FarmWeek September 3 2012

62 DAYS REMAIN UNTIL THE NOV. 6 ELECTION

THE KEEP IT for the Crop (KIC) by 2025 program already is gearing up for the 2013 cropping season. ..........................................3

RECORD-BREAKING sales and patronage refunds were announced at the GROWMARK annual meeting last week. ............11

Monday, September 3, 2012

Two sections Volume 40, No. 36

Farm bill now, farm, agribusiness groups demand

BY MARTIN ROSS FarmWeek

Pam Johnson wants one thing above all else when she takes the reins of the National Corn Growers Association (NCGA) on Oct. 1: a new farm bill that enables farmers to “get through this drought and start over again next year.”

But it’s not just a farm bill. It’s a food and energy security bill, a rural development blueprint, and may be the best hope for ag Pam Johnson regulatory reform (see page 4).

That’s the message NCGA is taking to policymakers, along with 45 other farm, agribusiness, state government, and ag financial members of the national Farm Bill Now coalition.

In a news conference at the Farm Progress Show, the coalition emphasized the need

for action on a 2012 farm bill prior to Sept. 30 expiration of existing ag policy.

Johnson, incoming NCGA president, noted one in 12 U.S. jobs is “directly tied back to the farm.”

Farm bill debate “started with great momentum in the spring — we got it through the Senate Ag Committee, got it through the Senate,” she said.

In July, after the House Ag Committee released its farm bill draft, “we hit a brick wall,” the northern Iowa farmer told FarmWeek.

“We’ve been advocating to get it moving again, to get that momentum back and get it across the finish line,” she said.

“What’s really accelerating things is, of course, the drought. It should be apparent and certainly visible why farmers need a comprehensive five-year farm bill now.

“It’s hard enough for farmers

the ground right now. Where do those guys stand? Farmers are going to start buying inputs for corn and soybeans. There are a lot of unknowns.”

Given ongoing budget/spending concerns, Johnson is doubtful a retroactive farm bill can move in a post-election “lame duck” ses-

sion. Further, she acknowledged increased farmer pre-purchasing of inputs and ever-earlier planting dates, accelerating the need for immediate policy security.

The big picture “It’s important for business plans in agriculture to have See Now, page 4

corn saver

Jeff Justus and Dick Chesnut of rural Sidney in Champaign County view some ears from a drought damaged, wind-battered 80-acre field being harvested last week. Justus installed a corn-saver device, made in Texas, on his header to pick up downed corn in a field hit three weeks ago with hail and 70 mph winds. The corn-saver has cones and gathering chains that pull the crop material into the center of the header. Justus tried to harvest as much of the downed corn as possible before the remnants of Hurricane Isaac blew into Illinois. (Photo by Ken Kashian)

‘Scared for wheat’ with potential herbicide carryover

BY KAY SHIPMAN FarmWeek

Periodicals: Time Valued

like us who’ve been farming for 40 years. Then you look at young farmers, men and women who are just getting their legs under them. They have a year like this and then go in to the bank for an operating loan uncertain what things are going to look like next year.

“Some wheat’s being put in

Farmers take heed if you’re considering planting wheat, oats, or other crops to take advantage of the nitrogen remaining in your fields.

The dry weather and growing conditions that allowed the nitrogen to be available also may have left soil-residual herbicides.

“I’m scared for wheat,” Barry Nash, a weed science technical manager with GROWMARK Inc., told FarmWeek last week. “My No. 1 concern is wheat, especially in Southern Illinois. Those guys are considering (planting) wheat.”

Nash and others apply a rule-of-thumb that 15 inches of rain between April and November are needed to break down herbicides sufficiently. “There are several areas that have not had six inches (of rain) since April,” he added.

Farmers who plant this fall into fields with herbicide carryover may not see the damage now, but may next year, Nash said.

GROWMARK is encouraging crop advisers and farmers to do simple field bioassay Barry Nash tests to determine possible carryover problems, according to Nash.

He recommended using a spade or trowel to collect soil samples from the top three inches in a field. “I guarantee the herbicide would be in the top three inches,” he said.

For each field, he suggested collecting representative samples for a soil composite of the general field and of possible application overlap areas, such

FarmWeek on the web: FarmWeekNow.com

as end rows and point rows. In addition, a bioassay test should be done on a “control” soil composite from a fence row or another place where no herbicides were applied.

For the general field soil composite, Nash suggested collecting soil samples in a zigzag or X pattern across a field.

Place each soil composite in a two-inch deep roasting aluminum pan and water the soil for three to five days, making sure the soil stays moist, he said.

About one week after the sample has been watered, plant the intended crop, and then evaluate the plants for any herbicide injury two or three weeks later.

University of Illinois weed scientists are conducting field bioassays at the Brownstown Agronomy Research Center in Fayette County and the Orr Agricultural Research Center near Perry in Pike County.

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

FarmWeek Page 2 Monday, September 3, 2012

Quick Takes HOW ARE THE CROPS YIELDING? — Harvest is under way across Illinois, and Illinois Farm Bureau would like to get a handle on yields.

IFB members can take an online yield survey at FarmWeekNow.com or ILFB.org beginning this week.

Please provide your name, yield information for both corn and soybeans, and any comments you may have.

The data will be compiled and reported (without the name being included) throughout the harvest season online and via FarmWeek and RFD Radio.

DROUGHT IMPACT FELT — Illinois farmers are feeling the full impact of this summer’s drought. As of Friday, 6,200 Country farm clients had filed production claims.

With harvest approaching and under way in some areas, farmers need to be aware of aflatoxin in cornfields. If you harvest aflatoxin corn, be sure to have samples taken before the grain is placed in on-farm storage.

No adjustment can be made for aflatoxin unless samples are taken in the field by a certified country crop adjuster. The adjuster will make sure the sample is sent to an approved lab, which will mail results to farmers.

BIODIESEL MOMENTUM — Last week, the U.S. Environmental Protection Agency (EPA) reported 100 million gallons of biodiesel were produced in July, reporting year-to-date production of just under 658 million gallons through the end of that month.

Last year, the biodiesel industry set a new yearlong production record of nearly 1.1 billion gallons, supporting more than 39,000 jobs across the country.

American Soybean Association President Steve Wellman said he remains hopeful Congress will retroactively extend the recently expired $1-pergallon biodiesel blenders tax credit to keep that momentum strong.

Wellman also is pushing congressional extension of the current $5 million estate tax exemption and 35 percent “death tax” rate. A drop back to a $1 million exemption and a 55 percent maximum rate could force many “family-owned/family-built” farms to liquidate assets to meet tax obligations, he warned.

(ISSN0197-6680) Vol. 40 No. 36 September 3, 2012 Dedicated to improving the profitability of farming, and a higher quality of life for Illinois farmers.

FarmWeek is produced by the Illinois Farm Bureau.

FarmWeek is published each week, except the Mondays following Thanksgiving and Christmas, by the Illinois Agricultural Association, 1701 Towanda Avenue, P.O. Box 2901, Bloomington, IL 61701. Illinois Agricultural Association assumes no responsibility for statements by advertisers or for products or services advertised in FarmWeek.

FarmWeek is published by the Illinois Agricultural Association for farm operator members. $3 from the individual membership fee of each of those members go toward the production of FarmWeek.

Address subscription and advertising questions to FarmWeek, P.O. Box 2901, Bloomington, IL 61702-2901. Periodicals postage paid at Bloomington, Illinois, and at an additional mailing office.

POSTMASTER: Send change of address notices on Form 3579 to FarmWeek, P.O. Box 2901, Bloomington, IL 61702-2901. Farm Bureau members should send change of addresses to their local county Farm Bureau. © 2012 Illinois Agricultural Association

STAFF Editor Dave McClelland (dmcclelland@ilfb.org) Legislative Affairs Editor Kay Shipman (kayship@ilfb.org) Agricultural Affairs Editor Martin Ross (mross@ilfb.org) Senior Commodities Editor Daniel Grant (dgrant@ilfb.org) Editorial Assistant Linda Goltz (Lgoltz@ilfb.org) Business Production Manager Bob Standard (bstandard@ilfb.org) Advertising Sales Manager Richard Verdery (rverdery@ilfb.org) Classified sales coordinator Nan Fannin (nfannin@ilfb.org) 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

STATE

State paying penalty for lack of reforms

BY KAY SHIPMAN FarmWeek

Illinois continues to pay the price for its massively underfunded state pension system.

Standard & Poor’s (S & P) Ratings Services delivered the most recent bad news when it downgraded the state’s bond rating due to “continued financial weakness” and “weak pension funding levels and lack of action on reform measures.”

The downgraded rating means the state will have to pay more to borrow money for construction projects and other expenses. While the state will be able to continue borrowing money, it must pay higher interest when bond ratings are downgraded.

Illinois Farm Bureau is gathering members’ views on pension reform in Illinois and what

Farm Bureau policy on reform should be. ”Eliminating our $83 billion unfunded pension liability is vital to getting our financial house in order,” Gov. Pat Quinn said in a prepared statement after the S & P announcement. “We must address the unfunded pension liability and we can only do it together.”

Illinois Comptroller Judy Baar Gov. Pat Quinn Topinka called the S & P downgrade “another cautionary note that cannot be ignored.”

“The rating agencies have made it clear that continued delay will trigger another downgrade,” Topinka continued. “We cannot afford that — it is time to set aside the posturing and get this done.”

Harvest truck travel, hauling concerns surface

With harvest under way, farmers should call their highway commissioners before traveling over hot roads, advised Kevin Rund, Illinois Farm Bureau senior director of local government.

“The excessive heat and the early harvest combine to up the odds that some harvesting will occur while oil and chip roads are hot and soft,” Rund said.

He recommended farmers contact their highway commissioners so the commissioners have a chance to put a layer of chips on the roads to prevent “rolling-up” the oil seal coat on truck or farm equipment tires.

Rund also provided answers to three transportation-related questions: A farmer asked if he could still use a Federal Motor Carrier Safety Administration (FMCSA) online “form MCS150” that was labeled to expire July 31. One use for the form is to address a farmer’s status as an intrastate or interstate carrier.

Rund said the FMCSA confirmed the agency would “continue to accept and process the form with the July 31 date.”

The form is online at {www.fmcsa.dot.gov/registration-licensing/printforms/print-forms.htm}.

Another farmer asked if he could make online changes

to the status of a carrier’s U.S. Department of Transportation (USDOT) number.

An individual may sign up online initially for a USDOT number at the USDOT website, and he also may make periodic updates online, Rund noted.

However, online changes are not an option for an individual who already has registered for a USDOT number and wants to deactivate the number or switch to intrastate status while keeping the number active, Rund added.

That individual must print out the MCS-150 form and mail or fax it to the USDOT to complete the change. Farmers are advised to use only one method — either mail or fax — to submit the form.

Another farmer asked if there is a complete listing of intrastate farm commodity markets and those considered

DATEBOOK Sept. 6 Illinois Pumpkin Day, 10 a.m. to 2 p.m. University of Illinois Vegetable Crops Research Farm, Champaign. More information at {www.specialtygrowers.org}.

Sept. 8 Pasture management and restoration workshop, Lamplight Farm and Stables, 210 E. 150 North Rd., Cerro Gordo. 8:30 a.m.-12:30 p.m. Register at {https://webs.extension.uiuc.edu/dmp} or call Piatt County Extension at 217-762-2191.

Sept. 12 Beef roundtable discussion, 10 a.m. to 3 p.m. Elizabeth Community Building.

interstate commodity markets.

Rund said such a list is not available.

“The best we have to date is the rule of thumb provided by FMCSA,” Rund offered.

He noted there are four situations in which the delivery of farm commodities automatically would be considered interstate commerce: • Crossing the state boundary to get to the market; • Delivering to a river terminal; • Delivering to a facility that has unit train loading capacity of 75 cars or more; and • Delivering to an intermodal facility, such as a rail/container shipping facility.

“Shipments to other facilities will, by default, be treated as intrastate commerce, but can be reviewed by the FMCSA on a case-by-case basis,” Rund added.

