FarmWeek February 13, 2012 edition

USdA LAST weeK trimmed its South American crop production estimates as heat and dryness continue to wilt yield potential. ....5

The new preSidenT of the Illinois Livestock Development Group knows the importance of livestock to cash grain farmers. ....2

The STATe’S Ag industry is making strides on some of its agenda but is facing challenges in other areas. .................................................6

Monday, February 13, 2012

Two sections Volume 40, No. 7

Little known about cost to dismantle wind turbines

BY KAY SHIPMAN FarmWeek

Periodicals: Time Valued

Government officials and wind energy developers can only speculate about the actual cost to dismantle a wind turbine and related components because none has been decommissioned in the United States.

However, a lack of experience has not stopped government officials and wind developers from estimating costs and developing reclamation agreements as part of the permit approval process.

Information compiled from decommission studies across the U.S. has not supplied conclusive evidence, according to David Loomis, director of the Center for Renewable Energy at Illinois State University.

Loomis spoke at a conference on siting, zoning, and taxing of wind farms last week in Normal. The conference, geared toward county and local officials and employees, was hosted by the Illinois Wind Working Group.

Loomis reported a wide range of estimated dismantling costs, based on per kilowatt capacity. Those costs ranged from a negative amount (the materials’ salvage value was anticipated to exceed the dismantling cost) to as high as

$198.75 per kilowatt.

While Loomis said he expected to find reduced costs in dismantling a larger wind farm due to economy of scale, his theory was not supported by the current studies.

R. Todd Weegens, an engineer with a Wisconsin firm, said his company has written plans that estimate the cost to dismantle wind farms at between $30,000 to $50,000 per turbine.

The techniques to dismantle a turbine would be the same as those used to build one, but in the reverse, Weegens noted.

Any landowner compensation for disruption due to move-

ment of cranes or other actions “would need to be brought up during the development phase,” he advised.

Weegens pointed out underground cable removal may or may not be included in required decommissioning and it may depend upon the reclamation depth required in the permit.

Site restoration also may cover the subsoil materials used and topsoil restoration.

Turbine access roads are another component that may be dismantled as part of the agreement.

In August, Champaign County obtained its first wind

CRESS FOR YOU

Matthew Schneider, chief financial officer and greenhouse manager of Living Water Farms Inc., holds a bunch of cress bearing the farm’s label with the family’s photo on the reverse side. Whole Foods and other commercial markets sell the greens with roots attached. Read about the greenhouse on page 4. (Photo by Cyndi Cook)

FarmWeek on the web: FarmWeekNow.com

energy project reclamation agreement that estimated scrap metal value at $380 per ton, said C. Pius Weibel, county board chairman. The scrap steel value will be updated periodically.

Using a five-year average of salvage cost, the per-turbine dismantling cost would be about $27,650 per turbine, Weibel said. The decommissioning plan also will be updat-

ed periodically, he said.

Weibel reported the county’s agreement also required the removal of materials to a minimum depth of 54 inches.

“We want the reclamation agreement to be part of the (permit) application,” he said.

“What do we need?” he asked in a rhetorical question to his fellow conference participants. “Real experience in decommissioning.”

State launches ed reforms linking learning, careers Ag sector is a key player Illinois wants to better prepare its students for successful careers through education.

Last week, Gov. Pat Quinn and Lt. Gov. Sheila Simon joined educators and business leaders to launch a new education initiative.

“Jobs follow brainpower,” Quinn told a large audience in Bloomington.

“We have a skills shortage Gov. Pat Quinn in the country,” added Richard Stephens, a Boeing Co. executive and chairman of the Illinois Business Roundtable.

The state will spend $3.2 million of $43 million in federal education reform funding on career-based learning with an emphasis on science, technology, engineering, and math.

Agriculture, food, and natural resources were identified as one of nine key career fields in Illinois. Ag was well represented at last week’s launch by educators, agribusinessmen, and ag education supporters.

If Illinois-based industry is able to find employees with the right skills and training,

the state’s economy also will benefit, noted Simon.

“This (initiative) is worth pursuing — a connection to build our state,” Simon said.

Essentially, the initiative will promote development of career education, known as learning exchanges. Curriculum will be offered to preschool students through adults with a special focus on the elementary through high school grades.

Components of a learning exchange include career exploration, work-based learning, student organizations, and internships or similar job experiences.

State education officials stressed high school students should be able to earn some college credits and/or obtain certifications that would ease their entry into the workforce.

Susie Morrison, state deputy superintendent of education, said $21.4 million would go to school districts.

The Illinois State Board of Education has posted information and applications online at {www.illinoisworknet.com/ilpathways}.

The first learning exchanges are expected to start this fall.

Immediately following the announcement, representatives of the ag sector discussed strategies for pooling resources and pursuing funding. — Kay Shipman

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

FarmWeek Page 2 Monday, February 13 2012

Quick Takes CAT RULES OUT ILLINOIS SITE — Caterpillar Inc. executives last week gave several reasons why the manufacturer will not relocate a factory from Japan to Illinois.

Uncertainty about the state’s financial situation was one factor, according to a Cat e-mail. However, Gov. Pat Quinn countered that the decision had more to do with the state’s lack of a deep-water port and less to do with its business climate.

Cat executives explained the company had considered access to ports and the distance to its building and construction products headquarters in North Carolina. However, the state’s poor fiscal health also played a role, according to executives.

During several downstate presentations, Quinn noted that the state had passed reforms of worker’s compensation and state employee pensions. The legislature also passed tax credit for research and development, the governor added.

ILLINOIS RANKS FOURTH IN WIND ENERGY — Illinois moved up one spot last year and now ranks fourth in wind energy capacity in the U.S., according to David Loomis, director of the Center for Renewable Energy at Illinois State University.

“It would be difficult for Illinois to catch California,” Loomis reported during a wind energy conference last week in Normal.

Illinois has 2,743 megawatts of wind energy capacity, compared to California’s 3,927 megawatts. Texas leads the nation with 10,377 megawatts followed by Iowa with 4,322 megawatts.

Among Illinois counties, McLean County has the largest wind energy capacity installed. LaSalle County is second, and combined Ford-Iroquois counties is third.

USDA TO HOST TOP AG CUSTOMER — USDA on Thursday will host its first U.S.–China Agricultural Symposium in Des Moines.

The event, which will be held at the World Food Prize Hall of Laureates, will bring together government and industry leaders from both countries.

“China and the United States have an opportunity and responsibility to work together to help increase the availability and use of sustainably produced food for a rapidly growing world population,” said Ag Secretary Tom Vilsack, who has traveled to China twice in his current position to strengthen bilateral trade relations.

China in 2011 was the top market for U.S. ag goods, purchasing $20 billion in U.S. ag exports. The value of U.S. far m exports to China supported more than 160,000 American jobs in 2011, according to USDA.

(ISSN0197-6680) Vol. 40 No. 7

February 13, 2012

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emerging issues

New ILDG head sees growing livestock demand

BY DANIEL GRANT FarmWeek

Rob Shaffer, the newly elected president of the Illinois Livestock Development Group (ILDG), knows firsthand there are opportunities to expand the state’s livestock industry.

Shaffer of El Paso and his brother, Emory, grow corn and soybeans in McLean and Woodford counties and they also operate a specialty beef business.

“We sell freezer beef to people in the (Central Illinois) area,” Shaffer told FarmWeek recently.

The Shaffers have a small

herd of Angus cattle and they sell all the beef directly to local consumers.

In fact, demand for beef from the Shaffers currently is outpacing their ability to produce it.

“We’d like to expand,” said

Shaffer, a fourth-generation farmer. “The problem is we’re running out of land.”

Overall, though, Shaffer believes Illinois has the resources (land and an abundant supply of feed) and is in the prime location to expand its livestock herd.

Rob Shaffer “ILDG’s mission is to promote and hopefully expand the livestock industry in Illinois,” Shaffer said.

Livestock receipts in the state the past decade declined from $2.3 billon to $1.7 billion.

But the industry more recently has shown some positive signs.

The number of permits issued to expand or build livestock facilities in the state increased from 65 in 2010 to 91 last year.

“That’s a good sign (for the

entire ag industry),” Shaffer said. “Usually, what’s good for livestock producers is good for grain producers.”

Shaffer also serves as the secretary of the Illinois Soybean Association (ISA).

He noted about 60 percent of ISA’s budget for the current fiscal year is geared toward animal agriculture.

“We (grain producers) have to remember they (livestock producers) are our No. 1 customer,” Shaffer said.

ILDG is comprised of the Illinois Beef, Corn Growers, Milk Producers, Pork Producers, and Soybean Associations and the Illinois Farm Bureau.

Other ILDG officers recently elected are Chad Schutz, vice president, White Hall (representing IFB); Mike Haag, treasurer, Emington (representing Illinois Pork Producers Association), and Doug Scheider, secretary, Freeport (representing Illinois Milk Producers Association).

For more information about ILDG or the state’s livestock industry, visit the website {www.illinoislivestock.org}.

