FarmWeek March 25 2013

AMERICAN WHITE pelicans, which have become more common in Illinois during spring and fall migration, may help somewhat with the Asian carp problem. ..................2

THE KEEP IT FOR the Crop prog ram is g earing up to help farmers assess and address crop nutrient needs following last year’s drought. ...........................................3

CATTLE INVENTORY numbers released Friday in USDA’s March cattle on feed report are expected to be neutral to slightly friendly to market prices. ................10

Spring begins with winter-like conditions Monday, March 25, 2013

BY DANIEL GRANT FarmWeek

Periodicals: Time Valued

Spring officially began last week (March 20), but unseasonably cold temperatures made it feel more like winter.

The statewide average temperature for the first 20 days of this month was 33.3 degrees. That’s down 17.8 degrees from last year when the temperature averaged 51.1 degrees during the same stretch of March, according to Jim Angel, state climatologist with the Illinois State Water Sur vey.

The cause of the cold stretch this month is the same as what created unseasonable war mth last March — the position of the jetstream — according to Dan Smith, meteorologist with the National Weather Ser vice (NWS) Lincoln office.

Last March, the jetstream was farther north than usual, which allowed a wave of war m air from the South to move into Illinois. This year, the jetstream is farther south, which has allowed colder Canadian air to infiltrate the state.

The pattern is expected to continue this week. Rain and possibly a wintry mix

Two sections Volume 41, No. 12

on Friday was forecast over the weekend.

“It appears the cold pattern will hang on for at least another week,” Smith told Far mWeek.

The pattern may break early next month, however.

The NWS 30-day forecast released last week predicted average to above-average temperatures in April.

If realized, that would be good news for farmers. Soil temperatures last week were around the freezing mark compared to close to 60 degrees at the same time a year ago. (See graphic) Illinois far mers last year planted 5 percent of their corn crop in March.

The NWS long-range (three month) forecast also was encouraging as it called for warm and wet conditions in the eastern half of the Corn Belt, which includes Illinois.

House-Senate budgets far apart

Government funding approved

BY MARTIN ROSS FarmWeek

Whatever else comes out of last week’s House-Senate budget debate, at least two things are certain: The government will roll on, and steaks and chops will continue rolling off the line at federally inspected plants.

The House and Senate last week reviewed separate budget proposals that offer “two different perspectives on the future and where policy should go,” according to Illinois Farm Bureau National Legislative Director Adam Nielsen.

The House approved a federal budget outline for fiscal 2014-2023 that aims to balance the budget through cuts in so-called “wasteful” spending, tax code revisions, and entitlement program reforms. The plan proposes to cut spending by $4.6 trillion through 2023.

The Senate, meanwhile, was prepared Friday for a so-called budget “vote-a-rama,” with Senate Majority Leader Harry Reid (DNev.) seeking to pare back on the 400-some amendments to the measure. The Senate has proposed raising $1 trillion in new tax revenues while cutting a net $875 billion in spending over the next decade.

“There’s not going to be a (House-Senate)

conference on the budget,” Nielsen acknowledged. “But this is historic for the Senate — it’s the first time in four years it will have accomplished what it’s needed to do.” In order for the debt ceiling to be increased, the Senate was required to approve a budget.

However, Nielsen reported the U.S. Treasury may take added measures to enable Congress to delay a vote on increasing the federal debt limit possibly until July.

Meanwhile, the House OK’d a new Senate continuing budget resolution (CR) that keeps the federal government operating beyond Wednesday, when the current continuing resolution was to expire.

The newest CR funds government operations through Sept. 30, the end of fiscal 2013, reportedly easing highly publicized concerns about temporary furloughs for USDA meat inspectors that could disrupt livestock/meat markets.

The new CR raises hopes House-Senate appropriators now can develop across-theboard spending measures for fiscal 2014 under routine “regular order,” Nielsen said.

The long-term Senate budget bill held the line at $23 billion in ag cuts over 10 years, despite recent Congressional Budg-

FarmWeek on the web: FarmWeekNow.com

et Office (CBO) “rescoring” of long-term ag spending projections that suggested cuts deeper than those proposed by House and Senate ag committees last year.

Farm bill proponents argue the CBO has “way underestimated” potential savings that could be achieved in federal nutrition programs, based on its questionable assessment of how individual states have administered “food stamps” and related benefits, Nielsen said.

House Ag Committee Chairman Frank Lucas (R-Okla.) said he was pleased by House budget passage, arguing the plan would provide a $4.6-trillion reduction in national debt and balances the budget “over the same timeframe,” without increasing taxes.

While it suggests Lucas’ committee reexamine both farm programs and crop insurance spending, the budget measure does not prescribe specific ag cuts.

Nielsen nonetheless stressed “we’re still going to have to push very hard both in the Senate and the House to get farm bills that work for our members.” The House Ag Committee is expected to formulate a farm bill next month.

Illinois Farm Bureau®on the web: www.ilfb.org

Quick Takes

EMERGING ISSUES

FarmWeek Page 2 Monday, March 25, 2013

PRATT GIVES AG MESSAGE IN D.C.

TUSCOLA IN RUNNING —Tuscola is one of three Midwestern locations being considered for a $1.2-billion fertilizer plant project. A site decision is expected within the next few months, according to Tuscola Economic Development Inc. The project (named Project Cronus) is being pursued by a group of international businessmen and developers with more than 50 years of experience in the global fertilizer industry.

It is expected to require 1,500 to 2,000 construction workers, 150 full-time employees, 40 to 50 permanent contractor and maintenance positions, and 30 to 50 trucking jobs.

SMITHSONIAN LAUNCHING AG HERITAGE ARCHIVE — The Smithsonian Institution’s National Museum of American History is launching the Agricultural Innovation and Heritage Archive and reaching out to farmers, ranchers, and American agribusinesses to preserve the nation’s agricultural heritage and build a collection reflecting modern agricultural practices.

Museum curators are seeking stories, photographs, and materials to record and preserve the innovations and experiences of farming and ranching. For example, the Smithsonian will accept donations of conservation road signs from Jim Rapp, a farmer from Princeton, Ill. For details and to participate, go online to {americanenterprise.si.edu}.

NEW APP FOR FFA — Journal Communications of Franklin, Tenn. and the National FFA Organization last week announced the launch of an FFA New Horizons magazine mobile app for Apple, Android, and Kindle Fire devices. The app is free and available in the iTunes store, Google Play store, and Amazon marketplace.

FFA New Horizons magazine is the member publication for the National FFA Organization. The magazine is published by Journal Communications and delivered quarterly to more than 500,000 student members, agriculture educators, and FFA alumni.

The app features content from the FFA New Horizons magazine, including stories about FFA members’ achievements, agriculture facts, information about careers in agriculture, and issues facing the agriculture industry and community.

“A mobile version of the magazine is a logical choice for the publication’s audience, which is mostly 15-21 year olds and very technologically savvy,” said FFA New Horizons magazine editor Kim Holmberg.

(ISSN0197-6680) Vol. 41 No. 12

March 25, 2013

Dedicated to improving the profitability of farming, and a higher quality of life for Illinois farmers.

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STAFF Editor Dave McClelland (dmcclelland@ilfb.org) Legislative Affairs Editor Kay Shipman (kayship@ilfb.org) Agricultural Affairs Editor Martin Ross (mross@ilfb.org) Senior Commodities Editor Daniel Grant (dgrant@ilfb.org) Editorial Assistant Margie Fraley (mfraley@ilfb.org) Business Production Manager Bob Standard (bstandard@ilfb.org) Advertising Sales Manager Richard Verdery (rverdery@ilfb.org) Classified sales coordinator Nan Fannin (nfannin@ilfb.org) Director of News and Communications Michael L. Orso Advertising Sales Representatives Hurst and Associates, Inc. P.O. Box 6011, Vernon Hills, IL 60061 1-800-397-8908 (advertising inquiries only) Gary White - Northern Illinois Doug McDaniel - Southern Illinois Editorial phone number: 309-557-2239 Classified advertising: 309-557-3155 Display advertising: 1-800-676-2353

Dixon farmer Katie Pratt discusses the new language of food and modern agriculture during an Ag Day briefing on Capitol Hill in Washington, D.C. Last week, Pratt represented the U.S. Farmers & Ranchers Alliance (USFRA) as its farmer spokesman and discussed seed technology and modern equipment. She was joined by Kansas farmer Erika Poppeireiter, and Chris Galen, a USFRA board member. (Photo courtesy of the American Farm Bureau Federation)

Northern snow increases pelican sightings in state

BY KAY SHIPMAN FarmWeek

Attribute the timing of spring migration and significant northern snow and ice for an abundance of American white pelicans in Illinois, especially along the Mississippi and Illinois rivers, according to Randy Smith, wetlands program manager for the Illinois Department of Natural Resources.

