With COngress and the General Assembly in session over the next several months, FB Act members must get ready. ...3
A sPringField artist makes jewelry out of cooked bacon. A bacon belt buckle, earrings, or cuff links, anyone? ..................................5
reCent rAins offered some relief in parts of parched South America, but crop concerns persist. ...........................................10
Monday, January 30, 2012
Two sections Volume 40, No. 5
Johnson: Pension debt state’s financial albatross BY KAY SHIPMAN FarmWeek
The state’s financial health will deteriorate further unless state employee pension debt is addressed, the Illinois Agricultural Legislative Roundtable was warned last week. “If we don’t deal with this (pension debt) issue, the other issues don’t matter,” reported Tom Johnson, president of the Taxpayers’ Federation of Illinois. Johnson used sobering financial Tom Johnson data to support his claim. Illinois has the dubious honor of having the nation’s top unfunded state employee pension — an estimated 38 percent funded. Current pension fund assets are not enough to pay for existing retirees let alone cover retirement
benefits for current state employees, according to Johnson. If current economic trends and pension formulas do not deviate, the state would spend 60 cents of every $1 in tax revenue collected for pensions by 2045, he noted. Johnson calculated the state’s current total debt is $170 billion, including capital program debt. Although the temporary 2011 income tax increases generated $7.3 billion, the state didn’t make any headway toward getting out of debt, he said. Instead, the current fiscal budget pushed $1.7 billion in Medicaid debt into fiscal year 2013 and overstated anticipated federal revenue by $800 million. “So now we’ve got to do cuts. Where should we cut? Education (grades) K though 12? Higher ed? Human services?” Johnson asked. One of the state agencies facing potential cuts considers the status quo to
be a positive outcome. H.W. Devlin, acting state agriculture director, admitted the Illinois Department of Agriculture (IDOA) took budget hits last year, “but we’re still kicking.” “If we can come out of the next budget cycle (as) stable without any significant reductions, we’d be happy,” Devlin said. “The governor . . . wants to see us do well . . . he has to balance all these issues.” The increased income tax rates have raised the state’s average tax burden to 10.35 percent, above the national average of 9.32 percent, according to Johnson. At the same time, the state’s average wealth has not kept pace and the average tax burden vs. average wealth is out of balance. Once that happens, “we may be overtaxing,” Johnson said. The Taxpayers Federation supports legislative changes to the state employee pension system and an Illinois Supreme Court decision to determine any consti-
tutionality question about those changes. Johnson called for a re-engineering of state finances. The Taxpayers Federation is “going to put out ideas that will be shocking to some people,” he said. “As we come out with some ideas, we’re asking for your open-mindedness. We have to do something. This is the No. 1 problem facing our state.”
Obama backs tax reform, infrastructure/energy rebuild BY MARTIN ROSS FarmWeek
Periodicals: Time Valued
In his annual State of the Union Address last week, President Obama directed Congress to address crumbling U.S. infrastructure, the need for expanded energy resources, and current inconsistencies in the federal tax code. Touting what he deemed a
“Blueprint for an America Built to Last,” Obama recommended fundamental tax reform, major infrastructure improvements with reduced project “red tape,” and an “allout, all-of-the-above” clean energy strategy emphasizing continued renewable energy tax credits and natural gas development. U.S. companies receive tax breaks for “moving jobs and profits overseas,” while “companies that choose to stay in America get hit with one of the highest tax rates in the world,” Obama noted. He proposed a new “basic minimum tax” for multinational companies that operate within the U.S. In a news conference addressing the president’s remarks, Peoria Republican U.S. Rep. Aaron Schock called for comprehensive tax reform, proposing elimination of many current “loopholes and special carve-outs” to lower acrossthe-board income tax rates without reducing federal revenues. At the same time, Schock
recognized concerns within the farm community about future estate tax liability, continuation of current bonus depreciation, and “the long line of tax issues that affect
FarmWeekNow.com Go to FarmWeekNow.com to listen to Matt Kaye’s follow-up report on the State of the Union speech.
their (farmers’) day-to-day businesses, that affect how much risk they take, that affect what kind of investments or capital outlays they’re going to make.” Congress in 2010 approved a temporary $5 million individual estate tax exemption, at a 35 percent top tax rate. However, producers face a return to a pre-2002 $1 million exemption in 2013 if lawmakers can’t devise a longterm fix by Dec. 31. That’s a substantial drop for farm families who have seen significantly higher land values over the past decade, Illinois Farm Bureau Presi-
FarmWeek on the web: FarmWeekNow.com
dent Philip Nelson maintained. He warned against pushing an estate tax fix until the end of 2012, “with no certainty for our producers.” “The sooner we can answer that question and the sooner we can resolve tax policy, the sooner entrepreneurs and businesspeople can go about their work of investing and growing their businesses in the United States based on that new policy,” Schock told FarmWeek. Obama emphasized the need to “rebuild” U.S. infrastructure, noting the economic impact of “crumbling roads and bridges, a power grid that wastes too much energy, an incomplete high-speed broadband network that prevents a small business owner in rural America from selling her products all over the world.” The president announced plans to sign an executive order that would reduce federal bureaucracy “that slows down too many construction projects,” and urged Congress to do its part by funding transportation/infrastructure projects.
Schock argued a five-year highway bill reauthorization is “truly something Republicans and Democrats can get behind in an election year.” The House is expected to vote on highway measures in February, tentatively including a Schock amendment that would use revenues from offshore drilling and natural gas exploration for highway improvements. Obama pledged “every possible action to safely develop” natural gas deposits, and directed the Department of Interior to finalize a national offshore energy plan that makes 75 percent of potential offshore resources available for development by opening new areas in the Gulf and Alaska. However, he recently rejected an application to build a 1,700-mile, Canada-to-Texas Keystone XL oil pipeline, arguing a congressionally imposed deadline for a decision did not leave sufficient time for a necessary project See Obama, page 4
Illinois Farm Bureau®on the web: www.ilfb.org
FarmWeek Page 2 Monday, January 30, 2012
Weather outlook
Quick takes IDOA SETS CORN REFERENDUM HEARING — H.W. Devlin, acting director of agriculture, has planned a 10 a.m. Tuesday, Feb. 21, public hearing for Illinois corn growers to submit comments on a proposed corn checkoff referendum. The hearing will be at the Illinois Department of Agriculture (IDOA) building on the Illinois State Fairgrounds, Springfield. The Illinois Corn Marketing Board (ICMB) is proposing to enhance corn marketing and promotion by increasing the checkoff by one-fourth of a cent per bushel. The proposal would increase the voluntary rate from three-eights of a cent to five-eights of a cent per bushel. Growers would still have a right to a refund. Copies of the proposed amendment are available from IDOA’s marketing and promotion office. After the public hearing, ICMB will review all comments presented. If the ICMB then approves the proposed amendment, IDOA will hold a referendum within 90 days Individuals unable to attend the hearing may submit written comments by Feb. 17 and address them to: Director of Agriculture, P.O. Box 19281, Springfield, Ill., 62794-9281. IFB TO TAKE PART IN HEARING-LOSS STUDY — Illinois Farm Bureau recently partnered with the University of Michigan’s “HEAR on the Farm” research program. The program is a web-based study being offered to farmers with a goal of reducing noise-related hearing losses among farmers by increasing their use of hearing protection devices. Producers who enroll in the study could earn as much as $40 for participating and earn additional money for Farm Bureau safety programs. For details or to enroll in the program, go to the website {www.hearonthefarm.org} and enter the access code “saveears.” Farmers also can contact study administrators at hearonthefarm@umich.edu. Representatives of the program will be at the IFB Young Leaders State Conference this Friday and Saturday, Feb. 3 and 4, to answer questions and assist farmers with the study. The YL event will be at the Marriott Hotel and Conference Center in Normal. CENTRAL ILLINOIS FARM FAMILY SHARES IMPACT — A “USA TODAY” story described the potential negative impacts of federal child labor rules to the young sons of LaSalle County Farm Bureau Vice President Darren Walter. Walter, his wife, Samantha, and sons, Austin and Dalton, were featured in a Jan. 25 story that outlined how the boys would no longer be able to work on their grandfather’s or great-uncle’s farms if the Department of Labor’s proposal on child labor is implemented. The Walters explain how they teach their children safety practices and gauge each child’s responsibilities based on his abilities. The story and photos are online at {www.usatoday.com/money/economy/story/2012-0124/regulations-kids-farm-work/52778304/1}.
