The IFB BoaRd has approved state legislative priorities that cover fiscal policy and initiatives approved at the annual meeting. ...............................3
The TRuCkIng industry seeks to move from today’s 80,000pound federal threshold to a 97,000pound limit nationwide. ...................4
Monday, January 9, 2012
LIFe aFTeR ‘VeeTC’ began Jan. 1, but the ethanol industry remains optimistic heading into the new year. ..........................................5
Two sections Volume 40, No. 2
Run of mild, wet conditions benefits winter wheat BY DANIEL GRANT FarmWeek
Periodicals: Time Valued
The run of mild temperatures and above-average rainfall the past two months has done wonders for the state’s winter wheat crop. The condition of the crop in Illinois last week was rated 81 percent good to excellent, 17 percent fair, and just 2 percent poor, the National Agricultural Statistics Service Illinois field office reported. “I’d say (the wheat crop) is in very good condition right now,” said Steve Stallman, president of the Illinois Wheat Association. The statewide temperature was 3.6 degrees above average in November and 5.9 degrees above average last month, which made it the ninthwarmest December on record since 1895. Meanwhile, average precipitation statewide the past two months totaled 8.66 inches, 2.64 inches above normal. The majority of the precipitation, though, was rain compared to snowfall a year ago that totaled 10 to 25 inches around the state by midDecember, according to Jim Angel, state climatologist
with the Illinois State Water Survey. “As long as the temperature stays moderate, the lack of snowfall doesn’t make any difference (to the wheat crop),” Stallman said. There have been some concerns expressed that no snow cover could leave wheat plants vulnerable to winter damage if and when temperatures plummet well below freezing. “The pattern the past two months has been warm and wet, and most outlooks predict that pattern will continue,” Angel said. “But even in a mild winter, there always is some period of real winter weather” that could pose a threat to the wheat crop. “Ideally, you’d like a little snow cover (on the wheat crop) for the really cold
days,” Angel noted. Snowfall in December totaled less than an inch in Southeastern Illinois and 1-2 inches elsewhere in the state, with a high of 4 inches in the northwest corner of the state. Another benefit of all the rain is most of the state’s soil moisture now is adequate to surplus, with just a small area near Decatur that remained short as of last week. “A small area around Macon County is the only area where we see any lingering evidence of the drought this (past) summer,” Angel said. Overall, topsoil moisture across the state last week was rated 86 percent adequate, 9 percent surplus, and just 5 percent short. With the release of its wheat seedings report, USDA on Thursday will estimate the number of acres of wheat.
Ruling against California law ethanol ‘win’ BY MARTIN ROSS FarmWeek
A federal court has blocked California’s Low Carbon Fuel Standard, a move Illinois Corn Growers Association Business Development Director Dave Loos said offers an opportunity to help California get clean air policy “right.” As the ethanol industry prepared for Dec. 31 expiration of the federal Volumetric Ethanol Excise Tax (VEETC), a U.S. district judge ruled the California law discriminated against out-of-state ethanol and crude oil and thus violated the U.S. Constitution’s Commerce Clause. “This win in California is huge for the ethanol industry as the VEETC expires,” Loos told FarmWeek. The federal Renewable Fuels Standard (RFS2) requires 36 billion gallons of biofuels use nationwide by 2022, including up to 15 billion gallons of conventional ethanol. However, the California law set down a schedule for transitioning to “advanced” biofuels that purportedly offer greater greenhouse gas emissions reductions than corn-based ethanol. The standard ranks imported sugarcane-based ethanol well above corn ethanol in greenhouse gas reductions, based on disputed “land use” claims related to corn production. Officials also
For more on ethanol’s market and policy future, see page 5 granted California-made ethanol a higher greenhouse score based on sources of electricity used in in-state production and reduced ethanol transportation needs. The judge argued the standard discriminates against both out-of-state ethanol and Alaskan and foreign crude oil. His decision “brings back a level playing field for cornstarch-based ethanol” on a regional and possibly even national level, Loos said. Loos warned California’s “nonsensical approach” effectively would have required the U.S. economy to “trade gallons” — importing Brazilian ethanol while forcing more Midwest biofuel into export channels. That would have boosted fuel prices for California motorists, Loos said. “This ruling maintains the West Coast market for Midwest and other domestic ethanol sources,” he said. “It’s about a 1.5billion-gallon market that we could lose in two or three years based on the way (California) rules are written.
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“That would be critical to the wellbeing not only of Midwest ethanol plants and corn growers but also of ethanol in the whole RFS2 program. Sugarcane ethanol is looked upon as an advanced biofuel in the RFS2, and (California law) could play a role in restricting the part of the RFS2 that cornstarch-based ethanol thought it had carved out.” The case against California’s standard was spearheaded by the Rocky Mountain Farmers Union, which serves Colorado, Wyoming, and New Mexico farmers. Attorneys general from Alaska, Kansas, Michigan, Missouri, Nebraska, North Dakota, and South Dakota also filed briefs challenging the law. The California Air Resources Board (CARB) reportedly plans to appeal the ruling, but Loos believes the judge’s constitutional argument will stand. That likely will spur re-examination of greenhouse gas impacts related to various fuels, and may strengthen relations between ethanol interests and CARB “as we help get it right the next time around,” he said. “While this lawsuit’s been going on, there have been quite a few studies and analyses (of biofuels impacts) supported by the ethanol industry, the Illinois Corn Marketing Board, and others,” Loos noted.
Illinois Farm Bureau®on the web: www.ilfb.org
FarmWeek Page 2 Monday, January 9, 2012
Quick takes HIGH-SPEED RAIL ON TRACK — Illinois has received an additional $186 million in federal funds to extend the high-speed rail project between Joliet and Dwight, state and federal officials announced last week. When the project is completed, trains will be able to travel 110 mph nearly 70 percent of the route between Chicago and St. Louis. Work on the Dwight-Joliet extension is expected to start this spring. Ugrades on the Dwight-Alton portion of the route are expected to be finished by 2014. REGULATORY RELIEF REDUX? — Congressional advocates for regulatory moderation are gearing up for another try at reining in the U.S. Environmental Protection Agency (EPA). The Senate soon may again take up the Reducing Regulatory Burdens Act, GROWMARK Government Affairs Director Chuck Spencer told FarmWeek. Among other things, the bill would clarify that National Pollutant Discharge Elimination System (NPDES) permits are not required when applying pesticides according to EPA-approved labels. Ag interests are seeking “ever y available avenue” for Senate approval of the measure, said Spencer, who noted reported support by more than 60 senators. The bill passed the House and the Senate Ag Committee, and bipartisan senators pressed Majority Leader Harry Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.) for its consideration on the Senate floor before the end of 2011. “We were in the mix for the payroll tax (cut) extension between the Christmas and New Years holidays, up until the last moment,” Spencer related. “Because of the wrangling over that bill that we all witnessed, (regulatory relief provisions were) left on the table.” STATE VINEYARD, WINERY CENSUS COMING — Illinois will count its vineyards and wineries this year when the state field office of the USDA National Agricultural Statistics Service, working in cooperation with the Illinois Grape Growers and Vintners Association (IGGVA), mails surveys to growers and winery operators this month. IGGVA obtained a USDA grant to conduct the census with a goal of tabulating grape acres and total wine production in Illinois. It has been five years since a similar survey was conducted. A second survey will be mailed next month and individual interviews will be conducted in March. The survey is expected to be completed by May.
Government
FDA bans certain uses of antibiotic in livestock The U.S. Food and Drug Administration (FDA) last week issued an order that prohibits certain uses of the cephalosporin class of antimicrobial drugs in cattle, swine, chickens, and turkeys. The ban takes effect April 5. FDA as of that date will prohibit “extra-label” uses of cephalosporin drugs, which include using the antibiotic at unapproved dose levels, frequencies, or durations. It also will ban the use of cephalosporin drugs for disease prevention in livestock. Cephalosporins commonly are used on humans to treat pneumonia, skin and soft tis-
sue infections, diabetic foot infections, and urinary tract infections. “We believe this in an imperative step in preserving the effectiveness of this class of important antimicrobials that takes into account the need to protect the health of humans and animals,” said Michael R. Taylor, deputy commissioner for foods. The order does not limit the use of cephapirin, an older cephalosporin drug that FDA does not believe significantly contributes to antimicrobial resistance. Veterinarians still will be able to use or prescribe
cephalosporins for limited extra-label use in cattle, swine, chickens, and turkeys as long as they follow the dose, frequency, duration, and route of administration of the label. Veterinarians also can still prescribe cephalosporins for extra-label uses in minor species of food-producing animals such as ducks and rabbits. The new order of prohibition has a comment period that began Friday, Jan. 6, and will close March 6. To comment on the new order, go to the website {www.regulations.gov} and enter FDA-2008-N-0326 in the keyword box.
