State legiSlatorS did not resolve the looming pension debt or other pending issues during the first few days of the lame duck legislative session. ............................2
r o C k r e m o va l i n t h e Thebes reach of the Upper Mississippi is “progressing beautifully,” according to the St. Louis District Corps of Engineers. .......................4
USDa’S highly anticipated reports Friday will provide some direction for the crop markets. Final production estimates for 2012 will be revealed. ...................10
Monday, January 7, 2013
Two sections Volume 41, No. 1
Congress avoids fiscal cliff, major estate tax hit BY MARTIN ROSS FarmWeek
Many Illinois farmers, including Paul Taylor, began the new year prepared for the worst as Congress continued to haggle over a “fiscal cliff ” solution. A lame duck Congress nonetheless reached an 11thhour agreement Jan. 1 that provides a permanent $5 million individual/$10 million-percouple estate tax exemption and extends a variety of expiring tax provisions important to farmers, ag businesses, and the renewable energy sector. Illinois Farm Bureau President Philip Nelson hailed efforts by Senate Majority Whip Dick Durbin, a Springfield Democrat, to help ensure an “overwhelming” 89-8 New Year’s Day vote for the measure. The House then voted 257-167 to pass the package prior to adjournment of the 112th Congress. “I told my wife when we went to bed New Year’s Eve, ‘I bet it won’t pass,’” Taylor, a DeKalb County producer and Illinois Corn Growers Association president, told FarmWeek. “I’m enthusiastic that Congress did something.” Taylor’s enthusiasm
nonetheless was tempered by “the frustration that the work our corn farmer-members invested to pass a five-year farm bill was effectively tossed out the window” with Congress’ mere nine-month extension of 2008 farm bill provisions. American Farm Bureau Federation policy specialist Pat Wolff told FarmWeek “we (agriculture) did wonderfully” under the fiscal cliff measure. The $5 million personal “death tax” exemption is indexed for inflation, and new law provides for a step-up in basis. And with the certainty provided by permanent estate tax relief farmers “don’t have to do their estate plan over every two years,” Wolff said. Had Congress not acted, the individual exemption would have dropped to $1 million dollars — a treacherously low trigger given Illinois land values, and the estate tax rate would have risen to 55 percent. Lawmakers nonetheless approved a 5 percent increase in the existing 35 percent estate tax rate. The new 40 percent rate was a reported concession for those who sought a mere $3.5 million exemption. “Though many of our mem-
bers would like to see the estate tax eliminated, this action at least lowers farm family exposure until the opportunity to eliminate this tax arises,” IFB’S Nelson said. The plan also leaves the capital gains tax rate unchanged at 15 percent for individuals earning below $400,000 annually
and couples earning below $450,000. The top capital gains rate rises from 15 percent to 20 percent. In 2012 and 2013, the Section 179 expensing option — the maximum amount a small business can immediately expense when purchasing equipment or other business
assets, instead of depreciating them over time — will be $500,000, reduced dollar-fordollar when expenditures exceed $2 million. The Section 179 threshold will fall to a maximum $20,000 dollar-for-dollar reduction on See Fiscal cliff, page 3
OREOS AND TURNIPS
Belted Galloway cattle graze on turnips and rye cover crops near Congerville in Woodford County. David and Leanne Fogle and their family raise the distinctively marked Scottish breed (sometimes referred to as Oreo cattle) as Wayside Valley Belted Galloways. Read about another farmer whose cattle graze on cover crops over winter on page 5. (Photo by Ken Kashian)
Periodicals: Time Valued
Nine months for Congress to deliver new farm bill?
Congress purportedly saved consumers some milk money but failed in the waning hours of 2012 to approve key ag budget savings and a new farm safety net. As part of a New Year’s fiscal cliff deal, lawmakers approved a nine-month extension of expired 2008 farm bill provisions without providing extended program funding. Farm Bureau sought approval of a five-year bill based on Senate- and House Ag Committeeapproved proposals that included $23 billion to $33 billion in deficit savings. Now, the 113th Congress essentially must reboot farm bill
debate amid uncertainty about potentially severe ag budget “sequestration” cuts. Under a continuing budget resolution, current ag spending expires March 27, though existing 2012 corn and soybean programs extend through August and the extension continues existing program authorizations through Sept. 30. The extension measure extends the Milk Income Loss Contract (MILC) program to cover dairy losses and authorizes livestock disaster provisions — albeit without funding. Illinois Farm Bureau President Philip Nelson argued “it will be important for Farm Bureau
FarmWeek on the web: FarmWeekNow.com
members to work hard to encourage Congress to address a five-year farm bill this summer and not wait until the 11th hour again.” Lawmakers touted the need for farm bill extension to avoid reversion to 1949 “permanent” ag law and outmoded dairy programs that could significantly boost consumer milk prices. Illinois Corn Growers Association President Paul Taylor is more concerned about U.S. farmers falling behind as “tens of thousands, hundreds of thousands of hectares of land come into production in South America, the Ukraine, all over.” “We haven’t repealed the
rules of economics,” he told FarmWeek. “We’ll be swimming in corn and wheat at some point. We’re really disappointed we didn’t get a new farm bill. “We’re still concerned about the vulnerability of crop insurance as the base of what most of our growers tell us is important for revenue management. I know everybody was concerned about $7-a-gallon milk. I don’t know that they were really concerned about the rest of it.” Taylor, a DeKalb County producer, said he was hopeful Senate Ag Chairman Deb Stabenow (D-Mich.) could lead See Farm bill, page 3
Illinois Farm Bureau®on the web: www.ilfb.org
FarmWeek Page 2 Monday, January 7, 2013
Quick Takes COCHRAN TOP SENATE AG GOP — Asserting his seniority on the Senate Ag Committee, Sen. Thad Cochran (R-Miss.) became the ranking member of the committee on Thursday, unseating Sen. Pat Roberts (RKan.), who helped forge the Senate’s 2012 farm bill plan. “I had hoped to stay, but agriculture is at a critical point, and I just think you don’t want to roil the waters,” Roberts said. “I’ll still be sitting right next to Thad, and I intend to continue to make my voice heard.” Roberts has been a strong advocate for crop insurance protections in several farm bill debates. Cochran, who represents producers of several major southern crops, takes the reins as the House haggles over the idea of instituting both a new farm revenue program and continued price protections favored within his region. ILLINOIS WIND FARM SOLD — Canadian Algonquin Power & Utilities Corp. bought the Shady Oaks wind farm in Lee County from China’s Goldwind International for an estimated $148.9 million, the company announced Wednesday. Shady Oaks, a 71-turbine, 109.5 megawatt (MW) wind farm, is located in Lee County and began operating in June. Shady Oaks has a 20-year power purchase agreement with Commonwealth Edison. Goldwind executives say the sale is an important step to show its permanent magnet direct-drive (PMDD) wind turbines are seen as viable assets in the United State and demonstrate the company’s ability to compete in the wind energy market. The wind farm is comprised of 68 Goldwind 1.5 MW turbines and three of its 2.5 MW units. WIND ENERGY EXTENSION — Wind energy supporters breathed easier after a one-year federal tax credit of 2.2 cents per kilowatt-hour was included in the package to avoid the “fiscal cliff.” Congress approved an extension of the wind energy Production Tax Credit (PTC) and Investment Tax Credits (ITC) for community and offshore projects, according to the American Wind Energy Association (AWEA). The credit will apply to all wind projects that start construction before the end of the year, according to AWEA. Without the extension, the PTC would have ended in December and put in jeopardy 75,000 jobs in the U.S. wind energy sector, according to the industry group. New construction had slowed as developers awaited a congressional decision.
