F FA M E M B E R S A N D ADVISORS at the state FFA convention said they continue to focus on far m safety lessons ...............................................3
USDA TRIMMED ITS estimate for winter wheat production by 1 percent as yield estimates were lowered in some key states....................................9
Monday, June 18, 2012
SIX CHICAGO-AREA ‘field moms’ learned about growing, marketing, and transporting soybeans when they toured a Roseville farm and agribusinesses ..........................12
Three sections Volume 40, No. 25
Senate farm bill laden with ag, unrelated amendments Call today BY MARTIN ROSS FarmWeek
Periodicals: Time Valued
The Senate this week faces the daunting task of weeding through hundreds of proposed farm bill amendments dealing with everything from crop insurance and federal renewable fuel mandates to “humane” livestock practices and even U.S.-Pakistani issues. Senate Majority Leader Harry Reid (D-Nevada) and Minority Leader Mitch McConnell (RKy.) are working to iron out procedures for paring that legislative avalanche down to a manageable, relevant Senate farm bill debate. The Senate adjourned Thursday with plans to resume talks this week. As of FarmWeek’s Friday deadline, a reported 283 amendments had been submitted for potential consideration. Those amendments “cover the waterfront,” Illinois Farm Bureau National Legislative Director Adam Nielsen noted: “For everything about the farm program, there’s an amendment to try to cripple it or kill it.” Whittling that down to a reported 30 to 40 approved amendments and setting floor time for debate is seen as vital to moving a final bill this session. House Ag Chairman
Frank Lucas (R-Okla.) reportedly plans to push approval of his committee’s farm draft only after the Senate takes action. American Farm Bureau Federation policy director Dale Moore said Friday he could not predict when debate over selected floor amendments could begin, though he cited hopes that “over the weekend, something could get sorted out.” With direct payments already slated for elimination, crop insurance has become a major target for farm support critics. An amendment sponsored by Senate Majority Whip Dick Durbin, a Springfield Democrat, and Tom Coburn (R-Okla.) would reduce the level of federal premium support for growers with an adjusted gross
income over $750,000 by 15 percentage points for all buy-up policies beyond catastrophic coverage. IFB President Philip Nelson called crop insurance “the number 1 priority for Illinois farmers” and an important consumer protection, as well. Utica grower and Illinois Agriculture Legislative Roundtable participant Justin Durdan said original Senate Ag Committee program/insurance proposals overall are “good for corn,” and is “concerned” by Durbin’s proposal. “We’re very concerned about (income) means testing for crop insurance,” Nelson said. “This, I think, would be a step in the wrong direction See Amendments, page 8
State pension reform elusive spring session goal BY KAY SHIPMAN FarmWeek
Discussion of state pension reforms continued as Gov. Pat Quinn and state legislative leaders met recently following the June 1 adjournment. No resolutions were offered publically, but it is expected that they will sometime this summer when the leaders craft a plan that could be voted upon. “This has been one of the most challenging legislative sessions given where the state is fiscally,” said Illinois Farm Bureau President Philip Nelson. “Illinois Farm Bureau has worked with the governor and the General Assembly for meaningful pension and Medicaid reforms.” Although legislation reforming the state’s pension system has not yet been passed, the General Assembly did pass reforms to the state’s Medicaid system, Nelson added. IFB also this spring: • Succeeded in preventing a vote in the Illinois Senate on a bill to remove the agricultural overtime exemption and increase the state’s minimum wage; • Secured passage of one of the organization’s legislative priorities, addressing misuse of slow-moving-vehicle (SMV) emblems. • Supported passage of changes to the Illinois Fertilizer Act that creates a new Nutrient Research and Education Council to manage nutrient research, education, and water quality efforts; • Supported passage of changes that would reorganize the Illinois Council on Food and Agricultural Research (C-FAR) and would put into place recommendations made several years ago by agricultural and commodity groups; and • Secured passage of legislation that addresses issues of thefts of recyclable metals and requires buyers of recyclable metals to keep certain records and prohibits the sale of certain metals and metal items. FarmWeek on the web: FarmWeekNow.com
Crop insurance protects farms of all sizes from weather-related disaster - something Illinois farmers have been reminded of this year, as they face a potential dry spell. Some already have experienced a late freeze. Illinois Farm Bureau is asking farmers through Wednesday to make two short calls to U.S. Sen. Dick Durbin, a Springfield Democrat, and Senator Mark Kirk, a Highland Park Republican, and respectfully state that they oppose crop insurance means testing. IFB also is asking members to tell the senators that “we need a farm bill” and that farmers do not need costly egg production mandates as some have proposed. Here are some points underlined by IFB: • Means testing is unacceptable. Durbin is offering an amendment that would reduce the premium subsidy for farmers with average annual adjusted gross incomes greater than $750,000. No other federally-sponsored insurance program is means-tested. Any policy that discourages participation by lower risk participants increases the risk pool for remaining participants and drives up premiums. • A five-year farm bill must be passed now. IFB supports the Senate Ag Committee proposal for its emphasis on crop insurance, revenue-based Agriculture Risk Coverage program, and deficit reduction goals ($23.6 billion in cuts over 10 years). Many farmers are mulling decisions for the 2013 crop year and beyond, and they need certainty with the current farm bill expiring at the end of September. • Animal production practices must not be legislated. Farm Bureau strongly opposes the Sen. Dianne Feinstein (D-Calif.) “egg amendment” which would legislate animal care standards. The amendment will drive up production costs and consumer egg prices and is opposed by both conventional and cage-free egg farmers in Illinois. IFB emphasizes calling both senators. While Kirk continues to rehabilitate and will not be voting on the bill this month, it’s possible final action on the farm bill won’t occur until the end of the year. Call Durbin at 202-224-2152 and Kirk at 202-224-2854.
ACTING AG DIRECTOR
Bob Flider, acting Illinois Agriculture Director, center, chats with Dave Loos, left, technology and business development director with the Illinois Corn Growers Association; and Craig Willis, vice president of ethanol sales with Archer Daniels Midland. Flider, Loos, Willis, and other members of the Illinois Agricultural Legislative Roundtable toured the Patriot Renewable Fuels plant in Annawan last week. Read Flider’s comments on page 3. (Photo by Kay Shipman)
Illinois Farm Bureau®on the web: www.ilfb.org
FarmWeek Page 2 Monday, June 18, 2012
IFB In actIon
Quick takes QUINN SIGNS MEDICAID REFORMS — Illinois will reduce its Medicaid bill by $2.7 billion after Gov. Pat Quinn signed a package of reforms last week. The five pieces of legislation target Medicaid fraud and abuses, include $1.6 billion in Medicaid spending reductions, and raises the cigarette tax by $1, resulting dollar-for-dollar federal matching funds. The new laws also provide new federal funding for hospitals. The state faced a potential of $21 billion in unpaid Medicaid bills by 2017 if no measures were taken. PRODUCE DISTRIBUTION FIRM OPENS — North Bay Produce Inc., last week opened a new refrigerated warehouse at MidAmerica Airport in Mascoutah. “North Bay’s decision to locate its global distribution facility at MidAmerica Airport reinforces the Metro East’s role as a key transportation hub to the world,” said Gov. Pat Quinn. “Our goal is to make Illinois the inland port of the nation.” The company’s expansion to MidAmerica Airport is a key step in its plans to open the Asian trade lane. The new $5.7 million, 36,448-square-foot facility can hold 1,317,600 pounds of product, which arrive from around the world. North Bay Produce is an international, growerowned fresh produce marketing and distribution cooperative, headquartered in Traverse City, Mich. ANTIBIOTIC ANXIETIES — American Farm Bureau Federation and a coalition of ag organizations sent a letter to Rep. Louise Slaughter (D-N.Y.) last week regarding her support for severely restricting antibiotic use in livestock and poultry production. The coalition cited several published, peerreviewed risk assessments showing any threat to human health from antibiotic use in livestock and poultry production is negligible. It pointed out many of the bacterial illnesses becoming resistant to antibiotics in human medicine have little or no link to antibiotic use in food animals. The coalition also noted that a stringent federal approval and regulatory process for antibiotics already is in place. In February, Slaughter asked food company representatives to submit their purchasing policies related to antibiotic use in food animals. Her Preservation of Antibiotics for Medical Treatment Act seeks to ban the use in livestock and poultry production of several classes of antibiotics employed for preventing and controlling diseases and for promoting nutritional efficiency.
(ISSN0197-6680) Vol. 40 No. 25
June 18, 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
Bob Gehrke, left, Illinois Farm Bureau District 1 director, discusses farming practices on his Kane County farm with Franz Winkler, a participant in the International 4-H Youth Exchange program, who was visiting from Austria. Gehrke and his wife, Beth, have traveled to other countries to meet with farm families and learn more about agriculture and ag markets. They also are regular hosts of international visitors on their farm. (Photo by Ken Kashian)
Gehrke enjoys travel opportunities BY DANIEL GRANT FarmWeek
Bob Gehrke, 54, and his family have enjoyed a lot of success in agriculture. They currently operate a third-generation farm in Elgin (Kane County). But Bob and his wife, Beth, believe they still can learn a lot from other farmers and they enjoy learning about different cultures. So, when they’re not busy producing crops on their farm, the Gehrkes often are on the go visiting new places and meeting new people. “The travel bug is in our family,” Gehrke said. “I like to explore other cultures.” Beth in 1979 went to Switzerland as part of the International 4-H Youth Exchange program and has kept in contact with four farm families there. The Gehrkes over the years have traveled to Switzerland at least a half dozen times and hosted many Swiss visitors on their Kane County farm. In fact, a Swiss couple who met on the Gehrkes’ farm later got married. Gehrke said one of his favorite parts of traveling is visiting with other farmers and learning how they run their operations. “Being in the ag business, I’m always looking for different things that could come our way,” said Gehrke, who observed technology in the hay business in Europe years before it arrived in the U.S. He also participated in the Illinois Farm Bureau Market Study Tour to China in 2009, and said that was an eye-opening experience for him. “I never realized all the different products we ship to China,” said Gehrke, who spoke with a Chinese dairy farmer who imports alfalfa from the U.S. “That’s a market (for alfalfa) I hadn’t thought about.” The Gehrkes’ son, Wayne, and daughter, Carolyn, also enjoy seeing new places. Bob noted that when he and Beth earlier this year were at the American Farm Bureau Federa-
tion annual meeting in Hawaii, Wayne and Carolyn were on separate University of Illinois study trips to Guatemala and Africa, respectively. Wayne currently is in the process of returning to the family farm as a fourth-generation, full-time farmer. Carolyn will have the same option. “I always told him (Wayne) if there were opportunities out there he liked, to go for it,” Gehrke said. “But I was hoping he’d come home and farm. It’s a hard-working life, but a good life.” The Gehrkes (Bob farms with his brother, Gordon) grow corn, soybeans, and wheat. They also have a 200-acre hay operation, which they plan to expand for Wayne, and they custom-harvest about 100 additional acres of hay. They entered the custom hay business due in part to a decision to exit the dairy business and strong demand for hay in their area. “Our market mostly is horse clientele in our area,” Gehrke said. “The hay is extra income coming in so we don’t have to rely on corn and soybean prices,” he continued. “And, we can set our hay prices. They’re not determined in Chicago.” The Gehrkes also market wheat straw. “Basically, we grow wheat for the straw,” he said. Bob and Beth got involved in IFB through the Young Farmers program, currently known as Young Leaders. Bob has served on the Kane County FB board for 18 years, including a stint as president from 2004 to 2010. This past December, Gehrke was elected the IFB District 1 director. He represents IFB members in Boone, DeKalb, Kane, Lake, and McHenry counties. Bob and Beth also serve on the board of St. John’s Lutheran Church in Sycamore and Bob is on the CONSERV FS board.
