Farmweek december 22, 2014

Merry Christmas from FarmWeek! The newspaper will not be published next week. The next issue will be dated Jan. 5.

Lower crop prices don’t necessarily mean a return to the days of prices near loan rate levels. page 5

Specialty growers will discuss continuing 100-year-old orchard traditions at their conference. page 7

Monday, December 22, 2014

Two sections Volume 42, No. 50

Federal spending bill includes benefits for agriculture

BY DEANA STROISCH FarmWeek

Periodicals: Time Valued

President Barack Obama last week signed a $1.1 trillion spending bill that avoided a government shutdown, reduced federal spending and ordered the Environmental Protection Agency (EPA) to withdraw a controversial “interpretive rule” associated with its “waters of the U.S” proposal.

The 1,603-page bill, which funds most of the government until Sept. 30, was

backed by the majority of Illinois’ Congressional delegation.

Reps. Danny Davis, D-Chicago; Bill Enyart, D-Belleville; Luis Gutierrez, D-Chicago; Robin Kelly, D-Matteson; Bobby Rush, D-Chicago; and Jan Schakowsky, D-Evanston, voted against the measure.

Adam Nielsen, Illinois Farm Bureau’s director of national legislation, noted the bill includes several nonspending related items that benefit agriculture.

“End of the year omnibus

spending bills often provide opportunities to pass key priorities,” he said. “And this one was no exception.”

The bill does the following: • Kills EPA’s “interpretive rule” related to the “waters the U.S.” proposed rule. EPA has said the interpretive rule was intended to spell out which farming practices were exempt from Section 404 “dredge and fill permits.”

But IFB and others say the rule would require voluntary conservation practice stan-

dards to become mandatory.

Many believed the “interpretive rule” would ultimately be changed, if not withdrawn.

“Still, a nice win,” Nielsen said. “Because it maintains our forward movement toward the ultimate goal of ditching the rule and helping develop a reasonable alternative that farmers, businesses and local governments can live with.”

• Prevents USDA from implementing a new beef checkoff program. IFB supports this move.

“Our board was very concerned about the initiation of a second beef checkoff side-byside with one that currently exists,” Nielsen said.

• Directs the Secretary of Agriculture to recommend changes to the Country of Origin Law (COOL) by May 1 or within 15 days of the WTO’s decision on the U.S. appeal in the case versus Canada and Mexico, whichever comes first.

Illinois Environmental Protection Agency’s (IEPA) water bureau, highlighted strategy applications to agriMarcia Willhite culture and some for wastewater treatment and industry last week. Her speech to the AGMasters Conference

in Champaign marked her first public presentation on the strategy since its release in late November.

Illinois developed a statewide strategy with a menu of actions to reduce excess nitrogen and phosphorous in rivers, lakes and streams. The public may comment on the strategy until Jan. 24.

“The bottom line for agriculture is widespread implementation,” Willhite said.

“We’re looking at every acre to see what might be done.

“You’ll notice what is not on the (strategy) list — regulatory requirements or ‘you must do it this way,’” she continued.

Willhite shared the state’s overall goal to reduce all nitrogen and phosphorous moving into water by 45 percent compared to baseline levels of 1980-90.

Nutrient strategy a big challenge for agriculture

BY KAY SHIPMAN FarmWeek

Illinois agriculture faces a big job — albeit a voluntary one.

Agriculture contributes most of the nitrogen and roughly half of the phosphorous moving into rivers, lakes and streams, according to scientific data behind the proposed state Nutrient Loss Reduction Strategy.

Marcia Willhite, chief of

See Spending, page 2

See Nutrient, page 3

www.facebook.com/illfarmbureau

Quick Takes

FarmWeek • Page 2 • Monday, December 22, 2014

QUINN CALLS SPECIAL SESSION — Gov. Pat Quinn last week called legislators back to Springfield on Jan. 8 to consider legislation that would allow voters to elect the next state comptroller. Incoming Comptroller Judy Baar Topinka died last week.

The next statewide election will be Nov. 8, 2016, which follows the March 15, 2016, primary.

FINEGAN JOINS AFBF COMMITTEE — Jared Finegan of Ashkum, immediate past Illinois Farm Bureau Young Leader Committee chairman, has been appointed to a two-year term on the American Farm Bureau Federation Young Farmers & Ranchers (YF&R) Committee. He begins his appointment in March.

AFBF President Bob Stallman appointed Finegan and 15 others to the committee. Committee members help plan AFBF’s biannual FUSION Conference and YF&R programs, including coordination of YF&R competitive events during AFBF’s Annual Convention each January.

National committee members are nominated by their respective state Farm Bureaus. They study farm and food policy issues, participate in leadership training exercises and hone other professional skills during their tenure as committee members.

APPELL NAMED FSA CHAIR — Jill Appell of Altona has been named chair of the USDA Farm Service Agency (FSA) Illinois State Committee.

Appell, who farms in Knox County, succeeds Darell Sarff, a central Illinois grain and vegetable farmer and past Illinois Farm Bureau Board member.

Appell has been a member of the Advisory Committee for Trade Policy and Negotiations since 2010, and serves as a member of the USDA Agricultural Technical Advisory Committee for Trade of Animals and Animal Products.

She served as president of the National Pork Producers Council and the Illinois Pork Producers Association, and previously directed USDA’s Illinois Rural Development.

AMERICANS STRUGGLE WITH SAVINGS — A weaker-than-expected start to the holiday shopping season might have had less to do with the quality of the deals than the struggling state of many Americans’ savings.

Just 42 percent of Americans, who responded to the latest COUNTRY Financial Security Index, said they set aside money for savings or investments during the last two months. That’s down from a pre-recession saving rate of 55 percent in October 2007.

Americans aged 40 to 49 appear to be most strapped for savings. Only 32 percent of them said they set aside money in advance of the holidays.

(ISSN0197-6680) Vol. 42 No. 50 December 22, 2014 Dedicated to improving the profitability of farming, and a higher quality of life for Illinois farmers.

FarmWeek is produced by the Illinois Farm Bureau.

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STAFF Editor Chris Anderson (canderson@ilfb.org) Legislative Affairs Editor Kay Shipman (kayship@ilfb.org) Agricultural Affairs Editor Deana Stroisch (dstroisch@ilfb.org) Senior Commodities Editor Daniel Grant (dgrant@ilfb.org) Editorial Assistant Margie Fraley (mfraley@ilfb.org) Business Production Manager Bob Standard (bstandard@ilfb.org) Advertising Sales Manager Richard Verdery (rverdery@ilfb.org) Classified sales coordinator Nan Fannin (nfannin@ilfb.org) Director of News and Communications Michael L. Orso (morso@ilfb.org) 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

Ag benefits from Cuba policy

BY DEANA STROISCH FarmWeek

Agriculture will benefit from President Barack Obama’s plan to re-establish diplomatic relations with Cuba, according to farm groups.

“The president’s opening to Cuba promises to improve trade conditions by making it easier for Cuba to buy U.S. agricultural and food products,” said American Farm Bureau Federation President Bob Stallman.

“This is welcome news for our nation’s farmers and ranchers.”

Stallman noted farmers can already export products to Cuba, but third-party banking requirements and limited credit financing make it difficult to compete in the market.

“We look forward to a prompt lifting of those restrictions,” he said.

The president’s announcement last week, which coincided with the release of U.S. con-

tractor Alan Gross, represents the first change in Cuba policy since relations were severed in 1961.

The Illinois Cuba Working Group, of which the Illinois Farm Bureau is a founding member, called on members of the new Congress to lift the trade embargo altogether.

The president’s revised approach to Cuba calls for: • Immediately initiating discussions to re-establish diplomatic relations.

• Opening an embassy in Havana in the coming months.

• Easing travel and financial restrictions. U.S. institutions will be permitted to open correspondent accounts at Cuban financial institutions. U.S. credit and debit cards can be used by travelers to Cuba.

• A review of Cuba’s “State Sponsor of Terrorism” designation, which it received in 1982.

Illinois Farm Bureau policy supports “resumption of nor-

mal trading relations with Cuba,” including elimination of restrictions on U.S. citizens traveling to Cuba and simplification of licensing and shipping requirements for sales to Cuba.

Tamara Nelsen, IFB’s senior director of commodities, said Cuba proved an important market for Illinois agriculture before the embargo.

She estimated the market for agricultural products would increase by $7 million a year with the types of changes Obama announced. Corn and wheat, she said, would make up about half of that increase.

Nelsen noted Cuba represents a much smaller market for agriculture compared to China, but “strategically, 90 miles off our coast, it is a very important neighbor and has huge opportunities for ongoing exchanges.”

Nelsen led a group of about 20 Illinois farmers and IFB staff to Cuba in 2012.

