EvEry county in the state will be eligible for emergency hay harvest and grazing of Conservation Reserve Program land as of Thursday. ........................................................3
An IllInoIs congressman and others say it’s time to get serious about improving the infrastructure on the nation’s waterways. ................................................5
Monday, July 30, 2012
thE IllInoIs Department of Agriculture has launched a new logo and campaign to raise awareness and increase sales of Illinois ag products. ...................................10
Two sections Volume 40, No. 31
Drought evolved for months, could linger through August BY DANIEL GRANT FarmWeek
Periodicals: Time Valued
The effects of the 2012 drought have been most evident the past two months. The portion of the corn crop rated good to excellent since May 20 declined more than 70 percent in Illinois and more than 60 percent in Indiana, Missouri, and Ohio. “There has been a lot of peak heat since (the corn crop) went through pollination in June,” Jon Davis, meteorologist with Chesapeake Energy, said last week at the Illinois Farm Bureau Commodities Conference in Normal. Davis reported there were as many as 22 days with a maximum temperature of at least 95 degrees between June 20 and July 23 in the central Midwest and even more hot days in the South during that timeframe. Last week featured several days with high temperatures of 100-plus degrees in many parts of the state. But while the drought has been in the headlines for weeks, it actually started taking shape months ago. (See Jim Angel column on page 16) “We had the warmest winter on record,” Davis said. “It began to set the stage for what has happened here this summer.” The warm winter meant there was no permafrost layer in much of the Midwest,
which allowed evaporation to continue all season. The situation worsened as precipitation in the state the first half of 2012 averaged just 12.6
FarmWeekNow.com Listen to comments from Jon Davis on what weather to expect in coming weeks at FarmWeekNow.com.
inches, which was the sixth-driest on record. Meanwhile, portions of the Southwest experienced the third-driest April through June on record. “It got extremely dry in the Rockies (earlier this year),” Davis said. “It was the start of the breeding ground of heat that’s been the drought of 2012 in the Midwest.” Davis said elevated mixed layers (EMLs) — hot air masses that move in arcs — have been funneling the extreme heat from the Southwest into
the Midwest for months. “The same mechanism was involved in the droughts of the 1930s and 1950s,” he said. “Those were set up by EMLs.” And, unfortunately, that pattern is expected to continue through August. “I think we’ll see more of the same in August, below-normal rainfall and above-average temperatures,” Davis said. About the only hope for relief next month is a tropical storm. But Davis doesn’t see any on the horizon. “The tropics have been incredibly quiet,” he said. “There’s no sign of anything for the next two weeks.” The hot weather pattern will weaken as the days shorten and there is less radiation. “But that won’t be until September or October,” Davis added. “For early August, it doesn’t look good at all.”
Country offers crop premium deferral
House panel floats farm bill extension
BY MARTIN ROSS FarmWeek
Last week, U.S. Ag Secretary Tom Vilsack offered insurers and growers leeway with pre-harvest crop insurance costs while offering stern words on House Speaker John Boehner’s (R-Ohio) assessment of farm drought and ag policy needs. Vilsack asked insurers to voluntarily offer a short “grace period” for unpaid crop insurance premiums. Country Financial subsequently opted to defer charging interest on unpaid spring crop premiums until Nov. 1. While that gives Country policyholders an added 30 days to pay premiums without penalty, October interest will be included in obligations that come due Nov. 1, Country crop underwriting manager Lindsey Rinkenberger stressed. “We sort of relate interest deferral to buying a large appliance and getting 60 days to pay with no interest,” she told FarmWeek. “The intent and hope is that by Nov. 1, they will have the opportunity to have some grain delivered to the elevator so they can have cash to pay their premiums.” USDA will not require insurers to pay uncollected premiums until one month later. Interest deferral will have no impact on Country earnings or reserves, Rinkenberger said.
Farmers who do not pay premiums in a timely manner face a 1.25 percent-per-month interest penalty. Producers with policies from other companies should consult their agent about premium deferral policies. As of Thursday, Country had received 1,695 production loss claims for 2012-planted crops. Illinois Farm Bureau risk management specialist Doug Yoder cited the positive “timing” of premium relief: Under the 2008 farm bill, premium payments technically were to be due this year in August rather than October for the first time, and the farm bill’s Supplemental Revenue (SURE) disaster assistance program expired last fall. Vilsack drove home the importance of both a strong crop insurance program and SURE-style protections for livestock farmers, blasting Boehner’s failure to push action on a new farm bill. The House Rules Committee reportedly will consider a proposal for a one-year extension of the 2008 farm bill Tuesday. Vilsack charged Boehner’s reasons for deferring debate on a full bill “aren’t good enough to justify delay on what has passed through the Senate, and what has passed through the House Ag Committee in a bipartisan way, with bipartisan leadership.” American Farm Bureau Federation policy director Dale Moore is wary of rebooting
FarmWeek on the web: FarmWeekNow.com
farm bill debate in 2013, questioning whether the budget situation “will be any better for agriculture than it currently is.” National Corn Growers Association President Garry Niemeyer argued the need for a new farm bill that enables farmers “to make sound business decisions for the next five years.” Simple extension raises several issues, from an absence of emergency livestock support to the possibility that direct payments scrapped in favor of new revenue protections under new farm bill proposals instead could be tapped for deficit reduction or “ad hoc” disaster aid.. Niemeyer maintained proposed new farm program provisions would be “responsive to taxpayers.” And under measures approved by both the Senate and the House Ag Committee, livestock and specialty crop aid already would be “paid for,” Moore told FarmWeek. “Some folks are beginning to process and look at liquidating the herds,” Vilsack said. “They know full well at this point in time that there’s nothing else that can be done beyond the steps we’ve taken to open up more haying and grazing areas. “The sad reality is that Congress needs to do its work to get a disaster program in place to provide help and assistance to these producers.”
Illinois Farm Bureau®on the web: www.ilfb.org
FarmWeek Page 2 Monday, July 30, 2012
Quick Takes HAY PRICES RISE — Hay has become much more valuable this summer as supplies are short and many pastures burned up due to the drought. The Arthur Sale Barn last week reported sales of small square bales increased $2.75 to $3.50. Premium alfalfa square bales there fetched $11.25 to $13 while good-quality bales brought $6.25 to $8. Elsewhere, United Producers weekly hay auction in Shelbyville brought an average of $7.55 for premium square bales and $5 for good bales. Reel’s weekly hay report from Congerville noted grass hay bales increased by $1 in value from a week ago. Premium alfalfa small bales there brought $6.50 to $7.25 while good hay sold for $5 to $6.75 per bale. Pasture conditions in Illinois last week were rated 91 percent poor to very poor, 8 percent fair, and just 1 percent good. ESTATE TAX CONSEQUENCES — In a congressional Joint Economic Committee press call on estate taxes last week, American Farm Bureau Federation (AFBF) Young Farmers and Ranchers Chairman Glen Cope highlighted potential farm concerns if lawmakers turn back the clock on the “death tax.” During a discussion hosted by Rep. Kevin Brady (RTexas), Cope recalled when his grandmother passed away in 2009, the individual estate tax exemption was $3.5 million, significantly higher than the pre-2002 $1 million exemption that will be in effect next year unless Congress acts. “If she had passed away when the exemption was only $1 million, that would have been devastating to our livelihood, because only roughly 10 percent of the farm would have been exempt,” he said. “We would have been forced to sell land, livestock, hay, and equipment to pay this tax.” AFBF supports extending the current $5 million exemption until the estate tax is repealed. DAIRY FARM BROTHERS PARODY VIDEO — New York dairy farm brothers, Justin and Fred White, filmed a parody of “Call Me Maybe” that is a slice of farm life. Entitled “Farm It Maybe,” the video features 9-year-old Fred milking cows, popping up in a cornfield, and explaining, “You cannot beat the farmin’ life.” With Lil’ Fred belting out the lyrics, viewers see a calf nursing, a milking parlor in action, and even the boys’ grandma on a riding mower. Since the video was posted July 14 on You Tube, the Whites have become an Internet sensation. During an interview on “Fox and Friends,” the boys said they were inspired by the Kansas Peterson brothers and their video “I’m Farming and I Grow it.”
(ISSN0197-6680) Vol. 40 No. 31
July 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 Richard Verdery (rverdery@ilfb.org) Classified sales coordinator Nan Fannin (nfannin@ilfb.org) Advertising Sales Representatives Hurst and Associates, Inc. P.O. Box 6011, Vernon Hills, IL 60061 1-800-397-8908 (advertising inquiries only) Gary White - Northern Illinois Doug McDaniel - Southern Illinois Editorial phone number: 309-557-2239 Classified advertising: 309-557-3155 Display advertising: 1-800-676-2353
DrOughT
10 counties authorized for early CRP grazing BY KAY SHIPMAN FarmWeek
The Farm Service Agency (FSA) last week authorized emergency grazing of Conservation Reserve Program (CRP) acres in 10 Illinois counties, effective immediately. The counties are: Adams, Brown, Cass, Greene, Hancock, McDonough, Mason, Menard, Pike, and Schuyler. No hay harvest on CRP acres is allowed until Thursday (Aug. 2) when all counties become eligible for CRP hay harvest and grazing. Scherrie Giamanco, state FSA executive director, reminded farmers there will be a 10 percent CRP payment reduction for early emergency grazing of CRP acres. Emergency CRP grazing is limited to livestock farmers with drought-related pasture losses in the 10 counties. Through Wednesday, eligible farmers will be permitted to move livestock within the
10-county area. Farmers in those counties who wish to graze livestock and those with land enrolled in CRP who wish to provide grazing privileges to an eligible livestock farmer must first request approval from FSA. They also must obtain a modified conservation plan from the Natural Resources Conservation Service (NRCS). When farmers go to NRCS, they need to have information about the number of livestock that will graze, said Don King, FSA chief program specialist. Early grazing requirements include: not grazing at least 25 percent of each field or contiguous CRP field for wildlife, or not grazing more than 75 percent of the stocking rate as determined
by NRCS. King suggested farmers call their county FSA offices before going there to submit applications. Information also is online at {www.fsa.usda.gov}.
Drought news roundup River council hears drought impact — The drought’s impact varies along the Mississippi River, Lt. Gov. Sheila Simon and the Mississippi River Coordinating Council heard last week. Navigation through the upper Mississippi River down to the confluence of the Missouri and the Mississippi rivers near St. Louis has not been impacted by the drought, reported James Stiman, chief of the water control for the Army Corps of Engineers’ Rock Island District. However, the drought has resulted in historically low average river levels along the middle Mississippi down to the confluence of the Ohio and Mississippi rivers near Cairo. Stiman reported low water levels are forcing reductions in barge loads. State water conservation and other drought-related information is online at {www.drought.illinois.gov}. Nitrate testing — The Centralia Animal Disease Lab is providing “significantly more testing for nitrate (in corn samples) than in years past, and we are glad to provide that service,” Acting Illinois Director of Agriculture Bob Flider told FarmWeek last week. Dr. Gene Niles, the lab’s director, has said the lab planned to continue providing testing services through Aug. 15 before the lab closes Aug. 31 as a budget-cutting measure. “There is still a severe fund-
ing shortage, and that was what caused the decision (to close the lab). Overcoming that is a huge obstacle,” Flider said. Aflatoxin in corn — The Illinois Department of Agriculture is surveying some 280 grain elevator operators in the state about their plans to handle aflatoxin-contaminated grain. Aflatoxin levels are highest during hot, dry summers. Aflatoxins are chemicals produced by certain mold fungi and can be harmful or fatal to livestock at certain levels. Streamflows down — The Illinois State Water Survey reported rapid drop in streamflow. Some regions have reached or are close to 10-year low levels. Decline is expected to continue in all parts of the state with more regions expected to reach 10-year low levels this week or next. Bulk water sales stopped
— Mt. Pulaski in Logan County has stopped bulk water sales because of low levels in the city’s wells, according to the Illinois Environmental Protection Agency. The pumping level is the lowest level ever seen in those wells. Free plant help — Farmers may bring a plant sample for diagnosis Aug. 16 to the University of Illinois Agronomy Day. Experts in plant disease, insect, and weed identification will be available at the plant clinic booth located in the large tent. Typically, a fee is charged for all samples, but Agronomy Day visitors will be permitted to bring one sample for a free diagnosis on a first-come, firstserved basis. Agronomy Day activities will start at 7 a.m. with onehour tours departing every half hour until noon. — Kay Shipman
DATEBOOK Aug. 2 University of Illinois Dixon Springs Agricultural Center Agronomy and Horticulture Field Day, 9 a.m. to noon, Simpson. Aug. 9-19 Illinois State Fair, Springfield. Aug. 16 University of Illinois Agronomy Day, 7 a.m. to 2 p.m., Crop Sciences Research and Education Center, Urbana. Aug. 24-Sept. 3 DuQuoin State Fair, DuQuoin. Aug. 28 Meet the Buyers event, Highland Community College conference center, Freeport. Registration deadline Aug. 24. Call 815-235-4125.
