FarmWeek February 11 2013.pdf by Illinois Farm Bureau

Farmers haVe an extended deadline for filing taxes this year, but a tax specialist suggests they file as they have in the past. ...........4

hog production costs have eaten into profits in recent years, but a reduction in feed costs is being projected. ........................5

Freshman u.s. rep. Rodney Davis has formed a Mississippi River Valley caucus to address issues along the river. .....................8

Monday, February 11, 2013

Two sections Volume 41, No. 6

Vilsack: Farm bill ‘imperative,’ failure costly BY MARTIN ROSS FarmWeek

Periodicals: Time Valued

Passage of a 2013 farm bill is “imperative” and the potential public cost of congressional failure is extreme, Ag Secretary Tom Vilsack advised last week. Senate Majority Leader Harry Reid’s (D-Nev.) recent reintroduction of the Senate’s 2012 farm bill package signaled farm bill resolution is “a Senate priority,” Vilsack said following his keynote address at last week’s National Ethanol Conference in Las Vegas. Reid’s support reflects Senate Ag Committee Chairman Debbie Stabenow’s (DMich.) efforts in “encouraging her colleagues to understand the importance of a food, farm, and jobs bill,” he maintained. “There’s probably still some work to be done on the bill, because you now have a different ranking (Ag Committee) member in Sen. (Thad) Cochran (R-Miss.),” Vilsack told FarmWeek. “He may have slightly different views on the structures that support farmers, coming from the South and given the crops raised there.

“But I believe he’s interested in working out those differences and getting something done quickly. And I think the House Ag Committee has the same motivation to get something done.” Concerns about high milk prices (should the impasse cause a reversion to 1949 law) reportedly motivated lawmakers to extend 2008 farm bill provisions through September, and Vilsack urged Congress to “figure out something creatively on dairy (policy).” The Senate proposes a new dairy margin protection plan aimed at addressing high feed

FarmWeekNow.com Ag Secretary Tom Vilsack says passage of a 2013 farm bill is imperative. For more details, go to FarmWeekNow.com.

costs and dairy price volatility. However, Vilsack warned a shrinking federal budget baseline for dairy programs will make it difficult to find “that sweet spot where both (House Ag Committee Ranking Democrat) Collin Peterson (D-Minn.) and (House Speaker) John Boehner (R-Ohio) are happy.” Vilsack stressed the economic implications of timely farm bill passage. Across-the-

board budget sequestration (cuts) — slated for March, barring a congressional deficit-reduction compromise — would make it difficult to take savings from direct payment elimination and “plow that into a new (safety net) system,” he said. Further, he noted sequester cuts would force a temporary furlough for USDA food safety personnel and thus a shortterm shutdown of federally inspected meat plants. That

means “billions and billions of dollars’ impact on the market,” Vilsack warned. He advocates a “strong” farm bill energy title as a key component in efforts to “rebuild the rural economy.” Other linchpins in rural recovery include ag production and exports, conservation programs linked to recreation, local and regional food systems, he said. “All that has to be in a farm bill,” Vilsack said.

Quinn delivers tough challenges for lawmakers BY KAY SHIPMAN FarmWeek

Renewable Fuels Association President Bob Dinneen, left, acknowledges Ag Secretary Tom Vilsack’s support for biofuels development at last week’s National Ethanol Conference in Las Vegas. (Photo by Martin Ross)

FarmWeek on the web: FarmWeekNow.com

Gov. Pat Quinn challenged state lawmakers with a lengthy to-do list last week in his State of the State address. Speaking to members of both chambers, the governor urged action on “the toughest of issues” — reforming the state pension system that has a $97-billion unfunded liability, the worst in the nation. “We cannot allow our economic recovery to be held hostage by the pension crisis. We simply must act,” Quinn said. He praised Senate President John Cullerton (D-Chicago) for his legislative proposal and Gov. Pat Quinn House Republican Leader Tom Cross (ROswego) and Rep. Elaine Nekritz (D-Northbrook) for their bipartisan efforts. In addition to pension reform, the state’s chief executive lobbed several other tough issues at the General Assembly. He urged legislators to raise the state’s minimum hourly wage from $8.25 to $10 over the next four years. “Nobody in Illinois should work 40 hours a week and live in poverty,” Quinn said. The governor raised the issue of gun violence and pressed legislators to ban the sale of assault weapons and high-capacity ammunition magazines in the state. “We must abide with the Second Amendment, but there is no place in our state for military-style weapons designed for rapid fire at human targets at close range,” Quinn said. The state would be safer with stronger background checks for firearm owners and required reporting of lost or stolen guns, the governor claimed. He also supported legislation requiring every school to practice safety drills. Looking ahead to the next election, Quinn called for open primaries that would not require voters to publicly declare their party affiliation and for online voter registration. “We must move our election process into the 21st century,” he said. The governor admitted lawmakers will need political courage “to do the right thing.” “With courage, hard is not impossible,” he concluded. Illinois Farm Bureau®on the web: www.ilfb.org

FarmWeek Page 2 Monday, February 11, 2013

Quick Takes BUSTOS BUDGET BILL — East Moline Democrat U.S. Rep. Cheri Bustos has introduced her first bill, one aimed at targeting budgetary waste “while preserving crucial services and programs.” Congress is gearing up for potentially severe spending cuts under a required budget “sequestration” process. Bustos’ bill would create an Independent Government Waste Reduction Board to develop detailed proposals related to 2011 Government Accountability Office (GAO) recommendations. “This represents a good first step toward getting our country back on sound fiscal footing without hurting our middle class,” Bustos said. For example, the federal government has 47 job training programs, 44 of which overlap. She said simply consolidating programs could save tens of billions of dollars while preserving program quality. Bustos’ board would include 15 congressional members, six each picked on a bipartisan basis by the House and Senate BIOTECH REALITIES — Ag Secretary Tom Vilsack has been out on the conference circuit stumping for farm bill passage and biofuels growth. But he also has some strong words for European interests that challenge ag biotechnology. At last week’s National Ethanol Conference, Vilsack argued European Union leaders must be “far more open to this new science.” “They have to understand that there aren’t the risks to (biotech crops and foods) that a lot of people think there are — the science just does not support that,” he told FarmWeek. “We have to embrace these new technologies. Otherwise, the challenge of feeding 8, 9, 10 billion is going to very daunting.” VALENTINE FLOWER PESTS — Valentine flowers may harbor more than sentiments. Each year, ag specialists with the U.S. Customs and Border Protection (CBP) inspect millions of imported cut flowers for pests and diseases. During the Valentine season (Jan. 1 to Feb. 14, 2012), the CBP nationwide processed 842.2 million cut flowers. Most of the shipments came from South America, primarily Colombia. Ag pests and diseases capable of destroying U.S. crops or forests include the Emerald ash borer, the Asian longhorned beetle, citrus canker, and the Khapra beetle. The most common insects intercepted in imported cut flowers are mites, aphids, and moths. Last year, the CBP in Chicago inspected 6.2 million imported flowers.

(ISSN0197-6680) Vol. 41 No. 6

February 11, 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 go toward the production of FarmWeek.

Address subscription and advertising questions to FarmWeek, P.O. Box 2901, Bloomington, IL 61702-2901. Periodicals postage paid at Bloomington, Illinois, and at an additional mailing office. POSTMASTER: Send change of address notices on Form 3579 to FarmWeek, P.O. Box 2901, Bloomington, IL 61702-2901. Farm Bureau members should send change of addresses to their local county Farm Bureau. © 2013 Illinois Agricultural Association

STAFF Editor Dave McClelland (dmcclelland@ilfb.org) Legislative Affairs Editor Kay Shipman (kayship@ilfb.org) Agricultural Affairs Editor Martin Ross (mross@ilfb.org) Senior Commodities Editor Daniel Grant (dgrant@ilfb.org) Editorial Assistant 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

STATE

Legislature passes, Quinn signs supplemental spending bill BY KAY SHIPMAN FarmWeek

Gov. Pat Quinn last week signed legislation that allows the state to spend an additional $603 million in general revenue funds and $1.5 billion in other state funds. The House passed the measure on a 63-52 vote, while the Senate voted 38 to 15 in favor of the bill. Included in the measure was an additional $675 million for road construction projects in anticipation of the state receiving new federal funds, according to Kevin Semlow, Illinois Farm Bureau director of state legislation. “This important measure

will allow us to begin construction projects this spring, putting Illinois workers back on the job repairing bridges and improving roads,” the governor said. Quinn noted the bill also restored funding to the Department of Children and Family Services for child-welfare services. The funding will “protect the most vulnerable among us,” he added. In other action, the Senate Executive Committee forwarded same-sex marriage legislation to the full Senate after lengthy debate. IFB opposes SB 10. The bill may be called for a vote on the Senate floor this week.

Pratt, chef take NYC media tour Illinois’ national agriculture spokesman, Katie Pratt of Dixon, discussed food and ag terminology Friday during media interviews in New York City (NYC). One of four Faces of Katie Pratt Farming and Ranching with the U.S. Farmers & Ranchers Alliance, Pratt was

joined by the Food Network’s Chef Danny Boome. This marked Pratt’s first experience with media interviews conducted via satellite, she told FarmWeek. Pratt and Boome sought to demystify such food terms as organic, grass-fed, and naturally raised. Since being named a national spokesman, Pratt said she has been interviewed by many Midwest-based reporters, primarily in her home state.

Pratt and Boome also conducted a series of radio interviews on the USDA Radio Network, It’s Your Health National Network, and KTRS in St. Louis, Mo. As their mother has been greeted and congratulated by many in their community, Ethan 7, and Natalie 5, are realizing their mom has become well known. “Mommy, I think you might be famous,” Natalie recently told her mother. — Kay Shipman

DATEBOOK Feb. 12 IFB Crop Insurance and Trucking Regulations seminar, 8 a.m., Parkland College Tony Noel Center, Champaign. To register go to {ilfb.org/regionalseminars} at least three days prior to the event. For more information, email jharrison@ilfb.org or call 309-557-3207. Feb. 14-15 Rural first responders security training, 8 a.m. to 5 p.m., Workforce Development Center, Normal. Registration deadline Feb. 4. Contact Keith Gehrand at 309-268-8454 or keith.gehrand@heartland.edu. Feb. 15 IFB Crop Insurance and Trucking Regulations seminars, 8 a.m., Danville Area Community College, Danville, and 1 p.m., Evergreen FS, Bloomington. To register go to {ilfb.org/regionalseminars} at least three days prior to the event. For more information, email jharrison@ilfb.org or call 309-557-3207. Feb. 20-21 Illinois Farm Bureau Governmental Affairs Leadership Conference, Crowne Plaza Hotel, Springfield. Feb. 25 IFB Crop Insurance and Truck Regulations seminars, 8 a.m., Lincoln Land Community College’s Trutter Center, Springfield, and Madison

County Farm Bureau, 1 p.m., Edwardsville. To register go to {ilfb.org/regionalseminars} at least three days prior to the event. For more information, email jharrison@ilfb.org or call 309-557-3207. Feb. 26 IFB Crop Insurance and Truck Regulations seminars, 8 a.m., John A. Logan Community College’s H 127 and 128, Carterville, and 1 p.m., First Christian Church, Salem. To register go to {ilfb.org/regionalseminars} at least three days prior to the event. For more information, email jharrison@ilfb.org or call 309-5573207. Feb 26 Meet the Buyers event 9 a.m. to 5 p.m., Heartland Community College, Normal. Registration deadline is Feb. 22. Call McLean County Farm Bureau at 309-663-6497 to register. Feb. 27 IFB Crop Insurance and Truck Regulations seminars, 8 a.m., The Holiday Hotel, Olney, and 1 p.m., Lake Land Community College’s West Building, Mattoon. To register go to {ilfb.org/regionalseminars} at least three days prior to the event. For more information, email jharrison@ilfb.org or call 309-557-3207.