Roundtable seeks NPDES permit relief, farm bill vote Relief from a new pesticide permit requirement by the Environmental Protection Agency (EPA) and a desire to move on the 2012 farm bill were the subjects of letters sent to federal legislators last week by members of the Illinois Agricultural Legislative Roundtable.

Letters sent to U.S. Sens.

Dick Durbin and Mark Kirk seek the senators’ support for H.R. 872.

That bill would reinstate a previous EPA rule that certain pesticide applications made on or near water were exempt from National Pollutant Discharge Elimination System (NPDES) permits under the Clean Water Act (CWA) and instead regulated under the Federal Insecticide, Fungi-

cide, and Rodenticide Act (FIFRA).

The measure was approved by the U.S. House last March.

Necessity for a permit is a result of a Sixth Circuit Court of Appeals decision that pesticide discharges into U.S. waters are pollutants, and applicators needed a permit under the CWA. On Oct. 31, the Illinois EPA finalized NPDES permit regulations that will impact a variety of pesticide applications in the state, including agricultural ones, to or over water or at water’s edge.

“This interpretation of the permitting requirements falls outside the scope of the court ruling,” Ag Roundtable members said.

“Our members support a legislative fix to address the

duplication, confusion, and justifiable concern created by the Sixth Circuit’s ruling.”

A SECOND LETTER, sent to the chairs and ranking members of the Senate and House Ag Committees, seeks a vote on the farm bill before the end of the year.

Roundtable members said that during the failed Super Committee process agriculture was the only sector to publicly seek a reduction in its own federal support — a cut of $23 billion over the next decade.

“Given that deficit reduction remains an overriding congressional priority, it is imperative that a farm bill be written and enacted by the end of this year,” said Roundtable members.

FSA making loans available to some farmers

The Farm Service Agency (FSA) reserves funds each year to make loans to certain types of applicants for buying and operating family-size farms, according to Scherrie Giamanco, Illinois FSA executive director.

Operating loans may be used for short and intermediate credit needs, such as buying livestock and equipment and for annual operating expenses.

Farm ownership loans may be used to buy and/or improve farmland and the buildings associated with the property.

Eligible applicants include individuals, partnerships, joint operations, corporations, limited liability companies, and cooperatives primarily and directly

engaged in family-size far ms.

Repayment terms for direct operating loans depend on the collateral used to secure the loan and usually extend from one to seven years. The current interest rate for an operating loan is 1.375 percent.

Repayment terms on direct farm ownership loans are up to 40 years. The current interest rate for farm ownership loans is 3.375 percent. Guaranteed loan terms made through commercial lenders are set by the lender.

Applications for direct FSA loan programs are made through local FSA county offices, while guaranteed loan applications are processed by participating lenders.

FarmWeek Page 3 Monday, February 13, 2012

IFB IN ACTION

Nelson discusses state of the ag industry, IFB priorities Illinois Farm Bureau President Philip Nelson has spent much of this winter addressing a host of economic, regulatory, and social issues confronting farmers. Last week, he discussed many of the key past and present issues with FarmWeek.

FarmWeek: You recently were elected to a final two-year term as IFB president.

What are some accomplishments you enjoyed most in your previous terms?

Nelson: If I look over the last eight years, three things come to mind. First I think the Vision for Illinois Agriculture project that we put in place, that looks at where we want Illinois agriculture to be in the next five or 10 years, certainly has been something we are very proud of. However, we need to continue to look at improving our state’s business climate and attracting young people into agriculture careers.

Secondly, I look at the director of external relations position that we put in place when I came in the first year as president. It’s paying big dividends by establishing relationships vital to our industry.

Thirdly, I also look at the Illinois Farm Families campaign.

Going back to 2008 when we had the challenges related to the whole food/fuel/feed debate, we tried to bring Illinois agriculture together to have a common message, and we did extensive research with consumers. We found out that we needed to reconnect to the consumer in a better way. I think we are starting to do that.

FW: What are some of the key policy and marketing issues facing agriculture this year?

Nelson: First and foremost, the policies that we have on the farm bill I think will be pivotal as we, hopefully, write a farm bill this year.

Illinois Farm Bureau is well positioned for the policies that we have in place today.

Our Farm Policy Task Force heard and everything we hear from farmers is to make sure we have a strong safety net. I think we have clear policy to

do just that.

We are all hopeful that commodity prices will stay at these levels, but I think being a realist, we know that will not happen.

So, it’s imperative that we have a strong safety net in place.

Secondly, I think it also was clear from our Farm Policy Task Force that conservation programs are important and we want to make sure we prioritize these programs in the next farm bill, knowing that we are going to have some cuts in resources and in the allocation of those resources.

Research and rural development continue to play a strong emphasis coming out of our membership’s Farm Policy Task Force recommendations, and I think we are going to see Congress take a hard look at all of the nutrition programs. We added $10 billion in the last farm bill to the nutrition title alone, and I think our people are saying let’s analyze and make sure we are getting the best return for those dollars.

FW: At the state level, how big a threat is the budget deficit to key programs such as agriculture and education?

Nelson: The threat to agriculture is one that could be daunting. I think any agency funded by the state budget is under attack — attack from the standpoint that we’ve got to figure out how to deal with a state budget after we’ve seen one of the most massive increases on income tax and corporate tax rates in recent history and at the same time, we’re looking at a budget deficit of about $8 billion.

The other side of that, we continue to see almost $6 billion of unpaid bills that are four months of age or older and we’re looking at the biggest unfunded pension liability of any state in the country — somewhere north of $80 billion. We know we’ve got to grapple with pension reform. I think we have to continue to look at ways to close that budget deficit, and we’ve said all along that just putting more revenue on the table is not going to solve the

problem. You’ve got to look at a multi-faceted approach.

FW: How can farmers produce enough food to feed the

FarmWeekNow.com Go to FarmWeekNow.com to view video of President Nelson’s Q & A with Daniel Grant

growing population?

Nelson: I think, historically, technology has been what’s allowed that to happen.

We have continued to make advancements in production, and if by the year 2050 we are going to feed 9 billion people, we have to continue to ramp up our research and the adaptation of technology in production agriculture.

FW: Why is promoting livestock important to the state, and how can we expand the industry going forward?

Nelson: I’ve always said livestock has got to be a priority of every grain farmer because it’s his biggest consumer. Yes, we have biofuels, whether it’s ethanol or biodiesel, but the four-legged animals that are fed by production agriculture are one of the biggest markets for the grains that we produce in Illinois. We continue to work with the Illinois Livestock

Development Group to find new markets, or expand present ones, or site new livestock facilities to gain the efficiencies that are needed today by producers.

FW: Why is trade so important to agriculture and what can we do to expand and improve our trade opportunities?

Nelson: Trade has been, and will continue to be, a major priority of Illinois and American agriculture. In Illinois, about one out of every three rows of corn and soy-

beans we raise ends up in the export market. As much as 20 percent of the livestock that we raise ends up in the export market. So it’s very important to not only our bottom line but also to the trade surplus that we acquire. We have to continue to explore new markets for our products. We witnessed this last year the passage of the South Korea, Panama, and Colombia Free Trade Agreements.

I think now we look at the TransPacific Partnership that’s being talked about to really open more trading areas for our products.

FW: 2012 is an election year – what’s at stake for farmers and how can they be involved?

Nelson: It is a very important year not only because of what’s happening at the state level but at the national level as well. We’re going to try to engage our membership as much as we possibly can and emphasize the need to get out to vote at all levels. I think there are some very important decisions to be made. At the state level, as we grapple with huge budget deficits, we’ve got to put people in the General Assembly who are going to try to tackle that problem, so we don’t mortgage the future of this state. I think the “get out to vote” campaign is going to be critical at both the state and national levels.

FW: The U.S. transportation system for years has given farmers a competitive advantage. How concerned are you with maintaining that edge or even losing it to others in the future, and what can we do about it?

Nelson: I’m very concerned about the aging infrastructure of our transportation system. I think categorically if you look from roads to rails to waterways, they are in dire need of modernization and upgrading. With the expiration of the highway bill this year, there is great concern on two fronts. No. 1, the amount of money that will be appropriated, or

extended, if we do a one-year extension.

No. 2, and what really concerns me, is whether we are going to have enough funding at the state level to match the federal funds that will be available for some of these projects. We have to continue to push this agenda if we are going to be efficient in the future. I happened to be in Brazil last spring and I saw the dollars that are being put into its infrastructure. It concerns me greatly that we’re not matching them on the ways to modernize our infrastructure.

So, long term, I think we’ve got to invest in those projects in order to stay as competitive as we can in the future.

FW: How concerned should farmers be about the threat of increased regulations?

Nelson: I’m very concerned as I look down the road in production agriculture. We are at a crossroads where basically agencies are looking to impose more regulations that could stifle what is a very vibrant industry today. We need to get some common sense back into that approach.

That starts with leaders in our organization standing up and knowing the issues, and telling the federal regulators about what we do in production agriculture and that deals with everything from clean air to clean water and making sure that agriculture gets a fair shake in those discussions.