Page 3 Monday, June 18, 2012 FarmWeek
STATE
Fallout from state cuts causes search for ideas BY KAY SHIPMAN FarmWeek
Judd Hulting, center, Patriot Renewable Fuel commodities manager, discusses the ethanol plant’s operation in Annawan with Illinois Farm Bureau President Philip Nelson, front right, and other members of the Illinois Agricultural Legislative Roundtable. Last week Roundtable members toured the plant as part of a focus on renewable fuel issues. (Photo by Kay Shipman)
Ag Legislative Roundtable delves into the renewable fuels sector ture Director Bob Flider noted. He pointed The Illinois Agricultural Legislative out that agriculture is responsible for 25 Roundtable focused on the state’s renewpercent of jobs in Illinois. able fuels sector at its sumThe renewable fuels indusmer meeting last week in try also is assisting with Gov. Annawan. For the second year, the ‘ I t h i n k t h a t ’ s Pat Quinn’s goal to double Roundtable devoted a meets o m e t h i n g w e state exports by 2014. “I think that’s something we can ing and tour on an industry can a c h i e v e achieve because of agriculand this year was “the because of agri- ture,” Flider said. renewable fuel industry and Patriot exports dried disthe challenges,” Illinois Farm culture.’ tiller grains (DDGs) to Asian Bureau President Philip Nelmarkets and also exports son told Roundtable members. — Bob Flider ethanol, said Gene Griffith, Patriot president and chief The group was briefed on Acting Illinois executive officer. related regulatory issues Director of Agriculture Judd Hulting, Patriot’s before touring the Patriot commodities manager, said Renewable Fuels ethanol the plant’s DDG storage plant in Annawan. facility is a popular tour stop for importers The renewable fuels industry is imporfrom Japan and other Asian countries. — tant to the state’s economy and contributes Kay Shipman to ag-related jobs, acting Illinois Agricul-
The Illinois Department of Agriculture (IDOA) is grappling with losses of funding and expertise from potential early retirees. In such an environment, agency efficiency will be even more important to Bob Flider, acting Illinois Agriculture Director. “We would like to work with the agriculture community on ways we can run the department more efficiently,” Flider told members of the Illinois Agricultural Legislative Roundtable who met in Annawan last week. Once an employer of more than 800 people, IDOA is down to 350 employees and more are considering early retirement, Flider said. “Many (employees) are taking a wait-and-see attitude,” he told FarmWeek. The governor and top legislative leaders are expected to develop and propose a pension reform plan later this summer. “With every retirement there is a loss of expertise. That requires you to come up with a plan and make sure the gaps are being filled,” Flider added. At the same time, IDOA has grappled with budget cuts. The state has reduced general revenue funding (GRF) from $49 million in fiscal year 2008 to $29 million in fiscal year 2012. “That has forced the department to look at ways to operate more effectively and
Farm safety important lesson for FFA advisers, members DOL proposal not forgotten A Central Illinois teen driving a tractor knocked down a utility pole in the fall. Most importantly he didn’t leave the cab, but waited for help just as his FFA adviser and ag teacher said she had “preached to him.” “The first responders (to the accident) felt the ground was energized,” Betsy Pech, Hartsburg-Emden FFA adviser, told FarmWeek. Her student “did what he was instructed to do,” Pech said. Farm safety, especially for children and teens, has been in the national spotlight after the
Department of Labor (DOL) proposed, and later withdrew, controversial child labor guidelines that would have severely restricted farm work for youngsters. Illinois ag teachers and leaders have said DOL’s action should spur efforts to teach farm youth safety. A hands-on lesson about grain-bin entrapment was offered to FFA members last week by the Illinois Farm Service Agency (FSA) and Monsanto during the Illinois FFA State Convention in Springfield. At a simulated binentrapment demonstration, teens struggled, but weren’t able, to pull hard enough to free someone trapped in only three-feet of grain.
“This (demonstration) puts it in perspective for kids to see how dangerous it is,” said Dan Puccetti, FSA executive director in Montgomery County. At a trade show booth, Puccetti said he stressed bin safety rules, including the need to inform someone before entering a bin and to never go into a bin when an auger is running. Those rules weren’t new to Cole Baker, a HartsburgEmden FFA senior. “My dad preaches bin safety a lot,” Baker said. “We don’t go into a bin until we can see the floor.” Farm safety lessons include safe practices for working with welders, saws, and other tools, said Miles Allen, Illini-Central High School ag instructor and
FFA adviser. “I teach farm safety because I have a considerable number of kids who work and live on farms,” Allen said. Pech said her safety lessons start in the fall with tractor and combine safety and continue throughout the school year. She had discussed the DOL proposed guidelines with her students. One of Pech’s students, sophomore Zachary Bryan, said he didn’t like the proposed rules because he works on a family friend’s farm. Bryan said teens need experience to learn, but safety is critical. “If you’re going to work on a farm, you need to be safe,” Bryan said. — Kay Shipman
more efficiently ... Anything that depends on GRF is at risk of losing more funding in the future,” Flider said. The University of Illinois is struggling with its own loss of GRF dollars, added Terrance McLennand, U of I associate director of federal relations. In fiscal year 2002, the U of I received $805 million in GRF, but that was reduced to $650 million this year, he said. Cuts in state funding is leading IDOA and the U of I to search for new ideas and funding sources. Flider told ag leaders he is interested in their ideas to help IDOA be more efficient. He used as an example the successful legislative efforts of the fertilizer industry and agriculture community to change funding for fertilizer research and education. The U of I is working with other Midwestern states to propose a consortium for large-scale watershed research, McLennand said. The consortium would compete for federal USDA research funds. “There is a great need for a large regional database,” he said. The research would be used to develop best management practices that would be shared with farmers and communities through local Extension specialists, he explained. “This industry steps up and tries to resolve these problems,” Flider said.
Tuesday: • Ag Weather with Chesapeake Meteorology • Keith Brannan, VP, Financial Security Planning for Country Financial • Mike Doherty, IFB senior economist and policy analyst Wednesday: • Illinois Department of Agriculture • Jim Bower, Bower Trading • Brad Conant, Perry County Farm Bureau Manager Thursday: • Mark and Sherri Kannmacher, Illinois Soybean Association • Wendell Shauman, Chair, US Grains Council Friday: • Sara Wyant, AgriPulse • Julie Barreda and Pilar Clark, Field Moms from Chicago • Alan Jarand, RFD Radio Director
FarmWeek Page 4 Monday, June 18, 2012
energy
Biofuels CEO: ‘Don’t mess with the RFS’ BY MARTIN ROSS FarmWeek
When lawmakers and lobbyists “mess with the RFS,” they mess with farm income, job potential, and national security, according to Renewable Fuels Association CEO Bob Dinneen. During last week’s Illinois Agricultural Legislative Roundtable, Dinneen addressed concerns about continued opposition to the Renewable Fuels Standard (RFS2) and the progress of E15 (15 percent ethanol blends) to the pump. The RFS2 requires 36 billion gallons of annual U.S. biofuels use by 2022, through annual mandatory targets. Data collected to date indicates the RFS2 has been “an extraordinarily successful program” in building alternative fuel use, Dinneen argued. Since 2005, fuel imports have dropped 15 percent amid rising biofuels demand, and the ethanol sector to date has generated some 400,000 jobs, he said. Because RFS2-powered ethanol demand has
boosted corn prices and reduced grower need for farm support, “Congress can contemplate a much different farm bill than it could have 10 years ago.” He nonetheless reported “the assault on the Renewable Fuels Standard is in full force.” Dinneen sees an unprecedented “grip of Big Oil wrapped around Washington.” “There have been no less than five (Senate) amendments offered to repeal the Renewable Fuels Standard, even though it’s not a farm bill program,” he told FarmWeek. “You see it in the ‘working group’ that (Republican Sen. James) Inhofe from Oklahoma, a big oil state, wants to form to do a ‘seed-to-wheels’ analysis of ethanol. “OK, that’s great — let’s study ethanol. I think we can stand up to their scrutiny. But there’s no context. How about a ‘war-to-wheels’ analysis of oil? Because if we don’t have ethanol, if we don’t have renewable fuels, we’re just going to be increasing our
demand for more oil. And where’s that next marginal barrel going to come from? “Well, of course, it’s going to come from Canadian tar sand or from deeper wells in the Gulf, or other ‘dirtier’ forms of oil. How about we start taking a look at the consequences of not having an RFS?” Illinois Corn Marketing Board Executive Director Rod Weinzierl noted biofuels advocates are battling environmentalists, major oil interests, the national Grocery Manufacturers Association, livestock and poultry producers, and even ethanol critics within the conservative Tea Party. The oil industry “is not happy” with the market share biofuels have gained in recent years, Weinzierl argued, noting ethanol has accounted for nearly all “gasoline growth” in consumption since 2000-2001. Dinneen deemed RFS2 mandates crucial in ensuring fuel refiners continue to provide biofuel blends: “If we want to preserve the marketplace for ethanol, we’d better preserve
E15, exports, and engines: Ethanol prospects improving? Despite continued roadblocks to bringing E15 to the pumps and currently sagging U.S. ethanol exports, biofuels interests last week were optimistic about ultimately crashing the 10 percent ethanol “blend wall.” After facing “one regulatory barrier after another” to sale of 15 percent ethanol blends, National Renewable Fuels Association CEO Bob Dinneen suggested E15 finally is “all teed up” for potential retail sale. During the Illinois Agricultural Legislative Roundtable, Dinneen noted the need for E15 introduction to help the biofuels industry past demand limitations under a 10 percent ethanol cap in conventional gasoline. Countering charges the sector has overproduced corn-based fuel, he instead maintained “our demand is being artificially constrained.” Gene Griffith, president of Annawan-based Patriot Renewable Fuels, emphasized the importance of E15 in helping supplement a currently flagging export market that last year absorbed 1.2 billion gallons of U.S. ethanol (see page 3). “We’re producing approximately 14 billion gallons as an industry in North America,”
Griffith told FarmWeek. “The maximum blend rate at the present time is approximately 10 percent, which has been the historical blend rate since the early ‘70s. The petroleum industry’s now supplying approximately 131 billion gallons of gasoline for the motor vehicle market. We’re producing about 14 billion gallons for a market that will only absorb about 13 billion gallons. “E15 would increase the potential market something above the current 10 percent presently available to us. It won’t be 15 percent for a long time, because (retail E15 adoption is) a voluntary thing and there’s the matter of getting (E15 fuel) infrastructure in place. But it can increase the market — it can be a major help to us.” In addition to ethanolderived distillers dried grains for both the domestic livestock and export markets, Griffith Patriot’s corn oil extraction technology, which produces a potential feed/biodiesel coproduct, has proven “extremely important in a market that’s pretty tight at this moment.” In 2010 and early 2011, EPA approved use of E15 for U.S. vehicles produced after 2000. Dinneen suggested EPA since has attempted to pro-
mote the new blend while simultaneously throwing up added roadblocks to near-term retail sale. The latest is EPA’s scrutiny of the third of a gallon of residual fuel routinely remaining in a fuel dispensing hose following a fill-up and the potential impact of residual E15 blend on pre-2001 vehicles. New ethanol “blender pumps” offer consumers a choice of blends from E10 to E85, though they currently are intended mainly for flex-fuel E85 vehicles. “EPA has never, ever, in any other fuel regulation, been concerned about that third of a gallon,” Dinneen told FarmWeek. “One fill-up of 11.5 percent ethanol isn’t going to hurt anybody. But this is the level of regulatory scrutiny, the level of regulatory nonsense that EPA is having us jump through in order to get E15 commercialized.” He noted the difficulty of testing older vehicles “when they’re already beyond their useful life.” But Brazil has routinely approved use of E20 to E25 blends since the ‘70s, and he told Roundtable members older U.S. models “really are not any different from the vehicles being driven in Brazil.” — Martin Ross
the Renewable Fuel Standard.” Given “the odd set of partners” attacking the RFS2, RFS2 supporters must “reach out and bring more than just farmers to the table,” Weinzierl argued. Potential allies include fertilizer-chemical dealers, seed companies, equipment suppliers, rural banks that serve farms and small businesses, and rural school districts that have benefited from an ethanol-fueled increase in their tax base, he said. “In 2013, once we get past
the elections and (Congress’ lame duck session), we believe we will be really fighting a big defensive battle relative to others out there who want to eliminate or substantially change the Renewable Fuels Standard,” Weinzierl told Roundtable participants. “That is one reason we want the farm bill out of the way this year so that we are ready focus on one issue. That’s going to be to maintain the Renewable Fuels Standard.”
Above, Illinois Farm Bureau President Philip Nelson, left, and IFB livestock specialist Jim Fraley examine low-moisture distillers dried grains (DDGs) at the Patriot Renewable Fuels ethanol plant in Annawan. A tour of the plant capped last week’s Illinois Agricultural Legislative Roundtable meeting. Below, Patriot Commodities Manager Judd Hulting describes operations at Patriot’s DDG “energy center,” where natural gas is used to dry the co-product corn solids left after ethanol is produced. (Photos by Martin Ross)
Page 5 Monday, June 18, 2012 FarmWeek
energy
Aflatoxin threat to ethanol sector as well as livestock BY MARTIN ROSS FarmWeek
Aflatoxin is considered one of the most carcinogenic substances known to humans. It also can threaten livestock operations and kill corn sales and ethanol profits. For the first time, fungal “mycotoxin” control efforts shared the stage with new uses and cutting-edge product technologies at this year’s annual Corn Utilization and Technology Conference. Aflatoxins are produced by the fungi Aspergillus flavus and Aspergillus parasiticus. Because toxins can survive ethanol processing, they can impact the quality of ethanol-derived distillers dried grains (DDGs) as well as the safety of livestock-fed corn and acceptance of U.S. grain exports. National Corn Growers
Association Mycotoxin Task Force member Dan Cole noted successful use of clay binders –- Montmorillonite or bentonite clay treatments that lock up toxins in feed so they can pass harmlessly through an animal’s digestive system. However, the Plainville farmer emphasized “prevention is always, always the best.” Experts at the corn conference reviewed strategies for fighting fungal development, from corn genetics research aimed at building fungus resistance or reducing drought or insect pressures linked to fungal development to inoculation of fields with harmless fungi that edge out more toxic molds. “We’ve now found out that these fungi have first and second cousins that grow in the same environment that aren’t
Better biorefinery profits through better chemistry In the ethanol industry’s continued search for “cheap sugars,” cheap doesn’t mean dirty. Archer Daniels Midland Co. renewable research director Charles Abbas notes a variety of emerging technologies “extend what we can do with corn,” and, ultimately, with a variety of raw ag-based feedstocks. That includes a new chemical treatment developed by Iowa State University that can be used to remove soil-borne alkaline “earth salts” and heavy metals from biomass so that more sugars can be extracted and converted into additional fuel and high-value chemicals.