State Senate president talks revenue, cellphone law BY KAY SHIPMAN FarmWeek
Illinois Senate President John Cullerton said he expects the General Assembly to pass a balanced budget this year, just as it did in the last session. Last week, the Chicago Democrat offered his projections for the upcoming legislative session in a news conference with reporters. Cullerton challenged his GOP counterparts to suggest ways to make the income tax more fair. “The goal is to raise the same amount of money we get now ... and make it fairer — not an increase — but a fairer tax,” he said.
“The business community should be optimistic about what we’re doing,” Cullerton noted. Asked if the state would expand its limits on drivers’ use of hand-held cellphones, Cullerton said there is no political support for such a ban. Public acceptance of driving-related safety laws takes time, Cullerton said, adding that he sponsored state child restraint laws and last year’s law requiring seatbelts for back-seat passengers. “Maybe down the road, but not right now,” he said about banning hand-held cellphones for all drivers.
PETA seeks signs for cows killed on Illinois roads An animal rights group’s request for memorial signs marking the deaths of cattle killed in Illinois vehicle accidents likely would be denied because the law requires a request come from close relatives of the victims, a spokesman with the Illinois Department of Transportation (IDOT) told FarmWeek. People for the Ethical Treatment of Animals
(PETA) has sought to buy two signs commemorating an accident in suburban Chicago and another near Peoria. Josh Kauffman, IDOT spokesman, said the group’s application has to go through appropriate channels, but likely would be denied because of the relative requirement. The state Roadside Memorial law stipulates a “DUI memorial marker” would
commemorate “one or more persons who died” as a result of a crash caused by a driver under the influence of alcohol, other drugs, or intoxicating compounds. The law also states a “qualified relative” of a victim may make the request that a memorial be installed. The roadside memorial program is intended to raise public awareness of impaired driving. — Kay Shipman
Transportation focus of IFB ‘On-the-Road’ seminars (ISSN0197-6680) Vol. 40 No. 2
January 9, 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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Farm Bureau members will learn about the latest transportation issues and regulations at several Illinois Farm Bureau “On-the-Road” seminars presented by Kevin Rund, IFB senior director of local government. There is no fee to attend, but reservations are requested. Interested members should contact the host county Farm Bureau. January seminars and locations include: Jan. 23, 10 a. m., Winnebago County Farm Bureau, Rockford, 618-9620653; Jan. 24, 9:30 a.m., Menard CFB, Petersburg, 217-632-2217; and 2 p.m., Mason CFB,
Havana, 309-543-4451; Jan. 25, 9 a.m., Peoria CFB, Peoria, 309686-7070; Jan. 30, 6 p.m., Jackson County Extension office, Murphysboro, 618-684-3129; and Jan. 31, 7:30 a.m., Union CFB, Jonesboro, 618-684-3129; and 6 p.m., The Gambit Golf Course clubhouse, Vienna, 618658-2871. February dates and locations include: Feb. 1, noon, Grecian Steakhouse, Pinckneyville, Perry and Washington CFB, 618-3579355; and 6 p.m., FS Building, Marion, 618-993-2609; Feb. 2, 6 p.m., Saline CFB, Harrisburg, 618-252-6992; Feb. 3, 1 p.m., Lawrenceville CFB, Lawrenceville, 618-943-2610;
Feb. 7, 7:30 a.m., Shelby County 4-H Center, Shelbyville, 217774-2151; and 1 p.m., Macon CFB, Decatur, 217-877-2436; Feb. 21, 6 p.m., Knox County Agri Center, Galesburg, 309342-2036; Feb. 24, 1 p.m., John Wood Community College Ag Center, Orr Farm, Perry, 217285-2233; Feb. 27, 7:30 p.m., Effingham CFB, Effingham, 217-342-2103; and Feb. 28, 9 a.m., Fayette CFB, Vandalia, 618-283-3276. March dates and locations include: March 7, 10 a.m., Jo Daviess CFB, Elizabeth, 815858-2235; and March 13, 7 p.m., Ford-Iroquois CFB, Gilman, 815-265-4712.
Page 3 Monday, January 9, 2012 FarmWeek
Government State legislative priorities
IFB eyeing state’s fiscal woes, statewide wind energy standards
BY KAY SHIPMAN FarmWeek
Illinois Farm Bureau in the upcoming General Assembly session again will seek to maintain funding for core agricultural programs without changes to the state’s current tax structure. The IFB board recently approved state legislative priorities that covered state fiscal policy and three legislative initiatives approved by delegates at the IFB annual meeting. Illinois’ economic outlook remains grim based on a state financial report released last week, noted Kevin Semlow, IFB director of state legislation. “Once again, the General Assembly will be faced with balancing the budget while living within revenue resources, which means operation funding cuts to keep programs,” Semlow said. “We know there will again be cuts to non-education budget lines ... We anticipate this will be a difficult task in light of the fiscal climate facing the State of Illinois,” he continued. Last week, Gov. Pat Quinn warned state programs should anticipate 9 per-
cent funding cuts, and more reductions will be needed in Medicaid expenses. Unlike previous years, the governor now must release a multi-year budget outline as required by recent law. Given anticipated funding cuts on top of this year’s substantial cuts to the Illinois Department of Agriculture (IDOA) budget, IFB wants to preserve important ag services, Semlow said. “Further cuts to many of these ag programs could hinder significantly services such as grain and warehouse inspections, meat and poultry inspections, and environmental programs,” Semlow explained. One IFB state legislative initiative will focus on statewide commercial wind enerChuck Cawley gy project standards. Currently, wind projects of any size in Illinois are governed by county and/or local ordinances. “Multi-county wind projects, especially, have been held up or slowed
Remember no hand-held cell phones in buses, large trucks Farmers need to remember to use only hands-free devices, such as Bluetooth technology, to communicate while driving large trucks. A federal rule took effect Jan. 3 prohibiting interstate truck and bus drivers from using hand-held cell phones while driving. Because Illinois generally incorporates federal trucking regulations, this means the ban also will be applied to all other intrastate drivers. As a rule of thumb, the ban applies to farmers who have a U.S. Department of Transportation number or should have such a number. It also applies to drivers involved in intrastate commerce if the vehicle being driven is required to be placarded.
FSA outlines provisions for HELC and WC lands Farm Service Agency (FSA) State Executive Director Scherrie Giamanco reminds landowners and operators that they must comply with Highly Erodible Land Conservation (HELC) and Wetland Conservation (WC) provisions in order to receive payments from USDA. Farmers with soils determined to be highly erodible, have tillage, crop residue, and rotation requirements specified in their conservation plan. Farmers also should notify FSA prior to conducting land clearing or drainage projects to ensure compliance. “If you are planning on installing new tile or grading wet spots in a field, contact your local FSA county office before starting any work,” Giamanco said.
“Also, if you intend to clear any trees to create new cropland, these areas will need to be reviewed to ensure any work will not jeopardize your eligibility for benefits,” she added. Landowners and operators may complete form AD-1026 Highly Erodible Land Conservation and Wetland Conservation Certification to determine whether a referral to Natural Resources Conservation Service is necessary. “Something as simple as clearing a fence row or converting a pasture into cropland could result in losing USDA benefits,” Giamanco warned. For more information on HELC and WC provisions, contact your FSA county office or go online to {www.fsa.usda.gov}.
because of differences among county standards,” said Chuck Cawley, Rochelle, chairman of the IFB Government Committee. IFB will seek passage of statewide standards for siting, building, and decommissioning of commercial wind projects. The standards would address such issues as access, landowner compensation, and decommissioning funding. “Statewide standards related to decommissioning would provide protections for landowners,” Cawley noted. To date, individual county governments and landowners have had to negotiate their own agreements for decommissioning of wind turbines. Another IFB legislative initiative again will seek to increase the fine to $75 for misuse of a slow moving vehicle (SMV) emblem. Semlow pointed out such an attempt was made in the last legislative session, but this year’s proposal includes tweaking specific violations under the current law. “We learned last year that SMV violations pertain only to misuses on road-
ways and we want to include all illegal uses,” Semlow explained. A third legislative initiative will seek passage of legislation to return unused mineral rights to the surface landowner. The legislation would apply if utility, pipeline, or underground gas storage easements or leases are unused, abandoned, or dormant for 20 years.
