Farmweek november 18 2013 by Illinois Farm Bureau

Appetites continue growing for local food economic data as regional food systems develop........................5

Ethanol industry officials and researchers teamed to dispel media attacks on biofuels....................................7

Thanksgiving diners will gain real value with their feast this year, according to an AFBF national survey.............................11

A service of

Producer boom in later innings, new game ahead?

Illinois Farm Bureau mission: Improve the economic well-being of agriculture and enrich the quality of farm family life.

Monday, November 18, 2013

BY MARTIN ROSS FarmWeek

Periodicals: Time Valued

Producers may be in for — and may be advised to take — a 7th inning stretch as economists warn of a possible twilight in the current “farm boom.” That was a central message at last week’s American Bankers Association Ag Bankers Conference in Minneapolis, where speakers advised lenders to carefully assess their farm customers and producers to “really sharpen their pencils and their computers over this next winter,” in the words of Virginia Tech economist and conference keynoter David Kohl. Kohl noted growing “suppression” of farm profits with per-bushel production costs exceeding $4-plus corn prices. At that rate, farmers “can get upside-down pretty quickly,” he warned. Containing production costs is increasingly vital, said Kohl, citing University of Minnesota data indicating a strong correlation between lower

costs, higher yields and gross returns. In the current environment, he urges producers to “get efficient before you get bigger” and agrees currently more “exuberant” farmers may want to pare back on the “toys.” “I think we’re probably in about the 7th or 8th inning, particularly on the grain side of agriculture,” Kohl told FarmWeek. “We’re starting to see the cycle mature. As the old saying goes, high prices take care of high prices, and they’re doing it at this time. And I’d say we’re probably in about the 8th inning as far as land prices are concerned. “(Producers) are probably going to need to sit down with their lenders, with their farm management consultants, and see where they stand at various price thresholds, given their costs. We’ve just bid up the land, we’ve bid up cash rents, and it’s draining profits.” According to Purdue Associate Dean Jason Henderson, a former Kansas City Federal Reserve official, the question remains whether the current boom “fades or goes bust.” Kohl sees a three-pronged producer strategy for navigating the next phase of farm economics: tax management, growth in working capital and growth in the business. For example, 2013 prepurchase of 2014 inputs may offer some tax advantages, but given a projected general drop in fertilizer, chemical and fuel/drying prices next season, Kohl predicts “some real headscratching over the next 45 days.” And while he is reluctant to pinpoint a specific formula for reinvesting profit back into See Boom, page 3

Three sections Volume 41, No. 46

HARVEST WINDING DOWN

Logan County farmer Greg Howe of Mount Pulaski dumped corn on-the-go last week with help from part-time employee Frank Buckles. Howe said he’s pleased with average corn yields, especially considering the fact the field was planted June 10. Dry conditions occurred in August. (Photo by Ken Kashian)

Glauber: Farm income, land values could slip in 2014 BY DANIEL GRANT FarmWeek

Continuation of high farmland prices indicates the farm sector generally remains in pretty good shape despite recent crop price declines, according to Joe Glauber, USDA chief economist. Numerous auctions around the state in recent months fetched nearly five figures per acre, despite the fact corn prices plummeted about 35 percent this season. “The farmland market is a key bellwether to gauge the financial health (of the farm industry),” Glauber said last week at a farmland market conference hosted in Champaign Joe Glauber by the University of Illinois’ new TIAA-CREF Center for Farmland Research. And what did that gauge show in recent years? “We added over $1 trillion in farm equity, mostly from land values,” Glauber said. The strong financial position could be particularly important for farmers the rest of this year and in 2014 as Glauber predicted crop prices and farm income will decline. USDA this month projected season-average prices of $4.50 per bushel for corn (down $2.39 from last year), $12.50 for beans (down $1.90

FarmWeek on the web: FarmWeekNow.com

from last year) FarmWeekNow.com and $7 for wheat, (down 77 Listen to USDA chief economist cents). The low- Joe Glauber’s comments on er prices are the t h e f a r m e c o n o m y a t FarmWeekNow.com. result of a big boost in crop production around the world that eased previously tight supplies. “We are expecting a decline (in net cash income) this year (of about $10 to $15 billion) due to lower prices,” Glauber said. “For most major crops, we’re seeing a big response to high prices and we’ve seen a recovery of stocks.” The drop in crop prices is expected to finally catch up to farmland values by next year. “The projection that cash income will drift down would suggest a softening of real estate prices, although I’m not projecting a major correction,” Glauber said. Meanwhile, corn demand from the ethanol sector could plateau due to limits of the Renewable Fuels Standard and decreased fuel consumption in the U.S. Motor fuel consumption this year in the U.S. is expected to total about 130 billion gallons, down from previous projections of 150 billion gallons, Glauber noted. “The growth rate of ethanol has begun to See Glauber, page 3

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

Quick Takes

FarmWeek Page 2 Monday, November 18, 2013

A revamped RFD Radio Network studio will be unveiled Friday. From left, RFD’s Alan Jarand and Rita Frazer interview Illinois Farm Bureau President Philip Nelson in the studio. (Photo by Chris Magnuson)

RADIO STUDIO OPEN HOUSE — Forty-six years ago, Illinois Farm Bureau cultivated radio programming bringing the latest market, news and weather to Illinois listeners. On Friday, the RFD Radio Network will turn another page in history with its first official broadcast in a new studio on the second floor of the IFB Building in Bloomington. An afternoon ceremony will light up the studio’s new on-air sign. The first live broadcast Friday plans to feature GROWMARK President John Reifsteck, COUNTRY Financial Chief Executive Officer Kurt Bock and IFB President Philip Nelson. “It has been our goal since we aired our first program at 5:30 a.m. April 3, 1967, to provide our members the latest farm news every day,” said Philip Nelson, IFB president. “We’ve been providing quality farm programming ever since. We will continue to supply our more than 80 affiliate stations daily with the latest news about state and national legislation, market impact, custom weather and features.” Radio Director Alan Jarand and Network Anchor/Broadcast Editor Rita Frazer serve as part of the IFB news and communications team that combs the state for the latest farm news. They share their findings daily from the new studio equipped with the latest technology. Podcasts of RFD programs are available on FarmWeekNow.com and the new FarmWeekNow app. The radio network, combined with the editorial staff of FarmWeek and FarmWeekNow.com, comprise the largest ag news gathering team covering Illinois agriculture. ®

(ISSN0197-6680) Vol. 41 No. 46 November 18, 2013 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 goes toward the production of FarmWeek. “Farm, Family, Food” is used under license of the Minnesota Farm Bureau Federation.

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. © 2013 Illinois Agricultural Association

STAFF Editor Chris Anderson (canderson@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

FARMLAND MARKET

Farmland is a good investment BY DANIEL GRANT FarmWeek

Farmland prices jumped to record levels in recent years due in large part to returns generated from crop production. But farmland also continues to attract a great deal of interest as a solid long-term investment. “The recent performance of the farmland market has increased interest by investors, landowners, lenders and operators,” Bruce Sherrick, ag finance professor at the University of Illinois, said last week at a farmland market conference in Champaign hosted by the U of I TIAACREF Center for Farmland Research. Farmland frequently is viewed as a hedge against inflation. It also stacks up favorably to other investments, Sherrick noted. The average annual return of farmland in Illinois from 1970 to 2012 was 10.8 percent. Returns during the same period averaged 8.96 percent for gold, 6.5 percent for the Dow Jones Industrial Average and 6.3 percent for the S&P 500. “Farmland has a more stable pattern (of returns),” Sherrick said. “And it reduces risk.” But while interest in farmland is strong, investing in it is no easy task. That may explain in part why farmers are the dominant buyers (farmland represents about 83 percent of

Joe Glauber, right, USDA chief economist, discusses the financial outlook for the farm sector with George Schweneker of Seneca, center, and Marshall Cusic, Marshfield, Wis., left, during a farmland market conference in Champaign hosted by the University of Illinois TIAA-CREF Center for Farmland Research. (Photo by Daniel Grant)

farm assets) and why prices are so high. The turnover rate of farmland is extremely low, less than 2 percent annually, so it’s not readily available. And farmland ownership requires additional management skills over a long period of time. “It’s easy to look at your ETrade account every night to view instant results,” Sherrick said. “It’s a very different asset to look at farmland.” But there are risks in the market that could have a major impact on farmland values. A reversal of national monetary policy, a significant change to crop insurance provisions, a global slowdown of income growth or a major change to the Renewable Fuels Standard or related policies could dampen the outlook.

“The 2012 drought wasn’t terrible for (farm) income (or farmland values) because crop insurance worked as I think it should have,” Sherrick said. Joe Glauber, USDA chief economist, also believes an increase in interest rates could soften the farmland market. “A sharp increase in interest rates would have a negative impact on land values, no question,” Glauber said. But strong demand for food from a growing population likely will keep a floor under the farmland market for the foreseeable future. “Farmland has been a very good investment and, in my opinion, it will continue to be so,” said Gary Schnitkey, U of I Extension farm management specialist.

Adjustments to cash rental rates could take time

Farmers likely will receive less for their crops next year and possibly beyond than they did from 2010 to 2012. But that doesn’t necessarily mean cash rental rates will decline as quickly as crop prices in recent months. “We’re projecting farm returns in 2013 and 2014 will be lower than they were from 2010 to 2012, but not as low as the pre2006 period,” Gary Schnitkey, University of Illinois Extension farm management specialist, said last week at a farmland market conference in Champaign Gary Schnitkey hosted by the U of I’s TIAACREF Center for Farmland Research. “The major reason for lower returns is because of what we’re projecting for commodity prices,” he noted. Crop prices, after a bull run the last three years, are expected to settle back into the average range from 2006 to 2012. Corn prices during that time averaged $4.77 per bushel compared to the previous long-term average price of $2.37 per bushel from 1975 to 2005. “It’s not a dire outlook,” Schnitkey said. “But we shouldn’t expect the returns of 2010, 2011 and 2012 all the time. “If we have a good crop next year, I think

it’s more likely we’ll see below-$4 corn than above-$5 corn,” he noted. Many central Illinois farmers generated operator returns of $400 to $500-plus per acre the last three years. Schnitkey projected those returns this year could slip to $295 per acre. “We’ve had good returns (the last three years), so high cash rents worked,” he said. “But if our estimate (for returns this year) is correct, a cash rent above $300 doesn’t work.” A key question for next year will be whether or not cash rental rates come down, Schnitkey said. Average cash rental rates in the state vary wildly, from an average of $371 per acre in Sangamon County to $69 per acre in southern Illinois. Average rates in counties vary by $75 or more per acre. High-end cash rental rates should be renegotiated, but Schnitkey believes rental rates on the low end actually could increase. “Red ink probably has to be real before rents come down,” Schnitkey said. The statewide average cash rent increased from $183 per acre in 2011 and $212 in 2012 to $223 this year. Schnitkey advised farmers and landowners to consider renegotiating rates, avoid long-term leases or consider other lease types, such as variable cash rents or share rents that automatically adjust to changes in crop returns. — Daniel Grant

THE ECONOMY

Page 3 Monday, November 18, 2013 FarmWeek

China growth slowing; new income development key BY MARTIN ROSS FarmWeek

Annual economic growth of 7.5 percent? Good news for the U.S.? Not if we’re talking about China. Since 2006, China has become the No. 1 leading export destination for U.S. ag products, amid China’s roughly 10 percent annual economic growth over the last decade. At last week’s American Bankers Association ag bankers conference, Purdue University Extension director and Associate Dean Jason Henderson stressed “exports come from income growth.” However, Chinese officials have aimed for a mere 7.5 percent target for annual growth in gross domestic product (GDP) over the next five years. The nation will likely reach that goal by year’s end despite a recent economic slowdown, according to China’s central bank. And USDA long-term forecasts anticipate relatively flat

export growth. China has accounted for 17 to 18 percent of U.S. exports over the last few years, noted HenderJason Henderson son, former Federal Reserve Bank of Kansas City vice president. “The potential growth we might have been expecting from China might be a little softer than what we thought,” Henderson told FarmWeek. “There’s still growth potential, but instead of running at a sprint, it might be a little bit more of a jog. “The question then is, what are the other export opportunities out there? What about India, Russia? Is there a way we can help get African economic development standards higher, so we can export some food and agricultural products to them? If China’s going to slow down, then I think agri-

culture in general’s going to have to look at other markets where we can have tremendous growth potential. In my mind, that’s tied to economic development and incomes.” Reserve Bank of India (RBI) forecasters have scaled down India’s GDP growth forecast to 4.8 percent for the current fiscal year from an earlier projection of 5.7 percent. Russia’s Economy Ministry predicts national GDP growth will average around 2.5 percent annually until 2030 versus an earlier anticipation of 4 percent annual growth. Henderson maintains Africa’s long-term viability as a U.S. customer will depend on its ability to develop reliable transportation capabilities and a stable “political infrastructure across the continent.” Purdue is attempting to bolster economic development through initiatives in Guinea, Nigeria, South Africa and other nations. Harvest losses weigh heavily against African ag growth. The

Can banks withstand interest rate ‘speed of adjustment?’

