FarmWek November 12 2012 by Illinois Farm Bureau

IllINoIs Farm BurEau, the Illinois Corn Growers Association, and the Illinois Soybean Association have launched a campaign to get the farm bill passed. ..................3

ThE NuTrIENT Research and Education Council will direct research funded by a new fertilizer assessment and support the KIC nutrient stewardship program. ....2

Monday, November 12, 2012

Two sections Volume 40, No. 46

Incumbents upset, majorities remain

National election over; ‘fiscal cliff ’ focus next?

BY MARTIN ROSS FarmWeek

Periodicals: Time Valued

When the dust cleared from what many deemed one of the U.S.’ more acrimonious national campaigns, President Obama had reclaimed the White House, Republicans held onto the House, and Democrats strengthened their hold in the Senate. At the same time, California voters rejected potentially wide-ranging food labeling proposals. And several of Illinois’ congressional incumbents suffered defeat, raising concerns about the state’s continued clout on the House Ag Committee. Meanwhile, the fates of the farm bill and expiring federal tax measures remain uncertain (see page 3). But as the ballots rolled in last Tuesday, analysts at a national ag bankers conference in Milwaukee cited at least one absolute certainty on the political horizon: the approaching “fiscal cliff.” Congress and the president face impending expiration of current tax rates, dozens of tax

a oNE-maN play, “Farm Hands,” debuted in Chicago last week and could help finance the Ag rAbility prog ram in Illinois through future performances. .......8

exemptions, payroll tax cuts, and unemployment benefits, as well as major across-the-board spending cuts under budget “sequestration” mandates. The U.S. is rapidly approaching the federal debt ceiling. Andrew Busch, public policy strategist with Chicago’s BMO Capital Markets and a CNBC analyst, said he anticipated a six-month extension of soon-to-expire Bush-era tax cuts, but argued lame duck approval of tax “extender” legislation affecting a variety of newer breaks would be “really tough.” Kansas State University ag economist Barry Flinchbaugh said he believes Bush cuts will be restored by January and $1.2 trillion in spending would be sequestered, “half of which will be cuts to the military.” By spring, “we’ll have (currently AA-plus-rated) federal treasury bonds rated ‘BB,’ the president will panic as will Congress, and we’ll finally get a (fiscal) solution,” he said. At the same time, Illinois Farm Bureau National Legislative Director Adam Nielsen sees Obama working “to make good on his promise to address immigration,” opening the door to new Farm Bureau ag labor proposals, and continuing to support renewable fuel development. “The (recently approved) two-year highway bill will expire before we know it, and we really need to build support across the Midwest for waterways legislation,” he added. Biotech and ballots Meanwhile, ag interests scored a major win in California, where Proposition 37, an initiative seeking labeling of food containing crops improved through biotechnology, was defeated 53 per-

cent to 47 percent. Farm Bureau was a member of the “No on Prop 37” coalition, which also included the California Chamber of Commerce, and major retailers. “We’re pleased with how decisive the vote was and how much voter sentiment turned once the facts came out about the proposition,” American Farm Bureau Federation’s Kevin Richards told FarmWeek. “The agricultural community rallied to defend sound science and defend good labeling policy.” Meanwhile, Virginia voters approved Question 1, a property rights initiative that requires government and private authorities to assure any eminent domain condemnation “taking” is for public purposes, not for private gain. Illinois overhaul On the home front, several Illinois incumbents suffered upsets as a result of a new state congressional map and “the effectiveness of the Democrat ground game,” Nielsen said. Those included Rep. Bobby Schilling, a Colona Republican on the House Ag Committee, who lost to East Moline Democrat Cheri Bustos in Illinois’ 17th District. Also defeated were 8th District Republican Rep. Joe Walsh, beaten by Democrat Iraq War veteran Tammy Duckworth; 10th District Republican Rep. Bob Dold, who lost to Deerfield Democrat management consultant Brad Schneider; and Rep. Judy Biggert, a Hinsdale Republican who lost her 11th District seat to physicist and former Democrat Rep. Bill Foster, who previously served two years in the House. See Election, page 3

FarmWeek on the web: FarmWeekNow.com

USDA raises crop estimates

South America focus as U.S. harvest winds up

BY DANIEL GRANT FarmWeek

USDA on Friday raised its crop production estimates compared to last month by 111 million bushels for soybeans and 19 million bushels for corn. U.S. corn production was pegged at 10.725 billion while soybean production was raised 4 percent to 2.97 billion bushels. The boost in production surprised many traders and subsequently cast a bearish shadow over the markets. “USDA increased the size of the soybean crop even greater than the trade expected,” Brian Basting, analyst with Advance Trading, said during a teleconference hosted by the Minneapolis Grain Exchange. Meanwhile, USDA raised ending stocks by 50 million bushels for wheat, 28 million bushels for corn, and 10 milFarmWeekNow.com lion bushels for beans. End- Listen to Brian Basting’s coming stocks currently total 647 ments about the latest crop remillion bushels of corn and port at FarmWeekNow.com. 140 million bushels of beans. Crop prices Friday morning declined about 25 cents per bushel for soybeans and a dime for wheat while corn remained steady. “Typically, a short crop year tends to have a long tail, and I think that’s the pattern we’re seeing develop,” Basting said. “We saw a spike (in the soybean market) and now we’re seeing lower lows and lower highs,” he continued. “I think a tail is starting to form in corn, too.” USDA on Friday lowered its season average price estimates for all three crops. The new price ranges are $13.90 to $15.90 per bushel for beans (down 35 cents), $6.95 to $8.25 for corn (down 20 cents at the midpoint), and $7.75 to $8.45 for wheat (down a dime). “Export demand continues to be sub-par (for wheat and corn),” Basting noted. Nationwide, yields were projected to average 122.3 bushels per acre for corn, up 0.3 of a bushel from last month, and 39.3 bushels for beans, up 1.5 bushels from a month ago. In Illinois, harvest last week was nearly complete as 98 percent of corn and 96 percent of beans were in the bin. The state yield averages were pegged at 101 bushels for corn, up 3 bushels from last month but down 56 bushels from a year ago, and 43 bushels per acre for beans, up 4 bushels from last month but down 4.5 bushels from a year ago. Crop production in Illinois is expected to total 1.25 billion bushels for corn, down 36 percent from last year, and 378 million bushels for beans, down 11 percent from a year ago. “The bean market now will focus primarily on South America and the potential for record crops,” Basting said. “If there’s a problem (such as drought or an outbreak of rust), things could change (in the bean market).” Basting characterized current conditions in South America as less than ideal. Illinois Farm Bureau®on the web: www.ilfb.org

FarmWeek Page 2 Monday, November 12, 2012

Quick Takes ThaNksgiviNg meal cosT up slighTly — The retail cost of menu items for a classic Thanksgiving dinner increased less than 1 percent this year, according to the American Farm Bureau Federation (AFBF). AFBF’s 27th annual informal price survey of classic items found on the Thanksgiving Day dinner table indicates the average cost of this year’s feast for 10 is $49.48, a 28-cent increase from last year’s average of $49.20. The AFBF survey shopping list included turkey, bread stuffing, sweet potatoes, rolls with butter, peas, cranberries, a relish tray of carrots and celery, pumpkin pie with whipped cream, and beverages of coffee and milk, all in quantities sufficient to serve 10. The big ticket item was a 16-pound turkey, which came in at $22.23 this year. That was roughly $1.39 per pound, an increase of about 4 cents per pound, or a total of 66 cents per whole turkey, compared to 2011. coal pRoDucTioN up — Coal production in the Illinois Basin rose 13 percent during the first half of the year compared to the same period in 2011, according to the U.S. Energy Information Administration. The Illinois Basin, which ranges across Illinois, Indiana, and western Kentucky, produced 64.4 million tons. The expanded production came in response to domestic and international demand for cheaper coal. Production within Illinois has been key to driving basin increases. Illinois’ coal exports to international markets — 5.5 million tons — increased 120 percent last year compared to 2010. Domestic demand for the basin’s coal, particularly from Illinois, grew as industry sought more low-cost, high-sulfur coal. Utilities that have added scrubbers can burn high-sulfur coal and stay in compliance with the government requirement to cut sulfur dioxide emissions. TheRe’s aN ‘app’ FoR ThaT — Scientists working for USDA have released two mobile phone applications to make things easier for anyone who needs to adjust insecticide spray equipment. The apps were developed by Agricultural Research Service (ARS) scientists, and are designed to ensure that aerial and ground-based crews can hit targets and minimize pesticide drift by keying in specifics on the type of equipment and pesticide they are using. With dozens of manufacturers producing dozens of different types of spray technology — each with its own nozzle type, flow rate and pressure setting range — the equipment setup can get pretty complicated. The apps incorporate the latest science of spray technology, including “spray nozzle atomization” models developed by ARS at College Station. They can be used with a smartphone and accessed right from a field or the cabin of a small aircraft. The apps are available online through the Apple iTunes App Store and the Google Play Android Marketplace by searching for “Aerial Sprays” for the aerial application app and “Vector Sprays” for the ground-based sprayer app.

(ISSN0197-6680) Vol. 40 No. 46 November 12, 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.

