A FEDERAL AGENCY says the ethanol industry has “matured” and no longer needs the 45-cent-per-gallon federal tax credit. .............................................4
A NEW STUDY SUGGESTS soy producers and shippers have been significantly “overcharged” by major rail carriers. Reforms are being sought. ...................................5
A N A M E R I C A N FA R M B U R E AU Fe d e r a t i o n s u r ve y found retail food prices have declined about 10 percent compared to a year ago. ...................10
Monday, October 12, 2009
Two sections Volume 37, No. 41
Cap and trade export killer?
Ag picture even bleaker under Senate plan BY MARTIN ROSS FarmWeek
Economists now are painting an even bleaker picture for U.S. producers under revised “cap-and-trade” projections. The picture for Midwest farmers — and consumers — would grow even darker under current U.S. Senate provisions for determining winners and
losers in the future “carbon market,” American Farm Bureau Federation analyst Bob Young warned. Soybean, poultry, and pork exports could plummet under climate measures likely to reward a shift from ag production to widespread forestation, Young told FarmWeek Friday. Where House legislation
authorizes USDA to determine ag practices that would qualify producers to receive marketable emissions “offsets,” a Senate Environment and Public Works Committee plan would leave offset decisions to the White House. Corn grower groups have taken a wait-and-see stance toward House proposals, but
IT’S PUMPKIN TIME
Jim Rogers rearranged some of the pumpkins at his Rogers Pumpkin Farm near Lomax in Henderson county. Rogers and his wife, Kathi, grow 60-70 varieties of gourds, pumpkins, and squash on 15 acres. Rogers said harvest is a week behind, and some varieties produced no crop because of wet growing conditions. Both yields and sizes are down this year, he said. Illinois historically has led the nation in pumpkin production. (Photo by Ken Kashian)
Illinois Corn Growers Association President Rob Elliott maintained the Senate plan “doesn’t appear very agfriendly.” “It doesn’t appear that it even goes close to where the House tried to get,” Elliott said. “That would say the thing’s probably not going to work for agriculture. It needs a huge (ag) ramp-up before we would give it a go-ahead.” Under the Senate proposal, the president would identify eligible “offset types,” with no requirement to consider ag practices. The bill does not include House-approved proposals that would forestall U.S. Environmental Protection Agency consideration of indirect land use change as a measure of ag biofuels’ greenhouse impact and, in turn, federal support. In an RFD Radio interview, Senate Ag Committee Chairman Blanche Lincoln (D-Ark.) argued her committee would play “a big role” in trying to shape a Senate bill that is more “fair and productive for agriculture” and low-income consumers. “There is still a lot of work (to be done),” she said. Young said further analysis of data collected by EPA indi-
cates House proposals by 2050 would spur removal of “significant” farm acreages for tree production. Tree production is seen as the key strategy for “sequestering” carbon dioxide (CO2) in the soil and capturing carbon “credits” for sale to potential greenhouse polluters. Even optimal row-crop sequestration practices (such as no-till) are unlikely to generate major CO2 revenue for most farmers, Young said. CO2 prices at $20 per ton could encourage diversion of 12 million to 15 million acres for forests, he suggested. Under best-case assumptions, EPA predicts carbon prices would rise by at least $5-perton per annually, and with a potential $60-$100 long-term carbon price tag, Young sees the possibility of 60 million acres of land coming out of production by 2050. If anticipated new nuclear plants and renewable power sources failed to materialize, offset demand could jumpstart CO2 prices to an initial $50 per ton and 70 million acres could shift to forest by midcentury, Young said. See Senate, page 2
Periodicals: Time Valued
EPA announces new atrazine health study BY KAY SHIPMAN FarmWeek
The U.S. Environmental Protection Agency (EPA) announced last week the start of a new year-long study of potential health risks related to atrazine. Syngenta, the herbicide’s manufacturer, anticipated a review and looks “forward to a safety review based on sound science,” Sherry Ford, a Syngenta spokesman, told FarmWeek. At the end of the review, EPA will determine if it needs to revise its position on
atrazine or if current use restrictions are sufficient. Atrazine is one of the most widely used and extensively studied agricultural herbicides in the U.S. EPA will use a scientific advisory panel that was established under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) to conduct the review. However, EPA is not conducting a new study, Dale Kemery, an EPA spokesman, told FarmWeek. The advisory panel will review scientific literature available before EPA’s
FarmWeek on the web: FarmWeekNow.com
2003 decision to reregister atrazine as well as new studies issued between 2003 and 20l0. Syngenta believes “an ongoing transparent review is part of the ongoing process,” Ford said. However, she added the review EPA has planned is broader than the company had anticipated. In addition to reviewing scientific literature, the advisory panel also will consider water monitoring data that has been collected since 2003. As part of a 2003 decision, EPA required Syngenta in certain watersheds to conduct
weekly monitoring during the atrazine-use season and biweekly monitoring the rest of the year. The advisory panel also will consider what changes, if any, are needed for sampling frequency and watershed monitoring. “In large measure, this review is ensuring that any new science since the 2003 decision is considered to see what, if any, changes may need to be made to the agency’s regulatory framework for atrazine,” Kemery said. EPA outlined a timeline for See Atrazine, page 3
Illinois Farm Bureau®on the web: www.ilfb.org
FarmWeek Page 2 Monday, October 12, 2009
Quick Takes AG SPENDING APPROVED — Congress has cleared $9 million-plus in USDA/U.S. Food and Drug Administration (FDA) funds for Illinois projects. The fiscal 2010 ag spending package now goes to President Obama for his signature. The bill includes $3.5 million for the Biotechnology Research Development Center in Peoria to fund development of livestock productivity, crop yield, and veterinary medicine technologies. The Illinois Department of Natural Resources Illinois Conservation Initiative was granted $576,000 for conservation efforts including wildlife management, wetlands and habitat restoration, and invasive species control. The National Center for Food Safety and Technology at Summit-Argo will receive $2 million to continue FDA research into advanced detection technologies and preventive controls. Congress provided $745,000 to the University of Illinois for soy genomics and genetic engineering research to improve drought resistance, disease tolerance, and resistance to soybean cyst nematode and soybean rust. Another $175,000 goes to the Chicago Botanic Garden’s Windy City Harvest program to teach individuals new job skills. AG STUDENT CUTS SOY TOY DEAL — A Purdue University agricultural economics student not only created a new modeling clay from soybeans, he also gained a $300,000 investment for his new venture on a network business show. Sawyer Sparks created Soy-Yer Dough for the university’s Burton-Morgan Entrepreneurship Program. The modeling compound, which comes in different colors and scents, sells for $2 a package at {www.soyyer.com}. Recently, Sparks pitched his idea on ABC’s “Shark Tank.“ He sold 51 percent of his company to three of the program’s investors. Sparks is buying a licensing deal that will create jobs in his hometown, Bloomfield, Ind. He plans to hire 10 to 15 full-time employees. WHITE HOUSE GARDEN OFFERS SCHOOL TOURS — The White House has opened First Lady Michelle Obama’s kitchen garden for student tours. White House chefs will lead the tours and pass along tips for healthy eating. In addition to walking through the South Lawn, student tourists will get to take a peek at the White House bee hive. The first lady and local students planted the garden this spring. Since then, hundred of pounds of fresh vegetables have been eaten by guests and delivered to local food pantries. Information, regulations, and online applications are available at {www.whitehouse.gov/about/tours_and_events/ garden/}.
(ISSN0197-6680) Vol. 37 No. 41
October 12, 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
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
PRODUCTION
USDA raises corn, bean yield estimates and many eyebrows BY DANIEL GRANT FarmWeek
USDA Friday raised its yield estimates for corn and soybeans despite the fact harvest is off to such a poor start in much of the Midwest. The national corn yield currently is projected to average a
FarmWeekNow.com Listen to analyst Joe Vict o r ’s c o m m e n t s a b o u t t h e l a t e s t USDA crop repor ts at FarmWeekNow.com.
record-high 164.2 bushels per acre while the soybean yield is projected to be the third-highest on record at 42.4 bushels per acre. Yield projections in Illinois remained unchanged from last month at 179 bushels per acre for corn and 44 bushels per acre for beans. The high yields are projected to produce the largest soybean crop (3.25 billion bushels) and second-largest corn crop (13.02 billion bushels) on record. However, freezing conditions that were projected to move into much of the Midwest this past weekend, and the
possible continuation of the cool, wet pattern could force USDA in coming months to adjust its crop estimates (see the Cash Strategist commentary on page 15). “The trade has been playing the game that big crops tend to get bigger,” said Dale Durchholz, AgriVisor market analyst. “But the longer we keep putting harvest off, the more field losses will rise. We could end up with yields not much higher than they are today (Friday).” Joe Victor, vice president of Allendale Inc., said the market was anticipating a frost/freeze this week that could nip corn production by 100 million bushels while heavy rains and disease pressure in the South could trim soy production by 5 million bushels. “The growing season, for the most part, is over,” Victor said during a Friday teleconference hosted by the Minneapolis Grain Exchange. “We anticipate it could be a little bit lighter corn crop.” The 2009/10 season average price estimates were a little lighter as well: USDA on Friday projected a range of $4.55 to
$5.15 per bushel for wheat (down 35 cents on the high end) and $8 to $10 per bushel for beans (down a dime) while it left the corn price estimates unchanged at $3.05 to $3.65. But strong demand should keep pressure on prices. USDA raised corn feed use by 50 million bushels, food/seed/industrial use by 5 million bushels, and soy exports by 25 million bushels to a record 1.305 billion bushels. “We may have already passed the seasonal low (for corn and beans), and once we get by mid-November, I think this market has got some upside potential,” Durchholz said. “We’ve got a huge commitment on the books for soybeans and soy products.” Durchholz believes the wheat market also has limited downside risk. “Wheat prices probably are low enough,” he said. U.S. wheat exports in coming months could increase due to production problems in other areas of the world, and prices could be pressured by a possible reduction of winter wheat acres due to the late rowcrop harvest, Durchholz added.
GREEN BEAN HARVESTER
Travis Kasterschmidt of Ripon, Wis., displays a sample of the green bean crop harvested last week near Manito in Mason County. Kasterschmidt, a Del Monte harvest boss, and his crew harvested about 4 tons of beans per acre on the 155-acre field. Illinois growers plant about 3,400 acres of green beans, which are planted and harvested twice a year. (Photo by Ken Kashian)
Senate Continued from page 1 Best-case prospects appear dim with House rejection of funding for a nuclear waste dump at Nevada’s Yucca Mountain, and Democrat lawmakers continue to resist nuclear development. Without nuclear options, natural gas would be the likely option for replacing coalfired electrical generation, crimping gas supplies and raising ag energy and input costs. At $100-per-ton carbon by 2035, “we’re not exporting any soybeans at all,” and annual corn
exports could drop by 750 million bushels, Young said. (USDA on Friday projected corn exports for the coming year at 2.15 billion bushels). Pork producers hit by high feed prices could see a 25-40 percent export drop and a 50-60 percent jump in imported pork. “Pork production would be down by a third,” Young predicted. “By the time you got to 2050, it would be off by more than 40 percent.”
FarmWeek Page 3 Monday, October 12, 2009
GOVERNMENT
State revenue decline worse than anticipated BY KAY SHIPMAN FarmWeek
State revenues dropped, as expected, in the first quarter of fiscal year 2010, but the scale of the decline was disturbing, according to the General Assembly’s economic forecasting arm. Worse yet, the state economists warned not to expect an abrupt state revenue improvement even though the economy is recovering. Overall, Illinois revenue was down $340 million for the first quarter compared to the same period last year, the Illinois Commission on Government Forecasting and Accountability (COGFA) reported. However, that drop would have been worse without a $289 million gain in federal sources, economists noted.