Reports: China approved MIR 162 corn

U.S. Agriculture Secretary Tom Vilsack told reporters last week that China’s Ministry of Agriculture approved a genetically modified strain of corn, MIR 162 or Agrisure Viptera, for import.

In addition, news reports indicate Chinese Vice Premier Wang Yang told Vilsack that two varieties of biotech soybean had been approved by the Ministry. Formal, written confirmation has not been received.

Tom Buis, CEO of Growth Energy, said it would be “welcome news for America’s ethanol industry.”

“China has been the largest market for U.S. DDGs (dried distillers grain) and with the restriction removed, we look forward to once again

providing our highly nutritious animal feed to Chinese livestock producers, while also offering American producers the opportunity of an expanded market for the co-products of ethanol production,” he said.

Tamara Nelsen, IFB’s senior director of commodities, said China’s approval would be a “first step” toward normalizing trade.

“Clearly there’s going to be a push for China to get a more predictable regulatory process in place,” she said.

Some American farmers and agribusiness companies sued Syngenta for failing to get approval from China for its MIR 162 corn, which was approved in the United States in 2010.

Soybean Summit set for Effingham, Peoria Illinois farmers may attend free, 2015 Soybean Summit meetings Jan. 30 and March 6 sponsored by the Illinois Soybean Association.

The Jan. 30 summit will be held at the Keller Convention Center in Effingham, while the March 6 meeting will take

Spending

Continued from page 1 • Exempts livestock producers from EPA greenhouse gas regulations and relieves livestock operations from EPA permitting requirements.

• Adds $740,000 to the budget of Biotechnology Regulatory Services to address the backlog of product petitions awaiting approvals.

• Eliminates funding for meat inspectors at horse processing facilities. Nielsen called the provision “disappointing.”

“Sometimes you have to accept the bad with the good.

That one represents a step backwards in agriculture’s efforts to re-establish the domestic horse processing industry,” Nielsen said.

place at the Peoria Civic Center.

Funded in part by the Illinois soy checkoff, topics will focus on soybean management practices that help lead to higher yields, including employing new techniques to boost yield potential and find-

ing ways to overcome production challenges.

To view an agenda and register, visit {ilsoy.org/sum mit}.

Farmers must register for the Effingham meeting by Jan. 13 and for the Peoria summit by Feb. 22.

Commodity Challenge issued

Contest runs January through November

Illinois Farm Bureau members can compete for prizes and sharpen their marketing skills by participating in the 2015 Commodity Challenge.

Participants trade commodities on the cash, futures and options market via the free, online marketing simulation.

The game doesn’t cost anything, but top participants win real money.

Commodity Challenge participants are placed in one of four categories (Overall, Women, Young Leaders and Collegiate). The winner in each category wins $1,500, while second place receives $750 followed by $250 for third place.

The marketing simulation contest begins in January and ends in November. To sign up, visit {www.ilfb.org}. Then click on News & Events, and Conferences & Events. Or contact your county Farm Bureau.

The contest, organized by AgriVisor, CME Group, GROWMARK and IFB, requires participants to be at least 18 years of age.

IFB and CME Group employees and their immediate families are ineligible.

State used scientific data, teamwork on nutrient strategy

Page 3 • Monday, December 22, 2014 • FarmWeek

source contributor, while southern Illinois functions as Illinois developed its Nutrithe major nonpoint source of ent Loss Reduction Strategy phosphorous through eroded based on the best available scisediment, according to David. entific data, including By highlighting not agricultural information, a only the larger sources University of Illinois sciof each nutrient but entist said last week duralso the major regions Farm Bureau members may comment ing the AGMasters Confor each, Illinois may electronically about the Nutrient Loss ference in Champaign. focus its efforts, David Reduction Strategy via the Illinois Farm Bureau Legislative Action Center. The sysMark David studies emphasized. “Focusing nitrogen and phosphorous tem allows members to email comments on southern Illinois for directly to Illinois Environmental Protection cycling in ag fields and nitrate will not get us conducts long-term water Agency (IEPA) using template comments. far,” he reasoned.

Visit {www.ilfb.org/5138.aspx}. A sepaquality monitoring. David rate email will be sent from the Legislative However, different served on the state work- Action Center with that link. nutrient sources and ing group that developed regions means Illinois Comments may be mailed to: NLRS the nutrient strategy.

Comments, IEPA Bureau of Water, 1021 N. lacks a simple solution Illinois compiled infor- Grand Ave. East, P.O. Box 19276, Springor a single practice, a mation on nutrients con- field, Ill. 62794-9276. federal agency theory Comments may be emailed to tributed by urban runoff, David said he frequentdiffuse nonpoint sources Simon.Daniels@illinois.gov. ly refutes. that are predominantly Federal officials have agriculture and specific point promoted no-till and reduced lyzed major nutrient sources sources that are predominantly within major state watersheds fertilizer applications as the municipal wastewater treatanswers to Illinois ag issues, and eight major rivers. ment and industry. but David countered that Point sources in northeast David, who previously alone won’t reduce nitrogen Illinois and nonpoint sources, served on a national hypoxia and phosphorous in Illinois. predominately tile-drained scientific task force, estimated farm areas in central Illinois, Illinois approached its Illinois contributes about 20 nutrient strategy differently comprise the major nitrogen percent of the nitrogen and 11 sources. compared to other states. percent of the phosphorous However, scientists found a David pointed out a broadthat reaches the Gulf of Mexi- “different pattern” of phosbased group that included ca via the Mississippi River. agricultural organization repphorous sources that are 48 The scientist noted the resentatives assisted the Illipercent agricultural, 48 pernutrient strategy acknowledges cent point sources and 4 pernois Environmental Protecthe diversity between predomi- cent urban stormwater. Chica- tion Agency and Illinois nant sources of nitrogen and Department of Agriculture. go serves as the major point

BY KAY SHIPMAN FarmWeek

those of phosphorous as well as specific regions that are major contributors of nitrogen and those for phosphorous. The strategy even ana-

Make comments

IEPA providing technical training on new CAFO rules

The Illinois Environmental Protection Agency (IEPA) Jan. 14 will offer technical training on new state Concentrated Animal Feeding Operation (CAFO) rules for professionals who assist livestock farmers. Farmers may want to encourage their service providers to attend.

IEPA geared the training to individuals who have technical service provider certification with the Natural Resources Conservation Service, professional engineers, agronomists, commercial manure applicators and others who work with

livestock farmers to develop nutrient management plans, to land-apply livestock waste, and develop and submit National Pollutant Discharge Elimination System (NPDES) permit applications.

Training will start at 10 a.m. in IEPA’s Sangamo Room, 1021 N. Grand Ave. East, Springfield.

Direct questions to David Ginder, IEPA, 217557-8761; Lauren Lurkins, Illinois Farm Bureau, 309-557-3153; or Jim Kaitschuk, Illinois Pork Producers Association, 217-529-3100.

During a year and a half, eight public meetings included discussion about the strategy, he noted.

“Other states developed it (nutrient strategy) behind closed doors and put it out there,” David said.

For agriculture, the nutrient strategy offers three major types of practices: nutrient efficient ones, in-field management and off-site management/practices. David noted the implementation cost estimates for each practice was based on a 20-year period at 6

percent interest.

Running through the menu of practices, David pointed out no single practice offers a major reduction in the loss of either nitrogen or phosphorous, and estimated reductions from different practices aren’t automatically cumulative because one practice may reduce the impact of another.

“The whole idea of the strategy is to get us going,” David said. “Nobody expects a big (nutrient) reduction tomorrow ... but at some point, things should be going down.”

Continued from page 1 Two interim goals include a 15 percent reduction of nitrogen and a 25 percent reduction of phosphorous by 2025.

She praised the industry for “taking leadership on this issue with research and demonstrations” on best management practices and cited a laundry list of industry-supported programs.

Jean Payne, president of the Illinois Fertilizer and Chemical Association, urged ag industry representatives to “let’s be honest with ourselves.

“It’s what (nutrients) we Jean Payne lose — not what we use because we’ve reduced fertilizer,” Payne said.

“We’ve got to do better with voluntary management practices.”

Payne calculated the strategy means agriculture must make a “2 percent improvement” in phosphorous utilization and a

“10 percent increase” in nitrogen utilization.

Both Payne and Willhite noted the high cost estimates — as much as $800 million annually — to implement the suite of practices to reach nutrient loss targets. “They’re big numbers, no doubt about it,” Willhite said.

But Payne pointed out the farmer-funded Illinois Nutrient Research and Education Council (NREC) contributes $2.5 million annually for fertilizer research and education. Willhite noted existing cost-share agriculture practices serve as a strategy backbone for agriculture and “the guts of our actions going forward.”

Both offered optimistic outlooks on the strategy.

Payne summarized: “If every acre just did a little bit better job, we should see better water quality results.”

Willhite concluded: “I hope this (strategy) gives us something we can implement and live with — and after successes, something we can be proud of.”