As he ponders “the Fed’s exit strategy,” a former Federal Reserve official warns that when it comes to interest rate readjustment, speed “can kill financial markets.” Jason Henderson, Purdue University associate dean and past Federal Reserve Bank of Kansas City vice president, notes heightened speculation about the Fed’s near-term exit strategy for curtailing recent monetary policies aimed at bolstering nationwide jobs and economic growth. Henderson advised FarmWeek that “no matter how they do it, there are going to be higher interest rates going forward.” If rates climb too rapidly, lenders — and potentially the farmers and communities they serve — could suffer, he warned. Following the 2001 recession, the Fed’s funds rate — the interest rate at which financial institutions lend funds at the Federal Reserve to other financial institutions overnight —

Boom

Continued from page 1 operations, Kohl noted a growing measure of “extravagance” amid the recent “good times in agriculture.” Purdue’s Henderson maintains the ag “wealth effect” has seen producers “leveraging farm assets” for new homes, trucks, boats, RVs and other lifestyle upgrades, despite both commercial and Farm Credit reports of rising farm debt. “You’re seeing a new boom of construction in rural communities in a lot of places,” Henderson told FarmWeek. “When these things happen, they tend to be toward the end of a farm boom. “Given this period of low interest rates, do farmers bet the farm on prosperity going forward? Do they leverage their farm for other types of investments? How does that

dropped to a low of about 1 percent. Rates were adjusted by a “moderate” 2.5 percent after the last recession to allow financial institutions time to adjust to the change, Henderson said. He sees the possibility of rates rising 4 percent by 2015 — based on the Fed Open Market Committee theoretically raising rates 0.5 percent at each of its next eight meetings in 2014 — and notes “the Fed isn’t talking about speed of adjustment.” “It’s not just the level of interest rates bankers have to adjust to, but also the speed at which the Federal Reserve moves interest rates higher,” Henderson said. “Do bankers have their portfolios and balance sheets in place to manage a quicker ascent in interest rates to get to more of a long-term, stable rate, which the Federal Reserve has targeted at about 4 percent long term? How quickly does that long-term happen, and can banks adjust with it?” — Martin Ross play out if, say, there’s a negative shock in agriculture from lower prices?” With the Federal Reserve expected to shift course and interest rates projected to rise over the next year, Kohl recommends producers “shock-test” their finances to determine their ability to weather a 1 to 3 percent increase in rates. Kohl’s near-term ag forecast nonetheless includes a few rays of optimism beyond the grain sector. “Over on the livestock side, we might be in the 3rd or 4th inning,” he suggested. “Over the past few years, a lot of resources have gone out of livestock over into the grain area because you could make more money with less intensive types of agriculture. “That’s opened up a nice bright avenue for a few years on the livestock side, in general.”

Purdue Improved Crop Storage program has combated losses resulting from moisture, mycotoxin development and insect feeding by developing new burlap grain storage bags

with a plastic lining. “We’re seeing some things happening, but you have to have that political stabilization, country by country, region to region,” Henderson insisted.

Emerging economies, trade pacts key to rural health?

U.S. producers must keep their eyes on the global prize, even if other key U.S. sectors are looking elsewhere. So says Virginia Tech economist David Kohl, who argues the world’s emerging economies in coming years may heavily “influence agriculture in rural America, if not necessarily the East Coast and West Coast economies.” Within the swirling dynamics of the global alphabet soup, Kohl monitors progress not only among the semi-developing “BRICS” — Brazil, Russia, India, China and South Africa — but also among the lower-profile David Kohl “KIMTs” — South Korea, Indonesia, Mexico and Turkey. Together, those nations constitute 25 percent of the world’s economy, but have contributed FarmWeekNow.com 53 percent of global economic Listen to economist David growth since 1998, he said. Kohl reported growth in many Kohl’s comments about Asia’s of those countries is “moder- important trade role for farmers at FarmWeekNow.com. ating,” but stressed their appetites for imported food, fiber and fuel has not waned. Kohl thus sees a critical “interconnectedness” between the emerging economies and rural America — if the U.S. pursues those connections. The economist recommends keeping a particularly close eye on regional trade agreements such as the Trans-Pacific Partnership (TPP), which attempts to bring Western Hemisphere and Japanese, Malaysian and Vietnamese interests together. “The Asian region is going to be three in seven people in the world,” Kohl advised FarmWeek. “Their economies have been ascending. We are not the 800-pound gorilla we used to be. Matter of fact, we’ve been shedding a lot of weight — we’re probably down to about a 400-pound gorilla. “(Asian growth’s) been off our radar screen because we’ve been looking at Europe and some other areas of the world. As I travel in and interact with people from that area of the world, I see that it’s a very critical aspect. It’s something that probably needs future discussion in considering our agricultural health in the United States.” The TPP came under fire last week from an unusual mix ranging from hard-line conservatives to liberals — largely representing East and West Coast constituencies — who seek greater congressional input on the prospective agreement. Liberals claim the agreement could compromise Internet freedom and U.S. consumer protections, while a group of 22 House Republicans wrote they would not agree “to cede our constitutional authority to the executive (branch).” That further threatens the administration’s goal of helping reach an accord by year’s end. — Martin Ross

Glauber

Continued from page 1 flatten,” he said. “It was not unanticipated.” Demand growth is expected to continue, though, for ag products in China and developing countries around the world due to population and income growth. Annual crop demand in China is expected to grow 4.7 percent for soybeans and 3.3 percent for corn in the next five years. “Long-term growth in ag demand will continue to be driven by foreign markets,” Glauber said. “Trade will become more and more important (for the U.S. ag sector).” Glauber predicted U.S. corn exports will post a minor recovery and total around 1.4 billion bushels in the coming year after dipping to the lowest level since the 1970s.

GOVERNMENT

FarmWeek Page 4 Monday, November 18, 2013

Flinchbaugh: Congress’ ‘silly games’ threaten trade BY MARTIN ROSS FarmWeek

Congress can’t afford to play “silly games” with federal debt and the U.S.’ global standing, and the White House must throw a flag on the play if necessary, Kansas State University ag economist Barry Flinchbaugh insists. Following a two-week federal government shutdown in October, Congress agreed to fund government operations through Jan. 15 Barry and lift the fedFlinchbaugh eral debt limit through Feb. 7. Lawmakers face a potential renewal of partisan fiscal debate as they approach those deadlines. Flinchbaugh hopes House hard-liners have “learned their lesson” amid the shutdown’s fallout. He believes House Speaker John Boehner’s (ROhio) “not going to play that game again,” and will support bipartisan efforts to keep government “open” and avoid

U.S. debt default. The veteran policy advisor deems the debt ceiling debate “a bogus issue” with nonetheless dire consequences. October haggling “shook the confidence of the rest of the world in the almighty dollar,” he told FarmWeek last week. Congress has reauthorized near-term federal spending, and now “the bill needs to be paid” through long-term adjustment in the debt limit, he said. “This isn’t going to increase spending; this has nothing to do with spending,” Flinchbaugh argued. “The spending’s been authorized. Now, (legislative holdouts are) saying, ‘We’ve authorized the program, but we won’t pay the bill.’ They love to bad-mouth the ‘derelicts’ of society. Maybe they ought to look in the mirror. They aren’t paying their bills. “And the president needs to lead. There’s a 14th Amendment to the Constitution that, I would argue, gives him the authority to pay the bills. Pay ‘em; call their bluff. We can’t afford to flirt with bankruptcy again.” The 14th Amendment provides that the “the validity of the public debt … shall not be ques-

tioned.” Flinchbaugh and others argue that while it directs Congress, not the president, to protect the debt, the president can act if Congress violates its duty. In a FarmWeek interview, U.S. Rep. Bill Foster, DNaperville, noted moderate Republicans and Democrats met several times leading up to the October “crisis,” seeking a budget compromise essentially “behind leadership’s back.” While he acknowledged continued conflict between lawmakers insistent on Affordable Care Act repeal and those who refuse to deal with “the long-term problems in entitlements,” Foster hopes a similar moderate appeal might prevail this time. Flinchbaugh argues ongoing concerns about the debt ceiling and a potential downgrade in the U.S.’ credit rating shake international “confidence in the currency.” “It’s not the U.S. economy that’s the problem,” he said. “It’s the uncertainty in our political system. That can’t help but decrease confidence, which weakens us as a player in the export market.”