Efforts under way to reinvigorate Illinois ag legislative roundtable For many years, state agriculture leaders rep- Building, the meeting format will be shorter and will end after lunch instead of extending resenting many sectors have gathered at the into the afternoon. Illinois Agriculture Legislative Roundtable in The morning will include presentations on January to discuss legislative priorities and issues of general interest. plans for upcoming legislative sessions. Time will be allotted for groups to share However, the time has come to reinvigorate ideas and to discuss opportunities to work the groups’ combined efforts and to revamp jointly on different issues. the daylong format, according to Adam “There is still a place for networking, getting Nielsen, the roundtable coordinator and Illito know new people, and nois Farm Bureau direcfinding issues of common tor of national legislathat dovetail with tion and policy develop‘The need to work together interest some, but not necessarily ment. “Working together on is not going away; however, all, the roundtable particiissues and finding issues t h e n e e d t o d e v e l o p a pants,” Nielsen said. In the past, roundtable we can work on together generic legislative agenda participants have circulated has been effective, and has decreased.’ letters on different issues we need to do more,” and invited other groups to Nielsen said. sign in support. “The need to work — Adam Nielsen Some participants also together is not going Illinois Agriculture Legislative have discussed upcoming away; however, the need Roundtable coordinator legislative or agency comto develop a generic legmittee hearings or comislative agenda has ment periods on proposed rules and encouraged decreased. “We can work on issues as they come up and other groups to testify or to submit comments. Those types of activities are examples of I am convinced we can use each other to the effective collaboration, according to best of each’s ability,” he said. Nielsen. — Kay Shipman When ag leaders gather Jan. 26 at the IFB
USDA unveils conservation program funds Last week, USDA announced the availability of $11.74 million for fiscal year 2012 for the Cooperative Conservation Partnership Initiative (CCPI) and $25 million for the Wetlands Reserve Enhancement Program (WREP) through the Mississippi River Basin Healthy Watersheds Initiative (MRBI). The money is available only for new MRBI propos-
als within the 54 designated focus areas in Illinois and 12 other basin states. Eligible partners are encouraged to submit applications by March 19. For more information, go online to {www.nrcs.usda.gov/wps/portal/nrcs/detailfull/national/pr ograms/farmbill/initiatives/? &cid=nrcsdev11_024120}. USDA also announced pre-proposal Conservation Innovation Grants (CIG) are
due by Jan. 31. Pre-proposals support large-scale demonstration projects that test and prove original approaches to conserving land. This year’s CIG projects are to focus on nutrient management, energy conservation, soil health, and wildlife. For more information, go online to {www.nrcs.usda. gov/wps/portal/nrcs/main/natio nal/programs/financial/cig}.
FarmWeek Page 4 Monday, January 9, 2012
infrastructure
National weight limit economic boost for ag? BY MARTIN ROSS FarmWeek
In a tough economy, ag shippers seek more bang for the bulk in terms of freight efficiency and energy savings. As they continue to lobby for congressional transportation legislation aimed at upgrading the nation’s roads and bridges, farm and agribusiness interests are seeking trucking provisions that recognize their specialized needs and bolster transportation economics. GROWMARK Government Affairs Director Chuck Spencer notes support for expanding current pilot programs for six- to seven-axle
tractor-trailers of 90,000 to 97,000 pounds. The trucking industry seeks to move from today’s 80,000-pound federal threshold to a 97,000-pound nationwide limit. U.S. truck weights are “’way below” operational weights in most countries, according to Illinois Soybean Association transportation consultant Scott Sigman. A majority of trucks reach freight capacity well before hitting weight limits, but a change could help perhaps 20 percent of the industry haul more freight per gallon of fuel with fewer drivers, he said. Higher, uniform truck
Agri-industry training complex coming to Central Illinois The Asmark Institute, based in Owensboro, Ky., last week announced plans to build a new 26,000-square-foot training complex in Bloomington. Asmark will partner with the Illinois Fertilizer and Chemical Association (IFCA) and the Grain and Feed Association of Illinois (GFAI) on the training complex. The goal is to host an ammonia technician course and a series of new courses designed for grain facilities. The complex also is expected to host a variety of meetings given its unique design and capability to accommodate equipment used for specialized hands-on training. The Bloomington complex also will serve as the central dispatch point for the professional applicator training course. IFCA anticipates relocating its offices to the new complex and sharing the 7,200 square feet of office space with one or two other ag organizations. “Having well-trained employees, especially in the area of safety, has been a focus of the GFAI as well as the Asmark Institute for years,” said Jeff Adkisson, GFAI executive vice president. “We see this as the next step in training our grainhandling workers to recognize hazards and learn how to prevent or eliminate them.” Jean Payne, IFCA president, added: “The level of skill and training demonstrated by pesticide and nutrient applicators is often a determining factor in the overall prosperity of the ag retailer’s business. “IFCA’s partnership with the Asmark Institute to bring this technologically advanced, hands-on training center to Central Illinois is a major step forward for our industry, for farmers who rely on expert applicators, and for the safety of the public and communities that expect a high level of professionalism, safety and stewardship from our industry,” she said. The plan is to have office space ready for occupancy in March with the training complex to be finished in August in time for a national environmental, health, and safety, school.
weight limits would improve grain and input transportation efficiencies, “and those cost savings would go right back to the producer,” Spencer said. “For those who do interstate shipments, having uniform weights is important to competing and having the efficiencies they need,” Grain and Feed Association of Illinois Executive Vice President Jeff Adkisson told FarmWeek. “If you’re in a state with higher weights and you’re hauling to a state with lower weights, or vice versa, it creates some complex issues and problems.” At the same time, Illinois Farm Bureau transportation specialist Kevin Rund notes
concerns about the impact higher truck weights might have on roadway conditions, especially given “the huge investment in bridges in this nation.” A new report by the Transportation for Illinois Coalition cites 2,240 “structurally deficient” Illinois bridges. Nearly a quarter of the Illinois Department of Transportation highway program is targeted toward bridge maintenance, but the report warns “keeping pace with repair needs is daunting.” Adkisson thus argues careful consideration is crucial to ensure new weight limits do not create what amounts to an “unfunded mandate” for states, counties, or townships already struggling to
maintain roads and bridges. Spencer emphasized the importance of additional axles in tandem with weight limits both in terms of reducing potential road wear through weight redistribution and improving trucker stopping distances. Highway/motorist safety has been a major issue in debate over increased truck weights. Spencer sees shippers willing to invest in axle modifications as long as weight standards are “consistent” across a large enough geographical area. For instance, Iowa allows 90,000 to 96,000-pound seasonal weights with additional axles on local roads, but local bridge and federal highway limits remain at 80,000 pounds.
Highway bill route to river funding? U.S. House Transportation and Infrastructure Chairman John Mica (R-Fla.) has mapped a possible new route to locking in long-awaited river improvements. Federal surface transportation legislation (i.e., the “highway bill”) authorizes a variety of road, bridge, transit, and freight rail projects. But past highway bills have not addressed the river navigation system, which falls instead under the Water Resources Development Act (WRDA). The 2007 WRDA bill authorized seven new 1,200-foot locks on the Upper Mississippi and Illinois Rivers. But funding has been held up amid debate over the budget and availability of required cost-share dollars from the Inland Waterways Trust Fund, a repository for barge fuel tax revenues. House leaders have announced plans to move ahead with a Mica-drafted, multi-year highway bill which also proposes “significant policy reforms for rail and maritime transportation.” GROWMARK Government Affairs Director Chuck Spencer hailed first-time inclusion of maritime provisions. “We all know Congress will move a highway bill before any new Water Resources Development Act moves,” Spencer said. Citing increased emphasis on “multimodal” transportation of bulk and containerized goods, he sees Mica’s maritime provision helping ensure waterways are “integrated into the transportation process of river, road, and rail,” he said.
