Farmweek december 23 2013 by Illinois Farm Bureau

Keep those renewable fuel emails and letters coming until Jan. 28. EPA continues to collect public comments..........3

Despite lower corn prices, farmers say they’ll maintain corn acreage levels next year.....................................4

Illinois animal agriculture generated $5 billion in total economic output last year............................................10

A service of

Illinois Farm Bureau mission: Improve the economic well-being of agriculture and enrich the quality of farm family life. Monday, December 23, 2013

Two sections Volume 41, No. 50

Farm income decline projected in 2014; most farmers should weather storm BY DANIEL GRANT FarmWeek

Periodicals: Time Valued

It appears quite likely farm income will decline in 2014 as all signs point to a continuation of lower commodity prices. Gary Schnitkey, University of Illinois farm management specialist, last week predicted income on grain farms in 2013 and 2014 will be significantly lower than 2010-12. “Obviously, we believe we’re looking at lower commodity prices into 2014,” Schnitkey said at the 2013 Illinois Farm Eco-

nomics Summit in Champaign. “It will cause lower incomes.” Corn prices are expected to average around $4.50 per bushel through next year while soybean prices could slip from an average of $12.15 in 2013 to $11 next year, he noted. Gary Schnitkey The price estimates are down considerably from 2012 when prices averaged $6.89 per bushel for corn and $14.40 for beans. But prices still are expected to remain well above the historic averages (from 1975 to 2005) of just $2.33 per bushel for corn and $5.95 for beans.

No FarmWeek issue next week

FarmWeek will not be published next week. FarmWeek is published 50 times a year with no issues on the Mondays following Thanksgiving and Christmas. The next issue will be dated Jan. 6.

“There’s two ways to look at this,” Schnitkey told farmers. “We’re looking at a significant decline in income compared to 2010-12. But it’s still higher than the 2000 to 2006 period.” Farmers next year also will have to deal with lower revenue protection for insurance as the average insurance guarantee for corn in recent months declined by $1 per bushel to an average of $4.60. Schnitkey advised farmers not to cut corners, though, with crop insurance next year. “We’re moving into a more risky period,” he said. “It’s not the time to be lowering coverage levels.” Fortunately, most farmers will begin the new year in strong financial shape. U.S. farm debt-toequity in 2013 averaged 11.4 percent compared to 17.3 percent in 2000 and 19.6 percent in 1990. Schnitkey also looks for the recent upward spike in input costs to taper due mostly to lower fertilizer prices. The price of anhydrous ammonia recently averaged $650 to $680 a ton compared to $880 a year ago. “We should see moderate declines in costs,” he said. “But those cost declines won’t

FarmWeek on the web: FarmWeekNow.com

be enough to counter crop price declines.” Weather obviously will have a big impact on the crop size and prices next year. Schnitkey predicted corn prices next year could average as high as $5.70 per bushel if drought conditions return for a third consecutive year; $4.20 to $4.30 if there’s an average crop; and $3.70 if corn yields

are 10 percent or more above the trend line. “Most farms will do fine (next year),” he said. “The ones at risk are farms with more than 90 percent (of acreage) cash rented at $25 or more higher than the county average.” About 4 percent of farms in the state fall into the higher financial risk category for next year, Schnitkey added.

EPA renewable fuels proposal not good news BY CHRIS ANDERSON FarmWeek

If a proposal to lower the renewable fuels mandate becomes reality, corn growers will score a small win — there will be no need to import Brazilian ethanol. But that’s about the only good news that could result if the Environmental Protection Agency’s (EPA) proposal becomes final, according to Scott Irwin, University of Illinois Agricultural and Consumer Economics professor. “I think the EPA means business. They have never swayed from the mandate since

it was created in 2007,” said Irwin, speaking last week to attendees of the 2013 Illinois Farm Economics Summit in Champaign. EPA proposed the renewable fuel mandate in the Renewable Fuels Standard (RFS) be lowered next year from 14.4 billion gallons to 13 billion gallons. The advanced fuel mandate, including biodiesel and E85 fuel, would drop from 3.75 billion gallons to 2.2 billion gallons. Under the proposal, Irwin said corn used for ethanol proSee Proposal, page 2

Illinois Farm Bureau on the web: www.ilfb.org ®

Quick Takes

FarmWeek Page 2 Monday, December 23, 2013

CHICAGO NEW HOME FOR ADM WORLD HEADQUARTERS — Archer Daniels Midland Co. announced its new world headquarters will be in Chicago, but didn’t give a location for its future technology center with 100 employees. Between 50 to 75 employees will move to the Chicago headquarters, while another 4,400 employees will remain in Decatur at ADM’s North American headquarters. “While we considered other global hubs, Chicago emerged as the best location to provide efficient access to global markets while maintaining our close connections with U.S. farmers, customers and operations,” Patricia Woertz, ADM chairman and chief executive, said in a written statement. “ADM’s long-term commitment to Chicago, Decatur and our entire state demonstrates its own faith in its future here,” Gov. Pat Quinn said in a written statement. ADM planned to establish its technology center and global center in one location, but that would have “included state government support and multi-year commitments to stakeholders,” Woertz wrote. The General Assembly did not approve tax incentives sought by ADM. A decision on the tech center location is expected by mid2014.

AMERICANS OPTIMISTIC ABOUT 2014 — According to the latest COUNTRY Financial Security Index®, 32 percent of Americans think 2014 will be better for them financially than 2013. That’s the most optimistic they’ve been about the year ahead since December 2007 (42 percent). Those Americans expecting an improved financial future are banking on increased income expectations (48 percent), decreased debt (14 percent) and improvements in the economy (14 percent) in 2014. About 25 percent of surveyed Americans believe 2014 will be worse for them financially, attributing their outlook to a worsening economy (41 percent) and increased health care expenses (20 percent).

WIRELESS GIFTS TOP FARMER WISH LIST — If you haven’t gotten your favorite farmer a Christmas gift, there’s still time. According to a survey by Ayrstone Productivity, any piece of wireless technology would be sure to draw rave reviews. More than 40 percent of Corn Belt farmers surveyed want Santa to bring them wireless remote cameras and wireless remote weather stations/soil sensors. Nearly half said they would like a wireless farm network that extends up to 7.5 miles from their homes. Those surveyed said they would also like wireless remote grain monitoring technology, iPad or other tablets, new routers and remote thermal imaging.

(ISSN0197-6680) Vol. 41 No. 50 December 23, 2013 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 goes toward the production of FarmWeek. “Farm, Family, Food” is used under license of the Minnesota Farm Bureau Federation.

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. © 2013 Illinois Agricultural Association

STAFF Editor Chris Anderson (canderson@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 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 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

HEALTH CARE

Clock ticking on health care taxes and coverage BY CHRIS ANDERSON FarmWeek

When it comes to understanding impact of the Affordable Care Act, farmers don’t need to reach for an aspirin or cold compress — yet. Marc Lovell, University of Illinois Agricultural and Consumer Economics Tax School program director, suggested farmers keep an eye on four issues: • a new 3.8 percent net investment income tax (NIIT); • an additional .9 percent Medicare tax; • an individual health care coverage mandate; and • the employer health care coverage mandate. Speaking last week at U of I’s 2013 Illinois Farm Economics Summit, Lovell suggested farmers consult their tax advisors. “The clock is ticking. The two, new taxes are effective Jan. 1,” said Lovell. “Whether the new taxes affect a farmer depends on the farmer’s tax filing status and adjusted gross income (AGI) for the year.” For example, the taxes would apply to a married farmer filing jointly with more than $250,000 AGI. The NIIT applies to income from interest, dividends and rental income, including cash rent. However, a business exemption applies, Lovell noted. Income from a trade or business in which the farmer materially participates

would be exempt from the NIIT, he said. The additional Medicare tax applies to wages or self-employment income in excess of the AGI thresholds, Lovell told summit participants. The individual and employer insurance mandates become effective Jan. 1, 2014. Under the individual mandate, every farmer will need to maintain “minimum essential coverage.” “You may be exempt if you lack access to affordable coverage (in general, if a farmer would pay more than 8 percent of household income for health insurance) or if you’re married filing jointly and didn’t make more than $20,000,” said Lovell. The employer insurance mandate kicks in for farm businesses employing at least 50 full-time workers. Lovell cautioned that the number of hours worked by part-time employees need to be factored into a formula determining the number of full-time employees. The employer mandate does not require farm businesses to offer health coverage to full-time employees. However, farmers subject to the mandate will pay penalties for not offering insurance to full-time workers. “Farm businesses will not be subject to penalties in 2014. But keep in mind the penalties could add up ($40,000 or more) when they are assessed after the 2015 tax year,” Lovell said.