Page 3 Monday, July 30, 2012 FarmWeek
DroUGHT
FSA updates emergency CRP grazing, hay harvest
HAY DEMAND HEATING UP
BY KAY SHIPMAN FarmWeek
Illinois Farm Service Agency (FSA) officials last week announced every county in the state is eligible for emergency hay harvest and grazing of Conservation Reserve Program (CRP) land starting Aug. 2. In addition, 10 counties were approved for immediate early grazing only of CRP land. Emergency grazing ends Sept. 30, and emergency haying ends Aug 31. Last week, USDA also granted farmers the right to sell hay from the emergency harvest. Farmers who don’t own livestock may rent or lease grazing and haying privileges to eligible livestock farmers, USDA said. Farmers may not graze or harvest hay on CRP acres within 120 feet of a stream or other permanent body of water or acres with life easements. Eligible CRP acres include those planted in grasses and legumes, native grass, salt-tolerant vegetation and that planted to reduce salinity, and permanent vegetation with already established grass. CRP acres with wildlife habitat and wildlife corridors also are eligible. Farmers must obtain approval from their local FSA staff before they harvest hay or graze CRP acres. They also must obtain a modified conservation plan from the Natural Resources Conservation Service.
Rob Creasey of rural Macomb unloads a bale of grass for his 25 head of Charolais beef cattle. The drought has burned up pastures, cut hay harvest, and sapped crop yield potential. Hay prices recently shot up at many locations in the state due to short supplies. (Photo by Ken Kashian)
Some counties eligible for cost share for emergency water Some livestock farmers soon may be able to request cost-share assistance to provide a water source for their animals, according to Scherrie Giamanco, Illinois Farm Service (FSA) state director. Counties classified as “D3Extreme Drought” by the U.S. Drought Monitor (see map below) may be eligible for cost-share assistance through the Emergency Con-
servation Program (ECP). If a part of a county is classified as D3, the entire county is eligible. Under ECP, qualified farmers may seek financial assistance to provide water for their livestock during this critical time, Giamanco said. Counties meeting the classification must still go through an approval process before implementing ECP. Counties not designated as D3-
Extreme Drought also may qualify if they have a 40 percent shortage of rainfall compared to normal rainfall for the previous four months. “It is unknown if funding will be immediately available, but producers who are interested can begin making their cost-share requests, and they will be notified as funds become available,” Giamanco said. “It is important for producers to talk to
their local FSA office prior to digging wells or running water lines.” ECP program participants may receive up to 75 percent of the cost to implement approved temporary emergency practices and up to 50 percent for permanent practices. For more information about ECP or other drought assistance, visit {www.fsa.usda.gov} or contact your county FSA office.
Expansion of drought being felt across the nation BY DANIEL GRANT FarmWeek
Scattered rains late last week provided little relief for drought-stressed crops and farmers. The U.S. Drought Monitor
released Thursday showed the drought last week continued to spread and intensify in much of the Corn Belt. In Illinois, the majority of counties are in extreme drought with the remaining
counties, located near the Interstate 80 corridor, in moderate to severe drought. “We planted one of the biggest corn crops in the history of American agriculture, and we’ve watched it wither away right before our eyes,” Philip Nelson, Illinois Farm Bureau president, said last week at the IFB Commodities Conference in Normal. “Now the drought is expanding.” Ag Secretary Tom Vilsack last week reported about 88 percent of the nation’s corn crop and 87 percent of soybeans are in drought-stricken areas. The corn crop in Illinois last week was rated 66 percent poor or very poor, 27 percent fair, and 7 percent good while the bean crop was rated 49 percent poor or very poor, 38 percent fair, and 13 percent good to excellent. Last week’s crop ratings marked just the fourth time since 1980 that none of the Illinois corn crop was rated excellent this late in the season, according to John Hawkins, IFB farm information web editor. The other
years that occurred — 2005, 1988, and 1983 — also were plagued by drought. “Our farmers are no strangers to uncertainty,” Vilsack said. “But it’s even hard-
‘We planted one of the biggest corn crops in the history of American agriculture, and we’ve watched it wither away right before our eyes.’ — Philip Nelson Illinois Farm Bureau
er to plan for the future when we don’t know how much more severe the drought will be.” Weather Services International last week projected a continuation of the drought with warmer-than-normal temperatures in the central
U.S. in August. Jim Koeller, a farmer from Pike County, last week reported the 100-plus degree heat effectively killed the rest of his corn crop. He predicted corn yields of 60 to 90 bushels in fields that pollinated while other fields won’t make 10 bushels per acre. Pasture conditions also are bad, and hay supplies are low. “Livestock producers are immediately impacted because they don’t have the feedstuffs,” Nelson said. USDA last week projected the situation will cause food prices to rise next year by 3 to 4 percent. “Food prices are going up,” Nelson noted. “But not at the level (reported by some members of the media).” Rick Tolman, CEO of the National Corn Growers Association, reported the farm value of food ingredients consumers buy at grocery stores represents less than one-fifth of the price at the checkout counter. “The price of farm products has little impact on overall food prices,” he said.
FarmWeek Page 4 Monday, July 30, 2012
the rivers
Regulatory requirements frustrate flood protection efforts BY MARTIN ROSS FarmWeek
With irrigators pumping full-bore to salvage corn in the area, last week may have seemed an odd time to gather local, state, and federal officials for a Western Illinois forum on flood control. But to Hunt-Lima Drainage District Chairman Sam Zumwalt, who witnessed the ravages of 1993 and 2008 flooding, the next big flood could come next year. During a Hancock County Farm Bureau-sponsored meeting on the Warsaw-area farm of Zumwalt’s son, Joe, local officials and farmers challenged state and federal regulatory hurdles to approval of a $10 million project to improve protections within the Hunt-Lima levee system. The district hopes to raise levee height by 12 to 18 inches to provide 100-year flood protection for roughly 30,000 farmland acres and receive Federal Emergency Management Agency (FEMA) levee certification. Certification is crucial to local activity and development: Costly insurance is mandatory in areas where FEMA determines levees provide inadequate protection. FEMA is re-evaluating certifications as part of a floodplain remapping process, and the district seeks to bolster the levee before new maps are released. However, the district to date already has spent roughly $250,000 to address often duplicative permit, environmental, archaeological, and wet-
lands requirements (see accompanying details). “They request this, we give them that, and then they request something else,” Zumwalt told FarmWeek before meeting with representatives of the U.S. Army Corps of Engineers, the Illinois Department of Natural Resources (IDNR), and other agencies and state and federal lawmakers. The district’s current projected $700,000 permitting process, begun early in 2011, has included a survey of area mussel populations and development of a plan to “mitigate” the impact of construction on six acres of wetlands. Drainage Commissioner Jonathon Hofmeister questioned the logic of such requirements, citing the role of levee improvements in protecting wetlands wildlife habitat. Col. Mark Deschenes, new commander with the Corps’ Rock Island District, acknowledged concerns about “the permitting responsibilities that we share with many agencies.” He stressed the Corps must consider the potential impact of levee improvements “from Minnesota to New Orleans.” “The interests of this levee district are very much in line with the interests of the Corps,” Deschenes nonetheless said. “At the end of the day, we’re all after the same thing.” Zumwalt sees the need for flexibility in floodplain policies, noting, for instance, that districts can’t use Corps-dredged
During a tour of the Hunt-Lima Drainage District levee system, Col. Mark Deschenes, center, commander of the U.S. Army Corps of Engineers Rock Island District, discusses flood and levee concerns with drainage district Chairman Sam Zumwalt, left, and commissioner Dianne Barnett. Zumwalt emphasized the economic importance of flood management to both his area and farmers along the Mississippi. “The only way we can increase exports is down the river,” Zumwalt told FarmWeek. “We need to improve the river, and that takes improved levees.” (Photo by Martin Ross)
river material to bolster levees. Congressional approval of a comprehensive, coordinated Mississippi flood management plan would help reconcile issues between districts and neighboring states and reduce duplicative regulation, he argued. For example, district contractor Mike Klingner suggests a comprehensive plan would allow issuance of standard advance permits for districts seeking 100-year protection. The Corps has conducted some $16 million in floodplain stud-
ies, and Klingner questioned “why an individual district should have to redo a bunch of individual studies.” But Deschenes warned the Corps is a long way from realization of a comprehensive plan, though it has weighed the systemwide benefits and costs of various “contingency plans.” Zumwalt is frustrated by federal failure to factor crop values into the potential economic benefits of a plan. “The bottom line is, those contingency plans are still in
the reconnaissance phase,” Deschenes told FarmWeek. “We need to move into the (plan) feasibility phase before we can even get an authorization from Congress and be able to move forward on some of these things. “That doesn’t mean work stops. There are certainly things that can be done locally, with interagency cooperation and the different levee districts, to begin to approach at least some interim levels of protection.”
Deluge of levee regs impedes improvements In terms of its physical impact, the move from existing 50-year flood protection to a 100-year level of protection is “a very minor improvement,” engineer Mike Klingner notes.