Page 3 Monday, February 11, 2013 FarmWeek

energy

Ethanol industry facing key challenges, ‘fighting back’ BY MARTIN ROSS FarmWeek

Last week in Las Vegas, Renewable Fuels Association (RFA) President Bob Dinneen summed up the state of the ethanol sector in five words: “under siege but fighting back.” He led National Ethanol Conference participants in a mantra of “Don’t mess with the RFS,” and fired salvos at the petroleum industry’s push to eliminate or revise federal Renewable Fuel Standard (RFS2) biofuels mandates. He argued “American ethanol is engaged in a battle for the barrel,” and called on biofuels advocates to defend RFS2 from oil sector and congressional attacks, promote E15 (15 percent ethanol blends), and fight “protectionist” Brazilian/European Union (EU) biofuels policies.

Drought concerns have “exacerbated” efforts to defend the RFS2, RFA Chairman Neill McInstray, ethanol group president with The Andersons Inc., told FarmWeek.

‘American ethanol is engaged in a battle for the barrel.’ — Bob Dinneen Renewable Fuels Association

Thirty-six of 211 U.S. ethanol plants have temporarily curtailed operations, the industry is operating at rough-

RFS2 debate ‘disruptive’ to biofuels investment? Biofuels interests as well as those from the auto sector and even the petroleum industry last week indicated they doubt Congress would give in to renewed pressure to eliminate the Renewable Fuel Standard (RFS2). But consideration of RFS2 reforms is possible, according to panelists at last week’s National Ethanol Conference. And whatever the tenor or outcome of biofuels policy debate, a major financial analyst said he fears the furor alone could spur anxiety in the investment community. Mark McMinimy, director of Guggenheim Securities, said he sees continued investor interest in the biofuels sector and ag companies that benefit from the “ripple effects” of biofuels growth. But he warned many investors are disconcerted by pressure from “a contingent of influential industries” to alter or eliminate the RFS2. “Institutional investors want to know where the policy’s going,” he told FarmWeek. “In a lot of cases, they’re devoting a large amount of money to companies that have an interest directly or indirectly in the Renewable Fuel Standard. “When these bills come up that want to repeal or substantially alter the RFS2, that leads investors to wonder if they should reassess their strategy. In that sense, it’s very disruptive to the investment process.” American Petroleum Institute (API) Executive Vice President Marty Durbin conceded his group was unlikely to get RFS2 repeal “over the finish line.” John Reese, policy/advocacy manager with Shell Oil Products, admits Shell has “a minority view” relative to API, seeking changes in rather than elimination of the RFS2. “If you look at the math, the (ethanol) blend wall is still a problem” related to meeting long-term RFS2 goals, he said. At the same time, Reese stressed Shell does not support use of E15 (15 percent ethanol blends) — one of the ethanol industry’s key hopes for tapping existing ethanol production capacity and breaching the standard E10 blend wall. Reese deemed EPA approval of E15 “premature,” while Brooke Coleman, executive director of the Advanced Ethanol Council, charged oil interests have consistently impeded efforts to break the ethanol blend wall. The auto industry stood largely on the sidelines during 2012 RFS2 debate: Shane Karr, vice president of federal government affairs with the Alliance of Automobile Manufacturers, reported “we have not picked a side.” Karr finds the prospect of congressional RFS2 elimination “extremely unlikely.” But he told biofuels producers “we’re going to be very engaged this round” in any discussion of RFS2 reform measures. — Martin Ross

ly 85 percent of capacity, and for the first time in 17 years, production in 2012 declined from the previous year. But Dinneen said his industry’s greatest challenge remains “artificially constrained demand fueled by Big Oil’s propaganda.” The American Petroleum Institute (API) “has declared war on the RFS2,” and public misinformation has fueled “a Pavlovian connection between ethanol and food prices,” he said. API Executive Vice President Marty Durbin, a conference guest, insisted “we’re not against renewable fuels, we’re not against ethanol.” “We think this program (RFS2) doesn’t work,” Durbin said. Dinneen defended RFS2 “flexibility” in providing credits that enable fuel blenders to meet requirements during periods of reduced biofuels production. Despite “the worst drought in 56 years,” RFS2 “is working to allow marketers and others to adjust to these current realities,” McInstray said. Dinneen also cited a battle for ethanol market share “from Brussels to Brazil.”

In 2011, the U.S. exported 1.2 billion gallons while importing less than 300 million. Last year, the EU unsuccessfully pursued an anti-subsidy case against the U.S. and Brazil “fixed gasoline prices” and lowered its domestic ethanol blend ratio “to protect its sugar industry.” As a result, exports fell to 700 million gallons and imports rose to nearly 500 million. Dinneen said he sees U.S. interests ultimately prevailing in the EU’s continuing antidumping case against U.S. ethanol. Ag Secretary Tom Vilsack said biofuels growth is crucial to “the survival of rural America.” He said ethanol interests face widespread opposition because “you’re winning . . . and the folks on the other side are a bit concerned.” Vilsack told FarmWeek he remained in “close contact” with the U.S. Trade Representative’s office “to make sure our message is being conveyed” on EU biofuels trade issues. “I expect that at some point in time, I’ll travel to the EU to personally deliver that message,” he said.

ETHANOL NUMBERS

87,292 Direct U.S. jobs attributed to the ethanol industry in 2012

295,969 Indirect ethanol-related jobs

$43.4 billion Ethanol’s 2012 contribution to U.S. gross domestic product

$30.2 billion Nationwide household income attributed to ethanol

465 million Barrels of imported oil displaced by ethanol in 2012, valued at $47.2 billion

$7.9 billion 2012 ethanol-related federal, state, and local tax revenues that helped support local roads, schools, and first responders

Edwardsville facility rebranding

Biofuels center chief seeks farm bill

Timely farm bill passage is crucial to energizing a biofuels sector that is exploring promising feedstocks and technologies but struggling with industry economics and uncertainty. That’s according to John Caupert, director of the National Corn-to-Ethanol Research Center (NCERC), an Edwardsville facility being “rebranded” as the NCERC-Biofuels Research Center to reflect its expanding scope. Caupert said he is buoyed by reintroduction of the Senate’s 2012 farm bill proposal that includes a strong energy title. However, Senate staffers recently told him it was largely “up to the House” to move first on a long-term ag policy package that assures program funding that was absent in the extension of the 2008 farm bill. Midwest farm and biofuels interests “want to see action by Congress,” Caupert told FarmWeek. He deemed it “very fortunate” that Illinois has three members each on House Agriculture and Energy/Commerce committees. The Energy Committee

includes Collinsville Republican John Shimkus, Chicago Democrat Bobby Rush, and Evanston Democrat Jan Schakowsky. The Ag Committee features three freshmen: Taylorville Republican Rodney Davis, East Moline Democrat Cheri Bustos, and Belleville Democrat Bill Enyart. “We’ve been to them early and often,” Caupert related at last week’s National Ethanol Conference. “We’ve talked about the importance of a new, comprehensive five-year farm bill. In particular, we’ve talked about the need for mandatory funding for a (farm bill) energy title. “When extension of the farm bill went through, all that mandatory funding was removed. Funding for things like the (USDA-Department of Energy) Biomass R and D Initiative, where centers such as ours team up with the private sector to commercialize new technologies. What signal does that send to the investor community and to the marketplace?” The Senate farm bill ener-

gy title also includes biomass crop and biorefinery assistance programs aimed at fostering new cellulosic ethanol production. Caupert said he is excited by center efforts to tap corn bran ethanol potential as well as the U.S. Environmental Protection Agency’s new approval of grain sorghum-based ethanol as an environmentally friendly “advanced biofuel,” opening new avenues for development. The center last year invested in a new “fermentation suite” that helps simulate commercial ethanol/biochemical processing. The suite has consistently been “booked up,” Caupert said. However, the center relies on private partnerships for funding, and he said “market uncertainty” has some venture capitalists skittish about biofuels investment. “We’ve had a couple of pretty major projects canceled — not delayed, not rescheduled — because of a lack of funding,” Caupert admitted. — Martin Ross

FarmWeek Page 4 Monday, February 11, 2013

taxes

Tax time: Section 179, insurance twists merit attention BY MARTIN ROSS FarmWeek

Now that Congress has addressed the “fiscal cliff,” Illinois farmers can at least temporarily stop fretting about taxes and prepare for filing. Until Congress finally acted on New Year’s Day to extend a variety of expired Bush- and Obama-era tax measures, farm tax planning was at best a dicey proposition, Illinois Agriculture Auditing Association Small Business Services Director Tom Husek said. Now, farmers who risked investing in 2012 may see even greater tax benefits than had been anticipated.