Over the last 10 to 20 years, those pelicans have become more common in Illinois during the spring and fall migrations, according to Smith. It isn’t unusual for thousands of birds to be seen in several locations.

“Significant snow and ice persists to the north

of us; thus, birds may be stopping here for a bit longer than normal during their migration, causing numbers of birds to increase, which makes them more conspicuous,” Smith told FarmWeek.

The pelicans also have been spotted on some of the state’s large lakes, such as Springfield, Carlyle, Shelbyville, and Clinton, and some have spent the summer at the Emiquon Preserve in Fulton County.

The visiting pelicans may be helping address one of the state’s invasive species problems — Asian carp. Smith speculated the pelicans mainly are eating the fish species in most abundant supply in the big rivers, such as Asian carp, and other common fish species in lakes.

American white pelicans congregate on the Mississippi River at the Two Rivers Marina, Pike Station, across from Louisiana, Mo. The pelicans have become more common in Illinois during spring and fall migration.

(Photo courtesy of Pike County Farm Bureau)

Tuesday: • Ag weather with an Illinois State Water Survey representative • Don Tourte, vice president of sales for Farm Progress Companies •‘Ralph Martire, executive director of the Center for Tax and Budget Accountability • Iain Kelly, product safety manager for Bayer CropScience’s North American bee care team Wednesday: • Kevin Runkle, director of reg-

ulatory services for the Illinois Fertilizer and Chemical Association • Jen Daulby, chief of staff for U.S. Rep. Rodney Davis • Eric Stewart, executive director of the American Rabbit Breeders Association • Ivan Dozier, state conservationist for Illinois Thursday: • Illinois Pork Producers Association representative • Ryan Gammelgard, Illinois Farm Bureau attorney

• Peter Liebhold, curator of the Division of Work and Industry for the Smithsonian Institution • P.J. Jonas, owner of Goat Milk Stuff.com Friday: • Harry Cooney, GROWMARK energy risk management • Mark DePue, director of oral history for the Abraham Lincoln Presidential Library and Museum To find a radio station near you that carries the RFD Radio Network, go to FarmWeeknow.com, click on “Radio,” then click on “Affiliates.”

Legislators take piecemeal action on pension reform

BY KAY SHIPMAN FarmWeek

State senators and representatives tackled separate components of pension reform last week before leaving the capital on spring break.

“This approach is different than what was expected to happen,” said Bill Bodine, Illinois Farm Bureau associate director of state legislation.

“Large, controversial issues generally are negotiated among major stakeholders. Once an accord is reached, the issue is rolled out in a ‘packaged’ bill and put up for a vote.

“We anticipate that approach probably will be how a final pension reform bill will be handled,” Bodine said.

On Thursday, with a 66-50 vote, House members approved changes that would delay cost-of-living increases in pension payments until state employees reach 67 or five years after their retirement. That change would apply to a portion of their annual pension.

Meanwhile, senators voted 30 to 22 to provide retired teachers a choice on retirement health care benefits or a reduced annual cost of living increase. Earlier, the Senate voted down a proposal that would have

reformed all state pension systems.

The previous week, both the House and Senate passed proposals to cap pension benefit salaries and require younger employees to retire at older ages.

Proposed hydraulic fracturing regulations remained in the House Revenue and Finance Committee after an additional amendment was filed to HB 2615. The amendment added a requirement for licensing of those drilling wells where high-volume hydraulic fracturing would occur and licensing of those conducting highvolume hydraulic fracturing.

The bill’s sponsor, Rep. John Bradley (D-Marion) announced he would not call the bill for a vote until unresolved issues are addressed.

Another key legislative issue, proposed changes to the state’s farmland assessment law, remained in the House Revenue Committee. IFB staff continues to work with the Illinois Department of Revenue on its bill, HB 2651.

IFB supports the proposed amendment, which gradually would phase-in changes to better reflect yield potential for different soils and maintain the integrity of the farmland assessment law.

Nutrient stewardship moving forward

After the 2012 drought, the Keep It for the Crop (KIC) program is gearing up to help farmers assess and address crop nutrient needs.

KIC will use data gained from more than 300 soil samples tested last fall for residual nitrogen. This spring, the soil testing will be conducted before side-dress applications occur, according to Dan Schaefer, nutrient stewardship director with the Council for Best Management Practices.

The spring tests will allow farmers to adjust nitrogen rates based on spring soil fertility levels.

“Testing for soil nitrate is not a common practice in Illinois, but given the value of this data, we hope it will become an ongoing practice,” Schaefer said.

Another KIC effort will be

yields, and Maximize input use.

Last year, six rate trials were conducted. This year, 50 farmers are expected to participate in similar trials to compare six nitrogen application rates, ranging from zero to 250 pounds of nitrogen per acre in 50-pound increments.

KIC will work with University of Illinois partners and local agriculture retailers to collect data from the trials.

The collected data will be used to refine nitrogen recommen-

dations of an Illinois-based nitrogen calculator app.

Anhydrous safety video: Farmers wanting to test their anhydrous ammonia knowledge will find a free online safety video program at {learning.ifca.com}, the Illinois Fertilizer and Chemical Association’s website.

The voluntary project was funded by a grant from the Illinois Nutrient Research and Education Council, which receives money from a 75-cent assessment per ton of fertilizer sold.

The program takes about an hour to complete and involves answering 20-some questions.

Individuals taking the training program must submit their names and email addresses so they can take the test and receive certificates of completion. — Kay Shipman

shortage of graduate medical education (GME) slots in the nation’s training hospitals. The number of federally authorized slots has not increased since 1997, and some estimates put the current gap in slots in the tens of thousands, he said.

Schock’s Training Tomorrow’s Doctors Today Act seeks to open 15,000 new GME slots over the next five years, half reserved for primary care physicians. Those added training opportunities would mean “rural America has a better chance of landing a primary

care physician,” he told FarmWeek.

“When there are few doctors, or only a few doctors to choose from, they tend to go to the specialty hospitals and the urban centers, where the communities have the capacity and the resources to pay them more,” Schock noted.

“One of the problems rural America has is getting general practitioners, family doctors, to come to their region. The reason they have that problem is not just that they can’t pay as much but primarily because

expansion of nitrogen rate trials. The goal has been dubbed MOM, helping farmers to Minimize environmental impact, Optimize harvest

GOVERNMENT

Page 3 Monday, March 25, 2013 FarmWeek

Proposed safety rules

IFB testifies about food safety issues at FDA Chicago hearing

Farmers with all sizes of farming operations need to be responsible for food safety, an Illinois Farm Bureau specialist testified during a recent Food and Drug Administration (FDA) meeting in Chicago on proposed food safety rules.

FDA officials heard public comments from about 40 individuals regarding the federal Food Safety Modernization Act (FSMA).

More than 300 industry representatives and stakeholders from as far as California, Florida, and Virginia attended the meeting.

“Food safety is everyone’s responsibility — regardless of the far m size. Just because produce is grown on a smaller scale does not guarantee it is safer,” Cynthia Haskins, IFB manager of business development and compliance, told federal officials.

“About one in six Americans gets sick each year from foodborne diseases, according to recent data from the Centers Cynthia Haskins for Disease Control and Prevention,” she noted. “Forty-six percent of foodbourne illnesses stem from produce. That is a shocking statistic and one that needs our attention.”

Haskins works with newer and experienced far mers working to meet the growing demand for locally grown fresh fr uits and vegetables as well as other local foods.

The FSMA is considered a sweeping refor m of food safety laws.

Signed into law Jan. 4, 2011, by President Obama, the FSMA would create an integrated food safety system and improve the quality of food products by reducing foodborne illnesses.

FDA is proposing five r ules that establish the food safety framework, including a foreign supplier verification prog ram, preventive controls for animal food, accredited third-par ty cer tification, produce safety standards, and preventive controls for human food.

In the Jan. 16 Federal Register, FDA announced the establishment of two dockets so the public can review the proposed rules and submit comments.

The produce safety rule would establish standards for growing, harvesting, packing, and holding of produce for human consumption.

The preventive control for human food facilities rule would establish standards for good manufacturing practices and hazard analysis and risk-based preventive controls for human food.

IFB also will submit additional written comments to FDA by the May 16 deadline. — Kay Shipman

Congressman prescribes measure to fill rural health gap

BY MARTIN ROSS FarmWeek

For some students who’ve invested heavily in a medical career, “Match Day” — the annual March announcement of where graduates are headed for hospital residency training — offers only disappointment.

That ultimately may prove disappointing as well for a rural community in need of basic health services, according to U.S. Rep. Aaron Schock, a Peoria Republican.

Schock supports legislation aimed at addressing a current

there are too few primary physicians right now.”