“Sequestering” the impurities from source material is crucial to ensuring “the right conversion,” Abbas argued. “The original idea was to take biomass and burn it,” he told FarmWeek. “This was what our ancestors did — that was then the best use of wood and wood products. “You’re beginning to see the beginning of dismantling biomass in a practical way, under controlled conditions, with the right chemistries, to achieve the right products. This gets us a bit closer to where we need to be in terms of achieving diversification from crops and crop residues that are out there in the field.” Iowa State’s Robert Brown is looking through his acid treatment technology to extract potentially sugar-rich “bio-oil” from the waste products of biomass heat treatment, or pyrolysis. Using the technology in what amounts to “a very hot pizza oven,” Brown has seen a “remarkable” bio-oil/sugar yield especially from red oak wood, though he also has explored corn stover and switchgrass potential. The scientist anticipates deriving a suite of value-added products, including fuel, industrial chemicals, heavy-duty de-icing compounds, and even “bio-asphalt.” “We paved part of a bicycle trail in Des Moines with this stuff,” Brown related. Purdue University’s Nathan Mosier meanwhile is working to develop specialized acids that mimic microbial enzymes used by many plants to convert sugars into ethanol but can withstand higher temperatures and significantly reduce product conversion time. By tweaking the formulation for each batch of biomass, “we can ‘dial in’ whatever products we want to make, and make them at higher yields,” Mosier said. — Martin Ross
toxic,” Cole told FarmWeek. “Some of those ‘new’ strains of Aspergillus are more aggressive, and if we can get those into the field first, they can out-compete (harmful strains).” “If we can keep aflatoxin from actually growing in the field, we don’t have to worry about it in storage; we don’t have to worry about it in the DDGs.” Aflatoxin is a serious global issue: Cole notes risks are especially significant in growing regions across Africa and Central America and in parts of South America and Asia. Those areas are seeing rising demand for animal protein, intensifying grain safety concerns, and food corn toxicity is linked to a high incidence of liver cancer in Africa. Texas Corn Growers has been particularly instrumental in guiding use of binders and studying other mycotoxin control strategies. Cotton seed is highly susceptible to mycotoxin development — cottonseed containing more than 20 parts per billion aflatoxin can’t be fed to dairy cows — and cotton growers have helped explore alternatives for fungal control. In fact, an Arizona cotton cooperative developed AF36, an effective fungal “inocu-
lant” treatment. A similar Syngenta peanut product, Afla-Guard, which uses a non-toxic strain of Aspergillus flavus was approved for corn use in 2009, but Cole said inoculation of Texas corn with the less costly AF36 to date has
the same shipment. At about $9 per acre, Ring thus deems AF36 an important added “insurance policy” for continued corn/DDG sales. “It will not eliminate aflatoxin, but it will lower the levels to a point where your product is usable and sell-
‘If we can keep aflatoxin from actually growing in the field, we don’t have to worry about it in storage; we don’t have to worry about it in the DDGs.’ — Dan Cole NCGA Mycotoxin Task Force
proven “very successful”. Because aflatoxin content can actually skyrocket in DDGs left after ethanol distillation, Mycotoxin Task Force vice chairman and Texas corn grower Charles Ring suggests using binders with the feed co-product. But binders can’t be used where aflatoxin levels exceed thresholds for feedlots or gestating animals or at all with export corn, where aflatoxin levels may differ sharply between samples taken from
able,” stressed Ring, an early AF36 user who chairs the Texas Corn Growers Research Committee. “That’s where we have to be. “I think this is going to require a combination of several different things — one thing alone is simply not going to cover it. We’re still working on breeding programs and the general health of the plant. But corn for South Texas is going to be different than corn for Illinois.”
FarmWeek Page 6 Monday, June 18, 2012
CROPWATCHERS Bernie Walsh, Durand, Winnebago County: The dry weeks are adding up, with lots of warm, dry weather again last week. We did luck out on Monday morning (June 11) and received 0.2 of an inch. Other than that, it has been more and more like desert weather, with very low humidity, almost no dew in the mornings, warm days, and cool nights. The corn on the thinner soils has started to roll in the afternoon, and the corn and beans on the better ground continue to look pretty good despite the lack of rain. The wheat is turning fast, but I think it still will be 10 days to two weeks before we combine it. Pete Tekampe, Grayslake, Lake County: Another hot, dry week in Lake County. No rain. Taller corn is really under stress with the plants “cupping” in the heat of the day. Most of the beans have germinated and look good considering the lack of moisture. Winter wheat is turning fast and should be ready by late this week. This is very early for us. Our hay wasn’t really good. Saw some beans go in after the hay was baled. They are calling for rain three of the next seven days. Hopefully, we will get at least a shower out of it. Leroy Getz, Savanna, Carroll County: Rain on June 11 of 0.3 of an inch brings the June total to half an inch. Early corn is doing OK. Some later fields are hurting from the dry weather. Fields with low organic matter and low fertility are showing the most stress. Some sidedressing has been applied, but most corn is now too big for that. Beans are looking better, but low population still exists. However, they do have the ability to compensate. Second-crop hay is not yielding well. Larry Hummel, Dixon, Lee County: Nothing measurable as far as rain goes for the month of June. Moving into the last half of the month with little reserves has everyone concerned. Corn crop for the next 30 days is going to need a fair amount of rain to get us in a position for an average crop. Corn prices on the board of trade have made a small bounce to the upside, but basis is where the excitement is. Basis for June delivery of corn is 60 cents over at some of the ethanol plants — close to 50 cents over our normal basis this time of year. If you think you could get some new crop harvested before the end of August — it’s at $1.15 over. That will pay for a lot of drying. But that is a big stretch for Northern Illinois to start that early.
Tim Green, Wyoming, Stark County: Another nice, dry week. The corn started rolling the first of last week, even when the temperatures were calm. We need some rain and need it soon. I don’t think our crop is hurt yet, but I think if we get hot weather many days in a row, it will take its toll pretty fast. A few beans are being sprayed right now. Otherwise, people are catching up with their odd jobs and hoping it rains. Mark Kerber, Chatsworth, Livingston County: Another dry week has gone by. We missed a key rain that tracked to the central and southern portions of Illinois last week. Corn is actually holding on with no moisture. Soybeans are growing very slowly. Soybean spraying has started, but many are waiting for another flush of weeds and taller soybeans. Markets are waiting to see if the Eastern Cornbelt receives rain this week. Ron Haase, Gilman, Iroquois County: Another dry week has passed by. We have been dry during the month of June and the 10-day forecast does not look promising for rainfall or cooler temperatures. So the crop stress will continue. Post-emergence herbicide application was the major activity in corn and soybean fields last week. Many farmers were trying to kill their big lambsquarters in their soybean fields. Corn development in the area ranges from the V3 growth stage up to the V10 growth stage. At V10, the corn plant begins a rapid, steady increase in nutrient and dry matter accumulation, and in water usage. If the weather continues, the stress on corn will continue to accelerate. Area soybean development ranges from the V1 growth stage up to the V4 growth stage. The local closing bids for June 14 were: nearby corn, $6.27; new-crop corn, $4.86; fall corn 2013, $4.81; nearby soybeans, $13.81; new-crop soybeans, $12.82 Brian Schaumburg, Chenoa, McLean County: High heat, low humidity, and dwindling soil moisture are stressing both plants and people. Another two weeks of this and things could get serious! Post-spraying of beans is continuing with higher rates and more additives to control weeds that are hardening off. Crop ratings are still good to excellent but could fall fast without rain. Basis for fall is tightening. Wheat harvest is starting in earnest. Corn, $6.47, fall, $5; soybeans, $13.80, fall, $12.90; wheat, $5.88.
Ken Reinhardt, Seaton, Mercer County: The area had 0.1 to 0.2 of an inch of rain early last week. The lack of moisture is on everyone’s mind. Japanese beetles are here and are becoming an annual problem. I drove up to Door County, Wisconsin Wednesday and saw some tough-looking corn throughout the state. Dry weather and cutworms have made for much replanting and spotty stands.
Steve Ayers, Champaign, Champaign County: It rains around here five minutes before it’s too late, and the countdown is down to three. Cornfields remind me of the pineapple fields of Costa Rica. Monday (June 11) at noon I was caught in a 0.2 of an inch downpour in Champaign and was soaked. I checked the rain gauge at the farm and there was a little mud slurry in the bottom. Then I dumped the gauge and two drops fell out. Looks like rain chances late this week with 90-degree temperatures.
Ron Moore, Roseville, Warren County: We did not receive any rain last week. The crops, hay, and pastures are now under extreme stress. The corn is rolling every day and the beans are not growing at all. We have only had about 1 inch of rain in the last five weeks. Several tile lines have quit running, and I am concerned about the streams in the pastures running dry in June. We are having to increase the herbicide rate on some fields of soybeans to get adequate control of weeds due to the dry conditions and rapid growth of weeds instead of the soybeans. The forecast is for rain this week so we will be watching the skies closely.
Wilfred Dittmer, Quincy, Adams County: Here we are again into yet another dry week with only a trace of rain in the northern parts of the county while southern areas received upwards of 1 inch or more. My gauge was a stretch at 0.35 of an inch. Corn has slowed its growth pattern with some close to tasseling and some in the far southern part of the county has tassels poking through. Sprayers have been going in the bean fields at a fairly steady pace. A little wheat has been cut but I have not heard any yield reports yet. The hay guys are working on a short secondcrop because of the drought. I’ve noticed a few Japanese beetles around the ornamentals.
Tom Ritter, Blue Mound, Macon County: A major front came through June 11 with the best opportunity we’ve had in weeks for rain that left us disappointed once again. A few isolated pockets received 0.5 to 1 inch of rain but the majority of the area was in the 0.2 to 1-inch range. Needless to say, that moisture was sucked up by the dry ground within an hour and we still remain extremely dry with no rains above 0.5 of an inch since mid-April. That, coupled with dry subsoil moisture from last year, sets us up for possibly an extremely poor crop, unless we have some timely rains. Overall, the corn has good color and is rooting deep. The farmers seem optimistic that if we get timely rains there is still a chance for possibly an average crop. Very little farmer activity going on. People are finishing up spraying soybeans, but for the most part, they are starting on their summer projects in preparation for fall harvest. Todd Easton, Charleston, Coles County: Another week has run its course for this growing season and unfortunately brought more of the same. The Monday (June 11) rains looked promising on the radar, but only put around 0.25 of an inch in the rain gauge, which is better than nothing. The crops liked it enough to grow a little more but are still showing the dry weather stress. Some of the best looking corn I have walked out in is at eye level and still has great potential if the rains come. Soybean fields are growing little by little and spraying of those fields is almost complete. Keep an eye out on sprayed fields as getting a good kill of persistent weeds in places has been difficult. It seems to be a combination of the dryness not letting weeds get the herbicide in their system properly and the height of some weeds that grew so fast sprayers couldn’t keep up. In the wheat fields, harvest is going pretty strong. Jimmy Ayers, New City, Sangamon County: We received 0.2 of an inch of rain last Monday (June 11). Apparently we were some of the lucky ones, as a lot of people didn’t receive anything. Ten or 15 miles south of us there was a band that went through that receive 1 to 1.5 inches, and up to 1.8 inches. Morrisonville was very fortunate this time. Corn looks pretty good and is still rolling. Beans are coming on. Still spraying beans. There is a lot of hay being put up. Everybody seems to be trying to get all of the bales they can, as dry as it is. Farmers are trying to cut wheat, but it’s a little bit wetter than most would like. Be sure and slow down at corners with the corn as tall as it is. This past week, we’ve seen the first tassels on corn that was planted on March 14 and 15. Pollination has begun. Looking at some 90-degree weather ahead of us. Doug Uphoff, Shelbyville, Shelby County: Dry, dry. Had 0.2 of an inch of rain last week. Oconee had 3.2 inches, but that was a small area. We had from 0.4 to nothing countywide. It’s serious now with pollination starting. We have 4 to 5 foot corn tasseling but the most important thing now is that we get some rain and to not stress the corn too much. We have cut our wheat and it yielded 77 bushels per acre on 20 acres and 71 on 35 acres. Trying to double-crop beans, but the ground is so hard that the planter only goes 0.5 of an inch deep in places. So much for getting wheat off early for higher yielding double-crop beans. Some are still waiting to cut wheat as it is still too wet. We are spraying beans and baling straw and hay this week. I haven’t mowed the yard for two weeks because it is so dry. There are bean fields where volunteer corn and other weeds are dying, but waterhemp is still flourishing. We increased Roundup rates but didn’t cut them in half. I have one field I put normal rate on and didn’t kill a thing. We put Envive down ahead of soybean emergence to help with waterhemp, but may have to mix something with Roundup to finish them off.