(ISSN0197-6680) Vol. 41 No. 1
January 7, 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.
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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
Lame duck session results in little resolution of issues BY KAY SHIPMAN FarmWeek
State legislators did not resolve the looming pension debt or other pending issues last week during the first few days of the lame duck legislative session. Representatives were scheduled to return Sunday (Jan. 6) and continue through Tuesday, while the Senate might return Tuesday. “In the closing minutes of Thursday’s session, Senate President (John) Cullerton indicated the Senate may return on Tuesday to take action on items the House may consider,” said Kevin Semlow, Illinois Farm Bureau director of state legislation. “But Cullerton hinted it was highly unlikely that senators would return.” The Senate took no further action to address the $94.6 billion unfunded liability of the state employee and teacher pension system. Senate leaders indicated the House already has legislation, which the Senate passed in the spring, to institute partial pension reforms for state employees and state legislators, Semlow noted. The underlying message from the Senate was that the House should pass its pension measures first, he added. The issue of gun control surfaced with proposals to restrict the use and sale of certain
types of guns through amendments to HB 815 and HB 1263. IFB opposes both amended bills. The Senate didn’t take any action on the bills, which are on the Senate floor and could be addressed Tuesday if the Senate returns. HB 815 would limit ownership and use of large-capacity ammunition feeding devices, starting Jan. 1, 2014. The bill would exempt a magazine, belt, or similar device that holds more than 10 rounds if the device were owned before Jan. 1, 2014. HB 1263 would ban assault weapons, .50caliber rifles, and other special firearms. Strict criminal penalties would be established for individuals who possess those types of weapons. An individual who owns such weapons before Jan. 1, 2014, and registers them with the Illinois State Police would be exempt from the ban. Shooting ranges and law enforcement officials would be able to own those types of weapons, and shooting ranges could lease those weapons for use on their premises only. Another issue was a proposal to legalize same-sex marriage via an amendment HB 4963. IFB opposes the amendment. The Senate Executive Committee passed the amendment on an 8-5 vote. However, the bill’s sponsor did not call the bill for a vote after it became clear there were not enough Senate votes for passage.
IFB focusing on state budget in upcoming spring session With the state’s economic problems continuing, Illinois Farm Bureau will support a budget that includes maintenance funding of core ag programs and no program growth, the IFB board decided at its December meeting. “Within the current revenue-and-tax stream, maintaining funding for key Illinois Department of Agriculture (IDOA) programs is important,” said Kevin Semlow, IFB director of state legislation. “We should keep as whole as possible such programs as meat and poultry inspection, warehouse and grain dealer oversight, weights and measures services, pesticide use, food and agricultural products inspection, and animal health,” Semlow said. “Our support includes many other programs that provide direct support to production agriculture, such as the Soil and Water Conservation Districts, University of Illinois Extension, county
fairs, and others,” he added. IFB again will support legislation to establish reasonable regulations for hydraulic fracturing or fracking and
horizontal drilling operations. Those regulations would provide appropriate safeguards for the protection of land and water resources. Negotiations on establishing regulations have been ongoing for some time. “IFB will continue to work with legislators and interested parties to develop regulations that protect natural resources, our members’ property rights, and allows for successful development of hydraulic fracturing in Illinois,” Semlow added. An issue expected to resurface is an increase in the minimum wage. IFB opposes an inflation-
ary increase in the minimum wage along with proposed removal of the overtime exemption for ag employers. “This will be a big issue again this year, and IFB will communicate to the legislation sponsor and other legislators about our strong opposition,” Semlow said. Other legislative priorities include: • Legislation mandating that any decision to permanently close a road or permanently post a reduced-weight limit would require the unanimous approval of the road commissioner, county engineer, and a majority of the elected members of the board associated with the road district; • Legislation to establish statewide standards for commercial wind energy generation systems that provide adequate protection of private property rights and allow for reasonable development of commercial wind energy projects. — Kay Shipman
Page 3 Monday, January 7, 2013 FarmWeek
government
Fiscal package offers short-term biofuels spurt BY MARTIN ROSS FarmWeek
Congress has provided another temporary growth spurt for the biofuels sector, which hopes to power major new supplies and demand in 2013. As part of last week’s lastminute “fiscal cliff ” package, lawmakers granted a one-year extension of the expiring cellulosic ethanol producer tax credit and the alternative fuel infrastructure tax credit for retailers who install new multiblend “flex pumps” or dedicated E85 pumps. Congress extended the $1per-gallon biodiesel fuel blenders tax credit to 2013 and made it retroactive for 2012. That means diesel fuel suppli-
ers who blended soy-based or other biofuels can receive credits for the past year as well as through next Dec. 31. The biodiesel credit expired Jan. 1, 2012, and biodiesel interests had lobbied all year for its restoration. The American Soybean Association listed credit extension as well as estate tax relief among its “foremost priorities.” Tom Buis, president of the biofuels group Growth Energy, lamented congressional failure to approve more long-term extension of biofuels credits, arguing “anybody in business needs more certainty than one year at a time.” But along with recent reaffirmation of 2013 federal Renewable Fuel Standard (RFS2) corn
ethanol requirements, extension of tax credits provides shortterm security for an ethanol industry that’s been on the ropes amid drought and supplyand-demand concerns, Buis said. “How do you get market access, direct to the consumer, when the competition controls all the distribution at the pump?” he told FarmWeek. “We know we can compete, but if you’re blocked from the market, you can’t compete. That’s why the RFS2 is still important from the mandate standpoint. “But if you’re ever going to make next-generation biofuels competitive, they’re going to need a little help at the start.” Buis hopes anticipated
Immigration, dairy, farm bill on AFBF agenda? Delegates at next week’s American Farm Bureau Federation (AFBF) annual meeting are expected to address issues ranging from ag labor and renewable fuel mandates to dairy sector concerns and, possibly, goals for the next round of farm bill debate. Illinois Farm Bureau delegates will present their national policy priorities during the Nashville, Tenn., convention. Following recent debate over the federal Renewable Fuel Standard (RFS2), IFB will support addition of AFBF language supporting the biofuels standard. IFB also may engage in discussion of animal identification and traceability and immigration policy. AFBF delegates will consider support for a proposed two-tiered ag temporary worker program that would enable undocumented workers in the U.S. to continue working and give farm employers greater flexibility in using foreignborn labor. While AFBF staff was anticipating a relatively uneventful delegate session, Congress’ failure to approve a new farm bill could influence discussions. “Not much has changed from last year,” AFBF Director of Grassroots Advocacy Cody Lyon told FarmWeek. “If anything, there may just be a strengthening of position and efforts to put us in the right spot for the discussions this year.”