(ISSN0197-6680) Vol. 40 No. 5
January 30, 2012
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 Linda Goltz (Lgoltz@ilfb.org) Business Production Manager Bob Standard (bstandard@ilfb.org) Advertising Sales Manager
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Mike McClellan, right, meteorologist and owner of Mobile Weather Team in Washington, discusses his weather outlook with Joe Louis of Kasbeer Farmers Co-op in Bureau County, last week during MID-CO Commodities’ 32nd annual winter outlook meeting in Bloomington. McClellan at the event predicted a switch to more winterlike conditions in February followed by a stormy start to spring in Illinois. (Photo by Daniel Grant)
Forecasters: February may be more winter-like BY DANIEL GRANT FarmWeek
Those wondering what happened to winter in Illinois this season may wonder no more if February forecasts come to fruition. Mike McClellan, meteorologist/owner of Mobile Weather Team in Washington, last week predicted colder-than-normal temperatures and above-average precipitation for the last full month of the winter season. The prediction, if realized, would be a big change from the relatively mild conditions experienced the first two months of the climatological winter (December and January). The prediction also differs from the National Weather Service Climate Prediction Center’s seasonal outlook which last week called for a continuation of above-average temperatures across Illinois in February. “We’ve been very spoiled. November and December
were very warm and we’re kind of in a snow drought,” McClellan said last week at MID-CO Commodities 32nd annual winter outlook meeting in Bloomington. “But I think it’s coming to an end. In fact, it’s changing already as January has been colder than we saw in November and
FarmWeekNow.com Listen to Mike McClellan’s outlook for the spring planting season weather at FarmWeekNow.com.
December,” the meteorologist continued. “Even though we got some warm spells (in January), we’ve also been getting cold blasts from the arctic. It looks like that will continue in February.” The wild temperature fluctuations and above-average precipitation predicted next month by McClellan could result in a heavy mix of rain and snow.
He based his forecast in part on changes to the North Atlantic Oscillation (a measure of differences in atmospheric pressure at sea level that affects the strength and direction of westerly winds and storm tracks) along with a La Nina in the Pacific Ocean that may persist and even strengthen in coming months rather than weaken. “Typically, with a La Nina we get a lot of cold and snow in the Ohio River Valley and Great Lakes region,” McClellan said. The stormy pattern, he said, could persist into the planting season. “I think we’re going to have a really active spring,” the meteorologist said. “The clash of cold and warm air could really spark off some severe weather. It’s already started down south.” Weather Services International last week also predicted a shift to colder-than-normal temperatures in February for the north central U.S.
Page 3 Monday, January 30, 2012 FarmWeek
government
FB ACT laying groundwork Ag colleges see for 2012 legislative sessions growing demands BY KAY SHIPMAN FarmWeek
Advance preparation will be key for Farm Bureau members who participate in FB ACT (Farm Bureau Agricultural Contact Team). “With Congress and the General Assembly in session over the next several months, we need to be ready to respond quickly to be effective as an organization,” said Liz Hobart, Illinois Farm Bureau associate director of national legislation and policy development. Hobart encouraged FB members and managers to take steps now and be better prepared to respond to an action request on an important issue. Topping her list is knowing which legislators represent you on the state and federal levels — and how to contact them. Hobart suggested Farm Bureau members program their legislators’ telephone numbers or e-mail addresses into their cell phones. “If it’s April and you’re in the field and get an action request, having the information readily available in your cell phone
makes the contact very easy,” Hobart said. Farm Bureau members also may contact the congressional switchboard at 202-224-3121 or the General Assembly switchboard at 217-7822000 and ask to be transferred to their lawmaker. Establishing or reaffirming relationships with legislators also is important, Hobart said. A Feb. 29 legislator reception during the Governmental Affairs Leadership Conference offers FB members an opportunity to chat face to face with state lawmakers. FB ACT members may sign up to be notified about action requests via an automated phone call, e-mail, or text message. Members also are encouraged to report their legislator contacts to IFB “so we can gauge where we are on the issues,” Hobart said. Members may consider programming the FB ACT reporting number (800-879-1976) or e-mail (fbact@ilfb.org) into their cell phones, she added. Contact your county Farm Bureau or go online to {www.ilfb.org/fbact} for more information.
If student demand is any indication, Illinois’ four collegiate ag institutions rank high in educational value. Bob Hauser, dean of the University of Illinois College of Agricultural, Consumer, and Environmental Sciences (ACES), reported on the situation at his university as well as at Illinois State University (ISU), Southern Illinois University (SIU), and Western Illinois University (WIU). The four universities annually report to members of the Illinois Agricultural Legislative Roundtable. Bob Hauser ACES received increased numbers of applications from high school seniors; however, the campus limits ACES freshmen enrollment to about 500 students, Hauser explained. The U of I is continuing to work with community colleges to assist students who want to pursue four-year degrees in Urbana, he added. ISU saw growth in agriculture undergraduate and graduate enrollments. The ag program, which celebrated its 100th anniversary, also reported nearly 100 percent job placement for its ag grads. SIU saw increased enrollments of undergraduate and graduate students. In addition, planning is under way for a new Agriculture, Food, and Forestry Building with a goal of breaking ground in the next five years. For the 2011-2012 academic year, WIU experienced the highest ag student enrollment in the last 30 years. WIU also noted its performance bull testing program is marking its 40th anniversary and continued success in organic farm research on WIU’s organic farm. –- Kay Shipman
Rural Development accepting applications for renewable energy, energy efficiency Rural Development is seeking applications for grants and loans for energy efficiency and renewable energy projects through the Rural Energy for America Program (REAP). The first application deadline is Feb. 21. REAP has helped 290 farmers and rural small businesses in Illinois since it was authorized in the 2008 farm bill. “We have seen remarkable results in energy savings in rural Illinois,” said Colleen Callahan, Rural Development
state director. Illinois recipients have installed solar panels, geothermal systems, wind turbines, and manure digesters. Others upgraded equipment to more energy efficient models. This year USDA will award at least $12.5 million in grants and about $48.5 million in loan guarantees. The following are being accepted: • Renewable energy system and energy efficiency improvement grant applications and
combination grant and guaranteed loan applications until March 30; • Renewable energy system and energy efficiency improvement guaranteed loan only applications on a continuous basis up to June 29; • Renewable energy system feasibility study applications through March 30; and • Energy audits and renewable energy development assistance applications through Feb. 21. Information about how to
Part of GROWMARK System
Wisconsin grain facility is cited by OSHA
A Wisconsin grain handling facility that is a retail division of Bloomington-based GROWMARK has been cited for five safety violations by the Occupational Safety and Health Administration (OSHA). OSHA cited Frontier FS of Ixonia, Wis., and proposed fines totaling $84,000. “We are committed to safety at all of our facilities,” said Amy Bradford, GROWMARK spokesman. “We understand there is greater emphasis on grain handling safety as a result of an incident in Northern Illinois (in which two young men died inside a grain bin at a nonGROWMARK facility), and we understand there are regula-
tions that need to be complied with.” Bradford said the Insurance and Safety Services Division of GROWMARK is investigating the issues brought to its attention by the OSHA investigation and is working with OSHA to address those concerns and to continue its effort to provide a legally compliant and safe working environment at its facilities. Frontier was cited for failing to de-energize and lock out sweep augers before workers entered bins. “Failing to de-energize and lock out sweep augers puts workers entering grain bins at unnecessary risk for amputa-
tion injuries, engulfment, and suffocation,” said Kim Stille, OSHA’s area director in Madison. The facility also was cited for failing to provide body harnesses or alternative protection as well as rescue equipment for work inside grain bins. “We are very active in promoting safe work environments for our employees, our member cooperatives, and other farmers and agribusinesses through company-sponsored training programs and other activities,” Bradford said. “We understand OSHA’s role and view OSHA inspections as a routine part of our business,” she said.
apply for funding is available in the Jan. 20 “Federal Register,” pages 2,948 through 2,954.
Questions in Illinois may be directed to Mary Warren at Mary.Warren@il.usda.gov or by calling her at 217-403-6218.
FarmWeek Page 4 Monday, January 30, 2012
gOvErnmEnT
European debt crisis could pinch U.S. ag economy BY DANIEL GRANT FarmWeek
The U.S. ag economy seemed unfazed last year by economic troubles around the world, including the European debt crisis. USDA recently projected U.S. net farm income for 2011 would total a record-high $100.9 billion. Farmland values, as a result, have continued to escalate to historic highs after increasing 22.2 percent the previous five years, according to USDA. “I continue to be impressed with the strength of the ag economy and of demand,” said Peter Goldsmith, ag economist at the University of Illinois. But the ag sector could face pressure this year from lower commodity prices, a stronger dollar, and increased costs. Economic troubles in some parts of the world also could slow demand for ag products. The International Monetary Fund (IMF) last week cut its 2012 forecast
‘I continue to be impressed with the strength of the ag economy and of demand.’ — Peter Goldsmith University of Illinois ag economist
for global growth from 4 percent to 3.3 percent, based in part on its projection of a mild recession in the 17-nation euro zone. “The United States and other advanced economies are susceptible to spillovers from a potential intensification of the euro zone crisis,” the IMF said in its latest World Economic Outlook report. The U.S. ag economy in recent years benefitted from a weak dollar that helped promote exports. But there are concerns a softer euro will strengthen
the dollar and slow ag exports. “It would be very bad if the euro implodes,” Goldsmith said. The IMF last week left its baseline oil price projection for 2012 unchanged at $100 per barrel, but it forecast a 14 percent drop in commodity prices, not including oil. The ag economist is hopeful, however, the situation in Europe will stabilize. He also believes strong demand and tight supplies could help maintain commodity prices.