Page 7 Monday, June 18, 2012 FarmWeek
CROPWATCHERS David Schaal, St. Peter, Fayette County: We received some much needed rain last Monday (June 11). Totals varied across the area from a few tenths to more than 1.5 inches. I had about 0.8 of an inch in my gauge. It sure freshened things up at least for a few days. Wheat harvest is complete and double-crop beans are planted. For the most part crops look decent but still would not turn away any rain. Japanese beetles have showed up this week, but no other pest problems at this point. A lot of soybean spraying occurred this week. Farmers are trying to kill weeds at a small stage before they get too big and are not able to control them. Have a safe week. Jeff Guilander, Jerseyville, Jersey County: Early last week we got some much needed relief with most areas getting between 0.5 and 1 inch of rain. It is not going to save the crop but definitely bought us some time. The first corn is just starting pollination and still looks far superior to corn planted five days later. I realized the later-corn should reach pollination by July 4, which is average for this area, it’s just the contrast that is amazing. Beans on the lighter soil are still struggling, but with the date and progress of the darker soils a lot of beans are being sprayed. Wheat harvest is essentially wrapped up and turned out fine for quality and yield but no one was overly impressed. All in all, just a little more optimism than last week. Let’s hope we can keep building on that.
Dave Hankammer, Millstadt, St. Clair County: Monday, June 11, the area was blessed with rain. Rainfall varied from 0.4 of an inch to 1.5 inches in the county. It was a welcomed weather event, which refreshed the growing crops on the farm. Temperatures were mild with lows in the upper-50s to highs in the mid-80s. Corn planted in late March has started to tassel. The corn crop in all fields seemed to have jumped in height. The rain also has given us an opportunity to replant corn on some slopes which had a poor stand. The seed in these areas germinated but couldn’t survive or develop due to the lack of moisture. The early-planted soybeans have gotten off to a good start and continue to develop well. However, some of the fields planted in the later part of May have an uneven stand with many of the slopes looking bare. After inspecting a field several days after the rain, the seed in these areas has germinated and is pushing toward the surface. Hopefully, there will be enough plant population emerge to keep the field. The majority of the wheat was harvested before the rain. With renewed soil moisture many of the farmers in the area are quickly planting soybeans and grain sorghum in the wheat stubble. Locally grown sweet corn and peaches hit the roadside stands. One peach grower has claimed this is the earliest harvest in memory. Local grain bids are corn, $6.31; soybeans, $13.92; wheat $6.06. Have a great week.
Dan Meinhart, Montrose, Jasper County: Showers moved through the area last Monday (June 11). Most people received little or no rain. Isolated areas got up to 1 inch. Temperatures climbed all week. Wheat harvest is wrapped up with some doublecrop beans being planted. Wheat straw and hay baling is in progress. Post-emerge chemicals continue to be applied. There is a slight chance of rain over the weekend with no other precipitation in the forecast. A good general rain would be most welcome.
Rick Corners, Centralia, Jefferson County: Well, the manna from Heaven came June 11. Although it was only 0.6 of an inch of rain, it was very welcome. Tuesday, things looked pretty good, but now we are back to twisted corn. Some of the beans came up in the bare spots where they have been lying for a month in dry dirt. We are going to need a good ground soaker soon or the corn will be hurt beyond repair. I’m hearing in places that the very early corn is about shot.
Kevin Raber, Browns, Wabash County: No rainfall last week. The crops are very stressed during the middle of the day. I don’t think the corn or soybeans are growing much. They are just trying to survive. The double-crop beans that were planted are still lying in dry dirt. Randy Anderson, Galatia, Saline County The only way to describe this report in words that can be printed is a train wreck! There is not much hope for the corn crop and the beans are not far behind. There were some spots that got anywhere from a few tenths to almost 1 inch June 11, but that was just a teaser. This is the worst I have ever seen. At this point, I feel there are some fields that will not need a combine this fall. Ken Taake, Ullin, Pulaski County: Dry continues to be the main story here in deep southern Illinois. Although we did have some thunderstorms move through the area on June 11, they were very spotty. Rainfall totals that I have heard ranged anywhere from 0.2 of an inch up to 1.5 inches. Here on our farm, we received about 0.5 of an inch. It was gone by Wednesday. By Thursday, the corn was already starting to roll again. The drought situation is getting very serious. The early corn is trying to shoot tassels. I don’t know what’s going to happen to it under all of this stress. There is no rain in the near forecast. This is just turning into a stressful year to say the least. Weeds, of course, continue to grow. The main activity right now seems to be trying to spray some soybeans. Please take time to be careful during this week. Reports received Friday morning. Expanded crop and weather information available at FarmWeekNow.com
Drought concerns? Large crops still forecast — for now BY DANIEL GRANT FarmWeek
USDA last week did not change its estimates for corn a n d s oy b e a n p r o d u c t i o n despite the fact drought and dryness concerns have spread in recent weeks. National average yield estimates last week were left unchanged from a month ago at 166 bushels per acre for corn and 43.9 bushels per acre for corn. If realized, production this year would total a record 14.7 billion bushels for corn and 3.2 billion bushels for beans. “The fact that production was left unchanged for corn and soybeans maybe was a little bearish,” Brian Hoops, President of Midwest Market Solutions, said during a teleconference hosted by the Minneapolis Grain Exchange. Hoops noted the latest crop production estimates, released in USDA’s monthly world ag supply and demand report, were based on June 1 conditions. “The estimates don’t take into account the last two weeks of declining crop ratings,” Hoops said. “I’d expect a small reduction in yields based on dryness.”
National corn condition ratings the past two weeks declined from 72 percent good to excellent, 23 percent fair, and 5 percent poor or very poor on May 29 to 66 percent good to excellent, 26 percent fair, and 8 percent poor or very poor last week (June 11). “There is some stress on the plants and it is dry,” said Dale Durchholz, AgriVisor senior market analyst. “But, in the midst of it all, the corn crop looks OK as a whole.” Durchholz believes crop conditions and the markets are near a tipping point. “When you look at corn right now, either the yield is going to go down or the price is going to go down,” he said.
Since USDA last week projected a large yield, it also projected a lower price range ($4.20 to $5 per bushel) this year for corn compared to
last year ($5.95 to $6.25). Soybean prices were projected to average between $12 and $14 per bushel, unchanged from last month’s
estimate, while the average wheat price was raised a dime t o $ 5 . 6 0 t o $ 6 . 8 0 , w h i ch wo u l d b e we l l b e l ow l a s t year’s average of $7.25. The situation could change next week when USDA will release is grain stocks and crop acreage estimates. “T he June 29 re por t is looming as a large report for the grain markets,” Durchholz said. The only major changes USDA made last week to supply and demand estimates is it lowered corn exports 50 million bushels, corn used for ethanol was raised 50 million bushels, and ending stocks for soybeans were lowered 5 million bushels to a cozy 140 million bushels.
Biodiesel advertising campaign hits jobs, energy needs It’s loud, fast, and thrilling, and it’s more than a concept. Biodiesel is America’s only advanced biofuel available nationwide. It’s the fast track to American jobs — the road to energy independence. That’s according to the U.S. biodiesel industry’s newly launched ad campaign. “A billion gallons — that’s how much imported diesel biodiesel replaced last year,” said Joe Jobe, CEO of the National Biodiesel Board (NBB). “This is not just an idea. Biodiesel is working today to
meet renewable fuel demands, and we can do more.” The ad campaign is the second time the industry has taken to the airwaves, television screens, web, and print outlets. Ads center around land speed record holder Brent Hajek, an Oklahoma soybean farmer who shattered the previous record in a stock Ford SuperDuty diesel truck running on 20 percent biodiesel. T he multi-million dollar project includes national television and web
advertising, and regional print and radio advertising. Two 30-second spots will air across the nation on Sunday-morning network news public affairs shows; the first aired over the weekend. NBB worked with PCI Communications, a leading provider of creative communications services for Fortune 500 corporations, national associations, and federal agencies, to create the campaign. The ad is available at {www.AmericasAdvancedBiofuel.com}.
FarmWeek Page 8 Monday, June 18, 2012
risk management
Timely replant decisions, reporting critical BY MARTIN ROSS FarmWeek
Illinois growers forced to consider replanting soybeans must act quickly but prudently to ensure their “new” crop remains protected, according to Country Financial Services crop claims supervisor Steve Worthington. If a new crop is irretrievably damaged prior to that crop’s final plant date and it is practical to replant, the grower must replant it to maintain insurance coverage and receive a replant payment to cover reseeding costs. The grower may also need to replant after the final plant date and should consult the adjuster if they are faced with that circumstance. In Northern Illinois, the final soybean plant
date was June 15; Wednesday is the final plant date for Southern Illinois growers. As of last week, Country had received more than 980 corn and soybean replant claims, most from growers south of a line through Springfield. Losses in original crops reportedly resulted largely from excess moisture or a lack of moisture necessary to the survival of germinating plants. “We’ve had a lot worse years as far as replants are concerned,” Worthington told FarmWeek. A grower is expected to file a replant claim as soon as they discover the damage and prior to destroying the damaged crop. Insurer consent is required before the claimant can destroy the damaged crop and plant new seed. Worthington reported a claims adjustor will
respond “as soon as possible” after the grower reports the claim to inspect the affected field, though Country can authorize a replant over the phone in many cases involving fewer than 50 acres per insured unit. “We need to inspect the field or give verbal consent before they tear the plot up,” Worthington emphasized. “If they destroy the original crop before consent, we cannot approve the replant payment. “Also, it has to still be practical for the grower to replant. There’s going to be a time when it’s going to be so late that it’s probably not practical to replant. If the crop is damaged at that point, then that changes to a production claim,” he said.
U of I urges farm bill flexibility for water, risk efforts The next farm bill could play a key role in targeting voluntary “best practices” for both ag water quality and farm risk management, according to Terrance McLennand, U of I associate director of federal relations. At last week’s Illinois Ag Legislative Roundtable, McLennand stressed the value of a flexible, solidly funded farm research title in fostering regional partnerships in a variety of areas. He underlined the importance of farm bill resources for “critical conservation areas,” focusing on surface and ground water management. To date, USDA-backed initiatives have been largely localized in small or mid-sized watersheds, he said. Midwest farmers are concerned about the U.S. Envi-
ronmental Protection Agency imposing nutrient management-water quality standards, similar to those being imposed in the eastern Chesapeake Bay, in the Mississippi River Basin. McLennand and Co. see the merit instead of a “consortium-based” approach that helps equip communities to implement truly effective, cost-efficient stewardship strategies. “What we’ve proposed, in conjunction with other land grants in Iowa, Missouri, Ohio, Wisconsin, and Minnesota, is looking at a ‘great rivers’ or a large watershed database — a much larger base of research data collection,” McLennand told FarmWeek. “We then use that data to create best practices that could be shared with communities on a voluntary basis. Commu-
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Certain sectors of agriculture are labor intensive and rely heavily on immigrant workers. What is a fair and balanced immigration policy?
How should Farm Bureau help prepare its members-both young and old--for transferring operations to the next generation of farmers and ranchers? What is Farm Bureau’s role in encouraging more transfers?
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nities, agricultural areas, and farmers could utilize practices which fit their needs and local circumstances.” Lawmakers could help foster that approach by broadening USDA grant programs and grant eligibility criteria to include regional consortia, he said. A similar approach could be applied — with farm bill support — to farm risk manage-
ment strategies, McLennand suggested. He argues USDA support could enable farmers faced with farm program cutbacks to better tap into U of I’s “recognized expertise in ag economics and ag finance” and relationships with Chicago commodity exchanges. Development of centralized, diverse risk management practices could help crop sec-
tors and the communities they support “remain profitable and viable and sustainable.” Following discussions with congressional staffers — including representatives of Illinois’ three House Ag Committee members — McLennand noted “broad-based support” for the proposal in both the House and Senate. — Martin Ross
coping with growing environmental “requirements and expectations.” Also at issue are proposals to set federal egg production standards based on Humane Society of the U.S.-United Egg Producers recommendations — standards that some fear could set the stage for future swine production rules. Kaitschuk questioned “the point” of statutory poultry/livestock animal welfare standards when major food service providers and restaurants already are setting marketbased expectations for their egg and pork suppliers. “Those marketing decisions that are being made today may change tomorrow,” he told FarmWeek. “But if you have specific, dedicated legislative language, you’re scripted until you change that legislative language. How you manage (animal) systems works differently for different people.” Bob Dinneen, CEO of the national Renewable Fuels Asso-
ciation, has been closely watching ag policy development because of the joint impact of the farm bill energy title on biofuels producers and farmers and proposed amendments to hobble the federal Renewable Fuels Standard. Dinneen acknowledged early expectations that farm bill energy funding “would not be that robust.” However, he noted existing farm bill energy programs currently under fire are important to launching production of new energy crops and regional processing of new crops and crop residues. “Unfortunately, they’re also programs that appear to be on the chopping block, because Congress is in a mood to slash programs that might increase the production and use of renewable fuels while at the same time fighting to protect programs that provide assistance to oil,” he told FarmWeek. “It’s like the town (Washington) is turned upsidedown.”