Address subscription and advertising questions to FarmWeek, P.O. Box 2901, Bloomington, IL 61702-2901. Periodicals postage paid at Bloomington, Illinois, and at an additional mailing office. POSTMASTER: Send change of address notices on Form 3579 to FarmWeek, P.O. Box 2901, Bloomington, IL 61702-2901. Farm Bureau members should send change of addresses to their local county Farm Bureau. © 2012 Illinois Agricultural Association

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) 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

NUTRIENT MANAGEMENT

New fertilizer assessment to support research, education BY KAY SHIPMAN FarmWeek

A per-ton assessment on fertilizer will help fund nutrient research and education as directed by the state Nutrient Research and Education Council (NREC). Illinois Farm Bureau Director Dale Hadden of Jacksonville represents IFB on the ninemember council. Hadden, who serves as the NREC secretary, is one of three voting farmers on NREC. The others are Gary Hudson, Hindsboro, Illinois Corn Growers Association representative, and Matt Hughes, Shirley, Illinois Soybean Association representative. Hadden noted farmers previously paid a 25cent-per-ton assessment on fertilizer with half of the money going into the state’s general revenue fund and the rest funding the former Fertilizer Research and Education Council (FREC). But since 2004, FREC funds repeatedly have been “swept” into the state’s general revenue fund, he added. This year, legislation establishing NREC was passed and signed into law. Starting on Aug. 15, a per-ton fertilizer assessment of 75 cents has been directed to NREC and 25 cents per ton to IDOA. Under the legislation, the state will not be able to sweep NREC funding. NREC members will determine research topics and forward those to university researchers

who will submit specific proposals, Hadden explained. NREC members will vote on whether to fund proposed research, some of which may be multi-year projects, he noted. Voting NREC members and their affiliations include: Howard Brown, GROWMARK; Ed Corrigan, Brandt Consolidated; Matt Duncan, Crop Production Services; Dave Creech, certified crop adviser; Chris Matlock, FS Custom Turf; and Jim Larkin, Illinois Department of Agriculture (IDOA). Non-voting NREC members are: German Bollero, head of the University of Illinois crop sciences department; Marcia Wilhite, Illinois Environmental Protection Agency; Mel Nickerson, Environmental Law and Policy Center; and Cindy Skrukrud, Sierra Club. The research will include on-farm testing to prove agriculture can reduce nutrient losses through voluntary, science-based practices. In addition to funding research, NREC also will support the Keep it for the Crop (KIC) nutrient stewardship program and the Illinois Council for Best Management Practices (CBMP). More information about NREC, including a video describing the program, is online at {illinoisnrec.org}. Presentations about NREC will be given at the Illinois Commodity Conference and other farm meetings this winter.

Crop insurance harvest prices brighten risk protection picture Steve Worthington reported. As of last week, Country Illinois crop claims contin- had fielded roughly 8,400 production loss claims. ue to roll in as farmers The company to date has statewide gain a clearer picture of the protections their paid out some $18.5 million crop insurance policies will to nearly 800 policyholders. provide. “A lot of the groundwork USDA’s Risk Management already had been done on Agency has set 2012 crop in- many of the claims that had surance harvest prices at been submitted,” Worthing$7.50 for corn and $15.39 for ton told FarmWeek. soybeans, enabling crop in“Claims are rolling in pretty surers to settle all Revenue steadily right now. We did Product (RP) claims. RP achave a few people who counts for the majority of wanted an early payment, Country Financial’s crop and we tried to accommopolicies. date those folks. Under RP, policyholders “This price factor is automatically qualify for the going to be important to higher of either a spring base those people who were price guarantee or a harvest caught in this drought situaprice guarantee. tion. Most of the losses we’ve For a reduction in premiseen have been based on a ums, farmers can reject the yield situation, and there’s harvest price election. Base prices for 2012 Yield just no doubt the additional Protection (YP) and RP crop money they may receive insurance policies were $5.68 based on the harvest price will be beneficial.” per bushel for corn and He urged farmers who $12.55 per bushel for soyhave not yet filed claims to beans. do so quickly, and to let adCountry crop adjusters justers know whether they had begun collecting would prefer to receive loss statewide harvest/loss data payments in 2012 or 2013 well prior to October price for tax purposes. announcements, Country Country also is processCrop Claims Supervisor BY MARTIN ROSS FarmWeek

ing quality loss claims concentrated primarily in the state’s southern tier, where “aflatoxin was a consideration in the loss.” The insurer is working on a “case-by-case basis” with producers unable to find markets for aflatoxin-contaminated corn, Worthington said.

Tuesday: • Harvey Freese, Freese-Notis Weather • Roger Webster, FMC • Troy Frerichs, senior investment officer, Country Financial • Steve Worthington, crop claims supervisor, Country Financial Wednesday: • Tim Schweizer, Illinois Department of Natural Resources • James Corneleus, curator of the Lincoln collection, A. Lincoln Presidential Library and Museum Thursday: • Illinois Corn Growers Association representative • Carolyn Sheridan, director of AgriSafe • Dr. Eric Moore, Merck Animal Health Friday: • Sara Wyant, AgriPulse publisher • Philip Nelson, Illinois Farm Bureau president • Alan Jarand, RFD Radio director To find a radio station near you that carries the RFD Radio Network, go to FarmWeeknow.com, click on “Radio,” then click on “Affiliates.”

Page 3 Monday, November 12, 2012 FarmWeek

goVERnMEnT

Democrats strengthen majorities in state Senate, House BY KAY SHIPMAN FarmWeek

The election swept Illinois Democrats to stronger majorities in the Illinois Senate and House. In the Senate, Democrats will control 40 out of 59 seats, creating a super-super

majority. House Democrats will fill 71 of 118 seats. “Both Democratic caucuses will have veto-proof majorities,” said Kevin Semlow, Illinois Farm Bureau director of state legislation. In the Senate, one party needs only 36 seats for a

Election

Continued from page 1 Urbana Republican House Ag Committee member Tim Johnson and Rep. Jerry Costello, a Belleville Democrat, will retire at year’s end. Taylorville Republican Rodney Davis, a former aide to Collinsville Republican Rep. John Shimkus, replaces Johnson in the 13th District, while William Enyart, a Belleville Democrat and former Illinois National Guard adjutant general, assumes Costello’s 12th District seat. Rep. Donald Manzullo, an Egan Republican, lost last March’s 16th District primary to Manteno Republican Rep. Adam Kinzinger, former 11th District representative. Rep. Randy Hultgren, a Winfield Republican, represents the now-highly suburban 14th District and has expressed interest in a seat on the House Financial Service Committee — an assignment that likely would mean his departure from the Ag Committee. “We’re going to have to get to know six new people — three from the Chicago area, three of them downstaters,” Nielsen summarized. “One of them is someone we’ve known and worked with and who’s been a Friend of Agriculture in the past — Bill Foster. We hope to pick up where we left off. He understands renewable fuels and agriculture. “Rodney Davis is someone who’s been on a congressional staff for many years, with (returning Collinsville Republican Rep.) John Shimkus. We’re already off to a very good start building that relationship. “We’re going to encourage Davis to be on the Agriculture Committee. That’s important — we don’t want to lose our presence on the committee. If we did, it would be the first time in memory that Illinois had no representation there.” Bustos’ Western Illinois district is home both to a large rural constituency and key manufacturing centers, Nielsen noted. Enyart reportedly will employ many of Costello’s current staff members, raising hopes he may carry on Costello’s legacy as an ag-friendly “champion on clean water issues” and infrastructure improvements.

veto-proof majority while 71 seats are needed in the House. “There are a lot of questions why Democrat candidates did so well throughout the state. Their get-out-thevote organization made the difference in close district races,” Semlow speculated. The Democrat-drawn map of legislative districts would have helped maintain Democrat majorities in both chambers, but not to the extent that occurred, according to Semlow. With Democrats controlling the Senate, House, and the governor’s office, they

were able to draw new district maps without Republican input. The state Constitution empowers members of the House and Senate to draw district maps the year after the census. Semlow illustrated his point of strong voter turnout in closely contested districts by highlighting two surprise outcomes. In a new 48th Senate District that includes Springfield and Decatur, Democrat Andy Manar from Bunker Hill defeated Decatur’s Republican Mayor Mike McElroy. Meanwhile, Republican incumbent Rich Morthland

was defeated by Democrat Mike Smiddy for the House’s 71st District seat. A large influx of new lawmakers — many with urban backgrounds — presents a challenge and opportunity for IFB. “There will be at least 45 new faces out of 177 (legislators),” Semlow said. “We look forward to reaching out and helping them learn about agriculture, and we’re hoping many of the new legislators in the Cook County area will become part of the Adopt a Legislator program,” he concluded.

LAWMAKER FIELD VISIT

State Rep. Elgie Sims, right, (D-Chicago) chats with Cook and Will County Farm Bureau members during a recent visit to the farm of Cook County Farm Bureau member Mark Yunker. Left to right are: Janet McCabe, Yunker, and Kim Morton, all Cook County Farm Bureau members; and Glen Ginder, Will County Farm Bureau member. Later, Kankakee County Farm Bureau members joined Sims and the group for lunch. Under the new legislative map, Sims’ 34th Legislative District added portions of Will and Kankakee Counties. (Photo by Bona Heinsohn, Cook County Farm Bureau director of governmental affairs and public relations)

Illinois ag groups spur post-election farm bill push BY MARTIN ROSS FarmWeek

As U.S. House leaders prevailed at the polls, Illinois ag groups launched a post-election farm bill push, and a leading ag economist took lawmakers to the woodshed. At last week’s Ag Banker’s Conference in Milwaukee, Kansas State University economist Barry Flinchbaugh lambasted congressional leaders for having “the audacity, in middle of the worst drought in 60 years, to let the farm bill expire.” Flinchbaugh anticipates passage by April of a farm bill that includes a “strong foundation” for crop insurance and a new farm revenue safety net echoing Senate proposals. He sees “a possibility” of the House passing a bill yet this year.