“The magnitude of the falloffs are somewhat unsettling and serve as a reminder that despite being in a recovery phase, revenues should not be expected to abruptly improve,” reported Jim Muschinske, COGFA’s revenue manager. The latest dismal revenue numbers preceded the start of the fall veto session this week. “The time-honored tradition of seeking supplemental appropriation bills in the veto session is going to have a damper put on it this year,” said Kevin Semlow, Illinois Farm Bureau director of state legislation. “The state’s economic forecast is con-
tinuing a downward spiral.” Sales taxes were down a “stunning” $244 million, Muschinske noted. Personal income taxes dropped $278 million, and corporate incomes declined $113 million. If the gains from federal sources were excluded, state revenue falloff would be “a much more alarming $629 million,” Muschinske wrote in a September revenue report. The revenue reality puts even more pressure on the state budget, according to Semlow. “State revenue from tax sources continues to fall. The current state budget, which was built on slightly declining revenue
estimates, is going to experience a significant negative impact,” Semlow said. Semlow projected that state agencies and state programs may face a difficult situation of delayed funding. “This means that state vendors and individuals who receive state grants and funding assistance could see those programs delayed or cut back even more,” Semlow explained. Muschinske’s best-case scenario would be a gradual improvement in the rate of declining sales and income revenue by the end of June. In the 2001 recession, the state needed about four quarters before the economic recovery was reflected in improved revenue from income and sales taxes.
offering online survey Rural broadband projects outstrip funds IDNR of Conservation Congress issues
Illinois proposals online
including fiber and new towers, but not for operations, Adelstein clarified. USDA and the Commerce Department All the project proposals, including maps, received proposals seeking nearly seven times are online at {www.broadbandusa.gov} and the amount of money available to expand may be searched by state. broadband Internet services, “You can see if someone is including 35 proposals for Illiproposing to serve your nois, said Jonathan Adelstein, ‘Broadband is as area,” he said. administrator of USDA Rural To search for Illinois proessential today as Utilities. posals, to the website and electricity was in find thego“What’s “We see rural areas are recognew at nizing the need for broadband,” the past.’ broadbandusa.gov” section. Adelstein said during an interA Sept. 9 entry has a link to a view on “RFD Today.” “Broad— Jonathan Adelstein searchable database of all band is as essential today as elecUSDA Rural Utilities first-round applications. administrator tricity was in the past.” Select Illinois to see proposThe two federal agencies als that focus on or include received about 2,200 applications Illinois. requesting nearly $28 billion compared to the Several proposals would serve multiple $4 billion available. states, including Illinois. Other proposals Adelstein anticipated the first selected prowould serve specific Illinois communities, jects will be named in November. He said more while still others focus on multiple counties. applications will be accepted from December Adelstein views broadband as an economic through February, and the recipients will be development tool for rural America and technamed in June before the program ends Sept. nology that will give young people an opportu30. nity to live and work in rural areas. — Kay Funding is to be used for infrastructure, Shipman
The Illinois Department of Natural Resources (IDNR) is offering an online survey through Thursday of topics to be discussed at the Conservation Congress Oct. 24-25. A Conservation Congress planning team will analyze and present survey results during the congress. The survey is online at {http://dnr.state.il.us/nrab/cc .htm}. At Conservation Congress, participants will review, propose, and vote on recommendations for elected and appointed Illinois officials. The topics will include youth recreation, access to privately owned land, and conservation funding. The survey asks individuals’ opinions and provides
opportunity for suggestions and comments. Individual survey results will remain anonymous, and those participating in the survey are not required to give a name or address. Survey questions cover three main issues of public access, youth outdoor recreation, and funding. For example, one question asks survey respondents whether they agree or disagree that the state should raise funding for conservation and recreation from a variety of sources, taxes, and fees. Another question asks respondents about their support for different incentives to encourage private landowners to open their land to outdoor recreation.
to the public. In addition, EPA said it plans to meet with interested groups to explore ways to
inform the public more quickly about results of atrazine drinking water monitoring.
Atrazine Continued from page 1 the review. In February, the agency will seek a scientific review of data from new epidemiology studies and how that will be incorporated into the atrazine assessment. In April, EPA wants a scientific review of potential non-cancer health problems based on animal laboratory studies. The agency also is to present its plan for sampling and monitoring of community drinking water supplies. In September, EPA plans a scientific evaluation of possible cancer-causing effects related to atrazine. The review is to include results from the National Cancer Institute’s agricultural health study expected to
be published next year. “The more open and transparent the process is, the better. We believe in the science,” Ford said. Kemery added EPA “is committed to sound science and transparency in the atrazine human health science evaluation.” EPA recently announced a new process for public review and comment on pesticide risk assessments (see accompanying article). Asked how that process would fit with the atrazine review, Kemery answered the public may comment during open meetings of the advisory panel. Information about the panel’s meetings can be found at {www.epa.gov/scipoly/sap/in dex.htm}.
Also the panel’s final reports and recommendations coming from each of its meetings will be available
USEPA taking more public comments on pesticide registration decisions The U.S. Environmental Protection Agency (EPA) is establishing a new process that will allow the public to review and comment on risk assessments and proposed registration decisions for pesticides. This expanded process will apply to all new pesticide active ingredients and first food uses, first outdoor uses, and first residential uses. “This new process will give the public greater opportunity to participate and understand decisions about new pesticides,” said Steve Owens, EPA assistant administrator for the office of prevention, pesticides, and toxic substances. Starting Oct. 1 for certain registration
actions, EPA’s risk assessment and proposed decision was added to the public docket and made available for a 30-day public comment period. After the comment period, EPA will publish its decision and responses to comments. This will give the public the opportunity to comment on all major new exposure patterns for pesticide registration. Interested persons also will get information sooner on reduced-risk pesticides being registered that can replace some of the older, often more toxic pesticides. For more information, go online to {www. epa.gov/pesticides/regulating/index.htm}.
FarmWeek Page 4 Monday, October 12, 2009
MARKETS ICGA head: ‘Investment’ still needed
GAO report targets ethanol tax credit BY MARTIN ROSS FarmWeek
Despite a government agency’s call for an end to the federal ethanol tax credit, now is not the time to remove the incentive, said Illinois Corn Growers Association President Rob Elliott. A federal Government Accountability Office (GAO) report concluded the 45-centper-gallon Volumetric Ethanol Excise Tax Credit (VEETC) may no longer be needed to stimulate corn ethanol production because the industry has now “matured.” Congress should consider ending the credit, GAO recommended. GAO estimated the credit could cost the U.S. $6.75 billion in annual lost revenue by 2015. The credit does not stimulate additional ethanol
consumption, the agency argued. The Washington-based Renewable Fuels Association (RFA) called GAO’s analysis “little more than a book report, rehashing many of the criticisms that have been leveled at the ethanol industry from a variety of special interests without introducing any new information.” RFA deemed the ethanol credit “instrumental” in helping building the U.S. renewable fuels industry and crucial “as long as petroleum and fossil fuel companies that dominate the energy market continue to receive preferential tax treatment and hidden subsidies.” “It’s really not the time to pull the plug now,” Elliott told FarmWeek. “(Ethanol producers) have been on the
bleeding edge of profitability, anyway. “To me, this is a return on investment thing. I was reading where the ethanol industry put about $8 billion in tax revenue into the Treasury last year. It represents about a half-million jobs and somewhere upwards of $70 billion in economic activity. In my mind, VEETC is an investment.” The federal renewable fuels standard (RFS) mandates 15 billion gallons of annual cornbased ethanol and 21 billion gallons of cellulosic and “advanced” biofuels use by 2022. Because VEETC benefits accrue to fuel blenders, it has helped fund distribution and retail infrastructure crucial to building ethanol demand needed to meet RFS targets
Industry to offer consumers more animal welfare assurances duction medicine and epidemiology at Kansas State University and co-chairman of Consumers in coming months will receive NAFAWC-Beef. more assurances that any concerns about aniSartwelle said he hopes the new commismal welfare are being addressed by the ag sion not only will provide more information industry. to consumers about animal welfare but also An independent advisory group, the that it will help the industry fend off attacks North American Food Animal Well-being from activist groups. Commission for Beef (NAFAWC-Beef), He believes attacks on modern agriculture recently was formed and will focus on issues from groups with a “vegetarian agenda” will related to the health and well-being of beef intensify in the future. cattle. “We need to show folks (and assure conMeanwhile, American Humane Certified sumers) we have an ample amount of scirecently launched a new training program ence and training and as producers we do designed to things right,” meet the food he said. “We industry’s call also need to for better ‘We need to show folks (and assure think about training of what we do consumers) we have an ample amount and how we people who handle farm of science and training and as produc- can do it betanimals. ter.” ers we do things right.’ “We hope to The comprovide assurmission’s pub— Jim Sartwelle lic outreach ances to ranchAmerican Farm Bureau Federation ers and conefforts will sumers,” said include farm Jim Sartwelle, organizations, economist with the American Farm Bureau consumer groups, beef harvesting companies, Federation, who is an ad hoc member of veterinary groups, food retail and restaurant NAFAWC-Beef. “And, hopefully, it will lead groups, and animal welfare groups. to added confidence for consumers” who Elsewhere, American Humane Certified’s purchase beef. new training program for farm workers will NAFAWC-Beef will seek increased focus on early recognition of behavior or research funding for animal well-being, facili- health problems that could be detrimental to tate the communication of research results in the individual animal or entire flock or herd. a timely manner, advance best management It also addresses animal welfare issues created practices in cattle health and welfare, and by a lack of worker/handler knowledge. serve as an unbiased science and production“It answers the industry’s need for edubased group to address concerns about anication of existing and new employees so mal welfare. they can ensure proper and humane animal “People across the country are looking for welfare and avoid potentially negative more information on animal care and hanissues,” Tim Amlaw, director of American dling and we’re eager to share our story with Humane Certified, said of the new training them,” said Dan Thomson, professor of pro- program.
BY DANIEL GRANT FarmWeek
and spur future cellulosic ethanol production. Ethanol infrastructure development is still lagging in regions including the southeast U.S., Elliott said. Further, he noted “higher demand profitability” generated by ethanol incentives has offset farm program payments previously triggered by $2 corn. Without the ethanol credit, Food and Agricultural Policy Research Institute (FAPRI) economist Pat Westhoff esti-
mates domestic ethanol production could fall by nearly 2 percent by 2018, with a similar drop in ethanol use. The credit, also available to those who blend foreign ethanol, is the basis for a 54cent-per-gallon tariff imposed on ethanol imports. Eliminating the tariff could result in an added 8.8 percent drop in domestic production and a possible 128 percent increase in imported biofuel, Westhoff projected.