Under the new American Taxpayer Relief Act, U.S. Tax Code Section 179 has been “enhanced” retroactively for 2012 and extended for 2013, with a $500,000 expense deduction limit and a $2 million limit on eligible annual capital purchases. The 2012 deduction limit originally was $139,000, but farmers now can use the higher limit when filing 2012 taxes. Under Section 179, a business can deduct the full purchase price of new or used financed or leased equipment placed into service in the same tax year for which the deduction is taken. New tax provisions also extend 50 percent bonus

depreciation, enabling producers to write off 50 percent of the cost of a new capital asset in the first year of ownership. “Farm incomes have been substantially up over the last couple of years,” Husek told FarmWeek. “Many farmers are trying to find ways they can shelter some of their income. In many cases, they’ve been buying equipment, being able to take advantage of bonus depreciation or Section 179 expensing. “A lot of people are ready to rock-and-roll, to start this year’s spring off. They’ve got a lot of cash in their pockets; they’ve paid a lot of bills, and a lot of

Despite IRS flexibility, specialist urges timely filing Farmers have added flexibility in filing taxes this spring, but Illinois Agriculture Auditing Association Small Businesses Services Director Tom Husek suggests they consider filing on the same schedule that they have in the past. Given Congress’ 11thhour New Year’s Day tax action, the U.S. Internal Revenue Service (IRS) continues to prepare to process

2012-year tax returns. At the urging of Sen. Chuck Grassley (R-Iowa), the IRS has moved the farmer tax filing deadline from March 1 to April 15 this year. Normally, if producers were required to make quarterly estimated tax payments for 2012 and underpaid estimated taxes, they would not be charged a penalty if gross farming income for 2011 or 2012 was at least

two-thirds of gross income and they file a 2012 tax return and pay tax due by March 1. However, Grassley was concerned IRS might not have the forms farmers needed in order to meet the normal March 1 deadline for filing Form 1040 Schedule Fs. “With the lateness of the tax change laws, and IRS making changes to its processing software, farmers will be allowed to file their returns up to April 15 without having to face estimated tax penalties,” Husek said. “I would still encourage farmers to get their information in and get their taxes done by March 1. It gets around to the first of April, those guys are itching to get out in the field. They still don’t have to pay their bill until April 15.” Estimated taxes are used to pay tax on income that is not subject to withholding, including income from selfemployment, interest, dividends, alimony, rent, gains from the sale of assets, and prizes and awards. In addition, IRS has revised the software necessary to process Form 4562/Depreciation and Amortization — the form in which Section 179 deductions (see accompanying story) are documented. The agency thus was not accepting tax returns including Form 4562s until at least mid- to late February. — Martin Ross

people are looking for places to buy equipment.” Meanwhile, drought-stricken farmers approved for crop insurance payments last fall may be able to defer taxes on those payments until 2013, as long as payments are based on yield or the portion of a revenue policy loss strictly attributable to yield. Payments triggered by price shortfalls are taxed in the year they are received. Eligible growers must

make a deferral election on their farm Schedule F. Deferral of crop revenues must be a normal practice for farmers hoping to defer insurance payments. “If my practice is to always sell my corn in January or to sell it in September out of the field with a January pay under a deferredpricing contract, then those insurance dollars can be deferred until the next tax year,” Husek explained.

Everything on the table?

Tax debate emerging one piece at a time?

House Ways and Means Committee Chairman Dave Camp (R-Mich.) has continued to pledge his committee’s push for comprehensive basic tax reform during the 113th Congress, American Farm Bureau Federation tax policy specialist Pat Wolff reported. Wolff noted Camp already has “dribbled out” several pieces of a plan that could lead to fundamental tax reform. Those include proposals to plug tax loopholes involving use of derivatives or other financial instruments and reducing corporate/personal income tax rates. Under fundamental reform, “everything’s on the table,” including individual rates and Section 179, Wolff told FarmWeek. Further, she cited a “long list” list of recently extended tax provisions that expire in December — Section 179, bonus depreciation, biodiesel and wind power tax incentives — that must be dealt with either through fundamental tax reform or through separate legislation. “I think they could push a comprehensive tax reform bill through the House, but its fate would be very uncertain in the Senate,” she nonetheless said. “Dave Camp’s been beating the drum — ‘Tax reform, tax reform’ — but Senate Finance Committee Chairman (Max) Baucus (D-Mont.) hasn’t issued any statements. Everything’s just more complicated in the Senate.” While some lawmakers have touted efforts to boost tax revenues as a key option in reducing the federal deficit, Wolff said tax discussions and debate about spending cuts under prospective budget “sequestration” appear to be proceeding “on separate tracks.” Ways and Means Committee member Aaron Schock, a Peoria Republican, noted support in the House for a plan to reduce the six current personal income tax rates to two. But while President Obama has supported raising taxes for those above prescribed income levels, Schock told FarmWeek House Republicans have focused instead on trimming deductions and loopholes “to make America more competitive.” He suggested “across-the-board simplification” of the tax code, advocating tax “permanency” rather than the current patchwork of annually or biannually expiring tax measures. Outside a fundamental reform package, Wolff said she was reasonably confident lawmakers will not attempt to further alter estate and capital gains taxes. Illinois Agriculture Auditing Association tax specialist Tom Husek argues existing income tax rates are “probably good for another two years,” while Congress’ recent estate tax fix “is pretty much in place now.” — Martin Ross

Page 5 Monday, February 11, 2013 FarmWeek

LIVESTOCK

Feed prices could ease later this year BY DANIEL GRANT FarmWeek

Profitability in the livestock industry could improve this year based on analysts’ projections last week at the Illinois Pork Expo in Peoria. David Nelson, Rabobank red meat specialist, predicted strong demand and tight meat supplies will translate to high prices for livestock this year. “Six months ago, if you looked at the futures contracts for corn and soybean meal related to hog prices, it was pretty negative,” Nelson said. “But the hog market responded.” Hog prices increased above $90 per hundredweight and crop prices have experienced periods of decline in recent months. Pork producers who locked in prices for hogs and their feed in many cases squeaked out some profit or

at least limited their losses. “This industry is doing a very good job using the futures market for risk management,” Nelson said. Livestock producers could be exposed to less risk this year if crop production rebounds in the U.S. Dan Zwicker, grain origination manager with CGB Enterprises, predicted feed prices could ease by the second half of this year. “I think livestock producers have upside (feed) price vulnerability the next 60 days (leading up to spring planting),” Zwicker said. “Then I think we’ll see some relief of feed prices as we move into summer (particularly if U.S. crops get off to a good start). Sue Martin, market analyst with Ag & Investment Services, said she believes the small-

est U.S. cattle herd since 1952 and decreased ethanol production will free up more corn to use as hog feed. Corn likely will be available from Brazil to feed livestock as well.

“Sugar is cheap (relative to corn), so Brazil likely will process its sugar (for ethanol) and sell corn (on the world market),” Martin said. The world market also will be a key to U.S. livestock prices.

“Demand for meat protein is mature in this country,” Nelson said. “We’ve become much more reliant on exports.” The U.S. currently is competitive on the world market with all animal protein, according to Nelson. Hog prices in China the past two months increased 10 percent. Meanwhile, European pork production is expected to decline 2 to 3 percent this year as hog producers there adjust to the ban on the use of gestation stalls. “That (situation in Europe) could open more export opportunities for us,” said Nelson, who noted U.S. pork exports doubled in the past decade. “(The export market) is one of the most important drivers of pork demand.”

Stein: Options available to reduce feed costs Pork producers don’t have to sacrifice pig performance or thin their herds to reduce input costs. There are a variety of ways farmers can lower feed costs on their operations to help improve the bottom line, according to Hans Stein, University of Illinois swine nutritionist. Stein last week provided hog feeding tips to farmers at the Illinois Pork Expo in Peoria. He recommended farmers focus on the very place pigs consume their food. “Make the effort to go through the entire (feeding)

system to make sure you don’t have waste,” Stein said. “Feeders are the main place (waste occurs). Many are either too old and leak feed or are not well adjusted.” Feed waste on most hog farms ranges anywhere from 2 percent to 12 percent of feed, according to Stein. The feed pan (in feeders) should be no more than 30 to 40 percent covered by feed. “If it exceeds that, research shows it increases feed waste,” he said. Pork producers also can change the physical make-up of feed to improve digestibility

and the feed conversion rate. Pigs derive more energy from finer ground feed, although feed that is ground too fine can cause ulcers in the animals. Pelleting also improves the feed conversion rate by more than 5 percent on average, Stein said. He said heavier pigs typically have lower feed conversion rates, so farmers may want to consider marketing hogs at lower weights. Stein also urged producers to consider using a variety of alternative feed ingredients that can be cheaper and just as effective as corn and soy-

bean meal. “Illinois is special,” he said. “There are many different coproducts available here.” Co-products that can lower swine feed rations include distillers grains, corn gluten, corn germ meal, hominy, bakery meal, and wheat middlings. “Depending on where you’re located, there may be opportunities to use (some of the various co-products) in formulations,” the swine nutritionist said. “You can get some nice savings.” Small grains, such as wheat, barley, oats, and peas,

are less plentiful statewide but can be very attractive feed ingredients at some locations. Stein also recommended farmers and nutritionists monitor the amount of amino acids in swine formulations. The average daily gain flattens out once amino acids reach the optimal level. “Make sure you don’t overformulate the diet,” Stein said. For more feed recommendations and updates on the latest research, visit the website {nutrition.ansci.illinois.edu}. — Daniel Grant

IPPA president optimistic after challenging year Dereke Dunkirk, Morrisonville, said he believes 2013 will be a better year than 2012 for pork producers. Hog farmers last spring were caught off guard when several food retailers and restaurant chains announced long term plans to source pork they purchase Dereke Dunkirk from operations that do not use gestation stalls. The policy change was in response to pressure from animal activist groups. Things got worse last summer and fall as the 2012 drought burned up much of the crops in the state and Midwest and pushed feed prices to new highs.

The sow housing announcements last year “took us by storm and left producers with a lot of questions,” said Dunkirk, who last week was reelected president of the Illinois Pork Producers Association. “And then with the drought, guys were just trying to figure out what to do about sourcing inputs. “Fortunately, pork prices stayed relatively strong as exports continued to grow,” he continued. “That kept it from being a perfect storm of high feed costs and low pork prices.” Illinois pork producers last year managed to keep their herd sizes mostly intact, despite the economic challenges. Hogs and pigs in Illinois as of Dec. 1 totaled 4.6 million head, down 1 percent from the previous year, while the number of breeding hogs increased

2 percent to 490,000. “With huge planting intentions and with trendline yields, it looks like we’ll have a big

pork only from farms that don’t use gestation stalls later clarified the plans are long term. McDonald’s, for

‘Some production systems we have in place we think provide the best care for animals.’ — Dereke Dunkirk President, Illinois Pork Producers Association

supply (of corn and soybeans),” Dunkirk told FarmWeek at the Illinois Pork Expo in Peoria. “That would be encouraging to producers.” Meanwhile, he believes hog farmers should have plenty of time to adjust to any changes in sow housing requirements by food retailers. Many food retailers that announced plans to source

instance, plans by 2022 to source all its pork from farms that don’t use gestation stalls. “That gives us time to figure things out,” Dunkirk said. Pork producers in the meantime are working with food retailers and consumers so they better understand hog production. “Some production systems we have in place we think pro-

vide the best care for animals,” Dunkirk said. Some producers are waiting for more direction from retailers before making changes to their operations while others, who are building or updating facilities, are setting them up to handle gestation stalls or group housing, Dunkirk said. Pork producers at the IPPA annual meeting also called for the continuation of efforts to promote ground pork, proper testing of corn and other feedstuffs to ensure they meet feed quality standards, and increased efforts to promote pork as a valuable protein source for the school lunch program. Other hog farmers elected to key IPPA leadership positions last week are Todd Dail, Erie, president-elect; Curt Zehr, Washington, vice president; and Bob Frase, Fairbury, secretary. — Daniel Grant

FarmWeek Page 6 Monday, February 11, 2013

PRODucTION

Illinois bucks national trend; cattle herd grows BY DANIEL GRANT FarmWeek

The U.S. inventory of cattle and calves as of Jan. 1 totaled just 89.3 million head, down 2 percent from a year ago. It was the lowest Jan. 1 inventory of all cattle and calves nationwide since 88.1 million head were on hand in 1952, USDA reported this month. “The 2012 drought was the

CATTLE NUMBERS

1.12 million The number of cattle and calves in Illinois on Jan. 1, marking the first increase in five years.