In terms of paperwork, it’s a monumental undertaking. Klingner, contractor for the Hunt-Lima Drainage District, hopes to wrap up the permitting process for planned dis-
Illinois Farm Bureau Vice President Rich Guebert Jr., left, and IFB board member Terry Pope eye river conditions at the Ursa Farmers Co-op at Warsaw. The pair addressed levee concerns at last week’s Hancock County meeting and tour of the Hunt-Lima Drainage District levee system. (Photo by Martin Ross)
trict levee improvements by year’s end. That process entails submission of extensive reports, surveys, and other data to the U.S. Army Corps of Engineers, the Federal Emergency Management Agency (FEMA), and Illinois’ Department of Natural Resources (IDNR), Environmental Protection Agency (IEPA), and Historical Preservation Agency. The Corps alone requires two separate permits. Submissions cover the waterfront, from analysis of levee structure and stability and plans for using dredged material to strengthen levees to biological and wetlands studies and archaeological surveys to ensure the project does not disturb sites of cultural or historical significance. Klinger, who is about halfway through the process, notes several duplicative requirements by various agencies. Both the Corps and IDNR require districts to
review project impact on river mussel populations. The Corps, IEPA, and IDNR require detailed wetlands analysis and “mitigation” plans. “Now, there are new requirements that not only do we have to create a wetland if we disturb any — you have to have a monitoring plan to show it’s going to be maintained,” Klingner told FarmWeek. “So we have to find a site the district can control.” Klingner and district officials last week recommended measures to streamline the regulatory process, including: • Allowing the regional Corps district to conduct required periodic reviews of standard 50-year or 100-year levees, with review of new levees, major levee alignment changes, or larger 500-year structures referred to the Corps’ Upper Mississippi Valley Division or Washington headquarters. • Development of a “clear
written process” for IDNR levee improvement permitting tapping current Corps resources. • Availability of levee-specific IEPA application forms and a simplified process for timely permit review. Like his Hancock County counterparts, Prairie du Rocher-Modoc Drainage/Levee District Chairman Rich Guebert Jr. notes efforts to ensure “we’re ready” when FEMA completes area floodplain remapping. However, with annual revenues of roughly $25,000, the district is concerned about potential regulatory costs ahead. “A study of (levee) underseepage and slope stabilization is going to cost us $300,000,” Guebert reported. “We’re looking at $1.2 million to $5.1 million for necessary levee repairs. It’s kind of hard to make the math work with $25,000 a year income.” — Martin Ross
Page 5 Monday, July 30, 2012 FarmWeek
the rivers
Long-awaited lock legislation on the horizon? BY MARTIN ROSS FarmWeek
It’s time to get moving on the nation’s waterways, U.S. Rep. Bobby Schilling believes. The Colona Republican cited 2011 approval of legislation that set the stage for improved air travel and June’s surprise passage of measures that pave the way for longneeded highway upgrades. Midwest lawmakers have raised hopes for consideration of “WRDA2” — Water Resources Development Act reauthorization — with passage of surface transportation legislation. WRDA2 is a potential vehicle for construction of seven Upper Mississippi and Illinois River locks authorized in 2007. As election concerns loom, Washington lawmakers already are “deferring so much of their work to an eventual lame duck session,” Soy Transportation Coalition Executive Director Mike Steenhoek noted. Steenhoek said he is “not optimistic” the
current Congress would address measures such as WRDA that are “not necessarily headline-generating bills.” Schilling nonetheless anticipates “a lot of focus” on waterways transportation in 2013. He sees continued interest in “WAVE4,” a bipartisan measure that would enable the barge industry to replenish private revenues used to match federal lock funding and tighten the U.S. Army Corps of Engineers’ project planning system (see accompanying details). “This is almost like the narrow road: They wait until several people die on the road and then widen it,” he told FarmWeek. “I don’t want to wait until our locks and dams fail and then have barge traffic stuck for a month or two while they’re under repair.” Proponents of new lock construction face congressional resistance to so-called regional project “earmarks” and to any tax increase —
Corps mulling reduced lock hours As Mississippi River levels continued to drop along with the cargo that can move on the shallower waterway, a barge industry representative warns of potential post-drought navigation concerns. Faced with current operations/maintenance funding shortfalls and increased costs of maintaining aging facilities, the U.S. Army Corps of Engineers has proposed by October to curtail barge service hours at 63 locks and dams. Hours tentatively would be trimmed at individual locks based on 2010 commercial traffic volumes. Sites with at least 1,000 “lockages” would continue to operate on a 24/7, yearround basis. Those with 500 to 999 lockages reportedly would move to two shifts per day. That would impact locks in the Minneapolis-St. Paul area, Waterways Council Inc. (WCI) Midwest Vice President Paul Rohde noted. Proposals to move to one shift at locks with 100 to 499 lockages could affect the Kaskaskia River Lock in Southern Illinois, though lock operations manager James Hill cited Corps discussions about the possibility of trimming hours further. Hill reported annual lockages today run in the “500 range,” but the lock is a key conduit for Gulf-bound crops and limestone for upstream users such as the Prairie State Energy Campus, a state-of-the-art, coal-fired power plant that uses it in its clean air scrubbers. The Kaskaskia Regional Port District thus is helping make the case for an exception to Corps plans with the hope of preserving around-the-clock operations. “Tonnages and development are increasing here on the riverway,” Hill told FarmWeek. “Another (river) port is being developed, and with the commitments the navigation industry is developing associated with this waterway, there may be a time when they need to expand hours of shipping.” Whatever the Corps’ final decision, at least one employee likely would remain on duty around the clock to maintain the lock’s navigational pool, Hill said. Rohde questions the Corps rationale for targeting service hours, noting there are only sparse details available about projected savings and other cost-cutting options. WCI plans to survey its members regarding the economic impact of cutbacks. — Martin Ross
even one proposed by taxpayers. WAVE4 includes provisions of an industry-drafted plan that embraces a 6- to 9cent hike in the current 20cent-per gallon barge fuel tax to rebuild waterways trust fund reserves. In mid-July discussions, House and Senate staffers remained hopeful about consideration of at least a “WRDA light” bill, according to Paul Rohde, Midwest vice president with the industry group Waterways Council Inc. Senate Public Works Chair-
man Barbara Boxer (D-Calif.) and Ranking Republican Jim Inhofe (R-Okla.) hinted at possible committee action in the near future but offered no specific timetable. Republican House Transportation and Infrastructure Committee staffers suggested lawmakers might take up a more policy-oriented measure vs. a “traditional WRDA bill” that locks in project funding, Rohde reported. He nonetheless believes that approach could incorporate WAVE4 provisions and grant an effec-
tive “green light” to new projects without funding specific earmarks. “There are a host of scenarios where a lame duck (session) could be very beneficial to a WRDA bill moving,” Rohde told FarmWeek. “Even before that, if you look at some members who have quite a number of waterrelated projects in their districts, there could be motivation to move a bill forward prior to the election. That said, we’re back in the anybody’s guess mode.”
WAVE4: RUNNING THE RIVERS WAVE4 — the bipartisan Waterways are Vital for the Economy, Energy, Efficiency, and Environment Act — attempts to bolster funding crucial to new lock construction and prioritize key projects across the inland navigation system. The measure could be included in Water Resources Development Act (WRDA) legislation. WRDA approval would help the U.S. Army Corps of Engineers chart a future course for efficient river transportation, according to Col. Mark Deschenes, commander with the Corps’ Rock Island District. “There really is no work that gets done without authorizations,” the engineer told FarmWeek last week. “One of the ways projects get authorized has been the WRDA bill. Clearly, that can be an important step forward. The Corps is serving the priorities of the nation. We will execute what is authorized and appropriated.”
WAVE4 is co-sponsored by House Ag Committee members Tim Johnson, an Urbana Republican, and Jerry Costello, a Belleville Democrat. It proposes to: • Improve Corps project management and processes to deliver projects on time and on budget. Cost overruns and continued construction delays at the Olmsted Lock on the Ohio River have spurred controversy over lock funding. But Waterways Council Inc. Vice President Paul Rohde cites a current roughly $8 billion in project “backlog” that must be addressed to keep river traffic running long-term. “It’s like we’ve almost given up on infrastructure,” Pike County farmer Jim Koeller added during a Hancock County river tour last week. “It’s what keeps business going, what keeps America producing. It’s our future. The longer we abandon it, the further behind we’ll be.” • Impose a 30-45 percent
hike in the existing 20 centper-gallon barge fuel tax. Shippers and barge interests support the move to replenish the Inland Waterways Trust Fund, which shoulders 50 percent of lock project financing. Even if Congress OKs new Upper Mississippi lock funding, “we don’t have a trust fund to accommodate that,” Rohde noted. A Senate proposal to provide 75 percent across-the-board federal funding “is not sustainable, either,” he said. • Preserve the existing 5050 industry/federal cost-share formula for new lock construction and rehabilitation lock projects costing more than $100 million. Under the bill, dam construction and smaller lock rehabilitation projects would receive 100 percent federal funding. • Set a cost-share cap on new lock projects, ideally to prevent Olmsted-type issues. — Martin Ross
Farmers face higher freight rates BY DANIEL GRANT FarmWeek
Most U.S. farmers obviously will have fewer bushels of grain and oilseeds to sell this fall due to significant yield losses caused by the drought. Informa Economics recently projected national yields could average 134 bushels per acre for corn and 38.5 bushels for beans, compared to USDA estimates earlier this month of 146 bushels for corn and 40.5 bushels for beans. And those estimates are expected to decline each week the extreme weather continues. “There are some issues coming as we start to ration demand,” Ken Eriksen, senior vice president of transportation, industrials, and energy for Informa, said last week at the Illinois Farm Bureau Commodities Conference. “We’re in continuous price volatility.” The uncertain outlook for farmers is exacerbated by slow economic growth in many countries. And to add insult to injury,
less-efficient transportation capacity likely will lead to higher freight rates at harvest, according to Eriksen. “The drought doesn’t just impact the crops,” he said. “There are problems on the lower Mississippi. (Shippers) have to load smaller barge tows (to avoid running aground due to low water levels).” Eriksen predicted barge freight rates this fall could jump by as much as 80 percent. Other portions of the transportation sector also have issues that could lead to higher shipping rates. Increased regulations and a shortage of qualified drivers could increase costs in the trucking industry while railroads currently are moving about 50,000 fewer cars per week nationwide. “Less-efficient transportation capacity will lead to higher freight rates,” Eriksen said. Meanwhile, economic growth in the U.S. is expected
to rise slowly, from 1.7 percent in 2011 to 2.1 percent this year and 2.3 percent in 2013. “Consumer spending still hasn’t been dynamic,” Eriksen said. “That’s not a growth pattern that will change the unemployment rate. We’ve got to get above 3 percent.” Eriksen predicted the U.S. unemployment rate will decline marginally, from 9 percent in 2011 to 8.1 percent this year and 7.4 percent in 2013. Elsewhere, economic growth in China and India was predicted to slow (from 9.3 percent last year to 7.7 percent this year in China and from 7.3 percent in 2011 to 5.6 percent this year in India) while Europe is expected to experience negative economic growth of 0.7 of a percent this year and 0.8 of a percent in 2013. “We are in a transition economy with a lot of challenges,” Eriksen said. The good news is the consumption base will continue to grow and inflation so far is in check in the U.S.
FarmWeek Page 6 Monday, July 30, 2012
CROPWATCHERS Bernie Walsh, Durand, Winnebago County: A little more rain lifted our spirits again last week. Tuesday morning we had a little more than half an inch at our farm and 1 inch a few miles south of here. The corn didn’t look as rolled up after the rain, and the beans are setting pods and showing more blossoms. This make us feel better for right now, but we also know that there is very little soil moisture left in any field, and to have any decent kind of grain fill, we are going to need more rain in the next six weeks. Several are still spraying for spider mites in soybeans and putting fungicide on soybeans. Thank goodness the forecast doesn’t call for any 100-degree days, at least for the next seven days. Pete Tekampe, Grayslake, Lake County: We had early morning showers the first three days of the Lake County Fair last week, with a total of a little more than 1 inch. Too late for the corn, but the beans are looking better and enjoying the showers. The days had been hot and humid. Hopefully, we will get timely showers for the beans. Some good hay has been baled and some wheat straw, also. Leroy Getz, Savanna, Carroll County: More 100-degree temperatures with only 0.15 of an inch of rain on Thursday. Crops are deteriorating more each day, but we are still better off than we were in 1988. Livestock farmers, including us dairymen, are looking at feed supplies and prices going into the winter months. Much feed already has been used. Sale barns are reporting large volumes of movement, which will lead to short supply later. Talk to your crop insurance agent before recovering any crops. I pray everyone has insurance. Ryan Frieders, Waterman, DeKalb County: It seems as if we are stuck in a weather rut. It was hot and dry every day last week. All of these 90-plus temperature days are really taking a toll on all vegetation, including the trees. Showers for the week totaled 0.2 to 0.5 of an inch but they were spotty in coverage at best. Spider mites are moving back into bean fields and spraying is being done for pests for the second time. Airplanes continue to fly and sprayers roll trying to protect what little crop it seems there will be. Larry Hummel, Dixon, Lee County: Anywhere from 0.2 of an inch of rain to 1.2 inches fell on Thursday, but just as important, or even more — the temperature dropped into the 80s with lows in the 60s. The bad news is that our corn that was stressed the most received the least. With that said, I’m starting to feel more confident in the yield potential out there. We are in a narrow band that has received a few showers now and then to keep the crops growing. I think there is a good chance that we could end up with 70-80 percent of our average yield. We aren’t there yet, but a few more showers over the next three weeks should finish this year off with a somewhat respectful yield, all things considered. This will be my last report for a couple of weeks, while my wife and I leave on a mission trip to Bolivia. After your prayers for rain, keep us in mind. Joe Zumwalt, Warsaw, Hancock County: I’m beginning to sound like a broken record. While a few widely scattered rains occasionally moved through the area, excessive heat and dry weather seem to be the norm. Yield potential declines every day. Early estimates range from 25 to 140 bushels per acre. The soybeans still have a chance if we start to receive rain soon. Hay and pastures are really running short. Fall is just around the corner in Western Illinois. Ken Reinhardt, Seaton, Mercer County: Rains were mostly just a tease for the week. As much as 1.2 inches fell Wednesday night in Aledo, but outside of town very little was received. It is still relatively green here and one does not have to travel far in any direction to realize how fortunate we are.