IFB survey: Farmers concerned about over-regulation, see value in crop insurance, consumer communications

Illinois Farm Bureau this month at its annual meeting in Chicago surveyed members for the third year in a row. And, for the third straight year, members identified government over-regulation as the top concern for their long-term profitability and longevity. “It’s certainly a concern that isn’t unfounded,” said Rich Guebert Jr., who was elected IFB president at the annual meeting after serving the past decade as vice president. “As we move forward this year, our leadership team will be looking for ways to work with our elected representatives and government agencies to help ensure our members will be able to continue to farm efficiently and profitably without unnecessary rules and regulations

Proposal

Continued from page 1 duction next year would not be significantly impacted. However, biodiesel production under the proposal would be sharply curtailed next year, pressuring the soybean and soy oil markets downward, he noted. “The EPA’s legal argument in making the proposal is inadequate domestic supply for the cellulosic fuel man-

from the government.” The other top threats to farm profitability, listed by 278 IFB members who completed the survey, include a combination of higher input costs and lower commodity prices, cash rents/land prices and lack of export demand for U.S. farm products. Thirty-two percent of respondents said that from a policy standpoint the Renewable Fuel Standard has the greatest impact on their profitability. IFB priorities in 2014, according to survey respondents, should be completion of the farm bill followed by contesting unnecessary regulations and maintaining current biofuels policy. “As the new president of the organization, the results will really help me and the

rest of the leadership team decide which issues are most important to our members and should be pursued,” Guebert said. Farmers also see the value in crop insurance at a time when crop and input prices have been volatile and government support is being scaled back. The majority of survey respondents, 88.5 percent, indicated they purchased crop insurance in 2013. A nearly identical amount, 88.1 percent, plan to purchase crop insurance next year. Meanwhile, nearly threequarters (71 percent) of survey respondents strongly agreed with the need for farm organizations to increase nonfarm consumers’ understanding of Illinois farming practices.

date. Cellulosic – plant fiber – has made some real gains in the commercial process, but it’s likely to remain a niche market,” Irwin explained. The professor called the legal argument “arcane.” He further noted the proposal depends on its legal interpretation. “If the EPA is sued, I lean 60-40 toward EPA losing,”

said Irwin. “There is real legal uncertainty here.” Vincent Kwasniewski, vice president of business development for bio-refiner GTL Resources, told FarmWeek that the biofuels industry may sue EPA if the proposal is finalized. He urged farmers to send personalized comments to the EPA. A public comment period ends Jan. 28.

BIOFUELS

Page 3 Monday, December 23, 2013 FarmWeek

Farmers sending clear message to EPA about RFS BY CHRIS ANDERSON FarmWeek

Nearly 900 Illinois Farm Bureau members signed a petition opposing the Enviromental Protection Agency’s (EPA) proposal to reduce the renewable fuel mandate from 14.4 billion gallons to 13 billion gallons. Adam Nielsen, IFB national legislation affairs director, said the petition will be sent to EPA this week. IFB members attending their annual meeting recently ranked ethanol policy as one of three top priorities for IFB in 2014. About half the farmers surveyed said they deliver corn and soybeans directly or indirectly to ethanol and biodiesel markets. “Personalizing the message makes a difference. We plan to generate more comments after the first of the year. We’re going to be dialing up the response,” said Nielsen. In the meantime, farmers can voice their opinion about

the Renewable Fuels Standard (RFS) proposal via Patriot Renewable Fuels’ petition at {protecttherfs.com}. A public comment period ends Jan. 28. Bob Dinneen, president and chief executive officer of the Renewable Fuels Association (RFA), urged farmers to continue sending messages to the EPA. “It is incumbent upon everyone concerned about energy security and global climate change to let the EPA know that rolling back the RFS mandate will Bob Dinneen negatively impact the climate, decrease farm income and increase gas prices,” Dinneen said. “I implore folks across the country to remind the EPA that the passage of RFS six years ago is a tremendous policy and a market success.”

Senate bill would eliminate corn-based ethanol mandate

Corn-based ethanol has fallen under further attack from two U.S. Senators who want to eliminate the corn ethanol mandate within the Renewable Fuel Standard (RFS). Sens. Dianne Feinstein, D-Calif., and Tom Coburn, R-Okla., gathered eight co-sponsors to introduce the bill. “This is unfortunate, yet every Congress has introduced a bill to eliminate the RFS,” said Adam Nielsen, Illinois Farm Bureau national legislative affairs director. “We take them seriously. We took our resolutions to the American Farm Bureau Federation subcommittee last week. Several state Farm Bureaus want to repeal RFS.” Co-sponsors of the bill include Richard Burr, R-N.C.; Susan Collins, R-Maine; Bob Corker, R-Tenn.; Kay Hagan, D-N.C.; Jeff Flake, R-Ariz.; Joe Manchin, D-W.Va.; Jim Risch, R-Idaho; and Patrick Toomey, R-Pa. Senate Environment and Public Works Committee Chairwoman Barbara Boxer, D-Calif., however, indicated any legislation lowering renewable fuel obligations under the mandate would face strong opposition. “As chairman of this committee, and I have the gavel for now, I’m not going to let us reverse course … I’m just not,” Boxer said. National Corn Growers Association President Martin Barbre said the bill rehashes arguments which have long been proven false. “The actions proposed in this bill would not only decimate rural America but also wreak havoc upon urban air quality as it seeks to remove the ethanol blends which have led to reductions in vehicle-related pollution and improved the air near our nation’s population centers,” said Barbre, a Carmi farmer. “These same consumers would be deprived of the nearly dollar per gallon in fuel savings ethanol offers, and the bill would not reduce grocery bills as food costs, in large part, do not correlate with the price of corn.” Bob Dinneen, president and chief executive officer of the Renewable Fuels Association (RFA), called the bill “monumentally stupid.” “This legislation ought to be entitled ‘The Oil Monopoly Protection Act of 2013.’ This bill would deprive Americans of cost-saving, renewable fuel choice,” he added. “What makes this bill so nonsensical is its timing. Farmers across this country have just finished harvesting the single largest corn crop in history. This legislation would take away demand for corn at a time when farmers need it most. It would increase farm program costs and destabilize this country’s agricultural industry.” – Chris Anderson

Biodiesel refineries could face sharply curtailed production under an Environmental Protection Agency proposal to reduce the national renewable fuel mandate by 1.4 billion gallons next year. Public comments may be sent until Jan. 28. Petitions are available through Patriot Renewable Fuels at {protecttherfs.com}. (Photo courtesy of Patriot Renewable Fuels)

Marking the sixth anniversary last Thursday of passage of the Energy Independence and Security Act, Geoff Cooper, RFA vice president of research and analysis, said ethanol production has grown from 6.5 billion gallons to 13.3 billion gallons since 2007. Cooper added that biodiesel production grew from 450 million gallons to 1.5 billion gallons. While the average gallon of fuel lowered greenhouse gas emissions 25 percent six years ago, an average gallon now decreases greenhouse gases by 34 percent. U.S. crude oil imports under the act fell from 67 percent in 2007 to 51 percent this year. Similarly, while the U.S. import-

ed 6 billion gallons of gas six years ago, the country no longer imports gasoline, Cooper said. “RFS has lived up to its promises of reducing foreign petroleum imports and stimulating the agriculture economy. The average price of milk and eggs has decreased 8 to 10 percent. Ag land use declined 5 percent. So, the environmental and food impacts detractors claimed would happen have not,” said Cooper. Nielsen further noted farmers are getting solid support from Congressional representatives. In the House, Illinois Democrat Cheri Bustos leads an effort to “fight for the health of our region’s economy” on behalf of farmers and rural communities. Rep. Kristi Noem,

R-S.D., joined forces with Bustos to initiate a letter to EPA Administrator Gina McCarthy requesting her to revise EPA’s proposal and “set volumes based on anticipated production.” So far, more than 20 representatives have signed the letter, including Illinois Republican Rep. Rodney Davis and Illinois Democrat Reps. Bill Enyart, Bill Foster and Tammy Duckworth. On the Senate side, Illinois Democrat Dick Durbin joined a bipartisan Senatorial group last week meeting with EPA administrators to protest the agency’s proposal. In November, Durbin joined 31 Senators in a letter to McCarthy voicing the same message.