President Obama’s stated desire for labor reforms over the next few months could spur immigration discussion, and transportation also could provide fodder for policy development, he said. National renewable fuels debate could prove lively, possibly exploring measures to assure grain stocks for livestock and other markets, according to Lyon. The dairy industry remains particularly in flux amid the farm bill stalemate. Lyon reported state Farm Bureau resolution submissions were “all over the board,” and delegate debate could break down among larger and smaller dairy production states. In addition, Ann Larson of Shabbona will represent IFB in AFBF’s Young Leader Discussion Meet finals in Nashville. IFB Young Leader Achievement Award winners Chad and Ashlie Broster of Mount Carmel will compete for AFBF’s top Young Farmer and Rancher award. And three Illinois county Farm Bureaus will be recognized at the convention through AFBF’s County Activities of Excellence Program. Cook County’s County Staff Exchange, Grundy County’s Grow a Garden, Feed a Family project, and Livingston County’s Project PAIL (Promoting Agriculture in Literature) will be featured on the AFBF exhibit floor. — Martin Ross
Fiscal cliff Continued from page 1 $200,000 of purchases in 2014 and subsequent tax years. Congress extended 50 percent bonus deprecation for the 2013 tax year — an additional benefit for farmers planning near-term capital investments. An IFB “action request” generated more than 4,400 member contacts from Nov. 30 through Dec. 7 in support of existing estate tax/capital gains provisions, extension of Section 179 expensing and bonus depreciation, and continuation of renewable fuels and energy tax credits. Beyond extending cellulosic ethanol and biofuels infrastructure tax credits and reviving an expired biodiesel credit Congress provided firstyear 50 percent bonus depreciation for cellulosic biofuels facilities. Lawmakers also extended for one year a pro-
duction tax credit of 2.2 cents per kilowatt-hour for production of electricity from wind energy and the Community and Distributed Wind Investment Tax Credit, which renewable electricity producers can use in lieu of the production credit. Illinois U.S. House members supporting the fiscal cliff measure included Republicans Judy Biggert of Hinsdale, Robert Dold of Kenilworth, Tim Johnson of Urbana, Adam Kinzinger of Manteno, Don Manzullo of Leaf River, Aaron Schock of Peoria, and John Shimkus of Collinsville, and Democrats Jerry Costello of Belleville, Jan Schakowsky of Evanston, and Chicago’s Dan Davis, Luis Gutierrez, Dan Lipinski, Mike Quigley, and Bobby Rush. “We were able to help persuade the vast majority of our (Congressional) delegation to support the bill and resolve some of our biggest-ticket agenda items,” Nelson noted.
Market entry for E15 has been slow as retailers absorb new federal and state fuel regulations and modify fueling infrastructure. But this chart shows steady growth in the number of fuel locations nationwide that offer “flex pumps,” formerly known as blender pumps, which dispense blends ranging from a standard E10 to E85 used in current flex-fuel vehicles. Flex pumps are seen as crucial in setting the stage for wide-scale U.S. sale of E15.
2013-2014 next-gen startups will buoy support for further extension of the cellulosic credit. Meanwhile, he sees extension of the infrastructure tax credit as “a critical step” in bringing E15 (15 percent ethanol blends) to consumers. With ethanol production bumping up against finite demand for E10, E15 is key to sector growth. Installation of flex pumps, which dispense various blends, is seen as crucial to breaking the current “blend wall” (see accompanying chart). Retailers receive a greater credit for adding E85 pumps
Farm bill
than for installing flex pumps. Growth Energy pushed unsuccessfully for lawmakers to provide “more equitable” credits for all blends above E10, Buis said. “We still have production overcapacity out there — that’s part of what’s depressed prices and margins in the ethanol industry and why we’ve recently seen plants cut back or close,” he reported. “Until we scale that blend wall and have that market access, we’re going to see some very difficult times. That’s why it’s so critical to get E15 into the marketplace.”
Continued from page 1 colleagues in reviving interest in what he termed “a newer, transitional, thoughtful farm program.” Beyond commodity programs, the national Center for Rural Affairs called the extension a “disaster.” Executive Director Chuck Hassebrook argued the farm bill deal endangers “many smaller, targeted programs that invest in proven strategies to create rural jobs, revitalize rural communities and initiatives to foster a new generation of family farmers.” The deal also prevents farmers from being able to improve soil and water conservation through new enrollments in the Conservation Stewardship Program, Hassebrook warned. “The fiscal cliff bill does not address deficit reduction, whereas the 2012 farm bill as passed by the full Senate and the House Agriculture Committee would have saved taxpayers $23 billion and $33 billion, respectively, while maintaining needed funding for important conservation programs.” Tom Buis, CEO of the biofuels group Growth Energy, called the extension a “big disappointment” for prospective next-generation biofuels producers. Lawmakers reauthorized USDA’s Biomass Crop Assistance Program (BCAP) and Biorefinery Assistance Program (BAP), as well as the Rural Energy for America Program (REAP), which helps producers and small businesses complete renewable energy systems or energy efficiency improvements and conduct energy audits and helps foster renewable energy development. But again, those programs received no new funding. “After the ’08 farm bill, (BCAP and BAP) were slow in getting started,” Buis told FarmWeek. “USDA finally got them working, but it takes awhile. It would be a shame to pull the rug out from under them at this point. “If (farmers and entrepreneurs are) going to develop next-generation biofuels, they’re going to need some incubation. Getting new appropriations in this type of budget climate is going to be pretty darned hard.” — Martin Ross
FarmWeek Page 4 Monday, January 7, 2013
watershed issues
River rock removal continuing on schedule BY MARTIN ROSS FarmWeek
Rock removal in the Thebes reach of the Upper Mississippi was “progressing beautifully,” St. Louis District Corps of Engineers spokesman Mike Petersen told FarmWeek late last week.
Rock pinnacles, underwater projections within the navigation channel, are potential lowwater impediments to winter barge movements in the key St. Louis to Cairo region. Rock blasting began Dec. 21 after contractors Newt Marine and Durocher Dock and Dredge
Crews continue to remove rock from the Thebes reach of the Upper Mississippi River between St. Louis and Cairo last week. Contractors hope to complete work in that area by the end of the month. Additional rock pinnacle removal will be contracted soon to ensure that barges will continue to pass through the region this winter. (Photo by Steve Schulte Photography for Illinois Farm Bureau)
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had mechanically excavated more accessible rock. Petersen anticipated completion of Thebes-area work by month’s end. “They’ve addressed most of the rock within the 300-foot (wide) channel,” he told FarmWeek. “There’s still a lot left — a lot of ‘outliers’ (outside the central channel) that need to be chased down. “Those outliers constrict the width of the channel. A lot of what we’re dealing with is at a bend just north of Thebes. When tows go through a bend, they need a lot more room.” The Corps expects soon to award contracts for additional rock removal near Grand Tower. Removal of some 890 cubic yards of rock was deemed crucial to maintaining the area channel after Corps officials stated they were unable to release added waters from Missouri River reservoirs to increase water depth to aid in Mississippi navigation. In addition, the Corps to date has twice released waters from Carlyle Lake reservoir on the Kaskaskia River to shore up the Mississippi channel. Water has been diverted from some upstream Mississippi locks to further “minimize the fall of the river,” Petersen said. Because Thebes crews have been working in 16-hour daily shifts, tows have experienced
some delays moving through the area. But Petersen said no special navigation restrictions have been necessary. He reported barge delays similarly have been minimal at Lock 27 at Chain of Rocks, where the Corps is overseeing replacement of miter gates and other repairs. “It’s significant that we’ve
gotten through the harvest,” Petersen said. “We were looking at this issue back in August — the concern was that we wouldn’t be able to get harvest to market. But we’ve been able to keep the channel open for that. The campaign’s not over, but at least we’ve won a couple of battles.”
Jackson out; deputy top choice?