Nutrient

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U of I professor: Don’t rush farm bill program decision FarmWeek • Page 4 • Monday, December 22, 2014

BY DEANA STROISCH FarmWeek

Farmers’ choice between Agricultural Risk Coverage (ARC) at the countylevel or Price Loss Coverage (PLC) boils down mostly to price expectations, according to Jonathan Coppess, a clinical assistant professor of law and policy at the University of Illinois.

“What we have seen thus far is that it really boils down to how low you think prices are going to go on a national year average for all five years,” Coppess told FarmWeek. “If they’re not consistently well below the $3.70 (reference price in PLC) year in and year out, then ARCcounty is going to provide more assistance over the time than PLC.” Coppess couldn’t say which program farmers favor at this point. He noted the selection deadline isn’t until March 31 and advised farmers to wait to make a decision.

County average yield information will be available by the end of February, which he said will help provide better payment estimates for each program.

“Right now for farmers, the key is to get familiar and understand programs and the choice,” Coppess said. “There’s no need to rush into the program decision. You’ve got until March 31. We’ll have a better idea of how programs will work by March.”

Coppess outlined farm program decisions during last week’s 2014

AGMasters Conference held at the I Hotel in Champaign.

Signed into law in February, the Agricultural Act of 2014 eliminates direct payments and modifies the target price program, replacing the CounterCyclical Payment (CCP) program with PLC. The bill also changes the revenue safety nets, replacing Average Crop Revenue Election (ACRE) with two ARC options — County ARC and Individual Farm ARC. Farmers also have the chance to update payment yields and retain or reallocate base acres.

Coppess suggested farmers first compare ARC-county with PLC and then look at ARC coverage at the individual level, which he described as more complicated. He said he hasn’t found many scenarios where ARC coverage at the individual level provides more benefits than the others.

Other thoughts: • Payment yields: Each farm can have updated yields, but only those electing PLC can use the updated yields.

Calculations are based on 90 percent of average yield between crop years 2008 and 2012. A year can be excluded if no acres were planted.

The decision can be made only by the landowner. Coppess called this the “easiest decision,” and said if the updated yield is higher: “take it.”

• Retain or reallocate base acres: All

Farm bill: Your questions answered

In addition to hosting informational meetings across the state, Illinois Farm Bureau’s Doug Yoder, senior director of affiliate and risk management, will answer FarmWeek reader questions about the farm bill program decisions farmers face.

This week’s question: Q: In the base acreage reallocation decision, can I decide which crops I want to increase base and which crops I want to decrease?

A: To an extent. The only two options available under the base acreage reallocation decision include:

payments are made on base acres. The total base acres can’t be increased, but acres can be shifted from one crop to another based on the proportion of acreage planted for the 2009 through 2012 crop years. If no change is made, the acreage defaults back to the farm’s current acreage.

• Retain base acres already established with Farm Service Agency (FSA) as of Sept. 30, 2013, or • Reallocate base on the ratio of planted acres for each covered crop from 2009-12, taking into account numerous other rules.

The ratio of planted acres for each covered crop is your only other reallocation option.

You cannot arbitrarily decide how much base you want for each crop.

Total base acreage for each farm cannot be increased.

If you have a question, please email it to dstroisch@ilfb.org, or mail it to: Farm Bill Questions, Deana Stroisch, 1701 Towanda Ave., Bloomington, Ill. 61701.

Coppess said landowners who could increase their corn base should reallocate base acres.

• Online tools: Coppess encouraged farmers to use farm bill tools to analyze their options.

For example, visit {farmbilltoolbox. farmdoc.illinois.edu}.

Congressional action

Senate OK’s tax extenders, barge diesel user fee hike

BY DEANA STROISCH FarmWeek

The U.S. Senate passed a bill last week that temporarily extends expired tax breaks, including Section 179 small business expense deductions at the $500,000 level.

President Barack Obama, who threatened to veto a deal to make the tax breaks permanent, has said he will sign a bill authorizing a temporary extension.

Richard Guebert Jr. H.R. 5771, the Tax Increase Prevention Act of 2014, also extends 50 percent bonus depreciation, production tax credits for cellulosic ethanol, biodiesel and wind energy for a year, and permanently increases the barge diesel user fee by 9 cents.

Illinois Farm Bureau and other agricultural groups have strongly lobbied Congress to reinstate Section 179 and 50 percent bonus depreciation. They were among dozens of tax breaks that

expired at the end of 2013.

IFB President Richard Guebert Jr. said the bill “provides Illinois farmers and other small businesses an incentive to invest in their operations and will help them to manage their purchases, cash flow and income.”

He urged Obama to sign the bill into law.

The temporary extension will apply to purchases from Jan. 1 to Dec. 31 of this year.

The deduction limit was set at $250,000 in 2008 and 2009, and at $500,000 from 2010-13. It dropped to $25,000 this year, and would have stayed there if Congress failed to act.

Section 179 drops back to $25,000 as of Jan. 1.

IFB plans to encourage the new Congress to tackle tax extenders early next year and make this year’s Section 179 provisions permanent.

Meanwhile, the bill also allowed the barge diesel user fee, which funds the Inland Waterways Trust Fund, to increase from 20 to 29 cents.

The fee increase could generate an estimated $27 million to $36 million a year.

Corn demand, possible drop in acres, offer price support

Page 5 • Monday, December 22, 2014 • FarmWeek

BY DANIEL GRANT FarmWeek

Recent support for corn prices could be a sign of things to come.

Darrel Good, University of Illinois Extension economist, believes a possible drop in corn acres and strong demand could push corn prices back above the $4Darrel Good mark next year.

“We will tighten the balance

sheet next year (if farmers plant less corn and yields return to the national trend around 163 bushels per acre),” Good said last week at the U of I Illinois Farm Economics Summit in Peoria. “If there’s any hiccup in production (next year), it could spark a rally.”

A drop in corn acres and production actually could occur much sooner than next season.

USDA will issue its final crop production estimates for the current crop year on Jan. 12.

“At this stage of the season, there’s probably more uncertainty about the size of the

crop than is normally the case,” Good said. “I think there’s considerable uncertainty about

FarmWeekNow.com

Go to FarmWeekNow.com to listen to interviews with U of I economists from the Farm Economics Summit.

how many (corn) acres were planted and harvested.”

The National Agricultural Statistics Service estimate of U.S. corn acres remains 4.6 million above the total reported to the Farm Service Agency (FSA). That difference usually totals about 2.5 million to 3 million, accounting for farmers not enrolled in FSA programs.

“Those numbers will come together at some point,” Good said. “The market is leaning toward a reduction of (corn) acres” in the Jan. 12 report.

Next season, Good foresees the possibility of U.S. farmers reducing corn plantings by about 1 million acres while bumping up soybean plantings.

“If (corn) production is tweaked down, prices could average $3.60 to $3.70 this year (above USDA’s estimate of $3.50),” Good said.

The average price next year could climb to $4.20 per bushel, according to Good, who noted, “it could average a bit higher than that.”

Ethanol demand, up 5 percent the first quarter, should remain steady while exports are on target to reach USDA’s projection of 1.75 billion bushels.

Good looks for an uptick in feed demand next year.

Meanwhile, soybean exports continue to climb as China’s appetite remains strong. USDA

this month raised U.S. soy exports 40 million bushels to 1.76 billion bushels.

“Our outstanding (bean) sales are quite large,” Good said. “We’ve already sold about 85 percent of what USDA expects us to export.”

Good believes appreciation of the U.S. dollar should have little impact on crop exports as Chinese currency ties to the dollar, thus having little impact on bean exports, while Japan remains a steady buyer of U.S. corn.

“Soy prices have held up remarkably well,” Good said.

“But next year, if we build up (soy supplies from the U.S. and South America), I think there’s some downside risk.”

Bean prices could average near $10 per bushel for the 2014-15 marketing year and in the upper$9 range next year, Good added.

recently joined the U of I staff from Ohio State University.

“But evidence doesn’t suggest we’ve gone back to (sub) $3 corn prices and $8 beans.”

U of I economists back in 2008 suggested the John Newton crop markets in 2006 entered a “new era” of prices due in part to growing demand.

Average new era prices were pegged at $4.60 per bushel for corn (with a range of $3 to $6.70) and $11.04 per bushel for beans. And so far, those projections are quite accurate as actual prices since that time averaged $4.87 for corn and $11.75 for beans.

Similarly, wheat prices, since 2008 averaged $5.98 per bushel compared to the U of I new era average price projection of $5.80.

The new era follows two previous crop price eras from 1947 to 1971 (when corn averaged $1.28 and beans averaged $2.63 per bushel) and 1972 to 2006 (when corn averaged $2.42 and beans averaged $6.15 per bushel).