New ASA officer: RFS proposal a step backwards BY DANIEL GRANT FarmWeek

The growth of biodiesel production this year has been a key to boosting soybean oil demand. So the fact that the Environmental Protection Agency (EPA) recently proposed lowering the target on biodiesel production as part of the Renewable Fuels Standard (RFS) couldn’t have come at a worse time, according to Ron Moore, a farmer from Roseville (Warren County). Moore, one of three Illinois farmers representing the state on the American Soybean Association (ASA) board of directors, called the proposal a step backwards for the biodiesel industry. “We need the RFS to help promote biofuels,” Moore said at the Illinois Farm Bureau annual meeting in Chicago. “It’s a wonderful opportunity to use homegrown fuels and lower our dependence on foreign oil.” Currently, 111 plants in the U.S. boast a capacity to produce about 2.2 billion gallons of biodiesel, according to the Energy Information Administration. But EPA recently proposed

lowering the biodiesel produc- Moore’s top priorities in his tion target in the RFS from 1.7 new role with ASA. He was joins fellow Illibillion gallons to 1.28 billion nois farmers Dean Campbell gallons. of Coulter“We don’t ville, and Mike want to go Cunningham backwards,” Moore said. ‘ W e s t i l l h a v e of Bismarck the ASA “We still have ex c e s s s oy o i l . on board. excess soy oil. (Biodiesel proMoore cur(Biodiesel production) is d u c t i o n ) i s o n e rently is on the Illinois one way to way to use it.’ Soybean Assouse it.” ciation ProThe RFS, passage of a — Ron Moore duction Committee and is farm bill and Warren County farmer, past ISA the continuaASA board member chairman. He tion of a also is a FarmWeek Cropstrong federal crop insurWatcher. ance program are among

MARKETS

FarmWeek Page 4 Monday, December 23, 2013

Uptick in crop exports not enough to alter price forecast BY DANIEL GRANT FarmWeek

USDA this month raised its export projections by 50 million bushels for corn and 25 million bushels for soybeans. But the slight uptick in sales â&#x20AC;&#x201C; USDA this month also raised its projection of corn used for ethanol production by 50 million bushels â&#x20AC;&#x201C;- isnâ&#x20AC;&#x2122;t near enough to reverse the downward trend in crop prices, according to Darrel Good, University of Illinois ag economist. Good provided his outlook for crop prices last week at

the 2013 Illinois Farm Economics Summit organized by the U of I. The annual series of meetings was held in Champaign, Sycamore, Galesburg, Mount Vernon and Bloomington. â&#x20AC;&#x153;I think higher prices clearly are behind us,â&#x20AC;? Good said. He predicted 2013-14 prices could average in the low-to-mid $4 range for corn and possibly slip another 50 cents next year if farmers produce another large crop. U.S. farmers this year produced nearly 14 billion bushels of corn, which is the largest crop on record.

IFB Commodity Challenge begins Jan. 2

Farmers, landowners and others interested in sharpening their marketing skills can compete in a free online contest next month. Illinois Farm Bureau and CME Group will host the annual Commodity Challenge. The contest begins Jan. 2 and runs through Nov. 28. Contest participants will make decisions about how to market a fictitious 100,000 bushels of corn and 30,000 bushels of soybeans using cash, futures and options markets. Prizes will be awarded to the top three contestants in four divisions (Overall, Young Leaders, Women and Collegiate). Each division winner will receive $1,000, second-place finishers will receive $500 and $250 will be awarded to the third-place contestant in each division. Winners will be determined by calculating the highest selling prices minus storage costs and futures/options transaction fees. For more information or to enter the free contest, visit the website {ilfb.org/marketing/commoditychallenge}, email Doug Yoder at dyoder@ilfb.org or contact your county Farm Bureau.

The average bean price could slip from $12.50 to $11.50 per bushel by next year as increased production should ease price pressure from strong demand. U.S. farmers this year harvested the third largest bean crop on record and South America is on pace to produce a record bean crop. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re continuing to look at larger (bean) crops in South America,â&#x20AC;? Good said. â&#x20AC;&#x153;Theyâ&#x20AC;&#x2122;re off to a very good start, overall, to the growing season there.â&#x20AC;? South American beans, as well as corn produced there and in other parts of the world such as the Ukraine, will compete with U.S. crops for market share around the world. Good noted that corn production outside the U.S. since 2006 increased 46 percent. â&#x20AC;&#x153;I expect large (crop) production will be with us for a period of time,â&#x20AC;? Good said.

â&#x20AC;&#x153;It will not reverse with lower price levels.â&#x20AC;? End users in recent months took advantage of lower prices to lock in supplies. Chi-

proposal to scale back biofuels production benchmarks in the Renewable Fuels Standard suggests the ethanol market for corn has leveled off, while

â&#x20AC;&#x2DC;I think higher prices clearly are behind us. I expect large production will be with us for a period of time.â&#x20AC;&#x2122; â&#x20AC;&#x201D; Darrel Good University of Illinois ag economist

na purchased roughly 200 million bushels of U.S. corn and about 66 percent of all soybeans sold on the world market this year. â&#x20AC;&#x153;We are gaining back market share (after U.S. corn exports plummeted to a 42year low last year),â&#x20AC;? Good said. â&#x20AC;&#x153;But weâ&#x20AC;&#x2122;re not seeing recovery back to the 2 billion bushel mark we were accustomed to in the past.â&#x20AC;? Meanwhile, the Environmental Protection Agencyâ&#x20AC;&#x2122;s

the biodiesel market for soybeans will fall well short of expectations. Elsewhere, China in coming weeks is expected to cancel soy orders as it seeks cheaper prices or waits for new supplies from South America. â&#x20AC;&#x153;The bottom line is the period of tight supplies (the last three years) is reversing back to a period of comfortable supplies (and lower prices),â&#x20AC;? Good added.

Corn plantings could be high in â&#x20AC;&#x2122;14 despite dramatic drop in prices

Farmers likely wonâ&#x20AC;&#x2122;t give up many corn acres next year even though prices in recent months plummeted to a three-year low. New-crop corn prices as of last week remained competitive, fertilizer looks to be more affordable than it was a year ago and Midwest farmers still are some of the best in the world at producing a quality corn crop. â&#x20AC;&#x153;I think farmers will maintain (corn) acres at a fairly high level,â&#x20AC;? Darrel Good, University of Illinois ag economist, said last week at the U of I Farm Economics Summit in Champaign. â&#x20AC;&#x153;New-crop prices still are pretty competitive.â&#x20AC;? A survey of 278 Illinois Farm Bureau members at the IFB annual meeting in Chicago this month revealed 82 percent plan to leave their corn acreage unchanged or increase it in 2014 compared to 2013. Some traders, however, believe many farmers next year could shift sizable acres from corn to beans or other crops. Soybean prices in recent months didnâ&#x20AC;&#x2122;t decline as rapidly as corn due to strong export sales to China and fairly tight ending stocks. Informa Economics recently projected plantings from 2013 to 2014 could slip by nearly 6 million acres for corn, from 97.4 million to 91.8 million, while soybean acres could grow from 77.2 million in 2013 to 81.9 million next year. Swine accounts for 83 percent of all soybean meal â&#x20AC;&#x153;I do expect some cutback of corn acres and I think weâ&#x20AC;&#x2122;ll see a tick up in soybean acres but, at this point, I look for a fairly consumed in Illinois. In fact, animal ag is your number minor adjustment,â&#x20AC;? Good said. RQH FXVWRPHU y FRQVXPLQJ SHUFHQW RI \RXU V Good expects acres to be large for both crops due in part to PHDO 7KDWuV EULQJLQJ KRPH WKH EDFRQ the fact that many prevent-plant acres from last year will be back in play. The Farm Service Agency estimated prevent-plant acres last year totaled 3.4 million acres of corn, 1.7 million acres of wheat and 1.6 million acres of beans due to spring flooding followed by drought. Another 1.6 million acres, which came out of the Conservation Reserve Program this year, could be available for crop production next year as well. Bernie Walsh, a FarmWeek Cropwatcher from Winnebago County, said farmers may not be quick to give up on corn next year as the 2013 state yield was projected to average a whopping 180 bushels per acre. In fact, some farmers in his area are planning to plant more corn while others will favor more beans. www.beyondtheelevator.com â&#x20AC;&#x153;I donâ&#x20AC;&#x2122;t think there will be a huge shift one way or the other,â&#x20AC;? Walsh said. ÂŠ2013 United Soybean Board John Williams, sales manager for Burrus Seeds, also looks for Source: USB Market View Database the 2014 crop rotation be similar to 2013. â&#x20AC;&#x153;I havenâ&#x20AC;&#x2122;t seen anything on the (seed) sales side that suggests a big change,â&#x20AC;? Williams said. â&#x20AC;&#x201D; Daniel Grant

26 million bushels YOUR soybeans

www.ILSOY.org www.ILSOY. www .ILSOY.org

EMERGING ISSUES

Page 5 Monday, December 23, 2013 FarmWeek

Are investors losing interest in farmland? BY DANIEL GRANT FarmWeek

The farmland market generally has remained strong in recent months despite the downturn in crop prices. About 1,550 acres of land in Crawford County, mostly contiguous cropland, sold this month for $8.2 million. Prices in the sale ranged from