EPA turnabout ‘victory’ leaves key questions
As 2013 drew to a close, livestock producers hailed U.S. Environmental Protection Agency’s (EPA) decision to back away from a controversial clean water directive. However, EPA may simply have opted to fight another day for more stringent ag regulation, American Farm Bureau Federation (AFBF) regulatory specialist Don Parrish suggested. Last month, EPA withdrew an order demanding a West Virginia poultry grower obtain a federal clean water permit for her farm. EPA had ordered Lois Alt to obtain a Clean Water Act discharge permit for stormwater runoff from her farmyard or face up to $37,500 per day in penalties. EPA’s withdrawal of the order came six months after Alt filed suit against the agency and six weeks before Alt and the AFBF were scheduled to file briefs challenging EPA’s interpretation of the law. The U.S. District Court for the Northern District of West Virginia ruled in October that AFBF and West Virginia Farm Bureau had the right to join Alt’s lawsuit. EPA had opposed the Farm Bureaus’ participation, and while EPA’s order withdrawal was a victory for Alt, it leaves unresolved a major legal issue with serious implications for other livestock and poultry farmers that must be addressed, according to AFBF General Counsel Ellen Steen. EPA has not backed away from its position that any amount of on-ground “pollutant” at a poultry or livestock farm requires a livestock permit, and apparently “does not want to defend its position in court,” Steen said. By keeping the issue out of court, EPA essentially “has reserved the right to try to bully individuals with this same type of approach, anywhere it wants to,” Parrish said. “Rather than settling this as a point of law, (EPA) wants to keep those arrows in its quiver, to pick off individual farms on a caseby-case basis,” he told FarmWeek. “I see this administration being pretty active in the environmental arena, and I don’t see any way to stop it.” In withdrawing its permit order, EPA cited new management practices identified in a May 2012 reinspection of the Alt farm. But EPA’s report also stated dust, feathers, and small amounts of manure still were observed on the ground at the farm — the basis of EPA’s order, Steen noted. Over the past year, lawmakers have made a pass at staying EPA’s regulatory hand through the farm bill and other measures. But partisan rancor surrounding December’s fiscal debate and forthcoming haggling over the U.S. debt ceiling raise doubts about Congress taking another run at regulators in 2013 or reaching “a consensus on anything to do with the environment,” Parrish said. Even Senate confirmation of a successor to departing EPA Administrator Lisa Jackson likely will prove a protracted and “nasty process,” he predicted. Deputy Administrator Robert Perciasepe reportedly has the inside track for the job, though the short list also includes former Pennsylvania Department of Environmental Protection chief Kathleen McGinty and EPA’s Office of Air and Radiation Assistant Administrator Gina McCarthy. Perciasepe will take the reins as acting administrator if the Senate fails to confirm Jackson’s successor by her departure at month’s end. Perciasepe generally has been charged with managing EPA’s regional offices, and is “maybe a little more pragmatic than Lisa Jackson” on the impact of federal regulations, Parrish said. “That said, he’s been around a long time,” he noted. “He has a background with the Audubon Society; he’s had a background with some of the state agencies. He’s been in (EPA’s) Office of Water; he’s been in the Office of Air. He knows how to maneuver.” — Martin Ross
Page 5 Monday, January 7, 2013 FarmWeek
ENviRoNmENt
2012 second-warmest on record 3-month forecast is encouraging BY DANIEL GRANT FarmWeek
Jasper County farmer Joe Bergbower shows a turnip, left, and a tillage radish he grew in a cover crop near Newton. Bergbower’s cattle graze overwinter on cover crops, which had an ideal growing season this fall. (Photo courtesy Joe Bergbower)
Cover crops stretching farmer’s hay supplies BY KAY SHIPMAN FarmWeek
To Jasper County farmer Joe Bergbower, his cattle grazing on snowcovered tillage radishes and turnips made a beautiful sight last week. In addition to providing scenic value, Bergbower’s 240 acres of cover crops also are supplementing his hay supply. “This year was ideal. The perfect year (for cover crops),” Bergbower said. After harvesting 240 acres of corn silage, the Newton farmer planted a mix of turnips, tillage radishes, crimson clover, and rye. It is a mixture that he has perfected over the past four years. Previously the 40 cows in Bergbower’s cow-calf herd would eat a large round bale of hay each day. Now, they spend hours grazing on turnips and tillage radishes and consume about one bale per week, he said. Over time, Bergbower perfected not only his cover crop mixture, but also his planting and management practices. After harvesting corn silage off the field, Bergbower mixes his cover crop seed with fertilizer and then broadcasts the mixture. Then he rolls the field with a roller. In the spring, Bergbower said he will apply Roundup as a burn down and do minimum tillage on the cover crop fields before planting. The farmer said he has noticed the cover crops improve the soil condition by breaking up compacted layers. The improved soils also attract many worms, he added. Bergbower advised interested farmers to ease into cover crops. He planted 15 acres his first couple of years and tried different seed mixtures before finding one that met his needs.
Workshop focus cover crop strategies A two-day workshop on cover crop strategies specifically for Illinois farms will be Jan. 29-30 in the Decatur Hotel and Conference Center. The early registration deadline is Jan. 21. The meeting will be hosted by the Soil and Water Conservation Society and will provide sessions on a variety of topics. Speakers will include farmers, crop consultants, and university researchers who have extensive experience with cover crops. Through Jan. 21, the registration fee is $49. After that date, the fee will be $75 for one day and $125 for both days. Topics will include different cover crop species and specie blends, seeding options, herbicide burndown, regional applications for corn and soybean fields in Northern, Central, and Southern Illinois. For more information or to register, go online to {swcs.org}.
Many farmers will remember 2012 for its lack of precipitation. Illinois in 2012 received an average of 30.4 inches of precipitation, 9.8 inches below normal and the 10th driest year on record, the Illinois State Water Survey (ISWS) reported. But it was exceptionally warm temperatures that catapulted the drought to another level. “I’m glad 2012 is over,” said Jim Angel, state climatologist with ISWS. “It was one of the warmest on record.” The average statewide temperature in 2012 was 55.5 degrees, 3.3 degrees above normal and the second warmest on record. The average temperature last year missed tying the alltime record, set in 1921, by just 0.1 of a degree. Above-normal temperatures
last year were most prevalent from January through July and then resurfaced last month. The statewide average temperature in December was 35.8 degrees, 5.9 degrees above normal. More winter-like conditions returned last week with snow showers and colder temperatures. AccuWeather last week reported 67 percent of the contiguous U.S. was covered by snow on Jan. 1, the widest coverage of snow on that date in the U.S. in the past decade. But it’s unlikely winter precipitation will rebuild low soil moisture levels, according to Angel. “It will be hard to recover (from the drought), especially in January and February,” he said. “We receive just two inches (of precipitation) each month, on average. And there’s the added complication that, if the ground is frozen, (precipitation) may not make it into the soil.” Subsoil moisture in Illinois last week was rated 67 percent
short or very short, 32 percent adequate, and just 1 percent surplus. The good news is the three-month forecast is encouraging and historical records indicate the chance of another severe drought in 2013 is low, according to Angel. “It would be extraordinary to have two back-to-back very dry years,” he said. The National Weather Service’s three-month outlook for January through March is for an increased chance of above-normal precipitation in a large portion of the Ohio River Valley, including the southern half of Illinois. If the precipitation pattern increases, it’s form (rain, sleet, or snow) will depend on the temperature. Weather Services International recently predicted temperatures from January through March will be below normal in the northern U.S. and warmer than normal in the southern U.S., especially in the Southwest.