CubaGO!: ‘Experiment’ over; time to move on After nearly a half century, the U.S.’ “experiment” with Castro’s Cuba has failed, said Illinois Corn Growers Association President Rob Elliott. The Warren County producer participated with a variety of commercial, academic, and humanitarian interests in a recent Washington “CubaGO!” briefing aimed at bolstering congressional support for Cuban travel and trade reforms. Former Ag Secretary John Block joined Illinois delegates in backing proposals to end federal travel restrictions on U.S. citizens and residents and travel-related “transactions” that could improve U.S.-Cuban trade. Illinois Farm Bureau national legislative director and CubaGO! participant Adam Nielsen questioned why “we can go to Iran, we can go to Afghanistan, but we can’t travel freely to Cuba.” Amid the need for U.S. economic stimulus and practical solutions to Cuba’s sociopolitical challenges, Elliott believes both countries would benefit from delivering “a little dose of capitalism” to the Communist island. “(Cuban sanctions are) a 40-50-year experiment that apparently isn’t going anywhere,” Elliott told FarmWeek. “If we think we’re going to get a different behavior by keeping the same old way we’ve been operating in place, it’s probably not going to happen. “Part of the thought process is that there are significant tourist and travel opportunities (Cuba) could garner revenue from. “If they have a little revenue in the country, they may be able to buy some things from us — corn, soybeans, maybe even meat for their people, who are under almost an old-time Communist rationing system.” Sen. Dick Durbin, a Springfield Democrat and the Senate’s second most powerful member, is a key proponent of open travel to Cuba. While the Obama administration is more amenable than the Bush White House to normalizing U.S.-Cuban relations, Nielsen noted resistance to current proposals among older anti-Castro Cuban-Americans in Florida. Brazil, Europe, and others are cashing in on open relations with Cuba — Elliott noted the European Union is “making a ton of money” on potato exports alone. Amid recent hurricanes, idled farmland, and other growing ag problems, Cuba has been forced to rely largely on trade partners to meet domestic food needs. Further, Nielsen sees opportunities for U.S. communities to form “sister city” relationships and thus improve bilateral communications and understanding. That would help address concerns about Cuban human rights, he said. “Any time Americans are able to travel, they’re able to influence thinking and beliefs,” Nielsen said. “For many reasons, open travel is the right policy.” — Martin Ross
FarmWeek Page 5 Monday, October 12, 2009
TRANSPORTATION
Rail study fodder for congressional reforms? BY MARTIN ROSS FarmWeek
A new report on soy rail transportation could provide momentum for rail reform efforts, Soy Transportation Coalition (STC) Executive Director Mike Steenhoek suggests. The STC study, Railroad Movement of Soybeans and Soy Products, highlights the volume of soybeans, soy meal, and soy oil moved by the rail industry on a national and stateby-state basis; key destinations for soy products; and rates associated with soy movements (see details below). The report focuses on the volume of soy products transported at “potentially excessive” rates, states with soybean industries more dependent on rail, and carriers that haul the greatest volumes. Soy-based revenue among
the largest “Class I” railroads nearly tripled over the last decade, from $549 million in 1998 to $1.505 billion in 2008. An estimated 42 percent of soy rail shipments are transported at rates the U.S. Surface Transportation Board (STB) would classify as potentially excessive, according to STC. That resulted in a potential $120 million “overcharge” for shippers in 2007 alone, the study concluded. A U.S. House Judiciary Committee proposal would revoke the current rail industry exemption from federal antitrust laws, while Senate Transportation Committee Chairman John Rockefeller (D-W.Va.) favors overhauling the STB, which oversees rail competition issues. Steenhoek hopes the study might amp up the “intensity of (lawmakers’) engagement” in rail reform.
TRACKING ILLINOIS SOY • Nationwide, BNSF Railway moves the largest volume of soybeans, including 8.8 million tons in 2008. Union Pacific (UP) was the largest originator of both soy meal and soy oil shipments, at 6.8 million and 3.1 million tons, respectively. • An average 19.35 percent of Illinois-produced beans, 64.31 percent of Illinois meal, and 60.65 percent of the state’s soy oil originated by rail in 2007 (the latest year of data available). The average railroad “haul” was 656 miles for beans, 961 miles for meal, and 594 miles for oil. • Canadian National led Illinois bean shipments in 2007 with 993,738 tons of originations, followed in order by CSX, Norfolk Southern, and BNSF. Norfolk Southern led meal shipments at 1.1 million tons, followed by Canadian National, CSX, BNSF, UP, and Canadian Pacific. CSX led oil originations with 414,328 tons, followed by Norfolk Southern, UP, Canadian National, BNSF, and Canadian Pacific. • Total 2007 Illinois rail freight charges were $31.4 million for beans, $109.4 million for meal, and $23.9 million for oil. Average per-car charges were $1,150 for beans, $1,720 for meal, and $2,309 for oil. Average per-ton charges were $15.02 for beans, $26.20 for meal, and $25.37 for oil.
“One of the things our study does is show really how acute the problem is in rural America,” he told FarmWeek. “We emphasized the volume of soybeans and soy products that are moving at potentially excessive rates and then ascribed a dollar figure to that to reflect how much money is not being retained in a farmer’s pocket and ... therefore circulating on Main Street.” House-Senate disagreement is a potential obstacle to speedy rail relief. Senate reform advocates fear passage of House proposals could prompt Congress to abandon
further rail reforms before Rockefeller can release a comprehensive plan possibly incorporating antitrust provisions. Rockefeller’s STB-based approach is “much more important to the shipping community as a whole,” argued Steenhoek, who cited concerns that stringent antitrust regulation actually might discourage investment in improved rural rail capacity. The STB could be “a more even mediator” in carrier-shipper disputes, he agreed. Steenhoek noted the bureaucratic hurdles and costs associated with STB’s rate relief appeal
process — a process he doubts “most grain elevators or even large processors would view as accessible and cost-effective.” At the same time, Class I carriers are promoting a 25 percent tax credit for rail infrastructure investment. Steenhoek sees merit in the concept, particularly if individual shippers were allowed to apply credits toward on-site facilities that improve transportation efficiency. “Ultimately, we don’t have so much of a regulatory problem in this country as we have an investment problem in this country,” he said.
Short lines, road weights key to more container use Nationwide uniform truck weight limits and incentives for short-line railroads are key to moving containerized shipping to the next level, according to an ag transportation specialist. A new rail study by the Soy Transportation Coalition (STC), indicates Pacific Northwest (PNW) ports in Washington and Oregon are the major destinations for railroad movement of U.S. soybeans. Forty-eight percent of beans loaded into rail cars are destined for the PNW, highlighting the strength of Asian export markets. And that, in turn, underlines the need to bolster intermodal resources for containerized ag shipments, according to STC Executive Director Mike Steenhoek. Union Pacific is building a $370 million, 785acre terminal and a 3,900-acre CenterPoint Intermodal Center at Joliet capable of processing 500,000 ocean-going freight containers annually. But Steenhoek sees improvements needed well beyond the container yards to make new transportation systems pay off for Midwest producers. Incentives to assure more “robust” regional short-line railroads would extend shipper access to beyond Chicago-area and other major container “hubs.” Semi tractor-trailer weight limits also bear
on extending container reach: “You can’t fill a container full of soybeans before you reach federal interstate weight limits,” Steenhoek noted. Last week, the Coalition for Transportation Productivity, an alliance that includes more than 100 shippers, sent a letter to U.S. House members encouraging their support for the Safe and Efficient Transportation Act of 2009. The act would raise the interstate vehicle weight limit to 97,000 pounds, with a sixth axle required to maintain stopping distance and braking capacity and reduce road wear. Highway weight proposals likely will be included in forthcoming comprehensive surface transportation legislation. What’s not needed are new federal costs for shipping commodities via container, Steenhoek stressed. “One of the things being suggested right now is to increase taxes on containerized shipping in order to pay for our surface transportation needs over the next six years,” Steenhoek said. “When you tax something, you disincentivize it at the same time. We’re going to be asking what the ramifications would be for the soybean industry if you tax containerized shipping.” — Martin Ross
L o o k - a l i ke s t u r g e o n n e w c a n d i d a t e
Endangered species direction threat to Midwest ag Proposed administration directions that has spurred review of existing barge traffic — are a key issue affecting in protecting scarce — or as in at least “critical habitat” designations. navigational reliability on the Missouri one case, look-alike — species could In late September, the U.S. Fish and River. Waterways Council Inc. Vice threaten Illinois producers and President Paul Rohde ag shippers. warns current proposals Federal regulators are even could impact Upper ‘We will continue to monitor this latest Mississippi navigation eyeing the impact of global cliattempt to increase ESA (designation) and lock improvements mate change in devising strategies for wildlife protection as well. to shovelnose.’ under the Endangered Species While according to Act (ESA), American Farm some estimates, shovel— Paul Rohde nose sturgeon outnumBureau Federation analyst Rick Waterways Council Inc. Krause told FarmWeek. ber “pallids” 80-1, ESA Krause sees little administraoffers protection if a tion will to legislatively expand the Wildlife Service (USFWS) proposed species’ appearance is so similar to that ESA, given potential for attack by crittreating the shovelnose sturgeon as a of an existing protected or endangered ics of the act. However, officials are threatened species under the ESA. species (i.e., the pallid sturgeon) that it working to clear a backlog of “candiEfforts to regulate water flow to makes enforcing the law difficult. date species” that purportedly warrant accommodate pallid sturgeon spawning Complicating the issues is the wideendangered or threatened status, and — potentially in conflict with river spread hybridization that has occurred
between the species, making it all the more difficult to distinguish between them. The USFWS proposal would affect the area south of the Melvin Price Locks and Dam near Alton and the Missouri River from Montana to its confluence with the Mississippi. ESA species designation easily could expand to the entire Upper Miss system if USFWS determines shovelnose harvest is sufficiently high to threaten it and pallid populations, Rohde warned. “Given the impact to Missouri River navigation that purportedly saving the pallid is having, we will continue to monitor this latest attempt to increase ESA (designation) to shovelnose,” he said. — Martin Ross
FarmWeek Page 6 Monday, October 12, 2009
CROPWATCHERS Bernie Walsh, Durand, Winnebago County: Cool and wet pretty much described the week’s weather. We had one nice day on Wednesday and we combined beans for about three hours, even though they were at 15 percent moisture. We have a very good crop of corn and beans in the field, but this year’s harvest is going to be very late and very wet, according to the long-range forecast. There have been reports of low to very low test weight corn. Hopefully, it’s not all like that. We need a nice long Indian summer for the rest of the fall. Leroy Getz, Savanna, Carroll County: Rain about every other day totaled 0.85 of an inch for the week. There was limited combine activity on the sandier soils. Bean yields are running from 50 to 60 bushels to the acre. Corn yields are ranging anywhere from 110-240 bushels per acre. Moisture in the corn is from 20 percent up to high of 35 percent. Many green fields of corn are still there, but old Jack Frost was expected to change that during the weekend. Some guys are still waiting to chop silage on their late-planted fields. Ron Frieders, Waterman, DeKalb County: Another week of disappointments. No Olympics coming to Chicagoland, but more importantly, no fieldwork in the county. In the 40 years I have farmed, we have always been harvesting before Oct. 9. Local cornfield samples are in the high 30s for moisture, and cool, wet weather is slowing its dry-down. Soybeans range from grass green to fully mature. As soon as the weather breaks, there will be some beans ready to go. A hard freeze was forecast for the weekend, and more wet weather is expected after that. USDA reports Friday called for record corn yields, and markets were 10 to 15 cents lower. Soybeans were 5 to 7 cents lower. Larry Hummel, Dixon, Lee County: It is starting to get scary. This time last year, we were looking forward to finishing our soybean harvest in a few days. Fast forward to this year and the combine hasn’t even been in the field. The weather forecast isn’t reassuring, either. There were chances of rain through the weekend and then again on Thursday. I haven’t even mentioned the frost freeze that was in the forecast for the weekend. There will be very few beans affected by the frost, but corn will be a different story. I really don’t think there is a very large percentage of the corn that has reached maturity in Lee County. I wouldn’t be surprised to see a 10 to 15 percent yield loss from the last third of the corn crop. Ken Reinhardt, Seaton, Mercer County: It was raining again Friday morning — just half inch so far for the week. A few beans were cut Monday (Oct. 5) and Wednesday with moisture of 13 percent to 19 percent. Corn remains too wet, mostly 28 percent and up. The growing season was expected to end during the weekend with temperatures in the mid-20s. There is quite a bit of corn that has not matured, and a few soybean fields that are green. Ron Moore, Roseville, Warren County: We received just a little under 1 inch of rain last week. Harvest is still not in full swing. We have been trying to find some dry corn to harvest. Most of the corn is still testing 25 percent or higher — some in the 30percent range. Yields are in the 180- to 200-bushel range. The ponded areas of the fields are really reducing the field averages. We have not done very many beans yet, so it is to soon to get a feel for the yields. The weather forecast is for more rain and freezing temperatures, so harvest likely will be delayed next week also.