Amendments Continued from page 1 going forward — we’ve never said there should be a certain size of farm that would fall under these types of categories. “Crop insurance is there to manage risk from a farmer perspective as well as a consumer perspective. We try to be as efficient and productive as we can be. That benefits the consumer, from the standpoint of letting producers manage more risk that’s dealt their way due to certain events they cannot control.” Coburn also has submitted proposals to cut USDA Market Access Program funding by 20 percent and Rural Development spending by $1 billion and eliminate the existing Environmental Quality Incentives Program (EQIP). EQIP is a major priority for groups including the Illinois Pork Producers Association (IPPA) and Illinois Beef Association. IPPA’s Jim Kaitschuk argued livestock-targeted EQIP funding is important to farmers
Auction Calendar
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Tues., June 19. 7 p.m. 80 Ac. Farmland. Virginia Lewis, CISNE, IL. Carson Auction Realty & Appraisal Co. www.carsonauctionandrealty.com Tues., June 19. 5:30 p.m. Crawford Co. Farmland Auc. Charles and Sarah Clark, HUTSONVILLE, IL. Parrott Real Estate & Auction Co., Inc. www.parrottauctions.com Thurs., June 21. 10 a.m. Douglas Co. Real Estate. HINDSBORO, IL. Stanfield Auction Co. www.stanfieldauction.com Fri., June 22. 10 a.m. Winnebago Co. Land Auc. Hertz Farm Mgmt. www.hfmgt.com Sat., June 23. 9 a.m. Consignment Auction. Sandwich Early Day Eng. Club., SANDWICH, IL. Wegener Auctions. Thurs., June 28. 10 a.m. McHenry Co. Land Auctions. MARENGO, IL. Farmers National Company. www.farmersnational.com Wed., June 27. 10 a.m. Logan Co. Land Auction. Owen Beaver, LINCOLN, IL. Mike Maske Auction Service. www.maskeauction.com
Wed., June 27. 6 p.m. Cumberland Co. Real Estate. Maria Smith Est., TOLEDO, IL. Stanfield Auction Co. www.stanfieldauction.com Thurs., June 28. 10 a.m. McHenry Co. Land Auctions. MARENGO, IL. Farmers National Co. www.farmersnational.com Thurs., June 28. 10 a.m. Farm machinery auction. T. Mark Forden Estate, MACOMB, IL. Wm. Beck Auction & Realty. www.williambeckauctions.com Sat., June 30. 10 a.m. Trucks, Trailers, Grain Handling, Shop Eq. and Tools. Iverson Bins & Millwright, Inc., FLANAGAN, IL. Bradleys’ and Immke Auction Service. www.bradleyauctionsinc.com Sat., June 30. 6 p.m. Perry Co. Land Auc. Sprague Land Co. & John and Heather Wilmesher, OKAWVILLE, IL. Sullivan Auctioneers. www.sullivanauctioneers.com Sat., June 30. 9:30 a.m. Antique Tractor and Eq. Auc. BROWNTOWN, WI. Powers Auction Service. www.powersauction.com
Page 9 Monday, June 18, 2012 FarmWeek
Production
USDA trims wheat estimate; harvest in high gear BY DANIEL GRANT FarmWeek
USDA last week trimmed its estimate for winter wheat production by 1 percent as yield estimates were lowered
in some key states. Winter wheat production currently is projected to total 1.68 billion bushels. The national yield was projected to average 47.3 bushels per
acre, down three-tenths of a bushel from the previous estimate. In Illinois, the 2012 crop was projected to average 61 bushels per acre, down one
Open markets during USDA reports could create ‘needless volatility’ USDA accepting public comments Last week marked the first time in recent history the grain markets were open during the release of a USDA crop report. USDA on Tuesday released its crop production report and world agricultural supply and demand estimates. Trading pits in Chicago and electronic trading were open at the time. “It was a unique situation to have the pits and electronic trade both open (during the release of a USDA crop report),” Brian Hoops, president of Midwest Market Solutions, said during a teleconference hosted by the Minneapolis Grain Exchange. “It resulted in a very broad trading range for corn.” December corn futures on Tuesday morning jumped to a high of $5.32 per bushel at 7:30 a.m. and then slipped to $5.17 three minutes later. “You had a lot of volatility when it (the USDA crop report) was released,” said Dale Durchholz, AgriVisor senior market analyst, who added that last week’s report wasn’t a true test of the new system due to the fact USDA
‘What happens if we get numbers like in March where one is bullish and one is bearish?’ — Dale Durchholz AgriVisor senior market analyst
left its corn and soybean crop estimates unchanged. “What happens if we get numbers like in March where one is bullish and one is bearish,” he continued. “You could get a 40 to 50-cent trade range.” USDA currently is reviewing the release times and procedures for several of its major statistical reports due to changes in market hours by major commodity exchanges. The Ag Department is accepting public comments about report release times through July 9. Public comments may be submitted online at {http://www.agcounts. usda.gov/optin/136771.} Durchholz was blunt about his opinion concerning open trading during the release of USDA crop reports. “I don’t like it,” he said. “There are so many numbers from USDA, it’s hard to
SIU plans Belleville field day Weed research and best management practices are among the topics slated for Southern Illinois University (SIU) College of Agricultural Sciences’ Belleville Field Day on July 12. The 46th annual event will start at 8 a.m. at the Belleville Research Center, located on Ill. 161 south of Scott Air Force Base’s Mascoutah Gate. One focus will be the extent and severity of weed and disease problems that exist in the area and how those problems may be managed. The event will start with an introduction by the newly named dean of the College of Agricultural Sciences, Mickey Latour. Latour, who will start his new post on July 1, comes to SIU from Purdue University’s College of Agriculture. He also served as associate dean for Purdue Extended Campus and chief director of Purdue University Distance Learning. The morning program of presentations will be from 9 a.m. to noon. Topics include: optimizing corn planting and nitrogen rates, the status of herbicide-resistant weeds, soybean and corn diseases, crop marketing, spray drift regulation, and cover crop research. After lunch, the afternoon program will be from 1 to 3 p.m. with information about opportunities for hands-on training of best management practices in herbicide applications. Throughout the day, several college departments and the Illinois Soybean Association, will provide information in an exhibit area.
assimilate all the major points on the fly, especially if there’s a surprise. “It creates a lot of needless volatility,” he added. The first real test of the situation could occur later this month, June 29, when USDA will release its grain stocks and acreage reports.— Daniel Grant
bushel from the May forecast. USDA last week also lowered world wheat production, with a decline of 111 million bushels projected in Russia. U.S. wheat exports and prices subsequently were raised by the ag department. “Wheat may be the most friendly on the balance sheet (compared to corn and beans),” Brian Hoops, market analyst with Midwest Market Solutions, said last week during a teleconference hosted by the Minneapolis Grain Exchange. “World (wheat) supplies could fall in subsequent reports,” he continued. “It could result in higher U.S. exports.” USDA bumped up its projected 2012-13 price range for wheat by a dime to $5.60 to $6.80 per bushel, which still would be well below last year’s season-average price of $7.25. Season average prices for corn ($4.20 to $5) and beans ($12 to $14) were left unchanged.
Harvest in Illinois should be timely as farmers are getting in the fields early. Illinois farmers also have 135,000 fewer wheat acres to harvest this year (a total of 630,000) compared to last year. “Winter wheat harvest is in full swing with 53 percent of the crop harvested compared to only one percent normally for this time period,” the National Agricultural Statistics Service Illinois field office noted last week. Last week 74 percent of the wheat crop was ripe compared to the five-year average of 11 percent. Many farmers so far have been pleased or at least satisfied with wheat yields and quality. “Wheat harvest is winding down and most of the area farmers that I’ve talked to are pleased with their yields this year,” said Ken Taake, a FarmWeek Cropwatcher from Pulaski County.
FarmWeek Page 10 Monday, June 18, 2012
trade
NPPC leader: Pork industry Russia PNTR debate dependent on free, fair trade important, complicated BY DANIEL GRANT FarmWeek
Access to key markets around the world likely will be even more critical to determine profit margins for U.S. pork producers in the future, according to R.C. Hunt, president of the National Pork Producers Council. Pork production is projected to grow nationwide at a pace that should continue to eclipse domestic consumption. “Personal, disposable income is flat (in the U.S.),” said Steve Meyer, president of Paragon Economics. “Meanwhile, retail (pork) prices are still close to record highs.” U.S. hog farmers have been increasing litter sizes at a clip of about 2 percent per year for the past four years. Farmers also have added 1 percent more breeding sows so far this year and higher finishing weights have added to the pork supply. The production and con-
sumption trends suggest U.S. pork producers could become more reliant on export sales to remain profitable. “The future of the U.S. pork industry depends on free and fair trade,” Hunt said this month at the World Pork Expo in Des Moines. Pork producers last year exported a record $6.1 billion worth of U.S. pork, which accounted for 27 percent of domestic production. The foreign pork sales last year added about $56 to the value of each hog in the U.S., according to Hunt. U.S. pork exports the first four months of this year increased 6 percent in volume and 16 percent in value, the U.S. Meat Export Federation reported. “The first quarter was excellent,” Hunt said. “But I don’t know if we can meet (last year’s record exports).” April pork exports to Japan were down 6.2 percent while exports to South Korea the first
quarter declined 31 percent. Meyer said the buildup of domestic swine herds in South Korea and China, the rising value of the U.S. dollar, and a recession in the European Union could slow U.S. pork exports the rest of this year. Hunt remains optimistic, though, about the long-term potential of U.S. pork exports. He said there is great market potential in Vietnam and Russia if the U.S. can overcome technical barriers in each market. He said Russia’s entry into the World Trade Organization presents an opportunity to negotiate a binding, bilateral trade agreement. “As foreign markets grow, it’s increasingly important we have free and fair trade,” Hunt said. “We must demand a fair and level playing field.” The implementation of free trade agreements with Colombia, Panama, and South Korea is expected to generate an additional $770 million in pork exports each year, he added.
BY MARTIN ROSS FarmWeek
Nothing’s ever really simple with Russia, whether it concerns politics, diplomacy, or trade. But one thing appears basic to American Farm Bureau Federation trade specialist Dave Salmonsen: Congressional approval for permanent normal trade relations (PNTR) with Russia is a win-only proposition for U.S. farmers. Last week, the American Soybean Association (ASA) hailed Senate introduction of a bipartisan measure authorizing President Barack Obama to establish normalized relations with Russia. ASA argues PNTR would help the U.S. capitalize on market-opening commitments under Russia’s forthcoming World Trade Organization (WTO) membership. Russia is a leading export market for U.S. soy, meat, poultry, egg, and dairy products, importing more than $770 million of those goods in 2011. Russia’s 2011 invitation into the WTO is a strong point in favor of PNTR approval, ‘ When you talk about Salmonsen told R u s s i a , y o u ’r e n eve r FarmWeek. The former Soviet cortalking about any one nerstone likely will thing.’ be a full member by August, once Russia’s Parliament — Dave Salmonsen signs off, he sugAmerican Farm Bureau Federation gested. Like China, which joined the WTO in 2001, Russia has proven a regularly difficult trading partner, falling back on what U.S. and other marketers deem scientifically suspect protectionist import barriers. And what may be more to the point, U.S. refusal to grant normal trade status to Russia could place U.S. farmers and businesses at a competitive disadvantage to other WTO member countries. Salmonsen said Russia bears the burden of trade compliance under WTO accession, noting “we don’t change (an import) tariff line or do anything differently.” However, also like China, Russia’s formal entry into the global trade community carries heavy sociopolitical baggage. “Nobody really disputes the idea that in order to take advantage of (Russia’s accession), we need to be in on it,” Salmonsen said. “But when you talk about Russia, you’re never talking about any one thing. You’re talking about a lot of things — foreign policy, human rights, all the other issues. “People want to talk about those issues. There are human rights concerns, and there’s some human rights concerns and another piece of legislation that likely could go along with that. While extending permanent normal trade relations to Russia is a legally simple thing to do in a very short bill, because it’s with Russia, it’s a much more complicated bill.” Russia’s economy relies predominantly on mineral, oil, and gas exports, “and when those prices stay good, they have money,” Salmonsen said. He reported beef markets are looking solid, and U.S. poultry exports to Russia are seeing “a good climb back up.” China continues to pose trade challenges, but Salmonsen nonetheless sees China making subtle, long-term progress in trade policies and market access. WTO membership is unlikely to quickly resolve U.S.-Russian trade issues, especially regarding pork, beef, and poultry (see accompanying story), but Salmonsen believes the WTO dispute process and global pressures will help deter Russia’s “habit of shutting down the market once in a while when it suits them.” The WTO provides the U.S. a “pure trade forum,” with disputes free of bilateral politics “and all this other baggage,” he noted. In 2010, a Washington summit between President Obama and Russian President Dmitry Medvedev was necessary to reopen the Russian market to U.S. poultry. “We really don’t want ag trade to be dealt with by presidents,” Salmonsen emphasized.