More information is available online at {www.ilfb.org/ policy-and-issues/currentissues/transportation-andinfrastructure.aspx}. — Kay Shipman

Tuesday: • Jim Angel, state climatologist • Mark Gebhards, Illinois Farm Bureau director of governmental affairs and commodities • Cynthia Haskins, IFB manager of business development and compliance Wednesday: • Tim Schweizer, Illinois Depar tment of Natural Resources • Chad Russell, director of the U.S. Meat Export Federation office in Mexico Thursday: • Kevin Rund, IFB senior director of local government • Illinois Corn Growers representative • Bonnie McDonald, president of Landmarks Illinois Friday: • Sara Wyant, AgriPulse publisher • Alan Jarand, RFD radio director

Page 3 Monday, September 3, 2012 FarmWeek

EmErging issuEs

IDOA issues aflatoxin advisory, warns of consequences

BY KAY SHIPMAN FarmWeek

The Illinois Department of Agriculture (IDOA) last week advised the state’s grain industry on government restrictions for aflatoxin-contaminated grain and warned about potential penalties.

“The grain-handling industry takes this issue very seriously,” Jeff Adkisson, executive vice president of the Grain and Feed Association of Illi-

nois (GFAI), told FarmWeek. “We are being proactive in our approach of managing this situation to make sure we comply with the FDA (Food and Drug Administration) guidance levels.”

IDOA noted it is working with GFAI as well as with state beef, corn, dairy, pork, and poultry organizations “to raise awareness of the potential problem.”

In a letter sent to grain elevators, warehouses, processors, and feed mills,

IDOA listed FDA restrictions for maximum allowable aflatoxin levels in parts per billion (ppb) in animal feed.

The most restrictive level of 20 ppb may be used in feed for immature livestock and dairy animals.

“Please be advised that corn containing aflatoxin over 300 ppb may not be fed to any livestock,” the advisory stated.

Any commercial feed with higher than allowable levels would violate Illi-

nois commercial feed law and would be subject to enforcement action by IDOA or referred to FDA for enforcement, IDOA warned.

Recently, IDOA began its annual process of testing random corn samples for three mycotoxins, including aflatoxin. Four samples will be tested from elevators in each county, and the test results will be posted on IDOA’s website and sent to the respective elevators.

KIC already gearing up for the 2013 growing season Farmers will need advice to help them use fertilizer more efficiently following a tough crop year, agronomist Dan Schaefer told crop advisers last week.

Schaefer, the nutrient stewardship director of the Illinois Council for Best Management Practices, discussed onfarm nitrogen rate trials and Dan Schaefer other efforts by the Keep it for the Crop (KIC) by 2025 program.

“Make sure your customers maintain their soil tests this fall,” Schaefer advised.

This year’s growing conditions and crop yields will impact soil nutrient levels, and soil tests will be important to assess nutrient levels, according to Schaefer.

KIC is focusing its efforts in the watersheds of Lake Bloomington, Lake Vermilion, Lake Decatur, the Illinois Basin of the Vermilion River, Salt Fork Vermilion River, and Lake Mauvaissee Terra.

New watershed plat book maps have been developed for

Illinois ag on regulators’ radar screens Illinois agriculture needs to keep documenting farmers’ improved use of fertilizer so the state can demonstrate nutrient and production efficiencies, a nitrogen expert told crop advisers who met in Bloomington last week.

“We have a way to show we are not stuck in the past; we are a dynamic agriculture,” said Cliff Snyder, nitrogen program director with the International Plant Nutrition Institute (IPNI).

This year’s drought and subsequent reduced Mississippi River flow into the Gulf of Mexico has Snyder concerned about what may happen if the gulf ’s hypoxia zone does not shrink enough in size.

Previously, the U.S. Environmental Protection Agency has pushed for cuts in nitrogen and phosphorous fertilizer uses to reduce gulf hypoxia, Snyder noted.

Regulators focus on Illinois and Iowa agrithe watersheds. The detailed information will help identify fields within the watersheds and help with the collecting of information on fertilizer practices and other related information for the watershed.

“The biggest thing we need is baseline data. We need to take credit for what (nutrient management) we’re already doing ... Many of you already are doing split (nitrogen) applications and

culture because of the number of corn and soybean acres grown and the amount of fertilizer applied in those two states, he added.

“The bull’s eye seems to be getting bigger on our chest,” Snyder said.

Fertilizer research, both short- and longterm, and data from research and field trials are important.

“We’re seeing more frequent extreme weather situations. What we used to rely on for nutrient management may need to be changed because of weather pattern changes,” Snyder said.

The agriculture industry needs to demonstrate it is working to improve nutrient efficiency in crops and keeping more nutrients in fields, according to Snyder.

“If you don’t get your own data to defend yourself, you’re at the mercy of everybody else,” he warned. — Kay Shipman

we need to take credit for that,” Schaefer said.

KIC continues to encourage on-farm trials of different nitrogen rates.

Yields and other data will be compiled for several trials conducted in each watershed.

Schaefer also encouraged crop advisers to test soil samples this fall for soil nitrate levels. The information will provide data on the

conversion rates of ammonia to nitrate, which can be lost through leaching and denitrification.

Schaefer told the group he had collected in-field data early this year and was able to refute some environmentalists’ assumption that most fertilizer already had been lost because it had converted to nitrate.

Soil test data “will help us defend ourselves against

innuendos about what form fall nitrogen is in in the spring,” Schaefer said.

After harvest, KIC will offer farmers in the watersheds an opportunity to conduct fall strip-till trials and deep placement of nutrients in corn and soybeans. John Deere donated equipment

for comparison trials.

An Illinois-based nitrogen calculator is available as an application for smart phones.

The app already is available for Droid phones and soon will be available for Apple phones.

Schaefer demonstrated how the app allows someone to calculate the costs of fertilizers, additives, and their application costs.

It also allows comparisons of one-time fall applications vs. split applications.

The calculations may be emailed to a farmer and crop adviser for their records. — Kay Shipman

Watershed research projects exploring nutrient technology Field research in two East-Central Illinois watersheds is studying ways to help farmers reduce nitrogen losses and maintain crop productivity.

George Czapar, director of the Illinois State Water Survey’s center for watershed science, described research in the Salt Fork River Watershed and the Embarras River Watershed. The work was funded through USDA’s National Integrated Water Quality Program.

“There’s no silver bullet ... We’re trying to find as many options as possible,” Czapar told FarmWeek.

Those options may become more important if the likelihood of big storm events increases. A study of rainfall data found a significant increase in the number of large storm events over the last 100 years, according to Czapar.

“Big storm events cause more nutrient and pesticide loss,” Czapar said. As big storms become more common, farmers will need help to plan accordingly, he added.

Efforts in both watersheds include integrating research results with field days and outreach programs to share information with local landowners and farmers.

The project in the Salt Fork River

Watershed, located in Champaign and Vermilion counties, involves managing water table levels with field tiles.

Gates in the tiles are used to retain water after planting.

Given this year’s drought, Czapar would like to hear about the experiences of farmers who use controlled drainage structures. He is interested particularly in yields from those fields.

Water availability for crops during dry periods is one of the benefits of water table management along with retention of nitrogen and crop nutrients.

Details about the watershed project may be found online at {http://saltfork.nres.uiuc.edu/}.

The Embarras River Watershed Project is located predominantly in Champaign County.

In March, a bioreactor was installed to treat diverted field tile drainage with wood chips. The goal is to help reduce nitrogen losses from a 50-acre field.

Researchers will be studying the results “to make sure there are no unintended consequences,” Czapar added.

Another part of the project involves continued study of constructed wetlands along a riparian buffer strip.

Diverted field tiles flow into the wetlands, which were built in 1994, before the water enters the river.

Along with the nutrient removal, scientists also are collecting data to ensure there are no greenhouse gas emissions.

Photos of the bioreactor construction and other information about the watershed projects may be viewed online at {https://netfiles.uiuc.edu/ mbdavid/www/Embarras/}. — Kay Shipman

FarmWeek Page 4 Monday, September 3, 2012

government

Farm bill plan spells regulatory relief

BY MARTIN ROSS FarmWeek

The proposed 2012 farm bill offers an important bipartisan gift for farmers: regulatory relief.

House Ag Committee farm bill proposals include what GROWMARK Government Affairs Director Chuck Spencer termed “clarifying language” aimed at halting duplicative pesticide permit requirements under the federal Clean Water Act (CWA).

The U.S. Environmental Protection Agency (EPA) recently implemented limited requirements for certain applicators using chemicals above or near surface waters, despite existing pesticide labeling/use restrictions under the Federal Insecticide, Fungicide, and Rodenticide Act. The farm bill provision echoes H.R. 827, the Reducing Regulatory Burdens Act, which cleared the House in March 2011 but stalled in the Senate.

Further, the House-proposed farm bill includes reauthorization of the Pesticide Registration Improvement Act (PRIA), which sets down specific standards for pesticide registration, testing, and review. According to Spencer, PRIA provides a “clear, transparent, science-based” process

for ag chemical approval.

“It establishes a known process that is science-based and that companies and persons of interest can understand, follow, and predict what steps they need to take,” he said. “That process is critical.”

Ag groups are pushing House proposals as Farm Bureau intensifies its “Stop the Flood of Regulations” campaign. New York Farm Bureau last week highlighted EPA “guidance” proposals that would remove the word “navigable” from the description of nationwide waters regulate under the CWA. That change would grant EPA regulatory control over “every roadside ditch, standing puddle, and drain no matter the size and no matter its proximity to federal waters,” the New York Farm Bureau warned.

Oklahoma Farm Bureau earlier held a “Stop the Flood” in a dry “buffalo wallow” — a slight depression in a prairie area that can retain rainwater and runoff — to illustrate the potential of EPA’s proposal.

Meeting with Illinois farmers in Springfield, U.S. Rep. John Shimkus, a Collinsville Republican, hailed House Ag Committee regulatory provisions,

Now Continued from page 1 certainty,” argued Chuck Spencer, legislative specialist with GROWMARK, a member of the National Council of Farmer Cooperatives, a Farm Bill Now participant.

By helping farmers manage risk and thus cash flow capabilities, the farm bill essentially provides security for “all of agriculture” and, by extension, rural communities, Spencer said.

The equipment industry normally sees a late fall “spike” in sales, often related to farm tax planning, said Charlie O’Brien, Association of Equipment Manufacturers vice president for ag services.

Drought-related financial concerns may force some farmers to delay planned machinery purchases for 2013, though O’Brien said manufacturers and dealers in Iowa appeared confident “even in light of the drought.” He nonetheless warns the “element of doubt” created by policy delays could make customers more “conservative in their thought process.”

O’Brien told FarmWeek “things have been going pretty well, overall, in the ag market,” citing new domestic and export opportunities for manufacturers. “We don’t want this element of uncertainty in the marketplace,” he said.

The even bigger picture American Soybean Association President Steve Wellman notes projections of a 9 billion world population by 2050 and a 75 percent boost in world protein needs by 2025.

Wellman thus stressed need for farm billauthorized research that can boost yields “on the limited amount of arable land we have.” Given the long-term nature and funding needs of major land grant/USDA projects, “you can’t do research on a one-year extension,” he told FarmWeek.

Farm bill Foreign Market Development and Market Access Program funding is key to fostering soy export markets, “so the United States Steve Wellman economy can stay competitive,” he said.

“Don’t look at an extension; don’t kick it down the road and make the real decision later on,” he chided lawmakers. “Make the tough decision now.”

arguing “EPA needs to get off the danged farm.”

American Farm Bureau Federation regulatory specialist Don Parrish sees a palpable

campaign focus on perceived regulatory abuse and excess particularly in rural areas.

“People are going to be raising it at ‘Meet the Candi-

date’ forums — they’re going to be asking candidates’ positions on these things,” Parrish told FarmWeek. “I think it’s going to play.”

National corn, soybean leaders seek aid for livestock brethren The ethanol boom has seen tensions surface between corn and livestock farmers, as evidenced by debate over the federal Renewable Fuels Standard (see page 8).

But despite drought- and policy-related issues of their own, soon-to-be National Corn Growers Association (NCGA) president Pam Johnson and American Soybean Association President Steve Wellman last week recognized the importance of their livestock customers and urged federal support for them.

Johnson emphasized the importance of House-Senate farm bill proposals that would revive now-expired livestock disaster assistance provisions, as well as September Senate passage of drought relief measures that would temporarily but immediately reactivate the Livestock Indemnity and Livestock Forage Disaster programs.