FarmWeek Page 6 Monday, January 7, 2013
production
Farmers advised to monitor stored grain BY DANIEL GRANT FarmWeek
It’s a new year but farmers who have drought-stressed grain in storage could encounter some of the same quality issues that showed up during the 2012 harvest. The mold that causes aflatoxin could start producing more aflatoxin in stored grain if any hot spots inside bins reach 50 degrees or more. Farmers, therefore, should continue to monitor stored
grain even though the ambient temperature has plummeted to some of the lowest levels so far this winter, according to Bob Rasmus, GROWMARK grain systems marketing manager. “Farmers should be watching grain in bins,� Rasmus said. “It needs to be monitored.� Farmers should monitor the grain temperature, moisture levels, and check for possible insect and rodent infestation. Signs of possible grain quality issues in stored grain include
a hard layer on top of the grain, warm grain beneath the surface, condensation under the bin roof, and a musty or sour odor. Farmers who find grain quality issues should start running bin fans as soon as possible and consider shipping the grain, Rasmus said. “We’ll probably see most of it (farm-stored grain) move in March (which is normal each season),� Rasmus said. Rasmus said he doesn’t expect major problems with
stored grain in coming months because the majority of the 2012 harvest went into commercial storage. Many farmers last fall hauled their crops directly to their local elevators to avoid storage issues and take advantage of premiums in the market. “The vast majority of farmers didn’t even try to store this crop,� he said. “They took it directly to market. Elevators are better equipped to dry it and clean it, in most cases.� Farmers who have grain in
on-farm storage should not go inside their bins to monitor it, Rasmus said. They should make a visual assessment of the stored grain and monitor the exhaust odors. Those who are building new bins or updating facilities can have cables installed in the bins that monitor the temperature and moisture of the grain. Some high-tech grain bin monitoring systems even alert farmers when it’s time to run the fans, Rasmus added.
Popular seed varieties in short supply for ’12 Farmers who have not secured their seed supply for the upcoming growing season should stay in close contact with their seed suppliers. Some popular corn varieties are in short supply, or in some cases sold out, until South American production arrives, according to Lance Ruppert, FS seed sales and marketing manager. “We might gain units further into winter (when products are available from South Ameri-
ca),� Ruppert told FarmWeek. The soybean seed supply also is tight, despite betterthan-expected yields on many farms last year. The decent soy yields were due to larger seeds and not more pods per plant, according to Ruppert. Soy seed sales are based on the number of seeds per unit. “The quality is good, but there is a tighter supply (of soybean seed) than in the last few years,� Ruppert said. “The
seed size is big, so farmers may have to adjust their planters.� Tight seed supplies are the result of last year’s drought. Demand also is strong as farmers are expected to plant a large number of corn and bean acres this spring. Crop production in Illinois last year declined 36 percent for corn and 11 percent for soybeans, compared to 2011, due to drought losses, according to USDA.
The Ag Department on Friday will finalize its 2012 crop production estimates. In South America, planting was delayed last fall due to wet conditions, particularly in Argentina. A cooler growing season also could delay maturity of the crops. “It probably will cause more seed to be flown back to the U.S. (rather than shipped via boat, which will add to costs),� Ruppert said. “But things are on target (with production estimates).� U.S. farmers last fall responded to the tight supply
of seeds by booking orders ahead of the usual pace. But the pace of orders slowed down recently, Ruppert reported. “(Farmers) should keep in contact with their seed suppliers,� he said. “If it’s in the shed, it’s always a good idea to take delivery.� Ruppert predicted the number of corn-on-corn acres could decline in some areas due to performance issues the past couple years. But, overall, he expects a large amount of corn and soybeans to be planted in the U.S. this spring. — Daniel Grant
Extension offering webinar series on farming topics The University of Illinois will offer 12 weekly webinars, starting Thursday, on farm production practices, management, and marketing. The free webinars will be presented by Extension’s network of small farm educators. The series is aimed at providing farmers of small acreages and others information to help them improve their farms’ profitability and sustainability. Interested participants may register until the day before a specific session or register for all the sessions simultaneously. To register, go to {http://extension.illinois.edu/go/smallfarmswebinar}. Participants may submit questions during the sessions. However, each session will be archived and may be viewed at any time. January dates and topics are: Thursday, raising broiler turkeys on small farms; Jan. 17, strawberry production; Jan. 24, water sanitation for small farms’ produce; and Jan. 31, wildlife damage control. February dates and topics are: Feb. 7, basics of fruit insect management; Feb. 14, introduction to farm financial management; Feb. 21, seed saving; and Feb. 28, managing crop rotations in high tunnels. March dates and topics are: March 7, farm-to-school sales; March 14, beneficial insects; March 21, weed control in pastures; and March 28, crop budgeting practices. MAZIMIZING EVERY ACRE
Ag info offered on U of I Extension Pinterest boards
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Agriculture, food and nutrition, and gardening are among the topics offered on the University of Illinois Extension Pinterest boards. Pinterest is an online content-sharing service that allows individuals to “pin� image, videos, and other information to their board. Think of it as a bulletin board of items you like, want to keep, or share with others. To find the site, go online to {pinterest.com/uiextension}.
Page 7 Monday, January 7, 2013 FarmWeek
extension
U of I Extension seeking research answers for Illinois’ problems BY KAY SHIPMAN FarmWeek
Illinois taxpayers will get more bang for their research bucks as more University of Illinois research reaches the public, according to Bob Hoeft, the U of I’s interim assoBob Hoeft ciate dean for Extension and outreach. Recently Hoeft reported an effort was under way to
tap experts across the university to develop researchbased Extension programs. Dean Bob Hauser of the College of Agricultural, Consumer, and Environmental Sciences (ACES) is leading the effort. “Millions of dollars of research is being done and it never gets out. It’s published in a journal. The research doesn’t get used, and that’s what Extension is all about,” Hoeft said. He pointed to U of I kinesiology research into exercise for specific human
conditions; however, those results have not been offered
for public benefit. “The opportunities are there to take the tax dollars we are paying and get the research out to the public, to meet the needs and address some of the state’s major problems,” he said. To address the needs of new vegetable and fruit growers, Extension educators are planning all-day, hands-on sessions. The sessions will be conducted on university research farms at Dixon Springs (Simpson), Champaign, and St. Charles. The
Survey results show need for farmer, consumer conversations Consumers and farmers see a need to share information about how food is grown and raised, according to recently released results of a U.S. Farmers & Ranchers Alliance (USFRA) survey. The survey of 1,250 consumers nationwide with an additional 236 New York City consumers and 501 farmers and ranchers nationwide was conducted in late October. Among the key consumer findings: • 53 percent of consumer respondents believe food production is heading in the right direction, up from 48 percent who responded to a 2011 USFRA survey. • More than one in four respondents (27 percent) admit
they often are confused about the food they are buying. Young adults ages 18 to 29 (38 percent) are more likely to be confused about food purchases than any other age group. • Three in five said they would like to know more about how food is grown and raised, but they don’t feel they have the time or money to make that a priority (59 percent). • Respondents overall (84 percent) believe farmers and ranchers in America are committed to improving how food is grown and raised. Among farmers and rancher respondents, the survey findings indicated: • Three-fourths believe the average consumer has little or
Milk prices drop $2 The Class III price for milk adjusted to 3.5 percent butterfat for the month of December was $18.66 per hundredweight, $2.17 lower than the previous month. The last time producers saw a $2 drop in price was during the summer of 2011. Although consumers avoided the much talked about “dairy cliff,” prices seemed to be due for a correction. Higher production numbers, coupled with more cows being milked compared to last year, are contributing to more milk on the market. This has softened prices considerably.
no knowledge about food production in the U.S. Nearly three out of five farmers and ranchers believe consumers have an inaccurate perception of modern agriculture (59 percent). • Farmers and ranchers want to see more emphasis on sustainability and the environment (42 percent) and transparency with consumers and customers (36 percent).
USFRA is comprised of more than 80 farmer- and rancher-led organizations, including Illinois Farm Bureau, and agricultural partners working to have conversations with consumers who have questions about how food is grown. To learn more about USFRA’s survey results, see the News and Information section of {fooddialogues.com}.
upcoming sessions are attracting much interest, Hoeft noted. Extension educators are teaching nutrition to lowincome people in the East St. Louis area by sharing information during grocery shopping trips. On the bus ride back from the store, the educator discusses proper storage, handling, and uses for produce and other foods. Extension programs and information about nutrition and health also will be key in a new program being developed with a Chicago public hospital. Hoeft said hospital officials originally approached university specialists to help start a 100-acre vegetable farm. The idea evolved into educational programs to control heart disease, diabetes, and other diseases through improved diet, according to Hoeft.