Foster polls focus groups on fiscal alternatives

Lawmakers must bring ideas rather than rhetoric to the table if Congress is to avert a replay of October’s shutdown debacle and set the stage for long-term fiscal reform, Naperville Democrat Rep. Bill Foster advised FarmWeek. In search of possible answers, the House Financial Services Committee member recently solicited producers and other northern Illinois constituents in “interactive budget exercises” to weigh options for addressing fiscal concerns. “Every one of them is painful, in one way or another, but constituents saw the same hard choices Congress has to face,” Foster stressed. “In the end, almost every table succeeded in coming up with a list of key options that they thought you could responsibly reduce the deficit with. “For example, many people thought military cuts were appropriate. Particularly as two of the longest and most expensive wars our country’s had are winding down, people are looking for a kind of ‘peace dividend’ — the kind we had after the collapse of the Soviet Union.” Foster’s two-hour “interactive budget” sessions were coordinated by the Concord Coalition, a nonpartisan group formed nearly 20 years ago by Sens. Paul Tsongas, D-Mass., and Warren Rudman, R-N.H., to explore strategies for balancing the federal budget. Foster saw widespread support for addressing the longterm solvency of Social Security by applying the federal payroll tax to all income, rather than merely the first roughly $115,000 under current law. Participants favored scrapping oil industry tax breaks, he said. Illinois farmers preferred cuts in sugar subsidies to reduced crop insurance support — an outcome Foster believes would be far different “if you repeated this exercise in Florida.” While the Affordable Care Act (ACA) generated considerable discussion, he said that “in the end, repealing the ACA did not seem to be a very popular option.” While groups were able to come to majority agreement on a number of options, he harbors little hope Congress can come to as rapid an agreement, particularly with an election cycle approaching. Many Republicans facing primary battles with Tea Party candidates “are voting very carefully, so as not to instigate a challenge from the far right,” Foster said. “When we get past the primaries, you might see some of those Republicans more willing to come to the table with real compromises,” he said. “That’s not going to help us in February, but it could help later this year.” — Martin Ross

Davis, Bustos named to WRDA conference panel

House Transportation and Infrastructure Committee members Rodney Davis, R-Taylorville, and Cheri Bustos, D-East Moline, have been named to serve on the Water Resources Development Act/Water Resources Reform and Development Act conference committee. That bolsters Midwest presence on the committee. Senate conferees represent largely East and West Coast states. Davis and Bustos are also members of the House Ag Committee, and they teamed up to include provisions for public-private project partnerships in the waterways bill. Bustos was hopeful “our bipartisan, common sense solution to modernize our region’s aging locks and dams is one step closer to reality.” “It’s been six years since Congress last approved a WRDA bill, a process that is supposed to take place every two years,” noted Davis, who is also serving on the farm bill conference committee. “Once we complete our work, I hope that we can return to the regular two-year schedule and rededicate ourselves to developing our water resources, which is essential to trade, agriculture and jobs in Illinois.”

LOCAL FOOD SUMMIT

Page 5 Monday, November 18, 2013 FarmWeek

Appetites growing for farm economic data tied to local food BY KAY SHIPMAN FarmWeek

Anecdotal evidence abounds but farm data on the impact of the locally grown movement remains unplowed, according to a senior economist with USDA’s Economic Research Service. Mary Clare Ahearn offered the latest farm and farm financial statistics for U.S. agriculture at last week’s Local and Regional Mary Clare Food Summit in Ahearn Bloomington. The

event was sponsored by Illinois Farm Bureau, the Illinois Department of Agriculture and Heartland Community College. Ahearn noted regional food systems are in the early development phase. “That’s where the most work needs to be done,” Ahearn said. “There are many unanswered questions.” Some of the questions may be answered in the 2012 census of agriculture. Ahearn referenced data from the 2007 ag census during her presentation. Growth in beginning farmers, including some who grow for local specialty markets, is generating calls from U.S. and international media, according

Food safety is ‘not just one person in the game’

Colorado farmer Michael Hirakata urged farmers to be team players and produce safe, healthy food for consumers. “It’s not just one person in the game. We have to take competitiveness out of food safety,” the president of the Rocky Michael Hirakata Ford Growers’ Association said last week in Bloomington. Hirakata, a fourth-generation grower from southeast Colorado, spoke at the Illinois Local and Regional Food Summit. When news of a food-borne disease outbreak surfaced in 2011, Hirakata admitted, “I didn’t know what listeria was.” He later learned the problem came from a farm only nine miles from his own operation. Unsafe washing procedures and poor cold-chain management of cantaloupe resulted in the deaths of 33 people and the hospitalization of another 147. A team effort was needed to restore consumers’ confidence in their produce, Hirakata noted. To start, a group of growers pooled their ideas and sought help. The state agriculture department stood behind the farmers’ food safety efforts, and the state ag commissioner played an

instrumental role. The governor’s staff urged retailers to support the farmers, and experts from Colorado State University provided information. Chefs joined the effort and helped promote cantaloupe. Hirakata made substantial food safety investments on his farm. A $1 million packing shed sports new cooling technology, a melon shower and a final wash. Now melon temperatures drop from 95 degrees to a 40degree shipping temperature within three hours, Hirakata noted. Farm traceability is available through QR codes on each carton of Hirakata melons. His farm employs a full-time safety manager, and all farm workers and shed employees have food safety training, he said. Employees are encouraged to report any potential problems. At the same time, Rocky Ford members are reaching out to consumers and promoting their farms and products. “Something we never did before was meet-and-greet (events). We’re telling our story, getting our faces out there,” Hirakata said. “We did tons of media ... (were) open about everything we could be and tell what we did.” Hirakata urged farmers “stay ahead of the game and learn about the latest technology.” — Kay Shipman

Faces of farming to move forward Farmer Katie Pratt of Dixon intends to continue her role as one of four Faces of Farming for the U.S. Farmers & Ranchers Alliance (USFRA) next year. “I think we’ll be doing more of what we’ve been doing – making a steady movement forward in telling the farm story, and compelling farmers and ranchers to tell their stories,” said the Lee County corn and soybean farmer. “We will continue giving consumers a place to

go to find more information about their food.” Pratt added that Illinois Farm Families (IFF) program complements USFRA Faces of Farming efforts. She noted the knowledge IFF Field Moms learn on farm tours gets passed to consumers through the moms’ blogs. To read more about USFRA, visit {fooddialogues.com/farmers-ranchers}. IFF happenings can be viewed at {watchusgrow.org}.

to the economist. “Growth in beginning farmers, we haven’t seen it yet. Maybe that will change in the 2012 ag census,” she added. The economic impact of different types of sales, such as direct and intermediary, isn’t known either. USDA does not survey farmers about intermediary sales. An obstacle to collect that information hinges upon the definition of the term intermediary, which farmers interpret differently. “Some may do it (intermediary sales), but not be aware,” Ahearn noted. However, evidence shows farms are more profitable when they sell to inter-

mediaries compared to direct sales, she said. She explained farms involved with intermediary sales tend to produce more and take advantage of economy of scale. Based on 2007 ag census data, 6 percent of all U.S. farmers were involved with direct sales, but those tended to be newer farm operations. Of the farms that had been in operation 11 or fewer years, 22 percent were more likely to make direct sales. In one market category, the north central U.S. region, which includes Illinois, leads the nation in growth of farmer’s markets with 3.6 percent, which was above the national average.

AFBF to work with the Farmer Veteran Coalition American Farm Bureau Federation (AFBF) is supporting the Farmer Veteran Coalition, a nationwide organization that works to help veterans transition into agricultural careers. Sabrina Matteson, AFBF director of rural affairs, shared links between AFBF and state Farm Bureaus and the nonprofit veteran coalition. Matteson spoke at the Illinois Local and Regional Food Summit last week in Bloomington. Some states are launching novel programs that

are growing. Last week, a Kentucky initiative to brand veteran-produced farm products was expanded nationwide. The Homegrown by Heroes program will be administered by the Farmer Veteran Coalition nationally. Matteson noted state and county Farm Bureaus may help veterans by inviting them to speak and/or attend leadership events and providing mentorships and other opportunities. — Kay Shipman

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FarmWeek Page 6 Monday, November 18, 2013

CROPWATCHERS

Last report of the season. Bernie Walsh, Durand, Winnebago County: Snow is a fourletter word when it comes in November and you still have corn to pick. We had about 1 inch Monday morning (Nov. 11), and it held us out of the field until Wednesday afternoon. Most of us are finishing up those last few fields. There is probably 15 to 20 percent left to harvest with more rain in the forecast. Very little fall tillage or fertilizer applications have been done. All in all, it has been a very good year, considering how late and wet the spring was and periods of hot, dry weather in July and August. Thanks for reading our reports. I hope you have enjoyed them, and have a great winter. Pete Tekampe, Grayslake, Lake County: A couple of rain events last week totaled 0.9 of an inch of rain. There are still a few beans left to cut. Corn is about 80 percent picked. Yields are about average, or maybe a little above. Hopefully, I will finish Friday.

Leroy Getz, Savanna, Carroll County: Snow covered the ground Monday (Nov. 11). With temperatures in the teens, it made it feel really like winter. Harvest is nearly complete. Those producers with corn still in the fields are working long hours to finish. Corn yields for the season have been in the 200- to 220-bushel range — well above anybody’s expectations. Soybeans ranged from 40 to 75 bushels. Again, more than anyone expected. Fall tillage and anhydrous ammonia applications are a priority before the ground gets frozen. Let us be very thankful for what we’ve had this year on this coming Thanksgiving Day. Ryan Frieders, Waterman, DeKalb County: I hope that when you read this we are done harvesting. The last field of corn to be combined had to be replanted in June due to tornado-speed winds and hail. It is coming out of the field at 32 percent moisture and is slowing our process down. After that, we will jump on our tillage tractors and turn this year into a memory. 2013 has been a good year for our farm and our family. We are already planning to make 2014 the best. Happy early Thanksgiving and continue to remain safe. Larry Hummel, Dixon, Lee County: CropWatcher reports are coming to a close and harvest is winding down. It’s time to reflect on this past growing season. The year started out with hopes and dreams of a recovery from last year’s crippling drought. Spring rains recharged the soil profile and tile lines were running again. Here in northern Illinois, most crops got in on time and in good condition. A new phrase came up in conversations — “flash drought.” July, August and September were dry as a bone. Finally, yields were dependent on the luck of an extra pop-up shower during July, or the water-holding capacity of the subsoil. Field averages for soybeans range from the upper 20s well into the 70-bushel range. Corn was just as variable with 50 to more than 250 bushels. See you next year. Ken Reinhardt, Seaton, Mercer County: I just wrapped up harvest Thursday, so it is fitting this is the final report of the season. It was a trying year with too much rain and then none. Yields were all over the map according to drainage and planting date. Lateplanted and replanted corn is still mid to upper 20s for moisture. Ron Moore, Roseville, Warren County: We received some rain and snow last week. Harvest was delayed for a day, but we finished Thursday. Now onto cleaning out the pits and fall tillage. It seems like the work changes but never ends. The yields will end up about average to a little below average for this area. Some really good crops and some that make you scratch your head and wonder what happened in that field. We will have all winter to figure that out and plan for next year. Lots of fertilizer is being applied now. We will need some moisture this winter to make next year a normal one.

Jacob Streitmatter, Princeville, Peoria County: Harvest is wrapping up for many across the area. Tillage is progressing and some anhydrous applications have star ted.

