASEY, IL. Schmid Auction and Realty Co. Sat., Jan. 9. 8 a.m. 6 Farm Closeouts.

CANTON, IL. Route 9 Auction.

Sat., Jan. 9. 10 a.m. 280.63 Ac. Knox Co. Esther M Swanson and Bertha Staggs, GALESBURG, IL. Van Adkisson Auction Service, LLC. Mon., Jan. 11. 10:30 a.m. WGALS Heirs Trust, GIBSON CITY, IL. Gordon Hannagan Auction Co. Mon., Jan. 11. 10:30 a.m. Ford Co. Farmland Auction. WGALS Heirs Trust, GIBSON CITY, IL. Gordon Hannagan Auction Co.

FarmWeek Page 10 Monday, December 21, 2009

PROFITABILITY

Fall season brings opportunities and challenges

BY ROD WELLS

As has been discussed for the past several weeks, this fall season has been one of challenge as growers struggle to bring in what appears to be an overall very good corn crop.

Dry plant food applications have been a bit erratic with the harvest progress.

Several fourto five-day Rod Wells windows of heavy fertilizer terminal movement have occurred in those areas where harvest has progressed enough allow application activity. Reports thus far indicate a return to “normal” or better application rates where fertilizer is going down, and that is clearly on a localized basis.

Current models show corn outperforming soybeans for income generation in 2010.

And with many growers skipping 2009 fertilizer application and today’s lower relative fertilizer cost when compared to last year, it would appear increased applications rates will continue.

With the lessons learned in 2008-09, many dealers and terminal operators were justifiably reluctant to fill their fertilizer buildings prior to the fall season.

As we have previously stated, conventional wisdom dictated that dealers acquire inventory on an as-needed basis. Where application has occurred and resupply has been needed, there are dwindling inventories of phosphate and potash as well, although to a lesser degree.

Producer inventories of phosphate are now very low, standing at 38 percent below the five-year average and are lower than they have been since March 2007.

Resupply is on its way, but in the meantime strong export markets have tightened up supply availability.

Overseas markets seem to have awoken about the same time as the U.S market did, so export demand has been very strong for phosphates.

China, expected earlier in the year to be an exporter of supply, has suddenly turned importer instead. As you might expect, phosphate prices are on the rise.

The restocking phenomenon is happening in world nitrogen markets, too, and prices for urea and for UAN-solutions have moved up. For ammonia, spring contract prices are about $70-$100/ton higher than what fall prices were. Potash pricing seems to have stabilized.

M A R K E T FA C T S

Feeder pig prices reported to USDA*

Weight 10 lbs.

40 lbs.

50 lbs.

Receipts

Range Per Head Weighted Ave. Price $33.48-$45.00 $39.36 $47.00-$48.00 $47.15 n/a n/a This Week Last Week 22,527 24,142 *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 $61.98 $59.32 $45.87 $43.90

Change 2.66 1.97

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

This week 79.71 79.58

Prv. week 78.89 78.87

Change 0.82 0.71

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

(Prices $ per hundredweight) This week Prev. week Change 94.00 93.13 0.87

Lamb prices Confirmed lamb and sheep sales This week 954 Two week’s ago 740 Last year 788 Wooled Slaughter Lambs: Choice and Prime 2-3: 90-110 lbs, $105. 110-130 lbs., $93-$96. Good and Choice 1-2: 60-90 lbs., $115. Slaughter Ewes: Utility and Good 1-3: $44-$46. Cull and Utility 1-2: $44.

Export inspections (Million bushels)

Week ending Soybeans Wheat 12-10-09 53.6 13.0 12-03-09 61.0 13.4 Last year 35.2 12.6 Season total 598.9 454.4 Previous season total 432.6 639.1 USDA projected total 1340 875 Crop marketing year began June 1 for wheat and Sept. 1 for corn and soybeans.

Corn 28.1 28.1 31.3 461.6 460.0 2050

All of this seems to be driven by the same restocking phenomenon as noted and the realization that demand at the farm level is returning to normal after the near implosion of last year.

Put simply, we encourage you to stay close to your local FS crop specialist to plan and communicate your winter and spring plant food needs.

Rod Wells is GROWMARK’s director of agronomy sales and operations. His e-mail address is rwells@growmark.com.

Net farm income could slip to four-year low in Illinois

BY DANIEL GRANT FarmWeek

Net farm income in Illinois for 2009 is expected to dip to a four-year low, according to projections by the University of Illinois.