FW: Why should farmers spend more time engaging consumers?

Nelson: Well, in the past, we’ve worried so much about trying to be efficient at what we do and producing food we haven’t really told our story, or connected that story, to the consumer.

Now, we are trying to reconnect to consumers, whether that’s through our Chicago field moms, the {watchusgrow.org} website, the Farmers Feed Us Campaign, or Ag in the Classroom.

Interview conducted by Daniel Grant, commodities editor with FarmWeek. Photos by Cyndi Cook.

FarmWeek Page 4 Monday, February 13, 2012

Specialty maRKetS

Central Illinois farm meets growing demand for specialty greens

BY KAY SHIPMAN FarmWeek

Living Water Farms Inc., near Strawn, served a feast for the senses on a dreary day last week.

Trays of greens created a leafy patchwork quilt across a greenhouse floor, while the scent of basil sweetened the moist air. Pea tendrils and mustard greens offered subtle sweet or spicy flavors for the taste buds.

The Kevin Kilgus and Mark Schneider families are growing their hydroponic greenhouse operation to meet an increased demand for locally grown foods in the commercial and restaurant sectors.

Recently, Living Water was one of four Illinois farms to receive a USDA value-added grant through Rural Development. The farm even was highlighted by Agriculture Deputy Secretary Kathleen Merrigan during her announcement about the grants.

The farm grows 10 varieties of specialty greens and custom mixes in a hydroponic system housed in a 8,000-square-foot geothermal greenhouse. The website is {www.livingwaterfarms.net}.

The recently expanded greenhouse shows creativity and ingenuity. Vertical seedling trays provide efficient use of floor space, saving sunlight for horizontal trays of growing greens.

A new bench growing system from Australia allows individual trays to be moved and harvested.

Everything — from the mixture of greens planted together and sold as green “bouquets” to the specialty seeds imported from Italy and Japan — has

been studied and planned.

“We like to work one-onone with chefs,” said Denise Kilgus, one of the owners.

“They are a community of their own.” They talk with each other and are eager to talk with farmers, she said.

“Working with chefs has helped us learn what they want,” added her son-in-law, Mark Schneider, another owner.

Their forays into restaurants have resulted in Living Water greens gracing diners’ plates at Chicago’s Signature Room in the John Hancock Center and the Lockwood Restaurant in the Palmer House. Schneider and Kilgus estimated they sell about 40 percent of their produce to restaurants.

Living Water also sells to commercial markets, mainly Whole Foods and Schnucks, and to the food service program at Wheaton College in Wheaton.

The family plans to use its $300,000 USDA grant to improve marketing and brand development as well as find new markets.

On average, the greenhouse has between 30,000 and 40,000 bunches of plants growing at any time. Planting and harvest occurs year round. In addition to three owners, the farm employs the equivalent of four to five full-time employees.

The families’ attention to detail includes uses for any excess produce. Every other week excess greens are delivered as donations to the Midwest Food Bank in Bloomington.

“It’s another way for us to do something good for the community,” Kilgus said.

Top photo: Mark Schneider, center, one of the owners of Living Water Farms Inc., discusses the hydroponic growing system used on his greenhouse operation near Strawn.

Joining Schneider are his brother, Matthew, the farm’s chief financial officer and greenhouse manager, and his mother-in-law, Denise Kilgus, another farm owner. Living Water plans to use a new USDA value-added grant through Rural Development to enhance its marketing efforts.

L eft ph ot o: Living Water Far ms Inc.’s Mark Schneider displays a custom mix of greens that are popular with chefs in upscale restaurants. (Photos by Cyndi Cook)

Illinois farms selected for value-added grants Four Illinois farms were among 298 recipients nationwide selected to receive valueadded grants through Rural Development. In addition to Living Water Farms Inc. of Strawn, the recipients were: Fairbury farmer Justin Kilgus, who with his brother, Trent, raises and sells meat goats to upscale restaurants in Chicago and Central Illinois.

The brothers’ Pleasant Mead-

ows Farm will use the $10,595 grant to study a formal business structure, create a 10-year plan, and identify additional local markets.

Marcoot Jersey Farm Inc., Greenville, will use a $217,866 grant to expand sales and markets for their artisan cheeses.

The seven-generation dairy farm produces 12 varieties of cheeses, which are sold in their own store, farmers’ markets,

specialty stores, and upscale restaurants.

Lime Rock Brown Swiss Cheese LLC, Davis, will use a $49,990 grant to expand its markets and customer base for its high-quality cheeses. The farm’s milk is processed into five custom cheeses at the Spring Brook Cheese Inc. in Davis. Lime Rock currently sells its product at farmers’ markets in Northern Illinois and southern Wisconsin.

Merrigan: USDA focus farmers’ bottom line Markets, near and far, are key to farmers and the USDA, Agriculture Deputy Secretary Kathleen Merrigan said during a recent news conference.

Merrigan discussed the breadth of farm markets during a Chicago teleconference at a Midwest meeting on expanding marketing of local foods.

Asked about the next farm bill and the potential role of local food or other initiatives, Merrigan didn’t hesitate: “Anything that helps farmers improve their Kathleen bottom line — whether it be Merrigan local (markets), export markets — that’s the business of USDA, and we will stay in that business,” she said.

Increasing the value of farm products “is an opportunity to create jobs in rural America,” Merrigan said. “Money spent on food is a powerful investment tool. It works across the country ... it’s a real job builder.”

At the meeting, Merrigan noted Rural Development and the Illinois Department of Commerce and Economic Opportunity will work together to jumpstart development of food hubs.

A food hub is a centrally located business facility for aggregation, storage, processing, distribution, and marketing of food grown within a local or regional area.

Both the federal and state agencies offer grants and loans to support development of food hubs and other local food projects.

— Kay Shipman

Page 5 Monday, February 13, 2012 FarmWeek

productioN

USDA lowers South American crop estimates U.S. crop exports expected to grow

BY DANIEL GRANT FarmWeek

USDA last week trimmed its South American crop production estimates as heat and dryness in recent months, particularly in Argentina, wilted yield potential.

Soybean production estimates in USDA’s world ag supply and demand report on Thursday were reduced by 3.5 million metric tons (129 million bushels) in

Brazil and 1 million metric tons (36.7 million bushels) in Argentina while the corn production estimate in Argentina was slashed by 4 million metric tons (156 million bushels).

“Those (South American crop estimates) are kind of a work in progress,” Al Kluis, market analyst with Kluis Commodities, said during a teleconference hosted by the Minneapolis Grain Exchange. “I think the numbers likely will get smaller.”

The issues with South American crop production are expected to provide U.S.

farmers with an opportunity to sell more crops to international buyers.

USDA in this month’s supply/demand report

FarmWeekNow.com Listen to Al Kluis’ comments on the grain market outlook at FarmWeekNow.com.

increased its export estimates by 50 million bushels for corn and 25 million bushels for wheat.

U.S. soy exports were projected to total 1.275 billion bushels for the year, down 226

Drought, rain may affect South American crops

BY PHIL CORZINE

I’ll start with what everyone is asking — how big is the South American crop going to be? I don’t have a number, but here are some things I know: Brazil’s southern states of Parana and Rio Grande do Sul have been severely affected by the drought. I think both corn and soybean yields in those states will be down 25 to 40 percent. Argentina is in the same situation Phil Corzine and should have some significant reductions in yields as well.

Northern Brazil has had plenty of rain — at times too much. At the moment, I expect most of the northern Brazilian states will end up in the averageto-above-average range, but too many cloudy days could take the top off of these yields.

I also believe there is a bias to the high side for yield projections from both the government and private companies in Brazil, and I think we’ll see gradually decreasing production numbers as time progresses.

The crops at our farms are

Auction Calendar Tues., Feb. 14. 10 a.m. LaSalle Co Land Auction. Hertz Farm Mgmt. Inc. www.hfmgt.com Wed., Feb. 15. 10 a.m. Unreserved Auction ~ Online Only. www.bigiron.com Wed. Feb. 15. 10:30 a.m. Land Auction Winnebago Co. Homer F. Green Trust, PECATONICA, IL. Lenny Bryson, Auctioneer. www.lennybrysonauctioneer.com Thurs., Feb. 16. 12 p.m. Farm Eq. Consignment Online Auction. www.EspeAuctions.com Thurs., Feb. 16. 10 a.m. Coles Co. Real Estate. John Mast, ARCOLA, IL. Stanfield Auc Co. www.stanfieldauction.com Thurs., Feb. 16. 10 a.m. Ford Co Farmland. J&J Trust, ELLIOTT, IL. Bill Kruse, Auctioneer.

Fri., Feb. 17. 2 p.m. Farmland Auction ~ Online Only. Aumann Auctions. www.aumannauctions.com Fri., Feb. 17. 10 a.m. Farmland and Hunting Ground Auction in Tazewell Co., IL. Robert Zimmerman, GREEN VALLEY, IL. Nehmelman Auction Co. topauc-

advancing nicely. At our Fatima farm, we continue to keep the mela disease managed with fungicides — some fields may require five applications before we finish. These 1,360 acres of beans will mature first; harvest probably will start about March 20.