Schock is co-sponsoring the bill with fellow House Ways and Means Committee member Allyson Schwartz (D-Pa.). The federal Centers for Medicare and Medicaid Services authorizes and provides grant funding for GME slots, and the House measure would allocate $2 billion over a 10-year period to fund added slots.

The Peoria lawmaker suggested his stand-alone bill ultimately could be included in Medicare overhaul legislation.

Schock and Schwartz solicited input from physicians and teaching hospitals.

The U.S. population has grown by roughly 50 million over the past 15 years. The Association of American Medical Colleges predicts that by 2015 the U.S. will experience a shortage of more than 62,000 doctors and that by 2025 that gap could exceed 130,000.

“What we’re really trying to do here is head off this crisis before it happens or before it gets worse,” Schock maintained.

TRADE

FarmWeek Page 4 Monday, March 25, 2013

U.S.-EU talks to center on controversial issues world prices, and the need for import tariff protections thus is less important to the EU, Drazek told FarmWeek.

Instead, the debate boils down to issues such as standards for biotech crops and commodities, animal welfare, use of the swine feed additive ractopamine, and ag “sustainability” standards that affect access to EU energy markets.

“There will be some sensitivities: (The EU) is quite concerned about imports of pork and a few other items,” Drazek said. “But I don’t think that’s the big sticking point.

“It’s more about the regulatory measures, the fact that their sanitary system seems to

be more politicized. It’s based more on a precautionary principle — let’s ban something because it sounds like it might be nasty, without really having any scientific basis.”

U.S. industrial and service sectors “are going to want this thing to happen, and they’re not going to want agriculture to stand in the way,” he said.

If ag disputes appear to be “an anchor” in talks, Drazek fears those interests could pressure negotiators to “write off agriculture” in the interest of an overall accord.

Commodity trade isn’t the only contentious area in U.S.EU talks. Environmental measures such as the EU’s

ter of trade negotiations.

“Before, we were talking about making some better

A one-act play about elderly farmers questioning their farm’s future will be performed this spring in Central Illinois.

Performances start at 6:30 p.m. They feature locally grown food and are free and open to the public.

Dates and locations are: Friday and Saturday, Corn Stock Theater, Peoria; April 4 and 5, St. Matthew Church, Urbana; and April 19 and 20, University of Illinois Extension office, Springfield.

The play, entitled “What Will Be Your Legacy,” was written by Doug Nopar of the Minnesota Land Stewardship Project. It focuses on an elderly farm couple whose children and grandchildren don’t want to farm.

To ensure sufficient seating and food, registration online at {thelandconnection.org/play} is requested.

tons of commodities.”

Japan’s participation also should improve buy-in from other U.S. trade interests, from the auto industry to service industries “that want a better shot at Japan,” Salmonsen said.

Under U.S. 90-day congressional notification requirements, Japan’s formal admission to the talks could take awhile.

All TPP participants must agree to Japan’s membership, but their approval process is “nowhere near as lengthy as ours,” Salmonsen reported.

Japan conceivably could participate in planned July TPP negotiations, or, if not, in an anticipated September round of talks, he suggested.

Japan long has operated behind “high (import) tariff walls,” but Salmonsen noted that “what they want, they let in.”

Given indications from new Japanese Prime Minister Shinzo Abe, Salmonsen sees hope for progress despite Japan’s protectionist policies on rice, fruit, and other domestically produced goods.

“They know they need to make changes in their government and the way they handle their economy,” he said.

“They’re rich still, but they’re stagnant. You use a thing like a

The Illinois Forage Institute has been rescheduled for Tuesday, April 2, at Black Hawk College, East Campus Conference Center, Galva.

The first scheduled date was canceled due to inclement weather.

The educational program, beginning at 9 a.m. and concluding at 4 p.m., will focus on managing hayland and pastures.

Cost for the educational

contacting the Rock Island County Extension at 309-7569978.

On-line registration and the program agenda can be accessed at {web.extension.illinois.edu/hmrs/}.

The Forage Institute is sponsored by the IFGC and Black Hawk College and supported by USDA Natural Resources Conservation Service and University of Illinois Extension.

BY MARTIN ROSS FarmWeek

Unlike recent U.S. trade talks in which market access was a key issue, U.S.-European Union (EU) negotiations will focus largely on issues of science, safety, and social perception, Washington trade consultant Paul Drazek advises.

Last week, the administration formally announced plans to start negotiations with the EU on a deal to create a $5 trillion “free trade zone.”

The EU has dramatically restructured its ag policy, moving from high price supports to a single farm payment system. European prices have fallen more into line with

Illinois Farm Bureau Governmental Affairs and Commodities Division representatives have been meeting with statewide interests to garner support for international trade talks.

Renewable Energy Directive, which sets standards for “sustainably” produced biofuels, could impede use of U.S. soybeans to produce European biodiesel, Drazek said.

Non-tariff barriers proliferate in the EU in part because of its fragmented multinational nature and diverse views among its 27 member states.

Further, Drazek noted a key divide between EU science agencies and political bodies.

“The Food Safety Committee will determine something is acceptable and safe for humans and the environment, and it doesn’t matter,” he said. “The member states at a political level will vote against approval.

“That would be akin to the Food and Drug Administration, the Department of Agriculture, and the Environmental Protection Agency agreeing a product is safe but Congress voting that it’s not.”

trade agreement to drive changes in your country that you can’t do yourself.

“It’s good they want to join, but they have to join like everyone else. They have to agree to

talk about all the issues — not try to gain prior exclusions (for individual products). Every country tries to do that, but Japan has made an art form of it.” — Martin Ross

TPP candidate Japan willing to let down its barriers?

Japan’s entry into TransPacific Partnership (TPP) talks transforms a potentially “OK” accord into a “big deal,” according to American Farm Bureau Federation trade analyst Dave Salmonsen.

Japan is the U.S.’ fourthlargest export market, good for about $14 billion per year in meat, feed grain, and other purchases.

However, while the U.S. has trade agreements with six of the TPP’s 11 other current participants, it has no comprehensive agreement with Japan.

“With Japan, you’re talking about a country with a lot of barriers,” Salmonsen told FarmWeek. “You’re talking about lowering (import) tariffs to get more access — the bread-and-but-

‘With Japan, yo u ’r e t a l k i n g about a country with a lot of barriers.’

— Dave Salmonsen American Farm Bureau Federation

food safety rules, more science-based rules — all good stuff, but awfully hard to quantify and hard to get people excited about unless their product is impacted.

With Japan, this cuts across

Farm continuation issues play focus

Illinois Forage Institute now scheduled for April 2 program is $15 per person for Illinois Forage and Grassland Council (IFGC) members and $20 per person for non-members. Pre-registration is requested by Friday.

Cost will be $20 and $25, respectively, per person after Friday and at the door on April 2.

Registration covers a noon meal and forage presentation handout materials. Program registration can be made by

U.S. must act, not just talk, to compete — Harvard analyst

When it comes to the shifting global trade picture, the U.S. can get in the game or risk getting “blocked out of the blocs,” Harvard agribusiness specialist Mary Shelman advises.

Shelman said she recognizes the importance of U.S.-European talks, but emphasizes the need for continued U.S. engagement across the globe, particularly amid market dynamics emerging among the so-called “BRICS” — the developing and semi-developed economies of Brazil, Russia, India, China, and South Africa.

Shelman noted regional trade agreements are gaining dominance in the world market, potentially forcing the U.S. and others to compete with trade blocs as well as with individual countries.

As the U.S. explores improved trade between East and West via ongoing Trans-Pacific Partnership (TPP) talks, Shelman said she sees bonds tightening between potential super-supplier Brazil and likely super-consumer China — both major forces in their own regions.

“You don’t see nearly the talk about (global negotiations) we saw even 10 years ago,” Shelman told FarmWeek. “Part of that’s because the U.S. and Europe were never really fully engaged as players.

“I think the more talking we do, the better, but we actually have to sign something to make some of these agreements work. I think a lot of countries and industries are looking at the European Union — and the U.S., to a lesser extent — and saying, ‘Why bother? That’s not where the economy’s growing, and there are a lot of rules over there.’”

In a long-anticipated move, Japan has bid to join TPP talks along with the U.S., Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. At the same time, China plans to step up talks toward a three-way free trade agreement with Japan and South Korea.

When asked about Japan and the TPP, Chinese Commerce Ministry spokesman Shen Danyang reported China would “push forward the progress of our own free trade areas.” China “sits on the outside” of the TPP, but with heavy Japanese investment in and continued Vietnamese involvement with China, it remains a key “presence” in the talks, according to American Farm Bureau Federation trade analyst Dave Salmonsen.