Tim Green, Wyoming, Stark County: Crops ended up being a little bit above average. Corn yields were pretty decent and bean yields were up and down, but in general a little better than we thought. Expectations were set pretty low, so everyone was pleasantly surprised. A lot of work will be done on fields as Mother Nature did a lot of damage. Probably 5 percent of the corn still needs to be picked, and there is a bean field here and there. Anhydrous and fertilizer are going on in preparation for next year. Have a good winter. Ron Haase, Gilman, Iroquois County: We lost almost two full days of fieldwork due to snow last week. We planned to finish harvesting corn Friday. Very few acres remain to be harvested in the area. Other field activities include spreading lime and fertilizer, anhydrous ammonia application and strip tillage with fertilizer application. Many fields have already been tilled. In reviewing the year, overall yields were slightly above average. After having corn planted at the end of May and into June, we are pleased with the yields. Our average yield was brought down by low yields on 25 percent of our acres due to extreme rootworm pressure in some areas. This has led to new decisions in the seed corn we purchased for 2014 and maybe some changes to our crop rotation in 2014. The local closing bids for November 14 were nearby corn, $4.10; fall 2014 corn, $4.31; nearby soybeans, $13.11; fall 2014 soybeans, $11.49. With the lower prices, there is a squeeze on profit margins for 2014. Brian Schaumburg, Chenoa, McLean County: There are still a few loads of grain going to the elevator every day. Anhydrous applications are trying to beat the arrival of bad weather, and tillage is getting wrapped up. As we close out another growing season, we learned subsoil moisture and cool temps are far more important to good yields than previously thought. Markets can be very fickle, and we are blessed to live the lives we do. Have a good holiday season! Corn, $4.18; Jan., $4.28; fall ‘14, $4.40; soybeans, $12.99; fall ‘14, $11.40; wheat, $5.90; new, $6.21. Steve

Carrie Winkelmann, Tallula, Menard County: I have never reported about snow before, but we received 0.5 of an inch Monday night (Nov. 11). We finished harvest Friday (Nov. 8), and sprayed Saturday, Sunday and Monday until rain stopped us in the late afternoon. Snow stopped us for a day, but we finished spraying Thursday and started applying anhydrous Friday. Best wishes to everyone from our farm family! Carrie, Kyle, Lydia, Grady and Grandpa Robert. Tom Ritter, Blue Mound, Macon County: Fields of corn and soybeans are very few and far between. Overall, farmers are very pleased with corn and soybean yields. Corn was probably more outstanding than the soybeans, if there was decent drainage for the heavier rains that came earlier in the spring. Corn planted the first week of June seemed to be some of our best, even though it was running at a high moisture. It defied the old rumor that you lose a bushel a day after May 10. A lot of tillage going on. I’ve seen some anhydrous tanks rolling, but not really as much as I thought we would see at this point. Todd Easton, Charleston, Coles County: It’s been another busy week across Coles County. At this point, virtually all of the combines have been retired to their sheds. My combine finally completed its work last Sunday (Nov. 10) in our double-crop soybean field that made a very surprising 40 bushels per acre without hardly any rain to speak of. The next day we received our first snow of the year. Tractors were back to work a short day later and will be going hard until rain returns this weekend. Tillage, spraying, dry fertilizer and limestone applications are mostly completed at this point. Anhydrous application is well under way. As our fieldwork gets into the short rows, the CropWatcher season also comes to an end. So, until next May, best wishes to you and yours. Jimmy Ayers, New City, Sangamon County: We received a pretty good cover of snow, and it slowed harvest up a little bit. There are still a few beans left in the area and some corn scattered around. A lot of fieldwork was done this week and quite a bit of anhydrous applied. Overall for the year, we were looking at a low of 170 and high of 221 bushels. The talk around the area has yields as high as 260 an acre. Soybeans at our place ran from 48 to 61 bushels. I hear of a lot of 60s and 70s in conversations. Overall, I think most everybody was pleased with what they received. The outlook on price for next year is a large concern. A lot of anhydrous being applied. The possibility of expanding our corn acres is real around here. I hope everybody enjoys their holidays. I look forward to seeing you and visiting with you next year.

Ayers, Champaign, Champaign County: Tuesday we were greeted by a skiff of snow with temperatures in the teens. USDA has our crop reporting district at 98 percent corn and 99 percent soybeans harvested. USDA estimated our crop reporting district at 176 bushels per acre corn yield compared with 2012 of 101.4 bushels per acre. Soybeans came in at 49.0 bushels per acre compared with 2012 yield of 44.9 bushels per acre. Fieldwork continues in earnest — chiseling and spreading anhydrous, lime and fer tilizer. Happy trails to you until we meet again!

David Schaal, St. Peter, Fayette County: Winter tried moving in this week with snowflakes on Monday night (Nov. 11). Temps have been below normal. Harvest is 99.9 percent complete. Wheat looks really good. Still some tillage, mowing, fertilizer application and fall chemicals being applied. It has been an interesting year again with planting on time and then turning wet forcing some farmers to replant corn and beans late. As the year progressed, corn turned out above average and soybeans were average or a little below. So long for 2013, Happy Holidays and we’ll see ya in 2014.

Wilfred Dittmer, Quincy, Adams County: I don’t know where the bushels all came from, but most fields were very good considering the short supply of moisture in our neck of the woods. Our totals for the summer were March, 0.8 of an inch of rain; April, 7.6 inches; May, 4.75 inches; June, 1.5 inches; July, 1.5 inches; August, 0; September, 1.2 inches; October, 3.9 inches; total of 21.25 inches. Considering the small amounts for June, July, August and September, we should feel pretty lucky. Happy Thanksgiving and Merry Christmas to everyone as the year 2013 will soon be history. Stay healthy!

Dave Hankammer, Millstadt, St. Clair County: This has been a busy week for farmers in the area. Additional fields of wheat were planted and even a cutting of alfalfa hay was made. Standing crops continue to be removed from the fields when possible. Winter weather made an appearance early in the week when overnight temperatures dipped into the teens, and a light rain and a touch of snow fell. The rainfall was less than a tenth of an inch and made already cool, damp soil appear muddy. Judging by the remaining amount of crops still standing, harvest should be done by Thanksgiving. Since this is our last report for the season, I would like to wish our readers Happy Holidays and hope to see all of you next spring.

Page 7 Monday, November 18, 2013 FarmWeek

CROPWATCHERS Rick Corners, Centralia, Jefferson County: We went a week with only a light shower of rain and everybody shifted into overdrive. There are still crops in the fields, but they are getting scarcer by the hour. If it doesnâ&#x20AC;&#x2122;t rain too much over the weekend as predicted, I think most everybody will eat their candied yams in peace. Not a record-breaking year, but overall, pretty good for what crops went through. Someone once told me that I never give any yield numbers, so here it goes. Beans made less than 100 and corn less than 300. I didnâ&#x20AC;&#x2122;t say how much less. As another CropWatcher year comes to a close, may all your ribbons be blue and all your dreams come true. See you on down the trail. By golly, Iâ&#x20AC;&#x2122;m a poet and didnâ&#x20AC;&#x2122;t know it.

Kevin Raber, Browns, Wabash County: It seems as if this has been a long harvest, but we are about to complete it. I should finish double-crop beans Friday or Saturday. In a quick review of this year, wheat yields were very good, corn yields were amazing, soybeans were good, but not as outstanding as wheat or corn. In finishing my report, as always, I just want to thank the Lord for blessing us with a safe and bountiful harvest.

Ken Taake, Ullin, Pulaski County: It was a very good week for us here in deep southern Illinois. We managed to finish harvest Wednesday afternoon. Iâ&#x20AC;&#x2122;d say the majority of farmers in our area are finished. Approximately 10 percent of the crops are left in the field. Overall, yields on our farm were good, but they were not record-setting. It seemed like there was a lot of variability in our yields. We are already starting to think about next year. Some fall fertilizer is being applied. Farmers looking at crop rotations for next year and what kind of fertilizer to apply.

Biofuels advocates counter AP ethanol attack BY MARTIN ROSS FarmWeek

Were it purely a matter of what Renewable Fuels Association (RFA) Vice President of Research Geoff Cooper termed â&#x20AC;&#x153;really sloppy reporting,â&#x20AC;? the latest Associated Press (AP) story on ethanol might not have generated so much industry furor. However, with congressional biofuels critics targeting federal corn ethanol requirements and a â&#x20AC;&#x153;leak draftâ&#x20AC;? of U.S. Environmental Protection Agency (EPA) proposals indicating it has considered paring back on 2014 Renewable Fuel Standard (RFS2) mandates, Cooper saw the story on ethanolâ&#x20AC;&#x2122;s supposed â&#x20AC;&#x153;secret costâ&#x20AC;? distorting not only the facts but also, potentially, biofuels policy direction. Cooper charged the article, by AP writers Dina Cappiello and Matt Apuzzo, â&#x20AC;&#x153;omitted some really key factsâ&#x20AC;? in its allegations that increased corn production related to RFS2-driven demand has â&#x20AC;&#x153;wiped o u t m i l l i o n s o f a c r e s o f c o n s e r va t i o n l a n d , destroyed habitat and contaminated water supplies.â&#x20AC;? The story maintains the government has overrated the greenhouse gas impacts credited to biofuels use. After the draft story was leaked by some AP subscribers, RFA provided AP with peer-reviewed studies and government data refuting the claims, but Cooper reported that information â&#x20AC;&#x153;was consciously ignored because it didnâ&#x20AC;&#x2122;t seem to fit the preconceived storyline.â&#x20AC;? The story came on the heels of efforts by Sens. Dianne Feinstein, D-Calif., and Tom Coburn, ROkla., to eliminate existing RFS2 corn ethanol requirements and a leaked October draft by EPA suggesting 2014 ethanol targets could be lowered to 2012 levels. â&#x20AC;&#x153;This is one reason weâ&#x20AC;&#x2122;re concerned about this

Farm financial boot camp set for January

Farmers wanting to boost their management skills can attend an Ag Financial Boot Camp from 9 a.m. to 4:30 p.m. Jan. 6 at the St. Louis Hilton at the Ballpark hotel. Topics at the boot camp conducted by Far m Futures will include ag accounting applications, farm financial analysis, recordkeeping and accounting software. A panel of farmers and ranchers will discuss key financial questions. The Ag Finance Boot Camp costs $100 for participants registering by Dec. 1. The cost increases to $150 per person after Dec. 1. Rooms at the St. Louis Hilton at the Ballpark can be reserved for $85 per night. Other boot camp sponsors include John Deere and the Farm Financial Standards Council. The boot camp precedes the Farm Futuresâ&#x20AC;&#x2122; Business Summit Jan. 7-8 featuring sessions on outlook for the global economy and markets, farm expansion decisions and estate planning strategies. Summit registration costs $299 before Dec. 1. To see the agendas and register, go to {farmfutures.com}.

Reports received Friday morning. Expanded crop and weather information available at FarmWeekNow.com.

story,â&#x20AC;? Cooper told FarmWeek. â&#x20AC;&#x153;It not only misses the mark entirely on a factual basis â&#x20AC;&#x201D; these types of stories do tend to influence the way people think about ethanol and the RFS2.â&#x20AC;? Fuel facts Cooper addressed the AP storyâ&#x20AC;&#x2122;s â&#x20AC;&#x153;most egregious factual inaccuracies:â&#x20AC;? â&#x20AC;˘ Ethanol and the RFS2 are responsible for cropland expansion and accelerated conversion of conser vation lands. Based on long-ter m trends, â&#x20AC;&#x153;cropland continues to shrink,â&#x20AC;? said Cooper, who reported overall U.S. field crop production has averaged 321 million years since RFS2 creation in 2007, versus an average 325 million acres during the previous decade. Neither does the data suppor t claims that ethanol corn production has impacted native grasslands or forests, nor, as the AP story suggested, â&#x20AC;&#x153;filled in wetlandsâ&#x20AC;? to raise more corn, he said. Cooper attributed reduced Conservation Reserve Program enrollments to 2008 farm bill funding authorizations rather than to ethanol corn production. â&#x20AC;˘ Ethanol diverts corn from crucial feed use. Every 56-pound bushel of processed corn produces 2.8 gallons of fuel and about 17 pounds of distillers dried grains and/or corn gluten feed, he stressed. â&#x20AC;&#x153;There isnâ&#x20AC;&#x2122;t a single mention of this coproduct in the very lengthy AP story,â&#x20AC;? Cooper related. â&#x20AC;˘ Projections of ethanolâ&#x20AC;&#x2122;s impact in reducing greenhouse gas emissions are optimistic. Cooper cited Argonne National Laboratory and Oak Ridge National Laboratory data, backed by Univer-