Last week, Illinois Farm Bureau, the Illinois Corn Growers Association (ICGA), and the Illinois Soybean Association launched a campaign to “pass the Farm Bill NOW,” arguing farm bill expiration “puts farmers in a tight spot.” Farmers can contact lawmakers toll-free at 1877-422-8424. David Crow and David Beaudreau Jr. represent ICGA on the Hill. Crow sees a “50-50” shot at a lame duck vote; Beaudreau suggests lawmakers could opt for a fiveor six-month extension of 2008 farm bill provisions “or similar language.” “It took the Senate, what, one or two days, to wade through roughly 400 (farm bill) amendments,” IFB National Legislative Director Adam Nielsen said. “The House can do it. “I don’t know that a simple extension would be easy.

You’re still going to have calls on the House side for deeper nutrition cuts. You’ll have to pay to extend the farm bill; therefore, you’re going to have to cut something, too.” A five-year farm bill could be wrapped into the upcoming “fiscal cliff ” solution, Beaudreau told FarmWeek. Depending on negotiations between the president and House-Senate leaders, a fiscal agreement could prove the vehicle for addressing wideranging legislation including expiring tax measures, he said. Farm state lawmakers will need “access to the right people at the right time,” he said. Beaudreau suggested Senate Ag Chairman Deb Stabenow (D-Mich.) may have the “political momentum” to garner support from Senate Majority Leader Harry Reid (D-Nevada), while

House Ag Committee Chairman Frank Lucas (R-Okla.) and ranking Democrat Collin Peterson (D-Minn.), both reelected by solid margins, could wield similar House clout. Beaudreau expects some clear indication of congressional intent in the next 40 days, conceivably culminating in a late December agreement. “We’re going to have to fight like crazy to get ourselves considered in lame duck,” Crow stressed. Supplemental Nutrition Assistance Program (SNAP) funding remains a major partisan divide. The Senate proposes cutting some $4 billion in SNAP (food stamp) spending over the next 10 years vs. a House-proposed $16 billion SNAP cut, and Crow emphasized “food stamp problems on the House

side have not gone away.” That’s led to proposals in some quarters to strip SNAP from the farm bill — in Flinchbaugh’s view, a potentially fatal error. Nutrition comprises 80 percent of USDA’s budget, and its removal from ag department jurisdiction could lead to USDA’s dissolution as a Cabinet-level department, he told FarmWeek. That could mean reassignment of food, conservation, and other ag programs to the Department of Health and Human Services, the U.S. Environmental Protection Agency, and/or the Interior Department, Flinchbaugh warned. “There are fewer than 50 agricultural (House) districts out of the 435,” he added. “How are you going to pass the farm bill if all that’s in there are programs for farmers?”

FarmWeek Page 4 Monday, November 12, 2012

ag ecoNomics 101

Multiple factors needed to slow ‘supercycle’ BY MARTIN ROSS FarmWeek

A sustained perfect storm of economic, policy, and natural events likely would be necessary to break a record ag “supercycle” and alter currently buoyant farmer “land psychology,” according to Virginia Tech ag economist David Kohl. At last week’s American Bankers Association Agricultural Bankers Conference in Milwaukee, the focus was on currently aggressive farmland, market, and capital dynamics. The U.S. has seen four such supercycles since 1910, but at close to 10 years running, the current cycle has lasted more than 2 1/2 times longer than any other recent surge, Kohl noted. Brent Gloy, director of the Purdue University Center for Commercial Agriculture, likens it to the recent “biofuel boom” — “There is so much exuberance in the sector.” But Gloy sees relatively little correlation between current land values and traditional crop price or supply-demand factors, and suggests “we need to get back to fundamentals.” He sees possible development of a potentially sensitive economic “bubble” within the ag sector. David Kohl “A lot of investment decisions right now are based not on rationale — they’re based on fear and greed and fear and emotion,” Kohl told FarmWeek. “Because we’ve had a long-term supercycle, we are definitely seeing some of this emotion and psychology being built into the marketplace, whether it’s in the form of cash rents or land values. “I would suggest there is a bubble. The bubble’s not on the East Coast or the West Coast or the southern part of the United States — it’s right here in the Upper Midwest. This is Ground Zero. The question is, how long will it last?” While farmers today account for roughly 60 percent of U.S. farmland purchases, Kohl said senior investors who “don’t trust Wall Street” account for another nearly 30 percent. Those older buyers provide a “tremendous floor” for land values, the economist-dairy farmer maintained. Kohl nonetheless is concerned about a heightened level of institutional non-ag land investment, which “usually tells me the market’s too hot.” Any change in the farm income picture alone won’t trigger an immediate shift in cash rents and land values, Kohl said. Instead, he sees five major factors that together could burst the bubble or at least slow the supercycle (see accompanying details). Should that convergence occur, the question would be whether the current boom merely levels out or “crashes,” he said. Kohl is inclined to believe farmers largely would see a leveling out and argues “this crisis would be a lot different than the 1980s.” “Of the 2 million-some U.S. farms, only 270,000 generate 80 percent of the revenue and carry 60 percent of the U.S. farm debt,” Kohl related. “While people may say U.S. farm debt is at record low levels, the key is, the debt is concentrated among our bigger producers. “If we do have a major ‘correction,’ it will impact the larger producers who’ve been aggressively growing. The ‘alpha dogs’ sometimes get backed into a corner when they don’t have the financial or risk management discipline. “And when they go kaboom, they go kaboom. But they also take out landlords, machinery dealerships, and rural banks.”

Cycling down: the ag cyclone? Virginia Tech ag economist David Kohl cites five major factors that cumulatively could generate a potential “bubble”-busting for U.S. agriculture. • Reduced growth in key emerging export markets. According to Kohl, that includes not only the larger developing “BRICS” bloc (Brazil, Russia, India, China, and South Africa), but also the less-publicized but nonetheless crucial “KIMT” (Korea, Indonesia, Mexico, and Turkey). “If their (gross domestic product) is growing on average at 8 percent, commodities are going to see strong demand,” he said. “If (growth) drops back to 5 percent, commodities will soften about 20 to 30 percent. If it ever goes to 3 percent, commodities will collapse, including corn, soybeans, oil.” Andrew Busch, global strategist with Chicago-based BMO Capital Markets, anticipates China’s move from demand for “hard commodities” such as iron ore or copper to demand for “soft commodities” including wheat and soybeans. China’s “starting to come back a little” after raising interest rates to slow expansion of the real estate sector, Busch said. However, Kohl noted the BRIC keystone is “very interlinked with the European economies.” Europe is the key export destination for the Chinese, and the European financial crisis hurt them, Busch told ag bankers gathered in Milwaukee last week. • Interest rates. Agriculture’s “very susceptible to interest rates, both on the farm income and the asset value side,” Kohl said. Brent Gloy, of Purdue University, noted the impact of interest rates on farmland values. “Low, low interest rates are like throwing fuel on this fire,” Gloy said. “As interest rates go down, you’ll pay a lot more for future earnings. When interest rates go up, it tends to hit farm incomes, which would tend to reduce farmland values.” Federal Reserve Chairman Ben Bernanke’s pledge to hold the line on rates at least until 2015 has helped drive producer optimism, Kohl argued. However, if U.S. debt were downgraded, that would impact the 10-year U.S. Treasury bond and, potentially, longer-term interest rates, he advised. • Alternative energy. Ethanol remains “very, very critical” to crop sector strength, Kohl said. • The dollar. Kohl cited continued Federal Reserve efforts to spur domestic growth “by keeping the dollar suppressed.” A strengthening of the dollar could disrupt U.S. export growth, he warned. • The weather. Because “Mother Nature trumped us” in India and Russia as well as in the U.S., corn prices remained high and “the supercycle kept motoring on,” Kohl told FarmWeek. “Should we have a slowdown in these world economies, with increased interest rates and a strengthening of the dollar, and should we go back to a ‘normal’ weather pattern and any changes in our biofuel initiatives, those could be the ingredients for a major Category 3/4/5 storm,” he said. “Immediately, you would see farm profits goes down. But the optimistic farmer says, ‘It’s going to be better next year.’ It would take multiple years of all this happening before the storm would come in, and then the psychology of land would shift.” — Martin Ross

Banking chief: Heartland key in financial reform Wall Street’s lost much of it’s political capital on the Hill. The Heartland’s “community” bankers have a far higher credit rating with policymakers and regulators, American Bankers Association (ABA) President Frank Keating argues. Keating opened last week’s ABA Agricultural Bankers Conference in Milwaukee with a call for “the best ideas, the brightest ideas” in addressing federal and global banking regulations that

FarmWeekNow.com L i s t e n t o J e f f P l a g g e ’s c o m ments about how rural bankers may impact Dodd-Frank rules at FarmWeekNow.com.

threaten rural lenders. He vowed “there will be reform of Dodd-Frank next year,” referring to the 9,300some-page financial reform bill passed in 2010 in response to the 2008 economic crisis. If burdensome regulations limit credit avail-

ability for farms and rural businesses, “communities blow away,” he warned. Bankers also face potential new rules under “Basel III” global bank accounting standards approved by the European Basel Committee on Banking Supervision. Basel III standards could be introduced beginning in 2013, pending U.S. adoption. Keating nonetheless sees the administration and postelection Congress focusing

IPPA to host roundtable meetings The Illinois Pork Producers Association (IPPA) this month will host a series of roundtable meetings. The meetings are designed to provide pork producers with an update on activities at the state and national levels and to gather input from producers on current industry issues. The meetings will be held in each of the 12 IPPA districts throughout the state. The first

meeting is scheduled today (Monday). “We urge all those involved in the pork industry to attend these meetings and share your ideas, views, and thoughts on current issues of importance to pork producers,” said Jim Kaitschuk, IPPA executive director. For a list of all the roundtable meetings, visit the website {ilpork.com} or contact the IPPA office at 217-529-3100.