Before the recent price

break, corn prices hovered above the new era average price for 35 consecutive months, while soybeans remained above the average price estimate for an impressive 46 months.

But as the law of averages goes, what goes up must come down. And it appears that’s what happened to crop prices when U.S. production surged to record levels this year.

“Even though we had a monster crop (this year), we’ve not shifted back to old era prices,” Newton said. “The evidence is not there.”

Evidence that the new era of crop prices will continue includes ethanol demand, which now consumes more than 5 billion bushels of corn annually, China’s insatiable appetite for soybeans (the Chinese this year are projected to import more than 2.7 billion bushels of beans) and weather uncertainty.

“Ethanol remains a strong safety net for corn prices, while China is a strong safety net for soybean prices,” Newton said.

So, even though crop prices plummeted this year, history shows a long run of belowaverage prices rarely follows a long run of above-average prices, according to U of I economists. — Daniel Grant

Newton: ‘New era’ of crop prices to continue Crop prices certainly corrected this year to adjust for a record supply response from U.S. farmers.

But there’s no evidence to suggest the “new era” of crop prices ended or that farmers are doomed to return to the days of crop prices down near loan rates.

John Newton, University of Illinois assistant economics professor, last week assured farmers at the U of I Illinois Farm Economics Summit in Peoria the new era of crop prices will continue.

“We’re probably in the lower tail of new price distribution,” said Newton, who

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Economist sees need to conserve cash

Lower income, steady input prices squeeze farm margins

FarmWeek • Page 6 • Monday, December 22, 2014

BY DANIEL GRANT FarmWeek

Crop farmers looking for perspective on the recent shift in economics can take some comfort in the fact that it’s not as bad as the 1980s.

Instead, farmers should think back about 15 to 20 years ago if they want to compare a similar past period to what could lie ahead, according to Gary Schnitkey, University of Illinois Extension farm management specialist.

Schnitkey discussed his outlook for farm income and input prices recently at the U of I Illinois Farm Economics Summit in Peoria.

“Obviously, we expect lower incomes and a need to conserve cash,” he said.

“It’s not as bad as the 1980s, yet.

We’re probably looking more along Gary Schnitkey the lines of the late-1990s and early-2000s (as a comparable period). Cash was tight.”

Cash flows are tightening up

again. Schnitkey projected 2014 crop farm income could average between $60,000 to $70,000, about half the average of 2013.

And incomes could slide more in 2015 if Schnitkey’s projections come to fruition.

He projected corn prices next year actually could increase close to $4 per bushel, but a return to more normal yields after record production this year could drag incomes lower.

Crop revenue projections were estimated at $748 per acre on northern Illinois farms for 2014, down $253 from the 2011-13 average. Higher prices but lower yields next year could

result in a further dip of revenue to about $741 per acre.

“We could see revenue per acre lower (despite the possibility of higher prices next year) if corn returns to trend yield,” Schnitkey said.

Operator and land returns could slip to an average of $244 per acre for corn and $273 for beans this year, which will be a loss for farmers who pay $300-plus cash rent.

The farm management specialist believes tighter farm income will pressure input prices. But it could take time for input prices to readjust and any drops aren’t expected to make

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up for the loss of farm income.

“Costs have gone up tremendously,” Schnitkey said.

Input prices in central Illinois from 2006 to 2013 increased $111 per acre for fertilizer and $69 per acre for seed. Overall, nonland costs for corn jumped from about $315 per acre in 2006 to an estimated $652 per acre this year.

Schnitkey expects a number of farmers will reduce capital expenditures (buy less machinery), reduce fertilizer rates and possibly plant more acres of soybeans at the expense of corn in 2015.

“Machinery dealers/manufacturers will be the first ones to feel the pain,” he said.

“They’ve already reported a decline of sales.”

Farmers benefit from the major drop in crude oil prices.

But it won’t have a major impact on farmers’ bottom

lines as fuel accounts for just 4 percent of all costs on Illinois farms (see graphic).

“We’ve seen crude (prices) come down dramatically,” Schnitkey said.

“It could have a $10 to $15 (per acre) impact, but it’s not going to be a game changer.”

Cash rents also eased a bit on some farms this year and are expected to decline in 2015.

Cash rental rates from 2014 to 2015 are expected to decline by an average of $36 per acre on excellent productivity ground, $34 per acre on good ground, $47 per acre on average ground and $31 per acre on fair ground, according to the Illinois Society of Professional Farm Managers and Rural Appraisers.

Winter arrives; get ready for colder temperatures

BY DANIEL GRANT FarmWeek

If the latest National Weather Service (NWS) winter outlook comes to fruition, brace for colder weather.

NWS last week predicted the temperature pattern this winter will be more like the frigid month of November rather than the mild start to December.

Winter officially began yesterday (Dec. 21).

“The January to March forecast has most of the state with an increased chance of below-average temperatures,” Jim Angel, state climatologist with the Illinois State Water Survey, told FarmWeek.

“Only far northern Illinois escapes this forecast (with a neutral temperature forecast).”

The NWS outlook bears some similarities to last year’s brutal winter with a chance of another season of below-normal temperatures, but it also offers hope of less severe conditions compared to a year ago.

Jim Angel A forecast of below-average temperatures usually indicates variance of a few degrees. Meanwhile, the forecast also calls for an increased chance of below-average precipitation. “(The NWS winter outlook) expects colder conditions to prevail from most of Illinois south all the way to the Gulf,” Angel said. “But that doesn’t necessarily mean we’ll have a repeat of last winter.”

Angel said Illinois lies on the edge of the area expected to experience below-average temperatures, so any slight shift of the pattern could alter conditions.

The state already experienced quite a contrast of weather patterns the past two months.

November ranked as the fourth-coldest on record in Illinois as the average temperature (34.3 degrees) registered a bone-chilling 8.2 degrees below average.

Temperatures during the first 18 days of this month coincidentally posted the same average (34.3 degrees). But that came in 2.1 degrees above average for that time period.

It appears unlikely the average temperature for December actually winds up warmer than November, though. The forecast late last week called for a blast of cold air to arrive near Christmas and continue through the end of the month.

Precipitation also was in the forecast after a fairly uneventful start to the month. Precipitation through Dec. 18 averaged just a half-inch for most of the state north of Interstate 70, while much of the state south of I-70 received 1 to 4 inches of precipitation during that time.

Angel cautions that a cold, dry winter forecast doesn’t guarantee there will be less snow. Cold weather can produce lighter, fluffy snow that accumulates but has less water content.

Important to pass down heritage along with the family farm

Page 7 • Monday, December 22, 2014 • FarmWeek

BY KAY SHIPMAN FarmWeek

Taking over a 142-year-old family farm requires the newest operators to look into the future without forgetting the past.

“When you pass on something that’s 142 years old and you’re the fifth generation, you have a responsibility to the generations before and the ones coming after. Our goal is to keep the family intact and together. It’s a heritage, and with that comes responsibility,” Michelle Sirles of Rendleman Orchard told FarmWeek.

Sirles and her husband, Wayne, are

taking on responsibilities for the Alto Pass orchard from his parents, Ren and Betty Sirles. Both generations will share their farm succession experiences Jan. 8 in a banquet keynote address at the Illinois Specialty Crops, Agritourism and Organic Conference.

The conference, Jan. 7-9 at the Crowne Plaza, Springfield, will start at 10 a.m. Jan. 7 with preconference workshops and continue with breakout sessions through Jan. 9. The preregistration deadline is Dec. 26.

The older Sirles’ started succession planning years earlier. Their son joined the family farm business 25 years ago,

Amy Bradford, left, GROWMARK corporate relations manager and GROWMARK Foundation manager, presents Susan Moore, IAA Foundation director, with $70,000 from GROWMARK and its FS member cooperatives to support Illinois Agriculture in the Classroom. (Photo by Ken Kashian)

GROWMARK, FS show support for ag literacy across Illinois

GROWMARK and its FS member cooperatives recently donated $70,000 to support Illinois Agriculture in the Classroom (IAITC) programs.

Amy Bradford, corporate relations manager and GROWMARK Foundation manager, presented a check to representatives of IAITC and the IAA Foundation, Illinois Farm Bureau’s charitable foundation, during the Illinois Farm Bureau annual meeting in Chicago.

“GROWMARK and its FS companies take great pride in supporting AITC activities,” Bradford said. “Many employees across Illinois, whether at GROWMARK or one of the FS companies, cooperate with ag literacy coordinators to share the agriculture story. Our financial contribution to these activities is another way the GROWMARK-FS System supports AITC efforts. We look forward to many more years of this relationship.”

GROWMARK’s annual contribution directly supports 69 county coalitions across the state. Those coalitions are comprised of individuals who conduct programs and activities to educate students about agriculture.

In the fall, $532,000 in grants were distributed to local coalitions — an increase over last year — due in part to GROWMARK’s generosity and ongoing commitment to IAITC programs.