“In Europe, I look at whether the private sector is buying sovereign debt, and they continue to buy,” Goldsmith said. “That’s a sign (the debt crisis) can be managed.” Meanwhile, the value of the dollar has risen but it still is at “exportfriendly” levels, according to Goldsmith. “I’m amazed how weak the dollar has remained given the extent of the European debt crisis,” he said. “Demand seems to be resilient enough (to keep ag products moving through the pipeline).” Goldsmith said he was not overly concerned about the trend of higher farmland values. Farmland values/cash rents “reflect what farmers think they can get for a fair return,” he said. “They’re not taking on a lot of debt (farm real estate debt from 2010 to 2011 actually decreased 3 percent). This is not like the 1980s.”
Ag banks remain strong but face unique challenges Agricultural banks last year tended to fare better than nonag banks as strong farm income strengthened loan portfolios. In general profits at ag banks improved as borrowers repaid farm debts. The return on assets at ag banks in the third quarter increased to levels above that at non-ag banks, according to the Federal Reserve System’s agricultural finance outlook.
Meanwhile, the share of delinquent farm real estate loans declined in the third quarter and delinquent nonreal estate loan volumes dipped to the lowest level since 2009. “Relative to non-rural banks, their (farm) clients have very healthy balance sheets,” said Peter Goldsmith, University of Illinois economist. The situation has created some unique challenges for
ag banks, though. Less farm debt/borrowing activity could mean less interest income for local ag banks. But Goldsmith believes the ag lending industry still is in strong shape. “If the cycle of credit were to slow, then there could be a problem,” he said. “But I don’t see any indication of that.” Higher farm income boosted liquidity in the farm sector and slowed non-real estate
p.m. Saline County Farm Bureau, Harrisburg. Feb. 3 On-the-Road seminar, 1 p.m. Lawrenceville County Farm Bureau, Lawrenceville. Feb. 6 On-the-Road seminar, 8 a.m. Christian County Farm Bureau, Taylorville, 217-824-2940. Feb. 7 On-the-Road seminar, 7:30 a.m. Shelby County 4-H Center, Shelbyville, 217-774-2151.
Feb. 10 Illinois Winter Wheat Forum, Krieger’s Holiday Inn, Mt. Vernon. Feb. 21 On-the-Road seminar, 6 p.m. Knox County Agri Center, Galesburg. Feb. 21-22 University of Illinois crop management conference, Kishwaukee College Conference Center, Malta. Feb. 24 On-the-Road seminar, 1 p.m. John Wood Community College Ag Center, Perry. Feb. 27 On-the-Road seminar, 7:30 p.m. Effingham County Farm Bureau, Effingham. Feb. 28 On-the-Road seminar, 9 a.m. Fayette County Farm Bureau, Vandalia. March 5 On-the-Road seminar, 5:30 p.m. Wabash County Farm Bureau, Mount Carmel, 618-262-5865.
lending in 2011, according to Federal Reserve Bank data. Ag bankers last year reported softer operating loan demand. And, with more deposits and limited gains in
non-real estate loan volumes, the average loan-to-deposit ratio at ag banks the second half of last year plunged to its lowest level in a decade. — Daniel Grant
DATEBOOK Jan. 30 On-the-Road seminar, 6 p.m. Jackson County Extension office, Murphysboro. Jan. 31 On-the-Road seminar, 7:30 a.m. Union County Farm Bureau, Jonesboro. On-the-Road seminar, 6 p.m. Gambit Golf Course clubhouse, Vienna. Jan. 31-Feb. 1 University of Illinois crop management conference, Northfield Inn Conference Center, Springfield. Feb. 1 On-the-Road seminar, noon, Grecian Steakhouse, Pinckneyville. On-the-Road seminar, 6 p.m. FS Building, Marion. Feb. 2 On-the-Road seminar, 7:30 a.m. Franklin County Farm Bureau, Benton, 618-435-3616. On-the-Road seminar, 6
On-the-Road seminar, 1 p.m. Macon County Farm Bureau, Decatur. Feb. 7-8 University of Illinois crop management conference, I-Hotel and Conference Center, Champaign. Feb. 9 On-the-Road seminar, 9 a.m., Piatt County Farm Bureau, Monticello, 217762-2128.
Obama Continued from page 1 review. Despite bipartisan support for highway legislation, Schock was not as optimistic about funding for long-awaited Illinois-Upper Mississippi river lock improvements, predicting “there will not be enough money” to fully fund new lock construction. Further, he sees no shift in House resistance to an industry proposal to raise barge fuel taxes that would help leverage federal project dollars. “There may be a small pot for emergency repairs and so on,” Schock said. “But I don’t anticipate the kind of money that would get my farmers and folks who use the rivers excited happening in this highway bill.” The president used his address to announce creation of a new federal “Trade Enforcement Unit” that will be charged with investigating unfair trading practices in China and other countries. He plans more inspections “to prevent counterfeit or unsafe goods from crossing our borders.” “I will go anywhere in the world to open new markets for American products,” Obama told lawmakers. “And I will not stand by when our competitors don’t play by the rules. We’ve brought trade cases against China at nearly twice the rate as the last administration — and it’s made a difference.”
Page 5 Monday, January 30, 2012 FarmWeek
ArouNd IllINoIs
HIGH ON THE HOG Bacon real work of art for Central Illinois artist BY KAY SHIPMAN FarmWeek
A
strip of bacon may be a tasty work of art to some people. Springfield artist Suzanne Schmid also sees something beautiful that is worth preserving. Say as a belt buckle, earrings, or cuff links. That’s right — Schmid, the daughter of a California cattle rancher, creates jewelry from meat, especially bacon. She sells much of her bacon jewelry through custom orders from online websites. Her creations also may be seen at {www.zanneavenue.com} or at the Blue Door Gallery, 214 S. Sixth St., Springfield. “The world of new and inventive ways to use the allpurpose bacon continues to surpass even my imagination,” said Jim Kaitschuk, executive director of the Illinois Pork Producers Association. Schmid, a sculpture major in college, remembered the first time she thought of meat as potential art material. The iridescent sheen on a package of roast beef caught her eye and it “snowballed into my love affair with meat in art,” she said with a laugh. Work as a photojournalist led Schmid to Springfield while jewelry and art were a sideline business. Over the past several years, she became a full-time artist and began creating bacon jewelry one year ago. Some of the public is surprised, even skeptical, about Schmid’s declaration that her work is made with genuine
Pendants and rings fashioned by artist Suzanne Schmid, Springfield, put bacon in a new light. (Photos by Ken Kashian)
cooked bacon preserved in resin. “They’re shocked at first, ‘No way.’ Then, ‘Oh, it’s awesome,’” she said. Her bacon buckle is the most popular seller among both men and women. Women also favor her bacon rings, she
FarmWeekNow.com For additional details on what’s new with bacon jewelry, go to FarmWeekNow.com.
added. When Schmid first ventured into the world of bacon jewelry, she tried using raw bacon with resin, but her artwork became too aromatic after two weeks. “Somehow the power of raw meat is greater than resin,” she explained. In desperation,
she threw her creation into a boiling pot of water, and voila, problem solved. Surprisingly, Schmid had not thought of tapping into her agricultural roots by marketing her jewelry to farmers. “I wouldn’t have suspected the ag market would be interested,” she said. Asked if she has any plans to expand her jewelry line into other meats, Schmid answered: “I’m always on the lookout for good-looking meats; but bacon is what people want.” As for her rancher father’s view of his daughter’s creations, Schmid said she believes “he is secretly proud.” After all, Schmid has proven that one man’s breakfast may be another man’s jewelry.
Illinois state horse judges seminar March 31 The annual Illinois State Horse Judges Seminar will be from 8 a.m. to 5 p.m. March 31 at the University of Illinois, Urbana. Registration and classroom instruction will begin in the Animal Sciences Lab’s room 150, 1207 W. Gregory Drive. Live classes may be held in the afternoon at the U of I stock pavilion, depending on arena conditions. The activity is open to all judges of youth and open horse shows, potential judges, horse show exhibitors, and spectators of horse events. The seminar is designed to encourage uniform standards for judging and exhibiting horses and to create a directory of horse show judges. The instructor will be Chuck Schroeder of Delaware, Ohio. Schroeder has judged 4-H shows for 35 years as well as international,
national, or world show championships for major horse breed associations. Topics covered will include show ring tips, ethics and standards, judging multi-breed 4-H classes, and class standards for stock, hunt, saddle and draft halter, Western showmanship, Western pleasure, stock and hunter seat equitation, and Western riding and trail. Registration fees are $20 for individuals younger than 18, $30 for adults, and $50 for adults planning to take written and live judging exams to be eligible for listing in the state horse judge directory. The seminar is sponsored by U of I Extension and the U of I animal sciences department. For more information or to obtain registration materials, e-mail Kevin Kline, U of I Extension equine specialist, at kkline@illinois.edu. His phone number is 217-333-1784.