‘ We’ve been through some of the best times in agriculture in (lawmakers’) careers.’ — John Blanchfield Center for Agricultural and Rural Banking

on “what’s best for Middle America.” In that regard, rural bankers currently are “on the side of the angels” in Washington, he said. “If you talk to the (Office of the Comptroller of the Currency), talk to the (Federal Deposit Insurance Corp.), talk to the Fed, everyone inquires, ‘What’s the feeling out there among community and obviously rural bankers?’” he said. Basel III would require

changes in the way banks treat some loans, possibly forcing lenders to reserve more capital against farm real estate mortgages, ABA Center for Ag and Rural Banking Senior Vice President John Blanchfield said. That could affect bank earnings and thus lender ability or willingness to make loans, he told FarmWeek. Blanchfield sees congressional awareness of DoddFrank’s “overreach,” noting “we’ve been through some of the best times in agriculture in these guys’ careers.” Iowa banker and ABA Chairman-elect Jeff Plagge acknowledges Congress will never repeal or even significantly overhaul Dodd-Frank. But given its sheer “enormity,” he sees opportunity for a “rule-by-rule” review of its relevance to community banks. — Martin Ross

Page 5 Monday, November 12, 2012 FarmWeek

energY

Analysts bank on economic, energy indicators BY MARTIN ROSS FarmWeek

Analysts from across the U.S. last week offered some conditionally good news for the general economy, continued bright prospects for agriculture, and raves about the nationâ&#x20AC;&#x2122;s move toward energy security. At last weekâ&#x20AC;&#x2122;s annual American Bankers Association Agricultural Bankers Conference, Tulane University economist Peter Ricchiuti noted signs pointing to â&#x20AC;&#x153;higher revenue from a rebounding economy.â&#x20AC;? That recovery is in the early stages, he cautioned, noting steady â&#x20AC;&#x201D; if relatively low â&#x20AC;&#x201D; economic growth over the past 13 quarters. But Ricchiuti rejects

fears that the U.S. is heading for â&#x20AC;&#x153;double-dipâ&#x20AC;? recession, arguing the housing market has bottomed and workers are being assigned greater weekly hours. The Louisiana analyst sees a generally â&#x20AC;&#x153;bullishâ&#x20AC;? outlook for agriculture, citing what he deemed â&#x20AC;&#x153;a lot of pent-up demand from the consumer.â&#x20AC;? â&#x20AC;&#x153;When you look at the demand side, not only domestically but internationally, you can have little issues like some fear of a slowdown in China, but the macro-picture is so positive,â&#x20AC;? he told FarmWeek. â&#x20AC;&#x153;The difficulty is in input costs. I think the prices of things like oil and fertilizer are going to take a chunk out of things. Itâ&#x20AC;&#x2122;s

Ethanol corn demand flattening but reliable? The federal Renewable Fuel Standard (RFS2) should continue to spur grain demand, but ethanolâ&#x20AC;&#x2122;s appetite for corn is rapidly reaching a saturation point, according to Purdue economist Brent Gloy. The U.S. Environmental Protection Agency was expected to rule this week on a request by several state governors and key livestock groups to waive 2013 RFS2 corn ethanol targets. The RFS2 is aimed at spurring 36 billion gallons of biofuels use nationwide by 2022, including a maximum 15 billion gallons of corn ethanol use. Waiver proponents argue suspension of ethanol mandates would relieve feed prices and supplies for drought-affected producers. But Renewable Fuels Association President Bob Dinneen argued last week that both candidates for president supported the RFS2 â&#x20AC;&#x153;because they understand U.S. ethanol production is not driving up global food and fuel prices.â&#x20AC;? During last weekâ&#x20AC;&#x2122;s Ag Bankers Conference in Milwaukee, Gloy acknowledged the â&#x20AC;&#x153;huge rampupâ&#x20AC;? in corn demand for ethanol in 2007-2008 â&#x20AC;&#x201D; a near-doubling in consumption to slightly more than 3 billion bushels. An average 689 million added bushels were needed annually to meet biofuel demand during the 2005-2010 period. But Purdue economists project a mere 215 million added bushels will be necessary annually to meet anticipated demand over the 2011-2015 period. At that point, demand should flatten out at somewhere above 5 billion bushels, Gloy said. â&#x20AC;&#x153;The big increases to meet the ethanol mandate generally are over,â&#x20AC;? he told farm lenders last week. â&#x20AC;&#x153;Thereâ&#x20AC;&#x2122;s two sides to this story. The growth likely is going to slow for ethanol on the demand side for the ag sector â&#x20AC;&#x201D; weâ&#x20AC;&#x2122;re not going to see a lot more growth there. â&#x20AC;&#x153;The other side of this is, hey, weâ&#x20AC;&#x2122;re talking 5 billion bushels. Thatâ&#x20AC;&#x2122;s a lot. I donâ&#x20AC;&#x2122;t think weâ&#x20AC;&#x2122;re likely to lose that going forward. (Ethanolâ&#x20AC;&#x2122;s) a good, stable source of demand, and itâ&#x20AC;&#x2122;s probably going to be there for a long time. But itâ&#x20AC;&#x2122;s unlikely to grow really rapidly unless cellulosic (ethanol) moves from science fiction to reality.â&#x20AC;? Despite anticipated biomass biofuels startups expected for 2013-2014, Gloy remains skeptical about near-term major demand for energy crops and crop residues. At the same time, he argued cellulosic production would be â&#x20AC;&#x153;very stimulative for agriculture.â&#x20AC;? â&#x20AC;&#x201D; Martin Ross

going to be a matter of (farmers) maintaining margins.â&#x20AC;? That said, Ricchiuti sees â&#x20AC;&#x153;amazingâ&#x20AC;? progress in natural gas development as an economic â&#x20AC;&#x153;gamechanger.â&#x20AC;? Gas extraction via hydraulic fracturing â&#x20AC;&#x153;has changed the whole equation,â&#x20AC;? he said, citing major shale fields in Louisiana, New York, Pennsylvania, and Texas. Natural gas prices have become temporarily depressed, but Ricchiuti predicts any recovery will â&#x20AC;&#x153;stall outâ&#x20AC;? at the $4 level, where shale production will become profitable. Given the history of Louisiana oil and gas development, he believes new technologies can address public concerns about

The Louisiana analyst sees a generally â&#x20AC;&#x2DC;bullishâ&#x20AC;&#x2122; outlook for agriculture, citing what he deemed â&#x20AC;&#x2DC;a lot of pent-up demand from the consumer.â&#x20AC;&#x2122; the safety and environmental impact of â&#x20AC;&#x153;fracking.â&#x20AC;? Chicago-based CNBC analyst Andrew Busch hailed the U.S.â&#x20AC;&#x2122; â&#x20AC;&#x153;rising energy tide,â&#x20AC;? predicting significantly reduced natural gas costs, electricity cost reductions as utilities move from coal to natural gas, and rising near-term reliance on domestically produced crude. â&#x20AC;&#x153;Going back to the 1970s, we

thought, â&#x20AC;&#x2DC;Itâ&#x20AC;&#x2122;s over for the United States â&#x20AC;&#x201D; weâ&#x20AC;&#x2122;ll never increase the amount of oil we produce out of the ground,â&#x20AC;&#x2122;â&#x20AC;? said Busch, public policy specialist with BMO Capital Markets. â&#x20AC;&#x153;Wrong. Weâ&#x20AC;&#x2122;re going to produce as much as Saudi Arabia by 2020. If you include biofuels, we already do this â&#x20AC;&#x201D; we already generate 9 million barrels a day. Thatâ&#x20AC;&#x2122;s crazy good.â&#x20AC;?

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FarmWeek Page 6 Monday, November 12, 2012

Production

Livestock producers adjust to feed challenges Winter wheat conditions in Illinois BY DANIEL GRANT FarmWeek

High feed prices, droughtinduced crop losses, and tight corn supplies provide major challenges for livestock producers this year. But Dave Lidy, dairy enterprise specialist with FS Total Livestock Services, believes most producers can get through the winter without significant herd liquidation. Rainfall the past two-plus months not only saved a good portion of the soybean crop, but it also revived pastures and allowed some farmers to produce quality silage and forage crops late this season. “We’ve got plenty of roughage,” Lidy told FarmWeek. “(Livestock producers) just need to find energy sources to complement it.” Lidy was one of the speakers last week during the FS Total Livestock Services beef tour in Southern Illinois. He noted many producers recently harvested oat silage that yielded 3 to 5 tons per acre. That should help make up for lower-yielding corn

silage, which produced only 5 to 10 tons per acre this year compared to 15 to 20 tons in a normal year. “This was one of the best years for oats,” Lidy said. “It produced high-quality silage.”