Page 11 Monday, June 18, 2012 FarmWeek
ARoUNd IllINoIS
GrassRoots Issue Teams study challenges, issues BY KAY SHIPMAN FarmWeek
The Illinois Farm Bureau GrassRoots Issue Teams (GRITs) recently completed their work and development of recommendations for consideration by the Illinois Farm Bureau board. Some of the recommendations also will be forwarded to the 2012 Resolutions Committee for its consideration in July. The Risk Management and Farm Programs Team recommended policy proposals related to crop insurance and the new farm bill. The Renewable Resources and Energy Team also recommended policy proposals for the new farm bill. The Rural Life Team focused on the needs of young people in rural areas. Policy was recommended to maintain agricultural education components in University of Illinois Extension programs and to
provide better opportunities for hands-on experiences for college students studying agricultural education. After hearing presentations about the latest information on cover crops, the Conservation and Natural Resources Team supported distribution of cover crop information as a voluntary best management practice. The team learned the Natural Resources Conservation Service supports use of cover crops through voluntary environmental programs and incentives. The Livestock and Dairy Team recommended policy proposals related to an animal disease traceability program. More than 100 Farm Bureau leaders served on this year’s teams that included Conservation and Natural Resources, Crop Production and Trade, Equine, Livestock and Dairy, Renewable Resources and Energy, Risk Management and Farm Programs, Rural Life, and Specialty Crops and Labor. The eight teams provided members the opportunity to address emerging policy issues affecting agriculture.
Illinois crop adviser wins honor Allendale has not posted a sign denoting an internationally recognized resident, but the Wabash County community could. Mike Wilson, a crop advisor with Wabash Valley Service Co., recently was notified that he will receive the International Certified Crop Adviser Award during the international meeting of the American Society of Agronomy, the Crop Science Society of American, and the Soil Mike Wilson Science Society of America. In December at the Illinois Farm Bureau annual meeting, Wilson was presented the Illinois Certified Crop Adviser Award and nominated for the international award. Both awards are well deserved, according to two local farmers. Wilson “has a lot of common sense and he is good with people,” said Daniel Harms, a Bone Gap farmer. Wilson “wants to better agriculture. With FS, he gives non-biased advice. I trust his judgment very much,” added Tom Marks, a West Salem
farmer who recommended Wilson for the awards. “He doesn’t mind giving up his time to be an Agriculture in the Classroom board member and give his ideas — not for his own glory. He wants to help others, especially kids, do well,” Marks continued. Wilson is well known for his volunteer efforts in Wabash and Edwards counties, said Rebecca Perry, Edwards County Farm Bureau manager. The county Farm Bureau had nominated Wilson for the state award. “When it comes to helping kids and supporting agriculture, Mike is one of the best I’ve ever met. He encourages his employees to be involved in community service and Farm Bureau,” Perry said. Wilson advises farmers in a 10-county area in Southern Illinois and has 32 years of crop advising experience, 17 years as a certified crop adviser. He has been a driving force behind the incorporation of technology and nutrient management. “Mike is a great example of what I hope our people represent — do what is best for our patrons,” said Todd Neibel, Wabash Valley Service Co. general manager. He praised Wilson’s efforts to learn new technology and consider new ways to help farmers be more profitable. — Kay Shipman
FB SCAVENGER HUNT
Sherrard FFA members Mick Exbom, right, and Charles Schultz learn the contest rules for a scavenger hunt quiz from Mariah Dale-Anderson, center, Illinois Farm Bureau special services manager during the Illinois FFA State Convention last week. Assisting Dale-Anderson from left to right are Claire Benjamin, IFB summer youth ambassador; Steve Wilson, IFB Young Leader Committee member from Uttica; and Daniel Gvillo, IFB Young Leader Committee member from Alton. IFB and affiliate companies offered information, souvenir photos, and prizes during the convention. (Photo by Kay Shipman)
FarmWeek Page 12 Monday, June 18, 2012
coNsumer outreach
‘Field moms’ take crop production crash course, tour BY KAY SHIPMAN FarmWeek
Consider all the inputs, steps, and decisions required to grow soybeans. What if you had about a day to learn that information for the first time? That was the challenge facing six Chicago-area “field
moms” who toured Ron and Deb Moore’s Roseville farm during an Illinois Farm Families (IFF) event June 8-9. IFF is a coalition of commodity groups for beef, corn, soybeans, pork, and the Illinois Farm Bureau. “I’m still wrapping my head around all the information shared with us,” said Pilar Clark, a field mom from Lisle. “Several of us continued our conversations regarding GMOs, insecticides, pesticides,
Roseville farmer Deb Moore, kneeling second from left, explains soybean growth to six Illinois Farm Families “field moms” who learned about soybean farming during a June 8-9 farm tour. Front row left to right are: Farrah Brown, Glendale Heights; Moore; Julie Barreda, Chicago; and Betsie Estes, Elk Grove Village. Second row left to right are: May Hansmann, River Forest; Pilar Clark, Lisle; and Amy Rossi, Naperville. (Photo by Cyndi Cook)
and other chemical processes used in farming and agreed we still have a lot to learn. Some “terms make (farming) methods sound negative
and intimidating, yet the science around many of them makes sense,” Clark continued. “For example I didn’t realize that fertilizers used to grow
corn are non-toxic to humans and actually incorporate naturally occurring elements, like nitrogen, that the plants then metabolize to aid growth. Yet, at the same time, I’m not entirely convinced that chemicals, like ammonia, are necessary or that creating new plant hybrids is a priority.” In addition to the farm tour, the field moms also toured Twomey Co. in Gladstone and learned about fertilizers and agrichemicals. They also saw the company’s barge-loading facility and learned about marketing. The field moms gained insights into crop research during a visit to Monmouth’s Monsanto Research Farm. The field moms also are trying their hands at farming. The Illinois Soybean Program Operating Board took the lead on a field moms’ project to grow their own soybeans at home and oversee an acre of beans on the Moore farm. Field mom Amy Rossi from Naperville learned her tall plants with three leaves probably are getting too much light and need a dormant period. The tours reinforced Rossi’s evolving view of farming. “My view of farming was real romanticized,” said the mother of six. Before IFF she thought farming entailed “planting corn and watching it grow — simple. But it’s really complex.” Clark, a mother of two, shared similar thoughts: “I always viewed farming as a very pastoral, manual-labor intensive field, which, as I’ve come to find out, is a very antiquated view more suited to farming of generations past. I had no idea how much science goes into farming, much less
marketing, communications, artistry, conservation, and management.” Both Clark and Rossi enjoyed seeing and learning about the conservation practices farmers use to protect the natural resources. “I didn’t know that farmers have environmental conservation on their radar and was excited to see their progress,” Clark added. To Rossi, the reasons behind farmers’ use of technology and current practices are: “We’re trying to feed a lot of people and this is what we have to do to feed a lot of people. I felt good learning there are reasons why farmers do the things they do.” To Clark, the field mom experience has given her “the tools to be more proactive about my produce, meat, and dairy choices when it come to buying food for my family.” “As the old saying goes, ‘Knowledge is power,’ and having the opportunity to go directly to the source, the farmers and their farms, has allowed me to feel more in control of what we’re eating,”
FarmWeekNow.com Learn more about Illinois Farm Families activities at FarmWeekNow.com.
she said. Deb Moore, who serves as the IFF farm hostess, said the field moms have become more comfortable about asking questions since their first farm tours in October. The farmers who have explained farming to the field moms have learned, too, Moore added. “It is a different mindset for farmers,” she said. “When they first start talking, it’s farmer-tofarmer and on one level. These women — it’s not that they’re not intelligent — they don’t have the background.” Even common farm country terms, such as ‘diversified farm,’ may need to be explained further to help an urban field mom understand, Moore pointed out. Clark said her connection to farmers and farming will continue. “I plan on continuing what I’ve been doing ... blogging about what I’ve learned, sharing photography as a means of telling stories about my experiences with the field moms, keeping up on current events affecting our communities ... and working to dispel the negative myths that exist about the food that’s raised a stone’s throw from the city.” “It’s so amazing how similar we all are,” Rossi summarized.
Page 13 Monday, June 18, 2012 FarmWeek
FROm The COuNTIes
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DAMS — The Young Farmers will host a fun night at 6:30 p.m. Thursday at the Gems baseball game. Tickets and food will be free. Call the Farm Bureau office at 222-7305 for reservations or more information. OONE — The 15th annual Boone County Farm Bureau Foundation Dairy Breakfast will be from 6:30 a.m. to 11 a.m. Saturday at Susie’s Garden Patch, Garden Prairie. Activities include a craft show, horse-drawn wagon rides, children’s games, a petting zoo, Cow Pie bingo, and antique tractor and Model T car displays. Cost for the breakfast is $6 for adults, $3 for children 6-10, and children under 5 are free. Tickets may be purchased at the Farm Bureau office or at the door. Call the Farm Bureau office at 815-547-7500 for more information. • The annual Charity Pull will be at 6:30 p.m. Saturday at the Boone County Fairgrounds (use McKinley Ave. entrance). Admission is $10. Sponsors include Joe Dieter & Sons Inc., D Squared Leasing Inc., Ag Leader, and Mor-Agra Grain Handling Co. Call Ed Kasper at 309-209-0117 for more information. All proceeds from the events will benefit the Boone County Farm Bureau Foundation. A portion of the proceeds from the Charity Pull will support the local 4-H and FFA programs. HAMPAIGN — The Champaign County Farm Bureau Foundation and Farm Credit Services will sponsor a Pull 4 Agriculture sporting clays event at 7 a.m. Saturday, July 7, at Ole Barn Sporting Clays, Oakland. Registration will close at 1 p.m. Cost is $60 per shooter or $200 for a team of four, which includes a raffle ticket for a Beretta semi-automatic gun and lunch. Mail registration and check to Champaign County Farm Bureau Foundation, Attention: Pull 4 Ag, 802 N. Country Fair Drive, Suite A, Champaign, Ill. 61821. Call 217-352-5235 for more information. • Farm Bureau will sponsor its Leadership Academy in August. Participants can attend five leadership sessions — one afternoon and four evenings – Aug. 1, 6, 13, and 20. Topics will include public speaking, conducting effective meetings, Farm Bureau and affiliated company structure, and leadership characteristics. Applications are available online at {www.ccfarmbureau.com}. Deadline to return applications is Friday, July 13. OLES — A landowner meeting to discuss
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Ameren’s Illinois Rivers project will be at 2 p.m. Wednesday at the Salisbury Church, Charleston. Laura Harmon, Illinois Farm Bureau general counsel, and Rae Payne, IFB senior director of business and regulatory affairs, will be the speakers. Call the Farm Bureau office at 345-3276 for more information. • The Coles County Ag Breakfast will be at 7 a.m. Thursday, June 28, at the Custom Smokehouse, 3020 Lake Land Blvd., Mattoon. Cost is $8. Cameron Craig, Eastern Illinois professor, will discuss environmental changes that have created the land that we farm. Call the Farm Bureau office at 345-3276 by Thursday for reservations or more information. • Farm Bureau and Country Financial agent Amy Fredrick will sponsor Bessie Bingo at 10 a.m. Saturday, July 21, at the Coles County Fairgrounds. Tickets are $10 per number and may be purchased at the Farm Bureau office or Fredrick’s office. Call the Farm Bureau office at 3453276 or Country Financial office at 345-2146 for more information. DGAR — Farm Bureau will sponsor the Farmers’ Market every Saturday through Sept. 22 from 7 to 11 a.m. on the north side of the square in Paris. • Edgar and Clark County Farm Bureaus will sponsor a landowner meeting at 6 p.m. Wednesday at Kansas High School. Rae Payne, Illinois Farm Bureau senior director of business and regulatory affairs, and Laura Harmon, IFB general counsel, will discuss how to negotiate energy leases. Call the Edgar County Farm Bureau office at 217465-8511 or the Clark County Farm Bureau office at 217382-4144 for more information. • The Edgar County Farm Bureau Foundation will sponsor a golf outing Friday, July 6, at Eagle Ridge Golf Course, Paris. Lunch and registration will be at noon, with a shotgun start at 1 p.m. Tickets for a ball drop with the winner receiving 50 percent of the profit are available at the Farm Bureau office. Cost for the ticket is $5. Proceeds from the outing will benefit the scholarship program. • Farm Bureau will sponsor a bus trip Thursday, July 19, to see the Chicago Cubs vs. Florida Marlins game. Cost is $90, which includes bus, admission, and driver gratuity. Call the Farm Bureau office at 217-465-8511 for reservations or more information. ANKAKEE — The Kankakee Farmer’s
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Market on Saturday will have a Meet the Farmer and a Farmer’s Share event from 7 a.m. to noon. The Farmers Share event will be in the market gazebo where customers can purchase a pastry and coffee for 40 cents, which is equal to what the farmer would receive for the ingredients of the items. The Meet the Farmer event will be south of the gazebo and include a modern farm tractor exhibit. The Policy Development Committee will conduct a public opinion survey. EE — The Young Leader Committee will tour Neumiller Farms in Savanna at 10 a.m. Saturday to learn about potato production. Call the Farm Bureau office at 815-857-3531 for reservations or more information. • Bureau and Lee County Farm Bureaus will sponsor their annual golf outing at 9 a.m. Friday, June 29, at Timber Creek, Dixon. The tournament will be a four-person scramble. Cost is $200, which includes golf, cart, and lunch. All proceeds will benefit the Ag in the Classroom programs. Call the Farm Bureau office or go online at {www.leecfb.org} by Friday for reservations or more information. • Bureau and Lee County Farm Bureaus will sponsor a trip Friday, Aug. 17, featuring
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a boat ride on the LaSalle Canal and a tour of the Hegeler Carus Mansion. Cost is $35, which includes lunch. Call the Farm Bureau office at 815-857-3531 for more information. CDONOUGH — Hancock and McDonough County Farm Bureaus, Haley Risk Protection, Sullivan Auctioneers LLC, and Brett Powell, Country Financial agent, will sponsor a marketing program at 7 p.m. Monday (today) at the Spoon River Outreach Center, Macomb. Steve Johnson, Iowa State University Extension farm management specialist, will be the speaker. The seminar is free to all Farm Bureau voting members. Cost for associate and non-members is $10. Call the Farm Bureau office at 309837-3350 or e-mail mcdfb@logonix.net for reservations or more information. EORIA — A 100th Anniversary celebration will be from 10 a.m. to 6 p.m. Saturday at the Shoppes at Grand Prairie, Peoria. The free event will include a tractor drive, toy show, farm animals, ag literacy activities, pedal and garden tractor course, and inflatables for children. Food will be served from noon to 2 p.m. HELBY — A “Wild for Wildman” benefit for
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Stewardson-Strasburg FFA adviser Mark Wildman will be from 4 to 8 p.m. Friday, June 29, at the Stewardson-Strasburg High School. A hog roast, kid’s carnival, pedal tractor pull, dunk tank, cake walk, and auction will be held. Proceeds will help with Mark’s medical expenses. ERMILION — Farm Bureau will sponsor a master grain contracts meeting at 6 p.m. Tuesday at the Farm Bureau office. Laura Harmon, Illinois Farm Bureau general counsel, and Jerry Quick, former Illinois Farm Bureau general counsel, will be the speakers. Call the Farm Bureau office at 217-442-8713 for more information. • The Vermilion County Farm Bureau Foundation is accepting team and hole sponsorships for its annual Barn Door Open golf outing. The fundraiser which will benefit Ag in the Classroom will be Thursday, July 26, at Turtle Run Golf Club, Danville. Call the Farm Bureau office at 217442-8713 for more information.