$7,835 per acre for good farmland to $5,419 per acre for lower quality land and $1,260 for recreational tracts, according to Murray Wise Associates, who managed the sale. But there are signs the market is flattening out or could soften in the near future after robust growth in recent years. Dale Aupperle, president of

Heartland Ag Group in Macon County, said he’s seen a slowdown in investor purchases and fewer bidders at some recent farmland auctions. “It seems about 80 percent of farmland is being purchased by farmers or local people in the county,” said Aupperle, who noted local farmers typically buy about

Champaign and Northwestern University. Each program considers what subjects are best for its local population. To find farm expert instructors, Bradley reached out to Jason Haupt, University of Illinois Extension educator in environment and energy stewardship. Haupt, based in Lewistown, contacted the Illinois Farm Bureau and area county Farm Bureaus to provide speakers. The university gave Haupt a lengthy list of farming topics in which OLLI students are interested, he said. “Part of this (class) will be allowing people to understand what is involved with farming and the expense of farming,” Haupt said. “One thing they (the students) want to understand is the farm bill and how it affects them and farmers. They want to understand how crop insurance works. I think they want to have a deeper understanding of farming.” West-central county Farm Bureau managers said they support the idea of educating older consumers about farming. A couple of managers said they’ve addressed OLLI classes previously. For example, Patrick Kirchhofer, Peoria County Farm Bureau manager, discussed drought

and seed genetics after the 2012 drought. “It’s great that OLLI (students) want to learn more about agriculture. There are lots of questions they want answered,” said Renee Deuth, Mason County Farm Bureau manager. “With Illinois Farm Families targeting young moms, that (OLLI student) might be an age group we are overlooking.” Bradley OLLI farm classes will start the second week of January. For information, call 309-677-3900 or visit {bradley. edu/continue/olli}.

Farming 101 subject for Bradley’s lifelong learners BY KAY SHIPMAN FarmWeek

Curiosity about farming knows no age limits as a class will prove next month at Bradley University in Peoria. The Osher Lifelong Learning Institute (OLLI) at Bradley University will offer a class

‘We have a lot of retired teachers and chemists with an extreme thirst for knowledge, especially in farming.’ — Michelle Riggio Bradley University

about farming, especially farm programs and logistics. OLLI attracts more than 1,000 Peoria-area students between the ages of 50 and 98 from all educational levels. “We have a lot of retired teachers and chemists with an extreme thirst for knowledge, especially in farming,” said Michelle Riggio, Bradley’s OLLI program director. “They’re interested in all aspects. They’re extremely inquisitive.” In Illinois, OLLI programs are offered at Bradley, the University of Illinois Urbana-

half of all farmland. “That’s a long-term positive as the farm community is supportive (of the market),” he continued. “But we’re just not seeing as much of the big investment money at the table right now.” Some local and institutional investors attended the recent sale in Crawford County. But, in the end, farmers bought most of the land, according to Kenny Schum, auction manager for Murray Wise Associates. “This auction was dominated primarily by the local operators, and we had a lot of them at the auction,” Schum said. Farmland is an excellent investment, according to Bruce Sherrick, University of Illinois ag economist, who noted the average return on Illinois farmland from 1970 to 2012 was about 10 percent. But investors sometimes experience difficulty entering the market as there is only about a 1.5 to 2 percent turnover rate each year, ground is sold in parcels rather than shares and there

is no equity market analog to track progress. “Farmland values increased rapidly the last three or four years,” Sherrick said. “But figuring out what you get in return for farmland is very tricky. You only get to measure it once a year.” Sherrick believes recent farmland prices in most cases appropriately reflect farm income expectations. But downside risks include the potential for higher interest rates and major changes to the Renewable Fuels Standard that could cut crop demand. If crop prices remain below the level experienced in recent years and the farmland market softens, Sherrick and Aupperle believe it could take time for rental rates to adjust. “In general, if commodity prices move lower there will be a lot of pressure on rental rates to come down,” Aupperle said. “But if prices are higher, we won’t see any impact on rents at all. It always takes an extra annual cycle (to trigger adjustments in rental rates).”

Four Illinois counties designated drought disaster areas by USDA

USDA designated 44 Iowa counties as primary natural disaster areas due to damages and losses caused by a recent drought. Four contiguous Illinois counties are also eligible for disaster assistance, Scherrie Giamanco, state executive director for Ilinois’ Farm Service Agency (FSA) announced. Those Illinois counties are: Hancock, Henderson, Mercer and Rock Island. All qualified farm operators in the designated areas are eligible for low interest emergency (EM) loans from FSA, provided they meet eligibility requirements. Farmers in eligible counties have eight months from Dec. 11, the date of declaration, to apply for loans to help cover part of their actual losses. FSA will consider each loan application on its own merits, taking into account the extent of losses, security available and repayment ability. FSA has a variety of programs, in addition to the EM loan program, to help eligible farmers recover.

TRANSPORTATION

FarmWeek Page 6 Monday, December 23, 2013

Santa must comply with special rules of the road Transportation regulations can be a headache for Santa, too, as he climbs into his sleigh. Kevin Rund, Illinois Farm Bureau senior director of local government, has been helping Santa, a member of the North Pole County Farm Bureau, understand the complexities of modern transportation rules. Rund said he gained new information in researching Santa’s special case. “Special provisions have been built into transportation regulations to accommodate the singular vehicle type operated by Santa Claus,” Rund said. “Known as the ‘Claus clause,’ these rules may be broadly applied — if anyone else happens to own or lease flying reindeer and a sleigh.” Rund advised the jolly old elf on some of the requirements: “Santa is pleased with the conspicuity marking requirements. That red and white reflective material fits nicely with his Christmas color scheme,” he noted. In addition, Santa had to get special authorization for his trip

because there is a red light on the wrong end of his rig — Rudolph’s nose. As an animal-drawn vehicle, Santa’s sleigh is required to display an SMV (slow moving vehicle) emblem — despite its blinding speed and the fact that it more often than not is airborne. Though the fluorescent orange clashes with red and green, Santa cheerfully applied the ASAE S276.5-compliant emblem to the back of his sleigh. As a private carrier engaged

in international commerce, Clause Inc. has a staff of elves busy arranging jurisdictional reciprocity with transportation officials across the globe, Rund said. A special Unusual Situations Department of Transportation (USDOT) number was assigned to Santa, but he was allowed to put it on his sleigh, instead of the power units (the deer are OK with animal ID, up to a point). Santa’s number ends in “25,” so he’ll have to update it in the fifth month of evennumbered years. And being

required to have a USDOT number means he has to have the Unique Christmas Registration (UCR) as well. Because Santa drives only once each year, he is issued a specialized CDL (Christmas Driver’s License). But that license is required to have an endorsement for customized air breaks (go figure). In the spirit of giving, Santa shared a couple of his special CDL test questions with FarmWeek. Seatbelts should be worn: A) during rooftop landings; B) when navigating between tall buildings; C) at all times as a driver and as a passenger; or D) over Belgium and Norway. Whenever you travel at night, you should: A) make sure you are well rested; B) drink plenty of milk with cookies; C) periodically polish Rudolph’s nose; or D) avoid wind turbine clusters. In researching Santa’s situa-

tion, Rund learned the equipment requirements for his sleigh and deer were specially modified under the Claus clause. • Air brakes have been given a whole new definition. • Glazing mandates are out the window. • Headlights were replaced by Rudolph with his nose so bright. • Fuel system rules have been modified to accommodate moss. • Coupling devices ... Santa preferred not to be specific. Santa realizes he has done his share to commercialize Christmas, so he knows he’s a commercial carrier. But he still finds the new medical card certification choices (NI, NA, EI and EA) to be very confusing. Santa is considering adapting a form of Bessie Bingo and make his decision using a 2-by-2 grid and nature, a system he calls “Dasher designation.” Rund advised truck drivers to take note of Santa’s off-street parking abilities. Santa’s rooftop technique satisfies all Motor Carrier parking regulations while preserving lane widths on local roads and streets, he said. “Happy Christmas to all and to all a good ride,” Rund concluded. Kevin Rund contributed material for this tongue in cheek holiday regulatory article in collaboration with Kay Shipman.

Tips, news from FEMA Repair tornado-damaged vehicles with federal help — Anyone whose car was damaged or destroyed by the Nov. 17 tornadoes may be eligible for Federal Emergency Management Agency (FEMA) disaster assistance. That includes individuals whose vehicles were damaged by tornadoes while they were working or visiting in federal disaster counties. Only vehicle owners with at least liability insurance will be considered. Individuals must submit proof of liability coverage to FEMA. First, any comprehensive policy claim must be filed with their private insurance company. Federal disaster assistance may fill coverage gaps in stormrelated damage costs. A completed Small Business Administration (SBA) disaster-loan application also must be submitted and cleared before an individual receives FEMA vehicle repair or replacement assistance. For more information, visit {FEMA.gov/Disaster/4157}.