Jacob Streitmatter, Princeville, Peoria County: Another week has passed in October and very little harvest has started. Some soybeans came out on the one nice day we had last week. Some corn also was combined, but moisture was between 34 to 36 percent. The corn crop is not maturing very well. I had some frost early in the week, but it did not kill too much. A killing frost during the weekend will turn a lot of corn brown. Hopefully, it will be a nice week to follow, and I will be able to get some soybeans out. Mark Kerber, Chatsworth, Livingston County: Very wet and cold — not good conditions for harvesting. We did get two more days of harvesting soybeans in last week. Soybeans are yielding well, and we are finding out that the Roundup Ready 2 soybeans are not as good as the Roundup 1 in my neighbor’s side-by-side trial and other trials. Corn will be good, but will take a long time to harvest. As we were calculating how many weeks and months it will take to get the crop through driers, it is starting to get scary. Ron Haase, Gilman, Iroquois County: Soybean harvest continued for a couple days last week, but was stopped due to rain. There were only a few hours a day for a couple days that we could be in the field harvesting. In the last 24 hours, we received a range of 1.2 to 1.5 inches of rain on our farms. Many soybean fields will be ready to harvest once the moisture dries down and the fields become fit to enter. Soybean yields have varied due to the amount of white mold. Cornfields in this area are in the dent stage (R5) or have reached black layer (R6). Corn moisture is in the low 30s for most of the corn. My hand samples tested from 29 percent to 35 percent moisture. Harvest is going to be very challenging this year. The local closing prices for Oct. 8 were: $3.38 for nearby corn and $9.29 for nearby soybeans. Brian Schaumburg, Chenoa, McLean County: What next? Less than 10 percent of the crop has been harvested due to the continuous loop of bad weather and high moisture content. Yields are still record-setting, but only if the crops get harvested. There will be a lot of red ink on the books after this year. At least, we have our health, so I better get my H1N1 flu shot! Corn, $3.43, $3.59 for January; fall and January soybeans, $9.16; wheat, $4.20. Steve Ayers, Champaign, Champaign County: Combines rolled Monday (Oct. 5) and Wednesday with 0.3 inch of rain Tuesday. It started raining again Thursday and we had 2.1 inches by Friday with more on the way. We were expecting frost on the pumpkin Sunday and Monday night with a hard freeze (26 degrees) Tuesday night, and more rain late in the week. Harvest progress is at a snail’s pace. Last Monday the National Agricultural Statistics Service pegged our district’s harvest at 1 percent for corn and 7 percent for soybeans. Gifford State Bank released a corn plot result with an adjusted 246.62 bushelsper-acre average with 21.7 percent average moisture planted on April 25. Think safety! Harry Schirding, Petersburg, Menard County: Rainfall last week, 2.44 inches. Total rainfall for October, 2.78 inches. Normal rainfall for October, 2.6 inches. Much of the corn has black layered, so the forecast of freezing temperatures should have little effect. Diplodia is the probable cause of damaged kernels producers are finding. Damage discounts at the elevator of 10 percent or more are not uncommon. The longer term concern is how much worse the damaged kernels will be before harvest can be completed. Most producers are pleased with yields in both corn and soybeans. Limited soybean harvest and wet fields kept much of the intended wheat acres from being planted. Corn nearby, $3.45, up 22 cents; soybeans nearby, $9.29, up 26 cents; corn for January, $3.44, up 25 cents; soybeans for January, $9.33, up 15 cents.
Wilfred Dittmer, Quincy, Adams County: Good morning from a soggy Adams County where the rain Friday was still falling after an all-day affair Thursday that left 1.6 inches in the gauge. The total for October so far is about two inches. Some machines were running over the Oct. 3-4 weekend but have been parked since and will be for awhile now. Most are still working in corn with only a scattered few bean fields being opened up. We still need some warm harvesting days, but the weather report does not sound good for the near term. Have a safe week. Tom Ritter, Blue Mound, Macon County: A wet, dreary, cold week delayed harvest. Corn and soybeans are barely 10 percent complete in this area due not only to weather, but to the high-moisture corn. Yields, though, have been better than anticipated. I would rate them as very good, at least on the corn that was planted early. It remains to be seen on corn planted in late May and June, which is still running 30 percent or better. We have had terrible drying conditions with the coolness and rain. We had two days of harvesting last week, but they were not very productive because the days have become shorter with the season. We just need warm weather and some wind to bring the late-planted corn along. But the forecast does not seem to be calling for that very soon. Todd Easton, Charleston, Coles County: This harvest is starting out exactly how we did not want it to. Rain showers have been making the bean cutting stop and go for producers and raising worries on how this fall will unfold. Yield reports for beans are coming in at about 50 bushels in the southern part of the county to 60 or above toward the northern part. No fresh news on corn yields as almost everyone is still waiting on the crop to dry out enough to harvest and have been concentrating on bean harvest so far. The Thursday rainstorms have given us almost 2 inches so far, which will probably stop any progress until this week. Doug Uphoff, Shelbyville, Shelby County: We picked 30 acres of corn, and then it rained. We cut 100 acres of beans, and then it rained again. Then we cut 40 acres of beans, and then it rained and it rained and it rained and it remains soggy. Yields were average, I would say. Crop prices are going up. Hopefully, we will get back into the fields soon. David Schaal, St. Peter, Fayette County: We had heavy rains here on Thursday and Thursday night and it was still lingering on Friday morning. Three inches plus have fallen here in the last few hours with parts of the county receiving more. Still not a lot of harvest in the area. There was a handful that I know of harvesting, mainly in the northern part of the county. I haven’t heard too many yields, but everybody says their early beans will be the best. Still not ready for a frost, but it sounds like one could be on the way. Right now, we need warm, dry weather. Hoping to start harvest soon. Have a good, safe week. Ted Kuebrich, Jerseyville, Jersey County: It rained all day and night Thursday. We received a little more than 4.5 inches, and at 5:30 Friday morning it was still raining. The rain came so hard and fast that it caused many creeks to flood, closing many low-lying back roads. The hard rain mashed down fields of beans and washed out ditches in many fields. Corn yields are running from 180 to 210 bushels per acre. Some of the better yields are coming off ground that has a slight roll so all the water was able to get away and less nitrogen was lost. Jersey County Grain is getting in some loads of corn that are being docked for white mold. The dockage is running about 12 percent average. Some of the early bean yields are running in the mid50s to mid-60s. Prices at Jersey County Grain, Hardin: October corn, $3.55; January corn, $3.59; June 2010 corn, $3.76; October beans, $9.56; January beans, $9.55; June 2010 beans, $9.17.
FarmWeek Page 7 Monday, October 12, 2009
CROPWATCHERS Dan Meinhart, Montrose, Jasper County: Rainfall this past week as of 7:30 Friday morning was more than 5 inches. And it was still raining. Temperatures have been cool. A few fields of beans have been harvested. The majority of beans are still very green. Some silage chopping has been done, but most are waiting for the corn to mature more. A very limited amount of corn has been shelled due to extremely high moisture. A few fields of wheat have been planted where field conditions permitted. Temperatures are expected to be in the 50s for the high this week. Bob Biehl, Belleville, St. Clair County: After Thursday and Thursday night we are starting the harvest season just as we did the planting season — in a monsoon pattern. Actually, we were a little dry at the beginning of the week, but we received right at 3.5 inches of rain in this last weather front. It was a slow, soaking rain, too, so that will really make it wet. Usually, with big rains, half to two thirds runs off and the fields don’t end up as wet. No harvest to report, but this coming week was the anticipated starting date. We will see how long it takes to dry out. A little corn was shelled in the area. I hear moisture is still 22 to 27 percent. We are still susceptible to frost. The last corn needs a little heat yet for black layer and double-crop beans are pretty green in places.
Rick Corners, Centralia, Jefferson County: Well, I bellyached wanting rain and I got it. Six inches for the week and it is still coming down. With harvest just beginning, this is a real mess.
Dean Shields, Murphysboro, Jackson County: After having a very good week of harvesting here in Jackson County, the rain started Thursday and continued into Friday morning. We received a total of 4 inches, and it looks like we are going to get more. That has put a damper on harvesting. I apologize for not making my report last week. Harvest was going so well that when I got up to make my report, my wife told me it was Saturday not Friday. Things were really busy. Yieldwise, the corn is doing pretty well. But drowned-out holes and low areas in some of the fields have taken a toll. The same goes for soybeans. The soybean yields have been good, but when you account for the holes in the drowned areas, etc., yields decline for the field as a whole. No milo has been cut yet, but the crop seems to have nice heads. We will chug along here hoping to dry out after this heavy rain and get back at it sometime this week. Hopefully, everybody is having a safe harvest.
Kevin Raber, Browns, Wabash County: Lots and lots of rain. It rained all day Thursday and it was still raining Friday morning. There was a flash flood warning out for all of Southeastern Illinois. There were two or three days fit for harvest last week and a lot of beans were cut. The rain is sure to hurt the wheat that has been sown and I don’t know when it will be dry enough to sow wheat. Ken Taake, Ullin, Pulaski County: It has been a wet week here in Pulaski County. We’ve had about 4.2 inches of rain since Monday night (Oct. 5). It’s really soggy out and it’s still raining as of this Friday morning. We did manage to get our early soybeans finished before it started raining. We won’t have any more beans ready for probably another week, which is a good thing. The corn doesn’t seem to be drying very quickly. Our non-GMO corn is not standing very well. It is still going down. Moisture is running about 20 percent or a little more. Please remember to be careful during this busy season.
Reports received Friday morning.
More rain puts damper on harvest activity BY DANIEL GRANT FarmWeek
Harvest activity last week picked up for brief periods around the state, but most combines were parked on Friday due to wet conditions. Large portions of the southern two-thirds of Illinois, Indiana, and Missouri as of Friday had received anywhere from 2 to 4 inches of rain, according to Ed Kieser, chief meteorologist at WILL — the public broadcasting service of the University of Illinois. “It will be several days before there’s even the potential for it to be dry enough to get back in the field,” Kieser said. Corn harvest in Illinois as of the first of last week was
just 5 percent complete (compared to the five-year average of 41 percent) while soybean harvest was just 6 percent complete (compared to the average of 40 percent). “I haven’t done a thing. None of my beans are ready, and there’s no corn below 30 percent moisture,” Wendell Shauman, a farmer from Kirkwood and treasurer of the U.S. Grains Council, said last week. “It’s been a really, really slow fall for me.” Shauman believes corn yields will be good and soybean yields should be decent in his area as long as the crops don’t suffer large amounts of field loss due to weather issues and ongoing harvest delays.
“I think (end users, including export customers) are comfortable there will be plenty of supply,” he said. But it could take weeks and even months before the bulk
of the crop is out of the fields. Kieser on Friday predicted the cool, wet pattern could continue this week. “There is potential for rain again (this) week,” he said.
“And we don’t see favorable temperatures for maturation or dry-down of the crops.” The majority of topsoil in the state (93 percent), prior to the latest deluge, was rated adequate or surplus. “It’s just frustrating,” Shauman said. “There still is a lot of green in the stalks, so it’s going to be November (before a lot of corn is harvested).” Kieser on Friday projected the growing season would be over in much of Iowa, Minnesota, Wisconsin, and parts of Northern Illinois because of an expected frost during the weekend. “The growing season may continue in Southern Illinois, and in many Central Illinois locations, it will be a close call,” he added.