‘ I f yo u r T M R i s just right, cattle will perform at a peak level.’ — Dave Lidy FS livestock specialist

An issue for some livestock producers now is how to feed the lower-yielding corn silage. Much of the drought-ravaged corn silage this year has less grain compared to normal silage, which means it is a lower energy, higher fiber feed. Farmers who feed total mixed rations (TMR) aren’t used to feeding large amounts of silage to their herds. “Now that we’ve got more silage, how do you get the

most value out of it?” Lidy questioned. He advised farmers to minimize the shrink and reduce spoilage in bagged silage. Feed bunk management also is critical to minimize losses and maximize herd output. If farmers put too much feed in the bunk, feed on the bottom can get out of condition. Too little feed obviously would impact daily gains. “You need to have a good feel for how much the cattle eat every day,” Lidy said. “If your TMR is just right, cattle will perform at a peak level.” Authors of the CME Group Daily Livestock Report also noted a recent improvement in feed conditions. But producers could be tested in coming months. “As beef cow producers transition from grass to hay, there is a fear we could see more cows come to market in January and February,” authors of the report noted. “Hay inventories are the smallest in many years and good-quality hay remains a precious commodity.”

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among best in nation, says USDA

Winter wheat ratings in Illinois are among the best in the nation so far this season. USDA last week rated the condition of the state’s wheat crop at 78 percent good to excellent, 21 percent fair, and just 1 percent poor. “Conditions have been almost ideal,” said Steve Ebelhar, agronomist at the University of Illinois Dixon Springs Agricultural Center. “We’re set up to be in good shape as long as we don’t have any excessive warm spells between now and the end of the year.” An extended warm spell in coming weeks could open the door for insect damage or promote excessive growth of the crop prior to dormancy that could leave it vulnerable to winter damage. Illinois was one of six states that had 70 percent or more of its winter wheat crop rated good to excellent last week by USDA. “We had good soil moisture at the time of planting, we had some good, timely rain after planting to get it out of the ground, and we had fairly warm conditions prior to this last cold front,” Ebelhar said. On the flip side, winter wheat condition ratings in the South and Plains were dismal last week. The majority of the wheat crop in Kansas (63 percent), Nebraska (87 percent), Oklahoma (79 percent), and Texas (66 percent) was rated fair to very poor. “Wheat conditions will likely show significant deterioration very soon without rain,” said Derrell Peel, Oklahoma State University Extension livestock marketing specialist. “Many cow-calf producers were hoping wheat pasture would supplement hay supplies that are, in many cases, barely sufficient for winter feeding,” he continued. “The recent lack of rain (in the South) is beginning to re-advance drought conditions that had improved somewhat in the past few weeks.” Nationwide, winter wheat conditions last week were rated 39 percent good to excellent, 42 percent fair, and 19 percent poor or very poor. Last year, 49 percent of the crop was rated good to excellent as of the first week of November. The majority of the crop, 73 percent, had emerged as of the first of last week, which was the same total as a year ago. Ebelhar projected the Illinois winter wheat crop will enter dormancy the last week of this month or first week of December. — Daniel Grant

Rail crossing offenses may be costly for some individuals with CDLs BY KAY SHIPMAN FarmWeek

Individuals with commercial driver’s licenses (CDLs) are reminded they face penalties for highway-rail crossing violations, according to Bob Meyer, Federal Railroad Administration grade crossing manager, based in Chicago. Under the Federal Motor Carrier Regulations, states must disqualify drivers who commit certain violations while driving across a railroad track in a commercial motor vehicle for which they are required to have a CDL. The violations are: • Failure to slow down and yield the right of way; • Failure to stop when required by law; • Failure to check for a clear track; • Failure to obey traffic control devices or law

enforcement officials; • Crossing without sufficient undercarriage clearance; and • Crossing without having sufficient space on the other side to clear the tracks without stopping. Those violations do not apply to drivers operating vehicles weighing between 10,001 and 26,000 pounds that do not require CDLs for operation. The penalty for violating any of those offenses is loss of the CDL for at least 60 days for the first violation, at least 120 days for the second violation, and at least one year for the third violation. An employer could be fined $10,000 if he or she is proven to have knowingly allowed, required, permitted, or authorized a driver to violate the law or regulation.

Page 7 Monday, November 12, 2012 FarmWeek

rEsEArch

Biofilter practical way to remove swine odor BY KAY SHIPMAN FarmWeek

A biofilter offers a practical way of removing odor from hog confinement building exhaust air, University of Illinois researchers told farmers during a livestock housing ventilation field day last week. “We think there is a real possibility of putting biofilters on Illinois farms. It helps

FarmWeekNow.com Visit FarmWeekNow.com to view a video interview with the U of I’s Ted Funk.

everyone be a good neighbor, reduces odor, and doesn’t produce greenhouse gases,” said Ted Funk, U of I Extension ag engineer. Since 2009, the U of I has treated its swine building exhaust air with in-ground biofilters. Funk has studied different designs, construction materials, and organic materials. “It’s relatively simple,” added Rich Gates, U of I agriculture engineering professor. Basically, exhaust air is blown through moist compost

material, allowing microbes to convert ammonia and other odorous gases. The organic materials must be kept moist for the microbes’ survival, but cannot get too wet or the bacteria may produce nitrous oxide, Funk cautioned. He recommended biofilters be used to filter smaller fans only because big fans would require enormous biofilters. Farmers may get help designing a biofilter system from U of I Extension or Natural Resource Conservation Service engineers. “The development of these techniques certainly is important,” said Jim Kaitschuk, executive director of the Illinois Pork Producers Association. “Biofilters are something we have talked about for years — if it proves to be a practice producers can use.” Practicality and affordability top Funk’s list. “Our hope is we will have something affordable for livestock producers that will get rid of odor,” he said.

University of Illinois Extension ag engineer Ted Funk, left, explains how a biofilter removes odor, ammonia, and hydrogen sulfide from air exhausted from a livestock building. Funk said his goal is to simplify the biofilter practice for farmers. (Photo by Kay Shipman)

Researcher: Not all heat lamps are equal Heat lamps may appear to give off the desired warm glow for little pigs, but a Mississippi State University (MSU) researcher warned farmers that appearances can be deceiving. Jeremiah Davis, MSU agricultural engineer, reported researchers found wide differences in the temperatures and the pattern of heat from heat lamps they tested. “Not all incandescent heat lamps are equal,” Davis said during a University of Illinois field day last week. Testing has shown young pigs prefer temperatures above 86 degrees Fahrenheit (F), but not higher than 112 F. Two of the tested lamps produced large hot spots when hung 18 inches above the floor. Davis showed how the hot spots covered most of the floor space within a gestation stall. The lamp produced only a small rim of comfortable temperature for young pigs, causing them to crowd each other or push into the sow, he noted. Another lamp didn’t produce enough heat to provide adequate warmth. The most efficient heat lamp tested was the Retrolite 175 watt. It produced an adequate amount of heat evenly across the surface, according to Davis. A Retrolite 100 watt heat lamp didn’t produce enough heat, and both a Phillips 175 watt and a SLI Lighting 250 watt produced hot spots, he noted. Davis said the MSU researchers have applied the research results on the university’s research farm. “These (heat lamp) research results have really played out in our operation,” he said. — Kay Shipman

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DATEBOOK Dec. 1-4 Illinois Farm Bureau annual meeting, Palmer House, Chicago. Dec. 10 Farm Economic Summit, I Hotel and Conference Center, Champaign. More information at {farmdocdaily.illinois.edu}. Dec. 11 Farm Economic Summit, Illinois Center for Agriculture, Sycamore. More information at {farmdocdaily.illinois.edu}. Dec. 12 Farm Economic Summit, Best Western Prairie Inn, Galesburg. More information at {farmdocdaily.illinois.edu}. Dec. 13 Farm Economic Summit, Holiday Inn, Mt. Vernon. More information at {farmdocdaily.illinois.edu}. Dec. 14 Farm Economic Summit, Doubletree Hotel, Bloomington. More information at {farmdocdaily.illinois.edu}.

Scan the QR code to visit us on the web or go to www.GofurtherwithFS.com

FarmWeek Page 8 Monday, November 12, 2012

AGRABILITY

Disabled farmer issues take center stage in Chicago theater AgraAbility spotlighted

AgrAbility and Illinois Farm Bureau representatives in the audience. IFB and AgrAbility were mentioned in the program, and AgrAbility brochures were distributed. â&#x20AC;&#x153;Farm Handsâ&#x20AC;? will be performed in late spring as part of a play festival in Chicago. Information will be available at {americanbluestheater.com}. As a gift, Whiteside has given AgrAbility the rights to her play, allowing the organization to receive royalties from future performances. â&#x20AC;&#x153;I want to help out any way I can,â&#x20AC;? she said. â&#x20AC;&#x153;I hope it raises awareness.â&#x20AC;?