The average net farm income this year, based on Illinois Farm Business Farm Management records, is projected to be $60,000.

That would be about $140,000 off last year’s record high and would be the lowest figure since net farm income hit $58,000 in 2005.

“Net farm income for 2009 is down significantly compared to recent years,” said Gary Schnitkey, University of Illinois Extension farm management specialist, during the 2009 Illinois Farm Economics Summit last week in Bloomington.

The drop in net farm income is due to lower commodity prices, which were estimated this year to average $3.50 per bushel for corn, $10.10 per bushel for soybeans, and $3.80 per bushel for wheat, and higher input costs, Schnitkey reported.

The 2008 and 2009 crops were the most expensive to produce in U.S. history, according to USDA. The U of I estimated input costs will be slightly lower in 2010 compared to 2009. For example, direct costs in Central Illinois on a per-acre basis were projected to decline from $428 to $302 for corn and from $192 to $159 for soybeans.

“Costs are projected to decline somewhat based on lower fertilizer prices and drying costs,” Schnitkey said.

“But they still will be among the highest cost levels on record.”

Actual input costs for next

year could be higher than current estimates due to the possibility of higher energy prices.

“The futures market suggests rising prices (for natural gas) and in the long run we could experience some upward pressure on crude oil prices,” Schnitkey said.

Meanwhile, a lack of fall fertilizer applications this year could create bottlenecks and supply problems next spring.

“There probably is more upside potential than downside pressure (on fertilizer prices) at this time,” the farm

management specialist said.

Schnitkey also looks for cash rents to remain relatively flat in 2010 after a 15.6 percent increase in 2008 and a 4 percent increase in 2009.

“I think we’ll see flat cash rents (in the upcoming year),” Schnitkey said. “I’ve never seen prices come down.”

The U of I is projecting farm returns will improve in 2010 compared to 2009 due to slightly higher crop prices and lower input costs. The average net farm income projection for 2010 in Illinois is $100,000.

FarmWeek Page 11 Monday, December 21, 2009

PROFITABILITY Corn Strategy

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

Soy demand exceptional Amid the market’s narrow focus on outside markets, the dollar in particular, it’s important to acknowledge that soybean and soy product demand is nothing less than exceptional.

In the above graphics, we’ve estimated November’s actual crush and exports. The estimates should be reasonably close as we used the National Oilseed Processor Association’s crush number for November and weekly USDA export shipments to estimate the monthly number for each.

Basis charts

The thing that jumps out at us on the graphics is how quickly exports and crush surged following the slow start this marketing year. Both exports and crush were subdued in September and early October by the lack of soybeans due to tight old-crop inventories and the slow early harvest.

Given the export sales already on the books and the persistence of very good crush margins, December’s consumption for both categories should exceed the pace based on the 2003/2004 marketing year, lifting the year’s total above the pace dictated by that year.

We’ve used that year as a base because its consumption was the most heavily front-endloaded year of the last 20, a period in which South American production almost tripled.

The longer consumption remains above the pace based on that year, the larger the odds our ending stocks projections are going to have to be trimmed significantly. And there’s reason to think we’ll stay ahead of that pace into February.

If there’s even a hint of a production problem in South America in this environment, it will dictate that everyone reevaluate their price forecasts and related risk-management positions. That spells — volatility!

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2009 crop: Corn continues to trade in a broad, sideways range. March futures have dropped to the $3.96-$4 support. Downside risk below it should be limited. Use rallies to make needed late-harvest sales, especially on commercially stored corn. Further gains may not pay much more than the cost of storage. If March futures rally to $4.35, boost sales to 50 percent.

Check the Cash Strategist Hotline often for changes. On farmstored corn, the large futures carry makes hedge-to-arrive contracts for winter/spring delivery attractive. Be careful storing corn beyond March/April unless you are confident about its quality.

2010 crop: We are considering initiating sales if December 2010 futures move above $4.50.

Fundamentals: There’s still a little more than 1 billion bushels standing in the field, with more than 900 million of that in areas that had snow.

Still, a 200-million-bushel loss would be relatively aggressive.

Soybean Strategy 2009 crop: Dollar strength finally triggered a wave of liquidation in soybeans and products. Unless January futures close below $10, we expect to see higher prices return. If March futures push above their $10.84 high, they should go well beyond $11. For now, wait to see if prices can still rally to new highs before making sales.

2010 crop: We are considering initiating sales if November 2010 futures approach $11. Check the Cash Strategist Hotline occasionally for a specific recommendation.