“We are definitely aware that not only are we hurting, but also that our end users, our biggest customers, are hurting, whether they be livestock producers or ethanol producers or exporters,” the NCGA first vice president told FarmWeek at last week’s Farm Progress Show.

“We’re concerned about that. We’ve worked so hard for so many years to build up this demand for corn. We want to be able to contin-

ue that as we turn this ship around and next year plant a bountiful crop.”

Meanwhile, Wellman cited the mutual benefits of trade expansion both for soy and livestock producers. He is awaiting House action on proposals to extend “permanent normal trade relations” (PNTR) to new World Trade Organization (WTO) member Russia.

PNTR approval is crucial to assuring that the U.S. has access to the Russian market under WTO oversight. U.S. livestock and poultry producers have contended with recurring barriers to entry, but under WTO rules, Russia in August lowered import duties on several meat products.

Wellman urged continued U.S. efforts to reach a agreement in current Trans-Pacific Partnership talks that would further open markets such as Vietnam to U.S. meat, poultry, and soy products.

“Vietnam’s built a couple of new processing facilities, and they’re looking to purchase whole soybeans,” Wellman told FarmWeek.

“But we certainly want to remember the domestic livestock sector and domestic processors and help them develop a market for their meat and poultry products so we can keep as much of that processing and feeding industry as possible here in the U.S.” — Martin Ross

Cuba hopes emerging U.S.-Cuba relations appear to be on ice pending fall elections and resolution of sensitive political issues.

But amid a youthful new groundswell of support for U.S.-Cuba “engagement” and an increasingly open dialogue among Cuban-American policymakers, Cuba watchers are hopeful people and goods eventually might flow freely across the Gulf.

On the heels of its June Market Study Tour of Cuba, Illinois Farm Bureau has rebooted its push for Cuban policy reforms. IFB National Legislative Director Adam Nielsen participated in a recent Cuba-Tampa Bay Relations Forum featuring U.S. Rep. Kathy Castor (D-Fla.).

Castor has parted ways with Cuban-American lawmakers who support a continued hardline approach to Castro’s Cuba.

Nielsen sat on a panel with former Tampa Mayor Dick Greco, Florida Council of Churches Executive Director Russell Meyer, and Antonio Zamora, a Cuba native and Florida-based international lawyer who specializes in foreign investment.

“My sense is we have some strong and influential allies in Florida who could help change the policy,” Nielsen said.

Mavis Anderson, senior associate with the Washington-based Latin American Working Group, reports U.S.-Cuba relations currently are “in limbo.” Only three of the 140 Cuban “People-to-People” travel licenses granted by the U.S. Treasury Office of Foreign Assets Control (OFAC) last year have been renewed, leaving groups to abandon plans or wonder if they will have to cancel Cuban visits.

Anderson cited speculation that OFAC may be withholding licenses until after the election “to see what the political landscape might be” regarding Cuba. On the policy side, “nothing’s going to happen before the elections, either on the part of the

president or Congress,” she told FarmWeek.

She noted concerns about conservative proposals to “roll back” recent advances in Cuban travel and interaction. Cuban-American lawmakers opposed to compromise with the Castro regime “are being vigilant to make sure nothing slips in that would loosen the (U.S. Cuban) embargo at all,” Anderson said.

“It’s wonderful that Representative Castor has had the courage to step out and say our policy is wrong and we need to change it,” she said.

“Polls have shown for years now that CubanAmericans favor engagement and working toward a normalization of relations. The hardliners are in the minority.”

Castor is joined by Cuban Americans for Engagement (CAFE), a group that Anderson said represents “the younger professional strata of the Cuban-American community.” In a letter to Republican and Democrat national committees, CAFE charged “a strategy of blind support for the embargo has become the norm for political candidates from both parties in order to garner the support of Cuban-Americans.”

A CAFE petition supporting Cuban trade and travel reforms is available online at {www.change.org/petitions}.

Complicating the issue is the continued imprisonment of Alan Gross, a government contractor for the U.S. Agency for International Development in Cuba who was arrested as a spy in 2009. In the wake of the Gross incident, Sen. Dick Durbin, a Springfield Democrat, and Rep. Jerry Moran (R-Kan.) have suspended efforts to alter U.S.-Cuba policy.

“The governments have to talk -– they just have to sit down and figure out how to get by this impasse,” Anderson said. “It’s not helping anyone — certainly not Mr. Gross.” — Martin Ross

Page 5 Monday, September 3, 2012 FarmWeek

productioN

Industry reps: Seed supply should be adequate for 2013

BY DANIEL GRANT FarmWeek

Seed industry representatives at the Farm Progress Show in Boone, Iowa, last week admitted the obvious; the seed crop was hurt by the drought.

But the situation in many cases isn’t as bad as feared and, in fact, the seed supply for 2013 is expected to be adequate.

“From what I’ve seen, it’s not as bad as everybody

FarmWeekNow.com Listen to an inter view about the 2013 seed supply at FarmWeekNow.com.

thought,” said David Thompson, national sales and marketing director for Stine Seed.

“We’re over half way done with seed corn harvest, and the returns are surprisingly good,” he continued. “It won’t be a bumper crop, but it will be an adequate crop.”

Thompson reported Stine Seed had some field failures in Southern Illinois. But production at other locations is expected to make up much of those losses.

Jeff Hartz, director of marketing for Wyffels Hybrids, said many of the company’s seed corn fields in North-Central Illinois received timely rains of 1.5 inches in June and 1 inch in July.

“Our situation is pretty good on seed production,”

Machinery sales grow despite drought The drought this year devastated crops and stressed livestock, but so far it hasn’t slowed growth in at least one sector — farm equipment sales.

Representatives of the ag equipment industry last week at the Farm Progress Show in Boone, Iowa, reported robust sales so far this year.

In fact, Moline-based John Deere last month reported record net sales and revenue for its third quarter.

“We’re not seeing a big impact (on sales) from the drought, for now,” said Barry Nelson, manager of media relations for John Deere’s Ag and Turf Division. “We’re still showing record sales and profit.”

John Deere this month reported worldwide sales were up 15 percent from a year ago.

The company forecast a record full-year income of $3.1 billion.

It may take time for the impact of the drought to catch up with equipment sales. Nelson noted many of the orders delivered this summer were placed last year.

Elsewhere, Burr Ridgebased CNH Global, the company created in 1999 when Case and New Holland merged, last month reported net sales for its second quarter were up 3 percent to about $5 billion. CNH sales were up 5 percent for ag equipment but

down 3 percent for construction equipment.

“Firm global demand of agricultural equipment, on the back of favorable commodity prices, compensated for a more mixed trading environment in the construction equipment sector,” CNH noted in a news release.

Gary Wojcik, segment marketing manager of high horsepower tractors at New Holland, said high commodity prices and crop insurance should allow many farmers to trade equipment this year despite the loss of crop yields to the drought.

“We expect farm income will stay relatively constant, even with the drought,” Wojcik said. “Our first half of the year (sales) were up from the year before.”

Peoria-based Caterpillar also is in strong financial shape, despite the ongoing drought.

The company in July reported a second-quarter profit per share of $2.54, which was an all-time quarterly record and a 67 percent increase over profits in the second quarter of last year.

The equipment industry is reacting to the drought, however, and is prepared for a possible slow-down in sales in some regions of the country.

Curt Hoffman of New Hol-

land reported some customers are taking a wait-and-see approach to determine how harvest turns out before they make decisions about equipment. New Holland likely will increase incentives for customers, Wojcik noted.

Meanwhile, CNH is offering contoured payment schedules with CNH Capital for customers in USDA-designated drought counties to help growers sustain equipment for their farming operations. — Daniel Grant

Hartz said. “We have a strong domestic crop.”

A survey of 1,800 U.S. farmers conducted by Farm Futures Magazine and released at Farm Progress Show indicated farmers next year intend to plant 93.1 million acres of corn (down 4 percent from this year) and 78.1 million acres of soybeans (up 1.2 percent).

“Obviously, the drought had an impact (on seed production),” said Todd Frazier, Pioneer business director in Iowa and Missouri. “But we can meet the (seed) demand and have a little upside.”

How can seed suppliers be so confident of their supplies in the midst of the worst drought since 1988?

Industry representatives noted the majority of seed crops are irrigated, in-bred seed corn requires less water than commercial corn, a number of companies this year planted excess acres, and seed production in South America is expected to skyrocket and possibly set a new record.

“We went in with a plan to grow excess inventory, so we grew a much larger crop than we needed,” said Craig Anderson, vice president of sales and marketing for AgReliant Genetics. “And we’ll utilize counter-seasonal production in Chile and Argentina. This year we have a bigger plan (for South American production) than we would otherwise.”

But while the overall seed supply is expected to be adequate for 2013, industry representatives noted availability of some hybrids likely will be tight.

“In a year like this, you can lose a field here and there and it will affect the supply of specific numbers,” Hartz said.

“I’d advise farmers that if they have a hybrid they really want, get an order in and get it reserved.”

Anderson offered similar advice.

“Make decisions early and get things ordered,” he said.

“There will be issues with certain hybrids, no doubt about it.”

CHALLENGE THE STATUS QUO

Attendees of the Farm Progress Show in Boone, Iowa, check out a Claas Lexion 750 combine. Ag equipment representatives at the show reported strong sales so far this year, despite the drought. Some companies have responded to the drought, though, by offering more incentives and alternative payment schedules. (Photo by Daniel Grant)

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FarmWeek Page 6 Monday, September 3, 2012

CROPWATCHERS Bernie Walsh, Durand, Winnebago County: For a change, we had some rain early last week. On Sunday, Aug. 26, we had 1.1 inches, and it all soaked in, of course. This will help some of the later beans, but lots of the beans already are turning color and dropping leaves. There was much talk last week about corn yields being even worse than everyone thought. As farmers get farther and farther into their fields, sometimes with a crop insurance adjuster, the yield expectations are going down. There are many cornfields in northeast Winnebago County that may average only 20-40 bushels per acre. Other areas of the county have caught some rain and may average 100. There was some fourth-cutting hay made on fields that caught some of that rain.

Leroy Getz, Savanna, Carroll County: A very warm and mostly dry week. We received only 0.3 of an inch of rain on Sunday, Aug. 26. That gives us 2.5 inches for the month of August and it doesn’t look like Hurricane Isaac will reach as far as Northwestern Illinois. Some cornfields are staying green while others are yellowing fast. There is some Goss’s wilt showing up. Soybean fields have areas that could be showing sudden death syndrome, or maybe just death. Good hay making with the fourth-cutting. Some guys have done a fifth cutting, and one farmer is on his sixth cutting. That’s never before happened in Northern Illinois.

Larry Hummel, Dixon, Lee County: Two weeks ago when I looked at our list of things that needed to get done before harvest, I wondered how we could make it all happen. The list is getting short now, and I think we still have at least a week before anything is ready to harvest. Drydown should come fast with crops maturing early, while we have plenty of heat. Standability and ear retention will be factors that determine what fields are harvested first — more so than moisture levels. I found quite a few cornstalks with a big bow in them like you see in tall prairie grass. That’s telling me that the structure of the stalk has been compromised by the drought. In other words, harvest as early as possible.

Joe Zumwalt, Warsaw, Hancock County: Harvest was in full swing last week, and the corn is coming out fast. Yields have ranged from 0 to 160 bpa field averages. My farm average so far is in the 130s. I am pleasantly surprised and grateful. I have heard of a lot of zeroes, and most yields in the county will not top 50 bushels per acre. Moistures range from 13 to 20 percent field average. And my tests have come back negative for aflatoxin, but there is a bunch of it in the county, and horror stories are adding up fast. With the cool nights two weeks ago, the soybeans have begun to turn early, too. Isaac’s rains are welcome no matter when they fall.

Ken Reinhardt, Seaton, Mercer County: I had 2.5 inches of rain on Sunday, Aug. 26. Up to 4 inches were predicted from Isaac.

Harvest has begun on corn that doesn’t appear to be hurricaneproof. Moisture and yields are quite variable through the fields so far.