The partnership between GROWMARK, FS and IAITC

goes beyond the most recent financial contribution. GROWMARK’s contribution brings its 11-year total of AITC support to more than $700,000.

Currently, 29 AITC coalitions have an FS representative on their local IAITC advisory council, according to Kevin Daugherty, IFB education director.

“In addition to the FS representatives on the advisory boards, many local FS representatives volunteer in the classroom, at Expo events or provide career-based information to teachers during teacher training sessions,” Daugherty said.

“The local FS makes sense to schools across Illinois,” he continued. “Students and teachers see the FS signs, and know there are local folks employed in this valuable agriculture sector. This local connection makes an even greater impact in schools.”

Last year, IAITC reached more than 516,000 students and 36,000 teachers through classroom presentations and other learning experiences.

“Through our dedicated volunteers and county coalition staffs, IAITC is making a significant impact in helping more young consumers understand agriculture and the important role of the farmer,” said Susan Moore, IAA foundation director. “Our donors see this, too, and we are grateful for major gifts like GROWMARK’s to keep local programs viable.”

while daughter-in-law, Michelle, recently joined the business.

“We’re going through the (succession) process now. We know it’s not an easy process, but everybody faces it at some point,” Michelle Sirles said. “We chose that (speech) topic because it’s something every farm could relate to.”

Part of the family’s heritage includes being one of the area’s largest employers.

“We feel we have a responsibility to give back, and part of that is educating the public about local food and how they can support it,” Sirles explained.

The family’s education support extends to Illinois State University’s Nor-

mal campus where ISU Collegiate Farm Bureau members distributed Rendleman apples to educate fellow students.

Closer to home, Rendleman Orchard also donated fruit and vegetables from June through December to the Murphysboro Food Pantry and to the Illinois Masonic Children’s Home in Murphysboro. Chefs at the home teach residents about preparing locally grown produce, Sirles added.

For conference agenda details or to download a registration form, visit {spe cialtygrowers.org} and click on the “Conference & Trade Show” icon on the right side.

Popular conservation cropping seminars return

Cover crops, soil health and nutrient management experiences return to three conservation cropping seminars in January and February. Large crowds attended last year’s seminars.

Dates and locations include: Jan. 27, DeKalb County Farm Bureau, Sycamore; Feb. 4, Lake Land Community College, Mattoon; and Feb. 18, Western Illinois University student union, Macomb. Seminars start at 8:30 a.m. and end at 5 p.m.

The preregistration deadline is Jan. 19.

Lauren Lurkins, Illinois Farm Bureau director of envi-

ronment and natural resources, plans to discuss the Illinois Nutrient Loss Reduction Strategy at each seminar.

Each seminar offers a panel of farmers with conservation cropping experience to share their expertise. Other topics include weed and herbicide management with cover crops and nutrient uses. Each seminar will offer topics particularly suited to that region.

The registration fee costs $20 and includes a meal. High school and college students will pay $10. Register online and pay via credit card at

{www.ccswcd.com} or mail registration information and payment to the Champaign County Soil and Water Conservation District, attention: CCS 2015, 2110 W. Park Court Suite C, Champaign, Ill. 61821.

The meetings are coordinated by local Soil and Water Conservation Districts, Illinois Department of Agriculture, Natural Resources Conservation Service, Illinois Stewardship Alliance, American Farmland Trust, Illinois Environmental Protection Agency and the Illinois Council on Best Management Practices.

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Farmers, Santa must cope with different CFV rules

FarmWeek • Page 8 • Monday, December 22, 2014

While farmers are adjusting to the new Covered Farm Vehicle (CFV) regulations — some now in place, others being phased in — Santa Claus is adjusting to his own new set of rules.

Because Santa’s sleigh is animal-powered, the government thought he, like the farm community, should be covered by the CFV, but there are obvious differences. Thus, a separate special set of CFV rules were developed for his “Christmas Flying Vehicle.”

To qualify for the CFV exemption as a farmer or as Santa, certain conditions must be met:

BY KEVIN RUND

Covered Farm Vehicle

Christmas Flying Vehicle

Must be a farmer Used only for farming Not for hire Range limit: In-state: anywhere Out-of-state: Under 150 miles Registered with a “farm” plate No hazardous materials

Must be an elf Used only for philanthropy None-compete with FedEx Range limit: In any state, everywhere Out-of-USA: Under 150,000 miles Registered with a “fa-lala-la-larm” plate No hazardous toys

The CFV gives qualifying farm drivers an exemption from certain medical requirements, such as a biennial physical. Regulators looked at Santa’s already-advanced age and decided, “Why bother? Whatever he’s doing is

working.” However, they did recommend a cookie lim- and/or holiday overtime.) it.

Finally, there is the federally-mandated CDL Farmers enjoy some hours of service breaks under exemption. As we have established in prior articles the CFV exemption, but little did they where farmers are concerned, it’s a “Commerknow that cial Driver’s License.” For Santa, it’s a Santa actu“Christmas Driver’s License.” ally champiSadly, Illinois farmers oned don’t yet have this CDL inclusion exemption under CFV of that provisions in place. Legone. So he, islation is required to accomtoo, gets a break plish that, and we’re expecting from limitations on that to happen in 2015. hours of operation. After But in a rare bipartisan disall, restricting the number of play of cooperation — undoubtedhours Santa could operate ly engendered by the Christmas spirhis CFV would have devastatit — the Illinois General Assembly ing impacts on Christmas Eve. chose to whisk through Santa’s CDL Maybe, just maybe, regulators have Illustration by Sharon Dodd exemption during the recent veto session. some self-interest in that one.

One final change. Earlier this year, the GenThe third major area of exemption for eral Assembly took steps to ensure farmers will be CFV operators is for inspection and repair of equipable to register pickup and dually trucks pulling ment. Farmers involved in interstate commerce are giv- “farm”-plated trailers as a CFV effective Jan. 1. So, en a pass on having their CFVs annually inspected. as it turns out — thanks to the CFV — farmers are Keep in mind, however, those farm vehicles are still slated to receive the gift of an exemption this Christsubject to roadside inspections. mas, and Santa will have the unrestricted ability to Santa’s version is different; in fact, it’s the reverse. deliver it.

Santa’s CFV must undergo an annual inspection Merry Christmas! because it has a lot of down time. But there wasn’t a law enforcement officer to be found who was willing to conduct a “roadside” inspection while Santa’s vehicle was en route (something to do with altitude

Fracking law provides landowners rights with water testing Illinois law governing highvolume horizontal fracturing provides landowners with rights related to mandatory water quality testing, said Bill Bodine, Illinois Farm Bureau associate director of state legislation.

The law requires oil and gas companies to conduct baseline water testing within 1,500 feet of a proposed well site, of any well or spring used as a water source, artificial lake, pond, reservoir or wetland listed on the Register of Land and Water Reserves.

The law specifies landowners must be provided with a document explaining their rights related to water quality testing — before signing any water

sampling agreement.

A landowner can deny a testing company access to his property or permission for water quality sampling.

A landowner can also enter into a nondisclosure agreement with the oil and gas company for test results of samples taken from private wells, or ponds wholly contained within their property or any part of a perennial stream or river that flows through their property. If a landowner enters into a nondisclosure agreement with a drilling company, that agreement protects the privacy of water quality test results before fracking occurs and post-fracking test results that don’t show the

Listen.

water was polluted.

If a landowner enters into a nondisclosure agreement with an oil and gas company, the agreement must include several provisions, such as the landowner must receive a copy of the test results.

If the tests show the water is polluted, the company must submit follow-up test results to the Illinois Department of Natural Resources (IDNR) and the Illinois Environmental Protection Agency within seven days.

If a landowner doesn’t enter a nondisclosure agreement, all water quality test results before and after fracking will be available to the public on IDNR’s website within seven days of the test results.

Kevin Rund serves as a transportation specialist with Illinois Farm Bureau.

Illinois farmers elected to soybean posts Ron Moore of Roseville (Warren County) will serve as 2015 secretary on the American Soybean Association’s (ASA) nine-member executive committee, while Bill Wykes of Yorkville (Kendall County) will serve on the ASA board as a new member. ASA members recently conducted their winter board meeting in St. Louis.

Moore served as ASA vice president last year and as past Illinois Soybean Association (ISA) chairman. He also serves on the board of directors of the U.S. Soybean Export Council and is past

Click.

chairman of Illinois Council for Best Management Practices, a coalition of ag groups in Illinois promoting improving farmers resource management and profitability.

Wykes served as ISA chairman in 2012. He previously held the vice chairman position and represented ISA on the National Biodiesel Board, Soy Transportation Coalition and World Initiative for Soy in Human Health.

In addition, United Soybean Board members elected Dwain Ford of Kinmundy as secretary. Ford has served as a USB director for six years.