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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.
GOLFING FOR IAITC
Austin Percy, left, Gibson City, celebrates a putt made by his brother, Ben, last week during the Illinois Agriculture in the Classroom (IAITC) Golf Outing in Pontiac. Joining in the celebration are the boys’ grandfather, Jim Schwartz, and father, Guy Percy, all of Gibson City. Guy Percy, a Country agent, serves on the IAITC golf outing committee. The 16th annual golf outing brought together supporters of agriculture and education from across Illinois to raise funds for ag literacy. (Photo by Cyndi Cook)
FarmWeek Page 14 Monday, June 18, 2012
PROFITAbIlITy
Biosecurity critical for disease control on livestock farms BY DANIEL GRANT FarmWeek
Foot and mouth disease (FMD) may not sound like much of a threat to some U.S. livestock producers since the last FMD outbreak in the U.S. occurred in 1929. But the threat of FMD and other diseases is real. FMD in recent years wiped out almost a third of the swine herd in South Korea. Livestock producers and others in the industry, therefore, should maintain tight biosecurity standards, take precautions to prevent disease, and have plans in place to protect livestock in the event of a disease outbreak, according to Dermot Hayes, ag economist at Iowa State University (ISU), and James Roth, director for the Center for Food
Security and Public Health at ISU. The livestock industry experts earlier this month talked to farmers about disease threats and biosecurity measures at the World Pork Expo in Des Moines. “The only good tool in a large outbreak is biosecurity,” Roth said. “And that will be the responsibility of each producer. “If you keep contaminated objects and feed off the farm, you have a better chance to avoid (various disease outbreaks) in your herd,” he noted. USDA currently is putting together a Secure Pork Supply Plan. It is focused on preventing and containing potential outbreaks of FMD, classical swine fever, swine vesicular disease, and African swine fever
USDA adds new strains to E. coli watch list USDA’s Food Safety and Inspection Service (FSIS) this week will begin instituting a zero-tolerance policy for six additional strains of E. coli that are responsible for human illness. Beginning this week, FSIS will routinely test raw beef manufacturing trim, which is a major component of ground beef, for the six additional strains of E. coli. Trim found to be contaminated with these pathogens will not be allowed into commerce and will be subject to recall. The additional strains that will be treated as adulterants are Shiga-toxin producing E. coli serogroups O26, O45, O103, O111, O121 and O145. Like E. coli O157:H7, these serogroups can cause severe illness and even death, and young children and the elderly are at highest risk. Illnesses due to E. coli serogroups other than O157:H7, which caused a high-profile illness outbreak in 1993, outnumber those attributed to O157:H7. FSIS declared O157:H7 an adulterant in 1994.
M A R K E T FA C T S Feeder pig prices reported to USDA* Weight 10 lbs. 40 lbs.
Range Per Head $30.26-46.00 $61.64
Weighted Ave. Price $38.51 $61.64
This Week Last Week 122,122 87,240 *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 $92.41 $87.56 $68.38 $64.79
Change 4.85 3.59
— none of which are a human health threat. Roth said the plan will establish biosecurity standards, active and passive surveillance that will monitor for diseases ahead of any outbreaks, and a communication plan. “Premises registration and animal ID are essential to track an outbreak,” said Roth, who reported about 90 percent of swine premises are registered in the U.S. A communication plan is vital not only to prevent and contain diseases but also to inform the public if and when there are food safety concerns. Confusion about H1N1 (dubbed “swine flu”) and more recently lean
finely textured beef, which was nicknamed “pink slime,” had negative impacts on meat sales and livestock prices even though meat supplies were not threatened in either case. One of the biggest effects on the livestock markets, in the event of a disease outbreak, would be the loss of export markets. “These (pork and beef exports) are growth industries for the U.S.” with sales growing an average of 1 to 2 percent per year, Hayes said. “If we get a disease and can’t export, we’d have to get U.S. consumers to eat 25 percent more pork and 15 percent more beef.”
In the event of a major FMD outbreak, Hayes estimated the U.S. pork industry could lose an average of $1.8 billion per year for a decade while crop prices could decline 20 cents per bushel for corn and 60 cents for beans, due to a reduction in livestock herds/feed demand. Part of the reason the U.S. pork industry is vulnerable to a disease outbreak is because it’s so efficient. There are about 625,000 head of swine shipped to different locations in the U.S. each day. The Secure Pork Supply Plan will develop procedures to allow for the safe movement of animals in the event of a disease outbreak.
Buying lubricants in bulk can save time, money BY MATT THOMAS
In the 1950s and 60s, service stations sold bulk lubricants out of glass jars at a lower cost compared to the standard quart container. Over the last half century, the lubricants and the containers have changed but the concept is still the same. Purchasing bulk products lowers overhead costs, therefore lowering the cost of the product. Bulk lubricant storage equipment Matt Thomas gives you the ability to purchase lubricants at the bulk price, while providing you with on-demand fluids. No more trips to the local supply store for a pail of hydraulic oil — it’s in storage and ready for use in your shop. Speaking of the shop, I am sure many of you can relate to
this picture: four or five lubricant drums covering a large portion of shop space, accompanied by numerous piles of oil dry. Now let’s replace that image with three to four stacked, three-foot square tanks on a universal stand with centrally located dispense bar and drip pans. This unit not only opens usable shop space, it removes the land mine pile of oil dry. Through the use of two to four tank gravity feed accessory packages, you have the ability to centrally locate all of your dispensing nozzles at a convenient height and location. Also, spring-loaded dispense valves can eliminate wasted product due to overfilling, adding to the value of bulk lubricants in the process. You can even take these systems one step further and install pneumatic RAM pumps with hose reels to dispense product through a metered or nonmetered dispenser directly into
your equipment. No more used oil quart funnels, leaking spouts, or incorrectly labeled containers leading to contaminated fluids in your equipment. All of your lubricant products will be centrally located, correctly labeled, and ready to dispense directly into your equipment on demand. Over the years the names, the faces, and the storage containers have changed, but the value and convenience of bulk lubricants have stayed the same. If you are tired of trips to the store for grease or hydraulic oil and cleaning up piles of oil, dry, bulk lubricants and bulk lubricant equipment are your answer. Contact your local FS member company to discuss bulk lubricants and bulk lubricant equipment, and how both can make your life easier.
Matt Thomas is GROWMARK’s facility equipment product manager. His e-mail address is mthomas@growmark.com.
PURSUIT OF HAPPINESS
USDA five-state area slaughter cattle price Steers Heifers
(Thursday’s price) (Thursday’s price) Prev. week Change This week 118.75 122.21 -3.46 119.07 121.93 -2.86
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 154.89 155.14 -.25
Lamb prices Slaughter Prices - Negotiated, Live, wooled and shorn 120-159 lbs. for 135-160 $/cwt. (wtd. ave. 154.54).
Export inspections (Million bushels) Week ending Soybeans Wheat Corn 06-07-12 14.2 21.5 17.0 05-31-12 17.2 21.6 27.5 Last year 7.7 24.9 35.4 Season total 1180.5 21.5 1238.4 Previous season total 1405.6 33.0 1374.9 USDA projected total 1315 1025 1700 Crop marketing year began June 1 for wheat and Sept. 1 for corn and soybeans.
This colorful quilt adorns the 100-year-old barn on the Marsha Wagner farm near Herscher in Kankakee County. The quilt named “The Pursuit of Happiness” was designed and painted by Pat Alcorn of Herscher and a group of home-schooled students and is one of three the group has produced. The quilt was donated by Clayton and Carolyn Pratt of Kankakee. Since 2008 the Pratt’s have organized an on-going effort to decorate 50 Kankakee County barns. (Photo by Ken Kashian)
Page 15 Monday, June 18, 2012 FarmWeek
PROFITABILITY Corn Strategy
CASH STRATEGIST
Tight soybean fundamentals to continue Since the South American drought cut soybean output sharply lower there and USDA forecast a smaller U.S. soybean planting this year, the focus has long been on whether supplies would be large enough to bridge world users to the next South American crop. The difficulty with assessing the situation is that we only have a limited number of years to work with. It wasn’t until 2001 that South American soybean production overtook the U.S., limiting the usefulness of looking at years prior to assess the current situation. The only year that was close to comparable was 2003/2004, and even it has limited usefulness as a drop in U.S. output drove tightness the most that season. South America had record large output the spring before, and only a small drop the spring after. And, the smaller crops they had in spring 2009 were followed by a record large U.S. crop the following fall. The 33 percent stocks-touse ratio for the three exporters at the end of the first half of the 2012/2013
world marketing year is the tightest in modern history. But, the actual stocks (U.S./Brazil/Argentina) are still larger than they were in February/March 2004. That’s assuming a U.S. crop just over 3.2 billion bushels. We are assuming a 3.5 million metric ton (129.5 million bushels) increase in use in the first half of the year over last year. That’s reasonable given prices are still relatively high. The result is a 33 mmt (1.2 billion bushels) stock of soybeans in the U.S., Brazil, and Argentina next February/March. At expected world usage rates, that’s a 1.5-month supply. Based on consumption at the three exporters, it’s a three-month supply. That’s not an impossibly tight situation, but one that dictates the need for a good U.S. crop. If our plantings are no larger than last year’s 75 million acres, or if weather negatively impacts yields significantly, the situation quickly could become uncomfortably tight. This assumes Chinese demand, along with that in the rest of the world, remains relatively robust too. Traders will be looking at the June 29 USDA acreage report to provide the first good insight into what may lie ahead for the next six months.
AgriVisor endorses crop insurance by
AgriVisor LLC 1701 N. Towanda Avenue PO Box 2500 Bloomington IL 61702-2901 309-557-3147 AgriVisor LLC is not liable for any damages which anyone may sustain by reason of inaccuracy or inadequacy of information provided herein, any error of judgment involving any projections, recommendations, or advice or any other act of omission.
Policies issued by COUNTRY Mutual Insurance Company®, Bloomington, Illinois AgriVisor Hotline Number
309-557-2274
Cents per bu.
ü2011 crop: Action on July futures suggests a possible test of $6.29. Use rallies close to that to wrap-up sales, or on a close below $5.75. ü2012 crop: Sales should have been increased to 50 percent when December futures hit $5.33. Use a rally to $5.25 to make catch-up sales if you are comfortable selling into a weather market. We prefer hedge-to-arrive contracts for making sales, but plan to tie up the basis by mid-summer. vFundamentals: The trade’s attention has been focused on the dry weather pattern developing across the central and eastern Corn Belt. The system blocking moisture has yet to break down, but forecast models change daily, keeping the possibility open that it might end. Condition ratings have slipped, but remain good, implying a very good crop is still possible this year. Export demand for corn continues to struggle. And even though old-crop basis levels are strong, cash prices don’t support the argument that old-crop supplies are tight.
Soybean Strategy
ü2011 crop: Even though weather problems could carry prices sharply higher, market action tends to suggest a major rally isn’t likely. We’d still use rallies to $14.21 on July futures to sell old-crop soybeans other than any “gambling stocks” you want to hold. ü2012 crop: If you are comfortable selling into a weather market, we’d use rallies to $13.50 to make catchup sales. vFundamentals: Uncertainty about double-crop plantings faded some with rains across the Midsouth and extremely southern parts of the Corn Belt. In its place, the trade’s focus has shifted to the lack of rain in the central and eastern parts of the Corn Belt. Weather models shift backand-forth on prospects on a daily basis. So far, yield potential has not suffered greatly. Export sales remain robust, especially to China. But, the Chinese may be
moving to build an inventory to counter U.S. production problems if they would occur. Short term, that’s a plus. But, without weather problems, it could become negative.