Fundamentals: Even with expectations for a large South American crop, demand for our soybeans and products remains exceptionally strong.

Even China continues to accumulate purchases at an impressive pace. South American growing conditions are mostly good, but the critical part of the growing season is still ahead.

Wheat Strategy 2009 crop: Wheat

slipped lower when other grains lost upside momentum.

Chicago March futures have support at November’s $5.07 low. Use March futures rallies above $5.50 for catch-up sales.

Hold off additional sales until after the 20-week low that is due in early 2010.

2010 crop: Our target of Chicago July futures reaching $6.15 to make an initial 25 percent sale may have been taken off the radar. We might adjust that target, but will wait for the trend to shift before considering a change.

Fundamentals: In the December supply/demand report, the Australian wheat crop was pegged at 22.5 million metric tons (814 million bushels), down 1 million tons (37 million bushels) from last month. The reduction was the result of intense heat in the southern growing region at the end of the season. Abundant world stocks have muffled the impact of the reduction. Still, there are potential developing problems with the new Russian and Ukraine crops that need to be closely watched.

FarmWeek Page 12 Monday, December 21, 2009

PERSPECTIVES

Have a honey of a holiday season One universal and timeless characteristic of the holidays is feasting. In fact, nothing shouts of holiday festivities like food.

The Christmas celebration is no different.

Of course, the type of food for any celebration is dictated by the time, place, and tradition.

Special food for the holidays involves almost any type of ingredients that you can think of except for one thing. Insects seem to be shunned when it comes to food items for the holidays.

At least that is generally the case in North America and Europe. In the rest of the world, an insect dish might be more likely to ur o TOM find a place at a celebration m TURPIN table.

Fro ive s h our But even in the United States an insect product is likely to be part of to y the holiday repast. Sweets, it seems, are an important part of holiday foods. Therefore, honey — nature’s finished sweet — has a good probability of showing up when the food is on the table.

For eons humans have availed themselves of this insect product to sweeten their food. We don’t know when humans first began to use honey to satisfy the demands of their sweet tooth, but it was long ago.

Honey bees are present in Egyptian hieroglyphics dating back to 3500 B.C. And even before that, rock paintings on the walls of caves in Spain indicate that our stone-age ancestors were honey collectors.

So honey at a meal is nothing new for humans. At our modern holiday tables, honey might be there in a honey pitcher, honey pot, or plastic honey bear. Such items are self-serve honey dispensers that allow diners the opportunity to adorn food with a hearty dose of what some poets have called “the fruit of the hive.”

Chances are good that a meat dish at the meal might have been prepared using honey. For instance, honey-cured ham or honeysmoked turkey.

If you buy a ham that is labeled honey cured, it must meet cer-

tain criteria. First, the honey must be U.S. grade C or better. In addition, the honey must be at least 50 percent of the sweetener used. Finally, the honey must have a discernible effect on the flavor and/or affect the appearance of the finished product.

I suppose similar rules apply if you buy a turkey labeled honey smoked. I found a recipe for honey-smoked turkey. Here’s what you do: After cooking for an hour on a charcoal grill, drizzle onehalf of a l2-ounce jar of honey over the bird. Then cook for another hour or so, turn the bird and baste with the remaining honey. Leave the turkey uncovered and cook for 15 minutes.

Presto, honey-smoked turkey!

There are other meat dishes that use honey: spare ribs that are honey glazed, balsamic-and-honey pork chops, and Cornish game hens with honey. For starters, spoon a little honey mustard dressing on the salad.

Honey wheat bread sounds like a nice idea.

And don’t forget about desert. Might I suggest figs with honey ice cream or honey apple pie?

If seasonal eggnog is a must at your holiday party, make it honey eggnog. But if eggnog is not your thing, you might try holiday honey punch.

Speaking of liquid refreshments, how about a glass of mead? Mead is an alcoholic beverage made from honey and appropriately known as honey wine.

Mead was said to be a favorite drink of the Medieval knights of old.

It also is the drink that is responsible for the term honeymoon, because a couple was supplied with enough mead to last for the first month of their married life.

With all of that food in your stomach, it is time for a cup of coffee or tea.

If your choice is tea, it makes sense to grab the honey bear container and sweeten the beverage with a squirt of honey. That would be a sweet conclusion to one honey of a holiday meal!

Tom Turpin is a entomology professor at Purdue University, West Lafayette, Ind. His e-mail address is turpin@purdue.edu.