Soybeans that are in the midgroup IIs are beginning to turn. The Farm Bureau hosted a busload of Brazilian farmers on their way to the Farm Progress Show. The next day a group of Japanese interested in non-GMO corn toured a local farm.

Ron Moore, Roseville, Warren County: We received 1.6 inches of rain last weekend (Aug. 25-26). Some areas got up to 2.5 inches. That will not help the corn, but it will help the soybeans quite a bit. Corn harvest has started and some fields are just a little better than expected. Others with lighter soils are worse than expected. Lots of black dust in the cornfields.

It is some kind of mold or fungus that turns the combine black, but it does not appear to be aflatoxin. There are just a few fields of beans that are starting to show some yellow leaves now. It looks as if soybean harvest will be starting at the normal time this year.

Jacob Streitmatter, Princeville, Peoria County: It rained again last weekend (Aug. 25-26). I received my biggest rainfall of the year — 2.3 inches. It will take much more to fill the cracks in the ground, but the crazy grass decided to green up and grow, so I had to mow. I took some corn out. To say the least, it’s not good when the moisture is reading higher than the yield per acre! I also went through small areas that looked like 200-bushel corn, but the yield monitor would only spike to 150. I was harvesting in part of the county where it forgot to rain.

Tim Green, Wyoming, Stark County: We hit 94-95 degrees a couple of days last week.

Crops are really starting to dry out. There has been a little bit of harvest activity, and moistures seem to be a little higher than expected. I haven’t heard of any yields yet. A few beans are starting to turn yellow. I think there will be a lot of harvest activity after the holiday.

Mark Kerber, Chatsworth, Livingston County: Harvest is just starting for some. A few cornfields with early varieties have been harvested. I’ve heard yields from 8 to 100. There will be a big difference from good to poor ground this year. Some soybeans are starting to turn. The recent rains really helped what pods are there. Most of us are starting harvest right after Labor Day, but we will see how much rain Hurricane Isaac brings. This could slow the start of harvest for many. Markets have consolidated.

Ron Haase, Gilman, Iroquois County: Corn harvest has begun in the area. I have heard of yields ranging from less than 1 bushel per acre on up to 80 bushels per acre. We received a shower on Sunday, Aug. 26. Our farms received from 1.6 to 2.3 inches of rain. Corn development ranges from the R5 (dent) growth stage and the milk line 15 percent of the way down the kernel on up to the corn being harvested. Local soybean fields are at the R5 (beginning seed) or R6 (full seed) growth stage. Most fields are at R6. Local closing bids for Aug. 30 were: nearby corn, $8.20; fall 2013, $6.19; nearby soybeans, $17.82; newcrop soybeans, $17.58; fall 2013 soybeans, $13.23. We enjoyed tour groups from Brazil who stopped by our farm last week on their way to the the Farm Progress Show.

Brian Schaumburg, Chenoa, McLean County: Hopefully, by the time you read this, Isaac brought some beneficial rain to recharge the subsoil and get wheat plantings off to a good start for 2013. Eardrop is a real problem in corn as the shank is very small and weak. Stalks are worse. The few yields reported have ranged from 30 to 80 bpa. Elevators have more blacklights than 1970s college dorm rooms to test for aflatoxin. Corn, $8.16, $8.08 fall, $6.27 fall 2013; soybeans, $17.78, $17.43 fall; $13.16 fall 2013; wheat, $8.08.

Steve Ayers, Champaign, Champaign County: By the time you read this, the drought map likely will have changed significantly. Latest rain amounts I have seen for us is 3 to 5 inches with locally heavier amounts, maybe up to 8 inches, and rain ending Labor Day morning followed by a dry week with temperatures in the mid-80s. Gusty winds are a real concern for the standing corn. Harvest is beginning and corn yields range from disappointing to elation, or 45 to 180 bpa. USDA has our crop reporting district at 1 percent harvested and 40 percent mature. Soybeans are 16 percent turning yellow.

Wilfred Dittmer, Quincy, Adams County: Good news: On Sunday, Aug. 26, we received 2.3 inches of rain bringing the total to 4.1 inches for the month. Some combines were running in corn with yields from 0 to 120 bpa.

Moisture is running from 15 to 20 percent. Soybeans are enjoying the extra moisture and may fill out some extra beans. Maybe Hurricane Isaac will help fill the rain gauge.

Carrie Winkelmann, Tallula, Menard County: Harvest was in full swing last week, but looks to be headed toward a bit of a slowdown as we see the rain coming up from Isaac. Corn moistures have held about the same as the previous week at 19-25 percent, and yields are about half of normal. The yield monitor ranged anywhere from 10 to 170 bpa in the field we were in Thursday.

Some beans in the area are turning, and I drove by a neighboring field two days ago that looked like it would be ready to go in a week.

But we will just have to wait and see how much rain comes out of the storm. What a crazy year.

Tom Ritter, Blue Mound, Macon County: It was a good week of harvest. With remnants of Hurricane Isaac heading up through Illinois, farmers were scrambling to get as much corn out of the field as they could. The rain will be welcomed, but stalks are very vulnerable and we’re worried about the wind that could come along with a 6- to 8-inch rain. Harvest is approaching 50 percent complete in this area.

Some farmers are finishing up and some are just getting started, but there has been a lot of corn taken out in the last 10 days. Moisture for the most part dropped to about 20 percent.

Some corn still has higher moisture. A fair amount of mid-April-planted corn has come out of the field at between 15 and 20 percent moisture. Aflatoxin has been a concern. Our local elevator has detected it in a few loads, and a few loads were rejected in Decatur, but it has not been a major problem yet. Yields remain good, considering the year, but they are all over the board. Heard reports of anywhere from 20 to 180 bpa. The majority of the corn is coming out in the 100- to 130-bpa range. The majority of the soybeans are still four weeks off from harvest, but some early varieties are getting numerous yellow leaves on them.

Todd Easton, Charleston, Coles County: Combines went hard across cornfields last week, although trucks and auger wagons do not have to run at much of a hectic pace, unfortunately.

Moistures have come down into the teens in most cornfields.

Yields are still dismal. They resemble what you would hope to get from a good soybean field instead of a cornfield. As far as the beans go, there has been no cutting yet, but a small handful of fields seem to be a week or two from full maturity. Weather forecasters are predicting a large amount of precipitation to fall over the weekend from the remains of tropical storm Isaac. We can only hope crop damage is minimal.

Jimmy Ayers, New City, Sangamon County: I had 0.1 of an inch of rain last Sunday, Aug. 26, with more expected from Hurricane Isaac. Yields? Wow! I’ve heard some farmers say they are getting 175. I’m also hearing yields are probably going to be from 0 to 130 on average. It’s all over the board. Corn-on-corn appears to be hurt most. We are seeing differences of 50 bushels in different places.

There is a lot of concern about whether the bean pods are going to fill. Rain now is not going to help. A lot of beans are turning already.

Doug Uphoff, Shelbyville, Shelby County: We put up hay last week and had 224 bales, which was up from 38 the previous cutting. Quality was high.

Corn harvest progressed rapidly.

We were trying to get as much done as possible ahead of rain from Hurricane Isaac. I have walked in some cornfields planted in mid- to late April and there is nothing there. We are still averaging between 50 and 97 bpa, depending on soil type. We are down to 220 acres of our own to be harvested and less than 80 acres for our neighbors. The elevator has been doing the best it can to keep up with us despite some dryer problems and logistics for wet and dry corn storage. That’s on top of trying to get a 550,000-bushel bin put up and wired in the middle of a monthearly harvest. Hopefully, we don’t get the 5-10 inches of rain being forecast. I know a farmer wants rain when he can’t have it and then doesn’t want rain when he can.

Page 7 Monday, September 3, 2012 FarmWeek

CROPWATCHERS David Schaal, St. Peter, Fayette County: Early on Aug. 27 we received 0.8 of an inch of rain, and it was much welcomed.

There are few more combines picking corn in the area, but yields are really low: single digits up to maybe 40 bpa maximum.

Haven’t heard too much about aflatoxin problems. Elevators are monitoring it pretty closely. The last couple of rains helped the beans some. I don’t really think they took second growth, but it seems they set some pods on the top of the plant. We are all wondering when Isaac is going to blow into our area. I attended a seed meeting Thursday and was told seed corn supply will be OK for 2013. Now, after some of the recent rains, they are not quite as worried about the bean supply. I think everybody is ready for the corn harvest or corn disking to be over this year.

Rick Corners, Centralia, Jefferson County: Isaac — you old buggar — if you had just come along two months ago, we wouldn’t be using a disk for harvest instead of a combine. Timing does matter. A few more are driving through their cornfields with combines. I didn’t say shelling corn, just driving. Moisture is in the 20s and yields are lower than (Cardinal’s pitcher) Adam Wainwright’s earned run average.

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

Jeff Guilander, Jerseyville, Jersey County: I had some technical difficulties reporting in the past two weeks, so here is a quick recap. The peach crop, along with most of the Marchplanted corn, has been harvested. I think we all expected the worst and hoped for the best.

Unfortunately, the early corn is meeting our expectations. There are some pleasant surprises, but for the most part the early corn is going to end up in the 50-80 bpa range. Yields on the very best dirt may be double that, but there is just not much of it.

The early beans are turning rapidly, and with the 3-plus inches of rain we are expecting, most of the leaves should be gone by this week. Aflatoxin is present, but to this point, it has not been nearly the serious issue we were warned about. Just don’t let your guard down. Harvest should really ramp up in the next couple weeks, and for better or worse most of the speculation will be over.

Dean Shields, Murphysboro, Jackson County: We had no rain last week, compared to two weeks ago when we got 2 to 4 inches and lot of hail damage.

Those rains helped the bean crop, which is looking better and seems to be filling the pods pretty well. There was quite a bit of hail damage to corn in Jackson County and in my area, especially. I started picking corn last week, and so far, yields have been between 20 and 30 bpa, so not too good. Hurricane Isaac was expected to bring us some rain, and that will help the late beans.

Kevin Raber, Browns, Wabash County: I started corn harvest and my first field had a middle-40s yield with moisture averaging 17 percent. The next field yielded better, but the moisture jumped to 22-23 percent. Corn harvest moved rapidly for the last week of August. The early-maturity soybeans are changing rapidly. The middle-to late group IVs are still growing, so the late rains may help them.

Randy Anderson, Galatia, Saline County The best way I can describe the corn crop on my farm is it is like going to the dentist for a root canal and not getting any pain killer. I had a feeling it was going to be bad but not this bad. Nice big, tall plants in some fields and not one ear to be found. The goal now is not how many trucks you fill but how many acres you can run over. I hope we get some rain out of the hurricane, but I’m not counting on it the way everything else is going.

Like most of us always say: Maybe next year will be better.

Ken Taake, Ullin, Pulaski County: It was another week with no rain, so it is very dry here in Pulaski County. Corn harvest continued. We are more than half done. Yields continue to be just terrible. I’ve never had yields this low. A few early soybeans are being harvested. We hope we can get some rainfall from the remnants of the hurricane. It may be a little late to help our late beans, however.

Market analyst: All eyes on South America

BY DANIEL GRANT FarmWeek

Now that the remnants of Hurricane Isaac have passed, the trade likely will shift its focus to South American crop potential.

The crop markets, which rallied last week as Isaac approached the Gulf Coast, could become increasingly volatile due to dr yness in Brazil.

“The key to the ag markets is beans,” Darin Newsom, DTN senior analyst, said last week at the Far m Progress Show. “All eyes will be on South America.”

Brazil is expected to produce about 80 million metric tons (2.9 billion bushels) of beans to help ease tightness in the market.

U. S . e n d i n g s o y b e a n stocks projections declined last month to 145 million bushels for 2011/12 and just 115 million bushels for 2012/13.

“The concern is without that record crop (from Brazil), and if demand remains strong, by the time we get to March, global (bean) supplies c o u l d b e n e a r z e r o,” s a i d B r yce A n d er s o n , D T N a g meteorologist.

Anderson re por ted soil moisture in Mato Grosso — a key soybean-producing region in Brazil about the size of Texas — last week was about 10 percent of normal.