Register with FEMA online at {DisasterAssistance.gov} or by calling 800-621-3362. For information about SBA disaster loans, contact the SBA Disaster Assistance Customer Service Center by calling 800-659-2955, emailing disastercustomerservice@sba.gov or visiting {sba.gov/disaster}. FEMA rental assistance if home uninhabitable –Individuals repairing or rebuilding their tornadodamaged homes may be eligible for rental assistance from FEMA. First, file a homeowner insurance claim and ask the insurance agent about additional living expenses (ALE) coverage. Those who are insured must submit settlement documents for review before FEMA can determine their eligibility status. A FEMA inspector may schedule a visit of the damaged home to determine eligible losses. The inspector may offer the individual an option of initial rental assistance to help with relocation.

AROUND ILLINOIS

Page 7 Monday, December 23, 2013 FarmWeek

Soybean growers mark anniversary with 600-million-bushel goal BY CHRIS ANDERSON FarmWeek

From hay crop to major food and fuel component, soybeans mark a significant crop success story for Illinois growers. Illinois Soybean Association (ISA) members in the midst of a 50-year anniversary celebration aren’t resting on their laurels. They’ve set a new soybean production goal to propel the industry into 2020. “We’re growing about 460 million bushels of soybeans now. We want to grow 600 million bushels in Illinois by 2020. It’s doable. We need to raise 2.5

more bushels per acre to reach the goal,” said Don Guinnip, an ISA board director. “This is a unique time for the soybean industry. We’re the No. 1 soybean-producing state in the nation, and we want to stay that way.” Guinnip, a Marshall soybean grower, recently told Illinois Farm Bureau annual meeting attendees ISA intends to meet the production goal by pursuing four priorities. Those include bolstering yield and profitability research; rebuilding state and national transportation systems; supporting animal agriculture (the No. 1 consumer of soybean meal); and protecting grow-

ers’ freedom to operate with minimal regulations. When soybeans were introduced in Illinois 100 years ago, the crop was used in pastures and for hay or silage. Only 2,000 acres were devoted to the crop. Today, soybeans grow on 9 million acres – one-fourth of Illinois’ land base. Illinois soybeans generate more than $5 billion in direct sales. ISA formed 50 years ago with a vision of enabling growers to be the most knowledgeable and profitable producers worldwide. The group began as the Land of

Lincoln Soybean Association. Members changed the name to ISA in 1993. Soybean growers formed a state checkoff program in 1974 overseen by the Illinois Soybean Program Operating Board. The U.S. Congress created a national soy checkoff in 1990. The checkoff has helped fund a number of industry efforts, including increased biodiesel production. The anniversary celebration, entitled “Embracing the Past, Envisioning the Future,” began in August at the Farm Progress Show. The celebration will culminate this summer during ISA’s annual meeting.

IAITC receives financial gift for careers ag program

Illinois Ag in the Classroom (IAITC) has received a $35,000 community investment grant from DuPont Pioneer. The charitable contribution completes the second phase of an initiative to give students in fourth through eighth grades an opportunity to learn more about careers in science and agriculture. “We are pleased to continue our relationship with the Illinois Agricultural Association

(IAA) Foundation and IAITC,” said DuPont Pioneer Heartland Business Director Brad Lance. “Career opportunities in the agriculture industry will continue to expand and will require higher skill levels over time. As technology changes and advances, it is important to help students understand the exciting potential of a career in agriculture.” Kevin Daugherty, IAITC education director, agreed. He

GROWMARK announces FFA essay contest theme

The theme for the 2014 GROWMARK Essay Contest is: “Promoting Sustainability and Conservation of Natural Resources.” The contest is open to all high school FFA members in Illinois. This is the 21st year for the program, sponsored by the GROWMARK System and FS member cooperatives, in conjunction with state FFA leaders, to help young people develop their writing skills, learn about current issues affecting agriculture and understand the unique role of

Tuesday: • Jim Angel, Illinois Land and Water Survey: ag weather • Jeff Martin, The Chicago Farmers: annual Farmland Investment Fair • Todd Lowery, McLean County Chamber of Commerce: ag exchange program • Mark Hardy, Hardy’s Reindeer Ranch: raising reindeer in Illinois Wednesday: • Tim Schweizer, Illinois Department of Natural Resources: deer season • Andy Knepp, Monsanto: employee response to Nov. 17 tornado • Stephanie Cundith, Midwest Dairy Association: health

cooperatives. Essays should be about 500 words, typed and doublespaced. The postmarked entry deadline is March 14. Ag teachers have received additional program details. Information also is online at {growmark.com}. Click on Our Commitments/Youth & Young Farmers/Essay Contest. The state winner earns $500 and the winner’s FFA chapter receives $300. Four runners-up each are awarded $125. benefits of dairy • Kevin Rund, Illinois Farm Bureau: Santa transportation regulations Thursday: • Justin Durdan, Illinois Corn Growers Association: EPA ethanol proposal • Mark Gebhards, Illinois Farm Bureau: state issues year in review Friday: • Harry Cooney, GROWMARK: energy risk management • Dan Adcock, WinField CROPLAN: 2014 planting • Michael Mahoney, Go Health: Affordable Care Act tax penalty To find a radio station near you that carries the RFD Radio Network®, go to FarmWeekNow.com, click on “Radio,” then click on “Affiliates.”

said IAITC’s new career readiness program showcases opportunities available to students. “Our goal is to help promote agriculture careers and educational opportunities to students at a young age. Showing agriculture as a field where high tech assists a growing and changing world is exciting,” Daugherty said. Susan Moore, IAA Foundation director, said the two-year

total of $60,000 from DuPontPioneer funds the entire career readiness initiative. “With the significant role of Pioneer as an employer in the field of agriculture science and technology, Pioneer is a great partner to help highlight career opportunities. I thank and commend Pioneer for making an investment that will reap benefits to agriculture for generations to come,” Moore said.

IAITC is the top funding priority of the IAA Foundation, Illinois Farm Bureau’s charitable foundation. Funding from agribusiness and related industries, state government, commodity groups and individual donors help the IAA Foundation reach its annual goals to raise funds to implement IAITC programming and provide teaching resources throughout the state of Illinois.

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EMERGING ISSUES

FarmWeek Page 8 Monday, December 23, 2013

Attorney to discuss health insurance law, farmers who employ 50 or more

Specialty Crops Conference BY KAY SHIPMAN FarmWeek

A Michigan attorney who specializes in agriculture employment issues will share her knowledge of the Affordable Care Act and its impact on farmers with 50 or more employees Jan. 10 during the Illinois Specialty Crops, Agritourism and Organic Conference in Springfield. Farmers in the livestock, dairy and other sectors are welcome to attend the health care session from 10:30 to 11:45 a.m., according to Diane Handley of the Illinois Specialty Growers Association (ISGA). The early registration deadline is Friday (Dec. 27).

One of farmers’ biggest concerns is whether the law’s threshold of 50 or more employees applies to them, according to Kimberly Clarke, an attorney with Varnum Law, Grand Rapids, Mich. Clarke grew up on a Michigan farm and watched her family cope with employment issues, which led to her career choice. “All of us are learning (about the Affordable Care Act). We will talk about what we know now and what we anticipate,” Clarke told FarmWeek. “Hopefully that will help employers know what to watch for as more information becomes available.” Clarke noted the law’s seasonal employee provision may

apply to some farm operations. She plans to discuss those provisions and others that apply to farms. Clarke covers the practicality and legality of employment issues with a farmer perspective. The two-day registration fee is $75 for individuals who aren’t ISGA members; however, Handley said a discount fee of $25

would be offered for farmers interested in attending only the health care session. Registration for the health care session will be done on site. Lunch tickets and admission to the trade show will be available for an extra cost. Call 309-557-2107 with questions about attending the health care session.

The registration fee for ISGA members is $65 by Friday’s deadline and $80 at the door. For more information or to download and print a registration form, visit {specialtygrowers.org} and click on the “Conference & Trade Show” icon on the right side. After Friday, on-site registration will be available.