The 2,300 acres of beans near Alvorada, Tocantins, were planted last and are just about ready to start flowering. We’re hoping for continued timely rains for the next six weeks to finish these beans out.

At our owned farms near Araguacu, the 1,330 acres of soybeans and 220 of corn look excellent. I think these yields will exceed last year’s.

Some of our early beans should be ready to harvest in late March.

Speaking of harvest, we are still working on contracts for our harvesting services. Our best quote to date is $27 per acre, plus fuel.

Phil Corzine is general manager of South American Soy, a global tions24-7.com/nehmelman Sat., Feb. 18. 10 a.m. 124 Ac. Richard Kelley, WATERLOO, IL. Schaller Auction Service. www.auctionzip.com Sat., Feb. 18. 10 a.m. Farm Eq Auction.

Randy Waddell Estate, TREMONT, IL. Hoyland Auction. www.auctionzip.com or www.auction-block.com Sat., Feb. 18. 1 p.m. Land Auction Jackson Co. Dorothy Edwards Estate, VERGENNES, IL. Mark Krausz Auction Service. krauszauctions.com Tues., Feb. 21. 10 a.m. Coles Co Real Estate. Kathryn Walker Robertson Trust, CHARLESTON, IL. Stanfield Auction Co. and Pierce Farm Mgmt. www.stanfieldauction.com Tues., Feb. 21. McLean Co. Farmland.

Jean Wilson Estate. Soy Capital Ag Services. www.soycapitalag.com Tues., Feb. 21. 10 a.m. Ford Co Farm Land. Day Family, MELVIN, IL. Bill Kruse, Auctioneer.

Tues., Feb. 21. 10 a.m. Knox Co. Land Auc. Romona D. Hinckley Estate, GALESBURG, IL. Van Adkisson Auction Service, LLC. www.biddersandbuyers.com

production management and investment company. His e-mail address is pcorzine @ag page.com.

million bushels from last year, but bean sales are expected to pick up in coming months.

“The lower soybean crop forecast and reduced export projections in Brazil, Argentina, and Paraguay are expected to be offset by additional U.S. sales and exports during the second half of the marketing year,” USDA noted in its report.

The U.S. also could pick up additional wheat sales around the world if production estimates eventually are lowered in Russia and the Ukraine.

“When you look at the global numbers, I was a little taken back that (USDA) didn’t lower the wheat (production estimates) in Russia and the Ukraine where the crop has been blasted by winterkill,” Kluis said. “I look for that to come in future reports.”

USDA lowered U.S. ending stocks by 45 million bushels for corn (to a total of 801 million bushels) and by 25 million bushels for wheat to 845 million bushels.

Soybean ending stocks were left unchanged at 275 million bushels.

Kluis predicted the crop markets will continue to bounce around for the next month before traders turn their full attention to U.S. planting conditions.

“We’ll still see some trade attention on the weather in South America, but more and more the focus will turn to corn planting conditions (in the U.S.),” Kluis said. “I agree with private forecasts that call for corn acres to jump up to 94 or 95 million acres.”

If corn acres reach that level and if yields average near the trend of 160 to 161 bushels per acre, Kluis predicted December corn prices by this fall could be below $5 per bushel.

“2012 could be a dangerous year for farmers if they don’t manage their margins,” he said.

The current breakeven price for corn is around $5 per bushel, Kluis added.

FarmWeek Page 6 Monday, February 13, 2012

AROUND ILLINOIS

Vision for Ag assesses progress, challenges

BY KAY SHIPMAN FarmWeek

The state’s agriculture industry is making strides on some of its agenda but is facing challenges on other parts, industry leaders learned last week.

Vision for Illinois Agriculture marked its fourth year with status reports from groups that focused on certain issues.

Vision members acknowledged progress in certain areas, such as increased awareness of ag-related careers, but daunting challenges remain to restore the state’s fiscal health. “The big gorilla in the room is the fiscal situation in Illinois,� said Illinois Farm Bureau President Philip Nelson.

When Nelson asked if the Vision should continue its efforts, many members nodded in agreement. The principles established four years ago remain valid, members noted.

One principle — attracting an educated workforce to the ag sector — has received attention

on a couple of fronts.

Last year for the first time, Illinois FFA chapters developed multimedia campaigns to interest high school students in agricultural careers, said Mariah Dale-Anderson, IFB youth activities manager. A competition was held with top winners advancing to the Illinois State FFA Convention.

Dale-Anderson noted the winning video focuses on the students’ points of view and uses current communication technology compared to an older ag career video that was produced on VHS tape.

The need to inform students about ag careers is great, according to Bob Hauser, dean of the College of Agricultural, Consumer, and Environmental Sciences (ACES) at the University of Illinois. “It’s surprising how little high school students understand what (collegiate agricul-

ture) programs are offered,�

Hauser said. “We’re constantly educating folks who aren’t aware or prepared.�

Agriculture also is one of nine industry sectors for which the State of Illinois is developing career-based learning.

Last year as part of the P-20 Pipeline and Career Pathways initiative, ag and education leaders developed career and education information to help students, parents, and educators understand the skills and education required for ag-related careers. This information will be integrated into the Illinois State Board of Education efforts.

For the second year, Department of Commerce and Economic Opportunity (DCEO) has included agriculture issues in an education innovation talent project.

Teams of students compete to solve real-world problems, and five diverse schools have chosen agriculture issues, reported Mike Baker with DCEO’s workforce development department.

Improvements also were

made to improve the process of obtaining some permits from the Illinois Environmental Protection Agency (IEPA).

The Illinois Chamber of Commerce led the effort to pass legislation that developed an IEPA permit website, said Bill Bodine, IFB associate director of state legislation. The idea dovetailed with the Vision’s ideas to improve the permitting process.

Through the website that became active two weeks ago, companies are able to monitor the permit process. “This makes the process faster� for smaller businesses, Bodine explained.

Vision members also sought to gain a better understanding of agricultural research and funding at the four state universities with ag programs. The members heard traditional government sources of ag research

funding continue to shrink.

More researchers are competing for funding from other government sources, such as the National Institutes of Health, and the private sector.

Federal research funding is moving toward larger, broader research projects instead of locally oriented ones, reported Richard Vogen with the U of I’s ACES. As a next step, the Vision research recommends pursuing an independent review and evaluation of public agricultural research in Illinois.

Efforts will continue to inform members of the state’s deteriorating fiscal situation.

As Don Borgman, industry relations manager for John Deere, noted: “I hate to over use the word crisis, but the State of Illinois is in a fiscal crisis.�

Macoupin County farmers Adam Edwards, left, and Farley Cole, co-organizers of a miniature golf tournament, assemble a farm-related miniature golf putting green for the upcoming Barn-to-Barn golf tournament. The event, held in barns, machine sheds, and garages around the county, raises money for the North Mac High School ag program and FFA. (Photo by Ken Kashian)

Unique barn golf tournament to raise funds for ag ed, FFA

MAZIMIZING EVERY ACRE

‹ *52:0$5. ,QF $ )DUP %XUHDX $IÀOLDWH $ &

Creative Central Illinois farmers are supporting their local high school ag program and FFA Chapter with a unique miniature golf tournament.

Dubbed the Barn-to-Barn, the event will start at 1 p.m. Saturday, Feb. 25, at 10 Macoupin County farms. A meal and live auction will start about 7 p.m. in the Knights of Columbus Hall, Virden.

The mini-golf holes are crafted by each host farmer and may be installed in a barn, machine shed, garage, or farm shop, said Adam Edwards, one of the organizers and a Macoupin County Farm Bureau board member.

This year’s tournament will be limited to 85 four-man teams and entries closed Feb. 11. The $100 registration fee covered a round of barn golf, a T-shirt, and an evening meal before the auction.

Teams will be disbursed among the participating farms for a shotgun start. Each team will have a map denoting other “golf � farms.

This will be the third Barn-to-Barn, and all proceeds are donated to the North Mac High School ag program and FFA. Last year, the farmer group raised about $20,000.

For more information, e-mail Edwards at edwardsfamilyfarms@yahoo.com or call him at 217-825-4332. — Kay Shipman

Page 7 Monday, February 13, 2012 FarmWeek

FarmWeek Page 8 Monday, February 13, 2012

Young leaders

Farm succession planning can be awkward, but necessary

BY DANIEL GRANT FarmWeek

Ron Hanson, ag economist at the University of Nebraska, has found farm families often don’t like to discuss “what if ” scenarios when it comes to the succession of their operations.

But it is critical for farm families not only to have those types of discussions but also to put their plans in writing, Hanson told a near-capacity crowd during a break-out session at the recent Illinois Farm Bureau Young Leader State Conference in Normal.

“How do you take the family farm, pass it from one generation to the next, and still make it work as a family?”

Hanson asked. “It’s one of the biggest challenges facing agriculture.”