BY KAY SHIPMAN FarmWeek

From his wheelchair, a â&#x20AC;&#x153;farmerâ&#x20AC;? shared the joys of harvest and watching the sunset from a combine cab with Chicago theater-goers Monday evening (Nov. 5). â&#x20AC;&#x153;No better view than my cab overlooking the pasture,â&#x20AC;? said farmer Mike, portrayed by Chicago actor Bob Ness. Ness, a quadriplegic, had been lifted onto the stage by three fellow actors. Audience members chuckled when the actor-farmer compared the size of farm equipment he drives to a Chicago cab. They reacted thoughtfully to his comment that farm life might be the answer for some city dwellersâ&#x20AC;&#x2122; anxieties. One man in the audience dabbed away tears. â&#x20AC;&#x153;Most urban people donâ&#x20AC;&#x2122;t

Chicago playwright Wendy Whiteside, left, chats with Chicago actor Bob Ness, second from left; Bob Aherin, AgrAbility Unlimited project director; and Peggy Romba, Illinois Farm Bureau program manager. Aherin and Romba attended a Chicago performance of â&#x20AC;&#x153;Farm Hands,â&#x20AC;? Whitesideâ&#x20AC;&#x2122;s play about disabled farmers. (Photo by Kay Shipman)

consider what it is like to live in a rural area,â&#x20AC;? director Heather Meyers of the American Blues Theater told FarmWeek. â&#x20AC;&#x153;Our major goal was to tell them (the audience) a story â&#x20AC;&#x201D;

not to feel sorry, but to consider things they donâ&#x20AC;&#x2122;t personally experience,â&#x20AC;? Meyers said. Chicago playwright Wendy Whiteside wove memories of her Kansas farmer father and disabled grandfathers into her

one-man play, â&#x20AC;&#x153;Farm Hands.â&#x20AC;? At one point during the play, Mike refers to himself as â&#x20AC;&#x153;differently abled.â&#x20AC;? Whiteside recalled her father, who has polio, uses that term. Whiteside not only is bringing the challenges of disabled farmers to the forefront, but she also wrote information about AgrAbility Unlimited into her script. Earlier, she interviewed Christian County farmer R.D. Elder at his Blue Mound farm and incorporated some of his comments into her play. At Monday eveningâ&#x20AC;&#x2122;s premier, Meyers pointed out

Get Your Gator On! At the IAA Foundation Live Auction Up for bid at the IFB Annual Meeting in Chicago on Saturday, December 1 at 3:45 Full spec sheet and video may be viewed at www.iaafoundation.org All proceeds benefit Illinois Agriculture in the Classroom Not attending IFB Annual Meeting? Contact the IAA Foundation for phone-in BIDDING OPTIONS s s *OHN $EERE 'ATOR I 856 X $ONATED BY $EERE #O AND 3,/!. IMPLEMENT The Details: s 9ELLOW !LLOY 7HEELS -AXXIS "IGHORN 2ADIAL 4IRES s $ELUXE #ARGO "OX WITH 0OLYUREA ,INER s 0OWER AND &RONT 0ROTECTION 0ACKAGE s Valued

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Page 9 Monday, November 12, 2012 FarmWeek

FROM THE COUNTIES

ROWN — Deadline to order Florida oranges, tangelos, grapefruit, red delicious apples, and pecans is Friday. Delivery to the Farm Bureau office will be Tuesday, Dec. 11. Call the Farm Bureau office at 217-773-2634 to place an order. OOK — Farm Bureau will sponsor a trim-thetree contest. Purchase a Christmas tree from a participating Cook County Farm Bureau farm stand, decorate your tree, photograph it, and email the picture along with an entry form to ccfb@cookcfb.org. Public voting will be from Monday, Nov. 19, to Monday, Dec. 17. First place winner will receive $250; second place will receive $100. Call the Farm Bureau office at 708-354-3276 or go online to cookcfb.org for entry forms and additional information. • Spend Friday nights with the Chicago Steel hockey team. Farm Bureau members may purchase tickets for $5. Visit the website {cookcfb.org} for game dates and information on how to order tickets. FFINGHAM — The Young Farmers Committee and South Central FS will collect coats for local families in need. Drop off new or gently used coats until Nov. 21 and receive a chance to win four tickets to the Illinois vs. Purdue football game Nov. 17 or three tickets to an Illini basketball game. Donations may be taken to the Fast Stop General Store, Effingham; Farm Bureau office, or Promark Advertising, Altamont. Call the Farm Bureau office at 217-342-2103 for more information. • Members are invited to participate in one of Farm Bureau Action Teams, which meet two times a year. The teams are legislative, commodities/marketing, and local affairs. The fall planning meeting will be at 6 p.m. Monday, Nov. 19, at the Farm Bureau office. Dinner

will be served. Call the Farm Bureau office at 217-342-2103 or email ecfbmgr@consolidated.net by Monday (today) for reservations or more information. ENRY — Henry and Rock Island County Farm Bureaus will sponsor a marketing dinner and seminar at 6:15 p.m. Thursday, Nov. 29, at the Geneseo Moose Lodge. Cost is $20 if pre-registered and $30 for walk-ins. Andy Shissler, Roach Ag Marketing, will be the speaker. Call the Henry County Farm Bureau office at 309-9372411 or the Rock Island County Farm Bureau office at 309-7367432 for reservations or more information. • Bushels for Hunger continues through Nov. 30 at participating grain elevators in Henry, Mercer, Rock Island, Stark, and Whiteside counties. All proceeds from the bushels of grain donated will be contributed to the River Bend Foodbank. Contact your county Farm Bureau office for more information. ASALLE — Order forms for Amish cheese, Florida fruit, KD Creek Beefsticks, and CC’s Specialty Foods are available at the Farm Bureau office or on the website {lasallecfb.org}. • The annual meeting will be at 6 p.m. Tuesday, Nov. 27, at Pitstick’s, Ottawa. Dinner will be served. Tickets are $10 and may be purchased at the Farm Bureau office or from a Farm Bureau director. Call the Farm Bureau office at 815-433-0371 for more information. EE — Carroll, Lee, Ogle, and Whiteside County Farm Bureaus, and Sauk Valley Bank will sponsor a marketing workshop at 7 p.m. Monday, Nov. 19, at the Comfort Inn, Dixon. Steve Johnson, Iowa State University Extension farm management specialist, will be the speaker. Call the Farm Bureau office at 857-3531 or email leecfb@comcast.net by

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today (Monday) for reservations or more information. CDONOUGH — Hancock and McDonough County Farm Bureaus; Brett Powell, Country Financial representative; Citizens Bank; Haley Risk Protection and Agronomy Service; and Sullivan Auctioneer LLC will sponsor a marketing outlook luncheon meeting at 11:30 a.m. Tuesday, Nov. 20, at the Spoon River College Outreach Center, Macomb. Steve Johnson, Iowa State University, will be the speaker. There is no charge for voting Farm Bureau members. Cost is $10 for non-members. Call the Farm Bureau office at 309-837-3350 by Friday for reservations or more information. ERCER — Mercer and Rock Island County Farm Bureaus will sponsor an estate planning seminar from 10 a.m. to 3:30 p.m. Monday, Nov. 26, at the Reynolds American Legion. Erica Eckley, Iowa State University Center for Agricultural Law and Taxation, will be the speaker. Topics include estate planning, planning for business succession, and Illinois estate tax exemptions. Call the Farm

Bureau office at 309-582-5116 or email mcfb1@frontiernet.net by Friday for reservations or more information. • The Marketing Committee is selling Florida citrus and Terri Lynn nuts. Call the Farm Bureau office at 309-582-5116 or email mcfb1@frontiernet.net by Thursday to order. ERRY — The annual meeting will be at 6 p.m. Tuesday, Nov. 20, at the St. Paul United Church of Christ, Pinckneyville. Entertainment will feature “Magicomedy” by Chris Egelston. Call the Farm Bureau office at 618-357-9355 by Tuesday for reservations or more information. TEPHENSON — Flu shots will be given from 9 a.m. to 3 p.m. Tuesday at the Farm Bureau office. Cost is $20 for members and $25 for nonmembers. • The Farm Bureau and Stephenson Service Co. annual meeting will be at 7 p.m. Tuesday, Nov. 20, at the Farm Bureau office. Doug Scheider will give a program on his market study tour trip to Cuba. The Freeport High School Varsity Choir will provide the entertainment. Call the Farm Bureau office at 815-232-3186

for reservations or more information. ERMILION — Orders and payment for Florida citrus, nuts and snacks, Ludwig Farmstead Creamery gift boxes, Leiding’s Meats Bavarian hams, and honey are due by Monday, Nov. 19. Delivery will be Monday, Dec. 10, to the Farm Bureau office. Call the Farm Bureau office at 217-442-8713 for more information. Order forms are available on the website {vcf.info}. • The annual meeting will be at 6 p.m. Tuesday, Nov. 27, at the Beef House Banquet Center, Covington, Ind. (Illinois time). Tickets are available at the Farm Bureau office and must be purchased by Wednesday, Nov. 21. The Vermilion County Farm Bureau Foundation will host its annual silent auction. Kevin Green will speak about his participation in the Illinois Farm Bureau market study tour trip to Cuba. Call the Farm Bureau office for more information.

“From the counties” items are submitted by county Farm Bureau managers. If you have an event or activity open to all members, contact your county Farm Bureau manager.