How much corn stover can a corn grower pick? How much corn crop residue, or stover, can be removed for biofuels use without harming the soil? A USDA Agricultural Research Service (ARS) study of a 10-mile circle around the University of
Minnesota’s Morris campus offers some clues. Dave Archer, an agricultural scientist at the ARS Northern Great Plains Research Laboratory in Mandan, N.D., chose the Morris area because the uni-
versity plans to heat its buildings with gas released by a controlled burning of corn stover. Using an ARS computer model, Archer found that if farmers in the area harvested 40 percent of the stover,
Dairy cow numbers retired this year reach 225,000 Farm audits for the second dairy herd retirement implemented this year by Cooperatives Working Together (CWT) have been completed and the majority of the 74,114 cows that produced 1.5 billion pounds of milk have been sent to processing plants. CWT in the most recent round of its dairy herd retirement removed 274 herds in 38 states, including 84 herds totaling 8,625 cows from the Midwest. Overall, CWT this year has removed 225,783 cows that produced 4.5 billion pounds of milk.
The majority of cows retired in the most recent round originated from the Southwest (31,476) and West (24,188). “In recognition of the severity of the financial crisis in the dairy industry, CWT auditors moved quickly to audit selected farms,” said Jim Tillison, CEO of CWT. The dairy product index for September was down 30 percent compared to the same time last year while the all-milk price last month of $12.70 per hundredweight was $5.50 below the average price for September 2008.
this would increase soil erosion by only 0.25 of a ton an acre per year. Erosion levels could be minimized by harvesting stover from areas less susceptible to erosion, by removing stover at lower rates, and by using conservation tillage, diverse crop rotations, and other conservation practices, he said. Archer used the model to estimate costs, including the expense of replacing nutrients lost when the stover is removed. Other scientists involved in the research program are studying whether returning the co-products of gasification to the soil can replace lost carbon and nutrients
and help prevent erosion. If so, additional stover could be harvested from soils that are treated with co-products.
FarmWeek Page 8 Monday, October 12, 2009
COMMODITIES
Biodiesel powerful tool in ‘clean diesel’ push BY MARTIN ROSS FarmWeek
With climate change and air quality in the public eye, diesel manufacturers and users recently rolled out the big equipment to raise awareness of industry advances. Machinery from Caterpillar, Deere, Mack, and others greeted visitors at Washington’s International Trade Center a few bustling blocks from the White House, as the national Diesel Technology Forum (DTF) highlighted the need for “clean diesel” in “powering key sectors of the economy.” U.S. Environmental Protection Agency Assistant Administrator Gina McCarthy told industry representatives federal diesel standards by 2020 “will prevent, each and every year, over 8,300 premature deaths, over 750,000 respiratory illnesses like asthma, and 1.5 million lost work days.” At the same time, the National Biodiesel Board testified before the U.S. House
Small Business Committee on the need to extend a federal biodiesel blenders’ tax credit currently set to expire Dec. 31. Clean diesel technology involves a combination of more efficient engines, effective vehicle emissions controls, and cleaner fuels, DTF public policy director Dawn Fenton stressed. While DTF focuses on vehicle technology, she sees biodiesel playing an important role in clean diesel efforts. “There’s growing support among the various user groups,” Fenton told FarmWeek. “There are stronger and stronger efforts to try and honor a higherblend use of biodiesel in various equipment, particularly the new equipment. “Among most manufacturers, a B5 (5 percent biodiesel) level is pretty universally accepted, whether it’s in light-duty diesel vehicles or heavy-duty. Frequently, you can find up to B20 being
allowed with a lot of heavyduty construction or ag equipment without negating (engine) manufacturer warranty. Biodiesel’s being
viewed favorably.” Fenton credits a current biodiesel push to new industry specifications for use of 6 to 20 percent biodiesel
Italian tourist Annapina Laraia inspects a John Deere tractor during a “clean diesel” exhibition in Washington, D.C. Deere’s approach is a cooled exhaust gas recirculation (EGR) system including a diesel oxidation catalyst that chemically breaks down pollutants and a particulate (soot) filter. The latest version of the technology is designed to meet 2011 emissions regulations requiring at least a 90 percent reduction in particulates and an up to 50 percent reduction in greenhouse nitrogen oxide from previous requirements. (Photo by Martin Ross)
fuels. Federal ultra-low-sulfur diesel requirements have driven use of biodiesel as a fuel component that supplies engine lubricity in the absence of sulfur. “Growing attention to greenhouse gas emissions” should further impact clean diesel strategies especially among consumer light-duty vehicle manufacturers, Fenton said. DTF’s Washington showcase featured a range of clean options, from an electrical hybrid school bus and Caterpillar’s electric drive tractor to Mack engine technology that uses deionized water and urea to control truck exhaust emissions. Some diesel fleets have converted to compressed natural gas. Biodiesel use requires few engine modifications. “The infrastructure to make natural gas fuel available is more expensive than making biodiesel available,” Fenton said.
Pork producers advised to get flu vaccinations The National Pork Board last week advised pork producers, farm personnel, and others who have contact with pigs to get a seasonal flu vaccination as soon as possible. The typical flu season begins in October and can last through May. Pork producers and others who come into contact with pigs also were advised to get a vaccination for the novel H1N1 flu strain as soon as those vaccinations are available. The recommendations were made to help protect the national swine herd from catching the flu from humans. The H1N1 flu strain as of last week had not been detected in the U.S. swine herd, although isolated case of it were found earlier this year in herds in Argentina, Australia, and Canada. Proper building ventilation and good hygiene also will help reduce the transmission of the flu viruses in the hog industry. “It’s more important than ever for producers and swine farm workers to reduce the risk of getting sick and bringing the flu to the farm or workplace by getting vaccinated,” said Liz Wagstrom assistant vice president of science and technology for the Pork Checkoff. Although some media outlets continue to refer to the H1N1 strain as “swine flu,” humans cannot contract the virus through the consumption of pork or pork products.
If not at risk, flu will last two weeks Most people who get the flu (either seasonal or H1N1) will have mild illness, will not need medical care or antiviral drugs, and will recover in less than two weeks, according to the Centers for Disease Control and Prevention (CDC). Some people, however, may get flu complications that could result in hospitalization or death. Examples of flu-related complications include pneumonia, bronchitis, sinus infections, and ear infections. The flu also may make chronic health problems worse. For example, people with asthma may experience asthma attacks while they have the flu. People who fit the following categories are more likely to develop flu-related complications if they get the flu: Children younger than 5, especially those younger than 2; adults 65 or older; and pregnant women. Risk categories include individuals who have cancer, blood disorders, chronic lung disease, diabetes, heart disease, and disorders of the heart, kidney, and liver.
FarmWeek Page 9 Monday, October 12, 2009
PRODUCTION
Cash rent negotiations could be tricky again this year BY DANIEL GRANT FarmWeek
Farmers and landowners have their work cut out when it comes to determining 2010 cash rental rates that are fair for both parties. Gary Schnitkey, University of Illinois Extension farm management specialist, believes swings in crop prices of $1 per bushel or more will
Late outbreak of soy rust no yield threat The fact that soybean rust in the past week was confirmed in 13 Illinois counties should not be a concern to growers. The outbreak is late enough in the season that it is not much of a threat to yields, according to Kevin Black, insect/plant disease technical
‘In no case is significant yield loss expected this year in Illinois.’ — Kevin Black GROWMARK agronomist
manager for GROWMARK. “In no case is significant yield loss expected from soybean rust this year in Illinois,” Black noted in last week’s edition of GROWMARK’s Production Solutions Newsletter. Soybean rust as of last week had been detected in Alexander, Gallatin, Hardin, Jackson, Johnson, Massac, McDonough, Pope, Pulaski, Saline, Union, White, and Williamson counties. It is “remotely possible” soybean rust could build up to noticeable levels in some of the very late-maturing fields in those counties, Black reported. But fungicide use was not advised, particularly in soybeans that have reached the R6 growth stage. Growers who decide to apply fungicide to a latematuring variety that has not reached the R6 stage should use a triazole fungicide, according to Black. But growers who make this decision should realize that fungicide application at this time won’t reverse or correct ongoing infection from Cercospora leaf blight or other foliar pathogens, Black added. Farmers can track the movement of soy rust online at {www.sbrusa.net}.
remain commonplace in the coming year while input costs are all over the board. “It’s hard to set cash rents with all this volatility,” Schnitkey said last week during a webinar hosted by DTN. Schnitkey projected fertilizer prices for next year will be down significantly compared to 2008/09 levels while corn prices in 2010 were projected to average $3.75 per bushel compared to $3.25 this year. However, seed and power costs are expected to remain near historic highs and the overall cost to grow next year’s crops still could be the second- or third-highest on record.
“It looks like 2009 will be a low-income year caused by relatively low commodity prices and high costs,” Schnitkey said. “There looks to be some rebound in 2010 but (income) won’t be back to 2007 and 2008 levels.
FarmWeekNow.com Check the latest cash rent information from the U of I at FarmWeekNow.com.
“This suggests cash rents fundamentally should come down,” he continued. “But we don’t expect that.” Instead, Schnitkey believes cash rents could remain stable for at least the next year. Farmers and landowners also
may pursue variable cash rent agreements that benefit landowners when crop prices are high but offer protection for farmers if crop prices are low. Ben Riensche, a farmer from Iowa who cash rents about 6,000 acres, expressed frustration about the recent run-up in rental prices. Nationwide, cash rents this year increased 5.3 percent while land values actually decreased by 3.2 percent, according to USDA. “Farmers are very concerned cash rents have been very elastic on the upside and inelastic on the downside,” Riensche said during the DTN webinar.
In Illinois, cash rents in 2010 could decline by 5 percent, according to recent survey of Illinois Society of Professional Farm Managers and Rural Appraisers (ISPFMRA) members. ISPFMRA members in July estimated cash rent levels for next year could average $260 per acre for excellent land, $210 per acre for good land, $160 per acre for average land, and $130 per acre for fairquality land. Farmers who don’t want to pay those or higher prices should consider taking their financial records/balance sheets to their landlords when they negotiate rates for next year, Schnitkey said.
FarmWeek Page 10 Monday, October 12, 2009
CONSUMER
Economist: Food price decline may continue into 2010 BY DANIEL GRANT FarmWeek
A recent survey of supermarkets around the country conducted by the American Farm Bureau Federation (AFBF) found retail food prices have declined about 10 percent compared to a year ago. The AFBF marketbasket survey, which tracks the price of 16 specific items including milk, meat, potatoes, and cereal, concluded the average grocery bill for those items in the third quarter declined by about 26 cents. The drop in prices was the fourth consecutive quarter in which food costs have decreased, according to AFBF. “Consumers continue to benefit
from modest, steady declines in retail The AFBF survey found the price of food prices at the grocery store,” said bulk products that require the least Jim Sartwelle, AFBF amount of processing economist. decreased the most. The Sartwelle believes price of whole milk, chedthe decline in food dar cheese, and potatoes, ‘ A s t h e w o r l d for example, declined 27, prices is due in large part to a sharp drop g o e s , s o g o e s 23, and 22 percent, respecin energy prices. tively, compared to a year food prices.’ Crude oil prices ago. recently were down But the cost of some — Jim Sartwelle processed items actually about 50 percent AFBF economist compared to historic increased, such as bagged highs established in salad, which was up 16 July of 2008. percent. “As the world However, the share of goes, so goes food the food dollar received by prices,” Sartwelle said. “We’ve seen a farmers continued to decline and is lot of processing and transportation about 19 cents compared to about 33 costs go by the wayside.” cents in the mid-1970s, Sartwelle noted.
Overall, the economist believes food prices will continue to soften, provided energy prices remain stable. “We see a continuation of this trend on a year-to-year basis,” Sartwelle said. But that doesn’t necessarily mean farm commodity prices will remain low. On the livestock side, Sartwelle said “economics have taken care of it” and the number of hogs, dairy cows, and chick placements will continue to diminish until returns improve. Meanwhile, crop prices could rebound on the strength of higher exports that could be generated by a weakening of the dollar. And gasoline prices that average $2.30 to $2.50 per gallon will continue to spur the production of more ethanol, he added.