But funding remains a key challenge to that integration. Commercial river users are willing to pay higher barge fuel taxes to refresh the Waterways Trust Fund and spur federal lock investment. The administration has come back with an ill-received new “per-barge, per-lock” fee proposal. Where the Highway Trust Fund, which is fed by truck fuel taxes, distributes money to all states as well as to federal coffers, lock fees would fail to address “systemic” navigation needs, argued Illinois Soybean Association transportation consultant Scott Sigman. Maintenance and manpower at the northernmost Mississippi locks is crucial to overall system operation. But those relatively lowtraffic northern locks would generate far less fee-based revenue than Illinois locks, Sigman said. “Today, there’s a degree of support that keeps the whole system operating optimally,” he told FarmWeek. “We’ve seen ‘unscheduled maintenance’ trend way upward. That’s a polite way of referencing the kind of collapse of the system that could result from a single lock’s extraordinary failure.” At the same time, while Illinois Farm Bureau transportation specialist Kevin Rund applauds the attention being afforded waterways in transportation debate, he is cool toward any proposal that would divert highway revenues for lock funding. — Martin Ross
Page 5 Monday, January 9, 2012 FarmWeek
markets
Life after VEETC: Fueling for the future BY MARTIN ROSS FarmWeek
Life after “VEETC” began Jan. 1, but the ethanol industry remains optimistic heading into the new year. Congress allowed the 45cent-per-gallon Volumetric Ethanol Excise Tax Credit (VEETC) to expire Dec. 31, along with a 54-cent-per-gallon ethanol import tariff designed to offset VEETC credits extended to foreign ethanol producers. The tax credit was created in 2004 as an incentive for fuel suppliers to blend ethanol with gasoline. Late in 2010, Congress approved a one-year extension of VEETC, but even then, industry groups were discussing biofuels policy alternatives in the face of the credit’s imminent demise. Collinsville Republican U.S. House Energy and Commerce Committee member John Shimkus told FarmWeek
ethanol credits likely are “done,” given federal budget concerns. In their stead, ethanol interests seek continued incentives for installation of E85 (85 percent ethanol) and flexible blender pumps and extension of programs to encourage production of next-generation cellulosic (biomass) ethanol. Meanwhile, Shimkus has sponsored a proposed “open fuel standard” that would require 95 percent of new cars to use non-petroleum fuels by 2017. The federal Renewable Fuels Standard (RFS2), which mandates an increasing volume of biofuels use nationwide through 2022, remains ethanol’s “line in the sand,” Shimkus stressed. He suggested Congress could peg future RFS2 requirements to U.S. “energy security” needs. Corn ethanol production likely can stay well ahead of annual RFS2 targets without
VEETC, as long as ethanol exports continue to grow, according to Illinois Corn Growers Association Business Development Director Dave Loos. Recently, high sugar prices have led to Brazil buying more U.S. ethanol. But even if projections of a healthy 2012 South American cane crop prove true and elimination of the ethanol import tariff opens the door to Brazilian ethanol, Loos anticipates an offsetting increase in European demand. Domestically, Loos sees final U.S. Environmental Protection Agency (EPA) approval for retail sale of E15 as “probably the highest priority” for the post-VEETC industry over the next two to three months. Nearly 15 months after EPA initially cleared E15 for model 2001 and newer vehicles, he is hopeful the new blend will reach pumps by mid-2012.
Fallout of MF Global debacle could pose regulatory threat “hedging their legitimate business risks.” Spencer In the wake of the MF Global debacle, proargued use of derivative “swaps” in “simple, lowducer groups and ag co-ops, including GROWMARK, have redoubled efforts to avoid a poten- volume, highly specialized marketplaces” shouldn’t be subject to the same costly regulatory tial regulatory overreaction. requirements imposed on large securities firms. Congress passed the Dodd-Frank Wall Street For example, in the Northeast Reform and Consumer ProtecU.S., milk producers trade whey tion Act in 2010 to improve protein contracts with cheese or accountability among Wall Street other dairy processors. and related financial institutions ‘Cooperatives are “There’s simply not enough blamed for recent economic not speculators.’ volume in the marketplace for crises. whey contracts even to be conBut some fear federal interpresidered by a commodities futures tation of the law could result in — Chuck Spencer exchange,” Spencer said. “Yet the unnecessary new ag reporting GROWMARK use of these ‘swaps’ allows a critand recordkeeping requirements. ical risk management function to Now-bankrupt MF Global’s occur between the dairy producalleged misuse of “segregated er, the cheese maker, and the flufunds” from brokerage customer id milk market. accounts “has impacted the process of Dodd“We’re finding that type of interaction being Frank rule writing and has the potential for repeated across the country, through fertilizer impacting agricultural trading,” GROWMARK swaps, energy swaps, in highly specialized marGovernment Affairs Director Chuck Spencer ketplaces. Cooperatives use the futures markets told FarmWeek last week. to manage risk. At the same time, they don’t hold Spencer noted efforts with House and Senate open (contract) positions overnight — a distinag committees to clarify that “cooperatives are guishing characteristic between a speculator and not ‘speculators.’ ” Last week, an ag coalition including the Amer- someone who actually wants physical delivery of ican Farm Bureau Federation warned Commodi- the commodity.” Categorizing a co-op or elevator effectively as ty Futures Trading Commission (CFTC) Chaira “swap dealer” would impose reporting, regisman Gary Gensler that overregulation of co-op or grain company hedging would “jeopardize the tration, and financial requirements that could outweigh the value of such ag risk management availability of risk management tools, putting tools, Spencer said. many farms and small businesses at a severe disOne proposal would require members of desadvantage in the marketplace.” ignated contract markets to record “all oral comThe coalition stressed support for “the broad munications that lead to the execution of transobjectives of Dodd-Frank — regulatory consistency, transparent markets, and reduced systemic actions in a commodity interest or cash comrisk.” However, the groups voiced concern about modity.” Requiring co-ops with a number of outlying, what they see as “an inflexible regulatory often seasonal operations to install thousands of approach with many of the proposed rules dollars of recording technology “doesn’t seem issued to date.” They stressed efforts with Congress to ensure feasible,” given the negligible economic impact key exemptions for ag end users who are merely of co-op activity, Spencer said. — Martin Ross
Longer term, boosting biofuels demand will require industry cooperation with U.S. automakers seeking to meet new federal corporate average fuel economy (CAFÉ) standards. Loos noted EPA’s CAFÉ rules are “weighted” toward production of electric vehicles, possibly “at the expense of FFV (E-85-capable flexfuel) vehicles,” but ethanol could make inroads through introduction of “hybrid” liq-
uid fuel/electric models. Exxon Mobil, the world’s largest oil company, predicts that by 2040, one of every two cars will be either a hybrid or some other alternative-fuel vehicle. “I think there could be a big role for FFVs coupled with hybrid technology in the future,” Loos told FarmWeek. “The FFV side of it has to get the proper (fuel efficiency) credits from EPA to be able to do that, though.”
VEETC elimination won’t affect corn $$ Elimination of the federal Volumetric Ethanol Excise Tax Credit (VEETC) should have little to no effect on corn prices, industry sources maintain. Renewable Fuels Association spokesman Matt Hartwig argued the ethanol market “has evolved” and the credit “is less necessary now than it was just two years ago.” He does not expect corn prices to fall or rise “just because the tax incentive goes away,” and argues, “We will produce the same amount of ethanol in 2012 as in 2011, or more.” “For years, VEETC hasn’t really had anything to do with impacting corn prices,” Illinois Corn Grower Association Business Development Director Dave Loos told FarmWeek. “What it did was provide an incentive to the petroleum marketer to give a little incentive back to the consumer in the form of a little lower price at the pump. Definitely, the consumer and the petroleum marketer will realize the impact much more than the ethanol industry will.” The tax credit cost the government an estimated $6 billion in revenues in 2011. However, some industry sources suggest consumers could see an increase at the pump of as much as 5 cents a gallon with elimination of the credit.
FarmWeek Page 6 Monday, January 9, 2012
Specialty GrowerS
‘I feel like I’m in first grade again’ BY KAY SHIPMAN FarmWeek
Two new specialty growers launched their dreams to grow value-added crops on small acreages last year. Each received a foothold via a oneyear grant for women farmers. Piatt County Farm Bureau member Terry Neutz Hayden planted a variety of fruits and vegetables on her Twin Silos Farm near Monticello. The farm website is {www.twinsilosfarmmonticello.com}. Knox County Farm Bureau member Raylene Roberts planted heirloom vegetables along with unusual varieties of fruits and vegetables on Roberts Odd Farm Produce near Knoxville. “It was a very good first year — two women with different sets of resources, and the outcomes were pretty much what we expected. It will be interesting to see how they take these experiences and make them grow and be part of their dream,” said Ruth Hambleton, founder of Annie’s Project, an educational program for farm women. Last January, the Illinois Department of Agriculture awarded a $10,000 specialty grant to Annie’s Project, Neutz
Piatt County Farm Bureau member Terry Neutz Hayden prepares to plant a black tartatian cherry tree on her farm near Monticello. Neutz Hayden grew a variety of fruit and vegetable crops in her first year as a specialty grower. (Photo by Terry Hayden)
Hayden, and Roberts, are both graduates of Annie’s Project classes. Neutz Hayden, a graphic designer, bubbled with enthusiasm and recalled challenges and triumphs. Her first year of farming? “Thoroughly exciting.”