Springfield artist Suzanne Schmid works on a heart-shaped pendant made of bacon encapsulated in resin. Schmid, a California cattle rancher’s daughter, sells much of her bacon jewelry online through custom orders.
FarmWeek Page 6 Monday, January 30, 2012
markets
Basis reaches historic levels; more corn needed
“(The market) is still encouraging farmers to plant more The corn basis this month corn.” jumped to historically high levSome private estimates have els as reluctant farmer-sellers projected U.S. corn plantings prompted processors to bid up this year could reach 94 million prices. acres compared Decatur to 91.9 million cash corn bids acres last year. ‘The (corn) basis is at historical levels last week were “We need a for this time of year. Producers have record crop this 28 cents above March Chicago year,” the anabeen reluctant sellers.’ corn futures. lyst said. “We “We have could rally never seen — Aaron Curtis (corn) prices cash bids over into the spring Market analyst, MID-CO Commodities futures for the planting season. third week in January which Short-term the basis should Far mWeek last week at we are seeing now,” said Darcontinue to be firm.” MID-CO’s 32nd annual rel Good, University of IlliCrop prices this year could winter outlook meeting in nois Extension economist, hang below last year’s levels, Bloomington. “Producers who for 38 years has tracked have been reluctant sellers.” though, if production weekly prices for country Illiprospects are good. Curtis believes the crop nois markets. “We need favorable weather markets in coming months Aaron Curtis, market anaand dry conditions to plant all need to encourage farmers to lyst with MID-CO Commodithose corn acres and keep plant more corn. ties, believes the jump in basis them,” Curtis said. If that USDA earlier this month levels was prompted partly by trimmed ending stocks of corn occurs, “we could have a burdentight corn supplies and a some supply moving forward.” by 2 million bushels, lowering recent drop in prices which Hugh Whalen, MID-CO anathe stocks-to-use ratio to 6.7 lyst, noted wheat prices dropped percent compared to 8.6 perabout $3 per bushel since peakcent for 2010/11. ing last February near $9 per “Carryout continues to be bushel as world wheat produchistorically tight,” Curtis said. BY DANIEL GRANT FarmWeek
made grain prices seem “cheap” to farmers compared to previous levels. “The (corn) basis is at historical levels for this time of year,” Curtis told
tion last year set a record. “Wheat stocks should remain comfortable for the coming year,” he said. “But
basis levels should be better than average. The market is having to bid up prices to pull wheat out of storage.”
Visitors stroll through the exhibits of last year’s Western Illinois University (WIU) Farm Expo on the Macomb campus. The two-day event will be Feb. 11-12 and feature a variety of products, services, and topics. (Photo courtesy WIU)
WIU Ag Mech Club’s Farm Expo Feb. 11-12
Western Illinois University’s (WIU) 42nd annual Farm Expo will open at 9 a.m. Feb. 11 on the Macomb campus. The show is organized by the Agriculture Mechanization Club. Show hours will be 9 a.m. to 5 p.m. Feb. 11 and 10 a.m. to 4 p.m. Feb. 12. The event will feature emerging ag technology, tractors and machinery, livestock equipment and supplies, crop supplies, as well as information about ag sales and service, conservation methods, and ag structures. Scherrie Giamanco, state Farm Service Agency executive director, will speak at 10:30 a.m. Feb. 11. A farm toy and craft show also will occur both days in the upper concourse of Western Hall. A tractor pull for children will start at noon Feb. 12. There is no entry fee and free parking will be available in WIU’s Q-Lot located on the east side of Western Hall. For more information, contact WIU’s School of Agriculture at 309-298-1080 or the Ag Mech Club office at 309-298-1231; e-mail farmexpo@wiufarmexpo.com; or go online to {www.wiufarmexpo.com}.
IFF answering consumers’ questions The Illinois Farm Families (IFF) is a coalition of commodity groups for beef, corn, soybeans, pork, and the Illinois Farm Bureau. It is accepting consumers’ questions and posting answers to those questions on its website {www.watchusgrow.org}. FarmWeek is publishing the questions and answers to share information and better prepare farmers the next time they are asked a probing question. Q: I am interested in becoming a farm owner one day. Although I would love to inherit my family farm, it’s just not in the cards. What advice you can give me? Jeffrey Butler, Blandinsville: Most farms today are family owned and operated. In fact, in Illinois, 94 percent of all farms are family owned. If you’re really serious about wanting to pursue your dream, I have a couple of ideas you can think about. For
starters, try to connect with an existing, established farmer in your area. See if you can find some work as a hired farm employee. Learn as much as you can about farming from that person. Then, as land becomes available, maybe you can trade labor for use of the farmer’s equipment. The cost to rent land these days averages from $200$350 per acre, and the cost to purchase land averages around $10,000 an acre (for excellentquality land). Another option for you to consider is to contact your local Farm Services Agency (FSA). There are some federal loans available for young farmers who have worked in agriculture for at least three years and who can show that they’re in charge of making all the management and financial decisions. My advice to you is to start out small and work your way up.
Page 7 Monday, January 30, 2012 FarmWeek
risk management
AgriVisor offers a variety of risk management tools BY KAREN JONES
Coping with risk is a huge challenge for today’s farmers. Although never an easy task, it seems to keep getting tougher — and the stakes keep getting higher. The world economy entered a new era of risk following the 2008 financial crisis, and with the intensifying U.S. financial challenges, the host of European Community problems, and now the recent implosion of a major U.S. trading firm, the likelihood for continued volatility seems high. “Certainly, the overall strength of the U.S. farming industry is exceptional, but history reminds us that good times don’t last forever,” said Clayton Pope manager of Agrivisor LLC. “We all know how quickly things can change and how often completely unanticipated surprises tend to pop up. This being the case, the prudent course is to consider exploring possible steps that can be taken to help ensure continued prosperity.” One easy step is becoming familiar with a firm that has spent the last several decades working exclusively with risk management. AgriVisor, a firm owned jointly by GROWMARK and the Illinois Farm Bureau, offers farmers a wide variety of services. Through its website, {www.agrivisor.com} FarmWeek, DTN, and other avenues, AgriVisor offers fundamental and technical
Chicago Farmers plan farmland investment fair The Chicago Farmers will have its annual farmland investment fair from 8 a.m. to 2:30 p.m. Saturday in Joliet Junior College’s Weitendorf Agricultural Education Center, Joliet. Lunch will be served between 11 a.m. and 1 p.m. Tuesday is the deadline for early registration. Fifteen breakout sessions will be offered on a firstcome, first-served basis. Topics include nutrient management, 1031 exchanges, farmland values, and eminent domain. The early registration fee is $50 until Tuesday and increases to $75 after that date. Registration may be done online with a credit card or by calling the administrator’s office at 312-3883276. Go online to {www.chicagofarmers.org}.
news, analysis, and broadly applicable cash marketing recommendations. Farmers who choose the
MaxVisor Premium Service work closely with a personal representative to find risk management solutions for
Hybrid cash grain contract options The four most popular hybrid cash grain contract options offered by AgriVisor, according to manager Clayton Pope, are: • Premium NT: Allows producers to capture above-market price on a cash sale today, in return for an offer of a specific quantity at a specific price in the future. • Crossover Floor LX: Allows producers to secure a guaranteed floor below current prices and still enjoy unlimited upside potential. • Min/Max: Allows producers to secure a guaranteed floor below current prices and still enjoy limited additional upside potential. • Insurance Hybrids: These products do an excellent job of maximizing the effectiveness of Federal Crop Insurance policies by integrating the prot ection they offer with marketing risk management.
flat-price marketing, merchandising, input cost expertise, hedge accounting, cash flow, and break-even analysis. Pope also explained the Crossover Solutions services, offered through local grain elevators. “The Crossover Solutions Insight program is a managed-bushel program where the producer commits bushels to expert traders from AgriVisor, Doane Agricultural Services, and ProFarmer for pricing during a defined period of time,” he said. “A variety of hybrid cash grain contracts also is available as a Crossover
Solutions service.” AgriVisor also offers traditional futures and options services, including full service retail brokerage, trade recommendations, market information, and timely execution. Pope recommends calling 800-676-5799 or visiting the AgriVisor website for more information. Karen Jones is GROWMARK’s publications and news specialist. Her e-mail address is kjones@growmark.com.
FarmWeek Page 8 Monday, January 30, 2012
programs
New award to recognize Friend of IFB Young Leaders BY DANIEL GRANT FarmWeek
Illinois Farm Bureau Young Leaders (YL) recently unveiled an award program that will recognize friends of the program and potentially boost membership and participation in YL. The State Young Leaders Committee, this month in its first meeting of the year, approved the implementation
of the new Friend of Young Leaders Award. The award is designed to recognize county Farm Bureau managers who encourage YL participation in events and programs. “It’s a brand new program that will run during the program year (Sept. 1 through Aug. 21),” said Jennifer Smith, IFB Young Leader manager.