IFB announces GRITs members for 2010 Farm Bureau members recently were named to Illinois Farm Bureau GrassRoots Issue Teams (GRITs) for 2010. This marks the 14th year for GRITs. The goal is to provide IFB with feedback on marketing, technology, regulatory, and rural issues, as well as to generate new approaches to problem solving and policy development. In 2010, an additional team was added and the other teams were restructured to adapt to evolving issues. Each year following GRITs appointments, IFB also submits nominations to the American Farm Bureau Federation for assignments to its advisory committees. Illinois nominees are selected from current and former GRITs members, when possible, to enhance continuity in
the problem-solving and policy-development processes at the state and national levels. Team members and the county Farm Bureaus they represent are as follows: Conservation and natural resources: Donald Duvall, White; Terry Ferguson, DeWitt; Kevin Green, Vermilion; John Gunter, Williamson; Alois Hoffmann, St. Clair; Donald Immke, Livingston; Rock Katschnig, Henry; Frank Learned, Peoria; Lonial Lovellette, Grundy; Jeffrey Schone, Scott; Aaron Wernz, Clark; Lindsay McQueen, Cumberland County Farm Bureau manager; and Darryl Brinkmann, Clinton, District 16 IFB director. Crop production and trade: Timothy Baer, Tazewell; Robert Baumgart, White; Raymond Elder, Christian; James Harms, Livingston; Mary
Lewis, Bond; Michael Marron, Vermilion; Larry Martin, Madison; James Raben, Gallatin; Emmett Sefton, Macon; Earl Sorrells, Montgomery; David Wyss, Woodford; Blake Roderick, Pike County Farm Bureau manager; and Steve Hosselton, Clay, District 14 IFB director. Equine: Dennis Adams, Christian; Charlyn Fargo, Sangamon; Bonnie Ferrell, Peoria; C.W. Gaffner, Bond; Debra Hagstrom, Champaign; Gerald Kopping, Cook; Sam Lilly, DuPage; Kim Miller, McLean; Sara Rhoades, Champaign; David Sadler, Vermilion; Duane Strunk, Champaign; Garry Jenkins, Williamson County Farm Bureau manager; and Kent Schleich, Fulton, District 8 IFB director. Livestock and dairy: Patrick Bane, McLean; Steven Becker, Clinton; Gerry Ferrell, Peoria; Robert Guppy, Peoria; Steven Harnetiaux, Bond; Nathaniel Janssen, Lake; James Niewold, Ford-Iroquois; George Obernagel, Monroe;
Douglas Scheider, Stephenson; Bradley Temple, LaSalle; Pat Titus, Douglas; Jill Frueh, Bureau County Farm Bureau manager; and Mike Kenyon, Kane, District 1 IFB director. Renewable resources and energy: Charles Everett, Hamilton; Ronald Fluegel, Stephenson; Dennis Haab, Livingston; Ronald Hohenbery, Peoria; Leland Jones, Winnebago; Steve Launius, Washington; Glenn Meyer, Randolph; Cindy Myer, McLean; Dwight Ringhausen, Calhoun; Eric Rund, Champaign; Eleanor Zimmerlein, Lee; Bruce Johnson, Stephenson County Farm Bureau manager; and Jim Schielein, Lee, District 4 IFB director. Risk management and farm programs: Dwayne Anderson, Henry; Dean Campbell, Randolph; Kenneth Dalenberg, Champaign; Randy DeSutter, Knox; Mark Hines, McLean; Matthew Hughes, McLean; Kim Morton, Cook; Dale Plumer, Schuyler; Richard
Ritter, Will; James Ufkin, Henry; Dale Wachtel, Effingham; Matt Lillpop, Whiteside County Farm Bureau manager; and Chris Hausman, Champaign, District 12 IFB director. Rural life: Robin Cruse, Champaign; Samuel DeNeal, Saline; John Eisenmeyer, Warren-Henderson; Donald Guinnip, Clark; James Launer, Macoupin; Glen Ludwig, Livingston; William Mathena, Marion; Carleen Paul, Madison; Steven Weber, Henry; David White, Wayne; Linda Wikoff, Knox; Teresa GrantQuick, Livingston County Farm Bureau manager; and Scott Halpin, Grundy, District 5 IFB director. Specialty crops and labor: Harry Alten, McHenry; Richard Curd, White; David Daniken, Bond; Thomas Feltes, DuPage; Glenn Gindler, Madison; Raymond Herman, Champaign; Patrick Horcher, Cook; Carol Meyer, Randolph; Richard Ramsey, Sangamon; Stanley Sipp, Piatt; Richard Steiner, Tazewell; Abby Corzine, Crawford County Farm Bureau manager; and Bill Olthoff, Kankakee, District 6 IFB director.
WIU slates ag open house for prospective students The Western Illinois University (WIU) School of Agriculture will host prospective students Oct. 31 at its Agriculture Open House. The day will start with registration from 8:30 to 9 a.m. in Knoblauch Hall, room 152, on the Macomb campus. Open house activities will continue until 1 p.m. This year, WIU will mark the 90th anniversary of the fouryear degree in agriculture at the
university. The open house will coincide with the annual “Ag Day” event at Hanson Field. The open house event is intended specifically for high school and transfer students, according to Brian Schullian, WIU ag student recruitment coordinator. “Students will be able to see what Western’s School of Agriculture can offer them in relation to their individual agriculture-career interests,” said Schullian. Each student participant will have his or her name entered for a $100 scholarship drawing,
and two scholarships will be given away. Presentations and a tour of campus, the research farm, and the livestock center will be followed by a complimentary meal. At the conclusion of the open house, participants may attend a 1 p.m. WIU football game with complimentary tickets. For more information, contact Schullian at 309-298-1080 or wiuagriculture@wiu.edu. An online registration form and a campus map are available at {wiu.edu/ag/agopenhouse/200 9announcement.php}.
FarmWeek Page 11 Monday, October 12, 2009
CONFERENCES
Replaces pesticide conference
U of I to host new Ag Masters Conference The University of Illinois will host its first Ag Masters Conference Dec. 1-2 at the University of Illinois I Conference Center, Urbana. Registration is on a first-come, first-served basis, and the second day is limited to 120 participants. The Ag Masters Conference will be significantly different from the former Crop Protection Technology Conference, which was an early January conference, according to Mike Gray, U of I crop sciences professor. The conference program has two distinct parts, each requiring separate registration. Registration may be completed online at {www.cropsciconferences.co m/agmasters/} The Dec. 1 program will feature many speakers and topics in a general session format. Topics will include the potential for 300-bushel corn yields, future corn hybrid development, genetic contributions to higher soybean yields, glyphosate resistance management, interpretations of on-farm foliar
Corn, Soy Classics dates announced The University of Illinois announced the dates and locations for the 2010 University of Illinois Corn & Soybean Classics. It marks the 13th set of classics, an educational program that offers the most current and timely information related to crop production, marketing, and pest management. More than 1,200 people attended last year’s events. Dates and locations for 2010: • Jan. 6, Mt. Vernon Holiday Inn, Mt. Vernon, • Jan. 8, Champaign I Hotel and Conference Center, Champaign, • Jan. 11, Crowne Plaza, Springfield, • Jan. 12, DoubleTree Hotel, Bloomington, • Jan. 13, Moline i wireless Center, Moline, and • Jan. 14, Kishwaukee College, Malta. Registration for the classics and the new Ag Masters Conference may be completed online by going to {www.cropsciconferences.org} . Interested persons also may contact the U of I’s Sandy Osterbur at 800-321-1296 for more information.
fungicide data, the global fertilizer market, and environmental issues. A panel of U of I Exten-
FarmWeekNow.com You can register online for the Ag Masters Conference by going to Far mWeekNow.com.
sion specialists will give their assessment of the 2009 growing season and offer projections for 2010. Following the presentations, participants may dis-
cuss information from the program with friends and colleagues at social activities. The advance registration fee for Dec. 1 is $135 and includes lunch, refreshments, and program proceedings. The on-site registration will start at 7 a.m. and the on-site fee is $175. Dec. 2 will feature eight different two-hour classroom-style intensive instruction sessions. Participants may register for four. Registration for day two will be on a first-come, first-
served basis and limited to 120 total. Each class will be limited to 30 participants. Topics will include corn nitrogen use, experiment design and analysis, soybean cyst nematode management, physiology of herbicideplant interaction, managing glyphosate-resistant weeds, genomic applications for plant breeding and crop improvement, Bt plants for insect management, and understanding product claims. Each advanced session will be offered twice.
For the second day, the advance registration fee will be $235. Participants who register in advance for both days will pay $350. Registration also may be handled by faxing a completed registration with payment to 217-333-5299 or by mailing a completed registration form to Sandy Osterbur, AW-101 Turner Hall, 1102 S. Goodwin Ave., Urbana, Ill., 61801. Registration questions may be referred to Osterbur at 800-321-1296 or e-mail her at saosterb@illinois.edu.
FarmWeek Page 12 Monday, October 12, 2009
AROUND THE STATE
IFB to help counties ‘sign up’ for safety BY MARTIN ROSS FarmWeek
Farm trucks, tractors, and combines are prominent features on the Illinois fall landscape. But with 2009 harvest concerns creating greater potential danger on rural roads, Illinois Farm Bureau is investing in greater statewide ag visibility. As part of an IFB Quality of Life Action Team project, the organization has approved $4,000 to help counties acquire and post fall farm safety/warning signs. County Farm Bureaus can receive up to $200 to recover costs for IFB-approved public signs, placards, or stickers. McLean County Farm
Bureau and the McLean County Sheriff ’s Department are posting “Start Seeing Farmers”
‘ Fa r m e r s a r e going to be working much later into the night.’ — Peggy Romba Illinois Farm Bureau
signs around the county, while De Kalb County has distributed “Harvest in Progress” signs. Eligible signs also may warn of
manure gas, grain bin suffocation, or other ag hazards. Given this year’s harvest delays, IFB member services program manager Peggy Romba suggests rural road safety in particular will be crucial this fall. “Farmers are going to be working much later into the night because of the weather challenges they’ve had,” Romba told FarmWeek as the initiative was rolled out Friday. “Over the Thanksgiving weekend, when thousands of people are on the road, our farmers also may be, still harvesting.” For further information or to apply for funds, contact Romba at 309-557-2007.
EPA, Illinois fertilizer manufacturer reach agreement U.S. Environmental Protection Agency (EPA) Region 5 has reached an agreement with Rentech Energy Midwest Corp. on alleged clean air violations at the company’s ammonia fertilizer plant in East Dubuque. The agreement, including a $79,700 penalty, resolves EPA allegations that Rentech’s industri-
al process refrigeration unit leaked excessive amounts of refrigerant. Rentech voluntarily reported the potential violations to EPA last September. Rentech agreed to replace the leaking refrigeration unit within a year with one that uses a non-ozone-depleting refrigerant.