Ron Moore, Roseville, Warren County: We received 0.25 of an inch of rain on Thursday. That was the first rain for the month of July. Two miles away at another farm we did not get any. That seems to be the way this summer has gone. No widespread rains and what we did get was not enough. I have some early-planted corn that is fully dented and the rest will be this week. Rain at this point will not help the corn, but it will help the soybeans. They are still flowering and starting to set pods. The insect population has exploded. We are spraying for Japanese beetles, beanleaf beetles, and spider mites. The corn borer beetles have moved into the soybean fields since the corn is starting to lose its color. Hopefully, spraying for them will help on next year’s corn. We have started to move cattle home from the pastures. No water or grass is making it a challenge to have livestock. Tim Green, Wyoming, Stark County: Another dry, warm week — not as hot as in the past, but almost. It really doesn’t matter now. Corn damage is severe. Corn-on-corn is pretty bad. Cornon-beans is holding up a little bit better, but I’m afraid all of it is going to be very disappointing. The talk around here concerns spider mites: If you have them, and should you spray if you do? If it doesn’t rain, it doesn’t matter. A few areas got a little bit of rain last week — half an inch. I think those people probably are going to spray for spider mites. The rest of us are scratching our heads on how much more money to spend on a crop that is going to be very low. Mark Kerber, Chatsworth, Livingston County: Crop watching maybe should be called crop deterioration watching this summer. We missed another chance for rain as a front went through and cooled us off. Corn yields will be at disastrous levels. Producers are hoping to have enough corn to fill contracts. Soybeans had a chance to be average a few weeks ago, but now with no rain they are taking yield hits also. Spider mites are showing up, but there isn’t much spraying activity as producers don’t want to put more money into this crop. Federal crop insurance will be our savior to recoup the expenses it takes to produce a crop. It has been a hot summer for fairgoers. The heat is really hard on the animals. My neighbor dug a hole 24 feet deep and came back the next day to find absolutely no water had leaked into the hole. Normally, it would have filled up. The ground is dry. Ron Haase, Gilman, Iroquois County: Another week passed with above-average temperatures and a lack of rainfall. Most cornfields in the area are in the R4 (dough) growth stage. Corn development ranges from the R1 (silking) growth stage on up to the R5 (dent) growth stage. Yield expectations continue to decline as the hot and dry weather continues. Most soybean fields are at the R2 (full bloom) or the R3 (beginning pod) growth stage. Soybean fields continue to be scouted for pests. Local closing bids for July 26 were: nearby corn, $8.08; new-crop corn, $7.82; fall 2013 corn; $5.88; nearby soybeans, $16.71; new-crop soybeans, $15.50; fall 2013, $12.14. The construction of our new shed has helped to keep our focus away from the crop deterioration and drought conditions. Brian Schaumburg, Chenoa, McLean County: Three more days of 100-degree heat and only scattered showers took prospects down another notch this past week. We are now preparing for how to deal with aflatoxin and other maladies caused by the drought. Accurate yield checks will be difficult to attain due to crop variability. “Can’t miss” marketing plans are being touted to enhance insurance claims. Past advice to find a respected commodities broker, study, and make your own informed decisions looks very sound in these turbulent markets. Corn, $8.01; fall, $7.72; soybeans, $16.81; fall, $15.42; wheat, $8.34.
Wilfred Dittmer, Quincy, Adams County: It was the same story around our place last week: DRY. The situation gets more serious as the days wilt away. Then we say to ourselves, maybe next year will be better, but who knows, maybe it will be worse. Some are chopping for feed, but there is very little grain. I guess farming always was, and will continue to be, a gamble. We received about 0.3 of an inch of rain Thursday and Friday, but the situation out there is not pretty. Poorest crop I have ever had. Carrie Winkelmann, Tallula, Menard County: It tried to rain on us last week, but none managed to hit the rain gauge. So it is just that much drier than when I wrote last week. The beans are blooming but not setting pods. The corn is still alive somehow, but in definite decline. My dad cleaned out and fertilized his garden for next year. Hope springs eternal. Tom Ritter, Blue Mound, Macon County: Seems like this is the same ole report. No rain within the last reporting period here. It did manage a slight sprinkle, but not enough to even wet the sidewalks. Crop continues to dry down dramatically. The last real rain we had was 0.4 of an inch in early June and before that a little more than 1 inch in midApril. Many farmers are talking of harvest starting somewhere between Aug. 15 and 20. Pollination has been variable, but for the most part good. However, most ears have tipped back significantly. Corn is starting to dent. Rain would not be very helpful at this time for corn. Beans are still blooming and a good rain would bring on more blooms. Moisture systems that come this way, they just dry up due to the atmospheric conditions. There is still some spraying going on for spider mites. Farmers also fear an aflatoxin problem and possibly aphid problems appearing right at the end. Todd Easton, Charleston, Coles County: It just keeps getting worse. Corn has entered the die-down phase and may be ready to harvest in the next couple of weeks if it stays upright. For some reason, I keep walking out in those fields and all I find is shrinking yields. Bean fields are finally giving up also as blooms fall to the ground, and chances of any of those plants making seed disappear. Word around the countryside is that this will be a very slow fall as the work normally done by producers will be greatly limited. Even if all the fields make enough to have a combine go through them, tillage and anhydrous ammonia application will not be possible until we see at least a foot of rainfall. On top of that, dry fertilizer applications will either be reduced or put off, leaving us wondering what we will do with our time. I get stopped by readers asking why I have nothing good to put in this column lately, and the best answer I have is that FarmWeek does not want me to write fiction. Jimmy Ayers, New City, Sangamon County: This past week stayed the course with no rain, and it was extremely hot. Tied a temperature record of 103 one day before it cooled off at the end of the week. Corn and beans are both suffering. It’s a shame to watch really good beans deteriorate like they are. Some of the corn ears are white and starting to droop. It is looking pretty tough from what this area normally produces. It’s certainly not normal. Harvest probably will go pretty quick with no more than what’s going to be out there. Remember, if you have a field at an intersection take a few stalks down, it could save somebody’s life. David Schaal, St. Peter, Fayette County: Another hot week with no precipitation. I hate to keep repeating myself, but crops just continue to deteriorate. There are reports of spider mites chewing on soybeans, but most farmers are just letting them eat. Air conditioners continue to work hard. Lawnmowers have been in a rest mode with few hours being put on them. Might be just like the combines this fall.
Page 7 Monday, July 30, 2012 FarmWeek
CROPWATCHERS Doug Uphoff, Shelbyville, Shelby County: Rain? Hmmm. What does it look like? Rain on the corn right now would do about as much good as 10,000 C130s dumping water over a forest fire that’s already burned the forest. We are at black layer and yields are 0 to 70 at best. I hope I’m wrong. Test weights will be horrific along with quality. A crop south of Shelbyville will be next to nonexistent. Beans, I am told by an agronomist, need 2 inches of rain. Then we need an inch every seven to 10 days after with lower temps and higher humidity to have a remote chance of a below-average crop. The beans have 8-10 pods per plant right now, and they have stopped flowering in the 95-105 degree heat. I’ve been feeding hay since June 1 and am out of old hay. First cutting, 440 bales; second cutting, 354 bales; third cutting, 38 bales. Good news? There is always next year. And, yes, I am a Cubs fan! Dan Meinhart, Montrose, Jasper County: It was another very hot and dry week. No rain. Crops continue to deteriorate. Soybean plants are shrinking in size. If there is no rain in the next week or two, soybeans are pretty well finished. Some farmers are checking into the possibility of baling the beans for hay due to the shortage of hay. Crop adjusters are reporting that in fields they have examined corn yields are averaging 1 to 2 bushels an acre. Silage choppers are running full blast. Some farmers are planning to chop a two-year supply of silage. Forecast is for temperatures in the lower-90s with a slight chance of rain this week.
Dave Hankammer, Millstadt, St. Clair County: I don’t have much of a report this week. I spent the first part of the week at the county president’s meeting in Bloomington and the Commodity Conference in Normal. I spent the rest of the week in South Bend, Ind.. However, when I called home, I was told it was hot with triple-digit temperatures. For those who are interested, they had 0.75 of an inch of rain in South Bend. I would like to remind everybody who is going to make a crop insurance claim to contact their crop insurance agent and the FSA office for the latest droughtrelief updates and insurance procedures. Rick Corners, Centralia, Jefferson County: Thursday – 2 p.m. – beeeeep! The National Weather Service in St. Louis had issued a severe thunderstorm watch for Jefferson County. Surely not. I must be hearing things. By 4 p.m., thunder. Boy, here it comes. Not! Had two drops! It all went south. By 6:30 p.m., it was still rumbling down there. This is just not our year. Goodbye, beans, it’s been nice knowing ya. Dean Shields, Murphysboro, Jackson County: We had another week of hot, dry weather with heat indexes around 105. Corn and beans were suffering. Friday night, along came 1 to 1.5 inches rain. That was the first substantial rain we had had in quite awhile. It may perk the beans up and let them hang on a little longer. The corn situation is pretty bad. Hope we get more rain in the coming weeks to help the beans out.
Randy Anderson, Galatia, Saline County Some rain showers fell throughout the area. Some places had damaging winds. Rain amounts here on the farm were anywhere from 0.7 of an inch to little more than 1 inch. I’m hoping that will help maintain what beans we have out there. It was nice to see some of our friends at the fair last week, and congratulations to all the kids who went to the fair and showed. Whether you win a ribbon or not, it teaches you that if you want something in life, you have to work for it. I would like to say a big hello to one of our readers, Miss Haribson, and her polled Herefords. Ken Taake, Ullin, Pulaski County: Another week of the same — hot and dry. I think the corn has done all it’s going to do. It has just given up. Between the dry and the poor pollination with the high temperatures, I think it’s going to be a very disappointing corn crop. We keep saying the soybeans have a chance if we could get some timely rains. I’m afraid we’re running out of time for those, too. It showered Thursday afternoon, but we received less than 0.3 of an inch here at our farm. While that may freshen things up for a day, it is certainly not going to be enough to break the drought.
Reports received Friday morning. Expanded crop and weather information available at FarmWeekNow.com
Hot, dry conditions raise aflatoxin concerns BY KEVIN BLACK
Aspergillus flavus ear rot and storage mold are prevalent primarily in hot, dry seasons such as the one we are facing now. High kernel moisture and high air temperatures favor disease development in the ear. Once the mold is established in the kernels, it can continue growing on the grain in storage. Aspergillus flavus is the pathogen that causes formation of aflatoxin. The presence of Aspergillus mold does not guarantee that aflatoxin will be present, but small amounts of Aspergillus mold are capable of producing large amounts of aflatoxin under ideal Kevin Black conditions. Aspergillus flavus can grow on any part of the corn ear but often is found on ear tips. Insect damage will foster Aspergillus mold growth, as will other sources of damage to the ear. Extensive earworm damage to corn ear tips may contribute to mold growth when such damage occurs. A shortage of nitrogen also will contribute to Aspergillus mold growth. The mold typically has a gray-green or olive green color and powdery texture. Aspergillus mold produces a substance that will fluoresce, or glow, under black light. T his is par ticularly noticeable on g round or cracked cor n. Elevators often use blacklight screening to detect the presence of Aspergillus mold, but this test does not detect the presence of aflatoxin. When Aspergillus mold or aflatoxin is found in a field, there are a few management steps that should be followed. The combine should be set to leave lightweight or damaged g rain in the field. Most of the aflatoxin will occur in this grain. Grain should be harvested at a relatively high moisture (25 percent), should be dried quickly to 15 percent moisture, subsequently dried to 13 percent moisture if the grain is to be stored, and maintained at this level. The mold does not reproduce well at moisture levels below 15 percent but may develop hot spots in
storage if grain is not further dried to 13 percent. Where possible, affected grain should be sold or fed to cattle, as long as action levels are not exceeded. Infected grain should not be stored for long periods of time. If stored, the grain should be mixed with a stiration device and/or sampled frequently to detect hot spots and mold growth. Local elevators and grain terminals sometimes are willing to help market infected grain by putting together bulk shipments destined for special handling and feeding to finishing cattle. Kevin Black is GROWMARK’s insect and plant disease technical manager. His email address is kblack@growmark.com.