sity of Illinois and Purdue University findings, documenting ethanolâ&#x20AC;&#x2122;s greenhouse â&#x20AC;&#x153;benefits.â&#x20AC;? Argonneâ&#x20AC;&#x2122;s latest study indicates corn ethanol use reduces greenhouse gas potential by an average of 34 percent over standard gasoline and a potential 48 percent under some biofuels production methods. Again, that report was offered to and ignored by AP, Cooper said. Ethanol and agriculture At last weekâ&#x20AC;&#x2122;s annual American Bankers Association National Agricultural Bankers Conference, Purdue University Center for Commercial Agriculture Director Brent Gloy stressed the RFS2 has represented a â&#x20AC;&#x153;huge demand shiftâ&#x20AC;? for agriculture. Corn use for ethanol â&#x20AC;&#x153;has been wonderful for row crops, wonderful for the overall level of income in the ag sector,â&#x20AC;? Gloy said. He sees a leveling-off in demand for corn-based ethanol â&#x20AC;&#x201D; a factor accounted for in EPAâ&#x20AC;&#x2122;s statutory 15-billion-gallon-per year RFS2 cap on conventional ethanol use. Gloy sees development of cellulosic ethanol from crop residue or energy crops being â&#x20AC;&#x153;very bullish for ethanolâ&#x20AC;? â&#x20AC;&#x201D; if overall future biofuels demand tracks feedstock supplies. Virginia Tech University economist David Kohl told FarmWeek biofuels policy along with emerging world economies and Federal Reserve policies are â&#x20AC;&#x153;the three big elementsâ&#x20AC;? currently impacting the course of the U.S. ag economy. Kohl deemed biofuels â&#x20AC;&#x153;very critical to the economic health of our farmers and rural America.â&#x20AC;? â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re hoping to hold on to what weâ&#x20AC;&#x2122;ve got,â&#x20AC;? Gloy warned. â&#x20AC;&#x153;Anything we lose here is really bad for demand.â&#x20AC;?

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PRODUCTION

FarmWeek Page 8 Monday, November 18, 2013

‘Go-go’ farmers advised to read the road signs BY MARTIN ROSS FarmWeek

University of Minnesota farm finance guru Bob Craven calls them the “go-go farmers” — younger producers willing to take their chances to make their mark through aggressive growth strategies. But at a time when the current U.S. “farm boom” may be in its late innings, Craven and colleagues urge the go-go generation to perhaps slow down a bit and review its options. Liquidity is usually an issue for the “hard charging” set, “because they’ve been expanding very rapidly,” he advised. Because they frequently rent acres and lease equipment, their gross income often approaches or exceeds their total assets, said Craven, director of the U of M Center for Farm Financial Management. At last week’s American Bankers Association Ag Bankers Conference in Minneapolis, he noted the recent downfall of Michigan farmer Mike Stamp, a recent Top Producer’s Top Producer of the Year finalist who purchased a nearby grain company and restored a railroad spur on the property as part of his approach to “full circle farming.”

Stamp had grown his operation from 240 acres to more than 40,000 over an estimated 16-year period. By late 2012, the 37-year-old declared bankruptcy, listing assets of less than $50 million, more than $90 million in reported liability and 200plus creditors. “What do we do to protect ourselves when we think of these operations — the go-go farmers, the rapid expansion?” Craven asked ag bankers. During the last several years, crop operations could gauge financial soundness based on balance sheets with mixed market/cost values and performance by farm Schedule F statements, “as long as they got a decent crop and got it to market,” he said. But “in a period where we think things are going to get tighter,” Craven maintains cashbased Schedule Fs — built on “tax rules that distort ‘income’” and often reflecting overly rapid depreciation — do not tell the whole story. Instead, an “earned net worth” analysis (see accompanying worksheet) considers changes in net worth over a specified period, ideally based on net farm and nonfarm income, family living expenses, taxes and changes

in farm valuation. “The valuation changes aren’t just in land any more,” Craven said, noting the need to assess machinery, vehicles and buildings. His colleague, U of M

Extension economist Curtis Mahnken, also emphasizes the importance of better “knowing your cost of production” as part of the financial soundness equation. “How do you compare to

other people?” Mahnken told FarmWeek. “Benchmark yourself against producers of similar size or against the top 25 percent of producers in terms of return on assets or net farm income.”

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POLICY

Page 9 Monday, November 18, 2013 FarmWeek

Economist fears farm bill could become budget fodder BY MARTIN ROSS FarmWeek

approach aimed at satisfying both Midwest and southern growers. He sees a program compromise as “doable” and the result providing farmers a

$750,000 or more in adjusted gross income. That could result in larger farmers dropping out of the insurance risk pool, leaving smaller policy-

don’t like big farmers’ — I always say, because all they do is feed us. “If you’re going to have a farm bill for farmers, you have

‘If you’re going to have a farm bill for farmers, you have to do it based on who’s doing the producing.’ — Barry Flinchbaugh Kansas State University economist

“pretty solid, sound safety net.” But Flinchbaugh hopes conferees will scrap crop insurance “means testing” proposals that would cap premium subsidies for farms with

holders with heftier premiums, he advised. “I don’t think some of these congressmen understand that,” Flinchbaugh contends. “It’s this idea they have that, ‘You’re a big farmer, and we

to do it based on who’s doing the producing. That’s not rocket science. They try to make a social program out of it. It’s not a social program — it’s an economic program.”

W . TO E M om S E S T o n .c R U S Y c ti FO N te R S I O pro HE AT of UC I C ne VO PL . zo 00 A P a r m 5,0 D t f 0 $ UI w a f 5 I Q no 1 o A L s te r gi

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A top U.S. ag policy adviser told FarmWeek he was “slightly optimistic — maybe 55-45” that Congress might at best roll a new farm bill into a congressional budget deal by year’s end. At a national ag bankers conference last week in Minneapolis, Kansas State University Ag Economist Barry Flinchbaugh offered bleak prospects for an ag conference resolution, given that “the House and Senate are so very far apart” on food/nutrition proposals. An aide to conferee Rep. Rodney Davis, R-Taylorville, reported Friday “no progress on the farm bill to announce yet,” but offered hope “we’ll have something soon.” House conferee leader Collin Peterson, D-Minn., suggests a “framework deal” could emerge next week. House Speaker John Boehner, ROhio, declared the farm bill off-limits as part of a budget deal. But reconciling the Senate’s $4 billion/10-year cut in Supplemental Food Assistance Program (SNAP) funding and a House-proposed $40 billion “food stamp” cut is “a gigantic task,” Flinchbaugh said. He perceives “a will now to get it done” among ag lawmakers, but cites a continued battle between “wing-nut Republicans” looking to tighten the screws on SNAP beneficiaries and “wing-nut Democrats” seeking in-kind retaliation against federal crop insurance support. Even if conferees can “split the difference” in long-term SNAP cuts, he questions whether the House would pass or the president would sign the measure. Flinchbaugh argued Congress’ year-long-plus delay in delivering a new farm bill has made the U.S. “the laughingstock of the rest of the world.” Worse yet, partisan “sandbox” battles have left producers, lenders and rural communities in “a Never-Never Land of uncertainty,” he said. Bankers nationwide are concerned about the on-theground implications of a continued farm bill stalemate. “Whether it be the farm bill, the government shutdown, the debt ceiling, all these debates create uncertainty, and that makes it hard to plan,” said Alan Lemons, who oversees Wells Fargo’s Colorado ag loan portfolio. “That’s the big gest issue we’ve g ot, especially at this time of year.”

Lemons also cites concerns about the expiration of the 2008 farm bill’s standing disaster program — a key protection for his state’s dairy, cattle and forage producers. Kansas Office of the State Bank Commissioner Manager Ed Spielbusch told FarmWeek his constituents appear less interested in future farm supports as they are in Congress “preserving the crop insurance program.” Flinchbaugh anticipated congressional negotiators arriving at a farm program “choice” for producers somewhere between Senate-style revenue protections and the House’s two-tiered revenue/price support options

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PRODUCTION

FarmWeek Page 10 Monday, November 18, 2013

Harvest nears completion despite recent weather shifts “Most harvest is pretty much done (in northwest Illinois), although there are a handful of cornfields left to be picked,” Livengood said. “Most everybody is saying yields are excellent for corn and better than expected for beans.” USDA this month projected Illinois farmers will harvest 2.11 billion bushels of corn, up 64 percent from last year. If realized, it would be the thirdlargest corn crop in state histo-

BY DANIEL GRANT FarmWeek

The growing season already was topsy-turvy from a weather standpoint prior to this month. Heavy spring rains delayed or prevented planting in some areas followed by a prolonged dry spell the latter part of summer and early fall that induced a widespread drought for the second consecutive season. So it probably was no surprise the weather took another turn last week as a cold front swept through the state and brought strong winds, bonechilling temperatures and a dusting of snow to much of the northern two-thirds of the state. “It’s been a game of guess the weather lately,” for farmers attempting to finish harvest or other fall fieldwork activity, said Ed Livengood, a farmer from Milledgeville (Carroll County). “The corn that’s left in the field is still standing well, so I think it will be OK,” he continued. “But (the cold front the

ry behind the crops of 2007 and 2008. The statewide corn yield was projected to average 180 bushels per acre, which would tie the record set in 2004. Soybean harvest in Illinois was projected to total 461 million bushels, up 20 percent from last year. The state soybean yield was projected to average 49 bushels per acre, up 3 bushels from the September estimate.

Will big crops spur demand? End users could take advantage of prices

middle of last week) really slowed down the drying of soil. Tillage has come to a halt.” Bill Raben, a farmer from Ridgway (Gallatin County) finished corn harvest last week. He hopes to complete soybean harvest prior to Thanksgiving, if the weather cooperates. “Most people are wrapping it (harvest) up and are down to

double-crop beans,” Raben said. Harvest around the state the first of last week was 93 percent complete for corn, 11 percent ahead of the average pace, and 97 percent complete for beans, 4 percent head of the average pace. Nationwide, 84 percent of corn and 86 percent of beans were in the bin as of last week.