Read.

The most people, on the ground, in Illinois, covering Illinois agriculture for you.

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Director Rf News & Communications RFDRN, FarmWeekNow.com, FarmWeek Mike has uncovered what matters to you from places like Washington, D.C., Brussels, Cuiaba, and Nashville – Nashville, Illinois that is. He leads your team of dedicated professionals who all juggle notepads, digital recorders, cameras, and smartphones in today’s 24/7 news cycle, ensuring the RFDRN, FarmWeekNow.com and FarmWeek provide you with information you want.

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HRISTIAN — Farm Bureau will co-host a dinner marketing meeting at 6:30 p.m. Jan. 13 at the University of Illinois Extension office in Taylorville. Sarah Reedy and Gerry Bertrand, First National Bank of Nokomis, will speak. Call the Farm Bureau office at 8242490 by Jan. 9 to register.

• Farm Bureau will co-host a dinner farm bill update meeting at 6:30 p.m. Jan. 27 at the University of Illinois Extension office in Taylorville.

Doug Yoder, Illinois Farm Bureau senior director of affiliate and risk management, will speak. Call the Farm Bureau office at 824-2940 for reservations by Jan. 23.

OOK — Farm Bureau is selling discounted Marcus Theaters movie tickets. Call the Farm Bureau office at 708-354-3276 or stop by for pricing and tickets.

EWITT — Farm Bureau will sponsor a farm bill and marketing breakfast at 7:30 a.m. Jan. 6 at Woodlawn Country Club in Farmer City. Doug Yoder, IFB senior director of affiliate and risk management, and Cory Winstead, AgriVisor, will speak.

Call the Farm Bureau office at 935-2126 for reservations.

ANCOCK — Young Leaders will sell gun/Gamemasters gift card raffle tickets for $20 each.

Drawings will be held each day Jan. 1 - Jan. 31. Proceeds will benefit Hancock County Agriculture in the Classroom and Foundation scholarships.

Tickets are available at the Farm Bureau office or from Hancock County Farm Bureau directors. For more information, call the Farm Bureau office at 357-3141.

• Farm Bureau will co-host three financial mini-sessions on running a successful farming operation. The first session, insuring your farm, will be held at 6 p.m. Jan. 9 at Lake Hill Winery in Carthage.

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Tuesday: • FarmWeek: “The Early Word” • Jim Angel, Illinois State Water Survey • Karen Blatter, 1st Far m Credit Ser vices: First Choice Agriculture Scholarships • Tim Maiers, Illinois Pork Producers Association Wednesday: • Tim Schweizer, Illinois Depar tment of Natural Resources: winter outdoor recreation options • Linda Olson, Illinois Farm Bureau manager of consumer communications:

Call the Farm Bureau office at 657-3141 for reservations

by Jan. 6.

EE — Farm Bureau’s annual meeting will be held at 10 a.m. Jan. 8 at the Farm Bureau building. For more information call the Farm Bureau office at 857-3531.

IVINGSTON — Farm Bureau will host “Continuing the Legacy” with Ron Hanson at 5:30 p.m. Jan. 19 at the Walton Centre in Fairbury. This event is open to anyone interested in passing their farm to the next generation. Email livefbmgr @gmail.com for more information.

ACON — Farm Bureau scholarships are available to members and their children majoring in an agriculture-related field of study. Visit {MaconCFB.org} for an application. Application deadline is Feb. 15. Call the Farm Bureau office at 8772436 for more information.

IATT — Farm Bureau will host a cash bash raffle Jan. 16 at the Monticello Best Western. Doors will open at 5:30 p.m., dinner will be served from 6 to 7 p.m. and the raffle will begin at 7 p.m. Call the Farm Bureau office at 762-2128 for tickets.

Proceeds will benefit the Farm Bureau Foundation and A Small Hand Infant Needs and Diaper Pantry.

• Farm Bureau will host a farm bill meeting at 7:30 a.m.

Jan. 6 at Woodlawn Country Club in Farmer City. Call the Farm Bureau office at 7622128 to register.

IKE — Farm Bureau will co-host a farm bill and crop insurance luncheon seminar at noon Jan. 7 at the Farm Bureau office. Doug Yoder, IFB senior director of affiliate and risk management, will speak. Cost is free for members and $15 for nonmembers. Call 285-2233 for reservations by Jan. 6.

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new consumer research results • Michelle Fluty, Prairie Farms Dairy: holiday flavors and contest Thursday: • Jared Hager t, United Soybean Board: soy checkoff priorities • Harry Cooney, GROWMARK • Kevin Rund, IFB senior director of local government: Santa rules of the road Friday: • Sara Wyant, Agri-Pulse •Jeff Mar tin, Mount Pulaski farmer and The Chicago Farmers: upcoming Farmland Forum • Jeff Har tz, Wyffels Hybrids: 2015 planting • “Let’s Talk Horses”

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Page 9 • Monday, December 22, 2014 • FarmWeek

COTT — Farm Bureau will co-host a farm bill and crop insurance seminar at noon Jan. 7 at the Pike CountyFarm Bureau office in Pittsfield. Doug Yoder, IFB senior director of affiliate and risk management, will speak. Cost is free for members and $15 for nonmembers. Call 7423351 for reservations by Jan. 6.

ERMILION — District 12 Young Leaders committee members will sponsor the Illini Farm Toy Show from 5 to 9 p.m. Jan. 9 and 9 a.m. to 5 p.m. Jan. 10 at the Wyndham Garden in Urbana, formally known as the Urbana Holiday Inn. A farm toy consignment “live” auction will be held Jan. 10 at 10:30 a.m. Cost

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

Five industry leaders earned Excellence Awards last week from the Illinois Soybean Association (ISA) for their work in impacting soybean profitability.

Recipients included John Block, OFW Law senior policy adviser; U.S. Rep. Rodney Davis, R-Taylor ville; Jim Fraley, Illinois Far m Bureau livestock program director; Mike Plumer, Illinois Council on Best Management Practices coordinator; and Larry Werries, American Far mland Trust project coordinator.

Block received the Excellence in Leadership Award for going out of his way to develop and establish a

global competitive position for Illinois soybeans and soy products. He ser ved as U.S. ag secretary from 1981-86 and as Illinois ag director from 1977-81.

Davis earned the Excellence in Transportation Award for helping develop, expand and secure greater efficiencies and transportation opportunities for soybean products. Davis ser ves on the House Agriculture, and Transportation & Infrastructure Committees.

Fraley accepted the Excellence in Animal Agriculture Award for helping ISA increase worldwide consumption of Illinois soybeans and soy prod-

ucts, and assisting with retaining and growing Illinois’ animal agriculture industry.

Plumer, a conser vation agriculture consultant, received the Excellence in Yield, Composition and Profitability Award for identifying, developing and influencing production solutions that provide far mers with a competitive edge.

Werries captured the Excellence in Freedom to Operate Award. He helps Illinois soybean far mers protect current markets, open new markets and advocate for public policies that eliminate far ming roadblocks.

is $3 for adults and $2 for children age 6 to 12. Call Sarah Hastings at 841-2190 for more information.

ISA recognizes Illinois leadership excellence

Protecting your field is our scout’s honor.

At FS, we’re focused on crop performance. Our certified crop specialists will identify environmental conditions, crop growth stage and plant development to make agronomically sound recommendationss for each of your fields. It’’ss our goal goa to maximize every acre you farm and protect the local environment nment so you’re ready for what’’ss next. ne

www w.fssystem.com

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©2013 GROWMARK, Inc. A14140

FarmWeek • Page 10 • Monday, December 22, 2014

Grains to go the way of economy in 2015

Record crops were the focus of grain traders for most of 2014 until reminders of strong demand started to captivate attentions this fall. Internal market fundamentals will continue to guide grains in 2015, but outside markets will also have plenty to say on price direction going forward.

Speculators have returned money to the agriculture space in recent weeks.

Hedge funds currently hold net-long positions in corn and soybeans that are as bullish as they have been in several months. Buyers have also flipped what was a long-held, net-short position on wheat.

Grain prices have turned up out of their fall lows without Joe Camp much help from the broader commodity market. Most-publicized has been the sharp tumble in energy prices — oil in particular.

Projections indicate oil production will continue to outpace consumption after OPEC’s decision to keep output levels unchanged.

Lower prices will test the viability of U.S. shale operations that have already been put to the test as a result of weak global demand; however, cheap fuel costs are likely to spark improved usage down the road.

Metals continue to trend lower. Copper prices have dropped by more than 15 percent in 2014. Known as “Dr. Copper” for its reliability as a barometer of global economic health, the metal has fluctuated in direct correlation with inflation expectations in recent years.

Inflation rates are lagging in the U.S. and abroad despite continued stimulus efforts from the world’s central banks. Policymakers in Europe, China and Japan have been in the news recently for taking measures to accommodate their slumping economies.