“If it doesn’t rain in the next two weeks, it will delay soybean planting in Brazil,” Anderson said. “It’s a very

Tyler Ingram of Homer (standing beside semi) last week was helping Jeff Fruhling and his son, Travis, harvest corn on a 190-acre field near Homer in

Champaign County. A yield report was not available Friday. The Fruhlings grow corn and soybeans and have Angus cattle. (Photo by Ken Kashian)

dangerous situation with soybeans.”

In the U.S., Anderson was concerned the remnants of Isaac could reduce crop yield potential by causing cornstalk lodging, ear drops, and by flattening soybeans.

The storm provided muchneeded relief for droughtparched areas, but Anderson

A key benchmark for farmers to watch that could indicate a reversal of the drought is the U.S. Drought Monitor. Anderson said drought ratings need to improve by at least two levels by Thanksgiving to indicate the drought is coming to an end.

Areas currently in extreme to exceptional drought must

predicted it would not be a drought-breaker in most areas of the Midwest.

“It will take a lot of sustained moisture to improve the situation in places such as Southern Illinois and southern Indiana,” Anderson said. “It would take at least 10 inches of precipitation to bring things around.”

i m p r ove t o m o d e r a t e a n d severe drought rankings by November in order to have “a f i g h t i n g ch a n c e t o h ave a decent situation next spring,” Anderson added.

The majority of Illinois prior to Isaac’s rainfall was in extreme drought with far Southern Illinois still in exceptional drought.

FarmWeek Page 8 Monday, September 3, 2012

energy

Storm damage could reduce crop yields

BY DANIEL GRANT FarmWeek

The remnants of Hurricane Isaac, which was downgraded to a tropical storm as it crept into Louisiana last week, was expected to dump significant rainfall across much of the South and the Mississippi River Valley.

But while the situation certainly will help restore soil moisture in those droughtparched areas, the storm actually could do more harm than good to current crops.

Bryce Anderson, DTN ag meteorologist, predicted the

storm could dump as much as 6 to 12 inches in Louisiana and southern Mississippi.

Elsewhere, the National Weather Service late last week predicted states as far north as Illinois could receive anywhere from 2 to 6-plus inches of rain over the holiday weekend.

“It will be good for soil moisture, but it’s not a good rain for the crops out there now,” Anderson said last week at the Farm Progress Show in Boone, Iowa.

“I think it will damage crops.”

The system could produce strong winds and heavy rain.

Those conditions likely would lead to lodging of cornstalks dropped ears, and flatten some beans, according to Anderson.

Fall harvest was expected to come to a halt as the storm passed over the heart of the Corn Belt. Corn harvest in Illinois as of the first of last week was 6 percent complete compared to the five-year average of 1 percent.

Jeff Justus of Champaign County last week was harvesting downed corn from a previous storm that pounded his farm with strong winds and hail.

“I’m getting most of it,” Justus said. “Yields, I think, are going to make 100 (bushels). If I can average that on my farm this year, I’ll be happy.”

Elsewhere, corn harvest last week was 56 percent complete in Texas, 33 percent in Tennessee, 32 percent in Missouri, and 25 percent in Kansas and Kentucky.

Commodity prices, including grain, oilseeds, and oil, rallied last week as the storm approached.

U.S. oil prices peaked last week at $97.92 per barrel before retreating by about $3

late in the week. Nationwide, fuel prices last week were up 15 cents per gallon for gasoline and 27 cents for diesel to $3.76 and $4.09 per gallon, respectively, compared to last year.

The jump in fuel prices was much more pronounced in Illinois. The average price of regular gasoline in Chicago last week reached $4.37 per gallon, which was the highest price nationwide.

The Illinois attorney general’s office subsequently announced last week it was on the lookout for price gouging in response to the run-up in fuel prices.

Ethanol, RFS2 deemed crucial in buffering gas price spikes

BY MARTIN ROSS FarmWeek

Hurricane Isaac — and its anticipation — served as a reminder of ongoing volatility in gasoline prices and the potential buffer effect of ethanol and biofuels policy.

Following a summer dip in pump prices, much of the U.S. last week saw the greatest jump in gas prices in 18 months.

Isaac shut down several petroleum refineries along the Gulf Coast and hampered production at others, altogether affecting some 1.3 million barrels per day of refining capacity.

That’s as corn and biofuels producers continued to await a U.S. Environmental Protection Agency (EPA) ruling on a

proposed waiver of federal Renewable Fuels Standard (RFS2) ethanol mandates for the coming year.

Meanwhile, Illinois Corn Growers Association (ICGA) said it was disappointed in newly announced federal Corporate Average Fuel Economy (CAFE) fuel efficiency standards that appear skewed toward incentives for electric vehicles and away from flex-fuel vehicles (FFVs) that run on higher ethanol blends.

ICGA Business and Technology Director Dave Loos told FarmWeek CAFE rules as issued could wind up costing consumers between $5,000 and $9,000 per new vehicle by 2018. FFVs can meet both CAFE-prescribed fuel economy and accompanying

greenhouse gas reduction standards, Loos argued.

In the short term, a lack of support for FFV adoption and continued resistance to higher ethanol blends is costing consumers at the gasoline pump, Loos argued. Ethanol provides a “tremendous price and supply buffer” during petroleum production/distribution disruptions, he said.

For example, Chicago gasoline prices were 78 cents higher than Windy City ethanol prices on Aug. 10.

“If we were at E15 (15 percent ethanol blend use), or we had more FFVs, that buffer would be even greater,” Loos said.

Loos maintained CAFE standards “conflict in so many

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ways with the RFS2,” which aims to boost biofuels use to 36 billion gallons by 2022.

American Coalition for Ethanol Executive Vice President Brian Jennings was confident EPA in November would reject waiver requests, concluding the RFS2 “moderates gas prices by magnitudes of order greater than any insignificant impact they have on increases in corn or feed and fuel prices.”

“I’m more worried about what happens in Congress next year regarding the RFS2,” Jen-

nings told FarmWeek Friday.

Loos noted the opportunity under CAFE to further consult with EPA and the U.S. Department of Transportation regarding FFV benefits.

But he warned “it’s not going to be easy,” and cited the possible need to revisit congressional initiatives such as the Houseproposed Open Fuels Standard, which would push production of FFVs and other alternative energy vehicles by American and foreign automakers who market in the U.S.

Do CAFE ‘footprint’ assumptions suggest interagency misstep?

New Corporate Average Fuel Economy (CAFE) standards strongly favor electric or compressed natural gas (CNG) vehicles over less costly biofuels-ready “flex-fuel” models, based in part on weak greenhouse “footprint” assumptions.

So says Brian Jennings, executive vice president of the American Coalition for Ethanol, who argues new CAFE rules “would really create an unlevel playing field among alternative fuels.”

Automakers can still qualify for greenhouse gas (GHG) emissions credits by producing flexible-fuel vehicles (FFVs) under new U.S. Environmental Protection Agency (EPA)/Department of Transportation rules. But Jennings told FarmWeek those credits “are not nearly as generous as they’ve been in the past.”

“A plug-in hybrid electric vehicle costs considerably more than a conventional vehicle,” he said. “A flexible-fuel vehicle does not cost considerably more. EPA argued that if a consumer’s going to spend extra money to buy a plug-in hybrid, they should get some incentive.

“I’m not sure I agree entirely with that. Given the critical mass of ethanol out there, given the (Renewable Fuels Standard), given the opportunity for us to use more ethanol in fuel, it would have been only fair to afford the same sort of credits for FFVs as for electric vehicles.”

In part, the administration’s push for electric vehicles is based on questionable notions regarding the greenhouse footprint of electric/hybrid cars vs. FFVs, he said.

Inputs used and land allocated for corn production count against ethanol in terms of federally perceived GHG impact. Fervor for electric vehicles frequently fails to recognize the impact of mining needed to equip batteries for and the added power transmission needed to fuel them, Jennings noted.

Electric generation remains “predominantly coal-fired,” he said, arguing EPA may presume unrealistic levels of future windor solar-based power. Ethanol’s greenhouse impact would be considerably lower than coal-powered vehicle use “in any fair (carbon) life-cycle analysis,” Jennings maintained.

Similarly, he charged EPA has failed to factor the “well-towheels” impacts of natural gas, which also receives highly favorable credits under CAFE standards.

Further, Jennings sees far more favorable consumer reaction to flex-fuel models. General Motors has sold some 13,000 of its $40,000 Volt hybrids this year, but dealers reported in late July that they still had 6,450 Volts in stock — a higher-than-customary inventory.

“A consumer gets a $7,500 tax credit today to buy an electric vehicle like a Volt, but the supply of those cars vastly exceeds the demand,” Jennings said. — Martin Ross

Page 9 Monday, September 3, 2012 FarmWeek

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FarmWeek Page 10 Monday, September 3, 2012

safety

Train the Trainer participants recognize responsibility

BY MARTIN ROSS FarmWeek

The summer of 2010 served as a crossroads for Illinois agriculture.

A community mourned Carroll County grain engulfment victims Alejandro Pacas, 19, and Wyatt Whitebread, 14.

Led by Pacas’ aunt, Catherine Rylatt, private and public interests forged what would become the Illinoisbased Grain Handling Safety Coalition (GHSC).

And amid heightened public scrutiny and proposed new federal labor guidelines, family farms and rural educators fought successfully last year for the ability to continue teaching and training farm youth on the farm.

That privilege comes with a promise, according to participants in GHSC’s maiden Train the Trainer Workshop, held in August at the LaSalle County Farm

Bureau in Ottawa.

Sixteen area farmers, commercial grain handlers, and educators convened at the initial workshop designed to help Illinois communities protect their own.

Noting a fragmented, somewhat scattershot approach to safety education, GHSC tapped a U.S. Occupational Safety and Health Administration (OSHA) grant to develop the community-based program, which focuses on bin entry, entanglement hazards, and other grain safety concerns.

Farm groups have been able to prevent enactment of U.S. Department of Labor proposals that would have severely limited ag-related activities for those under 16.

However, Daryle Wragge, a farmer and retired Putnam County ag teacher, warned fellow trainers-in-training that future farm-related accidents could prove the “nail in the coffin” for juvenile farm involvement.

The rural economy at large is at risk, Wragge

Using a 16th of a cup of grain dust, a heat coil, an air pump, and a sheet of paper, Grain and Feed Association of Illinois safety specialist John Lee, right, vividly demonstrates the potential dangers of suspended dust in confined storage. “This could be a 400-pound hunk of concrete coming through the roof of an elevator office,” Lee stressed as he displayed paper shrapnel resulting from the dust’s ignition. Looking on from left are Elburn Co-op employees Cody Bleuer and Clinton Vaughn and Extension educator Steve Ayers. (Photo by Martin Ross)

added, noting estimates that 85-90 percent of ag students

plan to work not on the farm but in “supportive industries.”

Carroll County Farm Bureau Manager Chas Welch stressed the importance of GHSC training to keep future accidents from happening.

“Safety — safety for our young people — is the utmost thing,” Wragge told FarmWeek.

“At the sidelines is the fear that if we don’t take care of our own safety factors, our own procedures, someone else will. The government will.”

Monsanto became a focus of safety concerns last year after two 14-year-old company-employed detasslers were electrocuted by a center-pivot irrigation system.

New GHSC trainer Andrew Waters, a safety technician with Monsanto’s Ashton soybean facility, said corporate involvement in community safety is invaluable, given “the very elaborate programs” companies have put in place for their own employees.

Shared cross-sector knowledge also is crucial to new or beginning farmers, according to James Theuri, Extension educator in local food systems and small farms for Grundy, Kankakee, and Will counties.

While his clients may not be involved in major grain or oilseed production, he said “a lot of people can benefit from hearing what we’re hearing here.”

Theuri noted bin entry can be an issue for the children of his larger livestock producers and cited the parallels between grain dust explosions and similar occurrences in stored hay.

He sees GHSC training as merely the beginning of comprehensive safety education that will benefit the small and specialty farmers he serves.

“A farmer friend of mine had this bull that looked very tame, was very easy to work around, until one day, he decided, ‘You’re invading my territory,’” Theuri recounted.

“My friend saw him coming. He made it to the fence, was just putting his foot over the top rail, when the bull caught up to him and threw him over. My friend had broken ribs.

“I hope I can address these safety issues with younger people, (and focus on) the precautions they need to take.”