“Put that down to the regional dynamism in the Pacific,” he told FarmWeek. “About half of all our ag exports go to the Asia-Pacific region; it’s where all the growth is. You have billions of people who want to live better.” — Martin Ross

ENERGY

Page 5 Monday, March 25, 2013 FarmWeek

Obama plan aims to bolster new energy investment

BY MARTIN ROSS FarmWeek

As policymakers sort out the diverse options outlined in the president’s new energy blueprint — some long-established, some cutting-edge — sound science will be crucial in sorting opportunities and risks.

So says Rep. Bill Foster, a Naperville Democrat and physicist who toured the Chicago-area Argonne National Laboratory with President Obama earlier this month.

Argonne faces deep cuts “if we don’t find a balanced alternative to (across-the-board budget) sequestration cuts,” he advised in testimony before the House Budget Committee.

The former U.S. Department of Energy scientist warned cutting research

investment is “bad nationally for our economic competitiveness,” as well as for local community economics.

The White House asked Congress to establish an Energy Security Trust designed to support investments that “will make the technologies of the future cheaper and better — technologies that will protect American families from spikes in gas prices and allow us to run our cars and trucks on electricity or homegrown fuels.”

Foster, who labels himself “a strong backer of corn-based ethanol,” told FarmWeek he is “very impressed” with ethanol’s improved carbon footprint not only from “a (plant) process efficiency point of view,” but also given the increased economic value of distillers dried grains and rapid

The plan: A trust for technologies

President Obama’s Energy Security Trust would provide a reported $2 billion over 10 years to support research into advanced electric vehicles, new biofuels, fuel cells, and domestically produced natural gas.

Mandatory funds would come from royalties generated by oil and gas development in federal waters of the Outer Continental Shelf. Trust revenues are expected to increase over the next several years based on a combination of oil and gas leasing, production, and price trends, and, possibly, fiscal 2014 budget reforms, the White House stated.

Overall, the president’s plan aims to: • Cut net oil imports in half by the end of the decade, though increased production of domestic oil, natural gas, and biofuels and improved vehicle efficiency.

• Double renewable electricity generation by 2020, according to the president, through wind, solar, and geothermal sources. Biomass also could provide new generation.

• Promote “safer production and cleaner electricity from natural gas.” U.S. Rep. Bill Foster, a Naperville Republican who met with Obama at the Argonne National Laboratory near Chicago, said ag and conservation interests alike are concerned about the possible environmental impact of “hydro-fracking” — pressurized extraction of underground natural gas reserves.

• Help develop a “responsible” nuclear waste strategy that would allow for increased use of “carbon-free” nuclear energy. Under Obama’s direction, the U.S. Department of Energy (DOE) created a Blue Ribbon Commission on America’s Nuclear Future to devise storage and management solutions.

Foster sees further economic and political challenges to building nuclear power capabilities. He noted “the economic pressure nuclear’s under from the very low prices of natural gas.”

If natural gas prices remain below $3 per million BTUs, “most nuclear plants in this country are not worth operating economically in competition,” Foster argued.

If prices rebound in the $4.50 range, “it is still economically viable to continue operating nuclear plants but not really viable to build new ones,” he suggested.

“There are a number of potentially less expensive, reliable, and safer nuclear designs out there,” the former DOE physicist said.

“Maybe, instead of mass-producing the existing nuclear design, we should do some research and development on improved, cheaper, simpler, and safer nuclear designs over the next 10 years. These are intrinsically safe designs that cannot melt down under any circumstances, and, therefore, have much simpler safety systems.” — Martin Ross

gains in corn yield.

“With corn yields projected to double again in the next 20 years as the next wave of genetically modified grains comes out and with the spread of advanced farming techniques across the world, I continue to be concerned we could face a glut of corn production and real oversupply unless we have something like the corn ethanol business to take up the slack,” he added.

Foster maintains cellulosic ethanol is still in “the longterm R & D phase.” Corn stover-based ethanol currently “can’t compete in an unsubsidized manner in the marketplace,” he said.

He nonetheless sees “some very promising technologies” for biomass conversion. Foster cited companies such as Kior Inc., which has launched a Mississippi wood-to-“oil” plant and which, according to the lawmaker, could quickly convert stover into so-called “drop-in” fuels that can directly replace petroleum fuels without having to be blended with gasoline.

“You could put these straight into refineries and crack them into the full range of products we use oil for,” Foster said. “But you have to understand the economics of collecting biomass — something you won’t understand until you do it to scale.”

President Obama addresses a gathering recently at the Argonne National Laboratory near Chicago. The president is pushing for increased investment both in sustainably boosting domestic oil and gas development and advancing research into renewable clean energy sources. The federal lab is dedicated to exploring national energy and environmental solutions. (Photo courtesy of U.S. Rep. Bill Foster)

ENERGY NUMBERS

13 percent According to a recent U.S. Environmental Protection Agency report, the decrease in U.S. carbon dioxide emissions from 2007 to 2012.

16 percent According to the same report, the increase in fuel economy values over the same period.

50,000 The reported number of alternative energy projects generated nationwide by federal clean energy tax incentives over the last four years. The White House maintains those incentives have attracted billions of dollars in private investment, creating tens of thousands of jobs, and proposes to permanently extend the federal renewable Production Tax Credit.

$40 million The president’s proposed new budget allocation to fund research into “safe and responsible” natural gas production.

SOUTH AMERICA IS TAKING OUR PLACE. Scary thought, isn’t it? The good news is we can do something about it every time we choose a soybean variety to put into the ground. If we start getting closer to 35 percent protein and 19 percent oil, our beans would be a lot more attractive to domestic livestock producers and foreign markets— and we’d help stop the loss of export share to Brazil and other foreign competitors. It’s time to talk with your seed dealer or Certified Crop Adviser about protein and oil. Then visit VIPsoybeans.org to validate your seed selection and ilsoy.org for more information.

FB IN ACTION

FarmWeek Page 6 Monday, March 25, 2013

Lawrence County FB provides training, equipment for firefighters IEPA reminds The Lawrence County Farm Bureau recently provided grain rescue training for 33 members of the Lawrenceville-Allison, Dennison, Bridgeport, and Christy township fire departments on the 4-H Fairground.

With support from 70 donors, the county Farm Bureau raised $12,805 and bought two rescue tubes, eight rescuer working harnesses, six victim harnesses, two vacuums, four fall-protection lanyards, two main line rope packages, and provided on-site training.

Bill Harp of the Safety and Technical Rescue Association based in Livonia, Mich., provided the training, which included two hours of classroom work, two hours of hands-on training, and an extraction of a “victim” engulfed in grain.

A 188-bushel grain bin simulator gave firefighters an opportunity to feel the pressures of a grain entrapment. Firemen said it was beneficial for them to experience an entrapment and be able to learn how to correctly use the new equipment.

“This project was the culmination of an eight-month effort by the Lawrence County Farm Bureau,” said Tyler Harvey, county manager. “Through the generous support of the Lawrence County community, we were able to bring this training and equipment to our county.”

He thanked the 70 donors and Bridgeport Grain for donating corn for the training.

permit required for prairie burns

BY TYLER HARVEY

Tyler Harvey is the manager of the Lawrence County Farm Bureau.

His email address is lcfbmgr@frontier.com.

Firefighters from the Lawrence-Allison, Dennison, Bridgeport, and Christy townships listen as Bill Harp, CEO of the Safety and Technical Rescue Association (SATRA), explains various techniques for a grain bin entrapment rescue. The firefighters surround one of the GSI RES-Q tubes that was purchased for the county.

More than 30 firefighters participated in the day-long rescue training made possible by more than 70 local donors and hosted by the Lawrence County Farm Bureau. (Photo by Tyler Harvey, Lawrence County Farm Bureau manager)

With the start of spring, many landowners burn their prairie stands.

Those individuals are required to obtain an open-burning per mit from the Illinois Environmental Protection Agency (IEPA), according to Dick Breckenridge, IEPA agricultural and r ural affairs adviser.

Go online to {epa.state.il.us/air/permits/openburn/} for relevant infor mation needed for the per mit, along with a frequently asked questions section.

Time to schedule annual well checkup Individuals who depend on wells for their drinking water need to have them checked annually, and spring is a good time to do that before peak

water use starts, according to the National Ground Water Association (NGWA).

An annual checkup by a qualified water well contractor is the best way to ensure problem-free service and quality water.

In Illinois, some county health departments offer well water testing and also may be aware of private testing services that are available.

Preventative maintenance usually is less expensive than emergency maintenance, and good well maintenance can prolong the life of a well and related equipment.

NGWA also recommends testing of well water whenever there is a change in taste, odor, or appearance, or when the system is serviced.

About half the U.S. population receives its drinking water from wells.

A check by a qualified water well contractor may include: • A flow test to determine system output, along with a check of the water level before and during pumping (if possible), pump motor performance (check amp load, grounding and line voltage), pressure tank and pressure switch contact and general water quality (odor, cloudiness, etc.).