“It will give managers recognition they don’t always get.” Under the program, managers will receive points for YL participation in county, district, and state activities. The manager who accumulates the most points each program year will receive a $250 Visa gift card and a traveling trophy. The YL State Committee
Conference to focus on grazing efficiency Livestock producers can learn how to cut feed costs through grazing at the 2012 Northwest Illinois Grazing Conference. The conference will be held from 9 a.m. to 3 p.m., Thursday, Feb 16, at the Holy Cross Catholic Church in Stockton. The theme of the event is “Dollars and Sense of Grazing.” Pastures often are under-appreciated as a less expensive way of meeting animal nutritional needs. An Illinois producer, with a moderate investment in materials and some management changes, can increase forage production significantly and meet animal nutritional needs for as many as nine months each year, according to event organizers. Experts from the University of Illinois, Iowa State University, and the Natural Resources Conservation Service will make pre-
sentations at the conference that deal with using water as a management tool, recommendations on temporary and permanent fencing strategies, how to successfully renovate pastures (including technical assistance that is available for pasture improvements), and a detailed analysis of how grazing reduces feed costs. Suppliers of pasture-related materials, services, or livestock-based local food who are interested in sponsoring or setting up a booth at the conference should call the Jo Daviess Soil and Water Conservation District at 815-858-3418 (extension 3) by Feb. 10. The registration fee is $20 per person through Feb. 10 and $30 after that date. Contact the U of I Extension at 815-858-2273 for registration information or register online at {web.extension.illinois.edu/jsw}.
hopes the award program will encourage more Young Leaders to participate in events and also encourage county Farm Bureaus to promote or increase the number of YL events each year. “Hopefully this will encourage counties to get more active and maybe even do (YL) recruitment events,” Smith said. Applications for this year’s inaugural Friend of Young Leaders Award must be sent to the IFB Young Leader Department and postmarked by Oct. 1. Boosting YL membership and involvement is among the top priorities this year for
Monica Stevens, state Young Leader chairman. “I think one of the biggest priorities this year for Young Leaders is working with existing committees and reaching out to counties that either want a (YL) committee or we think Monica Stevens should be involved in Farm Bureau,” Stevens recently told FarmWeek. “The more numbers we have, the more voices we have for agriculture,” she added.
‘Hopefully this will encourage counties to get more active and maybe even do (Young Leader) recruitment events.’ — Jennifer Smith IFB Young Leader manager
Anaerobic digester workshops slated Livestock and dairy farmers may learn about anaerobic digesters at three February workshops. Registration is required. On Friday (Feb. 3), dairy farmers in the Clinton County Electric Co-op area may learn about development of digester projects. The workshop will be from 9 a.m. to 2 p.m. in the Knotty Pine Restaurant, Breese. On Feb. 9, livestock producers in South-Central Illinois may learn about digester projects. The workshop, sponsored by four area electric co-ops, will be from 9 a.m. to 2 p.m. in the Keller Convention Center, Effingham. On Feb. 10, livestock producers in West-Central Illinois may learn about digester projects. The workshop, sponsored by six electric co-ops in the region, will be from 9 a.m. to 2 p.m. in Spoon River College’s community outreach center, Macomb. Each workshop will feature presentations on developing a digester, funding an anaerobic digester, connecting to the electric grid, using digester products, improving energy efficiency, and government regulations. To register or obtain more information, go online to {www.midwestcleanenergycenter.org} and click on the desired meeting under “Upcoming Events” on the right side. Farmers also may contact their area electric cooperative or John Freitag with the Association of Illinois Electric Cooperatives for more information or to register. Freitag’s contact information is jfreitag@aiec.coop or 217-241-7973.
U of I Board of Trustee chairman to give keynote address at GALC Christopher Kennedy, chairman of the University of Illinois Board of Trustees, will deliver the closing keynote address March 1 at the 2012 Illinois Farm Bureau Governmental Affairs Leadership Conference (GALC) at the Crowne Plaza, Springfield. Kennedy, a businessman, was appointed to the board of trustees in 2009 by Gov. Pat Quinn. He will discuss engaging in issues at the grassroots level. The two-day conference Feb. 29 through March 1 will
offer nearly 30 workshop topics. A legislative reception will be held Wednesday evening. Registration is being offered for either or both days. The cost is $50 for Wednesday only, $30 for Thursday only, or $70 for both days. Pre-registration ends Feb. 17. Hotel reservations are due directly to the hotel by Feb. 1. To register for the conference or receive more information, contact your county Farm Bureau or go online to {www.ilfb.org}.
Page 9 Monday, January 30, 2012 FarmWeek
from the counties
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UREAU — The Young Leader Committee will participate in the annual District 4 curling outing from 7 to 10 p.m. Friday, Feb. 10, at the Waltham Curling Club, Triumph. Participants will need to sign a liability waver. Clean tennis shoes are required. Cost is $20. Call the Farm Bureau office for more information. • Farm Bureau will sponsor an informational meeting at 2 p.m. Wednesday, Feb. 15, at the Farm Bureau office for the Sept. 22-28 trip to the Black Hills Buffalo Roundup. Call the Farm Bureau office for more information. • A Women in Agriculture seminar will be at 8 a.m. Friday, March 23, at the iWireless Center, Moline. Cost is $50, which includes breakfast and lunch. Michele Payn-Knoper, CauseMatters.com, will be the main speaker. Deadline for registration is March 1. Cost after the March 1 deadline is $60. Walkins will be $75. Call the Rock Island County Farm Bureau office at 309-736-7432 for reservations or more information. ALHOUN — Farm Bureau and Country Financial will sponsor an estate planning seminar at 10 a.m. Friday, Feb. 17, at the Riverdock Restaurant, Hardin. Call the Farm Bureau office at 618-5762233 for reservations or more information. ARROLL — Farm Bureau will sponsor a preview meeting for the Black Hills trip with TriState Tours at 7 p.m. Wednesday, Feb. 8, at the Naaman Diehl Auditorium. Call the Farm Bureau office for more information. • The Women’s Committee will sponsor a blood drive with the American Red Cross from 11 a.m. to 5 p.m. Monday, Feb. 20, at the Naaman Diehl Auditorium. Call the Farm Bureau office at 815-244-3001 for an appointment or more information. HRISTIAN — Farm Bureau will host an Onthe-Road seminar at 8 a.m. Monday, Feb. 6, at the Farm Bureau building. Call the Farm Bureau office at 824-2940 for reservations. The event is limited to 25 attendees. OLES — Farm Bureau will sponsor a state representative meet and greet meeting at 5 p.m. Thursday, Feb. 16, at the Lifespan Center, Loxa Road. Call the Farm Bureau office at 345-3276 for reservations or more information. OOK — Farm Bureau is offering a free education seminar on the property tax assessment appeals process at 6:30 p.m. Monday, Feb. 20, at the Farm Bureau office in Countryside. Cook County Board of Review Commissioner Dan Patlak will be the guest speaker. Call the Farm Bureau office at 708-354-3276 for reservations or more information. • Farm Bureau and the
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Ronald McDonald House of Charities of Chicagoland and northwest Indiana will host a non-perishable food drop-off for local food pantries Thursday, Feb. 23, at the Farm Bureau office in celebration of Food Check-Out Day. Contact the Farm Bureau office at 708-3543276 for more information. REENE — Applications for the Greene County Farm Bureau Foundation scholarships are available at the Farm Bureau office, high school agriculture departments, and from guidance counselors. Call the Farm Bureau office at 9426958 for more information. RUNDY — Farm Bureau is hosting a grain rescue and protection training session from 1–5 p.m. Wednesday, Feb. 15, at the County Highway Department. Contact the Farm Bureau office at 9426400 for more information. ERSEY — Applications for the Jersey County Farm Bureau Foundation scholarships are available at the Farm Bureau office, high school agriculture departments, and from guidance counselors. Call the Farm Bureau office at 498-9576 for more information. EE — Farm Bureau is hosting a Master Grain Contract seminar at 7 p.m. Wednesday, Feb. 8, at the Ogle County Farm Bureau building in Oregon. Jerry Quick, former Illinois Farm Bureau senior legal counsel, will be the guest speaker. The seminar is free of charge, but pre-registration is required. RSVP to the Farm Bureau at 815-857-3531. • Application deadline for foundation scholarships is Wednesday. Applications are available online at {www.leecfb.org}. Applications are open to high school seniors and undergraduate students pursuing a degree in agriculture or agriculture-related field. • Application deadline for the Foundation “Books by the Bushel” program is Wednesday. Applications are available online at www.leecfb.org. Contact the Farm Bureau office or e-mail leecfb@comcast.net for further information. • District 4 Young Leaders will be holding a curling event at 7 p.m. Friday, Feb. 10, in Triumph. RSVP to the Farm Bureau office at 815-857-3531 or leecfb@comcast.net. IVINGSTON — The Legislative Committee, WJEZ Radio, and The Daily Leader will sponsor a Livingston County state legislators’ candidate forum at 6:30 p.m. Tuesday at the Pontiac Township High School auditorium, Pontiac. Candidates for the 53rd Senate district and 106th Legislative district have been invited. Call Kent from WJEZ Radio at 815-844-6101 or Teresa Grant-Quick at 815-8421103 for more information.