Standing beside a mock accident scene involving a vehicle and a disk that had been staged for National Farm Safety and Health Week, young Livingston County residents hold signs that are being posted about the county and elsewhere to alert motorist to the fact that farmers will be on the roadways in large numbers and for long hours once harvest season gets into full swing. The “Start Seeing Farmers” signs were developed through the McLean County Farm Bureau and the county sheriff’s department. Pictured are Livingston County Farm Bureau Young Leader Chairman Brad Schmidgall, center, and Pontiac FFA members Chris Jackson and Shelby DeVito. (Photo courtesy of Livingston County Farm Bureau)
Yo u c a n v o t e
Historic Illinois barn vying for preservation in national contest A historic Greene County barn is competing in a national FFA and Campbell Soup contest. The Gregory Farm barn in White Hall is among 10 barns in nine states nominated in a preservation contest. A $5,000 grant will be awarded for each of five barns that receive the most online votes in an online election through Jan. 5. Winning barns will be announced in January. The North Greene FFA Chapter nominated the Gregory Farm barn through the National FFA Association, Josh Lawson, the chapter adviser, told FarmWeek. Stories, photos, and video of each barn are online at {www.helpgrowyoursoup.com}. Website visitors are limited to one vote per day for their favorite barn. Campbell Soup also will donate $1 for each vote cast, up to $250,000, to the National FFA. The Gregory Farm, owned and operated by the Jim Esarey family, dates back to 1821 when it was purchased by Charles Gregory through the Homestead Act. The original barn was built in 1909. Seven generations have lived and worked on the family farm. The site to see video and photographs of the Esarey farm in particular is {www.helpgrowyoursoup.com/barn_gregory.aspx#}. The Esareys serve as substitute teachers, judge FFA contests, host tours and activities, and provide other support to the North Greene High School ag program and its FFA chapter, Lawson said. Campbell Soup has formed a partnership with the National FFA and the National FFA Alumni. To date, Campbell and the FFA have restored five barns across the country and planted community gardens in Chicago, New York, Atlanta, Detroit, and Camden, N.J. — Kay Shipman
FarmWeek Page 13 Monday, October 12, 2009
FROM THE COUNTIES
B
UREAU — Bureau, Henry, and Stark County Farm Bureaus will sponsor a defensive driving course from 10 a.m. to 3 p.m. Thursday and Friday, Nov. 12-13, at the Black Hawk College Community Education Center, Kewanee. The course is open to those 55 and older who are auto policy holders. Those who complete both days of the course are eligible for a discount on their auto insurance. Cost is $20. Call the Farm Bureau office for reservations or more information. • Bureau, Marshall-Putnam, and Stark County Farm Bureaus will sponsor a college open house from 10 a.m. to 3 p.m. Wednesday, Nov. 18, at the MarshallPutnam County Farm Bureau, Henry. Several colleges who offer agriculture programs have been invited. Scheduled time slots for Ohio, LaMoille, and Princeton schools are from 10 a.m. to 11 a.m.; and Bureau Valley, Hall, and DePue schools are from 11 a.m. to noon. All schools have been assigned a time slot. Call the Farm Bureau office at 815-875-6468 for more information. UMBERLAND — The Women’s Committee will sponsor a bus trip Wednesday, Nov. 11, to downtown Chicago. Cost is $25. Call the Farm Bureau office at 849-3031 by Nov. 1 for reservations or more information. DGAR — Farm Bureau will host a flu shot clinic from 8 a.m. to noon Thursday, Oct. 29, at the Farm Bureau office. Cost is $25. Medicare Part B and Medicaid will be accepted. Call the Farm Bureau
C
E
Auction Calendar Sat., Oct. 17. 10 a.m. Tools, cars and collectibles. Marianne Schwahn, PONTIAC, IL. Immke and Bradleys’ Auction Service. Fri., Oct. 23. 6 p.m. 960 Ac. Jersey Co. Boyer Creek Farm, JERSEYVILLE, IL. Langham Auctioneers. Fri., Oct. 23. 10 a.m. Estate land auction. Ruth B. Hamm Trust, HUDSON, IL. Haycraft Auction Co. Sat., Oct. 31. 9:30 a.m. Consignment Auction. N.I.T.E. Equipment, PECATONICA, IL. Mon., Nov. 2. 7 p.m. 46.9 Ac. Champaign Co. Donald R. Prather and Beverly Jane Prather, URBANA, IL. Gordon Hannagan Auction Co. Fri., Nov. 6. 10 a.m. 160 Ac. Brown Co. Koch Farm, MT. STERLING, IL. Sullivan Auctioneers, LLC. Sat., Nov. 7. 10 a.m. 127.5 Ac. Ford Co. Burris Family Revocable Trust, ROBERTS, IL. Schrader Real Estate and Auction Co., Inc. Mon., Nov. 9. 10 a.m. 163 Ac. Woodford Co. Arthur P. Kennell Residuary Trust, ROANOKE, IL. Terry Wilkey Auction Service. Mon., Nov. 9. 10:30 a.m. Land Auction Champaign Co. Norma J. Elkins, PHILO, IL. Gordon Hannagan Auction Co.
office at 217-465-8511 for an appointment or more information. ENRY — Bureau, Henry, and Stark County Farm Bureaus will sponsor a defensive driving course from 10 a.m. to 3 p.m. Thursday and Friday, Nov. 12-13, at the Black Hawk College Community Education Center, Kewanee. The course is open to those 55 and older who are auto policy holders. Those who complete both days of the course are eligible for a discount on their auto insurance. Cost is $20. Call the Farm Bureau office at 309937-2411 by Monday, Nov. 2, for reservations or more information. • Bureau, Henry, Knox,
H
and Stark County Farm Bureaus, the University of Illinois Extension, and Black Hawk East (BHE) will sponsor a series of three equine seminars from 6:30 to 8:30 p.m. Thursdays, Nov. 5, 12, and 19, in the Black Hawk East ag arena. There is no charge for 4-H and FFA members and BHE students. Cost for others is $9 per session or $20 for all three sessions. Call the Farm Bureau office at 309-937-2411 for reservations or more information. ASALLE — Wendy Sanders, optometrist, has joined the LaSalle County Farm Bureau discount program. She will offer a 15 percent discount on goods and vision-related services. It
L
cannot be combined with health insurance. Dr. Sanders is located at 641 First St., LaSalle. Call the Farm Bureau office at 433-0371 for more information. EE — Lee County plat books are available at the Farm Bureau office. Cost is $30. Call the Farm Bureau office at 857-3531 or e-mail leecfb@comcast.net for more information. • Custom candle orders are due Friday to the Farm Bureau office. Payment is due with the order. Delivery will be Friday, Nov. 20, to the Farm Bureau office. Call the Farm Bureau office at 857-3531 or visit the website {www.leecfb.org} for more information. INNEBAGO — Farm Bureau will
L
W
sponsor an informational meeting on the Aug. 2-6 trip to Michigan at 7 p.m. Tuesday, Oct. 20, at the Farm Bureau office. Call the Farm Bureau office at 815-962-0653 for more information. • Prime Timers will sponsor a program at noon Friday, Oct. 30, at the Farm Bureau office. Joe Peterson, a local paleontologist, will be the speaker. Lunch will be served at noon, followed by the program at 1 p.m. Cost is $17, which includes lunch. Send your reservation to the Farm Bureau office. “From the counties” items are submitted by county Farm Bureau managers. If you have an event or activity open to all members, contact your county manager.
FarmWeek Page 14 Monday, October 12, 2009
PROFITABILITY
Indemnification for losses in transportation BY PETE TROTTER
A new law went into effect in August that provides that indemnification provisions in motor carrier transportation agreements cannot hold the motor carrier responsible for liabilities caused by the other party. While this Pete Trotter law is new to Illinois, it represents a legislative trend resulting in enactment of similar laws in a number of states, including Indiana, Missouri, Tennessee, Wyoming, Nebraska, Virginia, West Virginia,
North Carolina, and Kansas. Because many Illinois companies ship products and materials or provide transportation services, the new law may broadly affect the transaction of business in Illinois. Understanding the new law requires a basic understanding of the purpose of indemnification provisions. While such provisions may be considered complex, indemnification merely constitutes one party’s promise to cover specified losses of the other party in certain circumstances. In that sense, indemnification is similar to insurance. The difference is that the primary purpose of the agreement is not insurance or
indemnification, but instead relates to something else, such as transportation. In the case of motor carrier transportation agreements, indemnification provisions typically are intended to protect the shipper from losses caused by the carrier. However, indemnification is a negotiable item, and shippers have sometimes required the carrier to protect them from losses in transportation which were caused by the shipper or by third parties. The trucking industry has argued that small carriers are forced to accept such provisions, even though they are clearly objectionable, because they need the shipping business.
Legislatures have responded, as in Illinois, by barring indemnification which holds the carrier accountable when the carrier did not cause the loss. Confusion arises with respect to these laws because they are incorrectly interpreted to completely prohibit indemnification provisions in transportation agreements. However, many states permit contracting parties to agree to indemnify each other. While indemnification prohibitions vary in different states, they do not overturn the basic right of the parties to negotiate contractual provisions. The new Illinois law merely says that certain indemnifica-
tion provisions — those protecting the party causing the loss from its own actions — are unenforceable. The intent of the law is fairness in transportation contracts, an objective to which all parties ultimately can agree. Indemnification provisions continue to be appropriate in transportation agreements. However, confusion regarding the intent and application of the new law will persist, which suggests caution on the part of all parties entering into these contracts. Pete Trotter is GROWMARK’s assistant general counsel and privacy officer. His e-mail address is ptrotter@growmark.com.
Despite inputs relief margins projected to remain tight Farmers should see some relief on input costs next year, but profit margins are still likely to be squeezed. Bruce Erickson, a Purdue University agricultural economist, said growers likely would see the most savings on fertilizer costs in the 2010 planting season. “Some farmers were spending as much as $200 per acre to fertilize the 2009 corn crop, more than rent in some cases, when you consider nitrogen, P and K replacement, and any liming requirements,” Erickson said.
“Next year, it will be about one-third less — in our projections, about $100 to $130 per acre — depending on soils and crop rotation.” Erickson and his colleagues’ estimates are available in the “2010 Purdue Crop Cost & Return Guide,” now available online at {http://www.agecon.purdue.e du/extension/pubs/index.asp}. The guide gives estimates of input costs and expected returns for the coming planting season. At the time these estimates were prepared, Chicago Mer-
Feeder pig prices reported to USDA*
Weight 10 lbs. 40 lbs. 50 lbs. Receipts
Range Per Head Weighted Ave. Price $16.00-$34.00 $28.28 $26.50-$30.50 $29.99 n/a n/a This Week Last Week 20,100 12,031 *Eastern Corn Belt prices picked up at seller’s farm
Eastern Corn Belt direct hogs (plant delivered) (Prices $ per hundredweight) This week Prev. week $46.73 $45.44 $34.58 $33.63
Change 1.29 0.95
USDA five-state area slaughter cattle price (Thursday’s price) Steers Heifers
This week 81.71 81.86
Prv. week 82.78 82.87
Change -1.07 -1.01
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 93.55 95.36 -1.81
Lamb prices Confirmed lamb and sheep sales This week 1,056 Last week 544 Last year 939 Wooled Slaughter Lambs: Choice and Prime 2-3: 90-110 lbs, $98; 110-130 lbs., $89.25-$91. Good and Choice 1-2: 60-90 lbs., $109. Slaughter Ewes: Utility and Good 1-3: $28-$32. Cull and Utility 1-2: $28.
Export inspections (Million bushels)
Week ending Soybeans Wheat 10-01-09 12.5 18.0 09-24-09 7.5 24.2 Last year 14.3 32.0 Season total 38.7 290.9 Previous season total 35.2 459.0 USDA projected total 1305 900 Crop marketing year began June 1 for wheat and Sept. 1 for corn and soybeans.
their own budgets,” he said. While fertilizer prices already have come down, Erickson said overall costs remain relatively high and have not come down as much as commodity prices. Today’s grain prices are placing downward pressure on the seed and crop protection companies. “Some technology fees have increased, and we know list prices of some of the newest hybrids have gone up, but we’re also hearing of significant discounting,” Erickson said. Also, some input suppliers already have announced sub-
Corn 38.4 34.3 37.0 182.4 166.5 2150
stantially lower glyphosate prices. “For the second year in a row, farmers’ margins will be less than they were in 2007 and 2008,” Erickson said. One costsaving area could be machinery. Erickson said industry reports show sales of new large farm machinery are down, which could keep a lid on the cost of those purchases. On the other hand, interest in buying used equipment is on the rise. “There could be some bargains on new equipment out there,” he said.