“I feel like I’m in first grade again,” she said with a laugh. Her 17-acre classroom now boasts more than 50 trees that produce five types of fruit, three varieties of raspberries, two types of blackberries, two varieties of blueberries, strawberries, and two bee hives that
Knox County Farm Bureau member and new specialty grower Raylene Roberts of Knoxville tends to tomato plants that she later transplanted on her farm. Roberts is focusing on heirloom and unusual varieties of fruits and vegetables with her new venture. (Photo courtesy of Mallery Greenhouse staff)
became the pet project of her husband, Terry. She also planted tomatoes, watermelons, honey dew melons, and all kinds of herbs, squashes, and pumpkins. Neutz Hayden acknowledged she made her farmer neighbors curious. “We’ve got so many acres, we’ve been asked, ‘Why not put it in corn?’” she said. “I’ve been asked questions several times, ‘Why would you put that there?’” Along the way, she learned alfalfa has long roots after turning under her alfalfa field to plant specialty crops. She also learned how to operate her John Deere tractor, how much crop damage deer can do, and how quickly squash bugs multiply. Roberts, who has a background in botany, planted raspberries, two types of blueberries, asparagus, rhubarb, horse radish, tomatoes, bell peppers, melons, three varieties of cherries, and 17 apple trees on an acre. She grew heirloom vegetables with a goal of selling to restaurants. Roberts’ former greenhouse job also allowed her to start seeds and young plants indoors and get a jump on the growing season. Currently, she is looking for work to supplement her farming operation of 10 alfalfa and 21 pasture acres. “I have to get my (production) numbers up,” Roberts said. “Twenty-five pepper (plants) and 33 tomatoes seemed like a lot, but I realize I need more” to sell to commercial markets. Just as their seasoned farmer counterparts are
doing, the new growers already are planning changes for this year. Neutz Hayden is thinking about new crops, adding more hives, exploring marketing options, and looking forward to attending more workshops and classes. Roberts is considering where to plant more fruit trees, adding more fences for her climbing crops, learning about bees and honey production, and investigating new markets. Both women appreciated support and encouragement they received from other farmers and the University of Illinois Extension. “I’ve met the most wonderful people in this (specialty crop) area, they have such great family values,” Neutz Hayden said. “The (farmers and Extension staff) support has been outstanding,” Roberts said. Roberts added it helped to share her questions, problems, and ideas with Neutz Hayden: “On good days and bad ... Terry and I seemed like we were in the trenches.” The women’s first year validated what Hambleton said she has long taught her students through Annie’s Project — don’t expect to make money immediately. “A lot of people envision fruit and vegetable farms at the end (of several growing seasons) and forget the whole maturing part,” Hambleton said. Both new growers will apply the lessons learned and skills gained to the 2012 growing season. Through Annie’s Project, they will share their experiences with others who hope to join their ranks in the field.
Page 7 Monday, January 9, 2012 FarmWeek
YOUNG LEADERS
YL chairman hopes to boost membership, participation BY DANIEL GRANT FarmWeek
One of the top priorities this year for new Illinois Farm Bureau Young Leader (YL) Chairman Monica Stevens is to boost membership. The State YL Committee last week during a meeting in Bloomington identified at least half a dozen counMonica Stevens ties in the state where there is interest or resources available to start new YL county programs. “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 should be involved in Farm Bureau,” said Stevens, who is from Altona in Knox County. Young Leaders, age 18 to
35, once again will have added incentive to sign new members this year through IFB’s bonus program which last year awarded $300, $200, and $100 to the top three YL recruiters in the state. But Stevens is interested in more than just adding new members. She also wants to boost participation in various YL programs and events. “The more numbers we have, the more voices we have for agriculture,” said Stevens, who believes strongly in being an advocate for the ag industry. “Agriculture is kind of under fire,” she noted. “I’m a fairly energetic person, and one of my goals this year is to show my enthusiasm (for the industry) and pass on to others the importance of sharing the great message of agriculture.” Key ways Young Leaders can reach out to consumers, according to Stevens, is oneon-one contact, through the
YL blog and Facebook page, and the YL website {http://youngleaders.yolasite.com}. “Communication is vital, especially these days,” she said. “We need to give consumers an idea of what’s going on on our farms and give them the facts.” Stevens, who is the third generation of her family to raise purebred Shorthorn cattle, has been heavily involved in the industry since she graduated from Western Illinois University with a degree in ag/animal science. She works for SGS North America as a field technician, serves as the vice president of the Knox County Cattlemen’s Association, and served on the Illinois Beef Association’s Board of Governors checkoff division. Stevens is the first woman elected chairman of the YL State Committee. She will be joined in leadership this year by Vice Chairman Alan Bailey (Sang-
amon County) and Secretary Brent Pollard (Winnebago County). Young Leaders who will represent Illinois this week at the American Farm Bureau Federation annual meeting in Hawaii are state
award winners Katie Pratt (Lee County), discussion meet; Kirk and Stephanie Liefer (Randolph County), Achievement Award; and Alan Chesnut (Vermilion County), Excellence in Ag Award.
State Young Leader Conference Feb. 3-4
Event to feature new location, look The State Young Leader (YL) Conference this year will have a new look that could enhance its appeal to young farm families around Illinois. The annual event this year will be held in Normal, as opposed to Springfield, and the format has been trimmed from three to two days. “Everything is kind of new,” said Monica Stevens, new chairman of the YL State Committee. “It’s at a new place that’s centrally located, and we changed the format.” The conference this year will be Friday, Feb. 3, and Saturday, Feb. 4, at the Marriott Hotel and Conference Center in Normal. The event will feature silent and live auctions to benefit YL Harvest for All efforts, numerous networking and socializing opportunities, and informative breakout sessions that include such topics as family business succession, risk management, Illinois Farm Families, and the Illinois Farm-to-School Initiative. “This is a family-oriented event,” Stevens said. “There also will be sessions for kids.” IFB Vice President Rich Guebert Jr. will be a keynote speaker. “It’s a great way to network and meet other Young Leaders from across the state,” Stevens said. “There are a lot of great breakout sessions that will provide information anyone can take back and use on (his or her) own operation.” Young Leaders may register for the conference at their local Farm Bureau or visit the website {www.ilfb.org} for more information or to view video footage of last year’s event. Information about the event also is available on the Young Leaders’ Facebook page. — Daniel Grant
Course to help small-acreage landowners Small-acreage landowners may learn everything from stewardship practices to income opportunities during the Illinois Living on the Land 10-week course running on Thursdays from 6 to 9 p.m. Jan. 26 through March 29. The purpose is to help people sustainably manage small acreages of one to 50 acres, according to Ellen Phillips, University of Illinois Extension local foods and small farms educator. The session topics include inventorying resources; managing soil, pastures, and lawns; living with streams and ponds; managing well and septic systems; controlling weeds; and beginning a business using small acreages. The course will feature a farm tour and a small-acreage landowner panel. Participants also will develop a plan for their property using key information from the course. Four of the classes will be held at U of I Extension offices, including the Will County unit in Joliet, the Boone unit in Belvidere, the Stephenson unit in Freeport, and the
Sangamon unit in Springfield. The remaining five classes will be taught through online webinars. The tour will be determined by each county. A $200 registration fee is due by Jan. 23 for all 10 sessions; additional family members may register for $100. The fee includes one handbook per family. Registration for individual sessions is offered at $30 per session. Participants will need a computer, Internet connection (or PowerPoint or PowerPoint Viewer) and a speakerphone for the webinar classes. To register or obtain a brochure, go to online to {web.extension.illinois.edu/stat e/calendar_event.cfm?ID=5526 6}. For a listing of session topics, registration questions, and additional information about the course or the equipment requirements, call the Extension office where you wish to attend sessions. For Boone County, call 815-544-3710; for Will County, call 815-727-9296; for Sangamon County, call 217-782-4617; and for Stephenson County, call 815-235-4125.