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• Livingston and McLean County Farm Bureaus and Prairie Central Co-Op will sponsor a “Put Safety First on Your Farm” meeting at 7:30 a.m. Wednesday, Feb. 8, at the Lexington Community Center. Breakfast will be served. John Lee, Illinois Feed and Grain Association, and a representative from the Illinois State Police, will be the speakers. Call the Farm Bureau office at 815-842-1103 for reservations or more information. CLEAN — McLean and Livingston County Farm Bureaus and Prairie Central Co-op will sponsor a “Put Safety First on Your Farm” meeting at 7:30 a.m. Wednesday, Feb. 8, at the Lexington Community Center. Breakfast will be served. Partial funding provided by a farm safety grant from Illinois Farm Bureau and Country Financial. Call the Farm Bureau office at 309-663-6497 for reservations or more information. ACON — Farm Bureau will sponsor an On-the-Road seminar at 1 p.m. Tuesday, Feb. 7, at the Farm Bureau auditorium. Kevin Rund, Illinois Farm Bureau senior director of local government, will be the speaker. Call the Farm Bureau office at 877-2436 for reservations or more information. ONROE — A Viewpoint meeting will be at 6:30 p.m. Thursday at Bully’s
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in Columbia. Dinner will be served. Call the Farm Bureau office at 939-6197 for reservations or more information. • An Ag Day program will be at 8 a.m. Wednesday, Feb. 8, at the Monroe County Annex. Breakfast will be served. Robert Bellm and Wayne Johanning will be the speakers. Call the Farm Bureau office at 939-6197 or the University of Illinois Extension office at 939-3434 by Thursday for reservations or 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. Breakfast will be served. Call 671-7040 by Tuesday for reservations or more information. • A family fun day will be at 11:30 a.m. Saturday, Feb. 11, at Mt. Hawley Bowl, Peoria. Cost is $5 for three games and children 6 to 12 years of age bowl free. Reservations are not necessary. IATT — Farm Bureau will sponsor a stroke detection screening from 9 a.m. to 4:30 p.m. Wednesday at the Farm Bureau office. Cost is $100. Call 877-732-8258 for more information. • An On-the-Road seminar will be from 9 to 11 a.m. Thursday, Feb. 9, at the Farm Bureau office. Kevin Rund, Illinois Farm Bureau senior director of local government, will be the speaker. Call the Farm Bureau
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office by Monday, Feb. 6, for reservations or more information. • Foundation scholarship applications are due by 4:30 p.m. March 30. Scholarships are available for high school seniors and current college students majoring in an agricultural related field of study. E-mail ebakken@piattfs.com for an application. IKE — The annual meeting will be at 6:30 p.m. Wednesday, Feb. 8, at the Farm Bureau office. An Illinois Senate candidate forum will follow the business meeting. • Farm Bureau will sponsor a “meet the candidate” forum at 6:30 p.m. Wednesday, Feb. 8, at the Farm Bureau office. Featured will be the three Republican candidates from the 50th Senate district. The forum is open to the public. COTT — Farm Bureau will sponsor a “meet the candidate” forum at 6:30 p.m. Wednesday, Feb. 8, at the Pike County Farm Bureau office, Pittsfield. Featured will be the three Republican candidates from the 50th Senate district. The forum is open to the public. HELBY — Farm Bureau will host an On-the-Road seminar at 7:30 a.m. Tuesday, Feb. 7, at the Shelby County 4Center, Shelbyville. Breakfast will be served. Call the Farm Bureau office at 217-774-2151 for reservations.
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FarmWeek Page 10 Monday, January 30, 2012
profitability
Why the need for cleaner-burning diesel fuel? BY JOE KIRKPATRICK
Some will remember the Oldsmobile commercial with the tag line “It’s not your father’s Oldsmobile.” Today, the same can be said about diesel fuel. Diesel fuel is dramatically different than it was 60 years ago, when it started being widely used in vehicles and agricultural equipment. Emissions and fuel economy are two of many reasons why diesel fuel and engines have evolved. The Environmental Protection Agency (EPA) requires that newer engines meet increasingly tighter emission levels. At the same time, operators demand better fuel economy to help control their costs. To add to the complexity, EPA’s Renewable Fuel Standard 2 (RFS2) mandates higher usage of biofuels. The changes we see in diesel fuel are designed to help engines meet emission requirements while also working with new technologies that improve fuel economy. Managing the quality of the fuel that goes into newer vehicles and equipment is essential. Fuel quality management begins with purchasing a premium diesel fuel that contains a multifunctional additive package formulated to solve many of the problems associ-
ated with basic, No. 2 diesel fuel. Advanced chemistry improves lubricity to protect fuel pumps and injectors, while other additives prevent corrosion in tanks and fuel lines. Premium diesel also contains components that prevent problems associated with moisture, which can infiltrate fuel from condensation or poor handling practices. Also, detergents keep injec-
BY DANIEL GRANT FarmWeek
Recent rains offered brief relief in parched areas of South America, particularly southern Brazil and Argentina, but the precipitation wasn’t enough to end concerns about short crops. USDA earlier this month projected average soybean yields this year compared to last year would decline by 4.4 bushels per acre in Paraguay, 4 bushels in Brazil, and 0.3 of a bushel in Argentina. Meanwhile, USDA this month trimmed Argentina’s corn production by 3 million metric tons (118 million bushels) and many traders believe final yields will be even lower. “In Argentina, production is
Feeder pig prices reported to USDA* Weight 10 lbs. 40 lbs. 50 lbs. Receipts
Range Per Head Weighted Ave. Price $33.48-$62.18 $44.08 $69.41 $69.41 no longer reported by USDA This Week Last Week 121,528 129,624 *Eastern Corn Belt prices picked up at seller’s farm
Eastern Corn Belt direct hogs (plant delivered) (Prices $ per hundredweight) This week Prev. week $81.11 $81.08 $60.02 $60.00
Change 0.03 0.02
USDA five-state area slaughter cattle price Steers Heifers
while maximizing fuel flow rates. What can be expected from managing fuel quality and using a high-quality, premium diesel fuel? With continued use, lost horsepower will be restored from injectors that have become “dirty” over time. Fuel economy improvements between 5 and 6 percent are typical. Also, fuel pumps, injectors, and filters last longer, reducing expen-
sive downtime when equipment is needed most. It all adds us to real savings. Your local FS energy specialist has the knowledge and experience to make sure your fuel is clean and keep your equipment and vehicles operating at their best. Joe Kirkpatrick is GROWMARK’s refined and renewable fuels sales manager. His e-mail address is jkirkpatrick-@growmark.com.
Recent rain doesn’t cure crop concerns in South America
M A R K E T FA C T S
Carcass Live
tors clean to optimize combustion for maximum power, greater fuel efficiency, and lower emissions. Maintaining high-quality fuel starts even before your supplier delivers it. Storage tanks should be cleaned of moisture or sediment that may have occurred over time. It’s important to check transfer tanks, too. Installing new filters with the correct specifications also can help ensure fuel quality
(Thursday’s price) (Thursday’s price) Prev. week Change This week n/a 125.69 n/a 126.00 125.67 0.33
CME feeder cattle index — 600-800 Lbs. This is a composite price of feeder cattle transactions in 27 states. (Prices $ per hundredweight) Prev. week Change This week $153.07 150.39 2.68
Lamb prices n/a
Export inspections (Million bushels) Week ending Soybeans Wheat Corn 01-19-12 35.7 17.1 35.2 01-12-12 41.0 13.4 30.1 Last year 43.9 25.0 26.9 Season total 675.8 637.4 647.4 Previous season total 935.6 731.0 651.6 USDA projected total 1300 925 1600 Crop marketing year began June 1 for wheat and Sept. 1 for corn and soybeans.
centrally located, and that’s where it’s been the hottest and driest,” said Bryce Stremming, market analyst with MID-CO Commodities, during MIDCO’s 32nd annual winter outlook meeting in Bloomington last week. “They’re going to have some (production) problems.” Mike McClellan, meteorologist and owner of Mobile Weather Team in Washington, the keynote speaker at the MID-CO meeting, said recent rains were widely scattered in Argentina. He predicted the hot/dry pattern will continue there next month. “The problem is the fronts (that have passed over Argentina) have not been very well organized,” McClellan said. “Almost all of the farming area (in Central Argentina) is dry. And I suspect that, overall, the dry weather pattern will continue in South America.” The northern two-thirds of Brazil, on the other hand, has received sufficient rainfall for crop production. But many
traders doubt production there will be enough to offset crop losses to the south. “If we do see a drop in production in Argentina, we may see (U.S.) exports pick up a bit,” Stremming said. Elsewhere, a severe drought in Mexico, which seems to be getting less media attention than the South American situation, also could have a significant impact on the markets. The current outlook for spring-summer grain harvests in Mexico is for significant damage to production. “Logically, if there’s no water in the dams, there won’t be corn,” Jose Luis Luege, managing director of Mexico’s national water commission, said during a telephone interview with the media. “We’re going to need to im-
port more grains from the U.S.” Last year, Mexico lost a reported 1.2 million hectares (2.88 million acres) of crops and about 50,000 head of livestock to the ongoing drought, which also had a similar impact in the southern U.S., including much of Texas.