FarmWeek Page 8 Monday, January 7, 2013
Page 9 Monday, January 7, 2013 FarmWeek
from the counties
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ROWN — Farm Bureau’s annual meeting will be at 7 p.m. Wednesday, Jan. 16, in the Farm Bureau office basement in Mt. Sterling. Call the Farm Bureau office at 773-2634 for more information. OLES — Farm Bureau will sponsor a family bowling party at 3 p.m. Saturday, Jan. 19, at the Charleston Lanes. Cost is $1.50 per game and $1.50 for shoe rental. Call the Farm Bureau office at 3453276 for reservations. • Farm Bureau’s annual meeting will be at 5:30 p.m. Monday, Jan. 21, at the Lifespan Center, Charleston. Cost is $9. Call the Farm Bureau office at 345-3276 by Friday for reservations or more information. RUNDY — Farm Bureau’s annual meeting will be at 5 p.m. Thursday, Jan. 10, at Chapin’s North Banquet Facility in Morris. Cost is
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$15. The keynote speaker will be Rep. Pam Roth (RCoal City). Call the Farm Bureau office at 942-6400 for more information or tickets. ASALLE — The Young Leader Committee will sponsor its annual kickoff meeting at 6:30 p.m. Wednesday, Jan. 16, at Bianchi’s Pizza in Ottawa. Members between the ages of 18 and 35 may attend. Call the Farm Bureau office at 433-0371 for more information. EE — District 4 Young Leaders from Bureau, LaSalle, and Lee County Farm Bureaus will sponsor a curling event at 7 p.m. Friday in Triumph. Call the Farm Bureau office at 857-3531 or email leecfb@comcast.net for more information or to make a reservation. • Farm Bureau will form a committee to plan the county Farm Bureau’s 100th year celebration and to compile
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Chicago Farmers to discuss wind easements, pipelines The Chicago Farmers will discuss wind easements, pipeline projects, and transmission lines Monday in the Illini Center, 200 S. Wacker Drive, Chicago. Reservations are due by Friday. Ryan Gammelgard, an Illinois Farm Bureau attorney, will share information that landowners should know about easement agreements related to public utility, pipeline, or wind projects proposed to cross their land. His presentation will address provisions which may be included in these agreements, those to avoid, and general information on how to protect a landowners’ interests. He also will provide an overview of some current projects. Registration will start at 11:30 a.m., followed by the meal and program at noon. The member fee is $25 in advance or $35 at the door. The non-member fee is $50. Register online at {chicagofarmers.org} or by calling 312-3883276.
Travel with other Farmers!
Rocky Mountain & Western Frontier 14 Days
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COLORADO - WYOMING - SOUTH DAKOTA - MONTANA - UTAH
Plus...Yellowstone National Park
Depart July 10 & August 14, 2013 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
the history of the organization. Contact the Farm Bureau office at 857-3531 or email leecfb@comcast.net if you are interested in serving on the committee. • The Young Leaders will attend an Ice Hogs hockey game on Saturday, Feb. 16, in Rockford. Tickets are $12. Contact the Farm Bureau office at 857-3531 or email leecfb@comcast.net for more information or reservations. IVINGSTON — Farm Bureau will offer Farm Bureau members a $150 reimbursement toward the purchase of a ROPS (Rollover Protective Structures). Deadline to receive the reimbursement is Jan. 31. To receive the reimbursement, bring paid invoice to the Farm Bureau office. Call the Farm Bureau for participating dealers. ACON — Macon County Farm Bureau scholarships are available to members majoring in an agricultural-related field. Scholarship applications are available at {maconcfb.org} and must
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be postmarked by March 1. Call the Farm Bureau office at 877-2436 for more information. ONTGOMERY — Farm Bureau Prime Timers will sponsor a luncheon and meeting on Wednesday, Jan. 16, at the Farm Bureau office. Cost is $8. Montgomery County Board Chairman Roy Hertel will be the guest speaker. Call 532-6171 by Jan. 11 for reservations or more information. ERMILION — Farm Bureau will sponsor a spring outlook seminar at 9:30 a.m. Monday, Jan. 21, in the Farm Bureau Auditorium. Speakers will include Dale Durchholz, AgriVisor; Wayne Nelson, L&M Commodities; Jason Risley, JBS United; and Suzi Etchison, Stewart Grain. AYNE — A 2013 crop insurance program will be at 7 p.m. Tuesday, Jan. 22, at the Frontier Community College Foundation Hall, Fairfield. Doug Yoder, Illinois Farm Bureau senior director of affiliate
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and risk management, and Ron Gray, Country Financial crop specialist, will be the speakers. Call the Farm Bureau office at 842-3342 for reservations or more information. HITE — The annual meeting will be at 10:30 a.m. Friday at the Farm Bureau office. Read the complete notice of the annual meeting at {whitecfb.com}. Call the Farm Bureau office for reservations. • A silent auction benefiting the White County Ag in the Classroom program will be held in conjunction with the annual meeting on Friday. Contact Brianne Foster at 618-599-6338 if you have an item to donate for the auction.
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“From the counties” items are submitted by county Farm Bureau managers. If you have an event or activity open to all members, contact your county Farm Bureau manager.
FarmWeek Page 10 Monday, January 7, 2013
proFitability
Economist: Hog prices could rise despite large inventory BY DANIEL GRANT FarmWeek
Hog prices could improve this year compared to last year despite the fact USDA recently predicted larger-than-expected herd numbers. USDA in its quarterly hogs and pigs report last month estimated the inventory of all hogs and pigs in the U.S. as of Dec. 1 totaled 66.3 million head, down slightly from a year ago but well above pre-report estimates. “The report indicated there is about 1 percent more hogs than pre-report estimates,” said Ron Plain, ag economist at the University of Missouri. Many analysts and economists predicted the U.S. swine herd would shrink due
to high feed prices. “We’ve cut back a little bit, but nothing like what was implied in September (when USDA projected hog farrowings would decline 3 percent),” Plain said. “What hog producers really did was stop herd Ron Plain expansion, due to higher feed costs and red ink.” The herd could grow in 2013, though, as the breeding inventory (5.82 million head) was up slightly from a year ago. U.S. hog farmers the first
Scott County FSA office to go to part time hours Effective today (Monday), the Scott County Farm Service Agency (FSA) office in Winchester will be open one day each week, according to FSA State Executive Director Scherrie Giamanco. The office will remain open from 8 a.m. to 4:30 p.m. Wednesday for normal FSA business and closed the remainder of the week. Business hours of other co-located agencies, such as Natural Resources Conservation Service, the Soil and Water Conservation District, and Rural Development, will remain unchanged. Customers may continue to conduct all FSA business at the Scott County FSA office on Wednesday. FSA customers wishing to have access to FSA on a full-time basis will have the opportunity to transfer their farms to an adjacent county FSA Service Center. For more information regarding the revised office hours or the transfer of farms, contact Rebecca Walls, county executive director, Greene County FSA Service Center, at 217-942-5402.