Page 11 Monday, September 3, 2012 FarmWeek

GROWMARK

GROWMARK reports record sales for 2012 fiscal year Higher commodity prices and solid volume growth in most GROWMARK business units produced record sales for the cooperative for the 2012 fiscal year.

Jeff Solberg, chief executive officer, announced unaudited, estimated sales of $10 billion for the 2012 fiscal year, the highest in the cooperative’s history.

GROWMARK’s pretax income is estimated at $295 million, the second highest in the company’s history. An estimated $140 million in patronage refunds — also a company record — will be returned to GROWMARK member cooperatives and farmer-owners.

“This is our 85th year as a cooperative system, and we are proud of the progress from our founding to now, reporting the strongest sales numbers in our history,” Solberg said at last week’s annual meeting of the cooperative in Chicago.

“Our business is built around our mission to improve the long-term profitability of our member owners.

“With our record sales this year, we are able to return a record amount of patronage to our owners,” he continued. “We remain committed to their success and to the unity of our cooperative system.”

Operational highlights for the company’s business units were also reported at the annual meeting: Record high sales volume for the Plant Food Division was reported, due to strong corn acreage, a good fall application window, an early spring season as well as market share growth.

The Seed Division increased unit sales of seed corn to a record high, while soybean sales were even with last year.

The Crop Protection Division set another sales record over last year. Higher sales of agronomy application equipment and farm grain systems led to increased sales in the Facility Planning Division, as well.

The Energy Division recorded

GROWMARK directors elected Five farmers, including three from Illinois, were elected or re-elected to three-year terms on the GROWMARK Board of Directors during the cooperative’s annual meeting last week in Chicago The Illinois farmers are: Rick Nelson, Paxton, who has served on the GROWMARK board since 1990. He was elected vice chairman in 2004. He and his wife, Pat, operate a 2,100-acre cash grain farm. He also is president of the Ludlow Cooperative Elevator Board of Directors.

David Uhlman, Tremont, was elected to his first term on the GROWMARK board. He farms with his brother and son. They raise row crops, canning pumpkins, and have a cow-calf herd. He and his wife, Joan, have three children.

Uhlman also serves on the Ag-Land FS Inc. Board of Directors.

Dennis Neuhaus, Hoyleton, was elected to his first term on the GROWMARK board. His five-generation family farm includes dairy and beef cattle and 1,300 acres of row crops. He and his wife, Pam, have three daughters. Neuhaus also is a member of the Gateway FS Inc. Board of Directors.

4 grain cooperatives receive Ceres Award Four grain cooperatives were recognized by GROWMARK Inc. with the Ceres award during the GROWMARK annual meeting last week in Chicago.

The award, named for the Roman goddess of grain, is awarded to grain cooperatives that achieve excellence by meeting at least three out of the four following criteria: EBITDA (earnings before interest, taxes, depreciation, and amortization)/per storage capacity, return on invested capital, bushel retention, and GROWMARK’s capital guideline ratio.

The four co-ops that qual-

ified for the Ceres award were: • Farmers Elevator Co., Manteno. Alan Lamore is the manager and Harold McQueen the president.

• Grant Park Cooperative Grain Co., Grant Park.

Daniel Stadt is the manager and Richard Riechers the president.

• Minier Cooperative Grain Co., Minier. Keith Swigart is the manager and Duane Haning the president.

• Total Grain Marketing, Effingham. Randy Handel is the manager, and Davis Anderson was the president for the time period measured.

another record year for total energy volume. Gasoline and diesel fuel both showed strong growth, while propane was slightly lower than last year.

Lubricant volume remained steady.

Significant renovations at the Council Bluffs, Iowa, lubricant manufacturing facility expanded bulk storage capacity and allowed for key blending processes to be handled in-house.

The Grain Division reported an increase in bushels marketed through the five grain retail units. Eastern Grain Marketing began construction on a Norfolk Southern rail loader near Kankakee, which will provide increased marketing opportunities for area farmers when complete.

Risk Management Services, including MID-CO Commodities and AgriVisor LLC, reported continued strong demand for the products and services offered.

All of GROWMARK’s retail divisions reported successful years.

Total retail division sales are estimated at $1.7 billion, which includes

GROWMARK FS estimated sales of $260 million, and SEEDWAY estimated sales of $110 million, which would be a record.

Several acquisitions, efficiency improvements, and target marketing added to this year’s success.

“Although we are proud of our financial results, we are very aware of the widespread impact of this year’s drought. Our entire economy will feel the effects in one form or another,” Solberg said.

“Still, we remain optimistic about the future of agriculture. We stand ready to support our member companies and customers by continuing to be a reliable supplier of the products and services they need to assist their farmer-customers in meeting the food, fiber, and fuel needs of a growing world population.”

GROWMARK is a regional cooperative providing agriculture-related products and services, as well as grain marketing, in 31 states and Ontario, Canada.

Six co-ops receive performance awards Six Illinois FS member cooperatives last week were recognized during the GROWMARK annual meeting in Chicago for business performance improvement.

Over a five-year time frame, each cooperative’s return on invested capital is measured in comparison to other cooperatives in the system. From this measurement, the Performance Improvement Award was developed.

The cooperative with the

highest degree of improvement was Tri-County FS Inc., Jerseyville. Dave Lewis is the manager, and Joe Fessler the president.

Other Illinois cooperatives receiving the award were: • Gold Star FS Inc., Cambridge. Steve Swanstrom is the manager, and Ron Polage the president.

• Gateway FS Inc., Red Bud. Mike Kuhn was the manager during the time period measured, and Ronald

Fehr is the president.

• Carroll Service Co., Lanark. Ramon Woessner is the manager, and Rick Groen the president.

• Effingham-Clay Service Co. (now South Central FS Inc.), Effingham. Randy Handel is the manager, and Todd Wachtel the president.

• Lincoln Land FS Inc., Jacksonville. Keith Hufendick was the manager for the time period measured, and Joe Pickrell is the president.

GROWMARK names collegiate scholarship winners Forty-six college students from Illinois, Indiana, Iowa, Minnesota, Missouri, Pennsylvania, and Wisconsin will continue their education with help from GROWMARK. They are recipients of GROWMARK-sponsored scholarships aimed at promoting higher education in agriculture and business.

Students from Illinois receiving scholarships are:

Illinois State University Bethany Dill, daughter of Dave and Ann Dill of Tremont.

Donald Johnson, son of Donald Johnson of Chicago and Beatrice Mitchell of Tinley Park.

Gabriela Radanova, daughter of Georgi and Iliyana Radanova of Elk Grove Village.

Jacob Schlipf, son of Jake and Amy Schlipf of Gridley.

Jake Tester, son of Earl and Anita Tester of Morrisonville.

Illinois Wesleyan University Kristen Riechers, daughter of Landis and Mary Beth Riechers of Grant Park.

Iowa State University Daniel Herriott, son of Steve and Diana Herriott of Sidney.

Murray State University Rebekah Brennan, daughter of David and Connie Lihs of Trenton.

Souther n Illinois University – Carbondale Katlin Gehrt, daughter of Dean and Mary Gehrt of Gifford.

Nick Suess, son of Larry and Becky Suess of Greenville.

Elliott Uphoff, son of Douglas and Sara Uphoff of Shelbyville.

Tyler Voss, son of Tony and Linda Voss of Breese.

University of Illinois Elizabeth Koehler, daughter of Karl and Jennifer Koehler of Sparland.

Carlee Silver, daughter of Neal and Darcy Silver of Rantoul.

Doug Yunker, son of Mark and Heidi Yunker of Frankfort.

University of Iowa Christian Butler, son of Dennis and Lori Butler of Tolono.

Western Illinois University Riley Hintzsche, son of John and Lauren Hintzsche of Lindenwood.

Katharine Parker, daughter of Robert and Rosemary Parker of Ursa.

Haley Pfaffe, daughter of Jeff and Lana Pfaffe of Ashland.

Darcie Rahe, daughter of Tim and Carman Rahe of Bluffs.

GROWMARK honors retired ag leader Joyce Watson, retired CEO and president of the Illinois Agricultural Leadership Foundation, was honored last week with the “Friend of GROWMARK” award at the GROWMARK annual meeting.

Watson founded the Ag Leadership Foundation 30 years ago to develop knowledgeable and effective leaders to become policy- and decision-makers for the global ag industry. Many GROWMARK system employees and board members are graduates of the Illinois Agricultural Leadership Program.

The Friend of GROWMARK award was established in 1989 to recognize outstanding leadership and commitment to agriculture and friendship to the GROWMARK system.

FarmWeek Page 12 Monday, September 3, 2012

lANd VAluES

Illinois farmland values continue to gain ground

Rate of increase declines from ’11

BY DANIEL GRANT FarmWeek

Farmland values continued to gain ground through the first half of this year, according to a mid-year survey conducted by the Illinois Society of Professional Farm Managers and Rural Appraisers (ISPFMRA) and the University of Illinois.

Results of the survey were released last week during a news conference at the Farm Progress Show in Boone, Iowa.

“In spite of the devastating heat and drought, land values the first half of this year were up about 5 percent,” said Don McCabe, president of Soy Capital Ag Services in Bourbonnais and chairman of ISPFMRA’s Land Values Project.

It was one year ago the average price of excellentquality farmland in Illinois cracked five digits for the

first time in history.

This year, farmland prices in the state as of July 1 averaged $11,200 for excellent ground, $9,200 for good farmland, $7,800 for average land, and $5,900 for fair-quality farmland, based on the survey of farm managers and

FarmWeekNow.com Go to FarmWeekNow.com to listen to comments from farm manager Don McCabe about land values.

rural appraisers.

The prices, obviously, are averages and do not reflect going rates for a specific area.

Farmland values and cash rental rates vary greatly across the state based on soil types/productivity, market conditions, and other factors.

“Most of the gains (this year) were in the first quarter,” McCabe said. “There hasn’t been as much activity (in the land market) during the crop season.”

The rate of gain in land prices so far this year, 5 percent, is down considerably from last year. USDA reported cropland values in Illinois the past year increased 17.2 percent to an average of $6,800 per acre.

“Looking forward, survey respondents expect stable prices through the end of the year,” McCabe said.

“Even though we’ll have significantly lower yields, crop prices are higher, we should get a good dose of support from crop insurance, and many farmers are in strong financial positions,” he continued. “(Those factors) should help bridge the gap, even though it’s been a tough year.”

The ISPFMRA survey also predicted cash rental rates will creep slightly higher next year.

The statewide average cash rent, which was projected to increase $38 an acre from 2011 to 2012, was forecast to rise another $11 per acre in 2013.

FARM PROGRESS HARVEST

Thousands of attendees of the Farm Progress Show in Boone, Iowa, flocked to field demonstrations where they witnessed the harvest of about 80 acres of corn. A total of 15 different combines and more than 30 pieces of tillage equipment, along with sprayers, were used for the demonstrations. Corn harvested at the show tested 13 to 15 percent moisture with yields ranging from 120 to 150 bushels per acre. (Photo by Daniel Grant)

Pumpkin Day scheduled Thursday Illinois pumpkin growers may attend the 2012 Illinois Pumpkin Day from 10 a.m. to 2 p.m. Thursday at the University of Illinois Vegetable Crops Research Far m in Champaign.

Participants will have the opportunity to attend several presentations, including those discussing varieties, production systems, herbicides and weed control, bio-fumigants, insect pests, diseases, spray equipment, post-har vest issues, and marketing. U of I specialists will be on hand to present infor mation and answer questions.

Registration for the event is free and lunch will be provided. For more infor-

mation or directions, contact: Mohammad Babadoost at 217-333-1523 or babadoos@illinois.edu, or go to www.specialtygrowers.org and click on the Illinois Vegetable Growers Association page.

Ag Scholarship Digest Illinois Conservation Foundation — Three scholarships of $2,000 each are available for Illinois high school seniors who demonstrate voluntary, long-term dedication to protecting, preserving, and enhancing the state’s natural resources. Application deadline is Nov. 30.

Eligible recipients must be a state resident, provide specific conservation examples during high school years, enroll in a two- or four-year college, and maintain at least a C average.

Completed applications must include a high school transcript, a 500-word essay, letter of support from principal or guidance counselor, three letters from individuals familiar with the student’s conservation work, and acceptance letters from or the addresses of colleges or universities that have accepted the student or received the student’s application.