FarmWeek Page 10 Monday, November 12, 2012

profitability

Propane balancing act will influence winter prices BY RANDY MILLER Summer, the time for filling propane tanks and building inventories to prepare for the winter months and, hopefully, a grain drying season, has certainly done its job this year. Propane inventories Randy Miller have increased by 30 million barrels since early April. Propane demand in Illinois, considering summer fill and a somewhat limited dryer season, was certainly below expectations. However, demand in other parts of the country and other industries remains strong. So the big propane question heading into winter is: Where is production headed and is demand going to keep up? The accompanying chart confirms what industry sources have been predicting: that production of natural gas liquids (NGLs), particularly propane, continues to increase as shale plays become more developed. In the past year, increased shale production from the Bakken Shale Play (North Dakota)and the Marcellus Shale Play (Ohio, Pennsylvania, and New York) is starting to move into traditional propane markets. The chart shows some interesting breaks in production. In 2005, Hurricane Katrina inter-

rupted production, and the recession with falling commodity prices in 2008 also slowed production levels. But since that time, production has been somewhat static until about a year ago. The chart shows an increase of about 200,000 barrels per day. Where will all that propane go? Export facilities in the U.S. are continuing to expand, and with current dollar values and world demand, we expect to see exports continue to grow. August 2012 was the biggest propane export month in U.S. history, with reports of exports of just below 6 million barrels. Petrochemical plants are

BY DANIEL GRANT FarmWeek

Demand for farmland and the prices buyers are willing to pay for good ground have not dried up this year inspite of the drought. In fact, land values and rental rates in many areas of the Corn Belt remain at or near record levels, according to economists and real estate professionals speaking last week at the AgEngage farmland value and leasing conference in Decatur. “One thing occurring in about every area is record demand for land and record values,” said Lee Vermeer, vice president of real estate operations for Farmers National Co.

Feeder pig prices reported to USDA* Range Per Head $32.25-48.79 $46.00

Weighted Ave. Price $40.32 $46.00

This Week Last Week 70,185 100,963 *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 $79.10 $78.13 $58.53 $57.82

Change 0.97 0.72

USDA five-state area slaughter cattle price Steers Heifers

Autogas demand — for cars and passenger vans converted to propane use — is still relatively light but promising, and we expect to see growth in this area in the coming years.

Randy Miller is GROWMARK’s propane operations manager. His email address is rmiller@growmark.com.

Land in demand; market projected to remain strong in ’13

M A R K E T FA C T S Weight 10 lbs. 40 lbs.

being expanded with thoughts of plentiful and cheap NGLs, and throughout 2012 petrochem demand has run nearly 25 percent above the five-year average.

What to make of this? Look for price volatility to be the norm as increased demand and increased production fall out of balance for periods of time. Another warm winter would result in another summer of high inventories and pricing pressure, but normal temperatures likely will leave enough storage available to keep prices in check. Keep in contact with your local FS member cooperative for pricing options to take the worry out of the winter heating season.

(Thursday’s price) (Thursday’s price) Prev. week Change This week 125.00 126.22 -1.22 n/a 127.00 n/a

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 144.17 144.70 -0.53

Lamb prices Slaughter Prices - Negotiated, Live, wooled and shorn 79-156 lbs. for 88.66-111 $/cwt. (wtd. ave. 95.91)

Export inspections (Million bushels) Week ending Soybeans Wheat Corn 11-01-12 59.4 14.0 14.7 10-25-12 63.9 9.7 15.6 Last year 52.1 13.7 24.3 Season total 369.6 416.8 158.0 Previous season total 260.2 475.9 250.4 USDA projected total 1055 1200 1250 Crop marketing year began June 1 for wheat and Sept. 1 for corn and soybeans.

“There is a ton of cash pouring into this market.” The value of good farmland in the northern two-thirds of Illinois increased 15 percent from July 1, 2011 to July 1, 2012, according to David Oppedahl, economist with the Federal Reserve Bank of Chicago. “Values now are higher than the peak of the 1980s (when adjusted for inflation),” he said. “There doesn’t seem to be tremendous slowing (because of the drought).” Investors seeking a safehaven for their money have made their presence felt in the farmland market, but the majority of buyers are local farmers. Seventy to 80 percent of farmland buyers are farmers, Vermeer noted. “Right now, we have strong demand,” he said. “There are more buyers than sellers.” Farmers remain the dominant buyers due in large part to record-high crop prices this

year and a strong run of profitability. U.S. farm income since 2007 increased about 30 percent, Vermeer reported. “Obviously, that’s been a big influence on (land) prices and rents,” he said. More farmland flowed to the market in recent months. Real estate professionals believe that’s because of high crop prices and an extra incentive based on tax policy. The capital gains tax on Jan. 1 is set to rise from 15 percent to 20 percent. “We’ve had a 30 percent increase in sales over last year,” Vermeer said. “A lot of that is the potential changes in tax law.” The land market was projected to remain strong next year as well due in part to the expectations of strong farm income and the continuation of low interest rates. “The fundamentals of farming support further increases in farmland values and rents,” Oppedahl said. “Interest rates

are forecast to remain very low until at least 2015.” Cash rents for 2013 were projected to be stable to higher. “The leases I negotiated (this fall for 2013) we actually saw an increase in bids, up about 10 percent from last year,” said Jerry Hicks, farm manager with Agrivest. “But every farm is not created equal. There’s a wide variation in what (rental rates) people are after.” Don Olson, executive vice president and chief credit officer with Farm Credit Services of Illinois, reported cash rents in East-Central Illinois range from $200 to $500 per acre. “Straight cash rents are the most common (rental agreement) we see,” he said. “The range is very wide.” The statewide average cash rent increased from $169 in 2010 and $183 in 2011 to $212 per acre this year, according to Gary Schnitkey, University of Illinois farm management specialist.

Will high crop, land prices curb high prices?

Crop and farmland prices, which raced to record highs this year, could lose momentum in 2013. Economists last week at the AgEngage farmland value and leasing conference in Decatur predicted crop production next year likely will bounce back and put downward pressure on prices. “I’m absolutely convinced there is a supply response with these high prices,” said Craig Dobbins, ag economist at Purdue University. “People around the world are trying to produce more.” An estimated 190 million acres of cropland has been brought into production in Argentina, Brazil, China, India, and the Ukraine since 2000. In the U.S., contracts in the Conservation Reserve Program (CRP) totaling about 2.6 million acres expired this fall and those acres could be put into production next year. Another 3.3 million acres of CRP contracts expire next year. If crop production returns to normal levels next year, Gary Schnitkey, University of Illinois Extension farm management specialist, predicted crop prices will decline. He predicted prices next year will average $5.80 per bushel for corn and $12.80 for soybeans compared to $7.40 and $15.30, respectively, this year. “If we ever have a normal production year and rebuild stocks, prices will decline,” Schnitkey maintained.

A rise in crop production and subsequent decline of crop prices also could pressure farmland values, which in recent years have shot through the roof. “(Farm) income is a key driver (of farmland values),” said Lee Vermeer, vice president of real estate operations for Farmers National Co. “Local demand is very important.” Vermeer predicted farmland prices will remain strong next year. But the rate of increase could level off if there’s a rebound in crop production. “The drought has not affected the (farmland) market yet,” Vermeer said. “But we certainly can overproduce ourselves out of this market. It’s something to monitor going forward.” Dobbins agreed the current run-up in farmland prices could top out next year. “We might be approaching a peak (in farmland prices),” said Dobbins, who noted the only major downturns in farmland prices in modern history occurred during the Great Depression and in the 1980s. “Never say never. Farmland prices can come down.” Dobbins, however, believes a major market crash, similar to the burst of the U.S. housing bubble, is unlikely in the farmland market.— Daniel Grant

Page 11 Monday, November 12, 2012

PROFITABILITY Corn Strategy

CASH STRATEGIST Complexion of bean prices changes Occasionally, a USDA report comes along that changes a market’s trajectory. Regarding soybeans, Friday’s USDA production and supply/demand report may be one of those instances. The changes implied by the USDA numbers could have major consequences, especially with prices breaking to new lows. No longer can anyone suggest that prices need to move higher to ration demand enough to keep the world from running out of soybeans before the new South American crops become available. Thanks to record large pod weights, the 111-million-bushel increase in expected production was more than enough for the USDA to raise demand estimates and yet increase the ending stocks number slightly, too. The 140-million-bushel ending stocks is not a comfortable supply by any means, but in the era of big South American crops, it may be enough for domestic crushers to successfully cross the bridge from old crop to new crop. Maybe just as important was the reduction in USDA’s seasonal price forecast to $13.90$15.90. The midpoint of that range, $14.90, is where January futures were trading before the new estimates were released. The 111 million bushels added to production this month is the equivalent to adding 3 million metric tons (mmt) to midyear U.S./Brazilian/Argentine stocks when South American supplies will begin to enter the pipeline.