Large crops and lower prices predicted this month by USDA might not be all bad news for corn and soybean growers. The situation, if realized, could boost consumption, help livestock producers bounce back from drought/high feed prices and aid the U.S. in maintaining or regaining customers in the world market. “Prices (this month) are a lot lower since the last (USDA crop) report (in September),” Joe Vaclavik, market analyst with Standard Grain, said this month during a webinar hosted by the CME Group. “We’ll see if demand adjusts for that. I think there’s pent up demand.” USDA earlier this month in its world agricultural supply and demand estimates report raised total corn use by 275 million bushels. Corn exports were projected to increase by 175 million bushels, and feed and residual use jumped 100 million bushels. Soybean exports also were projected to grow by 80 million bushels to a total of 1.45 billion bushels. The soybean crush estimate was raised 30 million bushels to 1.685 billion bushels. “Conceptually, there is a difference between demand and consumption,” said Darrel Good, University of Illinois Extension economist. “Consumption theoretically is related to price, so with a lower price you’d expect to use more (corn and beans).” USDA this month projected U.S. farmers this year will harvest the largest corn crop (13.989 billion bushels) and third-largest bean crop (3.258 billion bushels) on record. Season average price estimates subsequently were lowered by 30 cents per bushel for corn and 35 cents per bushel for beans. And prices will need to stay

below recent levels to generate any type of response in consumption, according to Good. “In order for the usage numbers (projected by USDA) to materialize, corn prices have to stay pretty low,” Good said. “Otherwise, you won’t get that type of (consumption) increase, particularly in the feed and residual category (where U.S. cattle numbers continue to decline). “We still have pretty large year-ending stocks,” he noted. USDA this month pegged

‘Consumption theoretically is related to price, so with a lower price you’d expect to use more (cor n and beans). ’ — Darrel Good University of Illinois economist

ending stocks at 1.887 billion bushels for corn, up 32 million bushels, and 170 million bushels of beans, up 20 million bushels. Looking ahead, Good and Vaclavik don’t foresee a major change in crop production estimates from USDA. “Historically, the November number is very, very close (to the final estimate), particularly since USDA started incorporating the FSA (Farm Service Agency) acre numbers,” Good said. USDA in its latest report lowered harvested acres by 1.9 million for corn and 700,000 for beans mostly due to prevented plantings. “There certainly have been some harvest delays,” Vaclavik added. “But it’s too late in the season to have a major impact on production.” — Daniel Grant

EMERGING ISSUES

Page 11 Monday, November 18, 2013 FarmWeek

Consumers will find lower Thanksgiving dinner costs BY CHRIS ANDERSON FarmWeek

When the hungry hordes descend upon the Anderson homestead next week, their stomachs will be satisfied as usual. And they’ll enjoy an extra Turkey Day bonus — an excellent value. According to the American Farm Bureau Federation’s (AFBF) 28th Thanksgiving dinner price survey, the average feast for 10 will cost $49.04, down 44 cents from last year. “The cost of this year’s

meal — at less than $5 per serving — remains an excellent value for consumers,” said AFBF President Bob Stallman. “America’s farm and ranch

FarmWeekNow.com

Go to FarmWeekNow.com to view our video about AFBF’s Thanksgiving Dinner survey.

families are honored to produce the food from our nation’s land for family Thanksgiving celebrations.” There’s even better news for

Don’t forget to contact utility when expanding power needs BY KAY SHIPMAN FarmWeek

Picture yourself turning on a new grain dryer — and nothing happens. Ameren Illinois is asking farm customers to contact its

‘We want to assure the natural gas delivery system is sufficient to meet their energy needs.' — Paul Obertino Ameren Illinois regulatory consultant

construction and engineering services team before the installation of new or additional energy-intensive equipment, such as grain dryers, Paul Obertino, Ameren regulatory consultant, told FarmWeek. The scenario of the new grain dryer not working? That

occurred in a couple instances because the required natural gas supply exceeded the safe capacity of Ameren’s delivery system, he explained. Obertino advised Ameren farm customers to call 888659-4540 early in the planning process. “It could be six to eight months (of advance notice); it could be a year, depending on the project,” he said. An Ameren construction team will help by scheduling a meeting between the farmer and a local Ameren representative to assess how the farmer’s plan may impact natural gas delivery throughout the company’s distribution system. Advance contact will allow the farmer to receive a cost estimate if changes to the gas delivery system are needed or if that system has reached capacity and can’t support additional loads, according to Obertino. “We want to assure the natural gas delivery system is sufficient to meet their energy needs,” he said.

WIU School of Ag to host artificial insemination clinic

Western Illinois University (WIU) School of Agriculture will offer an artificial insemination clinic from 8 a.m. to 3 p.m. Dec. 5-6 in the WIU Livestock Center. Registrations and a $100 deposit are due Wednesday. The clinic will provide hands-on training on reproductive tract anatomy, estrus synchronization, heat detection, semen handling and insemination technique. Instruction will be provided by Tom Johnson from Select Sires. The cost is $200 per student or $500 for semen purchase. The clinic is open to the public. Space is limited. The registration deposit is due to Select Sires. Please mail the check to: WIU School of Ag, Attention: Sam Cunningham, 1 University Circle, 145 Knoblauch Hall, Macomb, IL 61455. For information or to register, contact Samantha Cunningham, WIU ag professor, at S-Cunningham@wiu.edu.

this head chef for the annual Anderson gathering. As one of AFBF’s price survey shoppers, my crew will be fed for about $45, according to Nov. 5 prices at a Bloomington-Normal grocery store. Survey shopping dates ranged from Nov. 1-12. Survey items included turkey, bread stuffing, sweet potatoes, rolls, peas, cranberries, carrots, celery, milk and pumpkin pie with whipped cream. This reporter was among 167 volunteer shoppers in 34 states. Turkey proved the best bargain this year. The national average turkey price came in at $21.76, 47 cents less than last year. Dinner rolls, peas, stuffing, fresh cranberries, whipping cream and pie shells also decreased slightly in price. Sweet potato costs posted the highest increase at $3.36 for 3 pounds, a 21-cent boost. AFBF Deputy Chief Economist John Anderson, no relation to this reporter, attributed the price bump to the fact that, like turkey, sweet potatoes

aren’t just for Thanksgiving any more. “We’re seeing improved demand for sweet potatoes. More restaurants are offering sweet potato fries,” said Anderson. “Conversely, slightly higher turkey production coupled with an increase in birds in cold storage may be responsible for the moderate price decrease our shoppers reported for turkey.”

The economist noted special sales and promotions will continue until Thanksgiving, potentially allowing shoppers to grab exceptional bargains. This holiday chef has already made a mental note that turkey now costs only 77 cents per pound with her store card in hand. Happy shopping and Happy Thanksgiving!

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PRODUCTION

FarmWeek Page 12 Monday, November 18, 2013

FARMERS THANKED DAIRY-STYLE

FDA decision on oils concerns soy growers BY DANIEL GRANT FarmWeek

Cook County Farm Bureau (CCFB) teamed with Culver’s in Tinley Park to thank farmers for feeding the world. CCFB volunteers Toni DeLaurentis, left, and Beth Christian help children make “moo” masks. Volunteers also delivered meals to customers and met with families looking at farm equipment parked in Culver’s lot. (Photo by Bona Heinsohn)

Most soybean growers have no problem with the fact that a Food and Drug Administration (FDA) ruling this month eventually could eliminate the use of partially-hydrogenated oils in human food products. The soy industry has been working for more than a decade to reduce the amount of partially-hydrogenated oils and trans fats in food products. FDA announced plans to require labeling of trans fat content in food products in 2003. “Most soy oil is not partially hydrogenated anyway. It’s free of trans fat,” Bill Raben, chairman of the Illinois Soybean Association, told FarmWeek. “Soybeans wouldn’t be affected (by the recent FDA ruling) as much as other products.” FDA earlier this month made a tentative determination to rescind the Generally Recognized as Safe status for partially hydrogenated oils, including partially hydrogenated vegetable oils. The ruling was made due to indications that increased consumption of trans fats may negatively affect coronary health. “The vast majority of soybean oil is free of trans fats, so consumers can be assured of the continued safety and healthfulness of soybean oil,” said Danny Murphy, president of the American Soybean Association. Raben believes the decision should have little to no impact on demand for soybeans or soybean oil. USDA this month pro-

jected soy oil prices could range from 40 to 44 cents per pound, down just 3 cents from the previous estimate. Soy growers are concerned, however, that if FDA finalizes its ruling too quickly food processors could replace partially hydrogenated oils with others that don’t improve the healthfulness of food products. FDA analysis revealed average consumer consumption of trans fats declined more than 70 percent in the past decade. “Given that the food and vegetable oil industries have already moved to greatly reduce trans fats in food products, we have questions about the need for FDA to take this proposed action,” Murphy said. “We have concerns that if FDA were to finalize this determination, food processors may be pressured to replace remaining partially hydrogenated oils with those high in saturated fat such as palm or coconut oils, which would not be a good outcome for consumers.” Soybean growers also want more time for the development and widespread production of high oleic soybeans, which are high in heart-healthy high oleic fatty acids and eliminate the need for partial hydrogenation. The process of partially hydrogenating vegetable oils was introduced and has occurred since the 1930s to make the oils more stable for certain baking, frying and other food applications. The process results in the formation of trans fats.

Illinois farmers, small businesses to benefit from Rural Development funds

Twenty-seven Illinois projects funded by USDA Rural Development will help farmers and rural small businesses reduce their energy use and employ renewable energy technologies, U.S. Agriculture Secretary Tom Vilsack announced last week. This brings the total of Illinois projects funded to 51 for fiscal year 2013. “Recipients will use the funding to replace outdated and inefficient equipment with energy efficient and renewable energy technologies,” added Illinois Director for Rural Development Colleen Callahan. USDA’s Rural Energy for America Program (REAP) offers financial assistance to farmers, ranchers and rural small businesses to buy and install renewable energy systems and improve energy efficiency. The federal funds leverage other private funding sources for businesses. For example, Adkins Energy in Lena, received a $500,000 grant to buy equipment for a new biodiesel plant that will be colocated with its existing ethanol facility. Adkins will use corn oil, a byproduct of ethanol production, to produce about 2 million gallons of biodiesel annually. Another Illinois recipient, River Valley Vineyard in Peru, received a $12,046 grant to install a geothermal system to heat and cool the winery’s production facility. The facility must maintain a constant temperature below 65 degrees with low humidity year-round. Compared to a conventional system, the geothermal system will use 36 percent less energy. For more information, please visit the Illinois Rural Development website at {rurdev.usda.gov/ILHome.html}.

FROM THE COUNTIES

Page 13 Monday, November 18, 2013 FarmWeek

Author nurtures history of Washington the farmer

Coming to IFB annual meeting

BY KAY SHIPMAN FarmWeek

Author Peggy Thomas and her family visited Mount Vernon, but never saw the inside of George and Martha Washingtonâ&#x20AC;&#x2122;s elegant home. As she scribbled notes on a tour map, Washingtonâ&#x20AC;&#x2122;s farm so mesmerized Thomas that she made a repeat tour of the first presidentâ&#x20AC;&#x2122;s barn and skipped his mansion. â&#x20AC;&#x153;I fell in love with the fact that George Washington was a real farmer ... and a scientific farmer ... that was a huge part of Peggy Thomas his life,â&#x20AC;? Thomas told FarmWeek. Her fascination of farmer George Washington led Thomas to write the childrenâ&#x20AC;&#x2122;s book, â&#x20AC;&#x153;Farmer George Plants a Nation.â&#x20AC;? The Buffalo, N.Y., native will greet readers and sign copies of her book on Dec. 8 during the Illinois Farm Bureau annual meeting in Chicago. Later that day, she will meet with teachers at the Chicago Teacherâ&#x20AC;&#x2122;s Center. Her story traces Washingtonâ&#x20AC;&#x2122;s desire to make Mount Vernon agriculturally self sufficient, a goal he also espoused for America, Thomas noted. She described Washingtonâ&#x20AC;&#x2122;s experiments with seed and fertilizer and his inventions, such as a combination plow and planter, to make his farm more efficient. Mount Vernon was never far from Washingtonâ&#x20AC;&#x2122;s thoughts â&#x20AC;&#x201D; even in the midst of the Revolutionary War. â&#x20AC;&#x153;When he had a break, he wrote and asked about the farm and the orchard,â&#x20AC;? Thomas explained. â&#x20AC;&#x153;Like everybody else, I have this starched, stone image of Washington. We see him in pictures

wearing a powdered wig and looking severe.â&#x20AC;? However, Washington openly shared his hard-gained information and experiments with others in hopes their farms would benefit, she said. Thomas surprised herself with her choice of subject matter. â&#x20AC;&#x153;Never in a million years would I have thought Iâ&#x20AC;&#x2122;d set out to write a book about Washington,â&#x20AC;? she said with a chuckle. Thomas jokingly dubbed her book â&#x20AC;&#x153;the accidental ag book.â&#x20AC;? Initially, she considered the book to be a general childrenâ&#x20AC;&#x2122;s book. â&#x20AC;&#x153;But I realized the importance of it being a history of agriculture,â&#x20AC;? she added. That led to her current project, a book about Thomas Jeffersonâ&#x20AC;&#x2122;s contribution to American agriculture. Thomas was surprised to receive recognition from state

Farm Bureaus and agriculture literacy groups. â&#x20AC;&#x153;I didnâ&#x20AC;&#x2122;t realize those kinds of accolades were out there,â&#x20AC;? she said. Since then, she has seen her work become a teaching tool and has fun watching creative educators use her book in classrooms. As a writer, she said her foremost concerns are â&#x20AC;&#x153;words, the accuracy, how the book will come out ... and making sure Iâ&#x20AC;&#x2122;ve done everything I can to make sure it is correct.â&#x20AC;? Thomas said she looks forward to meeting Illinois readers in Chicago and hearing about creative lessons on George Washingtonâ&#x20AC;&#x2122;s farm legacy.