Businesses and residents impacted by the Nov. 17 tornadoes have until May 31 to file any tax returns due on or after Nov. 15. Gov. Pat Quinn recently announced the extension for tornado victims. Taxpayers should file or pay

as soon as possible. If filing paper forms by mail, “Tornado – November 2013” should be written in red on the outside of the envelope and on the top of the tax return. To claim disaster relief through MyTax Illinois, resi-

dents may log into their MyTax Illinois account, navigate to the account for which they wish to claim relief and click “Claim Disaster Relief ” under “Account Maintenance” in the left sidebar. Then they may complete and submit the online disaster relief claim request. Those who file electronically and don’t use MyTax Illinois should email REV.TornadoNov2013@illinois.gov. Affected taxpayers should include their name, account identification number, the tax period affected and a brief explanation of the delay that includes an estimate of when they will file or pay. More information may be found at {Tax.Illinois.gov}.

Tax filing, payment deadlines extended for tornado victims

STANDING STRONG WITH FARMERS

Victims may appeal FEMA decision

Since 1925

Illinois tornado victims may appeal a decision from the Federal Emergency Management Agency (FEMA) within 60 days of receiving the agency’s letter. FEMA cannot duplicate assistance supplied by private insurance or other government sources. However, FEMA’s initial ineligibility decision may change if private insurance or other government assistance does not cover all eligible damage. Individuals may ask for another review to appeal the amount, type of help or any other decision about federal disaster assistance. The appeal letter needs to explain the basis of the disagreement and supply any new or additional documents that support the appeal. Appeal letters should include federal disaster declaration number ‘4157-DR-IL’ on all pages of documents; the applicant information, including the nine-digit FEMA application number on all pages; the applicant’s name, date and place of birth and signature; the address of damaged dwelling; and copies of documents that support the appeal. Applicants should keep all original documents. Mail appeals to: FEMA National Processing Service Center, P.O. Box 10055, Hyattsville, MD 20782-7055. Appeals may be faxed to: 800827-8112, attention: FEMA. Appeal questions may be answered at 800-621-3362.

Join the number one crop-hail insurer in Illinois for an information session near you. Topics will include:

Updates to the Federal Crop Insurance Program

Updates on the Farm Bill and what to expect moving forward

How to use grain marketing and crop insurance together to manage risk and get the best profit per acre

Best practices for handling claims to make the process as easy as possible

Sessions will run from December–March 2014. To register, go to www.countrycrop.com/update.

Policies issued by COUNTRY Mutual Insurance Company®, Bloomington, IL. This entity is an equal-opportunity provider.

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FROM THE COUNTIES

Page 9 Monday, December 23, 2013 FarmWeek

County Farm Bureau brings joy, phone cards to troops Will County Farm Bureau members have brought more than 48,000 troops and their

BY MARK SCHNEIDEWIND

families a little closer at Christmas over the last nine years. In October 2004, the Will County Farm Bureau morning investment club with help from the county Farm Bureau Women’s Committee launched a project dubbed Phone Cards for Troops. Norma Meader as chairman helped start the project. From a simple idea, the project expanded and inspired others to join. In the first year, 450 phone cards were bought and mailed to servicemen and women between Thanksgiving and Christmas. The Farm Bureau worked with American Legion Post 1080, a relationship that continues. The overwhelming response from the troops resulted in the Farm Bureau groups’ decision to raise money year-round. More than 3,100 phone cards were purchased in 2005. Each year, the group set a

higher fundraising goal to keep up with requests. In return, the troops sent several hundred thank you notes, letters and emails expressing gratitude for the opportunity to call home and talk with loved ones. In 2007, the Empress Casino joined the project and collected donations from employees and patrons. The following year, the Livingston County Farm Bureau became involved in the project and raised money for phone cards. In 2012, the Hollywood Casino joined the project fundraising. Each year, the money raised and phone cards purchased grew despite economic slumps. Each partner has continued raising money for the project. This year, $22,963.40 was raised and 5,740 phone cards purchased. Since 2004, the groups have raised $188,318.74 and bought more than 48,240 phone cards. This is just a little way of showing how much we appreciate what our troops have done and are doing for us! Mark Schneidewind is the Will County Farm Bureau manager.

Livingston County members donate hams

Livingston County Farm Bureau members in cooperation with the Illinois Corn Marketing Board donated $300 in gift certificates to purchase 44 hams for the Livingston County Community Food Pantry. The donation highlights the importance of corn as a feed product for livestock. Farm Bureau members also hope everyone can enjoy a ham for Christmas dinner with their family.

All A Ag. g. All IIllinois. llinois. Now. All Now.

iPhone Users

Android Users

ASS-MORGAN — Farm Bureau and COUNTRY Financial will sponsor a crop insurance seminar at 5:30 p.m. Jan. 6 at Hamilton’s Catering in Jacksonville. Doug Yoder, Illinois Farm Bureau senior director of affiliate and risk management, will be the speaker. Call the Farm Bureau office at 245-6833 for reservations. ANKAKEE — Farm Bureau will sponsor a WILL-AM 580 market panel discussion with Dave Dickey at 6 p.m. Jan. 7 at the University of Illinois Extension office in Bourbonnais. Call the Farm Bureau office at 9327471 to register. • Farm Bureau will sponsor an on-the-road program at 6 p.m. Jan. 27 at the University of Illinois Extension office in Bourbonnais. Kevin Rund, Illinois Farm Bureau senior director of local government, will discuss trucking regulations. Call the Farm Bureau office at 932-7471 to register. EE — Farm Bureau’s annual meeting will be at 10 a.m. Jan. 9 at the Farm Bureau office. Steve Sheaffer will speak about his trip to

Germany with the McCloy Fellowship Program. • Applications for the Foundation’s Books by the Bushel Program are available at {leecfb.org}, by calling the Farm Bureau office at 8573531 or by email at leecfb@comcast.net. Deadline to apply is Feb. 1. • Applications for Foundation scholarships are available at {leecfb.org}, by calling the Farm Bureau office at 8573531 or by emailing leecfb@comcast.net. Scholarships are available to high school seniors and undergraduate students who are studying agriculture-related fields of study. Application deadline is Feb. 1. EORIA — Farm Bureau will provide a discounted rate for the National No-Tillage Conference Jan. 15-18 in Springfield. For additional information visit {NoTillConference.com}. Call the Farm Bureau office at 686-7070 for reservations by Dec. 30. • Farm Bureau will sell tickets to the Bradley Braves versus the Missouri State basketball game at 7 p.m. Jan. 8.

Cost is $5. Tickets are available at the Farm Bureau office. IKE — Farm Bureau and COUNTRY Financial representatives will sponsor crop insurance seminars at 7:30 a.m. Jan. 6 at the Farm Bureau building and at 11 a.m. Jan. 6 at the Lions Club building at the Pike County Fairgrounds in Pleasant Hill. Doug Yoder, Illinois Farm Bureau senior director of affiliate and risk management, will be the speaker. Call the Farm Bureau office at 285-2233 for reservations. COTT — Farm Bureau and COUNTRY Financial representatives will sponsor crop insurance seminars at 7:30 a.m. Jan. 6 at the Pike County Farm Bureau building and at 5:30 p.m. Jan. 6 at Hamilton’s Catering in Jacksonville. Call 217-742-3351 for reservations.

“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 our county Farm Bureau manager.

PROFITABILITY

FarmWeek Page 10 Monday, December 23, 2013

High prices don’t necessarily cure high prices

There is a saying in commodity markets that “high prices cure high prices.” They cure high prices by serving as an economic incentive for producers to produce more, causing prices to fall as a result of the increased supply. A supply Kel Kelly response to high prices occurs, for example, when increased demand finally elevates prices after a long time of low profitability. This incentivizes marginal land to re-enter the market and expand the supply, thus bringing prices back down. But it’s difficult for supply to catch up to prices when prices are rising due to inflation instead of fundamental factors. The prices of most items become more expensive over time because the government adds more money to the economy each year. This is why we have consumer price inflation. But it’s not only consumer goods that increase in price; the additional money in the economy also affects stock, bond, and housing prices as well as — you guessed it — commodity prices. Though the new and additional money that enters the commodity markets BY KEL KELLY

comes in fits and starts instead of a little more each year as happens with consumer prices, it is still just price inflation. Over time, the rate of increase of new money entering the commodity markets outpaces the rate of production increases, making it very difficult for supply to ever catch up and “cure high prices.” That’s why corn prices over the last 150 years have never returned to their 1863 price of 65 cents. True, in some periods, like this year, prices fall. But they are falling mainly because some of the new money is

The State of Illinois’ financial woes would be much greater if not for the positive attributes of the animal agriculture industry, according to a new study. The United Soybean Board (USB) last week released the results of its Animal Agriculture Economic Analysis. It showed animal agriculture in 2012 generated $5 billion in total economic output, a $913 million impact on household incomes and $477 million in income and property taxes in Illinois. A successful animal ag industry benefits soybean growers who depend on livestock as the top consumer of soybean meal. Poultry, swine and other