89.3 million The number of all cattle and calves in the U.S. on Jan. 1, the smallest herd in the nation in 60 years.

38.5 million The number of cows and heifers that calved in the U.S. as of Jan. 1. This is the lowest Jan. 1 inventory of all cows and heifers that have calved since 1941.

primary driver of the decrease (in cattle numbers) last year as it destroyed pastures and forage supplies and catapulted corn, sorghum, and soybean meal prices,” said Chris Hurt, Purdue University Extension economist. The situation was a little more positive in Illinois, however. USDA reported the inventory of cattle and calves in the Prairie State on Jan. 1 totaled 1.12 million head, up 50,000 head compared to last year. In fact, it was the first increase in the Jan. 1 cattle inventory in Illinois since 2007. “It was the combination of a lot of things in Illinois,” said Nic Anderson, business developer for the Illinois Livestock Development Group. “Some of it has to do with the seasonal placement of cattle.” Beef cow numbers last year dropped by 9 percent in the Southern Plains and 6 percent in the Central Plains. Hurt believes some of the cows in the South were moved to the

Nic Anderson, business developer for the Illinois Livestock Development Group (ILDG), this month promoted the livestock industry at the Illinois Dairy Summits and the Illinois Pork Expo, and will be at the Illinois Beef Expo (Feb. 2124). Illinois Farm Bureau is a member of ILDG.

Northern Plains, where rain and feed were more abundant. But some of the increase in beef-cow numbers in Illinois was due to expansion, despite the difficult economic times for livestock producers. Notices-of-intent to construct cattle sheds the past three years in the state increased about 50 percent compared to previous years, according to Anderson.

Farmers who construct new cattle sheds for nutrient management and environmental improvements often improve the efficiency of their operations and then add more animals, he said. “In Illinois and the Midwest, we have about a $50 (per head) feed advantage compared to people in the Southwest and outside of the Corn Belt,” Anderson said.

Unfortunately, feed availability and high feed costs are expected to be a challenge at least the first half of this year. USDA recently reported hay supplies were at the lowest level since 1957. “Cow herd numbers continue to decrease with the lack of pasture and forages,” said Justin Fruechte, forage grass specialist with Millborn Seeds. “Unless you plan to increase your feed crop acres, prepare to cull cows.” Nationally, the beef-cow herd decreased by 3.6 million head (11 percent) since 2007, Hurt added.

IFB iPAD DRAWING AT PORK EXPO

Still time to register for GALC Farm Bureau members may still register for the Illinois Farm Bureau Governmental Affairs Leadership Conference (GALC) Feb. 20-21 in Springfield’s Crowne Plaza Hotel. Registration is being offered for either or both days. Participants are being asked to bring non-perishable food items to the conference. All items will be donated to the Central Illinois Food Bank and count toward the IFB Young Leaders Committee Harvest for All program. To register, contact your county Farm Bureau office or go online to {ilfb.org}.

Rick Winkler, a farmer from Coles County, registers for a free iPad at the Illinois Farm Bureau booth during last week’s Illinois Pork Expo in Peoria. Looking on is Melissa Rhode, IFB membership and program director. The annual expo is the premier show for the pork industry in the state. (Photo by Daniel Grant)

Keeenn K Ken K Kash Ka aash shi sh hiaaann hhian

Ken Kasshi K hiia ian a an n Limited Ed L diti dition iti Print Pi t Bishop Hill Blooms, 2012

Illinois Farm Bureau photographer Ken Kashian has captured the beauty of this historic Henry County community in western Illinois. Fourth in an annual series, the t matted, signed and or $25 at the numbered prints will be available ffor IAA Annual Meeting, December 1-4, in Chicago. Find them at the Foundation Country Store (in the Hospitality/Silent Auction area).

O Other ther prints in the series will also be be a available vailable in limit limited ed quantities. quantities. For More e Information... Contact your county Farm Bureau or visit www.ilfb.org

Only 50 Av Available A vailable

All proceeds benefit the IAA Foundation. Questions? Contact Carol at (309) 557-2230 or charms-garman@ilfb.org

Page 7 Monday, February 11, 2013 FarmWeek

productioN

Expectations of big South American crops weigh on markets BY DANIEL GRANT FarmWeek

Corn and soybean futures took a dive Friday as USDA upped its production estimates for both crops in Brazil. USDA in its world agricultural supply and demand estimates report Friday raised its

FarmWeekNow.com For more details on USDA’s crop production and supply-demand reports, go to FarmWeekNow.com.

production estimates in Brazil by 58.5 million bushels for corn and 36.7 million bushels for beans. The bump in crop production estimates was due to an improved moisture situation in Brazil in recent weeks, USDA reported. Meanwhile, an extended dry period in Argentina apparently didn’t affect soybean production as much as expected by traders. USDA on Friday reduced its estimate of soybean production in

Argentina by 36.7 million bushels. “There will be plenty of soybeans coming out of South America, starting in about 30 days,” Jack Scoville, vice president of The Price Futures Group, said Friday during a teleconference hosted by the Minneapolis Grain Exchange. “Even with all the weather problems (in South America), we’re looking at a pretty big crop.” USDA on Friday left its estimate for U.S. soy exports unchanged at 1.345 billion bushels and cut corn exports by 50 million bushels, to just 900 million bushels, due to the sluggish pace of sales and the prospects for more competition from Brazil. The corn export estimate, if realized, would mark the first time in 40 years the U.S. exported fewer than 1 billion bushels. USDA as a result of slumping demand for corn raised 2012/13 corn ending stocks 30 million bushels, to 632 mil-

Nominate a rural Illinois champion Do you know someone who works hard to make a difference in rural Illinois? Nominate that person or group as a rural champion by Feb. 15. Nominees may be featured on Lt. Gov. Sheila Simon’s web and social media sites. Submissions need to include the individual’s or group’s name, city, contact information, occupation, geographic scope of impact, length of service or project, and whether it is a volunteer or paid position. Nominees may be submitted for efforts in economic development, agriculture, education, sustainability, public service, or some other category. Also state in 250 or fewer words what the nominee does “above and beyond to make a difference in rural Illinois.” Those making nomination must include their name, email, phone number, city, state, and relationship to the nominee. Submit nominations to Laura Hepp Kessel at laura.kessel@illinois.gov or by mailing them to: Office of the Lt. Governor, Stratton Building, Room 414, Attn: Laura Hepp Kessel, 401 S. Spring St., Springfield, Ill. 62706.

Tuesday: • Ag weather with Harvey Freese of Freese-Notis • Bob Dewey, Country Financial crop insurance specialist • Stu Ellis, director of AgEngage • Kevin Rund, senior director of local government Wednesday: • Amy Bliefnick, Illinois State Fair manager • Brenda Matherly, assistant director of local government • Pat Stieren, Illinois Farmers Markets Association • Brad Clow, manager of crop claims, Country Financial Thursday: • John Hagenbuch, Illinois Soybean Association director from Utica • Bonnie McDonald, president of Landmarks Illinois Friday: • Sara Wyant, Agri-Pulse publisher • Tom Husek, Illinois Agricultural Auditing Association To find a radio station near you that carries the RFD Radio Network, go to FarmWeeknow.com, click on “Radio,” then click on “Affiliates.”

lion bushels, and lowered its season-average price forecast 20 cents to a range of $6.75 to $7.65 per bushel.

per bushel due to the large crop in South America. But Scoville expects bean prices will hold up overall leading

‘The corn market is struggling.’ — Jack Scoville Vice president The Price Futures Group

“The corn market is struggling,” Scoville said. “It’s easy to understand why, with decreased demand and increased (world) production.” Bean prices near-term could slip by 40 to 50 cents

into planting. USDA on Friday reduced soybean ending stocks by 10 million bushels, to 125 million bushels, and raised the seasonaverage price forecast a nickel to $13.55 to $15.05.

The bullish news on Friday was in the wheat market. USDA cut wheat ending stocks by 25 million bushels, to 691 million bushels, and raised feed use by 25 million bushels. “I think demand will continue to increase for wheat,” Scoville said. USDA on Friday projected a season-average price range for wheat of $7.70 to $8.10 per bushel. The markets for corn and soybeans could change drastically by the second half of this year. If big crops are realized in the U.S., prices by this fall could slip to around $5 per bushel for corn and $10 for beans, Scoville added.

Most Country drought claims paid Nearly 90 percent of the crop damage claims filed with Country Financial that resulted from last year’s drought have been paid, said Brad Clow, manager of crop claims. Despite the devastating drought, recently surveyed Country crop clients provided the highest customer service marks the company has received in the last five years. “I am extremely proud of our efforts to fully serve our clients during such a trying time,” said Clow. Country took several steps last year to make sure clients received prompt payment. It: • Formed a drought team in early July to

keep clients informed via farmer meetings, the company website, and nearly 50 media interviews reaching more than 2.8 million people • Contacted farmers within 24 hours of claims filing and maintained continued contact • Made policy changes in the field to speed claims processing • Moved claims auditing processes to the field to improve turnaround time With the March 15 federal crop insurance deadline approaching, Country representatives and crop specialists are meeting with farmers across the state to ensure their 2013 crops are fully protected. More information is available at {countrycrop.com}.

Is Federal Crop Insurance part of your plan for 2013? The drought of 2012 left many farmers without a crop, but COUNTRY Financial didn’t leave them without Federal Crop Insurance coverage. When COUNTRY surveyed our clients throughout the season, we found that we exceeded customer service objectives in every category. Make sure you’re ready for 2013. Contact your COUNTRY Financial representative or Crop Specialist today!