Auction Calendar
Cory Craig, Auctioneer. www.corycraig.com Tues., Feb. 7. 10 a.m. Farm machinery. Lester F. Lydigsen Jr., DWIGHT, IL. Bradleys’ and Immke Auction Service. www.bradleyauctionsinc.com Tues., Feb. 7. 11 a.m. Vermilion Co Land Auction. ROYAL, IL. Murray Wise Associates, LLC. murraywiseassociates.com Wed., Feb. 8. 10 a.m. Unreserved Auction Online Only. www.bigiron.com Thurs., Feb. 9. 10 a.m. 153 Ac. Livingston Co. Dorothy A. Coyne Trust, GRAYMONT, IL. Immke and Bradleys’ Auction Service. biddersandbuyers.com/immke Thurs., Feb. 9. 10 a.m. 395 Ac. Warren Co. Roy L. Green Trust, MONMOUTH, IL. Van Adkisson Auction Service, LLC. www.biddersandbuyers.com Fri., Feb. 10. 9 a.m. Consignment Auction. TREMONT, IL. Cal Kaufman and Brent Schmidgall, Auctioneers. kaufmanauction@aol.com or brentschmidgall@yahoo.com Sat., Feb. 11. 10 a.m. Farm and Livestock Eq. Auction. Rod Kehr Est., ALEXIS, IL. Gregory Real Estate and Auction, LLC. www.biddersandbuyers.com Sat., Feb. 11. 10 a.m. Pike Co Land Auction. Prairie Power Inc., PITTSFIELD, IL. Sullivan Auctioneers LLC. www.sullivanauctioneers.com Sat., Feb. 11. 10 a.m. Farm Eq Auction. Dave Miller, DELAVAN, IL.
Hoyland Auction. www.auctionblock.com or www.auctionzip.com Sat., Feb. 11. 9:30 a.m. Retirement Auction. David and Laverne Schumm, WAYNE CITY, IL. Jamie Scherrer Auction Co. www.jamiescherrerauction.com Sat., Feb. 11. 10 a.m. Farm Machinery Close-Out Auction. Chuck and JoAnn Ursprung, EDWARDSVILLE, IL. Mark Krausz Auction Service. krauszauctions.com Tues., Feb. 14. 10 a.m. LaSalle Co Land Auction. Hertz Farm Mgmt. Inc. www.hfmgt.com Wed. Feb. 15. 10:30 a.m. Land Auction Winnebago Co. Homer F. Green Trust, PECATONICA, IL. Lenny Bryson, Auctioneer. www.lennybrysonauctioneer.com Thurs., Feb. 16. 10 a.m. Ford Co Farmland. J&J Trust, ELLIOTT, IL. Bill Kruse, Auctioneer. Fri., Feb. 17. 2 p.m. Farmland Auction ~ Online Only. Aumann Auctions. www.aumannauctions.com Fri., Feb. 17. 10 a.m. Farmland and Hunting Ground Auction in Tazewell Co., IL. Robert Zimmerman, GREEN VALLEY, IL. Nehmelman Auction Co. topauctions24-7.com/nehmelman Sat., Feb. 18. 10 a.m. 124 Ac. Richard Kelley, WATERLOO, IL. Schaller Auction Service. www.auctionzip.com Sat., Feb. 18. 10 a.m. Farm Eq Auction. Randy Waddell Estate, TREMONT, IL. Hoyland Auction.
Tues., Jan. 31. 10 a.m. Warren Co Land Auction. John F. Gardner, Trustee, MONMOUTH, IL. Van Adkisson Auction Service, LLC. www.biddersandbuyers.com Wed., Feb. 1. 6 p.m. 86 Ac. Cumberland Co. Stanford H. Sholem Land Trust, TOLEDO, IL. Stanfield Auction Co. www.stanfieldauction.com Thurs., Feb. 2. 10 a.m. Land Auction. Earl Seltzer Trust, MORRISONVILLE, IL. Aumann Auctions. www.aumannauctions.com Thurs., Feb. 2. 158 Ac. Kankakee. Soy Capital Ag Services. www.soycapitalag.com Fri., Feb. 3. 10 a.m. Land Auction Warren Co. John A. Taylor, ROSEVILLE, IL. Van Adkisson Auction Service, LLC. www.biddersandbuyers.com Sat., Feb. 4. 9:30 a.m. Retirement Auction. Wright J. Cotter, GALATIA, IL. Jamie Scherrer Auction Co. www.jamiescherrerauction.com Sat., Feb. 4. 10:30 a.m. Land Auction. Ruby Nell Deckard, CAMARGO, IL. Gordon Hannagan Auction Co. www.gordyvilleusa.com Sat., Feb. 4. 10 a.m. Land Auction Randolph Co. WATERLOO, IL. BuyAFarm.com Mon., Feb. 6. 10 a.m. Farmland Auction. Rex Moreland, RAMSEY, IL.
Page 11 Monday, January 30, 2012 FarmWeek
PROFITABILITY Corn Strategy
CASH STRATEGIST
South American crops in focus The trade seems to have come to the consensus that the South American corn crop “is what it is.” No one is certain what the ultimate size of those corn crops will be, but the trade is not worried as much about that as it was at the end of December. The damage has been done. But there’s still time for the soybean output to change, for better or for worse. Hence, there seems to be more interest in looking at weather and the implications it might have for soybean output than it will for corn. South America’s February is our August, and that’s when the size of a soybean crop is really determined. Until now, there’s been some concern about the South American soybean crops, but the attitude that there was still time for conditions to change limited the anxiety. The moisture in Argentina over the past couple of weeks further relieved some of the concern. But now weather will have a chance to lower prospects significantly, or improve them modestly if conditions remain good. Generally, the industry is looking for an Argentine crop of 48 million metric tons (mmt) and a Brazilian crop close to 70 mmt. Both are off the initial expectations of 52 mmt and 75 mmt, respectively. Even though conditions
have improved in Argentina over the last couple of weeks, moisture will need to continue for growers there to achieve a 48 mmt crop, let alone possibly exceed it. Recent rains did allow a few more double-crop acres to get planted. Considering the average of the current expectation suggests a yield near last year’s yield, moisture will need to persist over the next month to keep the Argentine output near 48 mmt. Brazil is a different story. Southern Brazil continues to feel the impact of dry weather. Recent rains have largely bypassed some growing areas in Rio Grande do Sul, the southernmost state. It is the third largest producing state, behind Mato Grosso and Parana. Government officials in Rio Grande do Sul cut their soybean crop estimate another 0.75 mmt to 8 mmt this past week. It’s 2.3 mmt below their original forecast. Officials cut the Parana crop to 11.67 mmt down just more than 1 mmt from their original forecast. Moisture has improved some in Parana, stabilizing the crop there. But it remains dry in Rio Grande do Sul. And Paraguay, a country sandwiched between Argentina and Brazil has seen its crop potential decline. Officials there cut 1.5 mmt off their earlier predictions. But it’s important to remember crop reductions will cut into South America’s exports at the end of their marketing year, not the beginning. That stands to help our new-crop exports most.
Cents per bu.
ü2011 crop: Market activity has confirmed the 6- to 7week low has been established. If March futures can overcome $6.42, that would open the door for prices to test the $6.64 level. Use a rally above $6.35 on March futures to make catch up sales. Leave an order to add a 10 percent sale if March futures hit $6.60. ü2012 crop: Use rallies above $5.65 on December futures to make catch-up sales. Leave an order to add a 10 percent sale if December futures hit $5.80. vFundamentals: Recent strength in corn has come from a short-term burst in export demand and dollar weakening. The Federal Reserve announcement last week of its intentions to keep interest rates low through 2014 may keep the dollar on the defensive short term, but ongoing problems in Europe will prevent a major breakdown. The export market has perked up, lifting basis levels at the Gulf. Tight farmer holding is responsible for basis strength.