FarmWeek Page 8 Monday, January 9, 2012
BrAzil
Some areas of Brazil dry; others closer to normal BY PHIL CORZINE
The drought is bad in southern Brazil, including in the second leading soybeanproduction state of Parana. On the other hand, Mato Grosso, the No. 1 soybean state, seems to have good soil moisture. Phil Corzine The south of Brazil and Argentina clearly are getting the bulk of the La Nina effect, but my guess
is that South American corn production will be more severely affected than will soybean production. Overall, rainfall at our farms in Tocantins has been relatively average, although it seems to be raining more than normal when it rains, with more dry spells inbetween. While early-planted soybeans are being harvested in Mato Grosso, we are still planting in Tocantins, although we should be close to wrapping up by the time you read this. Our newest 1,730-acre farm, converted from pastures in October and November, is being planted conven-
tionally. This looks great to a farmer from Central Illinois, but in reality it is a lot trickier to plant in a region where it can rain an inch or more five days out of seven. I had a question on my comments about seed costs in Brazil. Roundup Ready seed did cost us 52 cents per pound, but it’s really not an apples-to-apples comparison, for a number of reasons. First, Monsoy, the Monsanto brand in Brazil, is produced and sold by private seed companies, and there still are a lot of private seed companies in Brazil. Also, seed prices can vary significantly year-to-year based on supply and demand
— sometimes as much as 40 percent. And finally, the real-U.S. dollar exchange rate is a multiplier when converting costs into dollars, and has ranged between 3.5 and 1.5 to the U.S. dollar during the eight years I have been in Brazil. If you have other questions, attend one of our Brazilian planting update meetings. They are March 10 in Bloomington and the 17th in Carlinville. Check our
website {www.sasoy.com} for details. Phil Corzine is general manager of South American Soy, a global production management and investment company. His e-mail address is pcorzine@agpage.com.
U of I Extension plans Herb Day Featured speakers at the Jan. 21 University of Illinois Herb Day will share their timehonored tips about herbs used in cooking and gardening with some special regional flair. The event will be held from 8 a.m. to 4:30 p.m. at the Holiday Inn Hotel and Conference Center, Urbana. Speakers are coming from several colorful cooking regions in the U.S. and will bring a unique flavor to the day, according to Chuck Voigt, U of I Extension vegetable and herb specialist and coordinator of the event. In addition to the speakers, there will be a retail area selling a variety of herb, spice, and gardening products as well as books and products from the presenters. The advance registration fee is $60, which includes a lunch buffet, and must be received by Jan. 13 to guarantee lunch. For more information, call Linda Harvey at 217-244-1693, or send an e-mail to lharvey@illinois.edu.
DATEBOOK Jan. 10 University of Illinois corn and soybean classic, Mt. Vernon Holiday Inn. Jan. 11 U of I corn and soybean classic, Crowne Plaza, Springfield. Jan. 12 U of I corn and soybean classic, I Hotel and Conference Center, Champaign. Jan. 16 U of I corn and soybean classic, Double Tree Hotel, Bloomington. Jan. 17 U of I corn and soybean classic, Kishwaukee College, Malta. Jan. 18 U of I corn and soybean classic, I Wireless Center, Moline. Jan. 19 U of I corn and soybean classic, Holiday Inn, Quincy.
Page 9 Monday, January 9, 2012 FarmWeek
from the counties
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ROWN — The annual meeting will be at 7 p.m. Wednesday, Jan. 18, at the Mt. Sterling Community Center YMCA. Call the Farm Bureau office at 217-7732634 for more information. UREAU — The Young Leaders Committee will sponsor a farm labor pool listing for Bureau County residents. It will list people who are looking for agricultural-related work. Forms are available at the Farm Bureau office or by emailing jillfrueh.bcfb@comcast.net. Deadline to sign up is Feb. 24. OOK — Farm Bureau will sponsor a social media and website marketing seminar for farmers from 7 to 9 p.m. Wednesday, Jan. 25, at the Farm Bureau office. Call the Farm Bureau office at 708-354-3276 by Monday, Jan. 23, for reservations or more information. • Farm Bureau and the Cook DuPage Beekeepers Association will sponsor a six-week beginners guide to beekeeping series beginning Tuesday, Feb. 21, at the Farm Bureau office. Cost is $60 for association and Farm Bureau members. Cost for nonmembers is $85. Call the Farm Bureau office at 708354-3276 for reservations or more information. • Farm Bureau and Ronald McDonald House Charities of Chicagoland and Northwest Indiana will celebrate Food Checkout Day Feb. 23. Help stock the pantries by bringing non-perishable food items to the Farm Bureau office. Call the Farm Bureau office at 708-354-3276 for more information. ULTON — The Ag Literacy Committee will sponsor a fundraiser chicken and noodle dinner from 4 to 7 p.m. Friday at the Farm Bureau office. Cost is $8 for adults and $4 for children 5 to 12 years old. Kids under 5 eat free. Tickets may be purchased at the Farm Bureau office or from Ag Literacy board members. All proceeds will benefit the Ag Literacy program. Call the Farm Bureau office at 5473011 for more information. ACKSON — An “on the road” seminar will be at 6 p.m. Monday, Jan. 30, at the Extension office, Murphysboro. Kevin Rund, Illinois Farm Bureau senior director of local government, will be the speaker. Call the Farm Bureau office at 618684-3129 by Monday, Jan. 23, for reservations or more information. EE — The annual meeting will be at 10
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a.m. Thursday, Jan. 19, at the Farm Bureau office. The winner of the Lee County Farm Bureau Foundation raffle will be selected. Call the Farm Bureau office for more information. • A crop insurance meeting will be at 10 a.m. Wednesday, Jan. 25, at the Farm Bureau office. Doug Yoder, Illinois Farm Bureau senior director of affiliate and risk management, will be the speaker. Call the Farm Bureau office by Friday, Jan. 20, for reservations or more information. • The application deadline for Lee County Farm Bureau Foundation scholarships is Feb. 1. Scholarship applications are available on the Farm Bureau website {www.leecfb.org}. High school seniors and undergraduate students who are pursuing degrees in agriculture may apply. • The application deadline for the Lee County Farm Bureau Foundation “Books by the Bushel” program is Feb. 1. The foundation is giving “Books by the Bushel” to any organization that can benefit from a bushel basket of agricultural books. Applications are available on the website {www.leecfb.org}. Call the Farm Bureau office at 815857-3531 or e-mail leecfb@comcast.net for more information. • The Young Leaders will attend a Rockford IceHogs hockey game Saturday, Feb. 11. Tickets are $12. Call the Farm Bureau office at 8573531 or e-mail leecfb@comcast.net by Friday, Jan. 20, for reservations or more information. ONTGOMERY — The Prime Timers will meet at noon Wednesday, Jan. 18, at the Lion’s Club, Hillsboro. Tammy Braye, Doc’s Maytag, will be the speaker. Call the Farm Bureau office at 217-532-6171 by Friday for reservations or more information. EORIA — An “on the road” seminar will be at 9 a.m. Wednesday, Jan. 25, at the Farm Bureau office. Kevin Rund, Illinois Farm Bureau senior director of local government, will be the speaker. Call the Farm Bureau office for more information. OCK ISLAND — Stop by the Farm Bureau booth at the Quad Cities Farm Show Sunday through Tuesday and receive a free sandwich coupon to use at the concession’s booth. The booth is located with the Rock Island County Soil and Water Conservation District in the northeast corner of
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the Expo Center. • Members will be able to purchase a plat book due out in February with a $5 discount off the regular $20 price. This offer will be good during the Quad Cities Farm Show and must be paid at the time of pre-purchase at the show. TEPHENSON — An “on the road” transportation issues program will be from 1:30 to 3:30 p.m. Monday, Jan. 23, at the Pearl City fire station. Kevin Rund, Illinois Farm Bureau senior director of local government, will be the speaker. Call the Farm Bureau office at 815232-3186 for reservations or more information. NION — An “on the road” seminar will be at 7:30 a.m. Tuesday, Jan. 31, at the Farm Bureau office. Breakfast will be served. Kevin Rund, Illinois Farm Bureau senior director of local government, will be the speaker. Call the Farm Bureau office at 618-833-2125 by Monday, Jan. 23, for reservations or more information. ERMILION — The Marketing Committee will sponsor a spring outlook seminar at 9:30 a.m. Monday,
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Jan. 16, at the Farm Bureau office. Paul Coolley, ADM Investor Services; Dale Durchholz, AgriVisor; and Blake Miller, Illini FS, will be the speakers. Call the Farm Bureau office for more information. AYNE — Farm Bureau will sponsor a crop insurance meeting at 7 p.m. Tuesday, Feb. 7, at the Frontier Community College Foundation Hall, Fairfield. Doug Yoder, Illinois Farm Bureau senior director of affiliate and risk management, will be the speaker. Call the Farm Bureau office at 618842-3342 for reservations or more information. • Farm Bureau will sponsor a bus trip Thursday, Feb. 16, to the National Farm Machinery Show, Louisville, Ky. Trip includes dinner at the Logg Inn, Haubstadt, Ind., on the return trip home. Breakfast and lunch are Dutch treat. Cost is $20 for members and $40 for non-members. Call the Farm Bureau office at 618842-3342 for reservations or more information. • Applications for the Wayne County Farm Bureau
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Foundation and Young Leader Committee collegiate scholarships are available. Go to the website {www.waynecfb.com} and click on scholarship graphic for an application. Applications are due March 31. HITE — The annual meeting will be at 7:30 a.m. Wednesday at the Farm Bureau office. An all-you-can-eat pancake breakfast from Chris’ Cakes, a silent auction benefiting Ag in the Classroom, and the Carmi-White County High School Choir’s “Singin’ Six” will be on the agenda. Call the Farm Bureau office at 618-3828512 for reservations. The notice of the meeting is posted online at {www.whitecfb.com/press/ annualmtg.html}.