Hurry! Sales closing date is March 15th! Policies issued by COUNTRY Mutual Insurance Company®, Bloomington, IL. This entity is an equal opportunity provider. 0113-526HO

FarmWeek Page 8 Monday, February 11, 2013

government

AFBF gauges House immigration reform support Bosworth said. “Still, they’re guidelines. I think there are some concerns until we put together the specific legisla-

Reading between the “guidelines,” Farm Bureau is pinning its hopes on broad Senate immigration reform proposals. In late January, a bipartisan Senate coalition, including Springfield Democrat Sen. Dick Durbin, unveiled a general “framework” for immigration reform touching on ag labor needs. American Farm Bureau Federation (AFBF) policy specialist Kristi Bosworth told FarmWeek AFBF and other members of a diverse Ag Workforce Coalition (AWC) were canvassing key House

leaders and House Judiciary and Ag Committee members on Senate proposals, “making sure our interests are very well known.” Meanwhile, the AWC is negotiating with the United Farmworkers Union on details of a potential ag worker “carveout.” The ag coalition has laid out a two-tiered proposal for ensuring an adequate supply of seasonal and year-round workers and new, long-term ag work options for the estimated 11 million undocumented immigrants now in the U.S. “From a broad standpoint, the Senate guidelines were good for agriculture — they noted that we were unique,”

tive language and everyone’s aware of what we’re looking at.” In the interim, she said she anticipates introduction of a variety of smaller, more focused immigration proposals,

For example, Highland Park Republican Sen. Mark Kirk joined last week with U.S. Reps. Mike Quigley, a Chicago Democrat, and Aaron Schock, a Peoria Republican, to reintroduce the Visa Waiver Pro-

gram Enhanced Security and Reform Act. The bill would bolster a federal program that currently affords visa-free travel for eligible visitors from 37 countries. Bosworth this week said she is looking to President Obama’s State of the Union Address for an emphasis on immigration reform that might “raise the energy” on Capitol Hill. “Immigration was addressed in his inaugural address,” she said. “That gets the word out to the rest of America — not just those living in the nucleus here in D.C. When that happens, senators hear from their constituents and feel a little bit of pressure.”

Freshman U.S. Rep. Rodney Davis, a Taylorville Republican, has formed a Mississippi River Valley and Tributaries Caucus with bipartisan colleagues from all along the major waterway. Davis, a member of House Agriculture and Transportation/Infrastructure committees, is one of four caucus cochairs, along with Reps. Blaine Luetkemeyer (R-Mo.), Cedric Richmond (D-La.), and Collin Peterson (D-Minn.) ranking Democrat on the Ag Committee. The Mississippi River runs

along the western edge of Davis’ 13th District, while the Illinois River flows through the district. How crucial the Mississippi is to the nation’s commerce was obvious this fall when concerns about a potential closure of the Upper Mississippi between St. Louis and Cairo surfaced. The drought, combined with U.S. Army Corps of Engineers rejection of requests to release waters from Missouri River reservoirs, prompted Corps-supervised rock removal to clear the channel in that stretch of the

river. “The river winds along Illinois for 450 miles, providing a vital artery to ship agricultural products and othRep. Rodney er goods that Davis help keep this country moving,” Davis said. “This caucus provides a bipartisan forum to discuss the importance of the Mississippi River, especially to businesses, employees, and fami-

lies in the 13th District.” Ag goods from the Mississippi region annually contribute $54 billion to the U.S. economy and represent 92 percent of the nation’s farm exports, caucus members reported. Dennis Wilsmeyer, executive director of America’s Central Port at Granite City, noted continued winter traffic in “anything and everything that’s moving on barges,” including coal, steel, fertilizer, and “a fair amount of grain.” Late January rains temporarily enabled shippers to

load barges more fully and cost-effectively. But given current river infrastructure and Corps restrictions and funding, suppliers and exporters continue to operate at the whim of nature. “I don’t think ‘normal activity’ is going to come back immediately,” Wilsmeyer told FarmWeek. “With the river fluctuating like this, it doesn’t mean everybody can begin handling things as quickly as they had before all this started. There’s still going to be a waitand-see approach to things.” — Martin Ross

BY MARTIN ROSS FarmWeek

potentially including proposals to improve the existing, widely criticized H-2A ag guestworker program.

‘The Senate guidelines were good for agriculture ... Still, they’re guidelines.’ — Kristi Bosworth American Farm Bureau Federation

Illinois freshman co-chair of new Mississippi caucus

Women in Ag conference offering business and government sessions

The New High Value Crop Be a part of making it happen. Take the challenge. Soybean Growers! This is your opportunity to test new and innovative farming practices to boost soybean yields. Best of all, be recognized and rewarded for it.

Women involved with the agriculture industry will find marketing, government, and educational sessions at the Women in Agriculture Conference March 22 in Jumer’s Casino and Hotel, Rock Island. The early registration deadline is Feb. 28. Registration will start at 8 a.m. The conference will conclude at 3:40 p.m. Speakers will discuss farm estate planning and farm life. Participants may select from among nine sessions related to specific areas of interest. Topics will include beginning and advanced marketing, agriculture and government regulations, state legislative issues, Agriculture in the Classroom, and the MarketMaker database program. The registration fee is $50 per person by Feb. 28, $60 after that date, and $75 on March 22. Room reservations must be made by March 5 by contacting 309-756-4696. To register, contact the Rock Island County Farm Bureau office at 309-736-7432 or go online to {womeninagricultureconference.com}.

2013

The Illinois Soybean Association created the Yield Challenge three years ago to boost yields. Our goal is to help meet the growing worldwide demand and to make Illinois soybean growers the global leaders in soybean production. Soybeans can be the new high value crop. We are inviting growers from across Illinois to explore, strategize and test new methods and crop protection products. Each district will have a first and second place award of $500 and $250. Plus, each winner will receive a certificate and recognition at the annual Illinois Commodity Conference!

For more details and to register, please visit www.soyyieldchallenge.com or email yieldchallenge@ilsoy.org. Registration Fee: Only $25 per participant!

Agribusiness summit to be held in Decatur A global agribusiness summit will be held March 13 in Decatur. Featured speakers will include Brett Begemann, president of Monsanto; Mary Shelman, director of the agribusiness program at Harvard Business School; Cory Reed, vice president of global market services at John Deere; and Colleen Callahan, director of USDA Rural Development in Illinois. The event will focus on the future of technology, policy, equipment, and consumer issues. Illinois Farm Bureau is one of the sponsors. Proceeds will benefit Illinois Ag in the Classroom. Tickets, which cost $10, are required and can be ordered online at {GlobalAgSummit.com} or by calling 217-424-6318.

Page 9 Monday, February 11, 2013 FarmWeek

Economy

Money grows in trees, wood in Illinois BY KAY SHIPMAN FarmWeek

Illinois policymakers may not see the forest for the trees when it comes to the economic impact from the state’s forests and related industry sectors. The forestry and forestry products industries make important economic contributions in Illinois, according to a recent study by the Illinois Forestry Development Council. “We were blown away by the significance of the sector,” University of Illinois Extension forester Jay Hayek told FarmWeek. Timber grows on more than 4.78 million acres in Illinois — about 13.4 percent of the state’s total land area.

The forestry products industry encompasses logging, processing of solid wood products, wooden furniture manufacturing, and secondary manufacturing, such as flooring and cabinets.

(See the numbers at right) In Illinois, the secondary manufacturing sector employs the most Illinois workers primarily in the Chicago area, according to Hayek. (Note manufacturing chart above)

Furniture manufacturing is the second-largest sector with 20,267 employees and $2.83 billion in industry output. Sold wood processing, which includes sawmills and plywood mills, ranks third with 18,316 employees and $2.59 billion in output. Hayek noted the forestry industry sectors add directly to the state’s economy through jobs, wages, and productions. The industry contributes indirect economic benefits by buying goods and services from support industries. In addition to the economic benefits, Illinois forests provide environmental benefits and recreational opportunities throughout the state. For more information, see

the Illinois Forestry Development Council’s website at {ifdc.nres.uiuc.edu}.

FORESTRY NUMBERS

131,459 Full and part-time jobs in the Illinois forestry and forestry products sector.

$8.1 billion Annual payroll of employees in Illinois forestry and forestry product industry.

$2.49 billion Annual tax revenue generated by the forestry sector. Source: Illinois Forestry Development Council

Illinois Performance Tested Bull Sale scheduled Feb. 21 Commercial cow-calf farmers and seed stock breeders interested in buying a performance-tested bull may want to to attend the 2013 Illinois Performance Tested (IPT) Bull Sale at 11 a.m. Thursday, Feb. 21, in the Livestock Center on the Illinois State Fairgrounds, Springfield. There are 85 bulls catalogued, 19 are longer-aged 2011 mature bulls, and 66 are yearlings. Of the breeds, 45 are Angus; 33 Simmental, and seven Hereford. Previously, 4,458 bulls valued at more than $7.5 million were sold, according to Travis Meteer, the sale manager. The sale order will be based on a power-score system that uses the economic indexes provided by the breed associations. Along with strict requirements for superior EPDs (expected progeny differences), bulls must meet some of the most rigorous requirements in the industry.

“These bulls don’t just have to pass the test. They have to pass every test,” Meteer said. All of the bulls must meet a stringent minimum scrotal circumference for their age. Mothers of the bull are required to test negative for Johne’s Disease or come from a level 1 or higher herd of the Voluntary Johne’s Certification Program. Bulls also must be tested for bovine viral diarrhea (BVD) using the persistently infected (PI) earnotch screening system. All senior and January yearlings must be fertility tested. All bulls are required to be free of genetic defects and meet weight, frame, and functional soundness evaluations prior to the sale. Meteer said the 2013 sale will offer some of the most elite bulls found anywhere in the U.S. as verified by their power scores. “There are truly unique combinations of performance, pedigree, and pheno-

First Illinois Farmers’ Market Conference scheduled The first annual Illinois Farmers’ Market Conference will be March 7-8 in the State House Inn, Springfield. The registration deadline is Feb. 22. The goal is to address the need for professional development for market vendors, staff, and supporters. The two-day conference will include 12 sessions on such topics as growing new markets, community partnerships, legislative updates, farmers’ market trends, food safety initiatives, and producer-only standards. The first day will conclude with a networking reception. The conference is being sponsored by the Illinois Farmers’ Market Association through a USDA farmers’ market promotion program grant. For more information or to register, go online to {ilfarmersmarket.org}.

type offered through the sale,” he said. The sale catalog along with supporting information is online at {IPTBullSale.com}.

The sale is supported by University of Illinois Extension, U of I animal science department, Illinois Angus Association, Illinois Simmen-

tal Association, Vita-Ferm, and ABS. For more information, contact Meteer at 217823-1340 or email him at wmeteer@gmail.com.