• A well equipment inspec-

DATEBOOK

tion to assure it’s sanitary and meets local codes.

• Testing of water for coliform bacteria, nitrates, and anything else of local concern.

Other typical additional tests are those for iron, manganese, water hardness, sulfides and other water constituents that cause problems with plumbing, staining, water appearance and odor.

Well owners also should: • Keep hazardous chemicals, such as paint, fertilizer, pesticides, and motor oil far from wells, and maintain a “clean” zone of at least 50 feet between the well and any kennels and livestock operations.

• Maintain proper separation between the well and buildings, waste systems, and chemical storage areas.

• Periodically check the well cover or well cap on top of the casing to ensure it is in good repair and securely attached. Its seal should keep out insects and rodents.

• Keep well records in a safe place.

These include the construction report, and annual water well system maintenance and water testing results.

For more information go to {www.ngwa.org} or {www.wellowner.org}.

April 2 Illinois Forage Institute, rescheduled, 9 a.m. to 4 p.m., Black Hawk College, East Campus Conference Center, Galva. To register, go to {web.extension.illinois.edu/hmrs/} or call Rock Island County Extension office at 309-756-9978.

May 11 5K Grow & Go, Illinois Farm Bureau, Bloomington. Call 309-5572230 or go to {iaafoundation.org} for more information.

MARKETS

Page 7 Monday, March 25, 2013 FarmWeek

Elmore: Solid crop demand not enough to sustain high prices

BY DANIEL GRANT FarmWeek

Demand for U.S. crops likely will remain strong this year, according to an agricultural economist.

But prices still could fall significantly in the months ahead based on expectations of increased crop supplies.

“Long-term, demand will keep prices at historically high levels,” Steve Elmore, global economics director for DuPont Pioneer, said this month at the Illinois Land Values Conference in Bloomington.

“But don’t expect these (record high prices of the past year) to hold. When supplies are rebuilt, the market will adjust.”

Steve Elmore Elmore predicted corn prices this year could decline to the most recent historic average (corn prices from 2006 to 2012 averaged $4.78 per bushel).

He does not, however, envi-

Senate panel votes to work on river grade

BY MARTIN ROSS FarmWeek

The time appears to be right for long-awaited measures aimed at bringing reportedly “D”-grade river infrastructure up to date, said Illinois Farm Bureau National Legislative Director Adam Nielsen.

The Senate Public Works and Environment Committee last week rapidly approved its version of WRDA2 — Water Resources Development Act water project reauthorization.

“WRDA2 was marked up in 10 minutes and reported out of committee — that’s a good sign,” said Nielsen, who attended an annual Washington waterways seminar and discussed navigation needs with lawmakers including Sen. Dick Durbin, a Springfield Democrat honored during the seminar.

The vote followed release of a new American Society of Civil Engineers “report card” giving overall U.S. infrastructure a D-plus but assigning inland waterways, levees, and ports a Dminus grade.

The Senate Finance Committee, meanwhile, is expected to take up a proposed industry-supported increase in barge fuel taxes that feed the Inland Waterways Trust Fund, a repository used for the private share of lock project funding. The challenge in the House is selling even a wholly voluntary tax hike to lawmakers who’ve pledged not to raise taxes.

However, Nielsen reported discussions with Illinois Republicans “gave me optimism that this is something we can work around.” Lawmakers understand failure to replenish trust fund revenues imposes a “tax on inaction” — the economic cost of unexpected river shutdowns, he said.

And Nielsen said Democrats appear “a lot more comfortable” with House Transportation and Infrastructure Chairman Bud Shuster (R-Pa.), who succeeds controversial Rep. John Mica (R-Fla.).

He sees that boding well for bipartisan House support of legislation that would refuel the waterways trust fund and improve U.S. Army Corps of Engineers lock maintenance and construction procedures.

IFB Senior Commodities Director Tamara Nelsen deemed infrastructure improvement key to U.S. export competitiveness.

Rep. Cheri Bustos, an East Moline Democrat on both House transportation and ag committees, told FarmWeek her assignments are “near-perfect complements to each other,” given navigation’s ag impact.

Bustos co-sponsors the bipartisan Water Infrastructure Now Public-Private Partnership Act, which proposes new project funding sources. It would “help clear a $60 billion backlog of (Corps) projects that would take decades to complete without private investment,” she said.

“We made it through a (low-water) crisis this winter,” said Durbin, who supports the measure. “We showed that when your industry and government at every level work together and think in new ways, we can keep our waterways open even in tough times.”

sion a scenario in which corn prices would slide all the way back to the previous historic average (corn prices from 1970 to 2005 averaged $2.30 per bushel).

Strong global demand is expected to continue to support prices, he said.

“China no longer is self-sufficient (producing crude) oil

FarmWeekNow.com

To view Steve Elmore’s video of his market outlook, go to FarmWeekNow.com.

and soybeans,” Elmore said.

“And (the Chinese) currently are importing (distillers’ grains) and pet food because they don’t have enough corn (to feed a growing livestock industry).”

Chinese demand for crops from 2000 to 2010 increased 191 percent for soybeans and 50 percent for corn, according to Elmore. China’s per capita dairy consumption during that decade shot up 212 percent.

And that trend should continue. China’s economic growth has slowed, but it still is about 7 percent.

“They (the Chinese and consumers in other growing nations) still want to put more meat in their diets,” Elmore said. “That’s positive for corn and soybeans.”

However, competition from other countries and reduced gasoline demand in the U.S. could put the brakes on demand growth experienced in the biofuels sector.

South America is expected to increase the size of its sugar cane crop while more rapeseed (canola) in western Canada is expected to compete for international biofuels markets.

In the U.S., annual gasoline demand this year has tumbled from 149.5 billion gallons predicted in 2007 to a current forecast of 133.8 billion gallons.

“The ethanol growth is not there if we remain at the E10 level,” Elmore said. “It could put a crimp in the corn market.”

Meanwhile, large plantings of corn and soybeans this year coupled with a more normal growing season could boost stocks-to-use ratios from 5.3

percent to 14 to 18 percent for corn and from 4.4 percent to 6 to 8 percent for soybeans in 2013/14.

“Futures prices are down from previous highs,” Elmore added. “We’re going to have more price volatility going forward.”

CHINA GROWTH NUMBERS

21 The percent increase in per capita meat consumption from 2000 to 2010.

26 The percent increase in per capita crop consumption from 2000 to 2010.

5.8 The percent increase in population from 2000 to 2010.

174 The percent increase in average incomes from 2000 to 2010.

CONSUMER OUTREACH

FarmWeek Page 8 Monday, March 25, 2013

County Farm Bureaus adapting non-farm outreach efforts

BY KAY SHIPMAN FarmWeek

Chicago hasn’t cornered the market on non-farm consumers who wonder how their food is produced. With an abundance of Illinois consumers to educate, county Farm Bureaus are striving to meet local needs and resources.

Following is a sample of ongoing efforts and others being planned around the state: Since last fall, Lee County Farm Bureau has hosted two farm tours and is planning a third for local non-farm moms, said Danelle Burrs, the county Farm Bureau manager.

The Farm Bureau found its participants by promoting the program in the county Farm Bureau publication and with press releases and through Farm Bureau member contacts with potential urban participants.

Livingston County Farm Bureau is starting its efforts by working with an existing church-based group of women with preschool-aged children,

according to Teresa GrantQuick, the county Farm Bureau manager.

On April 3, two county Farm Bureau Young Leaders who also are moms and are involved in dairy farms, will speak during the group’s scheduled meeting.

After the presentation, interested moms from the group will be invited to visit a farm, Quick added.

The county Farm Bureau chose to start its efforts by connecting with an existing group that offers babysitting services and has a meeting framework, she explained.

Last week, Livingston County Farm Bureau reached out to consumers through the local chamber of commerce’s “Issues and Eggs” event. The guest speakers were DeKalb County farmers Mike and Lynn Martz, who discussed their work with Chicago-area moms.

Sangamon County Farm Bureau is planning a spring meeting of urban and farm moms, said Sangamon County farmer Diana Beaty, who is

Farmer conversations with local non-farm moms, such as the discussion above with Lee County Farm Bureau President Jim Sheaffer, is a goal of several county Farm Bureaus. Consumer outreach programs are taking different forms, depending on local needs and resources. (FarmWeek file photo)

coordinating the moms’ event.

Nine farm women are planning to meet with the urban moms.

Beaty said the event has been publicized in local newspapers and through social media.

In Western Illinois, two county Farm Bureaus are planning a joint outreach program with area urban moms. Knox County Farm Bureau and Warren-Henderson Farm Bureau

each will be represented by five members on a planning committee, said Carol Ricketts, Warren-Henderson Farm Bureau manager.

The Farm Bureaus will have a brainstorming session but are considering a meeting of farm and urban moms and farm tours for interested moms.