For an application or more information, go online to {www.ilcf.org} or call 217-785-2003.

Page 13 Monday, September 3, 2012 FarmWeek

from the counties

C

LARK — The annual Clark County 4-H Barbecue will be from 11 a.m. to 7:30 p.m. Saturday at the Martinsville Township Center and Firehouse.

EE — Members may purchase “buy one, get one free” slow-moving vehicle signs during National Farm Safety and Health Week Sept. 16-22.

Office hours are 8 a.m. to 4:30 p.m. Monday through Friday.

ADISON — The Women for Agriculture Committee will sponsor a shred day from 9 to 11 a.m.

Saturday at the Farm Bureau office. Call the Farm Bureau office at 618-656-5191 for more information.

EORIA — The Prime Timers will meet at 10 a.m. Wednesday at Wildlife Prairie Park, where they will take a Trek bus tour and watch a wildlife presentation. Cost is $10. Call the Farm Bureau office at 686-7070 for reservations or more information.

• Farm Bureau will sponsor a prairie planting project around the office building from 8 a.m. to noon Saturday.

Lunch will be provided. Call the Farm Bureau office if you can help with the project.

TARK — Farm Bureau and Country Financial will sponsor a crop insurance claims informational meeting at 5:30 p.m. Wednesday at the Farm Bureau office. Alan Davis, Country Financial crop specialist, and Bill Meismer, Country Financial claims adjuster, will be the speakers.

Call the Farm Bureau office at 286-7481 for reservations or more information.

TEPHENSON — A health fair will be from 8

L

M P

S

S

a.m. to noon Saturday, Sept.

15, at the Farm Bureau office.

Flu shots, discounted for Stephenson County Farm Bureau members, will be given.

Free blood pressure and blood sugar testing and a hearing consultation will be provided.

Refreshments and door prizes will be provided.

• The annual family portrait program will be from 9 a.m. to 5 p.m. Nov. 10-11 at the Farm Bureau office. Each member may receive a free 8 x 10 color portrait. Call the Farm Bureau office at 815-232-3186 for an appointment or more information.

• A defensive driving class will be from 10 a.m. to 3 p.m.

Nov. 13-14 at the Farm Bureau office. Lunch will be provided.

Call the Farm Bureau office at 815-232-3186 for reservations or more information.

AYNE — A Stroke Detection Plus screening will be Wednesday, Oct. 24, at the Farm Bureau office. Tests include carotid artery, aortic aneurysm, peripheral vascular disease, and osteoporosis. Cost is $100, a savings of $35. Call 877-7328258 for an appointment.

HITE — A Life Line Screening program will be Tuesday, Oct. 2, at the Farm Bureau office. Tests include stroke/carotid artery, heart rhythm, abdominal aortic aneurysm, peripheral arterial disease, and bone density.

Cost is $149. Call 800-3241851 for an appointment.

W

W

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

iPad winner announced Abigail Coers of Chestnut in Logan County was the winner of an iPad from Illinois Farm Bureau after she recorded her name and email address at the iPad giveaway/email collection contest at the Illinois State Fair.

She reported last week that her grandmother, who has never used a computer, is using the iPad to play games and watch YouTube videos.

More than 200 people provided their email addresses at the IFB booth in the Commodities Pavilion at the fair.

Providing email addresses will allow Farm Bureau to keep members abreast of such things as pending legislation and member benefits.

Auction Calendar Thurs., Sept. 6. 157.779 Ac. Wildman Farm, KANKAKEE, IL. Soy Capital Ag Services. www.soycapitalag.com Fri., Sept. 7. 10 a.m. Knox Co. Land Auc. Kuntz Family Farm, GALESBURG, IL. Van Adkisson Auction Service, LLC. www.biddersandbuyers.com or vanadkisson.com Sat., Sept. 8. 8:30 a.m. Hazelhurst Consignment Auc. POLO, IL. Public Auction Service. topauctions247.com/paspolo or auctionzip.com Sat, Sept. 8. 9 a.m. Fall Consignment Sale. MURPHYSBORO, IL. Canning Auction Service. www.canningauctions.com or auctionzip.com Sat,. Sept. 8. 9 a.m. Livestock Eq and Machinery Sale. CONGERVILLE, IL. Sat., Sept. 8. 10 a.m. Bureau Co. Farmland. Herb Rumbold, Pat Pond, Wendy, Christian and Sharon Rumbold, MANLIUS, IL. Johnson Auction Service. www.biddersandbuyers.com keyword

Johnson or www.topauctions24-7.com Sat., Sept. 8. 10 a.m. Jersey Co. Land Auction. Ronald Hansen, JERSEYVILLE, IL. Jerry Joyce, Larry Derricks and Mark Pennell, Auctioneers.

Sat., Sept. 8. 9 a.m. Livestock Eq. and Machinery Sale. Reel Livestock Center, CONGERVILLE, IL. Mon., Sept. 10. 4 p.m. Real estate and personal property. Don L. Kren Estate, SPRINGFIELD, IL. Cory Craig, Auctioneer. www.corycraig.com Mon., Sept. 10. 6 p.m. Whiteside Co Land Auc. The Noah P. Hermie Estate, DEER GROVE, IL. Schrader Real Estate and Auction C., Inc. schraderauction.com Thurs., Sept. 13. 7 p.m. Land Auction. Betty Axelsen, Daniel Brookman and Wilbur Brookman, Jr., NEW LENOX, IL. Rosenboom Realty. www.rosenboomrealty.com Sat., Sept. 15. 10 a.m. Macoupin Co. Land Auc. Estate of Wm. E. Cromwell, BUNKER HILL, I L. Ahrens and Niemeier. www.a-nauctions.com

IFB energizing U of I student members

BY KAY SHIPMAN FarmWeek

Forget the proverbial BMOC (big man on campus). At the University of Illinois, there’s now FBMOC or Far m Bureau member on campus.

In August, Illinois Far m Bureau started its first collegiate Far m Bureau group as a student organization within the College of Agricultural, Consumer, and Environmental Sciences (ACES).

The new group is attracting attention.

Recently at a new-student event, the collegiate FB group drew interest from 75 freshmen and 53 upperclassmen students.

Mariah Dale-Anderson, IFB youth activities manager, credited the IFB Membership Action Team with recognizing a need to involve more young people in agriculture leadership.

“The Membership Action Team realized the demographic is changing and we need to make sure to provide for career leadership development” for young people who will be involved in the agriculture industry but not necessarily far ming, Dale-Anderson explained.

“We hope to get them (students) involved on an Action Team and in the Young Leaders while they’re collegiate FB members,” she said.

The collegiate FB group started at the U of I where Claire Benjamin, the 2012 IFB youth ambassador, attends college. Ben-

jamin is spearheading the collegiate FB group in Urbana this year, said DaleAnderson.

Current plans are to pilot test collegiate FB at the U of I and evaluate that program, then start a collegiate FB group at the next youth ambassador’s university or community college and evaluate that effort, Dale-Anderson said. By the third year, collegiate FB may be expanded to other universities and community colleges.

While collegiate FB is new in Illinois, other state Far m Bureaus, including Missouri, Florida, and Wisconsin, offer campus programs, according to Dale-Anderson.

In Urbana, the U of I group will meet monthly for different activities, including resume development and discussion of current issues. Already the group has elected officers and is planning agriculture awareness efforts and a Har vest-for-All food drive that would involve other student groups on campus.

In addition, U of I FB members, who join as associate members, will be matched with mentors who are members of the Champaign County FB Young Leaders and will work on activities with those Young Leaders.

U of I FB members also will be invited to the IFB annual meeting in Chicago and to the Young Leaders Conference in Bloomington-Nor mal.

FarmWeek Page 14 Monday, September 3, 2012

profitability USDA

Farm Service Agency Nine counties approved for ECP — Nine counties have been approved to implement the Emergency Conservation Program (ECP) due to severe drought, according to Scherrie Giamanco, executive director for the Farm Service Agency (FSA) in Illinois.

The approved counties are: Brown, Coles, Cumberland, Jasper, McDonough, Schuyler, Shelby, Vermilion, and Warren.

Qualified farmers may be eligible for cost-share assistance to rehabilitate farmland damaged by natural disasters and emergency water conservation measures in a severe drought.

“It is unknown if funding will be immediately available, but producers who are interested can begin making their cost-share request, and they will be notified as funds become available,” Giamanco said.

Fifteen other counties have requested ECP authority and their approval is pending. Those counties are: Adams, Bond, Cass, Clay, Effingham, Franklin, Gallatin-Hardin, Greene, Hancock, Mason, Sangamon, Scott, Williamson, and Woodford.

Farm program payment forms changing — This year brings several changes to the way FSA reports farm program payments to both the producer and the Internal Revenue Service (IRS).

In past years, IRS Forms 1099-G would be issued to show all program payments received from FSA, regardless of the amount.

Starting this year, farmers whose total reportable payments from FSA are less than $600 will not receive IRS Form 1099-G (Report of payments to producers), Giamanco said.

In addition, farmers who receive payments from more than one county will receive only one Form 1099-G if the total of all payments from all counties is $600 or more.

Giamanco advised farmers who receive less than $600 in combined payments to consult a tax adviser to determine if these payments must be reported on their tax return.

If the payments were subject to voluntary withholdings or subject to backup (involuntary) withholdings, a Form 1099-G will be issued regardless of the total amount of the payments.

The same changes will apply to farmers and vendors who normally receive IRS Form 1099-MISC from FSA. For more information, contact your county FSA office.

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

40 lbs.

Range Per Head $10.36-$46.50 n/a

Weighted Ave. Price $34.61 n/a

This Week Last Week 121,640 82,712 *Eastern Corn Belt prices picked up at seller’s farm Receipts

Eastern Corn Belt direct hogs (plant delivered) Carcass Live

(Prices $ per hundredweight) This week Prev. week $71.21 $80.09 $52.70 $59.27

Change -8.88 -6.57

USDA five-state area slaughter cattle price Steers Heifers

(Thursday’s price) (Thursday’s price) Prev. week Change This week 121.00 120.82 0.18 121.89 120.71 1.18

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 139.96 140.18 -0.22

Lamb prices Slaughter Prices - Negotiated, Live, wooled and shorn 100-140 lbs. for 90-130 $/cwt. (wtd. ave. 112.12).

Export inspections (Million bushels) Week ending Soybeans Wheat Corn 08-23-12 17.4 18.9 14.5 08-16-12 21.6 23.4 22.0 Last year 8.4 24.0 30.1 Season total 1350.2 232.8 1489.2 Previous season total 1481.6 276.7 1769.6 USDA projected total 1315 1025 1700 Crop marketing year began June 1 for wheat and Sept. 1 for corn and soybeans.

Corn supply-demand balancing act continues

BY AARON CURTIS

The U.S. just finished another great showing at the Olympics in London. While there were many great stories, much of the coverage in the first week involved the women’s gymnastics team.

Between Gabby’s smile and McKayla’s scowl, it made for some great Aaron Curtis tape-delayed television. One of the many attributes of a world-class gymnast is flexibility — which also has become increasingly important when dealing with the grain markets.

Concern about production has been the main driver of the corn market since midJune.

December corn futures have rallied above $3 in that time frame. After mostly sideways trade during the first part of August, recent crop tours have reignited the concern about yield.

In the August crop report, USDA cut corn yield to 123.4 bushels per acre (bpa).

This is a far cry from the initial “trend” yield of 166 bpa.

Total production has dropped 4 billion bushels over the last two USDA reports.

As prices move higher, the market focus is shifting from supply to demand.

Some kinks in the demand armor already are showing up.

Corn export demand has struggled, averaging just 6 million bushels of new sales since May 1.

U.S. corn sales have reached USDA’s target, but only after having that target reduced by 150 million bushels since May. Corn used for ethanol also has faded as margins slipped early in the summer.

Current weekly numbers suggest that USDA likely will need to adjust its monthly numbers lower.

The toughest demand segment of all is feed. Liquidation in the cattle industry continues as the combination of high feed costs and poor pasture conditions are too much for some producers to overcome.

Sow slaughter is above fiveyear average levels, and dairies, especially out West, are struggling to continue milking due to record feed costs.