FarmWeek Page 10 Monday, February 11, 2013

HISTORY

New archive preserving pieces of history BY KAY SHIPMAN FarmWeek

A worn leather booklet, yellowed typed pages, and faded badges tell a story about the Illinois Farm Bureau family of companies. That memorabilia and other pieces of history are being collected and preserved in a new archive housed in the IFB Building in Bloomington. â&#x20AC;&#x153;There are all kinds of treasures,â&#x20AC;? said Allison Carr, research specialist with IFB information management. On the wall, Carr pointed to a framed tan coverall, possibly worn by a claims adjuster in the field. She gingerly lifted a yellowed typed page â&#x20AC;&#x201D; a transcript of the 1919 IFB annual meeting. These treasures only hint at the variety of objects on shelves and in boxes. The idea for an archive started with an IFB GrassRoots Issue Team and was launched in 2010 when IFB began preserving items, including those

Memorabilia representing the history of GROWMARK, Illinois Farm Bureau, and Country Companies (now Country Financial) is being preserved in a new IFB family of companies archive. (Photos by Ken Kashian)

from an earlier Country Companies (now Country Financial) archive. Last September, the new archiveâ&#x20AC;&#x2122;s collection officially expanded into historical objects from the Farm Bureau family of companies. GROWMARK and Country Financial are providing resources and items for the archive, according to Carr. Currently, the archiveâ&#x20AC;&#x2122;s materials are being organized and eventually will be available for viewing. Carr envisions each

item being catalogued with a searchable database one day. For example, someone seeking information about former IFB President Harold Steele would be able to find articles and materials by searching for his name. As the project progresses, the IFB may ask for items of interest, she added. â&#x20AC;&#x153;We want to preserve and tell the story of Illinois Farm Bureau, Country, and GROWMARK,â&#x20AC;? Carr explained.

Allison Carr, research specialist with Illinois Farm Bureauâ&#x20AC;&#x2122;s information management, displays some of the objects that have been collected for a new Illinois Farm Bureau family of companies archive. The archive is housed in the IFB Building in Bloomington.

Auction Calendar

MAZIMIZING EVERY ACRE

Â&#x2039; *52:0$5. ,QF $ )DUP %XUHDX $IĂ&#x20AC;OLDWH $ &

Tues., Feb. 12. 8:30 a.m. Machinery Consignment Auc. HAMILTON, IL. Sullivan Auctioneers, LLC. www.sullivanauctioneers.com Wed., Feb. 13. 10 a.m. Online Only. www.bigiron.com Sat., Feb. 16. 10 a.m. Jackson and Union Co.â&#x20AC;&#x2122;s Land Auc. JACOB, IL. www.buyafarm.com Tues., Feb. 19. 11 a.m. Farm Eq. Closing Out Auc. Donnie and Linda Hoeft, DELAVAN, IL. Nehmelman Auction Co. and Ron Sanert, Auctioneers. topauctions247.com/nehmelman or auctionzip.com Thurs., Feb. 21. 10 a.m. Farm machinery. Mike and Susan Seitzinger, LAWRENCEVILLE, IL. Parrott Auctions. www.parrottauctions.com or www.auctionzip.com id 4851 Fri., Feb. 22. 7 p.m. Farmland Auc. Benjamin Howard Tull Est., SHELBYVILE, IL. Gordon Price Auction Service. www.priceauction.com Fri., Feb. 22. 9 a.m. Consignment Auction. MORRIS, IL. Richard A. Olson and Assoc. www.richardaolson.com Fri., Feb. 22. 6 p.m. Edwards Co. Farmland Auction. The Melvin W. Crackel Trust and Nadine M. Crackel Trust, ALBION, IL. Barnard Auctions. www.auctionzip.com id 2008 Sat., Feb. 23. 10 a.m. Shelby Co. Land Auc. Michael A. Rhoden and Sharon R. Glennon, STEWARDSON, IL. Krile Auction Service. www.auctionzip.com id #6524 Sat., Feb. 23. 10 a.m. Gallatin Co Land Auc. www.buyafarm.com Tues., Feb. 26. 10 a.m. Modern Clean Farm Eq. Edwin Lawrence Estate, WARRENSBURG, IL. Mike Maske Auction Service. www.maskeauction.com Tues., Feb. 26. Douglas Co. Land Auc. Justus Seaman Trust Farm. Soy Capital Ag Services. www.soycapitalag.com Wed., Feb. 27. 10 a.m. Bureau/Stark Counties Farmland. Paul and Cluskey, WYANET, IL. Rediger Auction Service and Brummel Realty, LLC. www.rickrediger.com or www.brummelrealty.com Thurs., Feb. 28. McLean Co. Farmland. Len Jones Trust Heirs. Soy Capital Ag Services. www.soycapitalag.com

Thurs., Feb. 28. 9 a.m. Peoria Co. Farmland. Marcus W. Britton, DUNLAP, IL. Jim Maloof Farm and Land, John Leezer. www.illinoisfarms4sale.com Fri., Mar. 1. 10 a.m. McLean Co. Land Auc. STANFORD, IL. Farmers National Co. www.farmersnational.com Fri., Mar. 1 and Sat., Mar. 2. 9:30 a.m. both days. Consignment Auction. RANTOUL, IL. Gordon Hannagan Auction Co. www.gordyvilleusa.com Sat., Mar. 2. 9 a.m. Farm Machinery. Dean Monke Farm, MT. OLIVE, IL. Ahrens and Niemeier. www.a-nauctions.com Sat., Mar. 2. 26th Annual Con. Auc. Murrayville-Woodson Emergency Ambulance Service. mweas.com Sat., Mar. 2. 10 a.m. Calhoun Co. Land Auc. PLEASANT HILL, IL. Buy A Farm. buyafarm.com Sat., Mar. 2. 9 a.m. Farm & Construction Eq. Consignment Auc. TREMONT, IL. Cal Kaufman and Brent Schmidgall, Auctioneers. kaufmanauction@aol.com or brentschmidgall@yahoo.com Sun., Mar. 3. 9 a.m. Consignment Auction. Murrayville Woodson EAS, MURRAYVILLE, IL. Mweas.com Tues., Mar. 5. 10 a.m. McDonough Co. Land Auc. Jack and Nancy Laverdiere, MACOMB, IL. Sullivan Auctioneers, LLC. www.sullivanaucitoneers.com Wed., Mar. 6. 10 a.m. Champaign Co. Farmland Auc. URBANA, IL. murraywiseassociates.com Thurs., Mar. 7. Spring Farm Closeout and Consignment Auc. Agri-Tech, Inc, RAYMOND, IL. Thurs., Mar. 7. McLean Co. Farmland Auc. Soy Capital Ag Services. www.soycapitalag.com Fri., Mar. 8. 10 a.m. Vermilion Co. Land Auc. HOOPESTON, IL. Hertz Real Estate Services. www.hertz.ag Fri., Mar. 8. 9 a.m. Consignment Auc. GREENVIEW, IL. Ron Sanert, Gordon Watkins and Eldred Nehmelman, Auctioneers. Auctionzip.com auction id2473 or topauctions.com Sat., Mar. 9. 9 a.m. Consignment Auction. BALDWIN, IA. Powers Auction Service. www.powersauction.com

Page 11 Monday, February 11, 2013 FarmWeek

FarmWeek Page 12 Monday, February 11, 2013

FB IN ACTION FARM SAFETY LESSONS

Above: John Lee, left, safety specialist with Grain & Feed Association of Illinois provides farm safety information to participants at a safety workshop recently hosted by the Livingston and McLean County Farm Bureaus and Prairie Central Co-op at the Asmark Agricenter in Bloomington. About 70 farmers learned about grain bin safety and rescues, grain dust dangers, and safety tips for working with anhydrous ammonia. Right: A safety dummy is engulfed in plastic beads that simulate grain in the Agricenter’s grain bin. Kevin Runkle with the Illinois Fertilizer and Chemical Association also provided training. (Photos by Teresa Grant-Quick, Livingston County Farm Bureau manager)

Ag literacy efforts expanding BY KAY SHIPMAN FarmWeek

Youngsters will be connecting agriculture to summer reading adventures and learning about gardening, thanks to new materials from Illinois Agriculture in the Classroom (IAITC). Last week, county ag literacy coordinators learned agriculture stories and topics dovetail with the theme for the reading program to be offered statewide this summer by the Illinois Library Association. Danny Mielneckzek, Illinois Farm Bureau education specialist, suggested several ag-related books and activities that fit the theme “Have Book Will Travel.” He recommended a story about Johnny Appleseed to teach children how apples were planted in the Midwest. Gardening is another focus with a new “Once upon a Garden” booklet developed with support from the IAA Foundation. The booklet offers lessons, books, and activities related to different aspects of gardening ranging from container gardens to community gardens. The ideas included different theme gardens, such as a pizza garden that is planted with the ingredients to make a pizza or a peanut butter and jelly garden that would include peanuts and strawberries to make into jelly. For more information, go to {agintheclassroom.org} or call IAITC at 309-557-2088.

Dawn Weinberg, Calhoun County Farm Bureau ag literacy coordinator, creates a smile using apple slices, peanut butter, and marshmallows during a meeting for ag literacy coordinators in Bloomington last week. The apple activity was one of several suggested for the statewide reading program at public libraries this summer. (Photo by Kay Shipman)

Travel with other Farmers!

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Plus...Yellowstone National Park

Depart July 10 & August 14, 2013 Power

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Your tour begins and ends in the “Mile High City” of Denver, followed by Cheyenne, WY. The next two days you will visit Fort Laramie; Mount Rushmore and Crazy Horse Memorial in South Dakota. Then return to Wyoming with a stop in Deadwood, continuing through the Black Hills to Little Big Horn Battlefield and the Buffalo Bill Historical Center. Then you will depart for Yellowstone National Park (two days) with extensive sightseeing, including Old Faithful and Hayden Valley. Your journey continues to Grand Tetons National Park with spectacular landscape; Jackson Hole, WY; Salt Lake City, UT with a city tour including the Great Salt Lake and opportunity to witness the Tabernacle choir rehersal. Then travel West visiting the Utah Field House Museum; Dinosaur National Monument and explore the vast variety of fossils and Rocky Mountain National Park including a drive through the park on Trail Ridge Road.