IFF Field Mom alum to speak at the Commodity Conference

One of the inaugural Illinois Farm Families (IFF) Field Moms will share her insights Nov. 26 during the Illinois Commodity Conference in the Marriott Hotel & Conference Center, Normal. Amy Rossi, a Naperville mom, will discuss what women want during her presentation. IFF is a coalition of commodity groups for beef, corn, pork and soybeans and the Illinois Farm Bureau. The annual one-day event brings together crop growers and livestock farmers from across Illinois to discuss challenges the agriculture sector faces. The program will start at 10:15 a.m. The registration fee is $90. Students may register for $25.

ROWN â&#x20AC;&#x201D; Farm Bureau is accepting citrus and nut orders. Orders may be picked up at the Farm Bureau office Dec. 17. Call the Farm Bureau office at 773-2634 to place an order by Friday. OOK â&#x20AC;&#x201D; Farm Bureau, COUNTRY Financial and the University of Illinois Extension will cosponsor a workshop on preparing wills and trusts and transferring nontitled property from 6:30 to 9 p.m. Dec. 4 at the JC Restoration Building in Rolling Meadows. Cost is free for members and $10 for nonmembers. Call the Farm Bureau office at 708354-3276 for reservations by Nov. 25. â&#x20AC;˘ Farm Bureau has relaunched {localfarmproducts.org}. The updated website includes enhanced search ability, additional farm data and a mapping feature for locating farmstands. DGAR â&#x20AC;&#x201D; Farm Bureau will host a winter/holiday market from 4 to 6 p.m. Friday in the Farm Bureau basement. A variety of vendors will be present. ASALLE â&#x20AC;&#x201D; Farm Bureau will be accepting fruit and cheese orders. Call 433-0371 to order or for more information by Nov. 27. â&#x20AC;˘ Farm Bureauâ&#x20AC;&#x2122;s annual meeting will be at 6 p.m. Dec. 4 at Celebrations 150 near LaSalle. Cost is $10. Tickets

E L

may be purchased at the Farm Bureau office or from any Farm Bureau director. EE â&#x20AC;&#x201D; Farm Bureau will cosponsor a marketing workshop at 6:30 p.m. Nov. 26 at the Dixon Comfort Inn. Steve Johnson, Iowa State University Extension farm management specialist, will be the speaker. Call the Farm Bureau office at 8573531 or email leecfb@comcast.net for reservations by Wednesday. CDONOUGH â&#x20AC;&#x201D; Farm Bureau will sponsor a market outlook meeting at 11:15 a.m. Nov. 25 at the Spoon River Outreach Center. Steve Johnson, Iowa State University Extension farm management specialist, will be the speaker. Call the Farm Bureau at 837-3350 or visit {mcdonoughcountyfarmbureau.org} for reservations by Friday. ACOUPIN â&#x20AC;&#x201D; Farm Bureau will cosponsor a seminar on the Affordable Care Act from 1 to 2:30 p.m. Nov. 25 in the Farm Bureau auditorium. Rep. Rodney Davis, R-Taylorville, will be available to answer questions. This event is open to the public. EORIA â&#x20AC;&#x201D; Citrus and nut orders may be placed at {peoriacountyfarmbureau.org}. Deadline to place orders is Friday. Orders may be picked up at the Farm Bureau auditorium Dec. 18.

M M P

IATT â&#x20AC;&#x201D; Farm Bureau Foundation will sponsor a cash bash beginning at 5:30 p.m. Jan. 17 at the Monticello Best Western. Proceeds will benefit the Foundation and Piatt County Community Action. Cost is $40 per person or $75 for two. Call the Farm Bureau office at 762-2128 or email ezelhart@piattfs.com for reservations or more information. COTT â&#x20AC;&#x201D; Farm Bureauâ&#x20AC;&#x2122;s annual meeting will be held at 7 p.m. Wednesday at the Farm Bureau building. ERMILION â&#x20AC;&#x201D; Farm Bureau is taking holiday food orders. Call the Farm Bureau office at 4428713 or visit {vcfb.info} to place an order by Friday or for more information. Orders may be picked up Dec. 16. â&#x20AC;˘ Farm Bureauâ&#x20AC;&#x2122;s annual meeting will be at 6 p.m. Dec. 2 at the Beef House Banquet Center in Covington, Ind. Cost is $10 for voting members and $20 for associate members. Philip Nelson, Illinois Farm Bureau President, will be the speaker. Tickets are available at the Farm Bureau office until Nov. 26.

â&#x20AC;&#x153;From the Countiesâ&#x20AC;? items are submitted by County Farm Bureau managers. If you have an event or activity that is open to all members, contact your county Farm Bureau manager.

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PROFITABILITY

FarmWeek Page 14 Monday, November 18, 2013

What factors will drive propane demand this winter?

Grain drying demand for propane reminds us of 2009. That year, grain drying demand dominated the agricultural news and propane terminals and pipelines were unable to keep up with demand. As we finish off the grain drying season this year, we are reminded that our industry can lift and burn propane BY RANDY MILLER

faster than it goes through pipelines to get here. As we start to enter the heating season, let’s take a look at demand and how it will affect us this winter. To be truthful, agricultural demand for propane has made up a relatively small percentage of total demand for propane. Back in 2001, agriculture demand made up

USDA

Farm Service Agency

CROP COMMODITY LOAN DISBURSEMENTS RESUME — The processing and disbursement of 2013 crop commodity loans has resumed, according to Scherrie Giamanco, state executive director of the Illinois Farm Service Agency (FSA). Crop year 2013 commodity loan-making was suspended Oct. 1 to make changes necessary to accommodate the automatic funding reductions known as sequester. Sequestration is mandated by the Balanced Budget and Emergency Deficit Control Act of 1985 as amended by the Budget Control Act of 2011. “We must comply with the laws established by Congress to reduce funds in accordance with sequestration policy,” Giamanco said. “We regret the delay this has created in USDA issuing marketing assistance loans because we know how critical the loans are to many farmers’ cash flow at this time of year.” Farmers requesting 2013 crop commodity loans on their harvested commodities now will have a 5.1 percent reduction to the loan amount upon its disbursement due to the sequestration. Commodity loans issued by marketing associations and loan servicing agents also are subject to the sequestration reduction. During the time loan-making was suspended, farmers were still able to submit loan applications to their county FSA offices, marketing associations and loan servicing agents. The processing and disbursement of these applications will begin immediately. For more information about commodity marketing loans, farmers may contact their local county FSA office or go to {fsa.usda.gov}.

M A R K E T FA C T S Feeder pig prices reported to USDA* Total Composite Weighted Average Receipts and Price (Formula and Cash): Weight Range Per Head Weighted Ave. Price 10-12 lbs. (formula) $38.00-$72.77 $48.87 40 lbs. (cash) $68.00-$85.00 $77.21 Recipts

This Week 77,124 *Eastern Corn Belt prices picked up at seller’s farm

Last Week 96,565

Eastern Corn Belt direct hogs (plant delivered) Carcass Live

(Prices $ per hundredweight) This week Prev. week Change $79.72 $80.83 -$1.11 $58.99 $59.81 -$0.82

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

This week NA NA

Prev. week $131.00 $131.00

Change NA NA

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 $164.96 $167.14 -$2.18

about 8 percent of total propane demand. In 2011, demand was reduced to 5 percent. Admittedly, 2011 was not a huge grain drying year, but growth areas for propane Randy Miller demand have centered on other industries. So what will drive prices this winter? • Petrochem demand: Petrochemical companies, makers of plastics, household chemicals and many other products use propane within their production facilities with the largest share located near the Gulf Coast around refinery and natural gas fractionation plants. Typically, the industry’s demand drops off in the winter months and peaks in midsummer. Petrochemical demand within the U.S. continues to grow on an annual basis — from 37 to 44 percent of propane usage from 2001 to 2011.

Export inspections (Million bushels) Week ending Soybeans Wheat Corn 11/07/2013 79.7 12.2 16.7 10/31/2013 80.5 8.9 31.4 Last year 64.7 10.5 9.5 Season total 418.1 610.6 223.4 Previous season total 435.8 427.3 168.2 USDA projected total 1370 1100 1225 Crop marketing year began June 1 for wheat and Sept. 1 for corn and soybeans.

work to “catch up,” but early cold temperatures will keep prices strong. If you have already locked in your propane for this winter season, you are in a great position to enjoy the winter. If you still need to purchase propane this winter, contact your local supplier and see what type of programs are available for you to take the worry out of the winter heating season.

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

Antibiotic conference helps dispel myths

The National Institute for Animal Agriculture hosted agricultural leaders, veterinarians, human medicine professionals and governmental regulators at its Antibiotic Conference last week in Kansas City. Conference attendees shed light on consumer perceptions, reviewed the latest research and discussed trends in other countries as well as here in the U.S. Mike Apley, a professor of clinical pharmacology at Kansas State University (KSU) College of Veterinary Medicine, pointed out that 71 percent of antibiotics used in the production of cattle are not used in human medicine. He said 64 percent of the “medically important” antibiotics used in swine production are tetracyclines, which have limited use in modern human medicine today. Many of the presenters emphasized the importance of antibiotics in animal medicine. Guy Loneragan, professor of epidemiology at Texas Tech University, suggested using biological science as the means to evaluate antibiotic resistance. “Selection for resistance is highly complex. We don’t have randomized clinical trials on humans, so we are forced to use observational data,” he said. Laws passed recently in the European Union, which outlaw the use of antibiotics for BY JIM FRALEY

Lamb prices Slaughter Prices - Negotiated, Live, wooled and shorn 78-166 lbs. for 130-164 $/cwt. (wtd. ave. 150.16)

• Exports: Propane exports were unheard of in 2001. In today’s new world of shale production in the U.S., exports continue to grow on a monthly basis with the addition of new export facilities in the Gulf Coast and more recently on the East Coast increasing volume moved out of the country. In 2011, exports made up 9 percent of the U.S. propane demand. This will likely double in 2013. What to make of this? Recent demand will likely keep propane prices strong into winter months. The industry will

Tuesday: • Freese-Notis Weather: ag weather • Adam McVey, LG Seeds regional business director: rootworm pressure in 2013 • Gordon Vail, Syngenta technical product lead: Callisto® GT herbicide • Dan Halstrom, U.S. Meat Export Federation senior vice president for marketing and communications: understanding international customers

growth promotion, are being met with some skepticism as well. Data shows trends in improved feed efficiency, increased pig numbers and average daily gain. However, KSU’s H. Morgan Scott, professor of epidemiology, said the steep reduction in the number of Denmark swine producers has caused a “survivor bias” in the data. Denmark’s farm numbers have decreased from 25,000 in 1994 to 5,000 today. Producers who couldn’t meet the new standards got out of the business. Scott also noted that human antibiotic use in Denmark remained steady during the last 10 years. The goal of the EU’s ban on antibiotic use was not to improve animal or human health, but to simply reduce the use of antibiotics. Ironically, therapeutic antibiotic use (for the treatment of a disease) is increasing in Denmark. Tom Heinen, third generation owner of Heinen’s Fine Foods located in Illinois and Ohio, said his customers tell him loud and clear what they expect in their meats. They are willing to pay top dollar for meats raised without antibiotics and not fed biotech grain. The families raising beef for his grocery stores receive a 20- to 50-cent per pound premium to produce product meeting those standards. Jim Fraley serves as Illinois Farm Bureau livestock program director.