Since the low water mark in the Sept. 12 USDA report, the increase in the forecast for our soybean production has added 9.17 mmt back to supplies available until the new South American crop starts to enter the world pipeline. Our larger Sept. 1 soybean stocks added another 1 mmt to the mix. The 3 mmt addition this past month is the equivalent of adding six days to average winter demand. The 10 mmt shift is enough to cover half a month of average winter demand from the three major producers. In short, the larger U.S. crop may have removed any need for prices to rally significantly to ration demand. As far as price action is concerned, the additional bushels present another problem. The big hedge funds still are long nearly 1 billion bushels of soybean futures and options. The break to new lows in the wake of the report likely will trigger more liquidation of existing long positions by the big trading funds. And by early this week, the 50-day moving average will drop below the 100-day moving average, potentially signaling an even more negative turn. That doesn’t necessarily indicate the funds will liquidate positions at these lower levels, but it will lower the price levels at which they will exit long positions. In the end, we not only have a situation in which end-users have little need to chase the market but one in which speculative money will more aggressively exit long positions. About the only factor that could reignite the bull market would be another major crop problem in South America. At present, there is no indication of that happening.

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ü2012 crop: Corn prices cannot seem to move out of a sideways trend, bounded by the $7.60s on top and $7.32 on the bottom of the March contract. At this point, we prefer to wait for March futures to trade above $7.65 before making catch-up sales. ü2013 crop: Use rallies to $6.40 on December 2013 futures for catch-up sales. We could use a push to $6.50 to add another increment. vFundamentals: The new USDA production and supply/demand fundamentals were not changed much. At the same time, issues on the demand side of the balance sheet remain weak. The corn grind for ethanol continues to be mildly disappointing, even compared to the USDA’s low forecast. But more important, traders fear the persistence of sluggish export demand eventually will cause the export forecast to be revised lower. And even though early problems are undermining Argentina’s potential crop, good conditions in Brazil may offset them.

Soybean Strategy

ü2012 crop: The new USDA production and supply/demand projections may dictate a change in strategy. January futures of $16 may be out of reach, let alone $16.50. Use a rally back to $15.20 to make catch-up sales. And given this past week’s break, we may add a sale at that time. ü2013 crop: Friday’s break may have succeeded in turning the short-term trend down again. Use a rally to $13.30 on November 2013 futures for catch-up sales. We are seriously considering adding another small increment at that level as well. vFundamentals: Without a doubt, Friday’s USDA soybean production estimate changed the dynamics of the market. It may have removed talk about possibly running out of soybeans before new South American supplies become available. And even though the ending stocks projection is still relatively tight, it

will be enough to bridge the shift to our new crop, especially if the South American crop is as good as advertised.

Wheat Strategy

ü2012 crop: Wheat may have put in a short-term top. A close below $9 in the Chicago March contract would signal additional weakness. Use prices above $9 for catch-up sales. ü2013 crop: Make catchup sales when Chicago July futures are trading above $8.88. Check the Hotline frequently; we could add a sale at any time.

vFundamentals: The November USDA report cast a slightly negative tone on wheat, with the cut in the export forecast reinforcing the lackluster export demand. Even with problems in Australia and Argentina, there is a chance India will replace part of those supply losses. Our export forecast was lowered 50 million bushels, with ending stocks increased a like amount, now standing at 704 million bushels. World stocks were increased slightly to 174.2 million metric tons. Still, the downside may be limited on continued concern about dry conditions in the U.S. Plains.

FarmWeek Page 12 Monday, November 12, 2012

perspectIves

Is it or isn’t it?

HSUS action results in on-farm pig audits

Labeling of processed cheese foods not clear Western Illinois University’s Allison Organic Farm is currently going through a lengthy process that eventually will permit it to certify its products are being grown organically. To say a product is organic is easy. But to prove it, so you may advertise it as USDA organically certified — like a note from your mother that says this really, really is organic — is not easy. Nor, in my opinion, should it be. USDA is directly involved in the organic approval process. It defines organic production as a production system that is managed in accordance with a variety of rules and regulations “to respond to sitespecific conditions by integrating cultural, biological, and mechanical practices that foster WILLIAM cycling of resources, promote BAILEY ecological balance, and conserve biodiversity.” And the Allison Farm, to gain organic certification, has to prove it does all of the above, and it must have records to support the claim. Being aware of the lengthy organic certification process, I noticed with interest a new sliced cheese product for sale at a local grocery store. The label on the product proclaimed the cheese was both organic and unprocessed. Because of the efforts by the Allison Farm to prove it is organic, I understood the organic part of the product’s label. But to declare that cheese was unprocessed gave me pause. Milk comes from a cow. To make that milk into cheese requires some type of processing, doesn’t it? I can envision unprocessed apples, carrots, and kiwi fruit. But cheese? After a little research, I learned that cheese is not only types such as Swiss, cheddar, or Parmesan. There are cheese products officially classified by the Food and Drug Administration (FDA). Those products include pasteurized process cheese, pasteurized process cheese food, and pasteurized process cheese spread.

In fact, FDA classifies 94 different types of cheese and cheese products including cheeses called sap sago and nuworld. Unprocessed cheese is not among the classified cheese products listed. Is there such a thing as unprocessed cheese? Thinking that perhaps I had missed the FDA classification, I contacted the company that makes the organic unprocessed cheese. Company officials chose not to call me back and discuss their product, leaving their cheese both unprocessed and undefended. Labels matter. That is why the new cheese product discussed has, in large letters, organic and unprocessed, on its label. That clearly is information the company believes is important to the buying public. But we need to trust what is on the label. Consequently, there are complex government rules and regulations detailing what may — and may not — be put on labels for food. Meeting those exacting standards is part of the regulatory process for the Allison Organic Farm so that it eventually will be permitted to put “USDA Organic” on the products it sells. The unprocessed cheese claim is not as clear. In fact, what does unprocessed mean? Does peeling a potato result in it being classified as processed? Are bake potatoes unprocessed? Hard-boiled vs. fried eggs? Labels should clarify, not confuse. William Bailey is director of the School of Agriculture at Western Illinois University, Macomb. His email address is WC-Bailey@wiu.edu.

The pig auditors are on the way. Get ready for them. Yes, it’s a fact. Recently, I received a letter from Tyson Foods stating that company representatives will be coming to my farm to perform an audit to see how we raise and care for our pigs. We sell most of our market hogs to Tysons, but an audit? I’ve never heard of such a thing. Tyson intends to audit all of its major suppliers. I guess they have that right, if I want to continue to sell them pigs. The pressure from the animal rights organizations is powerful. We have food JOHN BLOCK companies of all kinds bowing to their cry. In one respect, I don’t mind the audit. My hogs are happy and well cared for. We don’t even use gestation stalls, which is one of the Humane Society of the United States’ (HSUS) main complaints. Our sows run in the field. We should be a “poster child” for the People for the Ethical Treatment of Animals (PETA). By the way, even though Tyson has announced that it will be auditing its hog suppliers to ensure humane treatment, HSUS is not satisfied since Tysons has not outlawed gestation stalls. Along with the letter to alert me, Tysons sent me a list of questions to see if my employees working with the pigs know how to handle them. Here’s one of the questions: How do you pick up a baby pig? A. By the ear B. By the tail C. By the hind leg D. By the front leg Anyone who has worked on a pig farm knows you pick up a little pig by its hind leg. I knew that when I was 3 years old. Where are we headed with this stuff ? California has a law that eggs sold in the state must be produced by laying hens with a prescribed minimum space. In the future, McDonald’s will not use pork from farms that use gestation stalls. These kinds of demands are offensive to me. Livestock producers do all they can to keep their animals happy. An unhappy, mistreated animal will not be an efficient producer of meat, eggs, or milk. It’s that simple, and we are smart enough to know that. John Block, former U.S. agriculture secretary and a hog farmer from Gilson in Knox County, is a senior policy adviser with the Washington, D.C., firm of Olsson, Frank, Weeda, and Terman. His email address is jblock@ofwlaw.com.

Hurricane Sandy hit East Coast farms, too As if 2012 hadn’t been tough enough on farmers because of the severe drought, Mother Nature thought she’d have one more go at it before calling it a year. Superstorm Sandy wreaked havoc along the TRACY East Coast, GRONDINE threatening farmers once again. Fortunately, the overall impact on agriculture may

be less dire than the property damage and lost business in urban areas. Since the growing season was essentially complete on much of the East Coast and many farmers sped up harvesting ahead of Sandy, the overall picture isn’t so much black as it is grey. But that’s not to underestimate localized crop damage that is severe in places. Some farmers are facing massive flooding while others are challenged with a domino effect of the storm’s aftermath. For example, in Maryland

and Delaware, both ranked high in young chicken meat production, power outages, transportation disruptions, and a potential lack of feed potentially were detrimental to poultry farmers. In New Jersey, where Sandy made landfall, some farmers are challenged with direct losses to crops and livestock, as well as structural and property damage and lost business. New Jersey Farm Bureau officials estimate that 80 percent of the state’s crops already were harvested, which makes the situation

less ominous than it could have been. The Virginian-Pilot newspaper reported that agricultural damage in the Chesapeake Bay area was minimal, estimating potential damage to 2,000 acres of small grains, including wheat, barley, and oats. Some wheat that farmers in Virginia Beach just planted will be included in that number. In Virginia’s Suffolk and Western Tidewater region, where 60 percent of the cotton crop had not been harvested, Sandy could have

been disastrous. Fortunately, it’s estimated that the total cotton loss will only be several hundred pounds in that area. As for food prices, agricultural economists have said there likely will be only a short-term shock and no long-term effects. Some restaurants and grocery stores could be challenged with a lack of local food products. Tracy Taylor Grondine is director of media relations for the American Farm Bureau Federation. Her email address is tracyg@fb.org.