*Price per person, based on double occupancy. Airfare is extra. For reservations & details call 7 days a week:

1-800-736-7300

Page 13 Monday, February 11, 2013 FarmWeek

from the counties

UREAU — The Young Leaders Committee will sponsor a farm labor pool listing for Bureau County. Contact the Farm Bureau office at 875-6468 or email jillfrueh.bcfb@comcast.net to submit labor information by Feb. 28. Contact the Farm Bureau office after Feb. 28 to request a copy of the labor pool listing. HAMPAIGN — The Farm Bureau Equine Committee will sponsor a Champaign equine adventure from 8 a.m. to 12:30 p.m. Saturday, Feb. 23, at the Tony Noel Building at Parkland College. Cost is $5. The event will include speakers, a vendor area, and information from riding clubs and animal rescue agencies. HRISTIAN — The International Ag breakfast will be at 7 a.m. Thursday, Feb. 21, at the U.S. Bank community room. Call the Farm Bureau office at 824-2940 by Thursday for reservations. • The Farm Bureau Foundation trivia night will be March 23. Team registration deadline is March 15. • Farm Bureau Foundation scholarship applications are available at christiancofb.com. Application deadline is March 15. LARK — Farm Bureau Young Leader Committee will host a pizza party at 7 p.m. Tuesday, Feb. 26, at the Farm Bureau office. Members under the age of 40 may attend. Call the Farm Bureau office for reservations. LAY — Farm Bureau will sponsor a bus trip from 5:30 a.m. to 8:30 p.m. Thursday to the National Farm Machinery Show in Louisville, Ky. The trip is free for Farm Bureau members and will cost non-members $25 or the purchase of a Farm Bureau membership. The trip will include dinner at the Logg Inn in Haubstadt, Ind. Call the Farm Bureau office at 665-3300 or email claycofb@bspeedy.com for reservations or more information. • Farm Bureau will host a market outlook meeting at 6:30 p.m. Tuesday at the Farm Bureau office. Dale Durchholz, AgriVisor market analyst, will be the speaker. Call the Farm Bureau office at 665-3300 or email claycofb@bspeedy.com for reservations or more information. • Farm Bureau and Country Financial will sponsor an estate planning seminar at noon Friday, Feb. 22, at the Farm Bureau office. Jim

Hughes, financial security consultant for Country Financial, and a local attorney who specializes in estate planning will be the speakers. Call the Farm Bureau office at 665-3300 or email claycofb@bspeedy.com for reservations or more information. EE — Farm Bureau will sponsor a commercial driver’s license screening from 8 a.m. to noon Friday, Feb. 22, at the Farm Bureau office. Cost is $60 for a medical card examination and $50 for a drug screening. Call the Farm Bureau office at 857-3531 or email leecfb@comcast.net. • Farm Bureau membership appreciation dinner will be at 6 p.m. Tuesday, Feb. 19, at the Amboy Community Building. U.S. Rep. Adam Kinzinger (R-Manteno) will be the speaker. Call the Farm Bureau office at 857-3531 or email leecfb@comcast.net for reservations or more information. Reservation deadline is Monday. • Country Financial will sponsor a farm estate planning seminar from 11 a.m. to noon Wednesday, Feb. 27, at the Farm Bureau office. Rick Morgan, Country Financial security consultant, and Dan Hawkins, local attorney, will be the speakers. Call the Farm Bureau office at 625-4876 or your local Country Financial representative for reservations. IVINGSTON — The Marketing Committee will host Agronomy Day from 8:45 to 3:30 p.m. Tuesday, March 5, at the Livingston County Extension office in Pontiac. Certified crop adviser continuing education units will be available in nutrient management, integrated pest management, and crop management. Call the Farm Bureau office at 842-1103 or email livcfb@yahoo.com to register. CDONOUGH — Farm Bureau will sponsor a grain safety training from 9 a.m. to 4 p.m. Tuesday, Feb. 26, at the Spoon River College Community Outreach Center. Contact the Farm Bureau office at 837-3350 or at {mcdonoughcountyfarmbureau.org} for reservations. ACOUPIN — Macoupin and Montgomery County Farm Bureaus welcome O’Reilly Auto Parts in Litchfield as a new member benefit provider. Members will receive a 10 percent discount on farm, auto, lawn and marine parts and supplies. Membership card must be shown at time of purchase. • Farm Bureau Foundation scholarships are available for students who will continue

their education in an ag-related field. Contact the Farm Bureau office at 854-2571 for an application or more information. Deadline to return applications is March 22. ONTGOMERY — Farm Bureau will sponsor a trip Saturday, April 16, to see The American Passion Play at the Bloomington Center for Performing Arts. Call the Farm Bureau office at 532-6171 for more information. EORIA — The Peoria County Soil and Water Conservation District annual meeting will be at 8 a.m. Saturday at the Brimfield High School. Call 671-7040 for tickets. • John Roach, market analyst, will speak at Expo Gardens at 8:30 a.m. Monday, Feb. 18. Doors will open at 8 a.m. There is no cost for the program. Call the Farm Bureau office at 686-7070 for reservations. •Farm Bureau Young Leaders will tour the Keystone Steel and Wire at 1 p.m. Friday, Feb. 22. Members 18 to 35 may attend. Call the Farm Bureau office for reservations

or more information. • Farm Bureau will sponsor an estate planning seminar at 11 a.m. Monday, Feb. 25, at Gil’s Supper Club in Hanna City. Rick Morgan, senior financial security consultant with Country Financial, will be the speaker. Call the Farm Bureau office at 686-7070 or Country at 686-7050 for reservations. TARK — Farm Bureau will sponsor a trip to the Quad City Botanical Center for a chocolate tour from 9 a.m. to 3 p.m. Wednesday, March 20. Cost is $60. Call the Farm Bureau office at 286-7481 for reservations by March 8. TEPHENSON — Farm Bureau will sponsor an Internet basics class from 7 to 9:30 p.m. Monday, March 11, and a basic Word and Excel class from 7 to 9:30 p.m. Tuesday, March 12, at the Farm Bureau office. Classes are free for members, $10 per class for non-members, or $15 for both classes for non-members. Call the Farm Bureau office at 232-3186 to register. • Farm Bureau will sponsor a bus trip Wednesday, March

20, to the John Deere Tractor Works and Engine Works in Waterloo, Iowa. Cost is $30 for members and $40 for nonmembers. Call the Farm Bureau office at 232-3186 by March 13 for reservations. • Farm Bureau will sponsor a defensive driving class from 10 a.m. to 3 p.m. Wednesday, and Thursday, April 24 and 25. Cost is $15 for members and $25 for non-members. Call 232-3186 to register. ERMILION — Farm Bureau Foundation will host a “Luau for Learning” trivia night at 7:30 p.m. Saturday, March 2, at the Danville Knights of Columbus Hall. Registration is $100 per table of eight. Proceeds will benefit the Ag in the Classroom program.

“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 14 Monday, February 11, 2013

profitability

Used oil analysis should be part of routine maintenance program BY TOM DREW

Used oil analysis is a systematic approach to monitoring equipment performance. A sample of the oil is taken and sent in for analysis. The results are then sent back to the person who submitted the sample. The analysis includes physical property tests and

wear metal analysis. There are many advantages to including used oil analysis as part of your routine maintenance program. Those include: •Establish safe and proper drain intervals. •Reduce unforeseen breakdowns.

USDA

Farm Service Agency MARKETING ASSISTANCE LOANS — The marketing assistance loan (MAL) and loan deficiency payment (LDP) provisions authorized in the 2008 farm bill have been extended for the 2013 crop year, Scherrie Giamanco, Farm Service Agency (FSA) state executive director, announced. MALs and LDPs provide financing and marketing assistance for wheat, rice, feed grains, soybeans and other oilseeds, peanuts, pulse crops, cotton, honey, and wool. Assistance is available to eligible farmers beginning with harvest or shearing season and extending through the program year. The 2013 mohair crop is not eligible for MALs or LDPs. MALs provide farmers interim financing at or after harvest to meet cash flow needs. A farmer who is eligible but agrees to forgo the loan may obtain an LDP if such payments are available. For more information, visit your local county FSA office. NEW HOURS FOR FIVE FSA OFFICES — Five local FSA offices will be open one day each week, effective Feb. 18. The offices in Boone, Calhoun, Pulaski-Alexander, and Williamson counties will conduct business each Wednesday. The office in Wabash County will be open each Thursday. The change applies only to the FSA office and will not affect any other agency located in the USDA Service Center. FSA customers in the affected counties are encouraged to transfer their farms to an adjacent county office to continue fiveday-a-week service. To initiate the transfer, contact either the office in which the county is located or the applicable county to which the farm will be transferred.

M A R K E T FA C T S Feeder pig prices reported to USDA* Weight 10 lbs. 40 lbs.

Range Per Head $32.25-$56.61 NA

Weighted Ave. Price $43.11 NA

This Week Last Week 58,604 100,905 *Eastern Corn Belt prices picked up at seller’s farm

Receipts

Eastern Corn Belt direct hogs (plant delivered) Carcass Live

(Prices $ per hundredweight) This week Prev. week $85.63 $85.91 $63.37 $63.57

Change -$0.28 -$0.21

USDA five-state area slaughter cattle price Steers Heifers

(Thursday’s price) (Thursday’s price) Prev. week Change This week NA $124.89 NA $125.00 $125.00 $0.00

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 $145.43 $146.27 -$0.84

Lamb prices Slaughter prices - Negotiated, Live, wooled and shorn 135-200 lbs. for 87.50-130 $/cwt. (wtd. ave. 114.92)

Export inspections (Million bushels) Week ending Soybeans Wheat Corn 1/31/13 53.9 15.2 5.3 1/24/2013 40.9 22.3 21.4 Last year 39.9 17.1 40.4 Season total 1004.6 599.8 311.2 Previous season total 758.3 674.7 712.0 USDA projected total 1345 1050 950 Crop marketing year began June 1 for wheat and Sept. 1 for corn and soybeans.

•Reduce down time. •Reduce the number of oil changes and labor costs. •Provide overall maintenance savings. •Provide longer equipment life. •Eliminate unnecessary overhauls. Tom Drew •Provide better fuel mileage. •Provide support for equipment warranty claims. The drain plug method is the simplest way to obtain a sample for analysis. Take the sample after the engine has been operated at normal operating temperature for several hours. Let a small amount of oil drain out before catching the sample to be sent to the laboratory. This ensures that

any contamination surrounding the drain plug will not be present in the sample and influence the test results. Never take samples from the drain pan. Wear metal tests are used to interpret the condition of the equipment components. There are certain combinations of elements that indicate problems. Tin, lead, and copper may all indicate bearing wear. Iron combined with chromium usually will indicate liner and ring wear, possibly along with aluminum, which would also indicate piston wear. Silicon can usually be traced to a faulty air intake system which is allowing raw air into the combustion chamber. This air carries with it dirt or sand that can destroy the inside of an engine. Boron and sodium are components of ethylene glycol

and usually indicate antifreeze is present. This is usually the result of a blown head gasket, leaky oil cooler, or a cracked block. Soot level is an indicator of combustion efficiency. Oxidation is a measure of the effective service life of the oil. Nitration measures nitrogen compounds in the oil resulting from blow-by past the compression rings. High levels of ZDDP (zinc dialkyl dithio phosphate) depletion indicate that the additive is being used up. Water and fuel dilution also are measured. Changes in viscosity indicate improper servicing, dilution, or contamination and lubricant breakdown in service. Tom Drew is GROWMARK’s lubricants marketing manager. His email address is tdrew@growmark.com.