Linda Olson, Illinois Farm

Bureau manager of consumer communications, recommended farmers not call themselves “producers” or refer to their farms as “operations,” during a report to the IFB Board of Directors last week.

“Share your continuous improvements. Consumers like to hear you are constantly improving,” Olson said.

Karen Schotthofer of Chillicothe prepares to put down a placemat for one of the 1,550 persons served at the recent annual Peoria County Farmer’s Share of the Food Dollar Breakfast. (Photo courtesy of Peoria County Farm Bureau)

Breakfast cost: farmer’s share of food The Peoria County Farm Bureau sponsored its 13th annual Farmer’s Share of the Food Dollar Breakfast at Exposition Gardens in Peoria recent-

BY PATRICK KIRCHHOFER

ly and served about 1,550 persons a meal for only 85 cents.

The cost of the breakfast was based on the farm value of the menu items. It included two pancakes, two scrambled eggs, two 2-ounce whole hog sausage patties, an 8-ounce glass of milk, and an 8-ounce glass of orange juice.

A group of approximately 60 Farm Bureau member volunteers served the 1,550 customers. The breakfast was spearheaded by the county Farm Bureau’s Public Relations Committee but had assistance from the Princeville Lions

Club, two 4-H Clubs, and Peoria County FFA members.

Other activities included a silent auction to raise funds for the county’s ag literacy program and agriculture scholarships; a Barnyard Discoveries exhibit featuring live miniature farm animals; tractors from local dealerships; ag literacy activities and coloring books for the children; an Equine Committee exhibit; Soil and Water District display; and an opportunity for customers to purchase products made from corn or soybeans.

The purpose of the breakfast was to give the 99 percent of our population that is removed from production agriculture an opportunity to interact with farmers and learn about our food and fiber system.

Patrick Kirchhofer is manager of Peoria County Farm Bureau. He can be reached at 39-686-7070.

FROM THE COUNTIES

Page 9 Monday, March 25, 2013 FarmWeek

WGN INTERVIEW

Illinois pork farmer Chris Gould, left, joined radio host Mike McConnell and WGN Radio callers to discuss Illinois farmers and farming practices in celebration of National Agriculture Day. Gould’s visit was part of an agricultural literacy project organized by Bryan Blau, Brittany Dean, Shaen Inglis, Nick N a g e l e , To d d P r i c e , a n d R u t h Zeldenrust. The group also spoke with freshmen at the Chicago High School for Agricultural Sciences about careers in agriculture before taping a short piece for “This Week in Agribusiness.” Completion of an agricultural literacy project is a requirement of the Illinois Agricultural Leadership Program. Nagele, Price, and Zeldenrust are Cook County Farm Bureau volunteers. (Photo by Todd Price)

FARMER TO TABLE

Franklin County Farm Bureau President Leon McClerren talks with a group of school children about farm technology and the operation of a combine. The Franklin County Farm Bureau as part of the National Ag Day obser vance last week held a “Farmer to Table” presentation for 250 school children, telling them of how agriculture affects their lives from the farmer to the table. (Photo courtesy of Franklin County Farm Bureau)

FSA offering honey loans through April 1

The Farm Service Agency (FSA) is offering a honey loan, a type of marketing assistance loan, until April 1. The national loan rate for honey is 69 cents per pound. Market prices currently exceed the loan rate, so loan deficiency payments are not available at this time.

To be eligible, a farmer must have produced honey in the U.S. during the calendar year for which the loan is requested and extracted the honey on or before Dec. 31 of the applicable crop year.

The farmer also must have continuous beneficial interest in the honey through date of repayment of the loan and been responsible for the financial risk and responsibility of losses or damage to the bees or honey.

Farmers are responsible for maintaining the quality of farmstored honey during the term of the loan.

The containers must be marked with the farmer’s name, type of honey, number of container, and net weight. Pre-loan inspections are required before the loans can be disbursed. Honey used as collateral may not be disposed of without approval of the county office staff.

B

UREAU — Farm Bureau will sponsor an informational meeting on the Cuba trip at 1 p.m. Wednesday at the Farm Bureau office. The trip is scheduled for Sept. 8 to 15. Contact the Farm Bureau office for reservations or more information.

• Farm Bureau will host Stroke Detection Plus wellness screenings from 8:35 a.m. to 4 p.m. Thursday at the Farm Bureau office. Members will save $35 on screenings. Call 877732-8258 for an appointment or more information.

• Farm Bureau will hold an informational meeting for people interested in becoming vendors at the Farmers’ Market in Princeton at 10 a.m. Tuesday, April 2, at the Farm Bureau building.

LAY — Farm Bureau will sponsor a master gardening seminar at 6:30 p.m.

Thursday, April 4, in the Farm Bureau auditorium. Jim Heflin, certified master gardener, will give the presentation. Call 6653300 by Thursday to register.

EWITT — Farm Bureau scholarship applications are available for high school seniors and current college students. Applications

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must be turned into the Farm Bureau office by April 3.

• Farm Bureau will sponsor an exhibit at the Clinton Business Expo from 3 to 7 p.m.

Wednesday at Clinton High School.

ULTON — The Farm Bureau Marketing Committee and the Graham Hospital Wellness Center will conduct cholinesterase level screenings beginning at 7:30 a.m. Wednesday, April 3, at the Farm Bureau building.

Cost is $25 for members.

Cholesterol and glucose levels can be tested for an additional $30. Call the Farm Bureau office at 547-3011 by April 1 to schedule an appointment or for more information.

CLEAN — Farm Bureau and the University of Illinois Livingston, McLean, and Woodford Extension units will sponsor agronomy day from 8:30 a.m. to 3 p.m. Monday, April 1, at the ASMARK Agricenter. Call 663-8306 or go to {web.extension.illinois.edu/lmw/} to register.

ERCER — Farm Bureau will host a defensive driving class from

F

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8:30 a.m. to 12:30 p.m. Tuesday, April 2, and Wednesday, April 3, at the Farm Bureau office.

AARP will present the class for members age 50 and over. Cost is $12 for AARP members and $14 for non-AARP members.

Call the Farm Bureau office at 582-5116 by Wednesday to register.

NION — The Farm Bureau tractor drive will begin at 9 a.m. Saturday, April 6, at the old Transcraft lot behind the Anna McDonald’s. Cost is $20. Proceeds will benefit the scholarship fund. Call 833-2125 for more information.

AYNE — Farm Bureau will sponsor a changes to the farmland assessment law meeting at 7 p.m.

Wednesday, April 10, at the Fairfield First Christian Church.

Brenda Matherly, Illinois Farm Bureau assistant director of local government, and Shirley Walters, Wayne County supervisor of assessments, will be the speakers. Call 842-3342 to register.

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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.

PROFITABILITY

FarmWeek Page 10 Monday, March 25, 2013

Don’t be bullied in markets, bear an open mind

Over the past two years, I have had the privilege to travel across the Midwest and Northeast talking to farmers and providing market outlooks.

My travels and speaking engagements have brought Cory Winstead one particular question: “Are you bullish or bearish this market?”

From a risk-management standpoint, trying to fit into solely one of these categories can be costly. One lesson, especially after this past year, is that we must examine all risks and look for profitable opporBY CORY WINSTEAD

tunities to make sales.

With today’s volatility, the market can change quickly and take on a totally different tone from one day to the next. In some cases, one topic can move the market multiple times in just one week.

Take South American weather, for example.

Depending on the forecast, the market can move 20 cents higher or lower.

Volatility is here to stay, and as sellers, we need to have a plan in place to take advantage of the spikes.

For 2013, we are looking at a very similar crop production story as last year — the projection was for large acres and good weather.

If we have a normal growing season, instead of a

Major fertilizer deal in works A proposed acquisition in the fertilizer industry could make Canada’s Potash Corp. a dominant force in markets around the world.

Potash Corp. is attempting to acquire Israel Chemical. The Israeli government is expected to rule on the proposed deal this month.

If Potash Corp. acquires Israel Chemical, the two cartels and their affiliates would account for 96 percent of potash sold to India, 95 percent of the Chinese market, and 80 percent of the Brazilian market, the Financial Times reported.

In other industry news, Potash Corp., along with Mosaic Co. and Agrium Inc., last week agreed to pay nearly $100 million to settle private class-action lawsuits that alleged pricing of the companies’ fertilizer ingredient violated U.S. antitrust laws.

The three companies denied the accusations but paid the fines to avoid the costs of fighting the suits.

M A R K E T FA C T S Feeder pig prices reported to USDA* Weight 10-12 lbs.

40 lbs.