Example of Aspergillus flavus ear rot. (Mike Scheer photo)
David Butler, seated on bale, a dairy farmer from Arrowsmith in McLean County, discusses the impact of the drought on his operation during an interview with a South Korean news agency. The drought has reduced feed supplies, increased feed prices, and reduced milk output on some dairy farms. It also could affect reproductive rates of livestock into next year. (Photo by Jim Fraley, Illinois Farm Bureau livestock program director)
FarmWeek Page 8 Monday, July 30, 2012
risk maNagemeNt
Solid crop insurance strategy seen as ‘no-brainer’ BY MARTIN ROSS FarmWeek
Illinois farmers are realizing that crop insurance is, as University of Illinois risk management specialist Bruce Sherrick puts it, a “no-brainer.” But crop insurance strategy isn’t. Farmers who put forethought into risk protection this season may face far fewer headaches heading into 2013. “The past couple of years, it (crop insurance) hasn’t been the most profitable thing to invest in,” said Greene County farmer Chad Schutz, who insures 100 percent of his acres. “But it’s part of doing business. This is a year where (having crop insurance) is really going to pay off.” Given federal premium subsidies, crop Revenue Product (RP) coverage that covers real production costs makes “a lot of sense in most cases,” Sherrick said. But choosing the right
type of revenue coverage is key, as well. For example, corn growers this spring could have opted for standard RP, which triggers losses based on the higher of a $5.68-per-bushel spring price or a harvest price, or RP with a harvest price exclusion. In addition, Illinois farmers were offered the TrendAdjusted Actual Production History (APH) Yield Option for the first time this spring. That allowed eligible policyholders to elect to have their APH yield adjusted based on their county’s historical yield trend. “Clearly, regular RP was the best choice this season, and the highest (coverage) election you could have was the best choice,” Sherrick told FarmWeek. “On top of that, trend adjustment is an absolute nobrainer. There is virtually no case where doing that was not the right decision.” Of course, policyholders can’t anticipate all possible
Doug Yoder, senior director of affiliate and risk management, discussed crop insurance and several drought-related issues at this year’s Commodities Conference in Normal. (Photo by Cyndi Cook)
scenarios. This spring, Kane County farmer Bob Gehrke purchased a regular RP policy on an enterprise unit basis, which covers all corn/bean acres within a county. The 2008 farm bill increased premium subsidies for enterprise coverage. Higher-cost “optional” coverage of individual Farm
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Service Agency units, which separates higher- and loweryielding acres, likely would have provided greater drought protection, Gehrke admits. “But there’s definitely an advantage to having any crop insurance this year,” he said. House-Senate farm bill proposals would replace direct payments and other crop programs with a new revenue safety net — in the case of the House plan, a dual option aimed at meeting respective Midwest and southern farmer concerns. Sherrick stressed the need for a program that works with rather than “undermines” crop insurance. “What we’ll discover is that if we start out next March with
FarmWeekNow.com View Doug Yoder’s comments on how crop insurance is helping Illinois farmers at FarmWeekNow.com.
$7 (corn) prices, crop insurance is going to look really expensive on a cash flow basis, because it’s going to be covering really highly valued revenue,” he suggested. “If we get to next spring and we have $4 prices, crop insurance is going to look kind of cheap on a cash flow basis, because we’re covering revenue that’s not that highly valued. “But in both of those cases, that’s fairly priced insurance, and we have a subsidy on top. You have to start with underlying crop insurance,” said Sherrick.
‘The past couple of years, it (crop insurance) hasn’t been the most profitable thing to invest in. But it’s part of doing business.’ — Chad Schutz Greene County
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Watershed group to host field day The Agricultural Watershed Institute (AWI) will provide information about cover crops, biomass, and related topics Thursday, Aug. 9, during a field day on the Farm Progress Show site in Decatur. Registration and tours will start at 8:30 a.m. Attendees will hear about energy crop research in Illinois. Other presentations will include use of biomass for home and farm heating and cover crop production. Natural Resources Conservation Service and Farm Service Agency staff will discuss available programs for cover crops and other conservation practices. The program will conclude with lunch and equipment displays by local vendors. For more information or to register, call AWI at 217-877-5640 or email AWI’s Doug Gucker at dgucker@agwatershed.org.
Page 9 Monday, July 30, 2012 FarmWeek
trade
Caterpillar CEO sees growth markets outside U.S. BY DANIEL GRANT FarmWeek
Peoria-based Caterpillar is in strong financial shape. The company last week announced a second-quarter profit per share of $2.54, an all-time quarterly record and a 67 percent increase over profits in the second quarter of last year. “Our global footprint, the breadth of industries we serve, and our extensive line of products and services have helped us achieve these record-breaking results during this time of heightened economic uncertainty,” said Doug Oberhelman, chairman and CEO of Caterpillar. A key reason for Caterpillar’s success is its presence in foreign markets. Oberhelman last week at a meeting with County Farm Bureau presidents at the Illinois Farm Bureau Building in Bloomington, said Caterpillar exports 80 to 90 percent of the mining trucks and bulldozers produced at its
Auction Calendar Sat., Aug. 4. 9 a.m. Putnam Co FFA Alumni Con. Auction. GRANVILLE, IL. Bradleys’ and Immke Auction Service. www.bradleyauctionsinc.com Sat., Aug. 4. 9:30 a.m. Estate Auction. James (Jim) Schlipf Estate and Lena Schlipf, EUREKA, IL. Schmidgall Auction Services, Inc. www.topauctions24-7.com/schmidgall or www.auctionzip.com/schmidgall Sat., Aug. 4. 9 a.m. Farm machinery and misc. Estate of Dennis Merriman, VANDALIA, IL. Hanold Auctioneering. www.hanoldauctioneering.com Sat., Aug. 4. 10 a.m. Farm Eq. Auc. Bob and Jan Zarn, STOCKTON, IL. Jim Calhoun, Auctioneer. www.calhounauction.com Sat., Aug. 4. 9 a.m. Semi-Annual Washington Co. Farm Machinery Auction. NASHVILLE, IL. Schaller Auction Service. www.auctionzip.com Sat., Aug. 4. 10 a.m. Estate Auction. Howard J. Gilles Estate, KICKAPOO, IL. Col. Gail Cowser and Col. John H. Bliss. www.biddersandbuyers.com, www.cowserauction.com or www.illinoisauctioneers.org Sat., Aug. 4. 10 a.m. Huge Auction. John and Julie Gross, DAMIANSVILLE, IL. Mark Krausz Auction Service. krauszauctions.com Sat., Aug. 4. 12 p.m. Fulton Co. Land Auction. Ione Hamman Est., LONDON MILLS, IL. Lowderman Auction & Real Estate. www.lowderman.com Mon., Aug. 6. 10 a.m. Johnson Tractor Absolute Inventory Auction. JUDA, WI. Powers Auction Service Co. www.johnsontractor.com Wed., Aug. 8. Online Only Unreserved Auction. bigiron.com Wed., Aug. 8. 6 p.m. Madison Co. Land Auction. Eckart Family Members, COLLINSVILLE, IL. Schrader Real Estate and Auction Co., Inc. schraderauction.com Thurs., Aug. 9. 10 a.m. 80 Acre
Decatur and East Peoria plants. “Exports are a huge piece of our business,” said Oberhelman, an IFB member, who noted Caterpillar exports last year totaled about $20 billion. Why is Caterpillar focused on growing its business in other markets? About 95 percent of consumers live outside the U.S., Oberhelman said. He believes maintaining and increasing market access, improving infrastructure, and tax reform are among
the keys for U.S. companies to remain competitive in the global marketplace. “I see China, India, and Brazil investing billions in infrastructure, which will make these countries more competitive,” Oberhelman said. Caterpillar will remain headquartered in Peoria despite previous concerns voiced by company leaders about Illinois’ unattractive business climate. The company announced earlier this month it will construct a new office in down-
town Peoria. Caterpillar currently is headquartered in a 45-year-old downtown building. “We spent a lot of time on this (and decided) that we have such deep roots in the Peoria area that, rather than start the bargaining sweepstakes, we will keep our headquarters in Illinois,” Oberhelman said. Caterpillar was approached by leaders of at least five states about moving the location of its headquarters. The company has its
proving grounds, sales demonstration area, foundry, and bulldozer plant in the Peoria area. Caterpillar’s sales and revenues for 2012 last week were projected to range between $68 billion and $70 billion. “I am cautiously optimistic about the world economy in 2013, very positive on the long-term prospects for global growth, and excited about the role Caterpillar will play in making that growth happen,” Oberhelman added.
Grants helping 41 farmers’ markets make electronic sales Shoppers will be able to charge purchases of fruits, vegetables, and other products at an additional 41 farmers’ markets in 22 counties across the state, Lt. Gov. Sheila Simon announced last week. USDA grants of $1,200 each will be used for a wireless machine that will accept credit cards, debit cards, and LINK cards for federal food assistance. Currently, 49 out of 300 farmers’ markets use the wireless machines. Farmland Auc. Walter “Skip” Shaw, GIBSON CITY, IL. Bill Kruse, Auctioneer. Thurs., Aug. 9. 10 a.m. 2 80 Ac. Tracts of Farmland. Clarence Cox Estate, GIBSON CITY, IL. Bill Kruse Auctioneer. Thurs., Aug. 9. 10 a.m. Farm machinery. Lee and Cheryl Younker and Danny and Peg Geiss, PEOTONE, IL. Richard A. Olson and Assoc. richardaolson.com Thurs., Aug. 9. 7 p.m. Christian Co. Farmland Auc. Jeff and Helen Rhoades Estate, ASSUMPTION, IL. Wm. Beck Auction & Realty. Schroeder/Huber LLC. wmbbeck@ctiwireless.com or www.schroederhuber.com Thurs., Aug. 9. 2 p.m. Moultrie Co. Land Auction. CHAMPAIGN, IL. Schrader Real Estate and Auction Co., Inc. schraderauction.com CANCELLED ~ Thurs., Aug. 9. Summer Farm Closeout and Consignment Auc. Agri-Tech Inc. Fri., Aug. 10. 9 a.m. Henry Co. Land Auction. ANNAWAN, IL. Schrader Real Estate and Auction Co., Inc. schraderauction.com Sat., Aug. 11. 10 a.m. Real Estate, Approx. 84 Ac., House, Barn, etc. Lindell and Linda Walker, ANNA, IL. Joe Ollis Auction Service. www.ollisauction.com Sat., Aug. 11. 9:30 a.m. Farm machinery. Anderson Bros., SOMONAUK, IL. Chris Wegener, Mike Espe and Joe Wegener, Auctioneers. www.go2wegenerauctions.com Mon., Aug. 13. 10 a.m. Douglas Co. Land Auction. Murray Wise Associates, LLC. murraywiseassociates.com Wed., Aug. 15. 10 a.m. Winnebago Co. Land Auc. The Vern A. Davis Trust Farm, ROCKTON, IL. www.mgw.us.com Thurs., Aug. 16. 10 a.m. Estate Sale. Terry Johnson Estate, GIBSON CITY, IL. Bill Kruse, Auctioneer. billkruse.net
The 41 selected farmers’ markets range from large operations with nearly 100 vendors to small ones with fewer than five farmers. The markets must obtain certification to accept federal food assistance benefits through the USDA Food and Nutrition service and sign a contract with the Illinois Department of Agriculture (IDOA). “We expect sales of local foods across Illinois, from urban gardens in
Chicago to farms in Alexander County, to increase because of this program,” Simon said. The grant program is administered by IDOA and the Illinois Department of Human Services with support from the lieutenant governor’s staff. Additional funds remain and grant applications will be accepted on a firstcome, first-served basis. For more information, call 217-524-9129 or go online to {www.agr.state.il.us}.