Farmland market could tighten; prices projected to remain high BY DANIEL GRANT FarmWeek

Farmland prices, which have skyrocketed in recent years, aren’t expected to crash back to earth any time soon. Record-high land prices have been driven in part by record demand and strong farm income. And those trends are expected to continue this year, although the possibility later this year of big crops and lower commodity prices could slow the farmland market. “Record demand for land continues, along with record income, cash rents, and land values,” said Roger Hayworth, area sales manager for Farmers National Co. in Illinois and five other states. “This trend likely will continue in 2013. However, if the agricultural economy shifts, some leveling will take place.” Eric O’Keefe of The Land Report, a nationwide publication dedicated to the land market, said agriculture and the farmland market have been bright spots of the U.S. economy the past five years. He believes land prices could taper off this year if world demand for ag products declines or commodity prices fall, but a major crash in land values is highly unlikely. “I think the market will stay strong,” O’Keefe said. “I’m not a big believer in the bubble concept. Farmland is only as valuable as its income-producing component.” USDA recently estimated

‘ Record demand for land continues, along with record income, cash rents, and land values. This trend likely will continue in 2013.’ — Roger Hayworth Farmers National Co.

the value of farm assets for 2012 ($2.54 trillion) and farm equity ($2.27 trillion) were at record-high levels. U.S. farmland values subsequently increased 11 percent last year, USDA reported. Top prices for high-quality land in Illinois last year averaged $12,000 per acre, with some individual sales generating much more than that, according to Farmers National Co. “The continuing rise in farmland values indicates that it is viewed as a good investment and the low interest rates suggest funds are available for well-qualified borrowers,” USDA reported. The amount of farmland available for purchase this year

is expected to be tight, though, as many sellers cashed out before new tax laws took effect. If the supply of farmland is tight, it could keep pressure on the market. “Pure economics should dictate that values rise if the supply of available land tightens,” said Derrick Volchoff, vice president of real estate operations for Farmers National Co. The strength of the farmland market in the Corn Belt has pushed prices up in secondary markets, O’Keefe noted. But there is a growing disparity between values for cropland and livestock properties, he added.

Page 15 Monday, February 11, 2013 FarmWeek

PROFITABILITY Corn Strategy

CASH STRATEGIST

Brazil now a U.S. corn competitor Brazil has long been an aggressive competitor in the world soybean trade. But in recent years, it has become a viable competitor in the world corn trade, production permitting. Part of the change has come with a steady increase in Brazil’s second corn crop, mostly grown in Mato Grosso, the area of the country that has enjoyed much of the expansion in soybean acreage in recent years. But the big shift came in the 2000/2001 marketing year with significantly higher yields. That was a result of producers shifting to seeds with better genetics, along with generally better production practices. The average yield jumped from 38.5 bushels per acre in the 1990s to an average of 59.5 bushels since. Last year’s yield was just short of 75 bushels per acre. Production jumped from a 25 million to 30-million-metricton (mmt) level in the 1990s to mostly a 40 mmt-plus level. Last year’s output hit 73 mmt (2.8 billion bushels). In the 1990s, domestic feed demand in Brazil hovered near 30 mmt, necessitating small imports in those years when

production fell short of needs. Since 2000, feed demand has grown, but not nearly as fast as production, leaving more grain available for export. Looking at the chart above, it is interesting to see the pace of corn exports is relatively subdued until mid-summer. The inference one would draw is that much of the first crop corn is used by livestock feeders. The second crop appears to have become the crop destined for the export sector. Much of that may be tied to the export capacity constraints, with capacity in the spring/summer mostly used to export soybeans, soybean meal, and sugar. But the corn export push in the second half of the year puts much of Brazil’s supply onto the world market at a time when the U.S. typically is getting started on a new-crop export campaign. Over the past six months, Brazil’s exports have averaged 3.27 mmt, nearly 2.5 mmt higher than the prior year’s average, or 80 million bushels a month. That’s 80 million bushels per month that didn’t need to come from the U.S., nearly 500 million bushels in total. That helps explain why this year’s U. S. corn exports dropped below 1 billion bushels for the first time since 1971/1972. Furthermore, it’s a force we may have to deal with in the future.

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ü2012 crop: Even though corn prices slipped last week, it still looks as though the market is in a broad, corrective pattern. We’d still target a move to $7.75-$7.85 on March futures for catch-up sales. Plan to add to sales if prices reach that level. Check the Hotline. ü2013 crop: The positives of the old-crop situation will help support new-crop prices. But this past week’s break strengthened $5.90-$6 resistance on December futures. Plan to add a sale if December hits that level. Check the Hotline. vFundamentals: Even with the tight old-crop situation, corn prices may struggle to go higher unless conditions in the U.S. Southern Plains remain poor when the wheat crop breaks dormancy in the spring. Even then, poor export and ethanol demand continue to undermine the potential for extreme tightness for old-crop supplies.

Soybean Strategy

ü2012 crop: South American weather remains the dominant feature guiding the trade. But if that weather shifts, the rally is likely to stall. Price another 10 percent if March futures hit $15.15. ü2013 crop: Use a rally to $13.15 on November futures for catch-up sales. Sales were increased 10 percent last week. vFundamentals: Last week’s supply and demand report proved to be “much ado about nothing.” Brazil predicted an 83.4 million-metric-ton (mmt) (3.08-billion-bushel) crop on Thursday. USDA followed up with an 83.5 mmt estimate (3.09-billion-bushel). The Argentine crop was forecast at 53 mmt (2 billion bushels). But the Buenos Aires Grain Exchange estimated the Argentine crop at 50 mmt (1.8 billion bushels). Dryness in Argentina is the primary concern of the trade. Still, persistent showers in northern Brazil are slowing early harvest, diverting some business to the U.S. Our export pace continues to suggest the final export number will be slightly higher than forecast.

ûFail-safe: If March soybeans close below $14.40, make the old-crop sale.

Wheat Strategy

ü2012 crop: Wheat prices look as though they have established a short-term low and could shift into a sideways-tohigher pattern. If Chicago March can penetrate $7.69, it could rally to $7.84. Be patient on making catch-up sales. ü2013 crop: Plan to make catch-up sales with Chicago July trading above $7.84. vFundamentals: The February USDA supply/demand report was a

little friendly for wheat, with the U.S. ending stocks reduced to 691 million bushels — below trade expectations. But that was countered in part by the lack of change in the world ending stocks. Talk persists about India exporting more wheat to make room for its new crop, a crop that’s expected to again exceed India’s own needs. U.S. Southern Plains weather is a key feature. Short-term forecasts included limited rain and snow. Significant moisture is needed when the crop breaks dormancy to keep it from being a failure.

FarmWeek Page 16 Monday, February 11, 2013

perspectives

SWAT: Empowering our members, organization Knowledge is a powerful tool. Putting it into action is even more important. Recently, Illinois Farm Bureau launched new advisory teams whose goals include gaining knowledge, investigating, and sharing information about specific issues and policy questions. The Strength With Advisory Teams MARK GEBHARDS (SWAT) will help prepare our organization to understand, influence, and adapt to the changing realities of farming, the rural economy, and rural family life. Our members are our strength. Member involvement in identifying and shaping IFB’s future is the driving force behind our grassroots policy. We created SWAT to capture our members’ strengths and further enhance IFB policy development and

implementation. In turn, IFB will be in a better position to represent the views of you, our members. Each advisory team will study specific issues and policy questions. Those issues may be surfaced by team members, referred to the team by the IFB president or board of directors, requested for study by the IFB Resolutions Committee (RC), or identified by the IFB governmental affairs and commodities staff. The three teams are: conservation and natural resources, farming production and marketing, and local and state government. Each team will identify and research issues related to farmers, production practices, rural life, and other agricultural-related topics. The teams will provide their vision on those issues to the IFB board. Teams will assist in policy analysis by providing input to the RC through in-depth issue reviews. Perhaps most importantly, the team

members will be leaders who are informed on issues, regulations, and legislation. These knowledgeable leaders may work on key issues and serve as a sounding board for our organization and its policy. Not only will these teams help our state organization, but we also envision them strengthening our county Farm Bureaus with potential leaders and knowledgeable experts. We want the team members to apply their knowledge and experiences and take ownership of the challenging and complicated issues facing our industry. Each team has been assigned a broad subject area, but members will be able to target specific issues as needed. Those needs may include quick policy input from time to time. Some of you may wonder how the SWAT program differs from other member-leader teams. One major difference is the 60 ad hoc advisory groups on special interests. We have nearly 100 members with

special knowledge and interests in specific subject matter. Some leaders are serving on multiple ad hoc groups. The SWAT teams may seek additional information or input from the ad hoc groups. Another difference in the SWAT organization is an extended, but staggered, term of service. That will allow members the opportunity to continue building on their knowledge base while providing leadership continuity to the teams. Agriculture is a diverse industry with diverse challenges and opportunities ahead. Diverse knowledge and strength will be required to move the industry forward. We envision SWAT empowering and tapping our organization’s strength — its members. Mark Gebhards is the executive director of the Illinois Farm Bureau governmental affairs and commodities division. His email address is MGebhards@ilfb.org.

‘Adopted’ lawmaker program aids understanding Our state needs more opportunities for people to understand different viewpoints and life experiences. That’s why Illinois Farm Bureau’s Adopt-ALegislator program does so much good now and will continue to in the future. Many county Farm Bureaus have developed strong relationships with current and former “adopted” state lawmakers. The program is intended to build longterm relationships between urban legislators and downstate farmers. It “helps each underKAY SHIPMAN stand a little better where the other side is coming from,” explained Christina Nourie, IFB’s northeast legislative coordinator and overseer of the program. Case in point — the Jefferson County Farm Bureau and Chicago Democrat Sen. Kwame Raoul. Raoul will play a key leadership role on some major issues in the spring legislative session. Back in October 2008, I watched as Raoul, his family, and several constituents toured Jefferson County schools, farms, businesses, and sights. I still remember the Chicago group’s look of wonderment as they walked through the halls of the tiny rural McClellan Grade School. Its entire student body could have ridden on one school bus. A month later, Jefferson County farmers and leaders thoughtfully listened as two of Chicago’s Dyett High School students showed how a student jury is used to resolve a mock fight among students on the city’s south side. It was much different than the way conflicts are resolved at McClellan Grade School. Through the Adopt-A-Legislator program, the personal connections

State Sen. Kwame Raoul (D-Chicago), right, chats with leaders of the Jefferson County Farm Bureau and Illinois Farm Bureau during a tour of his legislative district last summer. (FarmWeek file photo)

build relationships that continue as some adopted legislators move into leadership positions or other elected offices. Some relationships date back to the beginning of the program in 2001. Former state Sen. Miguel del Valle, for example, stayed in contact with his

adopted county Farm Bureau even after he began serving as Chicago’s city clerk. Here’s a big pat on the back for the 73 county Farm Bureaus and the legislators who are involved with the Adopt-A-Legislator program. Stay

engaged. Our state needs understanding of different perspectives more today than ever before. Kay Shipman is the editor of legislative affairs for FarmWeek. Her email is kayship@ilfb.org.

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