Range Per Head $30.95-$48.00 NA

Weighted Ave. Price $37.09 NA

This Week Last Week 94,224 107,830 *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 Change $68.53 $72.85 -$4.32 $50.71 $53.91 -$3.20

USDA five-state area slaughter cattle price (Thursday’s price) Steers Heifers

This week Prev. week $124.68 $127.00 $125.00 $127.00

Change -$2.32 -$2.00

CME feeder cattle index — 600-800 Lbs. This is a composite price of feeder cattle transactions in 27 states.

(Prices $ per hundredweight) Prev. week Change This week $135.08 $137.19 -$2.11

Lamb prices Slaughter prices - Negotiated, Live, wooled and shorn 75-150 lbs. for 95-135 $/cwt. (wtd. ave. 118.07)

Export inspections (Million bushels) Week ending Soybeans Wheat Corn 3/14/2013 8.9 23.9 15.4 3/07/2013 17.8 28.7 14.5 Last year 24.0 21.2 23.3 Season total 1174.1 746.0 394.6 Previous season total 958.8 796.7 897.8 USDA projected total 1345 1025 825 Crop marketing year began June 1 for wheat and Sept. 1 for corn and soybeans.

drought as we did last year, we could be looking at a much larger carryout than in previous years.

On the surface, this can look bearish, but just being bearish or bullish is when we lose good opportunities to make profitable sales.

When managing price risk, one has to look at the information available and be prepared to make a profitable sale.

Resist getting caught up strongly on one side or the

other. Making good decisions includes being able to see all possibilities.

There are many tools available to lock in prices. Talk to someone you trust and are comfortable with when thinking about using these tools.

The more knowledgeable you are, the better seller you become.

Early news for the 2013 crop year is trending to the bearish side, meaning it’s good to start looking at managing

your down-side risk.

However, there likely will be spikes in the market that may provide an opportunity. Keep an open mind and be prepared to make small incremental sales at profitable levels.

Have a plan for the 2013 marketing year and be ready to execute it when the time comes.

Cory Winstead is AgriVisor’s account manager. His email address is cwinstead@agrivisor.com.

Allendale projects record-high bean plantings

BY DANIEL GRANT FarmWeek

U.S. farmers this year could plant the most soybean acres on record, based on the findings of a recent survey.

Allendale Inc., McHenry, this month released the results of its 24th annual nationwide survey of farmers’ planting intentions.

The survey indicated U.S. farmers this year could plant 78.324 million acres of beans, which would be a new record and up about 1.1 million acres from a year ago.

A farmer survey released last week by Farm Futures also projected farmers will plant a record-large number of bean acres (79.09 million) this spring.

Corn plantings in the Allendale survey were estimated at 96.956 million acres, down 200,000 acres from a year ago, while wheat plantings were estimated at 56.261 million acres, up about 600,000 from a year ago.

“Overall, acreage will be a little higher for (the combination of) corn, soybeans, and wheat,” said Rich Nelson, Allendale director of research. “There’s no doubt higher prices will encourage more acres (of those three crops at the expense of) other grains, cotton, and a little from CRP (Conservation Reserve Program).”

The biggest surprise of the report, according to Nelson, was farmers in Illinois and Indiana indicated they would not plant more corn this sea-

son than they did last year.

Allendale projected farmers in Illinois this spring will plant 12.727 million acres of corn, down 73,000 acres from last year, and 9.509 million acres of beans,

FarmWeekNow.com

To c h e c k o u t R i c h N e l s o n ’s comments about the upcoming planting intentions report, go to FarmWeekNow.com.

up 459,000 from a year ago.

“Our producers told us after three years in a row of disappointing (below-trend) yields, particularly for corn-on-corn, they would not plant more corn this year,” Nelson said.

The large planting intentions suggest crop supplies could reach much more comfortable levels by harvest.

An average yield of 156.9 bushels per acre would produce a 13.9-billion-bushel corn

crop, compared to 10.78 billion bushels last year. And an average soybean yield of 43 bushels per acre would result in a 3.35-billion-bushel crop, compared to 3.02 billion bushels a year ago.

USDA last month projected U.S. farmers this year will plant 96.5 million acres of corn, 77.5 million acres of soybeans, and 56 million acres of wheat.

It will release new estimates on Thursday in its annual prospective plantings report.

USDA that day also will release its quarterly stocks report.

“The planting report usually doesn’t get much price response,” Nelson said. “The trade wants to see the crops planted and up out of the ground before they’re priced into the market.”

Nelson believes the quarterly stocks estimates could have more bearing on the markets.

Cattle on feed down 7 percent from year ago

Cattle inventory numbers released Friday in supportive to cattle prices this summer, Good USDA’s March cattle on feed report are expected said. He also viewed the on-feed estimate as to be neutral to slightly friendly to market prices. supportive to the market.

USDA estimated the numBut beef demand is a little FarmWeekNow.com skittish, according to the analyst, ber of cattle and calves on due in part to less disposable feed as of March 1 totaled Visit Far mWeekNow.com to 10.9 million head, down 7 per- v i e w t h e l a t e s t i n f o r m a t i o n income for many consumers, o n U S D A’s M a r c h c a t t l e o n high retail beef prices, and high cent from the same time last feed report. gasoline prices. year.

“The (cattle) market pretty much Meanwhile, placements in has been range-bound, and it doesn’t look like it feedlots during February totaled just 1.48 milwill change (near-term),” Good said. “Cash lion head, down 14 percent from a year ago. prices have been running between $122 and “The placement figure is below (pre-report) estimates,” said Kevin Good, senior analyst and $128 (per hundredweight), and it looks like we’re probably stuck there for awhile.” fed cattle market specialist at CattleFax. “It’s Marketings of fed cattle during February mainly due to two severe (winter) storms in the totaled 1.64 million head, down 7 percent from Plains states in late February.”

Lighter-than-expected placements should be last year. — Daniel Grant

PROFITABILITY

Page 11 Monday, March 25, 2013 FarmWeek

CASH STRATEGIST Corn’s the name, stocks the game

Contrary to history, the March quarterly stocks numbers for corn, and even soybeans, are the primary focus of the trade this week. Typically, the prospective plantings numbers are what the trade anxiously awaits, but not this year.

Traders are said to be looking for something near 4.9 billion bushels for the March 1 corn stocks. That implies a usage in the first half of the marketing year of close to 6.8 billion bushels.

On average over the last five years, annual consumption in the second half of the year has averaged about 75 percent as much as the first half. Much of that can be traced to smaller feed consumption through the warmer parts of the year.

Using that number would imply a 5.1-billion-bushel potential demand prior to the new crop’s arrival. But this marketing year’s first quarter consumption was unusually large, especially the apparent feed consumption.

Harvest data from last summer suggest that something near 1 billion bushels of corn was harvested during August, with a good portion diverted into the feed pipeline. Because of USDA methodology, bushels consumed prior to Sept. 1 are counted as feed/residual usage in the first quarter of the marketing year.

The feed/residual number in the first quarter was 300 million bushels larger than it was a year ago. Discounting the first half usage by that amount and using a typical

consumption relationship would still suggest 4.8 billion bushels could be consumed in the second half of the marketing year.

That would leave something close to 200 million bushels for ending stocks, not the 632 million bushels currently forecast.

Imports have been running at a faster pace than the USDA forecast would imply.

After an understandably slow first quarter, second quarter imports are close to 50 million bushels.

There’s every reason to think that pace will continue, if not grow a little more.

Those imports could add 100 million or maybe even 150 million bushels to supplies available for consumption, boosting implied ending stocks to 300 million or 350 million bushels.

That’s still an unbearably tight level, leaving the market searching for the other 250 million to 350 million bushels perceived to accommodate a tight, but workable situation.

The soybean situation is potentially as tight if stocks come close to the 950 million bushels traders expect in this report. But unlike corn, it looks like our aggressive soybean export campaign is coming to a sudden halt.

And amid all the chatter, Brazilian supplies appear to be flowing readily into the world pipeline. And finally, a few analysts are starting to doubt Chinese import forecasts. If Chinese imports are indeed smaller than forecast, it would help pave the way for imports into the U.S., relieving our tight old-crop situation.

No matter the outcome, the stocks numbers are key and could set the market tone for the next couple of months.

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Corn Strategy

ü2012 crop: The shortterm trend continues to point higher, with recent wheat strength removing the drag it has had on the corn market.

Wait for a rally above $7.40 on May futures for catch-up sales.

We may add to sales if that’s achieved. Check the Hotline. ü2013 crop: Use rallies to $5.75 for catch-up sales. We may add a sale if December hits that level. Check the Hotline. vFundamentals: The quarterly USDA grain stocks and prospective plantings report coming Thursday will command the trade’s attention.

Of the two, the stocks number is the one the industry is most anxious about because of the current forecast of extremely tight supplies at the end of summer. A small change could have significant price implications. Some private firms have backed off on their corn acreage estimates, but there’s little doubt plantings will be big. As long as temperatures remain unseasonably cool, new-crop prices should hold firm on the impact any later planting might have on yields.