Farmers must be involved in global climate debate “Something is rotten in the state of Denmark,” says one of the minor characters in Shakespeare’s Hamlet.

Let’s hope that farmers don’t wind up drawing the same conclusion about the United Nations (UN) Climate Change Conference in Copenhagen.

The massive two-week event attracted more than 16,000 delegates. That’s enough to fill a basketball arena. Many of these conference-goers hoped that the nations of the world agreed to reduce their greenhouseDEAN KLECKNER gas emissions in order to reverse global warming.

Their own transportation to and accommodations at the conference released more than 40,000 tons of carbon dioxide into the atmosphere, according to one estimate. Arguably, this big carbon footprint will worsen the very problem that they tried to solve.

It goes to show that even the finest motives can suffer from unintended consequences — and why attendees, whose ranks included President Obama, had to tread carefully when it came to farmers.

Agricultural activity accounts for about 14 percent of all greenhouse gases around the world. In some developing countries, especially in Sub-Saharan Africa, farming is responsible for the majority of all carbondioxide emissions.

So agriculture needed to be an important

part of any discussion on how to reduce greenhouse gases. The answer isn’t as blissfully simple as asking us to start driving “green” tractors — and I don’t mean machines built by John Deere.

Whether you believe that climate change is a human phenomenon or a natural event in the long history of our planet is not the issue. It’s hard for laymen to know what to make of it all. Even the experts don’t agree.

It becomes more confusing in light of the new “Climategate” controversy. Several influential researchers, mainly from the U.S. and the United Kingdom, are alleged to have twisted data in order to score political points — a behavior that is the exact opposite of what we should expect from scientists.

No matter where people come down on this issue, all should be able to agree on one point: Humans are capable of messing things up, whether it’s the climate or the debate about the climate.

Let’s not allow blind obsessions on either side of the global warming issue mess up agriculture, too. If action from this conference raises the cost of farming, thereby making food production more costly and less bountiful, then what will we have accomplished?

Perhaps the planet will be warmer. Perhaps it will be cooler. One thing is certain: It will be a lot hungrier. That’s because a separate branch of the UN, the Food and Agriculture Organization (FAO), says food production will have to double

between now and 2050.

To meet the FAO’s goal, farmers must become more productive. This will be enough of a challenge without also having to contend with new restrictions on energy use.

Here’s a modest proposal for the UN and the people who attended its conference in Denmark: Any final agreement on climate-change policies must do nothing to imperil global food security. In other words, they should avoid policies that will make it more difficult for farmers to feed the world.

In some nations, it may make sense to encourage an intensification of agriculture because it would lead to welcome gains in productivity and lesson the pressure to turn forests into farmland.

More international trade would help, too.

By improving the flow of goods and services across borders, it may become possible for regions with relatively low carbon emissions to produce food for regions with higher levels.

But the bottom line is that when it comes to the deliberations over global warming, farmers must have a seat at the table. If they don’t have one, the Copenhagen conference may try to celebrate whatever success it enjoys — only to discover that nobody has anything to eat.

Dean Kleckner, an Iowa farmer, chairs Truth About Trade & Technology. He may be contacted at www.truthabouttrade.org.

Letter to editor Prefers not to have bucket in bathroom Editor: This is a reply to Herman Brockman’s letter, Nov. 13, 2009. Brockman contested Jim McCarthy’s position stating, “The use of industrial agriculture, which is highly dependent on fossil energy for fertilizer and pesticides, is not sustainable, and ranks high on my list of very worst practices.”

It appears Brockman prefers to live in the “world” of Cheryl Crow (limit use of toilet paper) ... or the world of Adam Fisher, Time magazine, Dec. 14, “Humanure-Goodbye Toilets,” placing a bucket in the bathroom and carrying humanure outside — (to save water) ... or the world of Environmental Protection Agency Administrator Lisa Jackson, who recently declared that carbon dioxide is a threat to human health.

Brockman cites Africa as a place which respects cultural and agricultural historical wisdom and traditions as opposed to what he refers to as non-sustainable agricultural practices in this country. The results: In Africa, small farms barely produce enough to feed the family.

In the U.S., one farm produces enough to feed 150 people.

Our system is sustainable via technology.

The implication that farming and/or living and breathing contributes to man-made global warming has not been proven.

Consensus does not equal science.

As John Block wrote in the Dec. 14 FarmWeek, “There are enough unanswered questions to suggest that man-made global warming may be a farce.”

I prefer to live in the real world — without a bucket in the bathroom.

LAWRENCE LABERTEW, West Frankfort

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