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-$61.49 n/a
Weighted Ave. Price $45.52 n/a
This Week Last Week 92,156 61,467 *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 $80.64 $75.88 $80.67 $56.15
Change 4.76 24.52
USDA five-state area slaughter cattle price Steers Heifers
(Thursday’s price) (Thursday’s price) Prev. week Change This week n/a 127.24 n/a n/a 127.00 n/a
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 149.58 147.46 n/a
Lamb prices Slaughter Prices - Negotiated, Live, wooled and shorn 120-176 lbs. for 94-120 $/cwt. (wtd. ave. 106.23)
Export inspections (Million bushels) Week ending Soybeans Wheat Corn 12/27/2012 12/27/2012 35.5 7.8 7.9 12/20/2012 45.4 15.2 13.9 Last year 34.4 13.4 25.2 Season total 774.0 515.8 255.7 Previous season total 566.4 596.3 548.1 USDA projected total 1345 1050 1150 Crop marketing year began June 1 for wheat and Sept. 1 for corn and soybeans.
quarter of this year intend to farrow 2.86 million sows, up from a year ago, USDA reported. Plain predicted the large hog inventory this year will lead to a slight increase in slaughter, about 0.2 of a percent, compared to last year. One reason hog production has remained steady is improved efficiency. Hog producers last quarter set a new record with an average of 10.15 pigs saved per litter. “Even though I’m expecting similar to slightly higher slaughter numbers this year, I think we’ll end up with slightly higher prices,” Plain said. “A lot of that is based on the competing meat supply tightening.”
quarter, the low $90s in the second and third quarters, and back to the $80s in the fourth quarter. “Whether those prices will be profitable depends on summer weather,” Plain said.
“If it rains, there could be a big drop in feed costs,” he continued. “But these hog prices I’m expecting won’t be enough to cover the cost of production if corn stays at $7 (per bushel).” U.S. pork exports could set another record this year, which also would support prices. “With Europe’s new housing rules (which took effect Jan. 1), they (the Europeans) will be less competitive in the world pork market,” Plain said. “That should be good news for U.S. pork exports.” A ban on sow gestation stalls and other welfare regulations took effect Jan. 1 in the European Union.
acreage number is going to be less,” Winstead said. “That’s where the lower production number will come into play.” USDA previously forecast national average yields of 122.3 bushels per acre for corn and 39.3 bushels per acre for beans. The most recent Illinois yield averages were pegged at 101 bushels per acre for corn
(down 56 bushels from a year ago) and 43 bushels per acre for beans (down 4.5 bushels from a year ago). Winstead also predicted U.S. corn exports will be lowered on Friday due to the slow pace of shipments. USDA will release countylevel data for corn and beans Feb. 21. — Daniel Grant
The economist projected U.S. output of beef, chicken, and turkey will decline this year. He predicted hog prices could average in the low $80s per hundredweight the first
FarmWeekNow.com To check out the status of the Illinois hog industr y from this latest report, go to FarmWeekNow.com.
USDA to release key reports Friday USDA’s highly anticipated reports Friday will provide some direction for the crop markets. USDA will release its final production estimates for the 2012 corn and soybean crops, the winter wheat seedings report, and the monthly world agricultural supply and demand estimates. “We’ll get a lot of different pieces (of the crop supply and demand picture) on Friday,” said Cory Winstead, AgriVisor market analyst. Winstead predicted the final crop production estimates could be lower than the previous forecast. He projected U.S. corn production could be lowered from 10.72 billion bushels to 10.69 billion bushels while soybean production could be trimmed from 2.97 billion bushels to 2.95 billion bushels. “I think the (harvested)
AgriVisor website features podcasts People looking for additional insight into the ag markets and news can use a new feature on the AgriVisor website. The site now features multi-weekly podcasts (audio market commentary and interviews) about key market news and trends. The podcasts can be accessed by visiting the AgriVisor website {AgriVisor.com} and clicking on the AgFanatics podcast icon. “The idea is there is a lot of information out there,” said Cory Winstead of AgriVisor. “We try to consolidate it into 10to 15-minute audio (segments).” The podcasts include audio commentary from AgriVisor analysts along with interviews of guest speakers. New podcasts typically will be posted to the site on Tuesdays, Thursdays, and days of key USDA reports.
IMPA to host dairy meetings
Milk producers face post-drought challenges
Recent rain and snowfall helped ease drought concerns on many farms in Illinois. But dairy producers still face a number of challenges heading into 2013, including lingering effects of the drought. The Illinois Milk Producers Association (IMPA) this month will host three regional dairy meetings that will address topics that include feeding drought-stressed forages, transition cow management, a feeding update, and calf and heifer management. The meetings will be Jan. 22 at Highland Community College, Freeport; Jan. 23 at the Illinois Farm Bureau Building, Bloomington; and Jan. 24 at Kaskaskia College, Centralia. Each meeting will be from 9:30 a.m. to 2:50 p.m. For details and registration, visit the website {illinoismilk.org} or call 309-557-3703. “We’re seeing milk price declines,” said Mike Hutjens, University of Illinois Extension dairy specialist, who will be one of the speakers at the dairy meetings. “There certainly is concern about where the price of milk will be in 2013.” USDA this month reported Class III milk prices averaged $17.40 to $17.50 per hundredweight, which was down from November prices. “Prices could be down 10 to 15 percent if
futures estimates are correct,” Hutjens said. The dairy market has been saturated by record milk production in New Zealand and has been further pressured by economic concerns in the U.S. and around the world. U.S. milk production next year is projected to remain steady, compared to this year, at 199.7 billion pounds. Dairy producers should benefit from lower corn and soy meal prices. But feed availability, feed quality, and high feed prices likely will remain issues for dairy producers well into next year. “We’re not out of the woods from the drought yet,” Hutjens said. Forages have stopped growing for the winter, supplies remain tight, and prices are high, the dairy specialist noted. There also have been issues with forage quality because many farmers harvested everything possible in an effort to address short supplies. Corn quality issues also could emerge once the temperature warms up this spring. “Aflatoxin could rear its head in the spring,” Hutjens said. The dairy meetings next month also will feature a trade show, which will offer producers a chance to see what’s new in the industry. — Daniel Grant
Page 11 Monday, January 7, 2013 FarmWeek
PROFITABILITY Corn Strategy
CASH STRATEGIST
South American crops look good Even though Argentine farmers have had to battle a wet planting season, the total soybean crop picture in key South American countries is shaping up very good this year. Brazil had few planting problems to start the season, although there was some anxiousness about dryness in the north when planting began. Paraguay’s planting and early growing season conditions also have been very good. With the calendar flipping to the new year, the focus will become even more intense. But at this point, there’s reason to expect good soybean crops from all three countries. Last week, the U.S. agriculture attaché in Brazil forecast an 83-million-metric-ton (3.05 billion bushels) crop. That was 2 mmt larger than the official USDA forecast, and slightly larger than the official Brazilian forecast released in December of 82.6 mmt. A new forecast will be released on Jan. 9. The Argentine government hasn’t released an official estimate yet, but it’s generally believed that country will produce 55 mmt (2.02 billion bushels) this year. Traders at the Buenos Aires Grain Exchange think planting
is 85 percent complete, with mostly double-crop planting yet to do. They report the crop is in good shape. Planting is thought to have increased nearly 5 percent in Paraguay. And given the good growing weather so far, some believe the crop there could be as large as 8.5 mmt, more than double last year. The combined output of the three could reach 146.5 mmt, if not higher. That’s equivalent to 5.38 billion bushels. The corn crop will be the loser in Argentina. The drag in planting, 82 percent complete, could trim plantings more than the half million hectares already expected. Traders in Buenos Aires indicate the crop that’s already planted is in good shape. But the trade is thinking the crop might end up closer to 26 mmt instead of the 27.5 mmt USDA forecast last month. Prospects for Brazil are more promising. Even though first crop plantings slipped slightly, better yields should boost output. The early start to soybean harvest should pave the way for timely planting of the second crop. The area is expected to be the same, maybe slightly larger. Yields could slip from last year’s record, dropping output slightly. In total, the Brazilian corn crop might drop only slightly from last year’s 73 mmt; it could end up just as large.