Cents per bu.

Soybean Strategy

ü2012 crop: Even though the day-to-day talk continues to hinge on Brazil’s shipping delays, export shipments indicate business is rapidly shifting to South America. Once that becomes entrenched, there’s little to support current soybean prices. Use rallies above $14.40 on May futures for catch-up sales. ü2013 crop: New-crop prices remain weaker than oldcrop on expectations of a significant increase in supplies.

Use rallies above $12.65 on November futures for catch-up sales. vFundamentals: The dayto-day talk continues to focus on Brazil and China. And even though talk persists that China may source more shortterm needs from the U.S., there’s no evidence of fresh business. In Brazil, the talk is more focused on trucks waiting to unload than vessels waiting to load. And evidence

continues to mount that China’s imports are coming in below forecasts.

Wheat Strategy

ü2012 crop: Market activity suggests a near-term low has been established. Wait for a rally back to $7.50 on Chicago May futures before making catch-up sales. Check the Hotline daily, as we may wrap up old-crop sales at any time. ü2013 crop: Wait for Chicago July to trade above $7.48 before making catch-up sales. vFundamentals: Activity in the wheat market has been

choppy, as the central focus remains on weather conditions in the Southern Plains. The current forecast is calling for significant precipitation to move across the region, potentially improving prospects for the hard red winter wheat crop.

There has been some anticipation demand for U.S. wheat would pickup, but that has not reflected in the weekly export sales. Only 484,500 metric tons were sold this past week, less than expectations for 800,000 to 1.1 million metric tons (a metric ton of wheat equals 36.74 bushels).

PERSPECTIVES

FarmWeek Page 12 Monday, March 25, 2013

Every farmer should care about immigration law All farmers should realize there is a reason the American Farm Bureau Federation (AFBF) is advocating for changes in our immigration law.

It is rare to have an opportunity to discuss this subject without a lot of rhetoric and HOWARD BUFFET innuendo; however, AFBF is guest columnist right to take a lead and provide the facts in explaining why every farmer should care about immigration.

The U.S. remains a powerhouse in international agriculture. I see this not just from my farm in Illinois but because our foundation has worked in 78 countries.

Almost all of these countries depend on imported food, have large populations living in poverty, pay as much as 70 percent of their household income for food, and have farmers who cannot always feed their own families.

To remain a powerhouse, we face four challenges: increased regulations, the need for better conservation production practices, an aging farm operator population, and a reliable and competitive migrant workforce.

As an American, basically, I won the lottery and almost everyone reading this won the same lottery. We didn’t earn our citizenship; it was provided to us because we were fortunate enough to be born in America.

We could have been born in Bangladesh or Niger; our parents could have been farmers, firefighters, scientists, or statesman — or homeless, unemployed, unskilled, or very sick. We clearly won the lottery.

With this lottery came incredible opportunity that puts all Americans in the upper few percent in the world in terms of wealth. I’m proud America still stands as a refuge for the “huddled masses,” and we promise the world to take “your tired and your poor.” These words etched on a plaque at the Statue of Liberty represent our values and principles.

But who are we as individuals? I believe farmers are some of the most generous people and among the first to respond to the needs of their communities. That is exactly why we should be a voice for immigration reform.

If you ask a corn farmer in Indiana about his detasseling crew, or a cherry farmer in Michigan, a dairy farmer in Wisconsin, or an onion farmer in Georgia, they will tell you how critical migrant labor is to their businesses.

There is little question, based on our research, that migrant labor is critical to U.S. agriculture in almost all 50 states.

So what’s the problem? Why don’t all farmers support reform? It is pretty much about two things — fear and jobs.

The fear is rooted in the unknown and concerns about the consequences of increasing migrant populations. Fear of the unknown is a natural response, but it must also be overcome because the alternative is far worse.

Our current “H-2A” system is broken. I know this from talking to farmers from New York to California. I know it from spending more than a decade on our border with Immigration and Cus-

toms Enforcement (ICE) as well as from our foundation’s (The Howard G. Buffett Foundation) support of one of the most effective programs helping U.S. farmers and migrant workers.

As far as concerns about migrant workers taking jobs from unemployed Americans, it isn’t happening. We know this because H-2A requires farmers to advertise for and hire Americans first, but farmers using H-2A will tell you that Americans do not apply and in the few instances they do, they do not stay.

In a study we funded through Arizona State University (ASU), the numbers came back that U.S. citizens actually collect more through state and federal welfare programs than they earn working long hours in available farm jobs. The fact is U.S. workers have no incentive to take these farm jobs.

Migrant workers actually support and create U.S. jobs and where migrant labor supply is low, U.S. jobs suffer. In Arizona, where it has become difficult to retain the necessary labor, farm production has moved into Mexico, putting farm equipment operators, truck drivers, and other support personnel in the U.S. out of jobs.

The ASU study looked at the economic impact of H-2A labor on Yuma County, Ariz., and found that local farmers would have had 42 percent lower profits if they did not have access to H-2A workers and that a controlled expansion of H-2A would create 143 new U.S. jobs.

It also would provide the economy nearly 13 times higher tax revenue compared to the expense of increased social services. Multiply this across the U.S. and the numbers become significant.

Count in the estimated $6 billion of U.S. crops lost because of a lack of labor, and you realize the real threat to our food safety, affordability, and availability.

Regardless of whether Congress can agree on comprehensive immigration reform, I believe the administration of the H-2A program should be moved from the Department of Labor (DOL) to USDA. The president could implement this change immediately through an executive order. Such a move could provide the catalyst to breaking down the historical barriers that view migrant workers as a labor issue rather than an agricultural issue.

A program that improves on labor availability, contract discipline, productivity standards, flexibility for minimum hours, and a return worker policy would go a long way toward fixing the system.

Aligning the federal agency with workforce agencies at the state level also would significantly improve the process. Perhaps the single largest failure of the current system is the

recruitment process.

Farmers suffer an enormous burden from the advertising requirements, the

first right-of-hiring concept, the application process, and the inflexibility to both the employer and the workers.

Job orders are written in such a way that it can actually cause farmers to lose a significant portion of their crop and the workers are locked into an inflexible work requirement when situations change.

When I sign up for USDA programs or report my acreage, I walk into USDA’s Farm Service Agency (FSA)

office. I would never imagine walking into the DOL, so why would our counterparts? The bottom line is this is about agricultural production and should be treated that way.

I believe American agriculture is critical to achieving food security on a global basis. I also know that for our system to succeed we must recognize the value migrant labor provides hundreds of farmers across our country.

Recently, I was criticized for similar remarks made to a group of migrant workers and accused of being un-American. Embracing another culture and people who sacrifice for our food system is anything but unAmerican — it is what America was built on.

Howard Buffett and his foundation operate 4,500 acres of farmland in Illinois, 1,400 in Arizona, and 9,200 in South Africa. The foundation’s mission is to improve the standard of living and quality of life for the world’s most impoverished populations. He has served on the boards of Archer Daniels Midland and ConAgra Foods, and currently serves on the boards of Berkshire Hathaway, Coca Cola, and Lindsay Corp.

LETTER TO THE EDITOR

Use Lent as reflection time

Editor: Not all farmers are or need to be Christians. Some are in other religions or are agnostics or atheists or just not interested in any religion. To me, that’s OK. But at this time of year, my faith community is in the pre-planting, preEaster season of Lent. Our practices say Lent is a time for self-reflection.

And I’m reflecting on my experiences as an Illinois Farm Bureau member.

I wonder why we label our opponents as “enemies” and “activists,” but we give awards to our members who ACT? (FB ACT is Farm Bureau’s Agricultural Contact Team).

I wonder why we readily and generously pay lobbyists to work for a “safety net” for us (who are quite affluent), and yet at times disrespect and ridicule poor people who need SNAP (food stamps) as part of their essential safety net.

Letter policy

Letters are limited to 300 words and must include a name and address.

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All letters are subject to editing, and only an original with a written signature and complete address will be accepted.

I wonder why anonymous ACTIVATORS issue voting endorsements when FB members have various and diverse political views.

I have family members and farmer neighbors (who belong to IFB) who are gay or lesbian, but some small FB group issues a policy decrying samesex marriage. And I wonder why we don’t support freedom and equality for all, as our Pledge of Allegiance promises.

Of course, I also wonder why I don’t get all my work done on time, and why I don’t chat with friends just when they may need encouragement, and why I sometimes stretch my yields a bit when I’m at the coffee shop, and why I don’t tell my wife and children I love them as often as I should.

But I’m not asking IFB to help me with those items. With God’s help, I should remedy those deficiencies myself.

ELDON MCKIE, St. Louis A daytime telephone number is required for verification, but will not be published.

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