FarmWeek Page 10 Monday, July 30, 2012
MARKETS
New logo, campaign promotes Illinois ag products BY KAY SHIPMAN FarmWeek
Spotting Illinois agriculture products just got easier. The Illinois Department of Agriculture (IDOA) has launched a new logo and campaign to raise awareness and increase sales of Illinois ag products. “The idea is to give consumers an easier way to find Illinois products,” Jennifer Tirey, head of IDOA’s marketing and promotions bureau, told FarmWeek. Tirey envisions the logo appearing in grocery stores and restaurants, farm stands and wineries, and on all sorts of packages containing ag or agribusiness products produced, processed, packaged, or distributed in the state. The logo also may be used by companies with
headquarters in Illinois. Farmers and others interested in using the logo must submit an application to IDOA and pay a one-time fee of $20 to download a high-resolution version of the logo, Tirey explained. IDOA is screening applicants to ensure the logo is used only on Illinois products. IDOA also is selling
stickers, banners, shelf signs, and T-shirts with the new logo. Along with the new logo, IDOA launched a new campaign encouraging consumers to spend $10 of their weekly grocery budget on Illinois products. The goal is for consumers to apply the $10 they would spend anyway specifically to purchase Illinois goods,
Tirey said. Special promotions of the campaign and the logo will take place during the Illinois State Fair. FFA chapters across the state also are promoting the logo’s use in their communities. IDOA is encouraging ag entities and consumers to submit digital photos and/or comments on creative uses and promotions with the new logo to {www.agr.state.il.us/market-
ing/ilprodlogo}. Since the launch, IDOA has received about 50 applications to use the logo and positive comments about the logo and campaign, according to Tirey. Applications are being approved within a day or two, she added. For more information, go online to {www.illinoisproductlogo.com} or call IDOA at 217-782-2172 and ask for Illinois product logo information.
USMEF: U.S. still low-cost producer of ag products BY DANIEL GRANT FarmWeek
A recent run-up in crop prices has tightened margins for livestock producers. But it shouldn’t affect demand for U.S. ag products around the world, according to Dan Halstrom, senior vice president of marketing and communications for the U.S. Meat Export Federation (USMEF). In fact, he believes the outlook for U.S. meat exports is quite positive. “Everybody is struggling with the drought,” Halstrom told FarmWeek at the Illinois Farm Bureau Commodities Conference in Normal. “But the thing to remember is we’re still the low-cost producer globally. “If the price (of corn) is $8 to $9 a bushel here, it’s going to be $10 to $11 in a place like China,” he continued. “We’re still very competitive globally.” Last year is a prime example of the U.S. meat industry’s ability to compete worldwide. Domestic hog and cattle prices reached record highs in 2011 yet U.S. exports still reached a record $6.1 billion for pork and $5.4 billion for beef. The export market last year added a record-high $209 to the value of each beef cow and
$58 to the value of each hog in the U.S. “Significant dollars for every animal slaughtered (in the U.S.) can be attributed to the export market,” Halstrom said. “And the growth prospects look pretty good going forward.” New markets are emerging for U.S. pork and beef in Central and South America due to economic growth. Elsewhere, Halstrom anticipates Japan by the end of this year or early in 2013 will change its import restriction on U.S. beef from cattle 20 months or younger to 30 months of age. The current age restriction allows just 25 percent of U.S. beef to be sold in Japan. Expansion of the age restriction to 30 months would qualify 95 percent of U.S. beef for sale to Japan. “We could see it by the end of this year,” Halstrom said. “Japan is the No. 1 margin market for packers.” He noted Russia also is a beef-deficit market, which offers growth potential for U.S. meat exporters. Overall, the U.S. last year exported about 28 percent of the pork produced here, 14 percent of the beef, 45 percent of the soybeans, and 14 percent of the corn.
TALKING PEPPERS
Jerry Jimenez, left, who operates the specialty crop farm Rancho Bella Vista at Cobden in Union County, chats about his pepper crop and how the drought is affecting it with Karis Gutter, USDA under secretary for farm and foreign agricultural services. Gutter also visited a beef farm in Johnson County and a cornfield in Pulaski County. (Photo by Tammie Obermark, Pulaski-Alexander Farm Bureau manager)
Page 11 Monday, July 30, 2012 FarmWeek
FB IN ACTION
Jefferson, Hamilton FB leaders visit ‘adopted’ legislators in Chicago BY CHRISTINA NOURIE
To strengthen the relationship with their “adopted” legislators, eight members from the Jefferson and Hamilton County Farm Bureaus recently took a train to visit those legislators in Chicago. They toured the legislative district of state Sen. Kwame Raoul (D-Chicago) and state Rep. Kimberly du Buclet (DChicago). Raoul has been an adopted legislator since 2005 while du Buclet is one of the newest adopted legislators. The legislators planned a visit that focused on Chicago neighborhoods of Hyde Park and South Shore. Farm Bureau members, the legislators, and staff members discussed several legislative issues pertaining to both Chicago and Southern Illinois during the visit. The legislators were interested in understanding the impact of severe drought conditions in Southern Illinois and how the drought also impacts their urban communities through higher food prices and a limited supply of fresh produce.
Precision organic ag WIU field day focus Precision in organic agriculture will be the focus of the Aug. 11 field day at the Western Illinois University’s (WIU) Allison Farm. The registration deadline is Aug. 8 for individuals planning to eat lunch. Field day activities will be from 9 a.m. to 3 p.m. at the Dakin Farm shop and the Allison Organic Farm, near Roseville, according to Joel Gruver, director of WIU’s organic research program and an assistant professor. Registration will start at 9 a.m. in the farm shop, followed by an overview of recent research on the Allison Farm and presentations on geographic positioning systems (GPS) and precision cultivation. An expert panel of organic grain farmers will discuss GPS guidance and other precision technologies. A free meal of local farm products will be provided. The event is free, but registration is required for those planning to eat lunch. At about 2 p.m., the program will move to the farm for walking tours of research and production fields. An equipment demonstration also is scheduled, weather permitting. To register or to get directions, contact Andy Clayton at 309-298-1172 or 217-322-2639 or the WIU School of Agriculture at 309-298-1080.
The group had a private tour of the DuSable Museum of African-American History, a museum featuring many exhibits which promote the achievements, contributions, and experiences of AfricanAmericans. The tour also included the South Shore International College Preparatory School, a new selective-enrollment high school that offers curriculum focused on awareness of foreign cultures taught through language, studies, and interactive field experiences. Currently, the school does not have an ag or horticulture program, but there is interest in establishing one and working with Farm Bureau to advise school officials in that effort. The final stop was the South Shore Cultural Center, a historic and cultural facility built in 1916 and recognized as a Chicago landmark in 2004. Formerly the South Shore Country Club, the facility stands on 64 acres along Lake Michigan and features a solarium, formal dining hall, Paul Robeson Theater, Washburne Culinary Institute, and the Parrot Cage Restaurant, where the Farm Bureau leaders dined with their Chicago hosts. The farmers invited both legislators, their families, and staff for fall harvest visits to Jefferson and Hamilton counties. Farm tours will give the Chicago folks first-hand knowledge of how the drought has affected this year’s crop. Both said they look forward to traveling to Southern Illinois. Christina Nourie is the Illinois Farm Bureau northeast legislative coordinator. Her email address is cnourie@ilfb.org.
Tuesday: • David Miller, president and CEO of iBio • Jon Davis, Chesapeake Meteorology • Dennis Bolling, president and CEO, United Producers • Claire Benjamin, Illinois Farm Bureau ambassador Wednesday • Joe Kath, Illinois Endangered Species manager • Troy Uphoff, farmer and IFB board member • Jim Fraley, IFB livestock program director Thursday • Illinois Corn Growers representative • Bonnie McDonald, president of Landmarks Illinois Friday: • Adam Nielsen, IFB director of national legislation • Ryan Whitehouse, governmental and public affairs director for McLean County Farm Bureau • Sara Wyant, AgriPulse publisher • Mike Doherty, IFB senior economist • Alan Jarand, RFD radio director
State Sen. Kwame Raoul (D-Chicago), right, chats with Jefferson County Farm Bureau leaders during their recent tour of his Chicago legislative district. Left to right are John Howard; Carmella and John Kiefer, county Farm Bureau president; Illinois Farm Bureau Director J.C. Pool of Hamilton County; and Adrienne Irmer and Ricardo Louis, two of Raoul’s staff. (Photo by Christina Nourie)
FarmWeek Page 12 Monday, July 30, 2012
FB IN ACTION FAIR VISIT FOR ESSAY WINNERS
DUCKY TIME AT THE FAIR
LaSalle County 4-H’er Rachel Duffield holds a chicken for students from Aurora to pet as the youngsters visited the recent LaSalle County Fair while teacher Alicia Gorski, left, looks on. Thirty fourth grade students from two Aurora schools made the trip to LaSalle County as a reward for a student from each school winning an essay contest sponsored by the county Farm Bureau and its adopted legislator, state Rep. Linda Chapa-LaVia (D-Aurora). This was the third year for the essay contest. The students also toured an equipment dealer and encountered Illinois Farm Bureau President Philip Nelson and his son, Kendall, at the fair. (Photo by Jeff Hartman, LaSalle County Farm Bureau manager)
Addison and Gianna Tarr, left to right, spend some time with a duckling being held by Taylorville FFA member Katie O’Brien during the recent Christian County Fair. Approximately 500 youth toured the interactive farm sponsored by the Christian County Farm Bureau and the Taylorville FFA. The youth had an opportunity to do “chores” at the interactive farm that included picking apples, gathering eggs, milking a cow, and digging potatoes. (Photo by Mellisa Herwig, Christian County Farm Bureau manager)
SCRAMBLING TO RAISE FUNDS
Matt Hefley of Fairfield tees off as teammates, from left, Mike Molt, Blaith Belangee, and Michael Molt spot his ball during the Fourth Annual Young Leader Golf Scramble held recently in Fairfield. Fourteen teams participated in this year’s event, which had 32 sponsors. The the team of Darrell Ar view, Joe Mitchell, Steve Dawkins, and Kent Nale won first with a score of 57. The team won four tickets to a Cardinals game donated by Roark Trucking of Carmi. Funds raised from this year’s golf scramble will support Young Leader programming (including the annual collegiate scholarship), the Progressive Agriculture Safety Day program, and participation in Illinois Farm Bureau Young Leader programs. A total of $2,800 was raised by the event. (Photo courtesy of Wayne County Farm Bureau)
FarmWeek
ADVERTISING DEADLINES READER SUBMITTED CLASSIFIED ADS
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Wednesday at 10 a.m. COMMERCIAL DISPLAY ADS
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(Including but not limited to: livestock, auctions, equipment)
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Page 13 Monday, July 30, 2012 FarmWeek
from the counties