Succession planning is as critical as ever as the farming population ages — more than 60 percent of U.S. farmers are 55 years of age or older. But it also is becoming trickier

Ron Hanson, left, ag economist at the University of Nebraska, discusses farm succession planning with Marc and Ashley Bremer, of Metropolis in Massac County. Mrs. Bremer is holding their 16-month-old daughter, Anna. The Bremers and Hanson spoke during the recent Illinois Farm Bureau Young Leader State Conference in Normal. Hanson was a featured speaker at the event. (Photo by Daniel Grant)

because a recent run of high commodity prices and escalating land values have put much more on the line.

Hanson said it was not uncommon 20 years ago for siblings who didn’t want to farm to cooperate if a brother or sister wanted to stay on the

farm and continue the family operation.

“Now, one of the attitudes I’m seeing more is ‘think of what we could sell this farm for,” he noted.

People also are living longer — the average life expectancy in the U.S. in 2010 was 78.7

years compared to 69.7 years in 1960 — so some young farmers may not be able to take over the family operation until they are in their 50s or older.

Hanson said he has seen

cases in which children worked on the farm well into adulthood but then were denied the chance to take over the operation due to sibling squabbles or changes made when one parent dies and the surviving parent remarries.

The life expectancy of men in the U.S. in 2010 was 76.2 years compared to 80.4 years for women.

“Most assume everything has been taken care of, but has anything been put in writing?”

Hanson said about farm succession planning. “Be awfully careful of promises. Things can change.”

Hanson encouraged Young Leaders to start farm succession dialogue with their families as soon as possible.

“Too many times those decisions are made under pressure (after a family member passes) and it’s highly emotional,” he said. “Mom and dad need to come up with an estate plan and you (young farmers and siblings) should respect those decisions.”

USDA unveils program, new rules to assist young farmers USDA last week expanded loan opportunities for beginning and socially disadvantaged farmers through the Farm Service Agency (FSA) and established a new Land Contract Guarantee Program.

The program is designed to encourage farmers to sell their property to beginning and socially disadvantaged farmers through the use of seller financing.

“These (program) improvements demonstrate FSA’s commitment to helping the next generation of America’s farmers participate in our nation’s agricultural economy,” said Scherrie Giamanco, state FSA executive director.

The changes in eligibility will increase access for farmers to FSA loans and credit assistance.

The new rule will enable landowners to sell their farmland to the next generation on a contract for deed with a 90 percent guarantee against losses to the seller.

FSA also can provide a guarantee of three years of amortized loan installments, plus payment of real estate taxes and hazard insurance premiums for the same three-year period.

For more information, go to a local FSA office or visit the website {www.fsa.usda.gov}.

Page 9 Monday, February 13, 2012 FarmWeek

from the counties

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DAMS — An “On the Road” seminar will be at 1 p.m. Friday, Feb. 24, at the John Wood Community College Ag Center at the Orr Farm. Kevin Rund, Illinois Farm Bureau senior director of local government, will be the speaker. Call the Farm Bureau office at 217-222-7305 for reservations or more information.

• A Food Check-Out Week celebration will be from 10 a.m. to 1 p.m. Thursday, Feb. 23, at the Quincy County Market. Register for giveaways at the booth.

UREAU — Farm Bureau will sponsor an informational meeting at 2 p.m. Wednesday at the Farm Bureau office for the Sept. 22-28 trip to the Black Hills Buffalo Roundup. Call the Farm Bureau office for more information.

• The Bureau County Farm Bureau Foundation will have scholarships available to students majoring in agriculture. Students must be Bureau County Farm Bureau members or dependents of a Bureau County Farm Bureau member and pursuing a degree in an agricultural-related field of study.

Applications are due by 4 p.m. Friday, Feb. 24, to the Farm Bureau office.

ALHOUN — Farm Bureau will sponsor an “On the Road” seminar at 10 a.m.

Friday, March 9, at the Extension Building, Hardin. Call the Farm Bureau office at 618-576-2233 by Thursday, March 1, for reservations or more information.

ARROLL — The Women’s Committee will sponsor a blood drive from 11 a.m. to 5 p.m. Monday, Feb. 20, at the Naaman Diehl auditorium. Call the Farm Bureau office at 815-2443001 for an appointment. Walkins are welcome.

OOK — The Commodities/Marketing Team will sponsor a grant program designed to provide community gardens with items such as plants, seeds, compost, and fencing. Four $300 Cookfresh grants are available.

Deadline to return applications is Tuesday, Feb. 28. Call the Farm Bureau office at 708-354-3276 for more information.

• Cook County Farm Bureau scholarship applications are available. Deadline to return applications is March 9. Call the Farm Bureau office at 708-354-3276 or go online at {www.cookcfb.org} for more information.

EWITT — Prime Timers will sponsor a trip Thursday, March 22, to see “The Foreigner” at the Conklin Barn 2 Dinner Theatre, Goodfield. Cost is $32. Members will carpool from the Farm Bureau office at 5:15 p.m. Deadline for reservations and payment is Friday, Feb. 24. Call the Farm Bureau office for more information.

• Farm Bureau and Warner Library will sponsor a “Meet the Candidate” night for county board candidates at 6:30 p.m. Monday, Feb. 27, for Districts A and B; and at 6:30 p.m. Tuesday, Feb. 28, for Districts C and D. The events will be at the Revere Room, Warner Library, Clinton.

• Farm Bureau Foundation Scholarship applications are available at all DeWitt County schools and at the Farm Bureau office.

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DGAR — Larry Acker, 3F Forecasts, will be the speaker at a Farm Bureau-sponsored meeting at 10 a.m. Wednesday at the Farm Bureau office.

Lunch will be served. Call the Farm Bureau office at 217-4648511 for reservations or more information.

• The East-Central Illinois Ag Expo will be from 9:30 a.m. to 2 p.m. Thursday at Richard’s Farm, Casey. A WILL Radio market panel and various speakers will be the highlights. Lunch will be served. Cost is $6. Call the University of Illinois Extension office at 217-465-8585 for reservations or more information.

ORD-IROQUOIS — A crop insurance informational meeting will be at 7 p.m.

Tuesday, Feb. 21, at the Farm Bureau office. Doug Yoder, Illinois Farm Bureau senior director of affiliate and risk management, will be the speaker. Call the Farm Bureau office for more information.

• Viewpoint breakfast meetings will be held at 7 a.m. at the following dates and places: Tuesday, Feb. 28, Happy Days Diner, Roberts; and Tuesday, March 6, at Annabelle’s Diner, Gilman. Call the Farm Bureau office for more information.

RUNDY — Two free workshops for elementary and middle school teachers in Grundy and Will counties will be at the Joliet Junior College Weitendorf Ag Education Center, Joliet.

The workshops will educate teachers how agriculture can be incorporated into classroom instruction. The first will be from 8:30 to 11 a.m. Saturday. A continental breakfast will be served. The second will be from 4:30 to 7 p.m.

Thursday, Feb. 23, with a light meal being served. Teachers will receive continuing professional development units, classroom books, and curriculum kits. Register by e-mail to Luke Allen, Facilitating Coordination in Agricultural Education Northern Region program adviser, at lallen@agriculturaleducation.org. Call Luke at 815280-6904 for more information.

ACKSON — An AARP driver safety course will be from 1 to 5 p.m. Monday and Tuesday, Feb. 27-28, at the Farm Bureau office. Call Bob Tyson, AARP instructor, at 684-5643 for reservations or more information.

AARP membership is not required.

ANE — Northeastern County Farm Bureaus will visit local legislators’ offices Friday with boxed lunches in recognition of Food Check-Out Week. Facts about Illinois and U.S. agriculture, along with a booklet containing Farm Bureau policy resolutions, will be given to the legislators.

• Farm Bureau will sponsor its annual Food Check-Out Challenge at 10:30 a.m. Monday, Feb. 20, at the Jewel-Osco, Batavia. State Sen. Christine Johnson (RShabonna) and state Rep. Bob Pritchard (R-Hinckley) will compete in a shopping spree. The food will be purchased by Farm Bureau and donated to two local food pantries chosen by the legislators. The public may attend.

ASALLE — Farm Bureau will sponsor a stroke detec-

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tion screening program from 9 a.m. to 4 p.m. Tuesday, March 13, at the Farm Bureau office. Farm Bureau members will save $35 on the cost of the screenings. Call 877-732-8258 for an appointment or more information.

• LaSalle County Farm Bureau Foundation has two $1,000 scholarships available. One will be awarded to a high school senior who will enroll in an ag-related field of study. The other will be awarded to a student currently enrolled in an ag-related field of study. The application is available on the website {www.lasallecfb.org}, or call the Farm Bureau office at 815-433-0371 for more information.

EE — The Governmental Affairs Committee will sponsor a “Meet the Candidates” night at 7 p.m. Tuesday, Feb. 28, at the Paw Paw Community Building. Candidates for District 2 county Board, state’s attorney, and circuit clerk will attend, as well as candidates for representatives in the Ill. House 90th District and 16th Congressional District.

• Deadline to return membership dues is March 1. If you did not receive your dues notice, call the Farm Bureau office at 8573531.