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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 9, 2012
profitability
Here’s how to meet new pesticide-handling regulations BY MATT THOMAS
Now that the holidays are over, it’s time to prepare for the growing season ahead. New federal regulations for pesticide handling went into effect as of Aug. 16 which mainly pertain to resellers. But if Matt Thomas you handle bulk pesticides in portable refillable containers (commonly known as mini-bulks or
shuttles), they affect you as well. Over the years, mini-bulks have become the main mode of transportation for pesticides, but they haven’t always been the most reliable. Mixing of multiple chemicals has led to improper application and field damage, tanks have been illegally discarded in secluded areas, and overexposure to vapors and residue has led to medical complications for handlers. Those issues should be addressed through new
requirements for these tanks. Going forward, the minibulk containers must be designed as a “one-way” tank, meaning that product can only be dispensed from the tank without breaking the tamperevident seal. To accomplish this, you have a couple of options. For those of you with a topmounted pump, you can wire seal your pump to the tank’s cage and then wire seal shut the bottom outlet. For those of you who
draw product from the bottom outlet, you need to retrofit your tanks with a new one-way valve. That way, product can only leave the tank and you can control the quality of the product inside the tank. One of the keys to this regulation is that you will not be able to have your tank refilled by your supplier unless it meets the regulations. You also are required to have a unique identifier on each tank as well as documentation regarding testing
and inspection dates. As mentioned before, all of the openings on the tank, excluding vents, must have a wire and tamper-evident seal attached to ensure the tank has not been tampered with. For more information on the equipment used to retrofit these tanks, contact your local FS member cooperative. Matt Thomas is GROWMARK’s facility equipment product manager. His e-mail address is mthomas@growmark.com.
Analysts: Commodity markets could stall in 1Q, rally in spring BY DANIEL GRANT FarmWeek
The latest bull run in crop prices may have peaked last week. But the recent price action could return this spring, particularly if weather issues put a significant dent in South American crop yields and world demand for grain remains strong, according to market analysts. “The world supply and demand situation is going to remain tight,” Darin Newsom, DTN senior analyst, said last week during a quarterly market update. “That’s why the grain markets aren’t ready to collapse just yet.” Global stocks-to-use ratios last week were 14.6 percent for
corn, which is the tightest level since 1973-74, and 24.8 percent for soybeans, which is about average. However, if dry weather cuts into crop yields in South America, Newsom predicted the global stocks-to-use ratio could dip as low as 22 percent. The outlook for South American crops improved, though, as rain was forecast for this week. Meanwhile, the value of the U.S. dollar climbed again last week, and that helped take the wind out of the crop markets’ sails. “The dollar could extend its recent rally due to pressure from the euro,” said Newsom, who noted investment money generally has been flowing out
M A R K E T FA C T S Feeder pig prices reported to USDA* Weight 10 lbs. 40 lbs. 50 lbs. Receipts
Range Per Head Weighted Ave. Price $46.00-$68.00 $57.58 $62.00-$75.00 $70.24 no longer reported by USDA This Week Last Week 115,060 86,355 *Eastern Corn Belt prices picked up at seller’s farm
Eastern Corn Belt direct hogs (plant delivered) Carcass Live
(Prices $ per hundredweight) This week Prev. week $79.93 $77.69 $63.59 $57.49
Change 2.24 6.10
USDA five-state area slaughter cattle price Steers Heifers
(Thursday’s price) (Thursday’s price) Prev. week Change This week 122.00 n/a n/a 120.00 124.00 -4.00
CME feeder cattle index — 600-800 Lbs. This is a composite price of feeder cattle transactions in 27 states. (Prices $ per hundredweight) Prev. week Change This week $147.17 144.20 2.97
Lamb prices n/a
Export inspections (Million bushels) Week ending Soybeans Wheat Corn 12-29-11 34.1 13.4 34.1 12-22-11 38.2 13.5 39.1 Last year 27.6 12.8 22.8 Season total 566.0 596.0 547.6 Previous season total 805.7 656.1 580.2 USDA projected total 1300 925 1600 Crop marketing year began June 1 for wheat and Sept. 1 for corn and soybeans.
of commodities in recent months as well. “That’s not good. That’s bearish.” Andy Shissler, market analyst with Roach Ag Marketing, agreed that a stronger dollar will pressure crop prices. He also noted ethanol margins have declined about $2 per bushel since the fall. “The minor currency move is working against corn prices the same way as ethanol when it’s not making money,” said Shissler, who predicted ethanol production this year could flatten out after a strong upward trend in recent years. Overall, Newsom predicted the commodity markets the first quarter this year could trade sideways to lower before bouncing back this spring in a move led by the energy sector. “Crude oil prices are expected to go up, and gasoline is expected to follow,” Newsom said. “Long-term, strong demand in the energy and grain sectors could support the (overall commodities) sector, although metals are expected to remain under pressure.” Hongwei Zhang, executive vice president of JGG America, who buys U.S. soybeans for Chinese consumption, predicted China’s demand for grain and oilseeds will remain strong in the future. However, economic growth in China could slow this year from a recent peak in gross domestic product of 12 percent back to an average growth of 7 to 8 percent.
“I’m confident the economy (in China) will remain stable,” Zhang said during a commodi-
ty outlook meeting in Bloomington hosted by Roach Ag Marketing. “In the future, China will and must import corn as feed demand in China keeps increasing (and annual Chinese crop yields remain flat).” Corn yields in China typically average between 60 and 80 bushels per acre. But demand growth has forced the Chinese, who previously were a net exporter of corn, to steadily increase corn imports since 2009, Zhang added. “(The market) is going to try to get more corn acres (in the U.S.) this spring” to satisfy global demand, Shissler added.
Milk price ends year on down note The Class III price for milk adjusted to 3.5 percent butterfat for the month of December was $18.77 per hundredweight. This is a 30-cent decrease from the previous month. Prices moderated as schools took a two-week break, lowering demand. Now that schools are back into full swing, any oversupply should soon be cleared out of the channels.
Page 11 Monday, January 9, 2012 FarmWeek
PROFITABILITY Corn Strategy
C AS H ST RAT E GI S T
Cents per bu.
ü2011 crop: The market is finally correcting after recent gains. Even though prices may be weak in the short term, the long-term trend remains positive. Target a move to $6.65$6.75 for catch-up sales, and possibly to add to them. Prices may not reach that until February at the soonest. We still like spring hedge-to-arrive (HTA) contracts for farm-stored grain. Commercial storage is a closer call depending on your storage rate. Compare options on those inventories. ü2012 crop: The turn up was too quick to recommend buying call options. Use $5.95 on December futures for catch-up sales. We may add to sales at that level, and we see more opportunities to do that. HTA contracts are still the best tool for making sales, but consider forward contracts if the basis is good. vFundamentals: The shift in the South American weather forecast triggered the short term break in prices, along with persistent strength in the U.S. dollar. The upcoming USDA report is an unknown, but some bullishness already has been built in.
Soybean Strategy
Export business remains subdued The steady financial deterioration in Europe kept the U.S. dollar firm, helping undermine demand for U.S. grains. Adequate to abundant perceived supplies added to the malaise in our grain export sector. Our wheat continues to be undercut by other countries, unless someone specifically wants high-quality, hardmilling wheat. The corn
export business is being impacted by the readily available supply of feed quality wheat and cheaper feed grains from other countries. That may change some with the decline in the South American crops, but there’s still plenty of feed wheat to offset the reduction in those corn supplies. Soybean exports have not gone unscathed, including product exports. Soybean oil sales are particularly weak this year. And even though soybean sales have been steady, the absence of daily news about Chinese buying has undermined price enthusiasm.
ü2011 crop: Wait for March futures to hit $12.50$12.75 to make catch-up sales. Plan to add to sales if March futures reach $12.90. A HTA contract for spring delivery for farm-stored soybeans has become more attractive with the spread widening. Compare your alternatives for commercial storage. ü2012 crop: Use a move to $12.30 on November futures to make catch-up sales. Plan to add another sale if November futures get close to $12.50. For newcrop sales, we prefer HTA contracts, but would use a cash contract if the basis level is good. vFundamentals: South American weather problems have been the primary fuel for the recent rally. But the latest forecasts suggest there may be some temporary relief from the hot, dry conditions. Financial markets mostly remain a drag on soybean prices, along with other commodities. Endusers don’t have a sense of
urgency to cover needs as they do in the corn market. The USDA report also may have short-term implications.