The Federal Reserve remains committed to

BY JOE CAMP

lowering unemployment and stabilizing prices and will keep short-term interest rates low for a “considerable time” in order to achieve those objectives. Interest rates are likely to remain at the zero bound until late 2015 or 2016, but the bank has ended its asset-buying program now that the U.S. economy is showing signs of strength.

Corporations are mostly in good health. We are coming off an earnings season that featured exceptional third-quarter numbers. Companies have been slow to hire throughout the post-2008 recovery, but they are flush with cash as a result.

Stock prices are certainly reflecting a bullish bias of attitudes toward the U.S. economy. The major indexes still hover near record highs and may attract money away from the agriculture space if equities continue to outperform. Conversely, money may find the grains if traders begin to view stocks as being a bit frothy.

The current state of outside markets is relatively straightforward. Economies abroad are struggling in their efforts to combat unemployment, currency instability and deflationary pressures. The U.S. faces the same challenges, but the economy is improving at an accelerated pace and fares much better than do economies outside the country. Central banks will keep the global economy afloat by taking measures that will ultimately provide long-run support to commodities.

Influences aside from the commonly talked about fundamentals will have important bearing on ag prices in the next calendar year.

Watch for attitudes regarding the global economy to direct money flows among the various investment spaces. In general, count on better economic health to be the rising tide that lifts all boats, grains included.

Joe Camp serves as a risk management specialist with AgriVisor, LLC. His email address is jcamp@agrivisor.com.

M A R K E T FA C T S

Analyst predicts cattle price rebound

BY DANIEL GRANT FarmWeek Cattle prices, which just four weeks ago reached an all-time high of $174 per hundredweight on the cash market, should bounce back after a tough week.

Feeder cattle futures last week dipped to limit-down prices five consecutive trading sessions. CME Group on Thursday responded by increasing daily price limits.

“The change in the daily permissible limit should help accelerate price discovery and is a welcome decision for market participants,” authors of CME Group’s Daily Livestock Report noted.

USDA on Friday released its monthly cattle on feed report that was neutral to slightly bearish, according to Rich Nelson, director of research at Allendale Inc. in McHenry.

The inventory of cattle on feed as of Dec. 1 (10.87 million head) increased slightly (1 percent) for the second consecutive month.

But placements (1.79 million head) and marketings (1.48 million head) in November slipped 4 percent and 11 percent, respectively.

“The surprise (of the report) was marketings, which were the lowest for November since the data series began (in 1996),” said Nelson, who noted the trade expected less than a 10 percent drop in marketings.

“Placements and on feed numbers came in as expected.”

Nelson believes the cattle market in this and coming weeks could rebound from

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Feeder pig prices reported to USDA*

some of the losses posted last week as consumers shift from holiday gift buying back to more beef purchases.

“We think the low point (in the markets last week) will be the low for the next two or three months,” Nelson said.

“We still have a tight first quarter supply in front of us. We look for a little higher pricing the next couple weeks.”

USDA scraps checkoff proposal In other cattle industry news late last week, Ag Secretary Tom Vilsack told DTN that USDA won’t proceed with its proposal to start a new, separate beef checkoff program that would have been run by the government.

Vilsack proposed the new checkoff when discussions to reform the current, national $1per-head checkoff stalled in recent months. But the proposal failed to gain industry-wide support.

Total Composite Weighted Average Receipts and Price (Formula and Cash): Weight Range Per Head Weighted Ave. Price 10-12 lbs. (formula) $37.50-$80.90 $48.25 40 lbs. (cash) $77.50-$92.00 $88.00 Receipts

This Week 88,529 *Eastern Corn Belt prices picked up at seller’s farm

Last Week 92,126

Eastern Corn Belt direct hogs (plant delivered) Carcass Live

(Prices $ per hundredweight) This week Prev. week Change $77.57 $83.70 -$6.13 $57.40 $61.94 -$4.54

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

Steers Heifers

This week $157.00 $157.00

Prev. week $163.14 $163.80

Lynn Rohrscheib, 2014 Yield Challenge100-Bushel Challenge Participant

Change -$6.14 -$6.80

Lamb prices Negotiated, wooled and shorn, 126-168 lbs. for 151.41-174 $/cwt. (wtd. ave. 161.62)

Export inspections (Million bushels) Week ending Soybeans Wheat Corn 12/11/2014 66.9 14.2 21.5 12/04/2014 81.1 9.9 21.0 Last year 63.8 17.6 25.2 Season total 939.4 470.4 400.0 Previous season total 767.2 696.5 386.8 USDA projected total 1700 900 1750 Crop marketing year began June 1 for wheat and Sept. 1 for corn and soybeans.

Joe Klein, 2014 Yield Challenge 100-Bushel Challenge Participant

BECOME A SOYBEAN MASTER

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

(Prices $ per hundredweight) Prev. week Change This week $230.63 $236.90 -$6.27

Dan Arkels, LaSalle County farmer and 2014 Yield Challenge 100-Bushel Challenge Winner

P Proven roven Yield-Busting Yield-Busting Advances Advances

Valuable V aluable T Take-Home Tak ake -Home Techniques Techniques

No matter matter what part part of Illinois Illinois you you far farm m in or the soil you you have soybean ybean yields is being reset. reset. have to to work work with... the bar for for so In proved larger larger yields are are In 2014, farmers farmers across across the state state proved possible. possible. Dan Arkels Arkels harvested harvested a record-breaking record-breaking 103.95 bushels per acre Yield Challenge test test acre on his ISA Soybean Soybean Yield plot in LaSalle County.

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Corn Strategy

Russia turns wheat upside down

The recent collapse in the energy market hit the Russian economy and markets especially hard, and they were already deteriorating. Their currency, the ruble, declined 36 percent in the last month. It’s now only worth half as much as last summer.

The collapse in their currency added to inflationary pressures that started with the imposition of trade sanctions after they began their conflict with Ukraine. Food prices have been impacted especially hard.

The collapse in the ruble is causing Russian farmers to act like their Argentine counterparts.

They are withholding grain sales from the market, using the physical commodity as a hedge against the collapsing currency.

The government is increasing the price it pays for wheat (less than exporters) in hopes of attracting more wheat into government stockpiles with an eye toward capping the rising price of bread.

They are also restricting exports of wheat to all but three countries — Egypt, Turkey and Armenia.

They’ve cut railway loadings of grain destined for export, hoping to cap internal market prices.

Still, they have plenty of grain to export. They’ve only shipped

15 million metric tons (mmt) of wheat of the 22 mmt they were expected to export. But they are also concerned about the condition of their new winter crop, the level of output it might have, and the supply of wheat and grains to meet their own needs next year.

When their winter wheat crop went into dormancy, it was in worse condition than it was for the 2010 crop. Production fell one-third that year.

With three countries still able to buy/ship wheat, some export business will continue. But they might only ship 1-2 mmt the rest of the year, causing exports to fall 5-6 mmt from the current 22 mmt forecast.

Other countries will easily be able to make up for the shortfall, the Europeans in particular.

Their large crop has left them with a comfortable, exportable surplus. And they are well positioned to fill the needs of the Russian customers.

Maybe more important is the fact world supplies outside of China are still comfortable in general. A reduction in Russian exports will lower ending stocks in the world, but they will still be significantly better than they were in the 2006-08 period.

Still, one has to recognize the threat to potential supplies next year if winter in the Black Sea area cuts into potential Russian and Ukrainian crops. But it’s still much too soon for the market to respond to that possibility.

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ü2013 crop: We continue to see good long-term potential, but don’t expect the market to reach long-term upside targets until spring at the soonest. Long-term storage should pay dividends. ü2014 crop: Nearby futures upside momentum stalled under resistance. Use rallies to get to 50 percent priced and to make needed sales. Use forward bids or hedge-to-arrive contracts against May futures to take advantage of the carry when pricing corn. vFundamentals: Rumors were confirmed this past week China approved the GMO corn trait that has caused so many problems for the past year. Reports indicate they have already bought 15 cargos of U.S. dried distillers grain (DDGs) for delivery by March.

But with their corn inventories, we don’t expect to see them buy corn soon, other than maybe scattered purchases for specific circumstances.

Argentine acreage is expected to drop 10 percent this year.

Opinions differ for secondcrop corn plantings in Brazil later this winter — some higher, some lower.

Page 11 • Monday, December 22, 2014 • FarmWeek Cents per bu.

Soybean Strategy

ü2014 crop: Demand for soybeans and soybean meal has moderated a little, but the fall pace was not going to be sustained. Nevertheless, demand remains good. The pipeline for both is returning to normal.

Use rallies for catch-up sales. ü2015 crop: We have no interest in pricing 2015 crop at these levels. The first 15 percent of the 2015 crop was priced at $12.07 basis November 2015 futures. vFundamentals: Moderating demand and promising looking South American crops are becoming an increasing drag on prices at this time.