ONROE — The annual meeting will be at 6 p.m.

Saturday, Feb. 25, at St. Mary’s Parish Center, Valmeyer. Dinner will be served following the silent auction. The Band Room Brass will provide the entertainment.

Tickets are $10, and the deadline to purchase them is Wednesday.

ONTGOMERY — The Prime Timers will meet at noon Wednesday at the Lion’s Club, Hillsboro. A fried chicken dinner will be served for $8. Ken Cripe, president of Fayette County Farm Bureau and owner of Cripe Elevator, will present a program on his recent market study tour to South America. Call the Farm Bureau office at 217-53426171 for reservations or more information.

• Farm Bureau will host an open house from 1 to 3 p.m.

Monday, Feb. 27, for retiring Country Financial agent Dennis Krueger, at the Farm Bureau office. He will retire with more than 30 years of service.

• Montgomery County Farm Bureau Foundation will award six $1,500 scholarships to Montgomery County Farm Bureau members or dependents of a member who are pursuing an agricultural-related field of study.

Deadline to return applications is noon Monday, March 12. Visit the website {www.montgomerycountyfb.com} for more information or an application.

EORIA — Food CheckOut Week will be celebrated from 10 a.m. to 1 p.m. Thursday, Feb. 23, at the Peoria Kroger’s store on Sterling Avenue. Customers may “spin the wheel” game to learn about agriculture and win Kroger gift cards.

• A stroke detection health screening will be Monday, Feb. 27, at the Farm Bureau auditorium.

Cost for four screenings is $100.

Call 877-732-8258 for reservations or more information.

ERRY — Farm Bureau will sponsor a bus trip

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Thursday to the Farm Machinery Show, Louisville, Ky. Cost is $55, which includes breakfast, snacks, dinner, and bus. The bus will depart from the Farm Bureau office at 5:30 a.m. Call the Farm Bureau office at 618-357-9355 for reservations or more information.

• The Marketing Committee will sponsor a market outlook meeting at 6 p.m. Wednesday, Feb. 22, at the Farm Bureau office.

Dinner will be served. Dale Durchholz, AgriVisor Services, will be the speaker. Call the Farm Bureau office at 618-357-9355 for reservations or more information.

• Foundation scholarship applications are available at the Farm Bureau office. Deadline to return applications to the Farm Bureau office is March 31. Call the Farm Bureau office at 618-357-9355 for more information IKE — Farm Bureau and the Pike County Chamber of Commerce will sponsor a “Meet the State’s Attorney Candidates” forum at 6:30 p.m. Thursday at the Farm Bureau office, Pittsfield. Featured will be three Democrat party candidates. The forum is open to the public.

OCK ISLAND — A market outlook meeting will be at 6:15 p.m. Wednesday, March 7, at the Moline Viking Club.

Mike Schaver, Gold Star FS grain merchandiser, will provide an update. Mike McClellan, Mobile Weather Team Inc., a Washington, Ill.-based company specializing in on-site weather forecasting and long-range ag weather forecasting, will be the speaker. Cost is $20 if pre-registered or $30 for walk-ins.

Call the Farm Bureau office at 309-736-7432 or the Henry County Farm Bureau office at 309-9372411 for reservations or more information.

• The Rock Island County plat books will be available Feb. 20 at the Farm Bureau office. Cost is $20. Non-member cost is $30.

• The Women in Agriculture conference will be from 9 a.m. to 3 p.m. Friday, March 23, at the iWireless Center, Moline. Michele Payn Knoper, {CauseMatters.com}, will be the speaker. There will be several breakout sessions and speakers.

Cost is $50, which includes breakfast and a luncheon buffet. Cost is $60 for reservations by March 1.

Walk-in price will be $75. Call the Farm Bureau office at 309-7367432 for reservations or more information.

TARK — An informational meeting for the Sept. 22-28 trip to the Black Hills area will be at 10 a.m. Wednesday at the Farm Bureau office. Tours will include Badlands National Park, Deadwood, Mount Rushmore, and the Buffalo Stampede and Roundup.

Call the Farm Bureau office at 309-286-7481 for more information.

• An informational meeting on a 2013 trip to New Zealand and Australia will be at 6 p.m. Thursday, March 29, at the Farm Bureau office. Call the Farm Bureau office for more information.

TEPHENSON — The “Stephenson Scenes 2012” photo contest is inviting participants to capture images of life in Stephenson County. Cash prizes will be awarded to the 12 finalists

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and top three entrants determined by public voting. Details are available at the Farm Bureau office or on the website {www.stephensoncfb.org}.

• Stephenson County Farm Bureau Foundation scholarship applications are being accepted for five $500 graduating high school senior ag study grants, along with 16 $500 scholarships for ag studies, general studies, and non-traditional students for those with at least 30 college credits earned. Applications are available at the Farm Bureau office or on the website {www.stephensoncfb.org}.

• Applications for the Stephenson County Farm Bureau summer program assistant position from June 1 through mid-August are being accepted. A student with at least one year of college may apply.

Complete information is available on the website {www.stephensoncfb.org}.

ERMILION — Farm Bureau and Country Financial will sponsor two estate planning information meetings Thursday, Feb. 23. Look in this week’s FarmWeek for an insert highlighting the details of the meetings.

Deadline for reservations is Friday.

• Farm Bureau and County Market will celebrate Food Check-Out Week Feb. 19-25 by collecting groceries for area food pantries. Collection points will be the Danville County Market stores and the Farm Bureau office. Farm Bureau members will bag groceries at the stores from 1 to 3 p.m. Friday, Feb. 24.

• The Young Leader Committee will sponsor a fun night for members and potential members Saturday, Feb. 25, at Jupiter’s, Champaign. Call the Farm Bureau office at 217-442-8713 for reservations and details.

ASHINGTON — Farm Bureau will sponsor a bus trip Thursday to the Farm Machinery Show, Louisville, Ky. Cost is $55, which includes breakfast, snacks, dinner, and bus. The bus will leave the Farm Bureau office at 6 a.m. Call the Farm Bureau office at 618-327-3081 for reservations or more information.

• The Marketing Committee will sponsor a market outlook meeting at 8 a.m. Wednesday, Feb. 22, at the Little Nashville Restaurant. Breakfast will be served. Dale Durchholz, AgriVisor Services, will be the speaker. Call the Farm Bureau office at 618-327-3081 for reservations or more information.

• Foundation, General and Upperclassman, and Agriculture Future of America scholarship applications are available at the Farm Bureau office. Deadline to return applications to the Farm Bureau office is March 31.

OODFORD — Farm Bureau will sponsor a “Meet the Candidates” night at 6:30 p.m. Tuesday, Feb. 21, at the Cerf Center, Eureka College campus. All candidates have been invited, but only candidates for state offices will speak. Call the Farm Bureau office for more information.

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

FarmWeek Page 10 Monday, February 13, 2012

profitability

Corn could replace wheat acres Evolution, revolution influence oil market

BY JACKIE MCKINNIS

BY DANIEL GRANT FarmWeek

Farmers in Illinois last fall seeded 660,000 wheat acres compared to 800,000 a year ago. Most of the acreage is in Southern Illinois.

And Louis Aldag, a farm consultant and owner of Aldag and Associates in Mt. Vernon, believes he knows the reason for a decline in wheat acres despite an adequate window to plant last fall.

“I think there will be more corn if the weather lets us,” said Aldag, who last week was a featured speaker at the Winter Wheat Forum in Mt. Vernon hosted by the Illinois Wheat Association.

University of Illinois projections suggest corn-after-soybeans currently offer the best operator and land return ($578 per acre in Central Illinois) followed by corn after-corn ($510) and soybeans after two years of corn ($425).

“For 2012, the most profitable crop appears to be corn following soybeans,” Aldag said.

In fact, research suggests corn has been the most profitable crop in the state five of the past 10 years. For two years beans were the most profitable crop and for three years a double crop of wheat and beans was most profitable.

A recent survey of 24 market analysts conducted by Reuters news service projected U.S. farmers this spring will plant 94.2 million acres of corn, which would produce a record crop of 13.8 billion bushels based on a trend-line yield of 161 bushels per acre.

The survey also projected U.S. farmers this spring will plant 75.3 million acres of soybeans, which would be up slightly from last year.

Long-term, however, the wheat-soybean rotation may be more competitive compared to corn — if prices moderate.

This year, the U of I projected corn prices will average $5.40 per bushel, but long-term prices are projected to average $4.50 for corn, $5.50 for wheat, and $10.50 for beans.

“Wheat acres dropped off (to a record-low 330,000 in 2009/10) and have come back a bit,” Aldag said. “A lot of it depends on planting weather and price expectations.”

The majority of the wheat crop in the state (75 percent) was rated in good to excellent condition through the end of January. Twenty-two percent was fair, and just 3 percent was poor.

M A R K E T FA C T S Feeder pig prices reported to USDA* Weight 10 lbs.

40 lbs.

50 lbs.