Soybean Strategy
ü2011 crop: Continue to use rallies above $12.25 on March futures to make catch-up sales. Because soybeans have more “weather vulnerabilities” in South America at this time, we are more patient in recommending a new sale. Still, leave an order to price another 10 percent if March reaches $12.75. ü2012 crop: With even a modest reduction in South American output, there’s a need to increase soybean acres and production here this coming year. Still we’d use rallies to $12.20 on November futures for catch-up sales. Leave an order to add another 10 percent sale if November futures hit $12.49. vFundamentals: Even with the talk about Russian, Ukrainian, and Argentine export curtailment for grains, soybeans still have the best fundamental reason to go higher. The calendar has now shifted into a period in which South American weather will be a more important factor for the soybean crops than it will be for corn output.
Wheat Strategy ü2011 crop: The shortterm trend turned higher when Chicago March futures overcame the $6.27 resistance. The next upside target is at a previous interim high at $6.70. Use current strength to make catch-up sales. Check the Cash Strategist Hotline frequently as this rally might be the winter selling opportunity we have been looking for. The carry in futures still pays for commercial storage, making spring hedge to arrive contracts the best marketing tool.
ü2012 crop: Stay close to the Hotline as we could recommend sales at any time, especially if Chicago July futures near $7. vFundamentals: Rumors have been circulating that Russia could curb its exports going forward because of dwindling supplies. An export tax is the most talked about tool. This would help improve the U.S. export business, especially now that our prices are competitive with the world. Temperatures in Russia and Ukraine will decline sharply, increasing chances of winterkill.
Cash Strategist sales recommendations AgriVisor endorses crop insurance by
Beans '11 '12 9/13/10 10% 10.27 8/29/11 10% 13.50 10/11/10 10% 11.54 11/15/11 10% 11.99
AgriVisor LLC is not liable for any damages which anyone may sustain by reason of inaccuracy or inadequacy of information provided herein, any error of judgment involving any projections, recommendations, or advice or any other act of omission.
Policies issued by COUNTRY Mutual Insurance Company®, Bloomington, Illinois AgriVisor Hotline Number
309-557-2274
9/13/10 10% 4.61
8/29/11 10% 6.65
10/11/10 10% 5.28 11/15/11 10% 5.671/2
Wheat '11 '12 7/13/10 10% 6.00
7/30/10 10% 6.98
5/31/11 10% 6.79
8/6/10 15% 7.35
8/1/11 10% 13.71 11/15/11 10% 11.99
8/1/11 10% 6.77 11/15/11 10% 6.45
8/8/11 10% 6.68
30% unsold
30% unsold
Prices are new crop or nearby futures
Prices are new crop or nearby futures
4/25/11 10% 13.76 5/26/11 10% 13.75
80% unsold
1/2
11/17/11 20% 6.343/4
7/21/10 15% 6.60
1/24/11 10% 5.87 4/25/11 10% 6.76 80% unsold
1/31/11 10% 13.31
AgriVisor LLC 1701 N. Towanda Avenue PO Box 2500 Bloomington IL 61702-2901 309-557-3147
Corn '11 '12
11/17/11 20% 6.30 20% unsold Prices are new crop or nearby futures
80% unsold
FarmWeek Page 12 Monday, January 30, 2012
pERspEcTIvEs
Rural Development: Living up to the Lincoln Legacy “I like to see a man proud of the place in which he lives. I like to see a man live in it so that his place will be proud of him.” — Abraham Lincoln Lincoln said those words in reference to a “hometown.” Rural Development is proud to serve the people of rural Illinois and help support communities in which we’re all proud to live. So it’s appropriate that we at USDA Rural Development COLLEEN share Lincoln’s CALLAHAN insights during this 150th anniversary of the United States Department of Agriculture. It was President Lincoln, after all, who established USDA. I believe Lincoln would be proud of the efforts of USDA Rural Development in his home state 150 years later, using its resources to give rural citizens the opportunity to be proud of the places in which they live. We continue today
to be committed to the future of rural communities and the hundreds of hometowns throughout the Land of Lincoln. We are helping our Illinois hometowns build bridges to the future by investing in their maintenance and improvements. This past fiscal year, Illinois’ USDA Rural Development financial partnerships helped meet community, business, and home needs by investing $698 million in rural Illinois. We delivered on average $1.9 million each day at an administrative cost of only 1.8 cents for every dollar awarded! Rural businesses utilized $36 million in support from USDA, an investment that leveraged 78 percent in additional funds. Another $49 million was awarded to rural communities and non-profits to create opportunities for local businesses to start or expand. More than 5,300 families used Rural Development financing options to purchase their first homes or upgrade to
better homes. We supported 585 rural rental complexes and homes in rural Illinois (that’s nearly 11,000 residences). Sixty-one percent of those are homes for seniors and the disabled. This past year we funded community improvement projects benefitting 85,131 rural residents, brought safe water to 13,700 rural families, and invested $90 million in rural broadband. The most important result of USDA Rural Development’s 2011 investments in rural businesses, communities, and housing is the people we help. That, too, is the legacy of Abraham Lincoln who called USDA “The People’s Agency.” In 1862, about half of all Americans lived on farms, compared to about 2 percent today. But through our work on food, agriculture, economic development, science, natural resource conservation, and a host of issues, USDA still fulfills Lincoln’s vision by touching the lives of every American, every day.
Mary Ellen Fricke graphic
While we don’t have all the answers or all the resources to meet the current needs, we continue to have guidance from Mr. Lincoln as it relates to progress: “I’m a slow walker, but I never walk backwards,” he said. We do our best at USDA
Rural Development to live up to President Lincoln’s expectations, 150 years later and into the future! Colleen Callahan is the state director of USDA Rural Development. Her e-mail address is Colleen.Callahan@il.usda.gov.
An economic look back and look ahead in 2012
A fresh start is what many investors are thinking about after leaving 2011 behind. While overall returns were flat to positive over the full year, the headlines and associated market volatility left most feeling exhausted. After a third quarter in which we saw the Standard & Poor’s (S&P) 500 Index decline 13.9 percent and 10-year U.S. Treasury rates drop to 1.9 percent over conTROY FRERICHS cerns in Europe, a U.S. sovereign debt downgrade, political disarray in Washington, and anemic U.S. economic growth, we had a fourth quarter that reversed most of the damage. While the European overhang was and is still present, improving U.S. economic data led to the S&P 500 gaining 11.8 percent during the fourth quarter.
The bond market told a different story, however, with rates on 10-year treasuries remaining virtually unchanged from the third quarter, seemingly unwilling to accept the better U.S. economic data in the face of the festering European debt crisis. So once the dust settled, where did that leave us for 2011? In the stock market, virtually the same place that we started, as the S&P 500 ended the year flat, not including a return from dividends (total return of 2.11 percent). In the bond market, the Barcap U.S. Aggregate Bond Index (a good proxy for the overall bond market) reflected the nearly 2 percent drop in 10-year treasury yields over the course of 2011 and ended the year with a 7.84 percent total return. Within U.S. stocks, growth stocks outperformed value stocks, and large
capitalization stocks outperformed midand small-capitalization stocks. Defensive economic sectors of the U.S. market performed best, including utilities, consumer staples, and health care, while more cyclical sectors — such as materials, industrials, and financials — underperformed the broad market. U.S. stocks also outperformed those of Europe, Japan, and emerging markets. Most sectors of the bond market were positive, with safe-haven sectors such as treasuries, municipals, TIPS (Treasury inflation-protected securities) and investment-grade corporates performing best. So what will we do with our fresh start? With the major caveat that the European debt crisis doesn’t spread to the rest of the world, we anticipate 2012 to be a lot like 2011. We think stocks look relatively attrac-
tive as investors come to terms with the fact there is some growth in the U.S. economy. There is a long list of positives going into 2012: real gross domestic product (GDP) that is at an all-time high, record corporate earnings, an improving employment picture, strong consumer spending, a pickup in manufacturing activity, low interest rates, tame inflation, and an election year (typically good for stocks). However, that could all be wiped out with a complete meltdown in Europe. At the same time, it is difficult to be excited about bonds, particularly treasuries, with yields near all-time lows. When everyone wants something, it usually gets expensive, and right now, we think investors are paying a premium for safety. Troy Frerichs is a senior investment officer in wealth management with Country Financial.
LETTER TO THE EDITOR Common sense ignored in oil pipeline issue
Editor: I certainly agree with Edward Ragdale’s letter in the Jan. 23 FarmWeek about the Canada-to-Texas oil pipeline. Enbridge already has an existing 3,500 miles of pipeline infrastructure originating in western Canada that reaches to Detroit and Chica-
go and had planned an extension in 2006 to be in service by 2009. This would have reached the transportation hub at Patoka, Ill., in Marion County. We were approached in 2006 and many received more than reasonable payment already in 2007. The mitigation agreement was sound and acceptable.
However, this project has been held up by unreasonable motivations, whether political, greed, or whatever — and if it proceeds, it will be much more costly than it would have been five years ago. Just as in the Keystone pipeline adventure, common sense is being ignored. JOHN GRAMM, Gridley
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