That being said, the objective of the futures price is to slow demand enough to ensure pipeline stocks. That price

could occur tomorrow, or it could be next spring, which is why producers need to stay flexible.

The last six years have shown a wide variety of ending stocks figures.

Each year, however, the final number has grown from the lowest point in that year, with many years

showing substantial growth.

Will it happen again this year? Could production stabilize/grow and demand contin It has happened before, so plan accordingly.

Aaron Curtis is MID-CO COMMODITIES’ commodity risk consultant. His email address is acurtis@mid-co.com.

Milk posts back-to-back gains

The Class III price for milk adjusted to 3.5 percent butterfat for the month of August was $17.73 per hundredweight, $1.05 higher than the previous month and a $2.50 gain over the past three months.

The strong price increase reflects lower milk production as a result of the hot weather. Now that school is in session, fluid milk demand will come back strong, and that helped firm up prices.

Silage harvest is mostly wrapped up in the southern twothirds of the state, with only the northernmost counties yet to complete harvest.

Reports of very light forage yields are common, with little to no corn on the stalk. Additional corn or protein will have to be added as this year’s silage is fed to dairy cows.

Page 15 Monday, September 3, 2012

PROFITABILITY Corn Strategy

CASH STRATEGIST

China soybean demand slowing?

The potential soybean demand picture for China got a little more uncertain last week. The Chinese National Grains and Oilseed Information Center (CNGOIC), indicated China is holding 22 million metric tons (814 million bushels) of soybean stocks.

That was significantly more than the 10 million metric tons (mmt) held in government inventories that has been talked about over the past couple of weeks. But the popular opinion is that it probably includes this year’s 13 mmt crop, putting stocks closer to 9 mmt. Given recent Chinese government inventory auctions, that number fits with the 10 mmt number, leaving some for port stocks.

Since prices started going up in July, the government has auctioned off 1.8 mmt of inventories. There’s talk the Chinese may auction off another 2 mmt yet this fall.

Just as important as the stocks number was an accompanying story forecasting imports through the end of the year (shown). CNGOIC put September and October imports at 3 mmt each, with 4 mmt for November and 4.5 mmt for December. Over the

next four months, that represents a 24 percent decline from the same period last year..

Meanwhile, new-crop purchases already on the books, 11.2 mmt, are 23 percent ahead of last year and 26 percent ahead of two years ago. And purchases could be larger than that if one includes a part of the 4.6 mmt sold to “unknown destination,” which are larger than the last two years. There’s also 1.4 mmt of old-crop sold but not yet shipped, larger than it has been the last two years as well.

But the real question underlying the situation is how strong is the Chinese demand for protein.

There are reports some small farmers have started liquidating breeding herds with the high feed costs hitting their bottom line. They account for 30 percent of the Chinese pork production.

Combining their “stocks” and purchases from us already on the books, one could argue they already have their needs mostly covered before the new South American crop arrives.

The key to gauging Chinese demand this year is going to be the pace of shipments. Two years ago, the U.S. started shipping 50 to 60 million bushels a week in mid-October, most of which went to China. If shipments aren’t close to that this year, there’s reason to think the Chinese import needs may be overstated.

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Cents per bu.

ü2012 crop: The December contract’s inability to challenge $8.23 points toward the trend turning down into the 40-week low. We continue to think having 70 percent of a realistic/conservative yield priced is a good marketing strategy, but don’t exceed your insurance guarantee. ü2013 crop: Sales should have been increased to 20 percent when December 2013 traded above $6.50. Use rallies for catch-up sales. vFundamentals: Attention last week was on Hurricane Isaac. There is concern about the heavy rains affecting standability because of poor stalk quality. Still, the rains not only started the process of replenishing depleted soil moisture but also will push more water into the river system and improve transportation. Evidence of demand-rationing continues, with weekly export sales again failing to meet expectations. Clues from the livestock sector are still sketchy.

A cargo of Brazilian corn was unloaded in North Carolina.

Soybean Strategy

ü2012 crop: Soybean futures pushed to new highs last week, but didn’t have much enthusiasm at the time.

Even though higher prices are possible later, there’s no guarantee. We’d use current levels for catch-up sales. But make sure you don’t exceed your insurance guarantee. ü2013 crop: Use rallies above $13.50 on November 2013 soybean futures for catch-up sales. vFundamentals: Unlike corn, uncertainty persists on both sides of the fundamental structure for soybeans. Still, we believe supply news may have peaked, leaving traders to focus more on demand. And from a supply perspective, recent Corn Belt rains may have improved production potential slightly, although western areas haven’t had much moisture. Chinese buying remains behind demand talk, but there are questions about how strong that demand might be in the coming year.

And with harvest just ahead,

the Chinese may wait on a “harvest dip” to buy more.

Wheat Strategy

ü2012 crop: If the Chicago December contract closes below $8.70, it could signal the start of a new down trend.

Use rallies to $8.90 on Chicago December futures for making catch-up sales. ü2013 crop: Make catch up sales with Chicago July futures trading above $8.50. vFundamentals: Recent strength in wheat prices was linked to speculation about restricted exports from Russia.

At week’s end, Russia con-

firmed it does not have any intentions of limiting grain exports at this time even though the size of this year’s crop is smaller than in 2010.

This left the wheat market with little positive news to trade.

Both domestic and international supplies remain more than adequate to meet demand.

Going forward, the trade is keeping an eye on conditions in Australia, as it has been abnormally dry. The remnants of Isaac will lay down moisture for planting the soft red winter wheat crop. And, slowly, moisture conditions in the Southern Plains are improving.

FarmWeek Page 16 Monday, September 3, 2012

perspectives

GAME CHANGE How to break the vicious economic cycle The unemployment rate is high, above 8 percent for the fourth year in a row.

To bring the unemployment rate down, the economy has to grow more than 2.5 percent per year as measured by inflation-adjusted gross domestic product (GDP).

Jobs must be created for the unemployed and for all those graduates entering the labor force each year. The GDP LARRY grew at a 1.5 percent DEBOER annual rate in the second quarter. Not enough.

One reason GDP isn’t growing fast enough is because consumers aren’t spending. Household spending is by far the largest part of GDP, more than 70 percent of the total.

Consumer spending grew only 1.5 percent in the second quarter, too. If consumers don’t spend, GDP doesn’t grow, and unemployment doesn’t fall.

But one reason consumers aren’t spending more is that unemployment is high!

It’s not a good idea to buy that new fridge if you fear for your job. If unemployment is high, consumers won’t spend, so GDP won’t grow, so unemployment won’t fall, so consumers won’t spend, and so on. It’s a vicious cycle.

There are a couple of traditional ways to get out of this cycle.

Monetary policy is one. The Federal Reserve expands the money supply and reduces interest rates, which causes households and businesses to borrow

and spend more.

The added spending gives businesses a reason to produce more goods and services and hire more employees.

Unemployment goes down, consumer spending gets a boost, and the economy takes off. Vicious cycle broken.

The Fed has tried and (probably) kept the recession from getting worse. But now interest rates already are really low.

The Fed’s policy rate (the federal funds rate) is near zero, as low as it can go, and corporate bond rates and mortgage rates are at record lows.

Will still lower rates help? Plus, an expanded money supply could threaten inflation. A little inflation might actually help, but some policymakers fear worse than that. It’s not clear that the Fed will step in, and it’s not clear how much help it would be if it did.

Fiscal policy is another traditional way out of a vicious cycle. Congress and the president agree to cut taxes and increase federal spending. Businesses respond by increasing production and hiring. Unemployment falls, and consumers increase their spending some more. Again, vicious cycle broken.

We tried fiscal policy a couple of times. We cut taxes during the Bush administration in 2008 and passed the stimulus package during the Obama administration in 2009.

Again, these measures (probably) kept the recession from getting worse. But now our federal budget deficit is large, and our national debt is rising.

Congress is so divided that more stimulus seems out of the question. In

fact, unless Congress acts, we’re scheduled to do the exact opposite in January 2013, cutting spending and raising taxes. If we jump off that “fiscal cliff,” we’ll be back in recession.

How about trade?

Maybe the rest of the world will buy more of our exports. Businesses would increase production and hiring, unemployment would fall and consumers would spend.

That’s not likely. Europe is on the edge of recession.

China’s growth is slowing from “blistering” to merely “ridiculously fast.” Our exports aren’t likely to grow much faster.

So how will the vicious cycle be broken? Maybe like this: Young people grow up and form families; they work for awhile and want to buy houses. Gradually, they buy up that big supply of houses left over from 2006. Gradually, the price of housing quits falling, stabilizes, and then starts rising. Rising home prices make households feel wealthier, and gradually they begin to spend.

Households pay down the big debts they took on in the 1990s and 2000s.

Gradually, their debt payments fall as a share of their incomes. When their debts are finally low enough, their borrowing and spending begins to

grow again, gradually.

Both of these things are happening.

We’re down to a five-month supply of homes, the lowest level since 2005.

Home prices appear to be turning around. Debt payments as a share of income have been falling since 2007 and are now as low as they were in 1996.

How will we break the vicious cycle?

Gradually. We’ll wait it out.

Larry DeBoer is a professor of agricultural economics at Purdue University, West Lafayette, Ind. His email address is ldeboer@purdue.edu.

Looking on the positive, negative sides of the economy

I asked our investment crew if there was anything positive we could discuss. The first responder asked me if I was kidding.

When assured that I was not, the following is what I received: • The Eurozone has not collapsed.

• U.S. sovereign debt has not been downgraded again.

• The U.S. won more gold and total medals BRUCE than any other FINKS country at the Olympics.

• Ten-year Treasury yields rose from 1.39 percent a few weeks ago to 1.75 percent recently.

• Stocks advanced about 3.5 percent in the past month and are up about 7.9 percent year-todate.

• There is a high level of confidence that central banks around the world will institute monetary stimulus sometime this fall.

Granted, the third point has nothing to do with the economy, but it helps give Americans a warm and fuzzy feeling.

On the other hand, I can think of a lot of items on the negative side: • Europe continues to avoid dealing with its most pressing

problem — too much debt and too little income with which to service it.

• European banks are heavily leveraged and facing real solvency issues.

• The Chinese economy is slowing down and may drag other economies down with it.

• The U.S. economy, while doing better than many other economies, is not immune to what happens overseas.

• U.S. stocks are approaching prices last seen in October 2007, which marked the peak in prices and the beginning of the financial crisis of 2008.

• The fiscal cliff, which consists of the spending cuts and tax increases that will go into effect on Jan. 1, 2013, if Congress does nothing to stop it.

• Financial gridlock, which prevents businesses from making decisions and investments that move them into the future.

• Political gridlock, which prevents legislators from resolving conflicts with the other political parties and often results in financial gridlock.

• There is a high level of confidence that central banks around the world will institute monetary stimulus sometime this fall.

Please note that monetary stimulus is shown as both a positive and a negative. For those

with a Keynesian view of economics, more stimulus is thought to help economies by providing a boost to consumer spending.

For the rest of us, an economy that is supposedly three years into a recovery to still need monetary stimulus is not very reassuring.

There are many more negatives that come to mind, but enough is enough. What is infinitely more important is: What could be done to solve some of these issues and get world economies moving forward again?

We believe that the largest problem facing most non-emerging-market economies is the lack of income growth of workers.

Real median household income has declined since 2000.

Central banks around the world got the idea that if assets grew in value, that would offset the lack of growth in incomes, and people might spend this appreciation in the value of their assets.

The problem with the methodology of consuming assets is twofold: To spend an asset, you must either: • Sell it, which if done en masse will stop further asset appreciation, or • Borrow against it, which increases overall debt loads.

Granted, corporate profits have advanced smartly since the crisis of 2008, but most of the advance has been the result of cost cutting, not increases in total revenues.

Unfortunately, most of the cost cuts came from labor, which explains why household income has shrunk to current levels. Also, increases in income that result from cost-cutting are not sustainable and will be difficult to reproduce in the future.

All the productivity we’ve heard about for the past 15 years has benefited corporate America, but not American workers.

Until we figure out how to get workers involved in the economic recovery, we fear that any recovery based on productivity or cost-cutting will be weak and unsustainable.

Bruce Finks is vice president for investments with Country Financial.

“I blame most of it on my milk going bad.”