Receipts

Range Per Head $33.35-$61.00 n/a no longer reported This Week 112,894 *Eastern Corn Belt prices picked up at seller’s farm

Weighted Ave. Price $44.20 n/a

by USDA Last Week 102,737

Eastern Corn Belt direct hogs (plant delivered) Carcass Live

(Prices $ per hundredweight) This week Prev. week n/a $80.81 n/a $59.80

Change n/a n/a

USDA five-state area slaughter cattle price Steers Heifers

(Thursday’s price) (Thursday’s price) Prev. week Change This week 123.00 124.00 -1.00 123.00 124.00 -1.00

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 $153.73 153.62 0.11

Lamb prices Slaughter Prices - Negotiated, Live, wooled and shorn 120-160 lbs. for 149.93-171.10 $/cwt. (wtd. ave. 154.86); dressed, no sales reported.

Export inspections (Million bushels) Week ending Soybeans Wheat Corn 02-02-12 37.3 14.5 39.4 01-26-12 41.8 18.8 22.8 Last year 44.5 30.6 29.2 Season total 755.6 671.4 710.6 Previous season total 1023.9 786.8 712.1 USDA projected total 1275 975 1700 Crop marketing year began June 1 for wheat and Sept. 1 for corn and soybeans.

You likely have noticed an evolution in the oil market over the past five years.

We’ve seen dramatic swings in price, inventories, and demand.

Domestic production is up; oil Jackie McKinnis imports into the U.S. are down.

In 2011, the U.S. became an exporter of petroleum products for the first time since 1949!

Remember the peak oil theory — that point in time when maximum petroleum extraction is reached, and then production enters a terminal decline? In 2007, pessimists said that most global oilfields already had passed their prime production rate, and we were fast running out of oil.

Well, the peak theorists were partially correct. We ran out of cheap oil.

By 2008, prices started rising dramatically, China’s oil use was escalating along with that of other emerging countries, and the world was requiring a lot more oil.

Along with the rise in oil prices came the ability to utilize expensive technology.

Hydraulic fracturing (fracking) in conjunction with horizontal drilling made a huge differ-

ence in our ability to recover oil that had once been unrecoverable.

Suddenly, new vistas opened up to the world: heavy oil in Venezuela, oil sands in Canada, oil shale in North Dakota and elsewhere. Reaching oil deposits in deep water also became a reality.

High oil prices made a lot of things possible which had previously been economically infeasible.

Then the recession hit.

Prices fell dramatically, oil inventories grew, and demand tanked. Massive global debt was revealed, and developed countries still are experiencing no demand or negative oil demand.

Meanwhile, in what we traditionally think of as the oilproducing area of the world, uprisings and revolutions are spreading. It has been a year since the “Arab Spring” began

with protests in North Africa and the Middle East.

Leaders were toppled, a civil war ensued in Libya, oil infrastructure was destroyed, and many protestors lost their lives.

At the core of the protests are high prices for food and fuel, coupled with high unemployment in countries that depend upon the oil industry for huge portions of their GDP. The oil market is lately captive to two opposing forces: fear of supply disruption (largely stoked by Iran) and economic weakness/lack of oil demand from developed nations.

But we know it won’t sit range-bound for too long — that is just not the nature of the oil market!

Jackie McKinnis is a GROWMARK energy analyst. Her e-mail address is jmckinnis@growmark.com.

Global appetite for meat projected to grow

year imported 13 out of every 100 hogs raised The export market should continue to proin the U.S. vide key support for U.S. livestock prices this And that number could grow as China deals year and beyond, according to Brett Stuart, marwith a growing human population with more ket analyst with Global AgriTrends. income while Japan and South Korea deal with Stuart at the recent Illinois Pork Expo in Peoria projected U.S. meat exports this year will shrinking swine herds.

South Korea last year culled about one-third increase 10.7 percent for beef, 2.9 percent for of its swine herd due to an outbreak of footbroilers, and 2.4 percent for pork. and-mouth disease. Some of the “Global demand is very South Korean farmers who were strong right now,” he said. bought out of business likely Domestic meat and livestock ‘ We ’r e a c t u a l l y won’t return, according to Stuart. prices have risen to historic Disease issues, particularly highs, but Stuart claimed the reducing risk by foot-and-mouth and PRRS U.S. still is one of the most effigetting pork going (Porcine Reproductive and Rescient and low-cost producers on to as many mar- piratory Syndrome) have the planet.

And the value of the dollar, kets as possible.’ plagued Chinese pork producers at a time of explosive growth in which has risen in recent weeks, demand. still is supportive to exports.

“Unless something major “What that (higher meat — Brett Stuart changes, they’re going to have prices) is telling us is consumption Analyst with Global AgriTrends high (pork) prices (in China) and is outpacing production,” Stuart we’re going to ship lots and lots said. “The market-driven message of pork there,” Stuart said. is we need to produce more.”

Last year, China imported $3.9 billion worth Stuart reported hog carcass prices in Decemof pork. ber averaged $74 per hundredweight in Canada Elsewhere, roughly half of (Japan’s) pork is and $78 in the U.S. but elsewhere the hog carcass price averaged $90 in Spain, $166 in China, imported,” the analyst said. “That’s why we’ll continue to grow that market.” and $177 per hundredweight in Russia.

Stuart said he is not concerned about the “North America is the most efficient (pork) producer on the planet,” the analyst said. “Rus- idea that U.S. pork producers are becoming too reliant on the export market. sia is trying to become self sufficient. The “We’re actually reducing risk by getting pork problem is consumption is increasing at the going to as many markets as possible,” Stuart said. same rate as production.”

The U.S. last year exported 23 percent of its Stuart predicted growth in U.S. pork exports will be the greatest in Asia. China and Japan last pork production. — Daniel Grant

Page 11 Monday, February 13, 2012 FarmWeek

PROFITABILITY Corn Strategy

CASH STRATEGIST

Wheat remains a drag on corn market As much as corn traders want to ignore it, wheat remains a drag on corn prices, and could become an increasingly stronger one this spring. One inescapable reality regarding wheat is that its growing season and harvest come before corn, not only here, but in the Northern Hemisphere as a whole, and it becomes increasingly important in the spring as a result.

USDA didn’t do the corn market any favors last week with the upward revision of world wheat ending stocks. The world stocks-to-use ratio is slightly larger than it was at the end of the 2009/2010 marketing year when wheat prices bottomed at $4.26 on nearby futures. It took the “drought of the century” in the Black Sea area to trim output enough and change psychology to pull wheat out of its slump.

If we look at the fundamental structure outside of the U.S. and China, wheat supplies are closing in on the burdensome levels that persisted in the middle 1980s and the late 1990s.

Clearly, if wheat price prospects are going to improve, it’s going to take a significant problem somewhere in the world.

Other than the Ukrainian difficulties, there aren’t many issues with the new wheat crop.

Recent cold has cut into potential Ukraine output, but farmers there still are expecting to export 6 million metric tons (mmt), down slightly from the 7-8 mmt they should ship this year, and that’s even with repercussions of the recent cold wave.

There was some winterkill in Russia, parts of Europe, and Eastern Europe, but it doesn’t appear to be unusually large.

And we’ve heard nary a peep about China’s crop. Even if

the Chinese have an issue, the government is thought to hold a reserve equivalent to about half a crop.

Which brings us around to the U.S. Even though conditions were extremely poor when the crop was planted, they have markedly improved. Soil moisture is at a small surplus for about two-thirds of Kansas, with the rest being near normal.

About one-third of Oklahoma wheat areas have normal moisture, with the rest just below normal. Texas has the poorest moisture. The condition of the crop in Kansas is significantly better than last year, while the Oklahoma and Texas crops are better than a year ago.

Unless something unexpected comes along to impact production, the large old-crop supplies and a better new crop cannot support wheat prices at current levels. While futures may not drop near $4 as they did in 2010, one could see prices drop below $5.50.

Unless corn prices drop as fast, that would pull new-crop hard red winter wheat into the cattle feed bunk in the Great Plains during the summer quarter. That’s traditionally the time when the bulk of the wheat is fed in the U.S. This past year, we fed 198 million bushels of wheat in the summer quarter. That was unusually light given the price relationship, but we didn’t have the abundant supply of hard red winter wheat in the Great Plains to feed last summer.

If the crop is reasonably good this year, summer wheat feeding could be 100-125 million bushels more than last year, displacing that much old-crop corn out of the feed bunk.

And instead of having an 801-million-bushel carryout, it could easily be above 900 million. That’s not tight enough to sustain current prices, especially if corn plantings are large.

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Cents per bu.

ü2011 crop: Recent action suggests the trend for the sixto seven-week cycle could be turning down. Sales should have been pushed up another 10 percent when March futures dropped below $6.33.

Use rallies above $6.35 to make catch-up sales. ü2012 crop: New-crop sales recently were increased to 30 percent. If you didn’t pull the trigger, use rallies above $5.65 on December futures to make catch-up sales. vFundamentals: Persistent slippage in wheat prices has capped the ability of corn prices to rally. The trade had been looking to the February USDA report to offer a reason for prices to go higher in the short term; that was not the case. New corn estimates, for the U.S. and the world were not a shock. But USDA’s Brazilian counterpart, CONAB, projected a 60.8-million metric ton (mmt) crop (2.37 billion bushels), larger than many expected. And USDA raised its estimates for world wheat supplies, helping keep wheat a viable substitute to corn in the feed bunk.