Wheat Strategy
ü2012 crop: Wheat has been tracing out a choppy sideways pattern since early June. It is going to be difficult to sustain upside momentum due to seasonal pressure, unless weather lifts corn and soybean prices. Plan on making catch-up sales with Chicago July trading to $6.35. Producers selling 100 percent off the combine need to be aggressive making sales on rallies. The futures carry makes
it attractive to store wheat during the summer, but only if it’s priced or hedged. vFundamentals: Recent momentum in the wheat market has come from spillover strength in corn prices due to less than desirable growing conditions in the Midwest. Wheat export business picked up slightly with recent weekly sales exceeding expectations, including two cargoes of U.S. soft red winter wheat to China. Winter wheat harvest is progressing rapidly with reports of activity in Nebraska. So far yield reports have exceeded expectations, especially in Kansas, despite dry late season conditions.
FarmWeek Page 16 Monday, June 18, 2012
perspectives
Two words to farm by: soil health
Soybeans emerge from a rye cover crop. This is one of many conservation practices that conserves soil and improves soil health. (Photo courtesy Natural Resources Conservation Service)
Illinois enjoyed a mild winter, an early spring, and a record-setting planting season. Crop prices are still high and happily, this sector of agriculture — from an economic standpoint — still is bucking the overall national trend. With higher commodity prices, many farmers have IVAN DOZIER been able to make investments in their farm operations. It might be investments in equipment, grain storage, or even purchasing more land. Others may look to open more ground for row crops by tapping in to expired CRP (conservation reserve program) acres, former pasture land or even previously idle lands considered marginal because of wetness or erosion concerns. While some of those options to increase productivity might seem like a good idea, they could end up costing us more in the long run. If you want to update and expand some aspects of your operation, I’d like to steer your attention toward what I believe is a critically important farm asset — your soil. Equipment, seed, herbicides, pesticides, nutrients, and fuel are key inputs to ag production and your bottom line but their value, the
impact of those expenses are nothing if we don’t consider the soil. As people who work closely with the land, I know it’s our instinct to care for the foundation of our livelihood. Generations before us learned — sometimes the hard way — the important relationship of protecting the soil to maintain production. While the concept of soil health is nothing new, as technology and production needs change, it might be time to reassess your needs. For example, some practices, such as cover crops, have stood the test of time for providing erosion control, weed control, green manure, and even wildlife habitat. Cover crops also can become a nutrient management tool. There are other practices derived from newer concepts, like drainage water management or bio-reactors. These practices might not be that familiar to you, but they could be an ideal fit to improve the soil in your operation. By investing in and building soil health, you can help ensure a productive and sustainable farm operation for many years to come. It’s not a quick and easy one-time application. There is no one size fits all plan for the land. It must be customized for your unique set of circumstances. The process can be more intricate and require patience, but the
return on your investment is well worth it. Whether it’s Drummer, Hickory, or Cisne, producers have a lot of control over just how healthy their soil is. You can affect organic matter content, compaction, permeability, friability, drainage, nutrient levels — all key soil properties that farmers need for optimal crop production. You also can include conservation practices on your farm to better control how water and nutrients behave on your land. Modern agriculture focuses on many things, including production. With a growing population and finite resources, our ability to maintain high levels of production is a must. My message to Illinois ag producers and farmers is this: Healthy soils are more productive soils. Healthy soils develop a natural capacity to retain and cycle nutrients through a living and functioning ecosystem. It benefits water quality, saves energy and fuel, reduces disease and pest problems, improves wildlife habitat, increases farm income and builds up resistance against drought. Healthy soils create a more sustainable situation for everyone. For 75 years, the Natural Resources Conservation Service (NRCS) has stressed the importance of conservation practices that protect soil and water. The best long-
term strategy for agriculture is one that values the creation of healthy soils. With fewer farmers, strong development pressures, and so many other challenges, it is time to actively pursue the care and nurturing of all Illinois soils. Let’s work together and tap into the amazing system Mother Nature gave us and then combine those healthy soils with all that 21st century science and agronomics has to offer. I will be speaking at and visiting different events and meetings across the state this summer and hope to meet and visit with you. Many eyes are on Midwest agriculture as we face crucial environmental decisions affecting our crop production techniques. We have a reputation as good stewards of the land. We have proven we can be responsible and voluntarily adapt our production methods to reduce negative environmental impacts. As you reap some of the benefits of these higher crop prices, I’m asking that you consider directing an investment into the land itself. You can start by giving your local NRCS office a call and tell them you’re ready to talk about healthy soil. Ivan Dozier is the state conservationist for USDA’s Natural Resources Conservation Service for the State of Illinois and is based in Champaign. He can be reached at ivan.dozier@il.usda.gov.
Americans can avoid the next big tax related to energy Requiring our vehicles to achieve higher miles per gallon is good for us, right? It saves us money on the gasoline we purchase to transport us to work, to school, for shopping, and entertainment. It saves energy, maybe even reduces the amount of oil we have to import from GARY HERWICK countries that don’t like us very much. And it can reduce greenhouse gas emissions, improving air quality. As a nation we have tried to reduce the amount of petroleum fuel we use for transportation for more than 30 years through Corporate Average Fuel Economy (CAFE) regulations. CAFE hasn’t worked. Consumers switched from cars to trucks and SUVs. They drove more miles because they got more miles per dollar. They
didn’t seem to care much about miles per gallon. In fact, the U.S. Environmental Protection Agency (EPA) has kept the mileage standard of 27.5 miles per gallon (mpg) roughly the same for the last 20 years. Now we’re going to take a different tactic. If our government and our EPA can’t get consumers to save fuel, they’re going to take the next giant step by trying to force all of us to buy and drive electric cars. New regulations from EPA and the National Highway Traffic Safety Administration (NHTSA) for 2017 and later, due to be finalized this summer, will force electrically powered vehicles to be produced in mass quantities, thereby restricting what we can buy. How? The EPA’s proposed rules for reaching the 54.5 mpg arbitrarily favor electric vehicles. Although there are currently several compact cars that achieve 40 mpg highway, it seems unlikely that even the
best conventional technologies could achieve 54.5 mpg city and highway combined. Even the smallest of current cars, the Fiat 500 2-seat only gets about 33 mpg combined. Is this bad? Maybe not, it you don’t mind paying $39,000 for a 2012 electric Ford Focus that only costs $22,000 if it’s gasoline powered. The car is eligible for $7,000 in government incentives, reducing the actual cost to $32,000, or about $10,000 in incremental cost. In contrast, EPA estimated the incremental cost of various electric technologies including battery, electric, hybrid, and fuel cell might range from $800 to $3,800 leading to a payback time in fuel savings of one to four years. Are we as consumers going to pay for this? Will it be a new tax? We’re paying through our taxes for the current $7,000 incentive on electric cars, but that is only applied to less than
2 percent of the car market. If we subsidized half the current 12 million vehicle annual market at a rate of $7,000 per vehicle, the math is mind boggling $42 billion per year. It’s just not at all clear where this money would come from. The good news is there is an effective and much less costly alternative that can substantially reduce petroleum fuel use and greenhouse gas emissions. It’s an alternative that is already required by EPA called the Renewable Fuel Standard (RFS). It would displace about 25 percent of our annual transportation fuel consumption with 36 billion gallons of renewable fuels. Some investment from the Department of Energy has already been made in advanced biofuels to meet the RFS and perhaps some additional investment will make sense. However, the amounts are not likely to be even one tenth of the investment in electric vehicles that is contemplated in
the new CAFE regulation. Even better, advances that have been made in recent years in ethanol production could qualify it as an advanced biofuel at no additional cost and reducing greenhouse gases by 50 percent compared to gasoline. We should be telling EPA to back off on the new 2017 CAFE rule and enforce the RFS. Consumers should have the option to buy electric cars if they want them, not be forced to pay the huge cost either directly or indirectly through taxes. Like EPA announced in its rules for the RFS, more flex fuel vehicles (FFVs) are needed that can use renewable fuels. More renewable fuels, FFVs, and ethanol could be produced right here in the United States. Gary Herwick is president of Transportation Fuels Consulting in Milford, Mich. He is an expert in vehicle emissions, transportation fuel quality, and alternative fuels with more than 40 years of experience.
Page 15 Monday, June 18, 2012 FarmWeek
PROFITABILITY Corn Strategy
CASH STRATEGIST
Tight soybean fundamentals to continue Since the South American drought cut soybean output sharply lower there and USDA forecast a smaller U.S. soybean planting this year, the focus has long been on whether supplies would be large enough to bridge world users to the next South American crop. The difficulty with assessing the situation is that we only have a limited number of years to work with. It wasn’t until 2001 that South American soybean production overtook the U.S., limiting the usefulness of looking at years prior to assess the current situation. The only year that was close to comparable was 2003/2004, and even it has limited usefulness as a drop in U.S. output drove tightness the most that season. South America had record large output the spring before, and only a small drop the spring after. And, the smaller crops they had in spring 2009 were followed by a record large U.S. crop the following fall. The 33 percent stocks-touse ratio for the three exporters at the end of the first half of the 2012/2013
world marketing year is the tightest in modern history. But, the actual stocks (U.S./Brazil/Argentina) are still larger than they were in February/March 2004. That’s assuming a U.S. crop just over 3.2 billion bushels. We are assuming a 3.5 million metric ton (129.5 million bushels) increase in use in the first half of the year over last year. That’s reasonable given prices are still relatively high. The result is a 33 mmt (1.2 billion bushels) stock of soybeans in the U.S., Brazil, and Argentina next February/March. At expected world usage rates, that’s a 1.5-month supply. Based on consumption at the three exporters, it’s a three-month supply. That’s not an impossibly tight situation, but one that dictates the need for a good U.S. crop. If our plantings are no larger than last year’s 75 million acres, or if weather negatively impacts yields significantly, the situation quickly could become uncomfortably tight. This assumes Chinese demand, along with that in the rest of the world, remains relatively robust too. Traders will be looking at the June 29 USDA acreage report to provide the first good insight into what may lie ahead for the next six months.
AgriVisor endorses crop insurance by
AgriVisor LLC 1701 N. Towanda Avenue PO Box 2500 Bloomington IL 61702-2901 309-557-3147 AgriVisor LLC is not liable for any damages which anyone may sustain by reason of inaccuracy or inadequacy of information provided herein, any error of judgment involving any projections, recommendations, or advice or any other act of omission.
Policies issued by COUNTRY Mutual Insurance Company®, Bloomington, Illinois AgriVisor Hotline Number
309-557-2274
Cents per bu.
ü2011 crop: Action on July futures suggests a possible test of $6.29. Use rallies close to that to wrap-up sales, or on a close below $5.75. ü2012 crop: Sales should have been increased to 50 percent when December futures hit $5.33. Use a rally to $5.25 to make catch-up sales if you are comfortable selling into a weather market. We prefer hedge-to-arrive contracts for making sales, but plan to tie up the basis by mid-summer. vFundamentals: The trade’s attention has been focused on the dry weather pattern developing across the central and eastern Corn Belt. The system blocking moisture has yet to break down, but forecast models change daily, keeping the possibility open that it might end. Condition ratings have slipped, but remain good, implying a very good crop is still possible this year. Export demand for corn continues to struggle. And even though old-crop basis levels are strong, cash prices don’t support the argument that old-crop supplies are tight.
Soybean Strategy
ü2011 crop: Even though weather problems could carry prices sharply higher, market action tends to suggest a major rally isn’t likely. We’d still use rallies to $14.21 on July futures to sell old-crop soybeans other than any “gambling stocks” you want to hold. ü2012 crop: If you are comfortable selling into a weather market, we’d use rallies to $13.50 to make catchup sales. vFundamentals: Uncertainty about double-crop plantings faded some with rains across the Midsouth and extremely southern parts of the Corn Belt. In its place, the trade’s focus has shifted to the lack of rain in the central and eastern parts of the Corn Belt. Weather models shift backand-forth on prospects on a daily basis. So far, yield potential has not suffered greatly. Export sales remain robust, especially to China. But, the Chinese may be
moving to build an inventory to counter U.S. production problems if they would occur. Short term, that’s a plus. But, without weather problems, it could become negative.
Wheat Strategy
ü2012 crop: Wheat has been tracing out a choppy sideways pattern since early June. It is going to be difficult to sustain upside momentum due to seasonal pressure, unless weather lifts corn and soybean prices. Plan on making catch-up sales with Chicago July trading to $6.35. Producers selling 100 percent off the combine need to be aggressive making sales on rallies. The futures carry makes
it attractive to store wheat during the summer, but only if it’s priced or hedged. vFundamentals: Recent momentum in the wheat market has come from spillover strength in corn prices due to less than desirable growing conditions in the Midwest. Wheat export business picked up slightly with recent weekly sales exceeding expectations, including two cargoes of U.S. soft red winter wheat to China. Winter wheat harvest is progressing rapidly with reports of activity in Nebraska. So far yield reports have exceeded expectations, especially in Kansas, despite dry late season conditions.