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ü2012 crop: The break to start the new year confirmed the short-term trend turned down. From a timing perspective, prices could stay weak through February. Use a rally to $7 on March futures for catch-up sales. We may add an increment at that level, or we may wait until after the USDA production, supply, and demand reports on Friday. ü2013 crop: The turn down accelerated with the new year. But prices should be near a short-term low. Use a bounce to $5.90 to make catch-up sales. If that comes in the next couple of weeks, we could even add to sales, but we prefer to wait until after the USDA reports. vFundamentals: Slow export demand remains the biggest fundamental drag on the complex. Competition from Brazil and feed wheat continue to divert demand from U.S. corn. But the bigger driver of the decline in prices may have been hedge fund liquidation of long positions. But even as they drove prices lower, end users didn’t show an inclination to extend coverage.
Soybean Strategy
ü2012 crop: The break to start the new year changed the complexion of the market. Use rallies to $14 on March futures to make catch-up sales. Target a rally to $14.35 on March to add a sale; check the Hotline. ü2013 crop: Use a rebound to $13 on November 2013 futures for catch-up sales. We would like to add another increment but feel it’s still too early to get too negative. Still, check the Hotline after Friday’s USDA reports. vFundamentals: Hedge fund liquidation pressure drove the decline in the soybean complex to start the year. Still, improving weather in South America and reports of very early harvest in Brazil were enough to keep end users sidelined. Adding to the negative part of the mix were more Chinese soybean cancellations. We think those are a “cancel/replace” order, but they are being replaced by South American purchases. The focus for this week will
be the USDA reports.
Wheat Strategy
ü2012 crop: Chicago March dropped through psychological support at $7.50, opening the door for it to slip toward $7. We are reluctant to get too negative at this time with the hard red winter crop in such poor condition. At a minimum there should be a good rebound for making sales, one that could carry prices back toward $7.90. ü2013 crop: The recent breakdown all but ended the possibility of seeing Chicago July getting above $8 again.
Plan on using a rebound into the $7.90s for adding to sales; check the Hotline frequently. vFundamentals: The latest monthly crop condition updates for the Southern Plains indicate the condition of the hard red winter crop declined in December. But instead of focusing on that, the trade appears to be watching the change in weather pattern that has started to bring more weather systems over the Southern Plains. Moisture has not ended the drought, but the forecasts consistently hold promise for more.
FarmWeek Page 12 Monday, January 7, 2013
perspectives
Insect scales weighty matter for both plants and growers
T
here are many types of scales. Some are small plate-like structures that form the external covering of fish or reptiles. There are flakey scales, such as the rust that forms on metal. Another type is a series of tones in music. Others, such as the one in your bathroom, are designed for weighing things. There also are scales in the world of insects — a fact that almost anyone who raises plants for either fun or profit can attest. That’s because scales of the insect kind are major TOM plant pests. TURPIN Scale insects get their name because the immatures and females of many species resemble fish scales. Throughout most of their life, female scale insects are wingless, and often legless. As you can probably guess, without legs and wings these insects don’t go scampering around. They just sit and use their piercing mouths to suck sap from plants. Male scale insects are more insectlike than the females. The males do have wings and resemble small gnats. Unlike the sap-sucking females, these
little male scale insects don’t feed. In fact, they don’t even have mouthparts. Scale insect biology generally works this way. Newly hatched scale insects have legs and are active. In this stage, they are known as crawlers and move away from their hatching site. Then, they molt, lose their legs, become stationary and begin to form the waxy substance that constitutes their scalelike covering. When the female scale insects mature into adults, they remain under the scale. The males develop wings and leave the protective scale. The males flutter about and mate with the females that are still concealed under their protective scales. The females produce their eggs under the scale. The eggs generally spend the winter under the scale of the female. Some scales are known as armored scales, and this group includes some very important pest species. One is the San Jose scale. This pest was introduced from the Orient. It attacks trees and shrubs, and sometimes kills the plants on which it feeds. Another armored scale is called the oystershell scale because it looks like the shell of an oyster. It, too, does major damage to fruit and ornamental trees. Another scale in this group is called the pine needle scale. This scale is found throughout the U.S., as anyone
who owns any pine trees can tell you. The so-called soft scales include a number of injurious species. The black scale, which is a major pest of citrus, is one of the soft scales. Another is called the cottony maple scale because its primary host is maple trees. Several other species of this group attack plants in homes and greenhouses. The insects known as mealybugs also are scale insects. They get their name because of the mealy wax that covers their bodies. Like the other scale insects, the mealybugs feed on plant species that are ornamentals or fruits and, consequently, have not endeared themselves to people who raise such species. But all scale insects are not pests. Some are considered beneficial insects, such as the mostly tropical lac insects. One of the lac insects is of commercial value. It grows on fig and banyan (a tropical tree with aerial roots) in the Far East. The wax, or lac, produced by the insect sometimes coats the twigs with a layer half an inch deep. The twigs are cut, and the lac is melted. The melted lac is used to make shellac and varnishes. Another scale insect for which
humans have found a use is known as the cochineal insect. This insect resembles the mealybugs, except the females are red. It feeds on prickly pear cacti. The females are removed from the cacti and dried. The red pigments are extracted from the dried bodies and used to produce cochineal dye. Another beneficial scale insect is the tamarisk manna scale. The females excrete large quantities of honey dew, which accumulates on the plants, to form a sweet material called manna. This is the same manna from heaven, which is mentioned in the Bible, that the children of Israel used. So, even if one or two species of this group of plant-feeding insects are beneficial, the weight of the evidence implicates most scale insects as pests. Case closed! Tom Turpin is an entomology professor at Purdue University, West Lafayette, Ind. His email address is turpin@purdue.edu.
What I learned from my food stamp experience The mayor of Newark, N.J., Cory Booker, went on food stamps for a week. Big deal! He has been on TV and interviewed by countless newspapers. Well, just for the record, I went on food stamps myself for a week 30 years ago while serving as ag secretary. I wasn’t planning to run for governor of Illinois. Mayor Booker has his eye on a race for New Jersey govenor against Gov. Chris Christie in the next election. The situation 30 JOHN years ago was that PresiBLOCK dent Reagan had been attacked repeatedly for not caring about the poor, not spending enough money on them. I wanted to see if the food stamp allotment was sufficient. After all, I was ag secretary and responsible for administering the program. So I went to the supermarket with the correct amount of money to purchase my weekly food stamp allotment. I bought eggs, milk, peas, carrots, hot dogs, bread, and I can’t remember what else. For a week, I ate my food-stamp diet. Nothing more.
I weighed myself when the week started. I weighed myself when the week was over — 156 pounds, no change. The next day was a three-mile run in Washington, D. C. I ran the race and then conducted a pre-scheduled press conference. The Washington press couldn’t wait to jump on me. All I told them was that “I feel fine. I didn’t lose any weight. Food stamps are quite adequate. They aren’t supposed to provide a gourmet feast. In most cases, they serve as a supplement to other sources of food. Keep in mind children have school lunch. Some also have school breakfast.” The press really didn’t like my evaluation of the food stamp program. “One week is not a fair test,” they said. Needless to say, that press conference was not a “love fest.” Cory Booker’s food stamp week caught my eye, and I just wanted to let you know that he was not the first public official to try out the program. I’m sure I wasn’t, either. John Block, former U.S. agriculture secretary and a hog farmer from Gilson in Knox County, is a senior policy adviser with the Washington, D.C., firm of Olsson, Frank, Weeda, and Terman. His email address is jblock@ofwlaw.com.
“Yeah, I hurt that knee milking . . . I mean playing linebacker for the Dallas Cowboys.”