Feeder pig prices reported to USDA* Total Composite Weighted Average Receipts and Price (Formula and Cash): Weight Range Per Head Weighted Ave. Price 10-12 lbs. (formula) $38.00-$82.82 $50.17 40 lbs. (cash) $80.00-$95.00 $90.12 This Week 86,173 *Eastern Corn Belt prices picked up at seller’s farm

Last Week 77,130

Eastern Corn Belt direct hogs (plant delivered) Carcass Live

(Prices $ per hundredweight) This week Prev. week Change NA $78.32 NA NA $57.96 NA

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

This week $130.22 $130.23

Prev. week $130.00 NA

spent to purchase a supply of 13.5 billion bushels of corn. Current forecasts show that

It’s difficult for supply to catch up to prices when prices are rising due to inflation instead of fundamental factors. — Kel Kelly GROWMARK economic and market research manager

bushels alone would serve to lower prices by only 9 percent, to $5.70, but it’s the reduction in spending that causes prices to fall the additional distance to the current price of $4.20, which is still historically high. Over time, however, more money usually flows in commodity markets than out, and that inflow of money usually outpaces supply increases, preventing high prices from curing high prices.

side investors expect higher gains in equities than commodities. For example, in 2011-12 before the 2012 drought, $84.1 billion was

for 2013-14 only $66.8 billion will be spent to purchase 14.8 billion bushels — a spending reduction of $17.3 billion. The increased supply of 1.3 billion

Kel Kelly is GROWMARK’s economic and market research manager. His email address is kkelly@growmark.com.

livestock consume about 97 percent of U.S. soy meal each year. In Illinois, livestock last year consumed 721,000 tons of soy meal from 30 million bushels of soybeans, according to the report. “It’s important that poultry and livestock farmers and soybean farmers from across the state continue to work together,” said David Hartke, a USB director and Teutopolis farmer. “A healthy animal ag sector supports our local and state economies, David Hartke our soybean demand and our food supply.” Nationally, the animal ag industry last year supported 1.8 million jobs and provided $346 billion in total economic output, according to the study. Senators seek elimination of barriers for U.S. pork Thirty-two U.S. senators last week sent a letter to U.S. Trade Representative Michael Froman and Ag Secretary Tom Vilsack

seeking broad market access for U.S. pork in countries that are part of the Trans-Pacific Partnership (TPP) trade talks. TPP talks represent an opportunity for the U.S. to open new markets for pork in the AsiaPacific region, expand existing markets and establish a standard for future trade agreements. However, a number of TPP nations (including Japan) currently have highly restrictive trade barriers that limit U.S. pork exports, according to the letter. “Increasing pork exports are important to many more Americans than just pork producers,” said Randy Spronk, president of the National Pork Producers Council (NPPC), who noted U.S. pork exports generate more than 110,000 U.S. jobs. Removal of tariff and nontariff barriers to U.S. pork in TPP countries would boost U.S. pork exports to that region by more than 50 percent within 10 years, according to the letter. A coalition of ag organizations, led by NPPC, is likely to oppose a final TPP trade agreement, though, if Japan doesn’t agree to comprehensive trade

liberalization, including elimination of tariffs on virtually all U.S. ag products. Animal welfare groups petition USDA Two animal welfare groups last week petitioned USDA to include chickens and turkeys in the Humane Methods of Slaughter Act. Cattle, swine and most mammals are protected by the act from abusive treatment in slaughterhouses. But chickens and turkeys don’t have the same protections, according to the Animal Welfare Institute and Farm Sanctuary. “A rule is a legal obligation,” said Bruce Friedrich, senior policy director for Farm Sanctuary. “Until you have a rule, you can’t get meaningful enforcement. This next step is needed.” Animal welfare groups are concerned abuses to poultry could increase under a proposed new inspection system that would allow poultry companies to accelerate processing lines by 25 percent. USDA says the new system will help remove pathogens from the food supply and make plants more efficient.

Study identifies economic benefits of livestock

Livestock roundup

M A R K E T FA C T S

Recipts

flowing back out of commodities — of all commodities, not just ag commodities — as out-

Change $0.22 NA

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 $166.53 $167.80 -$1.27

Lamb prices NA

Export inspections (Million bushels) Week ending Soybeans Wheat Corn 12/12/2013 62.5 17.6 25.1 12/05/2013 60.4 19.8 40.5 Last year 44.5 16.6 16.5 Season total 765.9 696.5 386.6 Previous season total 698.6 492.4 233.9 USDA projected total 1450 1100 1400 Crop marketing year began June 1 for wheat and Sept. 1 for corn and soybeans.

Cattle inventory down; demand could be key to prices

BY DANIEL GRANT FarmWeek

The inventory of U.S. cattle continues to decline heading into the new year. USDA on Friday estimated the inventory of cattle and calves on feed as of Dec. 1 totaled 10.725 million head. The inventory is down 5 percent from last year and is the second smallest inventory for Dec. 1 since 1996. U.S. beef supplies next year, subsequently, are expected to decline by 1.472 billion pounds (5.7 percent) compared to 2013, based on USDA estimates. Tight supplies should be supportive of cattle prices, but market movements could depend on consumers’ appetite for high-priced beef, according to Dale Durchholz, AgriVisor senior market analyst. “Supplies will be tight,” Durchholz said. “And the economy is showing more pizazz than it has been the last year, which would argue beef demand into 2014 should be better.

“But, at these high price levels, can we add (to demand),” he continued. “Beef is really high priced now, especially relative to pork and chicken.” Durchholz predicted steer prices likely will continue to trade around $130 through the winter months. USDA on Friday (Dec. 27) will release its quarterly hogs and pigs report. That report could have “huge implications” for the pork and beef markets as lower priced feed in recent months has been a huge incentive to expand pork output, according to the analyst. USDA in its cattle on feed report surprised traders a bit as placements in feedlots (1.88 million head) in November were down 3 percent compared to expectations of a slight increase. But heavy weights could offset the lower placement number. The average dressed cattle weight for the week ending Dec. 14 was 807 pounds, about 1 percent higher than the same period a year ago.

PROFITABILITY

Page 11 Monday, December 23, 2013 FarmWeek

CASH STRATEGIST

Winter wheat planting in focus

Along with the final production numbers from 2013 and the December 1 grain stocks, the USDA also issues its first report for the 2014 crops on January 10. The early take on wheat planting for this winter crop has estimates on either side of last year, but generally, very close to last year’s 43.09 million acres planted. Generally, it’s thought soft red plantings probably didn’t increase much from last year, if at all, because of this year’s slower Corn Belt corn harvest. Even though the corn market was entrenched in a downward spiral in the fall, the economics of corn was at least as good if not a little better than a wheat/soybean double crop. In October, Gary Schnitkey at the University of Illinois forecast a southern Illinois farmer had a potential $200 return to operator and land for corn in 2014. He estimated a wheat/soybean double crop would only return $165, keeping corn slightly more attractive. But given this year’s good wheat and soybean yields, it was probably close enough to keep soft red wheat plantings near last year’s level.

The situation in the Southern Plains was significantly different, not so much regarding economics, but regarding conditions at planting. Moisture conditions the last three years at planting have been nothing short of abysmal. While they weren’t great this year, they were enough better to encourage planting this year. The condition of the winter crop reflected the moisture situation with the crop being in the best shape going into dormancy that it has been in three years — the hard red crop in particular. An additional feature that might have impacted planting in the Southern Plains involved uses of part of the acreage for grazing purposes, especially in the spring. Even though cattle numbers are down, the high price of feeders may have attracted some additional acres to be sown. Maybe the most interesting feature of the winter wheat planting report is the trade’s persistent expectation for plantings to be higher than the USDA forecast. The last time the trade estimate for plantings was under the USDA forecast was 1991. Since then, on average they’ve been 3 percent too high. With some of the early indications for little change, maybe this will be the year that string will end. But even if it does, winter wheat plantings won’t be that much larger than last year.

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Corn Strategy

ü2013 crop: Even though the decline stalled last week, the overall action still suggests lower levels are ahead. The bottoming process may have started, but there’s still been no sign a low has been put behind. Use rallies for making sales to cover cash flow for the next four to six weeks. ü2014 crop: There are many reasons to remain longterm bearish regarding prices, but the 20-week cycle still hints a low is due soon — one that should be followed by a modest rebound. At some point this winter/spring, expect to see December futures trade over $4.75. vFundamentals: Amid the negatives of the Chinese rejections of U.S. corn, there are some positives. They are continuing to buy corn from the U.S. And the rejected cargoes are being willingly snapped up by South Korea because of the discounted price. It is thought the total has reached nearly 600,000 metric tons. Argentine weather has come into the picture, but it’s much too soon to expect any serious crop damage has been done.