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ROWN — Farm Bureau and Country Financial will sponsor a customer appreciation open house from 4 to 7 p.m. Thursday, Aug. 9, at the American Legion Hall, Mt. Sterling. Dinner will be served. Call the Farm Bureau office at 217-773-2634 or the Country Financial office at 217-773-3591 for more information. HAMPAIGN — The Ag Leaders of Yesterday, Today, and Tomorrow Committee will sponsor a bus trip Wednesday, Aug. 8, to the Chicago Board of Trade. The bus will leave the Farm Bureau parking lot at 9 a.m. Cost is $40, which includes bus and a visit with a trader. Lunch will be on your own. Call the Farm Bureau office at 352-5235 for reservations or more information. HRISTIAN — An FS field day will begin at 8 a.m. Tuesday at the Farm Bureau office. Following the tour, the group will return to the Farm Bureau office to analyze data. Lunch will be served. Call the Farm Bureau office at 824-2940 for reservations or more information. • A crop disaster meeting will be at 6 p.m. Thursday 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 at 824-2940 by Tuesday for reservations or more information. LARK — The annual Farm Bureau picnic will be at 5:30 p.m. Friday, Aug. 10, at Mill Creek Park. Call the Farm Bureau office at 217-382-4144 by Wednesday, Aug. 8, for reservations or more information. RAWFORD — Farm Bureau will sponsor a trucking regulation update at 9 a.m. Thursday at the Oblong Community Center. Kevin Rund, Illinois Farm Bureau senior director of local government, will be the speaker. Call the Farm Bureau office at 618-5443792 for reservations or more information. FFINGHAM — Farm Bureau will sponsor an oil and gas leasing meeting at 1 p.m. Tuesday at the Farm Bureau office. Laura Harmon, Illinois Farm Bureau assistant general counsel, will be the speaker. Call the Farm Bureau office at 217-342-2103 for reservations or more information. • Farm Bureau will sponsor “On the Road” seminars at 7 p.m. Tuesday and 9 a.m. Wednesday at the Farm Bureau office. Trucking reg-
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ulations will be discussed. Call the Farm Bureau office at 217-342-2103 for reservations or more information. • The Young Farmers and Partners for Farm Safety 4 Just Kids will sponsor a Progressive Agriculture Safety Day from noon to 2 p.m. Friday at the Effingham County Fairgrounds. Hands-on demonstrations at six stations will highlight hidden hazards of the farm and rural surroundings. Registration is available on site, but a parental signature is required. Call the Farm Bureau office at 217-342-2103 for more information. • The Partners for Ag Literacy will help sponsor ag literacy programs at 11 a.m. Monday through Wednesday, Aug. 6-8, at the Effingham County Fair, Altamont. Each day will feature different activities designed to help participants understand agriculture and how it affects their daily lives. The booth will be located in front of the 4-H livestock show building. • The Young Farmers Committee will sponsor a pedal tractor pull at 3:30 p.m. Friday, Aug. 10, at the County Fairgrounds. Altamont. Children 4 to 12 years of age need to bring $1 to be donated to local food pantries. South Central FS will sponsor trophies for three age categories. Each participant will receive a coupon for a free ice cream cone at the 4-H Dairy Bar. Call the Farm Bureau office at 217-3422103 to register, and registration is available on site. ULTON — The Marketing Committee and the Canton Ingersoll Airport will sponsor their annual crop flyover beginning at 8 a.m. Thursday. Cost is $45 for members and $60 for non-members. Participants will go up in groups of three. Payment and reservations are due by 4 p.m. Tuesday. Participants may request morning or afternoon flights. Call the Farm Bureau office at 547-3011 for more information. ANKAKEE — Farm Bureau will have a booth Wednesday through Sunday during the county fair. Information, public opinion surveys, and educational activities for children will be available. The ag professionals breakfast will be at 7 a.m. Thursday with Jerry Carroll, agricultural comedian, providing the entertainment. Cost is $10. Register for the breakfast by calling the fair office at 815-9326714. The Young Leader Committee will sponsor its annual Ag Olympics for
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county 4-H clubs at 3 p.m. Sunday in the cattle show arena. ASALLE — The Clean Line Energy meeting scheduled for 6 p.m. Wednesday has been canceled. • Farm Bureau will sponsor an “On the Road” seminar at 7 p.m. Monday, Aug. 13, at the Farm Bureau office. Motor vehicle laws will be discussed. Call the Farm Bureau office at 815433-0371 for reservations or more information. • The Prime Timers Committee will sponsor a defensive driving course from 8 a.m. to 12:30 p.m. Wednesday, Aug. 22, at the Farm Bureau office. Cost is $20 for members over the age of 55. Non-member cost is $25. Call the Farm Bureau office for more information. EE — Bureau and Lee County Farm Bureaus will sponsor a boat ride Friday, Aug. 17, on the LaSalle Canal and a tour of the Hegeler Carus Mansion. Cost is $34 and includes lunch. Call the Farm Bureau office at 825-857-3531. • The District 4 meeting will be at 6 p.m. Monday, Aug. 20, at the Mendota Civic Center. Dinner will be served. Kurt Bock, Country Financial chief executive officer, and Kevin Semlow, Illinois Farm Bureau director of state legislation, will be the speakers. Call the Farm Bureau office by Wednesday, Aug. 15, for reservations. • The Young Leader Committee will sponsor a Harvest for All food drive through Aug. 31. Donations of nonperishable food items or cash donations may be taken to the Farm Bureau office. All items will be donated to Lee County food pantries. • The Public Relations Committee will sponsor a Lee County Field Moms program for non-farm moms to learn about agriculture through farm tours and conversations with farmers. Those who are interested may return an application to the Farm Bureau office by Wednesday. Applications are available on the website {www.leecfb.org}. IVINGSTON — Farm Bureau will celebrate its 100th anniversary from 4 to 7 p.m. Saturday, Aug. 25, at the 4-H Park, Pontiac. Those who have an antique tractor to display should contact the Farm Bureau office at 815-8421103 or email tvlcfb@frontier.com. Provide your name, address, phone number, and tractor model. • Dinner will be served at
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the 100th anniversary celebration from 4 to 7 p.m. Evergreen FS will sponsor a pedal tractor pull at 5 p.m. Former Livingston County Farm Bureau presidents will share highlights of their service, and the first Livingston County Farm Bureau Distinguished Service Award winner will be announced at 6 p.m. Door prizes will be given. Call the Farm Bureau office at 815-842-1103, email livcfb@frontier.com, or return the postcard received in the mail by Friday, Aug. 10, for reservations. ONROE — Members and their families are invited to the Meet the Candidates meeting and ice cream social at 7 p.m. Thursday at the Monroe County Fairgrounds. Prizes will be awarded. • Farm Bureau will sponsor a family farm tax changes and planning meeting at 7:30 a.m. Thursday, Aug. 9, at the Monroe County Annex. Breakfast will be served. Call the Farm Bureau office at 939-6197 by Thursday for reservations or more information. • The Mon-Clair Corn Growers test plot will be at 6 p.m. Wednesday, Aug. 8, at Greg Guenther’s farm, Belleville. Dinner and updates will be at the St. Clair County Farm Bureau office. Call the Farm Bureau office at 939-6197 or the St. Clair County Farm Bureau office at 233-6800 by Thursday for reservations or more information. ONTGOMERY — The Young Leaders hybrid and variety plot tour will be from 6 to 8 p.m. Thursday at Carl Marten’s farm, Raymond. Door prizes will be given and a light dinner served. Call the Farm Bureau office for more information. EORIA — Orders for Calhoun County peaches are due Wednesday. Peaches are available in 25pound boxes. Delivery will be Thursday at the Farm Bureau auditorium. Order forms are available at the website {www.peoriacountyfarmbureau.org} or in the July Farmer newsletter. • The Peoria County 4-H Fair will be Wednesday through Friday at Exposition Gardens, Peoria. The Young Leaders will sponsor a tractor drive contest from 4 to 6 p.m. Thursday. Other events on Thursday are the buyer’s meal at 5 p.m. and the 4-H livestock auction at 7 p.m. ICHLAND — Farm Bureau will sponsor a blood drive from 12:30 to 5:30 p.m. Monday, Aug. 6, at
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the Community Building, Olney. The names of donors will be entered into a drawing for four Holiday World tickets. Call the Farm Bureau office for more information. • The Young Leaders Committee will sponsor a trap shoot at 11 a.m. Saturday, Aug. 18, at the Country Line Gun Club, Noble. Preregistration fee is $25 per person or $100 for a team of five. Tickets for the raffle of a Remington 870 shotgun, which is sponsored by Slunaker Gun Shack, are $5 each. Call the Farm Bureau office at 618-393-4116 or a Young Leader Committee member for tickets or reservations. T. CLAIR — The Mon-Clair Corn Growers test plot tour will be at 6 p.m. Wednesday, Aug. 8, at Greg Guenther’s farm, Belleville. Dinner and updates will be at the Farm Bureau office. Call the Farm Bureau office at 233-6800 by Thursday for reservations or more information. ERMILION — Farm Bureau will sponsor an “On the Road” truck information meeting at 9 a.m. Tuesday at the Farm Bureau office. Kevin Rund, Illinois Farm Bureau senior director of local government, will provide an update on trucking issues. Call the Farm Bureau office for more information. ABASH — Farm Bureau will sponsor its annual yield survey at 11:30 a.m. Friday at the Farm Bureau office. Lunch will be served. Call the Farm Bureau office for more information. • The annual Young Farmers’ tractor and truck pull will be at 4 p.m. Sunday, Aug. 12, at the Wabash County Fairgrounds. Call the Farm Bureau office at 618-2625865 for more information. • Visit the Young Farmers’ stand from 11 a.m. to 9 p.m. Aug. 8-11 during Ag Days. Pork burgers will be served each day. Pork tenderloins will be served on Wednesday and Thursday, Aug. 8-9; and smoked pork chops on Friday and Saturday, Aug. 10-11. AYNE — The member appreciation dinner will be from 5 to 7 p.m. Friday, Aug. 10, at the CP Church, Fairfield. Tickets are $2. Children 12 and under eat free. Tickets are available at the Farm Bureau office.
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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 14 Monday, July 30, 2012
proFitability
Fuel supply shortage rattles suppliers, distributors BY CHARLIE LABELLE
A tight fuel supply situation has suppliers and distributors across the Midwest rattled this summer. The circle on the map around the Chicago area shows where it all began in May 2012. With the Plains States’ wheat harvest ahead of schedule, two Charlie LaBelle very large Chicago refineries had production issues. Another refinery in Robinson, Ill., also went down unexpectedly. Basis values (price relationship to the NYMEX futures market) in Chicago shot up like the spaceship Endeavour. Supply points in Illinois began to run out, so distributors had to find alternate supply. Those alternatives led them hundreds of miles into Iowa, Missouri, and Wisconsin, putting strain on the gasoline and diesel fuel stocks in the Magellan system (a fuel management platform). This, in turn, has caused reduced supply in the Nu Star system that runs from Oklahoma, up through Kansas, Nebraska, South Dakota, and into North Dakota. The Magellan and
NuStar systems are referred to as “shallow troughs,” as they hold a lot of inventory, but fill up quickly, and, unfortunately, can be drawn down just as quickly. In May and June, Reid Vapor Pressure (rvp) is at its best for the year. The Environmental Protection Agency requires summer gasoline to be down to nine pounds of pressure for peak automobile operability and less smog in the atmosphere. Some metro areas, (Kansas City and Atlanta, for example) are required to use below seven pounds rvp. This grade of fuel needs more refining to produce, and is usually tight in the summer. Nine-pound fuel also takes extra processing and also can become scarce. The rvp gradually returns to 11.5 pounds in late September, 13 in October, and then to the winter requirement of 15 by December. The “forward curve” on the futures market also reduces gasoline supply. The spread between the front month on the NYMEX vs. the future months (the curve) has been high, as much as a minus-40cent spread going out to December. With this in place, refiners have no incentive to produce a lot of gasoline and hold it over to the next month, just
M A R K E T FA C T S Feeder pig prices reported to USDA* Weight 10 lbs. 40 lbs.