New labels may be detrimental to milk demand BY DANIEL GRANT FarmWeek
M A R K E T FA C T S
Carcass Live
cantile Exchange Group futures indicated that fall 2010 cash prices were near $3.30 per bushel for corn and $8.40 for soybeans. These prices are lower than what was used in the 2009 budget estimates by 70 cents for corn and 30 cents for soybeans. It’s fairly certain that these costs and returns will change before anything is planted next spring, but the estimates provide a starting point for thinking about 2010, Erickson said. “The guide provides a general barometer for people who do
An assortment of new labels on milk containers designed to differentiate products and in some instances add value actually may have a detrimental impact on demand, according to a recent study. An economic study conducted by researchers at the University of Delaware, the University of Wisconsin, and Cornell University concluded increased labeling of milk could portray conventional products in a “negative light” and lead to decreased demand for milk of all types. Results of the study will be published in the November issue of the American Journal of Agricultural Economics and it currently is available online at {http://www3.interscience.wiley.com/cgibin/fulltext/122511592/HTMLSTART}. “The introduction of new food products that portray conventional products in a negative light can have a significant impact on stigmatizing the demand for conventional products,” said Harry Kaiser, one of the authors of the study titled “Does Production Labeling Stigmatize Conventional Milk?” The study estimated labeling claims of organic milk reduced demand for conventional milk by 45 percent while labeling claims of milk that is free of added hormones reduced demand for conventional milk by 33 percent. Several large companies, including WalMart, Kroger, and Starbucks, in recent years implemented bans on all milk produced with recombinant bovine somatotropin (rBST),
which is a naturally occurring hormone in bovine that allows cows to produce up to 10 percent more milk. The study showed that labeling products as rBST-free, even though the hormone exists in all milk and has no known side effects, creates a perception among consumers that milk not carrying such a label is somehow inferior. “The implication of the stigma effect found here is that the dairy industry will have to confront the issue head on or risk a possibly major negative impact on milk consumption,” according to the study. In 2006 about one-third of dairy cows in the U.S. reportedly received supplemental rBST. The removal of the technology from farms is expected to increase milk prices and reduce income on dairy farms by about 80 cents per cow per day, according to Mike Hutjens, University of Illinois Extension dairy specialist. “There are two losers in this argument,” Hutjens previously told FarmWeek. “The consumers lose because they’re being asked to pay a higher price (for milk that has the same nutrient content and hormone levels) and farmers lose because they’re not allowed to use a technology that will produce more milk with a little more profitability at a lower cost.” The timing of the findings probably is hard for dairy producers to swallow. The economic recession has hurt dairy demand worldwide and a surplus of milk has weighed heavily on prices, creating massive losses in the industry and forcing some producers to exit the business.
FarmWeek Page 15 Monday, October 12, 2009
PROFITABILITY Corn Strategy
C A S H S T R AT E G I S T
Higher national yields unlikely Now that the industry has two reports under its belt that offer details about yield, it’s possible to envision the track ahead and where yields ultimately might end up. In the wake of the September report, one could see changes ahead for soybean yields because of changes in both pod numbers and implied pod weights. It was just difficult to forecast how they might fit together. As it turns out, the expected decline in pod weights was
Basis charts
fully offset by the expected increase in pod numbers. From here forward, though, pod numbers won’t change much, or increase just slightly. Pod weights, though, are still relatively high, even exceeding those of 2005’s record yield. Only 2006 weights exceed the current forecast, and harvest occurred at a normal pace that year. This year’s slow harvest and poor harvest weather could cause harvest losses to be slightly larger than normal, cutting into yields and the estimated pod weight. For corn, the ear count now changes very little, making yield changes dependant on ear weights. The current ear weight is second only to that in 2004. One could argue there’s a chance weights could move up toward that level, but the tendency is for the final ear weight to be no higher than the October forecast. On average, ear weights tend to decline a little, something that cannot be ignored this year because of quality issues. Like soybeans, a slow harvest could boost harvest losses, too, cutting into the implied ear weight. In the end, we see little upside for corn and soybean yields to increase. But, they could slip from current forecasts and that is especially true for soybeans. AgriVisor endorses crop insurance by
AgriVisor LLC 1701 N. Towanda Avenue PO Box 2500 Bloomington IL 61702-2901 309-557-3147 AgriVisor LLC is not liable for any damages which anyone may sustain by reason of inaccuracy or inadequacy of information provided herein, any error of judgment involving any projections, recommendations, or advice or any other act of omission.
Policies issued by COUNTRY Mutual Insurance Company®, Bloomington, Illinois AgriVisor Hotline Number
309-557-2274
Cents per bu.
2008 crop: We’re still willing to hold inventories until after harvest or use a marketing strategy that would keep pricing open until later this year. 2009 crop: The market action continues to indicate the seasonal low has been seen. In the short term, though, prices could correct lower as the pace of harvest accelerates. Use these levels to price any bushels you need to move at harvest. Still, if you have the ability to store bushels, we expect better opportunities later in the marketing year. Fundamentals: The USDA October production forecast was not much of a surprise. As discussed in the article at left, we don’t believe there’s a chance yields will go much, if any, higher. At the same time, the demand base appears to be large enough to absorb this crop. And given that corn prices are relatively attractive, demand could exceed expectations.
Soybean Strategy 2008 crop: This past week’s action all but put to rest the possibility of soybean prices going lower. We think there will be better prices than those available today to wrap up sales on any bushels you still have. 2009 crop: Given the nearly $1 rally off the lows, soybean prices may struggle to go higher yet in the short term. If you still need to price soybeans for harvest delivery, do it now. But if you can store soybeans, plan to hold them into winter. Fundamentals: Details of the latest USDA production forecast indicate the crop is not likely to get bigger and easily could decline slightly. At the same time, the export commitments of soybeans and products point to strong demand into the winter. Either prices need to go higher to pull soybeans out of producers’ hands or basis levels will remain unusually strong. Both are possible considering the competition between exporters and
crushers for soybeans.
Wheat Strategy 2009 crop: We are inclined to think wheat prices have put in a short-term low and possibly a long-term one, too. Prices on December futures have penetrated the 20-day moving average, signaling a short-term end to the decline. Still, prices may remain choppy as fundamentals remain weak. We still feel better pricing opportunities will come this fall or winter, so hold off sales. Even before considering catch-up
sales, we’d wait to see if Chicago December futures can attempt to rally back above $5. Fundamentals: The October report numbers were more negative for wheat than other commodities. USDA pegged 2009/10 U.S. wheat ending stocks at 864 million bushels, up from September’s 743 million bushels. In addition, world stocks were increased to 668.12 million metric tons, up 4.4 million from last month. Still, at some point negative numbers cease to drive prices lower. We might be there.
FarmWeek Page 16 Monday, October 12, 2009
PERSPECTIVES
Farming: Original ‘green collar job’
Cooperatives offer strength in commitment With the exhausted state of the economy and the ongoing struggle in the financial markets, Americans are frantically searching for answers on how to recover — or even maintain — their current status. Skeptical of fragile business structures and fed up with unethical business practices, consumers are dismayed by the situation and all the reasons behind it. Americans desire trust and commitment in their business relationships, and they want reliable businesses with DAN sound ethical standards. They trust KELLEY cooperatives for these and other reasons. Cooperatives are businesses owned and controlled by the people who use their services or purchase their products — individuals who have formed an alliance to meet a common economic, social, and cultural need. Cooperative businesses are all around us — there are 29,000 co-ops in the U.S. — and Americans have come to depend heavily on the variety of goods and services they provide. There are cooperatives in many sectors, including biofuels, telecommunications, electric, grocery, farm supply, credit unions and ag lending associations, and marketing cooperatives. According to a recent University of Wisconsin study, cooperative businesses account for more than $650 billion in revenue and two million American jobs.
The GROWMARK System is comprised of its FS and grain member cooperatives and subsidiaries, and employs more than 7,000 people who in turn serve more than 250,000 farmers. GROWMARK does business in 23 states, Ontario, Canada, and Mexico. GROWMARK has a strong cooperative heritage and deep roots within the American economy. More than 80 years ago, a group of Farm Bureau members seeking a reliable supply of quality products at a reasonable price joined together to accomplish this goal. It was this cooperation that led to the first FS cooperatives, which today make up the GROWMARK System of cooperatives. The GROWMARK System now generates billions of dollars in economic activity. Cooperatives throughout the U.S. celebrate October as Cooperative Month and recognize the value of the cooperative way of doing business. People trust cooperatives because they own and control part of the business, which gives members a role in maintaining ethical business practices, sound operations, firstrate customer service, and a strong commitment to their communities. These characteristics are rarely all found in the structure of a business and are what sets cooperatives such as GROWMARK and FS apart from other businesses. Dan Kelley is GROWMARK’s chairman of the board and president.
“The cow said moo, the pig said oink, the chicken went cluck cluck, I baaed, and then we adjourned.”
Letter to the editor policy Letters are limited to 300 words, and a name and address must accompany each letter to be published. FarmWeek reserves the right to reject any letter. No political endorsements will be published. All letters are subject to editing, and only an original bearing a written signature and complete address will be accepted. A daytime telephone number is required for veri-
fication; however, the number will not be published. Only one letter per writer will be accepted in a 30-day period. Typewritten letters are preferred. Please send letters to: FarmWeek Letters 1701 Towanda Ave. Bloomington, Ill., 61701
As the economy loses blue collar and white collar jobs, one bright spot in the employment outlook appears to be so-called “green collar jobs.” But what exactly are green collar jobs? Vice President Joe Biden described green collar jobs this way: “They provide products and services that use renewable energy sources, reduce pollution, and conserve energy and natural resources.” Biden did not say this, but by his definition farming is a green collar job. In fact, farming is the original green collar job. Farmers were among the original users of renewable energy to provide products and services. Early agriculturalists relied on solar power to grow crops just as we do today. They used wind power to draw water and grind grain into flour. They built irrigation systems to make more efficient use of the water. Yet, the term “green collar jobs” was unheard of until recently. It was first used as the title of a book 10 years ago, but there were references STEWART TRUELSEN to green collar workers prior to that. It became part of everyday vocabulary during the last presidential campaign when the candidates, particularly President Barack Obama, talked about creating millions of green collar jobs. There already were millions of green collar jobs a hundred years ago, but the rise in agricultural productivity made many of those farmers unnecessary. They went to the cities and took blue collar jobs in manufacturing. As manufacturing jobs moved overseas in more recent times, white collar and service sector jobs replaced some of that employment. The farmers who stayed on the land built American agriculture into the unparalleled success it is today. They don’t get enough credit for their green collar accomplishments over the years. Before there was an environmental movement, farmers were learning and adopting soil and water conservation measures. It was a painful lesson taught by the Dust Bowl of the 1930s. During the Great Depression, the American Farm Bureau Federation (AFBF) and others encouraged research into ethanol from corn and a variety of other crops and crop residues. They were decades ahead of the times, but again in the 1970s Farm Bureau revived its push for renewable fuels. AFBF and state Farm Bureaus also were leaders in conservation tillage, well-water testing, and many other environmental improvements of the 20th Century. And just as they were with ethanol, farmers were early adopters of modern wind energy and the use of methane from manure to generate electricity. The green collar economy is really not a new thing for farmers or even for this country in times of economic trouble. President Franklin Roosevelt had a similar idea with the Civilian Conservation Corps. It’s just a little more high-tech this time around — installing solar panels, weatherizing homes, building a new power grid, and hybrid cars. Long after the current excitement about the green economy has worn off, American farmers and ranchers will remain green collar workers as they always have been — efficient producers of food, fiber, and fuel, and stewards of natural resources. Stewart Truelsen is a regular contributor to the Focus on Agriculture column series and an author about the American Farm Bureau Federation history. His e-mail address is stut@fb.org.