Soybean Strategy

ü2011 crop: The lack of rain in southern Brazil is keeping prices firm, and may continue to do so until moisture relief comes. Still, leave an order to price another 10 percent if May reaches $12.50.

Use rallies for catch-up sales. ü2012 crop: November soybeans hit our target to price another 10 percent at $12.45 last week. If you didn’t make the sale, use a rally to $12.35 to get caught up. vFundamentals: The new USDA supply/demand report didn’t have any shocking details.

The 1 mmt (36.7 million bushels) reduction in the Chinese soybean imports to 55.5 mmt may have been the most significant. It underscored the absence of Chinese buying since China’s winter holiday. CONAB, Brazil’s USDA counterpart, surprised the trade with a 69.2 mmt crop estimate, one nearly 3 mmt below USDA’s. And southern Brazil weather remains dry. ûFail-safe: If March futures fall below $12, make

the 10 percent old-crop sale we are recommending.

Wheat Strategy

ü2011 crop: The minor trend on Chicago March futures has turned lower. With the cold wave in Europe behind us and a bearish world stocks number, price action likely will remain defensive. If you failed to pull the trigger and wrap up old-crop sales, use a rally back to $6.41 on Chicago March to get it done.

The carry in futures still pays for commercial storage, making spring hedge-to-arrive contracts the best tool. ü2012 crop: We recently pushed new-crop sales up to 35

percent complete. If you need to make catch up sales, use rallies to $6.69 on Chicago July futures. vFundamentals: The cold weather that dominated Russia, Ukraine, and other Eastern European countries appears to have passed, removing psychological support for prices. The numbers in the USDA supply/demand report were neutral to slightly negative.

Domestic stocks were lowered to 845 million bushels, world wheat supplies were increased to 213.10 mmt. Still, demand for U.S. wheat is showing signs of improvement with our prices finally becoming competitive.

FarmWeek Page 12 Monday, February 13, 2012

perspectives

Weather extremes of 2011 were plentiful The year 2011 was wetter and warmer than normal for Illinois.

It also was a year of extreme monthly temperatures and precipitation.

The statewide average precipitation for 2011 in Illinois was 45.6 inches, 5.4 inches above the 1981-2010 average of 40.2 inches. It was the 10th wettest year in Illinois.

It was also the wettest April, eighth wettest June, and sixth wettest November on record. On the JIM other hand, it ANGEL was the sixth driest August and 21st driest October on record.

The statewide average temperature for 2011 in Illinois was 53 degrees, 0.8 of a degree above the 1981-2010 average of 52.2 degrees. It was the 23rd warmest year on record.

It was also the fourth warmest July, seventh warmest November, and 11th warmest December on record. On the other hand, it was the 17th coldest January and 10th coldest September on record.

The standout features of the

2011 growing season were an extraordinarily wet spring, hot summer, and short but intense drought across Central Illinois.

After a cold, snowy winter, we saw above-normal precipitation in April, May, and June.

April was the wettest month with a statewide average of 7.4 inches, 3.6 inches above normal. The statewide average for May was 5.2 inches, 0.6 of an inch above normal. This was followed by June with 6.5 inches, 2.3 inches above normal.

The heaviest rains occurred in Southern Illinois from Carbondale southward. Threemonth totals of 20 to 30 inches were common throughout this region. The wet spring caused significant flooding in Southern Illinois and planting delays throughout much of the state.

The wet spring across Illinois was attributed to a strong La Niña event. La Niña events occur when the wind patterns and ocean currents change in the Pacific to allow cold water to upwell along the Equator off the coast of South America.

Over the U.S., it gives us a very active storm pattern along the Ohio River Valley.

While the above-normal rains continued in the northern and

At the same time, higher than normal temperatures and humidity were felt throughout the state. The state average temperature was 4.6 degrees above normal. Many locations around the state reported highs of more than 100 degrees for the first time in many years.

Even though we had abovenormal soil moisture at the beginning of July, the combination of hot, dry conditions across Central Illinois set the stage for a “flash” drought by

Our winter has raised an interesting question about the Japanese beetle. Would a hard winter or a mild one have any effect on the Japanese beetle population? What exactly can Mother Nature do to deter the pest?

You might remember that Japanese beetles accidentally were introduced into New Jersey in 1916. By the early 1970s, they had spread across the eastern MATT half of the MONTGOMERY United States.

In the late 1980s, they typically were isolated to urban and metropolitan areas in Illinois. One theory is the beetles accidentally were spread along with ornamental plant material — thus their initial “urban” habitat.

In the late 1990s, the pest began to move from urban pockets, and by the turn of the century some Illinois farmers were experiencing heart-stopping infestations.

Farmers began to notice Japanese beetle grubs in their fields during the spring while elm trees and fruit trees were completely defoliated each July.

By 2009, the beetles had begun to move into Central Illinois. University of Illinois Extension encouraged vigorous and comprehensive scouting to determine if the pest actually needed to be managed.

So what about winter weather extremes? Could that knock the pest down? The answer is: probably not, in most cases.

Remember Japanese beetles are present now in the soil as grubs. Once beetles begin to appear during the latter part of June/early part of July, they begin to mate.

The resulting eggs are about 1/16 of an inch wide. A grub roughly the same size emerges from that egg in about 10 to 20 days, depending upon the soil temperature.

This first-stage grub feeds for about two to four weeks.

The second instar follows and feeds for another two to three weeks. The final instar, called the “third instar,” migrates in the soil feeding on whatever root material it can find until September or October when soil temperatures begin to drop below 60 degrees.

At this point, the grub migrates down in the soil profile. It typically migrates to the bottom of the root zone (about seven inches deep), but

it can migrate much deeper. At 50 degrees, their activity stops entirely. As spring soil temperatures creep back to 60 degrees, these larvae migrate into shallower regions of the root zone.

It is the grubs’ feature of going deep for the winter that tends to save Japanese beetle grubs. The ground typically will not freeze deep enough to decimate the grub population.

What can Mother Nature do? Temperatures may not impact the pest, but moisture (or lack of it) does. Torrential rains will not deter them, but a drought can. Shutting off the rainfall can significantly reduce grub counts if the “spigot” is turned off early.

Japanese beetle eggs and first instar grubs are very susceptible to desiccation.

This means a dry July and August (the period when eggs and young grubs are most prevalent) can decrease grub survival, which decreases adult beetle pressure the following season.

Extension typically does not recommend managing grubs with insecticide with the intent of indirectly managing adult beetles. We steer people toward control of adults because grubs are usually eliminated from small areas rather

southern third of the state in July, Central Illinois started to dry out. Rain totals between Interstates 70 and 80 were typically 25 to 75 percent of normal.

gled with drought, the northern third of the state had close to normal precipitation in August.

Widespread rains returned in September, which was probably too late for corn but may have helped soybeans.

Mild temperatures and generally dry conditions around the state in September and October were more favorable for corn and soybeans in maturing, dry down, and harvest.

Finally, after harvest, the year ended with above normal temperatures and precipitation in November and December.

November precipitation was 5.1 inches — 1.7 inches above normal. December precipitaFarmWeek file photo tion was 3.5 inches, 0.7 of an inch above normal. These wetpeaked, leading to the rapid ter conditions at a time when decline of crop conditions in a demands on soil moisture were matter of weeks. low meant that soil moisture One of the hardest hit areas quickly returned to fully was around Decatur. After getrecharged levels across the state. ting 14.7 inches of rain in May Illinois weather always is and June combined, that area interesting, and the mild winter reported just 0.84 of an inch in with little snowfall already has July and 0.15 of an inch in given us something to talk about August for a combined total just for 2012. less than an inch. By the Farm Progress Show in late August, Jim Angel is the state climatologist the fields around the site were with the Illinois State Water Survey dry and dusty. at the University of Illinois. His eWhile Central Illinois strugmail address is jimangel@illinois.edu. the end of July and into August.

Most droughts are slow moving and take months to develop.

However, this one occurred in the heart of the growing season when demands on soil moisture

What can mother nature do about Japanese beetles? than large geographic regions.

Untreated areas allow grubs to survive, adults emerge from these untreated areas, and adults then repopulate grub-treated fields.

Areawide grub management is needed to reduce adult beetle pressure, and Mother Nature can provide that in the form of a drought.

A drought typically covers a much larger geographic area and has the potential to elimi-

nate adult beetle pressure because the grubs throughout a region are decimated.

Unfortunately, crops usually are, too.

Be careful about asking Mother Nature to help with Japanese beetles.

Matt Montgomery, University of Illinois Extension, is a local systems and small farms educator.

His e-mail address is mpmontgo@illinois.edu.

“Talk about a techno-dweeb. Beaker’s now gone wireless.”