Range Per Head $12.88-$46.50 n/a
Weighted Ave. Price $37.03 n/a
This Week Last Week 95,967 107,724 *Eastern Corn Belt prices picked up at seller’s farm
Receipts
Eastern Corn Belt direct hogs (plant delivered) Carcass Live
(Prices $ per hundredweight) This week Prev. week $85.71 $86.56 $63.43 $64.05
Change -0.85 -0.63
USDA five-state area slaughter cattle price Steers Heifers
(Thursday’s price) (Thursday’s price) Prev. week Change This week 114.00 112.09 1.91 114.00 112.00 2.00
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 134.18 137.39 -3.21
Lamb prices n/a
Export inspections (Million bushels) Week ending Soybeans Wheat Corn 07-19-12 15.8 11.6 19.6 07-12-12 14.9 15.2 22.2 Last year 6.4 23.7 38.8 Season total 1266.6 127.8 1386.8 Previous season total 1441.6 167.9 1595.7 USDA projected total 1315 1025 1700 Crop marketing year began June 1 for wheat and Sept. 1 for corn and soybeans.
to lose a lot of money in the process. The next piece of the supply puzzle is global pricing for fuels. Currently, diesel prices are higher in other parts of the world, so distillate exports continue to strain supply here in the U.S. terminal outages continue to be a problem, so keep your diesel storage tanks as full as possible. Contact your local FS energy specialist for more information. Charlie LaBelle is GROWMARK’s senior energy analyst. His email address is clabelle@growmark.com.
Farmers may treat low-quality forage to improve nutritional value for feed treatment of low-quality forage With drought-stressed pasFarmWeekNow.com are: harvest or purchase of the tures and hay shortages, cattlemen with limited forage supplies Learn more about treating for- forage, cost of the ammonia may be forced to use crop age products with ammonia at treatment, and cost of an enclosure. residue, such as wheat straw or FarmWeekNow.com. Ammonia must be applied cornstalks, or other low-quality within a sealed enclosure to preforages as feed, according to Paul Walker, animal science professor at Illinois State vent vaporization into the atmosphere, Walker noted. University. Also treated forages cannot be exposed to Walker offered several recommendations for precipitation. Plastic sheeting, bale tubes, or a feeding low-quality forages. plastic greenhouse or shed must be used for “Low-quality forages’ major limitations are their deficiencies in crude protein and digestible treatment and storage. Walker estimated the costs will range from energy,” Walker said. Research done in the 1980s showed treating low-quality forage with anhydrous ammonia will ‘Low-quality forages’ major limitations raise crude protein content by 6 are their deficiencies in crude protein to 8 percentage points, increase digestibility by 5 to 7 percentage and digestible energy.’ points, and increase intake by 20 percent. By treating the forage with — Paul Walker ammonia, it no longer will be Illinois State University animal scientist deficient in crude protein, and the animals will be able to con$16 to $24 a ton, excluding the cost of additionsume additional energy because of improved al labor or machinery needed to move the fordigestibility, Walker noted. age into and out of the treatment and storage He emphasized the value of the treated forsites. age must offset the costs of the treatment Walker advised applying anhydrous ammonia process and the treated forage must be the at a rate equal to 3 percent of forage dry matter least-cost method to meet the animals’ nutrior 60 pounds per dry ton of forage. If anhytional needs. “It is very important for producers consider- drous costs about $830 per ton or 41.5 cents per pound, it would add $24.90 to every ton of ing ammoniation to carefully consider the ecoforage or about $12.45 to each 1,000-pound nomics of the process,” Walker stressed. round bale of straw. The three costs associated with ammonia
Page 15 Monday, July 30, 2012 FarmWeek
PROFITABILITY Corn Strategy
CASH STRATEGIST
Crop condition mirroring 1988 Given the persistence of the hot, dry weather and all of the comparisons to 1988, we felt compelled to give you an update on the crop condition ratings. Whereas a month ago, it was unclear whether this year’s crops would follow the 2002 pattern or the 1988 pattern, the evidence is now undisputed. Nevertheless, there already is scattered talk that this year’s crops could be even worse than those in 1988. While that’s not impossible, it’s important to remember that 1988’s crops were in much worse condition from the start than was the case this year. While the poor/very poor ratings are not much different than they were in 1988, the good/excellent ratings are still a little better. Meanwhile, it seems like there’s a race in the industry to
see who can project the lowest yield, corn in particular. An early-week survey indicated traders on average were using a 130.8-bushel yield. Another private individual that uses planting dates, temperature, and moisture data projected 136.5 bushels early in the week. At week’s end, Informa projected a 134-bushel yield, while Lanworth, a company that uses satellite imagery, projected 122 bushels. A 1988type yield this year would be 123 to 128 bushels/acre. Meanwhile, being lost in the price discussion is the demand side of the equation. There are no indications the government is going to change the ethanol mandate, but poor profitability continues to reduce the weekly grind. Livestock producers here have started to look at ways to import feed grains. Meanwhile, all producers are feeling the pinch of high grain prices, both those in the U.S. as well as those around the world. Rationing has begun.
AgriVisor endorses crop insurance by
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ü2011 crop: Sell remaining old-crop bushels. ü2012 crop: The struggle prices are having suggests it may be difficult to sustain gains, even if they reach new highs. Do comprehensive yield checks to access your production potential. Get to 70 percent priced on a conservative assessment of the bushels you’ll have to sell, but don’t exceed your insurance guarantee. ü2013 crop: Leave orders to get sales up to 20 percent if December 2013 futures trade above $6.50. vFundamentals: Weather continues to stress the crops, dragging potential lower. The trade seemed to be trading a high-130 national yield to start last week. By week’s end, traders may have been working with a low-130 level. That’s getting close to a level comparable with 1988 yields. Demand is becoming as important as supply, and evidence is starting to surface that high prices are having negative repercussions. ûFail-safe: If December futures close below $7.45, make sure sales are at recommended levels.
Soybean Strategy
ü2011 crop: Wrap up oldcrop sales. ü2012 crop: Determining yield for soybeans is a more difficult call than it is for corn. But if you are comfortable with yield potential, get sales to 70 percent of a conservative output. ü2013 crop: Add another 10 percent sale if November soybeans reach $12.90 again. vFundamentals: The large long position held by the big speculative funds helped drive prices sharply lower this past week. Those same funds continue to leave the complex vulnerable to hard breaks, while the volatility and risk likely will diminish buying interest from them. China continues to be a steady buyer, but high prices are discouraging others from willingly pushing coverage forward. There are scattered signs the high prices are cutting into the demand base, in the protein
sector in particular. ûFail-safe: If November futures close below $15.61, make sure sales are at recommended levels.
Wheat Strategy
ü2012 crop: History has demonstrated the wheat market isn’t able to hold above $9.50 for a sustained period. Sales were boosted 20 percent when Chicago September closed below the $8.90 failsafe. If you failed to pull the trigger, use rallies above $9 on Chicago September to get caught up. ü2013 crop: An initial 15 percent new-crop sale should have been made when our
fail-safe was triggered. Make catch up sales with Chicago July futures trading above $8.20. vFundamentals: Wheat continues to be influenced by the corn market, but has some fundamental support. The trade remains concerned about growing conditions in the Black Sea region, with ongoing dry weather reducing output. Domestically, though, the supply picture is a little better with the North Dakota wheat tour estimating a better-thanexpected 45.5-bushel yield. ûFail-safe: If Chicago September closes below $8.90, make sure sales are at recommended levels.
FarmWeek Page 16 Monday, July 30, 2012
pERspEcTIvEs
2012 drought on verge of topping ’88 drought
I
July has been much drier at 1.1 inches, a deficit of 3.9 inches. To make matters worse, this July was much warmer with temperatures more than 6 degrees above normal while July 1988 was only 2.2 degrees above normal. It is very hard to recover from drought in the summer months. The recovery in 1988 did not begin until the fall when cooler temperatures and widespread rains began to recharge the soil moisture and replenish lakes and rivers. Even a return to timely rains and cooler temperatures in August will not undo much of the damage, but it could help some fields. In summary, the 1988 and 2012 droughts were comparable through the end of June. However, the preliminary numbers for July suggest this drought is now more severe than the 1988 event.
llinois and much of the Midwest are facing a major agricultural drought that rivals the 1988 drought in its
severity. While rare, drought is a major feature of the climate of Illinois. We define drought as an extended period of below-normal rainfall that leads to impacts on the environment and/or economy. Sounds vague JIM doesn’t it? ANGEL There is no universally accepted definition because: 1) drought is not a distinct event like a flood or blizzard, and 2) drought means different things to a homeowner, a farmer, or a water supply manager. Finally, the timing and duration of drought will determine who feels the impacts. In general, agriculture is most sensitive to short-term drought coupled with high temperatures during the growing season. On the other hand, most of our major water supplies only respond to droughts that continue into the winter and the next spring. In hindsight, our current drought probably began this winter. Precipitation amounts, both rain and snow, were below normal in January, February, and March. More importantly, temperatures were much above normal during that time, causing the soils to be unusually dry by the start of April. March temperatures were the warmest on record and averaged 14.5 degrees above normal, more typical of what you would expect in late April or early May. The shortterm benefit of the warm, dry weather was that field operations were not hampered by wet weather like we saw in the past three springs. The warmer and drier-than-normal conditions continued in April and May. While the state averaged 75 percent of normal precipitation during this period, the southern third of the state was much drier with amounts that were closer to 50 percent of normal. By the end of May, USDA’s National Agricultural Statistics Service had reported the top soil moisture in the state at 48 percent “short” and 15 percent “very short.” June was the turning point in the
Jim Angel is state climatologist with the Illinois State Water Survey at the Prairie Research Institute on the campus of the University of Illinois Urbana-Champaign.
Shriveled corn plants bake in the heat on Kevin Ulrich’s farm in Pulaski County. (Photo by Tammie Obermark, Pulaski-Alexander Farm Bureau manager)
growing season for much of Illinois. The statewide average precipitation was 1.8 inches, 2.3 inches below normal and the eighth driest June on record. Temperatures averaged 1 degree above normal, but the month finished out with temperatures in the upper 90s and low 100s just as the early corn was starting to pollinate. High temperatures and drought go hand in hand in Illinois. Many of our daily high temperature records across the state were set in the past droughts of 1934, 1936, 1954, and 1988. As the soil and the vegetation dry out, it is much easier to heat up the surface, causing temperatures to climb. Hot, dry weather continued in July with temperatures averaging about 6 degrees above normal. It could end up as the second warmest July on
record, just behind July 1936. Many sites in Illinois have reported highs in the low 100s on several occasions. While some areas in Northeastern and Southeastern Illinois have received rainfall of 1 to 3 inches, much of the state remains far below 1 inch. As a result, we are on track for possibly one of the driest months of July on record. It is interesting to compare this drought to the one in 1988. While the warm, dry weather started this year in January, the 1988 drought started later in April. By the end of June, the year-to-date precipitation deficit was 7.8 inches in 1988 and 7.3 inches in 2012. That makes the two droughts very similar through June. However, the precipitation in July 1988 was 2.6 inches, a 1.4 inch deficit. So far, this
‘In hindsight, our current drought probably began this winter.’
Institute home of state surveys The Prairie Research Institute is a multidisciplinary research institute charged with providing objective research, expertise, and data on the natural and cultural resources of Illinois. Established as a unit of the University of Illinois at Urbana-Champaign by the Illinois General Assembly in 2008, the Institute comprises the Illinois Natural History Survey, Illinois State Archaeological Survey, Illinois State Geological Survey, Illinois State Water Survey, and Illinois Sustainable Technology Center.
LETTER TO THE EDITOR Early CRP release won’t help all
Editor: I do not want to sound ungrateful, but release of CRP (Conservation Reserve Program) acres for haying and grazing in Piatt County will not help my cattle operation. Nearly all the conservation practices in Piatt
County are on the list of practices that prohibit haying and grazing. It is unfortunate these restrictions exist; I could have used the extra hay. The CRP on my farms are filter strips and grass terraces and these are on the no-haying list. SAM BRANDENBURG, Milmine
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