Planting has gone well in Brazil (94 percent) and Argentina (75 percent). Early crop conditions are promising.

There may be some scattered Brazilian harvest as the new year begins, but activity won’t be significant until late January.

Even though our exports have slowed from their breakneck pace, we continue to ship at the same rate as last year. And

exports are 20 percent higher than a year ago. Crush margins remain extraordinarily attractive, too.

Wheat Strategy

ü2014 crop: Price another 10 percent of 2014 crop wheat, lifting the total to 75 percent. ü2015 crop: Take advantage of this rally to make an initial new-crop sale. Price 25 percent of expected production now. vFundamentals: The wild ride for wheat continued with Chicago futures trading in a 45cent range. Prices continued to rally on news of Russian export restrictions. The country did

not enact tariffs as originally rumored, but did tighten up phytosanitary certification standards that govern export quality. The restrictions exempted Russia’s biggest customers — Egypt, Turkey and Armenia.

Still, exporters are having difficulty originating grain.

The export restrictions would not be so concerning to market participants if it were not for the fact they are being used in part as a hedge against weather issues currently facing their winter wheat crop.

Weather worries are also developing for U.S. and European Union crops, and will support the market in the near term.

FarmWeek • Page 12 • Monday, December 22, 2014

Heathcare coverage, USDA health grants strengthening rural Illinois

Living in a rural community shouldn’t have to come with a hefty price tag for health care. Thanks to the Affordable Care Act (ACA), it no longer has to.

The ACA already is making a difference in the lives of millions of rural Americans, including families right here in Illinois. Prior to the ACA, many rural families had a hard time finding affordable insurance coverage, paying an average of nearly half their costs out of their own pockets.

Today with the ACA, families in Illinois can choose from a variety of affordable COLLEEN SCHERRIE insurance plans, and CALLAHAN GIAMANCO many will qualify for financial assistance to help them pay for coverage. To sign up, visit {health care.gov} or call 1-800-318-2596 if you need help.

Sign up before Jan. 15 for coverage that starts on Feb. 1. For those who enroll between Jan. 16 and Feb. 15, coverage will begin on March 1.

But don’t wait too long to sign up for health insurance coverage! The last day to sign up during this open enrollment period is Feb. 15.

Even if you already have coverage through the market place, it pays to go back and review your plan.

You may be able to find a plan that saves you money, offers more services or includes more doctors.

In fact, eight in 10 current marketplace enrollees can get coverage for $100 or less in 2015 after tax credits.

In addition to providing affordable health insurance options for rural families, the ACA also addresses the underlying challenges to staying healthy in rural America. Insurance companies are now forbidden from denying coverage for pre-existing conditions

and are required to cover preventive care. That’s good news for rural Americans who, on average, suffer higher rates of chronic conditions, such as diabetes, heart disease and high blood pressure than those living in urban areas.

It also expands support for the National Health Service Corps, which offers scholarships and loan repayment to doctors and nurses in return for practicing in rural communities.

More than 3,500 corps members now serve in rural areas — and an average of 86 percent of them will remain in their communities even after completing their service. These investments help keep a steady stream of young, motivated doctors and nurses in rural America.

That’s a good thing because while one in five Americans lives in a rural community, just 10 percent of doctors practice there.

The ACA also invests significantly in expanding services at community health centers where 7.5 million rural Americans get access to primary and preventive care. Through the Distance Learning and Telemedicine program, USDA has helped hundreds of rural communities deliver in remote areas since it began two decades ago.

Just a few days ago, USDA Rural Development awarded $20.4 million in grants that will provide rural America’s access to medical services and improve educational opportunities.

Southern Illinois Collegiate Common Market received $439,425 to offer interactive video conferencing to connect community college faculty with high school teachers and adult teachers. The project

Bugs and bogus science put new spin on insect lore As an insect scientist, I have heard quite a number of unproven theories about the six-legged creatures I study.

Some such theories originated long ago and are now considered folklore.

That is the case of the earwig that is so named because TOM of the ancient TURPIN belief that the insect would enter human ears and chew through the eardrum. There is no truth to that assumption.

Hedge apple insect control?

A myth. Some unsubstantiated beliefs today are associated with human efforts to control insects that are considered pests.

For instance, I am sometimes told that placing hedge apples — the green fruits of Osage orange trees — in closets will keep moths out of clothes. There is no scientific support for such a control approach, short of dropping the hedge apple on the offending moth.

Also, some people believe eating garlic will prevent mosquito bites. Again, scientific evidence does not support this contention.

So how do ideas like these

originate? They probably get started when people associate two events and assume a causeand-effect relationship. But it is easy to be misled by such observations.

The only way to know for sure is to test the idea in a scientific experiment.

Scientists would classify an idea, such as eating garlic to keep mosquitoes from biting, as a hypothesis. A rigorous experiment could be set up to test the hypothesis. The data collected during this scientific test would be analyzed to determine if the hypothesis was true or false.

That process is called the scientific method.

All of this sounds good, but sometimes conclusions resulting from scientific studies on the same hypothesis differ. It is for this reason the scientific community often repeats experiments. And it’s also why scientists might debate the validity of conclusions from a scientific experiment.

But most scientists have a sense of humor about their disciplines. That spawned events such as BAHFest, an acronym for Bad Ad Hoc Hypothesis, the brainchild of online comic Zach Weinersmith.

This year, six contestants at BAHFest East each presented a fake evolutionary biology paper to a panel of four scientist

judges. Two contestants had an insect component to their papers; both incorporated an aspect of entomophagy or eating insects.

Justin Werfel, a Harvard University researcher who studied termites in Africa, focused on why humans think insects are disgusting. According to his fake theory, throughout the course of human evolution, competition for food drove humans to eat insects. Eating insects was good for humans, but not for insects. Werfel’s hypothesis suggested insects have evolved to look more disgusting as human populations grew in order to avoid becoming a meal.

Contestant Emma Kowal, also of Harvard, addressed the issue of why humans yawn. Her phony hypothesis was that yawning evolved as a way to catch insects to eat. She proposed yawning is more prevalent at dusk and dawn — when flying swarms of insects are most prominent.

I don’t know about you, but I think my mother might have had this figured out a long time ago. She always admonished us: “Cover your mouth when you yawn!”

Tom Turpin serves as entomology professor at Purdue University, West Lafayette, Ind.

will increase access to college level preparatory courses to community members.

A $194,223 Rural Development grant will be used to fund the telemedicine project Chaddock Telemental Health Program, which will provide communitybased mental health services in churches and schools for 130,103 residents in Adams, Brown, Cass, Hancock, Pike and Schuyler counties.

Video conferencing equipment will be installed at one hub and eight end user sites to provide greater access to mental health services. Services include training in mental health awareness, enhanced comprehensive foster child care through interconnection of involved care providers, training for potential foster, adoptive, and kinship parents, and professional development opportunities for teachers.

St. John’s Hospital Sisters of the Third Order of St. Francis received a $180,781 Rural Development grant to serve Christian, Sangamon, Shelby and Mason counties. The money will be used for a telemedicine project that will provide emergency department services to three rural hospitals. The project will provide Tele-Stroke, Tele-Emergency Department consults and Tele-Intensive Care consults.

The ACA gives hardworking rural families in Illinois financial security and peace of mind. It makes rural communities stronger and rural families healthier.

Scherrie Giamanco serves as state executive director for Illinois Farm Service Agency, and Colleen Callahan serves as state director for Illinois Rural Development.

Letter to the editor

Illinois farmers raising food people should eat

Editor: I have been a Farm Bureau member since 1950 when the University of Illinois hired me, and I moved my lipid research to Urbana. I have worked for six decades on what causes heart disease and would like to share this information with Farm Bureau members.

Two lipids in the diet are a cause of heart disease. They are trans fats and oxidized cholesterol. Trans fats are formed from partially hydrogenated oils, and when consumed, cause calcification of coronary arteries.

Oxidized cholesterol is formed from oils that have been overheated and overused, like in fast food fryers and commercial frying of potato chips, and interferes with blood flow. Consuming too many of these two

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lipids can result in sudden cardiac death.

Eating a nutritious diet can aid in preventing heart disease.

I found that an animal source of protein, like beef, pork, chicken, eggs, milk and cheese, all raised on the farm, are essential for good nutrition because they are complete proteins. They contain all 10 amino acids necessary to build body cells and provide a coating of cholesterol to keep these cells from harm.

Vegetable sources of protein contain amino acids, too, but are short one amino acid and are called incomplete proteins.

For a complete diet, you need to get protein from both animals and vegetables in order to provide all the vitamins and minerals the body needs.

FRED KUMMEROW, Ph.D Urbana letter authorship.

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