Wednesday: • Steve Chard, Illinois Department of Agriculture Land and Water Resources bureau chief: Illinois honeybee population • Jim Bower, Bower Trading • Tyler Loschen, Tri-Point FFA: 2013 American Star Farmer Thursday: • Illinois Corn Growers Association representative • Craig Heckathorne, Northwestern University research engineer: improving prostheses for farmers • Philip Nelson, Illinois Farm

Bureau president: issues facing agriculture Friday: • Dereke Dunkirk, Illinois Pork Producers Association president: current pork issues • John Reifsteck, GROWMARK president: legislative issues • Kurt Bock, COUNTRY Financial chief executive officer: President Nelson’s retirement To fnd a radio station near you that carries the RFD Radio Network, go to FarmWeekNow.com, click on “Radio,” then click on “Affiliates.”

PROFITABILITY

Page 15 Monday, November 18, 2013 FarmWeek

Corn Strategy

CASH STRATEGIST

Bean supplies are more comfortable

Thanks to our good soybean crop, and to last spring’s good South American crop, the world supply of soybeans will be relatively abundant as the next South American harvest commences. It won’t be as large as it was a few years ago, but certainly enough to somewhat diminish the need for a huge South American crop. On an absolute stocks basis, inventories at the three primary exporters should be 12 million metric tons (mmt) larger than they were last year if the current consumption pace holds. Those extra bushels give world buyers a cushion against demand being a little better, or the South

American crops being a little smaller than currently expected. If the South American crops are as good as currently forecast, soybean supplies will become burdensome in the second half of the marketing year. There will be some concern about the ability of Brazil to move supplies into the world pipeline. But the current demand for U.S. soybeans implies some users, notably China, may be building reserves to counter potential logistic problems. Even if the logistics prove to be somewhat of a nightmare again, large crops will still deter users from chasing prices sharply higher. And attitudes will be even worse if U.S. plantings are as big as some of the current forecasts indicate. If so, soybeans could join wheat and coarse grains in having comfortable supplies again at least until the next drought.

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ü2013 crop: The quick turn lower on corn prices suggested the trend for the sixto seven-week cycle has already turned down. That leaves the market vulnerable to slipping lower into the 20week low due at year’s end. Nearby futures could slip as far as $4 when that low comes. Make sure you have sales made to cover cash flow needs to accommodate that possibility. ü2014 crop: Even though acres are likely to decline, ending stocks could grow again next year if yields are near trend. Prices may slip lower in the short term, but it will be important to start pricing on strength in early 2014. A move back near $5 is not out of the question. vFundamentals: Not only are U.S. farmers still holding an unusually large portion of the crop just harvested, but Brazilian farmers are said to still own a large portion of this year’s second-crop corn. Because of storage limitations, that will have to be moved ahead of soybean harvest starting in late January.

Cents per bu.

Soybean Strategy

ü2013 crop: Use a rebound to $12.95 on January soybeans to make catch-up sales. Last week’s hard break positioned the market to break into the December cycle low with new lows not out of the question. ü2014 crop: The price ratio between soybeans and corn continues to point to a shift in acres to soybeans in 2014. Short term, November futures may not hit our $11.90 target, but we think there will be a chance of seeing that mark again in early 2014. vFundamentals: Demand for soybeans and soybean meal remains good, but not good enough to suggest the overall fundamental structure will get as tight as it was last year or two years ago. But South America looms large as a make-or-break for the market in the weeks ahead. For now, the weather is good, and planting has gone relatively well. And given China’s large import pace, the risk is rising for a

sudden slowdown with ports starting to get congested.

Wheat Strategy

ü2013 crop: The persistent decline in the corn market has become a steady drag on the wheat market. The more corn slides, the more it pulls wheat out of the feed bunk around the world, allowing stocks to potentially build. Like corn, wheat prices may stay weak into early 2014. At this time, we’d wait for Chicago May wheat to rebound to $6.85 to make needed sales. ü2014 crop: Although it’s

likely prices will slip lower in the short term, we aren’t interested in chasing the market lower at this time. vFundamentals: Of the three primary grains, wheat probably has the best potential fundamental balance, but there’s no sign of tightness, leaving the market prone to weakness. To be sure, export demand is good, but U.S. prices still aren’t good enough to attract any of the “splashy” business like Egypt. And buyers don’t seem prone to extending coverage willingly given current supplies and good new-crop expectations.

PERSPECTIVES

FarmWeek Page 16 Monday, November 18, 2013

Why Illinois needs

a farm bill now

A partnership for competitiveness

and growth

llinois agriculture and Chicago are linked by shared beginnings and shared dependence on infrastructure, finance, human capital and innovative institutions. Many of Chicago’s most prominent assets today — its preeminent position in global trading of commodities futures, its relationships with world-leading agricultural and food companies, its access to nearby land grant university research — are outgrowths of MARSHALL its relationship to BOUTON agriculture. Chicago is located in the center of some of the most productive farmland in the country. The competitiveness of both Illinois agriculture and the Chicago region depends on their shared access to high-quality infrastructure, high- and lowskilled flexible workforces, predictable fiscal and regulatory environments, international markets and innovative institutions. Yet in recent decades, it seems, neither Illinois agriculture nor Chicago has seen each other as highly relevant to their needs or important to their future. The reality might well be very different. Agriculture is an ever more global enterprise and requires understanding and dealing with highly diverse markets and economic and cultural settings. Competition for Illinois agriculture comes increasingly from foreign competitors, such as Brazil, rather than such neighboring states as Iowa and Indiana. Selling agricultural com-

modities to societies such as China and Korea requires knowledge of cultural preferences. Chicago is a widely acknowledged global city, ranking regularly in the top 10 global cities. It can help Illinois agriculture connect more effectively to the rest of world. Even for global cities such as Chicago, the global cities sweepstakes is a what-have-you-donelately game and innovation is the key to winning. Cities must pick carefully what they can do better than others and then be excellent at it. If Chicago is to strengthen its competitiveness in science, technology, engineering and math (STEM) fields, such as biotechnology, its connection to Illinois agriculture and the state’s related food and biofuel sectors will be valuable resources. Recently the City of Chicago developed a plan for economic growth and a plan is being developed for Illinois agriculture. Some ideas for potential collaboration include: • Chicago might seek to become a preeminent global center for food innovation through science, technology and commerce. • With the support of Chicago leaders and institutions, Illinois agriculture might set a goal to attract new investments from around the world — a trend already under way, but in which Illinois needs to differentiate itself. • Training, attracting and retaining a skilled and creative workforce is absolutely essential. Both Illinois agriculture and Chicago will benefit by aligning efforts where possible. • Increased Chicago involvement in Illinois agriculture could

help engage young people to consider agriculture’s future. In turn, Chicago wants to attract and train talented young people for job opportunities in the city. Together, Chicago and Illinois agriculture could design and invest in educational and training programs to prepare young people for the next generation of food and agricultural jobs. • One goal may be to make Chicago and Illinois a leading center for ag-bio-food innovation and to create the capacity to pursue that goal. Agriculture biotechnology should be part of Chicago’s focus to strengthen the role of STEM in the regional economy. • One of the highest infrastructure priorities for both Chicago business and civic leaders and Illinois agriculture leaders is rail, road and air transportation. Chicago has a welldeserved reputation as a great transportation hub worldwide. Illinois agriculture depends on rail and water transportation to move its products and both are at risk. Cooperation might begin with a joint effort to push renovation of the rail hubs south of Chicago that are so important to the entire state. Those are just some ideas to brand the Chicago-Illinois region more prominently as a leading center for 21st century agricultural and food business. The recent Food and Agriculture Summit held at the University of Illinois-Chicago was a great start to this conversation. Marshall Bouton served as president of The Chicago Council on Global Affairs from 2001–13. Prior to that, he was executive vice president and chief operating officer of the Asia Society.

This fall, Congress has an important opportunity to create jobs and grow the economy by passing a long-term, comprehensive Food, Farm and Jobs Bill. The farm bill impacts every American every day by providing a wide range of programs that strengthen our nation. The farm bill is crucial to maintaining a strong agriculture sector and an abundant food supply that benefits all Americans. During the last two years, producers have faced a multitude of disasters — from drought to flooding to blizzards. Those events demonstrate how important the safety net is to keeping producers going strong. Under the 2008 farm bill, the Farm Service SCHERRIE COLLEEN Agency (FSA) was able to GIAMANCO CALLAHAN provide $261.51 million in disaster assistance in Illinois using farm bill programs. A new Food, Farm and Jobs Bill would provide a strong crop insurance program, reauthorize the now-expired disaster assistance programs and provide retroactive assistance for livestock producers. By reforming the safety net to eliminate the direct payment program that pays producers whether or not they are in need of assistance, the Food, Farm and Jobs Bill would also save billions of dollars in the next decade. In addition, it would allow USDA to continue export promotion efforts that have led to the best five-year period in agricultural trade in American history, and provide FSA with the tools to extend additional farm credit in Illinois. The farm bill also is a job creation bill that would empower USDA to partner with rural communities to grow, expand and support new businesses. A new Food, Farm and Jobs Bill would help Main Street businesses grow and hire more employees, strengthen infrastructure in our small towns and provide new opportunities in biobased product manufacturing and renewable energy. In Illinois, USDA Rural Development has provided funding to 364 projects since 2009 to help farmers, ranchers and rural businesses save energy through the Rural Energy for America Program. This and many other efforts could continue with a new farm bill. A new Food, Farm and Jobs Bill would make important investments in nutrition programs that provide critical assistance to vulnerable Americans, including children, seniors, people with disabilities who are unable to work and returning veterans. It would enable USDA to continue its work with more than 500,000 producers and landowners to conserve soil and water. It would undertake new strategies to improve agricultural research, and it would ensure a safe food supply. All of these efforts strengthen our nation. A new Food, Farm and Jobs Bill would continue the job growth we’ve seen in recent years and help grow the rural economy. That’s why President Obama has identified passage of a new farm bill as one of his top three legislative priorities this fall. This is a prime opportunity to give America’s farmers and ranchers the certainty they need about the next five years of U.S. farm policy, while investing in the rural communities that stand at the heart of our values. The farm bill has stood as a model of bipartisan consensus for decades. It is high time that both Democrats and Republicans come to a compromise on this new farm bill. It is our hope the Senate and House conferees will reach a consensus quickly and move a farm bill forward as soon as possible.

Scherrie Giamanco serves as state executive director of the Illinois Farm Service Agency. Colleen Callahan is the state director of Illinois Rural Development.