Wheat Strategy
ü2011 crop: Wheat continues to take its cue from the corn market, but the fundamentals are negative, putting a drag on rallies in wheat and corn markets. Target a move above $6.50 on Chicago March futures to make catch-up sales. We may even add another sale at that level. The carry in futures still pays for commercial storage, making spring HTA contracts the best tool.
ü2012 crop: Use rallies to $6.95 on Chicago July futures for making catch-up sales. We may use a rally above that to add to them. vFundamentals: Following the dry start, the Southern Plains conditions have improved. Monthly crop condition updates were better for Kansas and Oklahoma, but about the same for Texas. However, the latter’s conditions were better than last year. USDA will release a winter wheat planting estimate on Thursday. Traditionally, the USDA number comes in below expectations.
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
4/25/11 10% 13.76
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 1/24/11 10% 5.87
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
80% unsold
4/25/11 10% 6.76 80% unsold
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
5/26/11 10% 13.75
1/2
11/17/11 20% 6.343/4
7/21/10 15% 6.60
11/17/11 20% 6.30 20% unsold Prices are new crop or nearby futures
80% unsold
FarmWeek Page 12 Monday, January 9, 2012
pERspEcTIvEs
Agriculture’s stellar performance impressive “Jobs, jobs, jobs” seems to be the campaign theme for both major parties in 2012, and while unemployment is a terrible hardship, we can be thankful that the campaign is not about “food, food, food.” In an election year, there is sure to be a focus on all the things that are wrong with the economy and the country at large. Both political parties would like to STEWART TRUELSEN make things better. Unemployment, housing, energy, education, and a crumbling infrastructure are all going to be touched on in campaigns. What’s missing from the list is food and agriculture and that’s because America does not have a food crisis. The basic goal of producing an ample supply of food at reasonable prices has been
met and exceeded. The reasons for American agriculture’s stellar performance are apparent in a report issued by the Economic Research Service (ERS), the USDA agency responsible for economic analysis. The 77-page report basically boiled down to the fact that American farmers and ranchers are still able to produce more with less; that is more food with fewer labor hours and less land than were used 30 years ago. As a result, U.S. farm productivity has increased nearly 50 percent. There are a number of factors cited in the report that enabled American agriculture to achieve these results. They include innovations in the way farms are organized, managed, and handle risk, as well as changes in production practices. Genetically engineered seeds and notill farming were credited with reducing
machinery, fuel, and pesticide use. Advancements in drip and pressure irrigation systems conserved water. In fact, agriculture relies more on science and technology for growth than other industries. The ERS report also noted that farm production has shifted to larger units over the past quarter century. These larger crop and livestock operations can take advantage of scale economies and are better positioned to negotiate contracts. Yet, 97 percent of all farms remain family operations, some of them going back four or five generations. The amount of land used in agriculture dropped during the period measured by the report (1982 to 2007), declining from 54 percent to 51 percent of total U.S. land area. Farming also used 30 percent less hired labor and 40 percent less operator labor.
In the past, the work ethic of farmers often has been cited as a contributing factor in productivity gains. There’s really no difference today. Farmers and ranchers are still incredibly hard workers, but thanks to better education, training, and technology, they also work smarter. Throughout the history of American agriculture there has never been a time when the people who work the land to produce our food, fiber, and fuel have said, “That’s good enough.” Instead, they have always tried to do better. This attitude may not show up in statistical tables, but that commitment to continual improvement is a driving force that makes American agriculture so successful. Stewart Truelsen is the author of “Forward Farm Bureau,” which marks the American Farm Bureau Federation’s 90th anniversary.
Little change in European Union actions, outcomes For the 10th time in the past two years, all eyes were on European leaders as they met Dec. 8 and 9 to resolve the debt problems that have plagued the European Union (EU) for the past several years. The financial markets even traded higher on those days because investors were convinced that, after the previous nine meetings where not much seemed to happen, the BRUCE Europeans FINKS finally grasped the gravity of their situation. Rating agencies S&P and Moody’s both put 15 of the 17 EU members on negative credit watch for a possible downgrade of their debt, which also served to put the EU ministers on notice that they needed to do something substantive and quickly. Recently the rating agencies also put several major European banks on negative credit
watch, meaning they, too, could be downgraded. Investors were hoping that this meeting would herald the creation of some sort of huge financial authority that would serve as the lender of last resort, similar to the role played by the Federal Reserve in the U.S. Alas, the meetings came and went and not much has really changed since the last time this group met. The EU members did agree to finance the International Monetary Fund (IMF) and have the IMF help, but they could not agree on how the various central banks in Europe will send money to the IMF or how much they should send. Germany does not want the money to simply be roundtripped back to struggling EU countries because this would violate EU treaties. The EU also made no mention as to how the money was to be used and how much might be contributed by the various central banks.
Should have debated issue at annual meeting
of man-hours by the committee and staff, our options were presented to us. As it should have been, the delegate body debated, discussed the pros and cons, and then voted on it. Then we came to the policy resolution change to conform our policy to state law on the issue of recognizing civil union relationships. WOW, what an embarrassment to Farm Bureau members everywhere. The night before at the presidents’ meeting, we discussed at great length about how to deal with this issue, with good debate. But when it was
Editor: On Dec. 5, 2011, the delegate body of Illinois Farm Bureau met at the Palmer House in Chicago to DISCUSS, DEBATE, and set policy for the next year. There were several bylaw changes on the agenda to be decided by the delegates. Two were on membership issues that came up last year. The delegate body decided to form a task force to come up with a solution. After great expense and a lot
Everyone wants the European Central Bank (ECB) to guarantee the debt of the individual sovereign countries, thus taking the risk out of owning the bonds and also lowering the cost of borrowing. No one has asked where the ECB would get enough money to back such a guarantee because the ECB has no money of its own. The one thing the EU countries did agree upon was to meet again in March. The financial markets around the world were not very impressed by the lack of answers emanating from these meetings and have given back the gains made on Dec. 9. It appears that the EU ministers have, once again, kicked the can down the road in the hope that something will change so that the very ugly choices with which they are faced might somehow become less ugly. The fact of the matter is that each time they delay, the problems seem to grow exponentially. The Maastricht
Treaty, which created the EU, states that no country can run a government debt to gross domestic product ratio of more than 60 percent. Today, only four of the 17 countries are below this limit. They are Finland, Slovakia, Slovenia, and Luxembourg. Germany and France are both running ratios in the mid-80s. The EU still is in denial and claims this is a liquidity problem. The reality is that this is a solvency issue and it is becoming so large there is hardly a force on earth that can handle it. The main question to ask is: From where will the money come to handle the sovereign debt and banking crisis currently engulfing the EU? The four solvent EU members do not have the resources. Meanwhile, economic conditions in the United States continue to surprise on the upside. While not extremely strong, at least the numbers are heading in the right direction. Unemployment claims were down in a Dec. 8 report, and
LETTER TO THE EDITOR This should have been debated brought up on the floor, there was no debate. Just one delegate spoke against the change, due to his beliefs and the beliefs of the members he represents. Then there was a motion to close discussion and a call on the vote. Unbelievable, we just showed every organization that if Illinois Farm Bureau gets backed into a corner, we’ll just give in to avoid controversy. As a longtime Farm Bureau member, I feel we really let our grassroots organization down.
and discussed on the floor and then dealt with if defeated. Remember, this is not about the specific issue, it’s about
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actual employment advanced by about 120,000. It’s not enough to soak up unemployment, but, once again, it’s a move in the right direction. The newspaper headlines the next day read: Unemployment rate drops from 9 percent to 8.6 percent, which created some excitement until you realized that it was an anomaly caused by a large drop in people looking for work, thus lowering the numerator. The Institute for Supply Management (ISM) numbers are above 50, meaning there is some amount of expansion in our economy. Personal income numbers are weak, but retail sales advanced, which means people are financing their spending on debt or out of savings. Unfortunately, such spending is not sustainable. If Europe would just get its economic and financial house in order, then perhaps our economy could recover. Bruce Finks is the vice president of investments for Country Financial.
open and free debate on all issues, that’s the reason we annually convene. STEVEN P. KOELLER, Godfrey will be accepted. A daytime telephone number is required for verification, but will not be published. Only one letter per writer will be accepted in a 60-day period. Typed letters are preferred. Send letters to: FarmWeek Letters 1701 Towanda Ave. Bloomington, Ill., 61701