Cents per bu.

Soybean Strategy

ü2013 crop: In the short term, Argentine weather is probably the key swing variable. Use rallies toward $14 on January futures to make catch-up sales if it remains hot. But get sales upto-date if the pattern changes. As much as the market may make you think otherwise, the world is not short of soybeans. ü2014 crop: Use current prices to make a 10 percent sale. But if March 2014 futures close under $12.95, get sales to the 20 percent level. New-crop, like old-crop, prices are going to be guided by Argentine weather forecasts in the short term. vFundamentals: Even as China continues to buy soybeans from us, there is some shifting of purchases to other countries, along with some small cancellations. But at the moment, the hot, dry weather in Argentina has become the primary focus. It’s too early to have a significant impact, but the fear is it could extend, potentially dragging produc-

tion potential down.

Wheat Strategy

ü2013 crop: The wheat market continues to slip steadily lower behind both good supplies and lackluster demand for U.S. wheat. At the same time, world trade tends to decline during the holidays. We expect prices to slip lower yet, but the 20-week low should be close. Hold off sales for now. ü2014 crop: Even though prices are likely to drop lower in the short term, we expect to see better marketing opportunities in winter/spring.

vFundamentals: The U.S. is subtly becoming the “supplier of last resort” in the world trade. On the last Egyptian tender, offers from the U.S. were about $20 per ton over the next lowest offer, mainly because of transportation. Argentine harvest is moving along with enough complete that the government raised its output. The trade is sticking with its 10.3 million metric ton forecast. Still, there is some concern the government might embargo sales. Brazil continues to be a small, steady buyer, including from the U.S.

PERSPECTIVES

FarmWeek Page 12 Monday, December 23, 2013

Tornadoes put holiday meaning in perspective

Arms around agriculture

Ron Holevoet, Clinton County, standing center, speaks during delegate debate at the Illinois Farm Bureau annual meeting in Chicago. (Photo by Cyndi Cook)

Happens once a year, a gathering of the arms, Illinois Farm Bureau 407,378 members represented by 342 delegates from each county in the state.

Cars and busses, trains and pickup trucks, the farmers pour in to the Chicago Loop toting suitcases (and billLIN folds!). WARFEL Delegates and alternates, friends and staff, officers and directors and onlookers, some 2,000 all together attend.

Into the exhibit hall they come greeting one another happy to be together; old faces and young ones from strollers to canes and walkers, they meet and greet and talk to each other.

Young Leaders engage debating issues of the day, bright young folks educated and well spoken, they compete and are judged, but every single one’s a winner.

Politicians come too, to milk the crowd, Friends of Agriculture; The Bureau pats their backs, pays them respect.

The capstone moves into place, 342 delegates take their seats; consideration of Resolutions begins ideas to amend policies or add new ones gathered from all round the state, sifted, combined and presented by the TRC, the Tentative Resolutions Committee, 18 county presidents rotated from the 18 districts.

Each resolution read, then discussed and debated sometimes for a moment, sometimes for an hour; the arms of the Bureau, the minds of the delegates engage and resolve, yaying or naying.

The votes come in sound waves, most often, a rush of voices competing; the President assesses, sometimes looks right and left to the astute secretaries, the vice president, the legal counsel, and pronounces the fate, “Passed!”... or “Failed!”

and the body moves on.

Forty-six pages, this year, 2013, plus some added from the floor, surfaced just recently, but important to consider. The delegates march on through, parliamentary procedure tested: “Point of Order!” “Move to amend!” “Ready to vote?”

Finally complete, the policies will gain feet, thousands of feet, walking to Springfield, to Washington, carrying the ideas for presentation with some policies becoming bills and the laws of our land.

The astonishing rich soils of Illinois produce these people, the “show up” folks who move our state, our nation, the farmers of Illinois, America, who have their arms around agriculture producing the food, fiber and fuel that sustain us.

Lin Warfel, Champaign County Farm Bureau president, wrote this poem about the 2013 Illinois Farm Bureau Convention in the Palmer House, Chicago.

Season’s greetings from Washington, Illinois. The landscape around here has changed a bit after an F4 tornado swept through town about a month ago. Luckily our farm had no major damage, just a lot of debris in the field. Unfortunately, we have many close friends and neighbors that cannot say the same. In a matter of about a minute, they lost nearly everything. It is estimated that about 20 percent of the homes in Washington (a town of 15,000) were damaged or destroyed. To say there RYAN VOORHEES was an overwhelming response of support through volunteers and donations would be an understatement. It’s comforting to know that in rural America we help one another out and don’t wait for or expect the federal government to come save us. Immediately after the storm, Washington was flooded with volunteers, but due to safety concerns most of the damaged area in town was closed off. Rather than sit idle, most of these volunteers were looking for something to do or someone to help. We mentioned to a few of the groups that many of the area farmers were looking for help picking up debris in the fields. We never could have imagined the response we would get. The weekend after the

storm there were upwards of 300 volunteers walking the fields picking up pieces of debris. This continued for about five days straight. In those five days, more was accomplished than we ever thought imaginable. Fields that we weren’t sure were going to be farmed in 2014 are now fairly clean. Over the last month, we have been helping many of our friends and neighbors pick up the pieces and look forward to a new start. One of the main things we have learned from those we have helped is to value the people in your life — not the things. Time and time again we would ask our friends if there was anything they wanted saved or salvaged, and we usually got the same answer: “Our family is all that matters, things can be replaced.” Our family has had a difficult time asking for anything this Christmas. We realize how materialistic our society has become. My charge to you this Christmas is to cherish the people in your life, not the things in your life. Christmas is about the gift of people — one person actually — not things. Merry Christmas from Washington, Ill. Pardon our mess while we rebuild.

Ryan Voorhees, Washington, represents District 7 on the Illinois Farm Bureau Young Leader Committee. He published this column on the Young Leader blog “Generation Agriculture.” Read more at {http://ilfbyl.wordpress.com/}.

Veterans relish the opportunity to live the farming dream When Dustin Ladenburger climbs up into his tractor seat these days, he finds he cannot reach the pedals. That is because Dustin’s new hired man is 6 feet 8 inches and Dustin is, well, not quite that tall. Other SABRINA MATTESON than that, Kevin Comer guest columnist is a perfect fit for the job at Ladenburger Farms. He cares for cattle, fixes equipment and works with crops and pastures. Comer is a military veteran who did not come from a farming background, but he knew it was a life he wanted. After eight years of service in the Army Reserves, he was working a construction job in the Denver area. Comer recognized right away that city life and being away from his family all day was not conducive to a healthy lifestyle. His wife, Jessica, was from the country and both of them had dreams

of farming if they could only make it happen. In order to network with farmers, the Comers joined their county Farm Bureau Young Farmers & Ranchers group. Comer was working at the Farm Bureau booth at the Denver Stock Show when Ladenburger happened to visit. The two talked and the farmer shared his contact information. A week later, Comer got in touch with Ladenburger to say he and Jessica were interested in making a commitment to farm — moving from Colorado to Nebraska, learning how to handle cattle, adapting his equipment maintenance skills from military vehicles to farm equipment and beginning to make a life in farming that fit their dreams. “There are so many skills that transition from military service to farming,” Comer said about his new career. “I think it is critical to have the personal drive to work a full day without a boss around to motivate you,” he con-

tinued. “Also, everybody in the military has emergency medical training which is great experience to have on the farm.” At first, Jessica struggled to find work in Stratton, Neb., a town of only 300 people. Now she is working parttime and expecting their first child in April. Ladenburger is happy to share the workload with one more person on the farm. In 2012, he finished serving on the national American Farm Bureau Federation Young Farmers & Ranchers Committee, which took him away from the farm a lot. Ladenburger and his brother, Nick, are fourth-generation farmers with their dad, Dan. They have 400 head of Angus cattle, lots of pastures and fences, and raise dryland wheat and corn. In Ladenburger’s spare time he teaches, which he can do more frequently now that he has another trusted hand on the farm.

“Kevin is learning a lot about agriculture and about the way we do things on our farm,” Ladenburger said. Ladenburger is happy to be able to help the Comers fulfill their dream of becoming farmers. It is a life he loves and can understand how others would want to have the same dream. To learn more about Ladenburger’s farm visit {http://bit.ly/1aRMwrD} or {http://bit.ly/oJCT3l}. The Farm Bureau Resource Guide to Assist Veterans in Agriculture is a free resource for county and state Farm Bureaus. It offers information about training beginning farmers, making equipment available to veteran farmers and how to help find farm ownership or employment opportunities for members of the military transitioning into the civilian workforce.

Sabrina Matteson is director of rural affairs at the American Farm Bureau Federation.