FarmWeek September 17 2012

50 DAYS REMAIN UNTIL THE NOV. 6 ELECTION

the number oF farm accident deaths in Illinois last year was the lowest in 30-plus years. But the object of this farm safety week is to reduce the number even more. ......8

Monday, September 17, 2012

AgriCulture students enrolled in record numbers at Western Illinois University in Macomb this year for the second consecutive year. .....................................................11

Two sections Volume 40, No. 38

Call at the Capitol: ‘Farm bill now!’

BY MARTIN ROSS FarmWeek

Last week, Farm Bureau and allied groups whipped up a Washington crowd to call for a “farm bill now!”

On Thursday, Rep. Bruce Braley (D-Iowa) filed a petition aimed at forcing a September vote on a comprehensive fiveyear farm bill, arguing “games are being played in Washington,” particularly among House leaders.

A majority of House members must sign the petition to cause an immediate vote. Farm state lawmakers were taking an “any-which-way-you-can” approach to courting a needed 218 votes, an aide to Colona Republican Rep. Bobby Schilling last week told visiting Illinois Farm Bureau Leaders to Washington.

Meanwhile, the atmosphere at last Wednesday’s Farm Bill Now! rally at the U.S. Capitol was energized, eclectic (some 80 groups support the effort), and, in American Farm Bureau Federation President Bob Stallman’s case, exasperated.

The rally, which also featured bipartisan Senate/House Ag Committee leaders, was designed to “emphasize and reemphasize the necessity of passing a farm bill,” Stallman

told FarmWeek prior to kicking off the event.

“Farmers deserve some certainty,” Stallman insisted. “The current bill expires Sept. 30.

Farmers don’t just wake up one morning and decide what to do.

We have to do a little bit of planning — a lot of people may not realize that.

“Congress knows when the farm bill expires, and it’s up to them to tell us what happens next. Tell us what the policy’s going to be, tell us what the bill’s going to be, and pass the bill.”

A Farm Bureau-supported measure passed out of the House Ag Committee in July, following Senate passage of a similar plan that proposes far smaller cuts in food stamp spending. Representative Schilling stressed the need to recruit “some big hitters” in order to force a House vote this week.

Illinois lawmakers fear the farm bill could face an even greater House challenge if brought up in a post-election lame duck session already dedicated to tax debate.

Schilling stressed farmers’ needs and contributions —“If agriculture had been a weak part of the economy over the past couple of years, where would

See Farm bill, page 4

Flanked by leaders of farm, conservation, consumer, and other groups, National Corn Growers Association President Garry Niemeyer of Auburn leads a chant of “farm bill now!” at a rally last week near the U.S. Capitol.

Respective American Farm Bureau Federation and National Farmers Union presidents Bob Stallman and Roger Johnson led the rally, demanding September farm bill passage. “We continue to be more productive and innovative,” Niemeyer told rally participants. “But we need to have some certainty about how we plan our business.” (Photo by Martin Ross)

USDA trims its crop yield, price estimates

BY DANIEL GRANT FarmWeek

Periodicals: Time Valued

we have been?” he asked IFB leaders.

If the 2008 farm bill expires Sept. 30 without the promise of a new bill, the U.S. defaults to old, “permanent” ag legislation and “we turn back the clock in rural America to 1949,” Senate Ag Committee Chairman Deb Stabenow (D-Mich.) warned rally participants.

That means outdated “government planting restrictions,” costly price supports, and annual ag disaster requests vs. current Senate-House proposals that would trim $23 billion to $35 billion in long-term ag spending, she said.

“It’s absolutely crazy to get even close to something like this,” Stabenow noted. “We have, in the Senate, passed a bipartisan farm bill that includes disaster assistance fully paid for within the savings in our bill.”

She hailed similar bipartisan House Ag Committee approval of livestock disaster provisions, and indicted House Speaker John Boehner (R-Ohio) for refusing to “back the chairman of the committee (Rep. Frank Lucas ROkla.) to get that done.”

USDA last week trimmed its yield and production estimates for the droughtparched corn and soybean crops.

Corn production was lowered 52 million bushels to FarmWeekNow.com 10.7 billion View comments about grain bushels, marketing this fall at with an FarmWeekNow.com. average yield nationwide of 122.6 bushels per acre (down 0.6 of a bushel from the August estimate).

If realized, U.S. corn production would be the lowest on record since 2006 while the average corn yield would be the lowest since 1995.

U.S. soybean production was forecast to total 2.63 billion bushels (down 2 percent from the August estimate and 14 percent from last year) with an average yield of 35.3 bushels per acre (down 0.8 of a bushel

from the August estimate).

The crop production estimates, while tweaked to the downside, were above trade expectations. Crop prices, as a result, are expected to trade sideways to lower, according to market analysts.

“What we’re seeing in the corn market makes the numbers bearish,” said Nick Klump, AgriVisor risk management specialist. “The production level is higher than expected.”

Higher-than-expected corn production, including an early start to harvest, combined with lower corn usage (2011/12 feed and residual use was lowered by 150 million bushels while 2012/13 corn exports were cut by 50 million bushels) led to an overall jump in corn supplies.

Those supplies for 2012/13 were increased by 108 million bushels. Ending stocks for 2012/13 were raised by 83 million bushels to a total of 733 million bushels.

FarmWeek on the web: FarmWeekNow.com

“That’s a pretty big bump in ending stocks,” Jonah Ford, senior analyst at Ceres Hedge, said during a conference call hosted by the Minneapolis Grain Exchange. “(The report) was modestly bearish across the board.”

USDA lowered its season average farm price forecasts by 30 cents for corn and wheat to a range of $7.20 to $8.60 per bushel for corn and $7.50 to $8.70 for wheat.

“It appears the corn trading range the past month and a half finally ran out of steam,” Klump said.

Ford advised livestock producers and other end-users to lock in feed purchases on the price breaks. “I think we’re probably in a sideways to possibly lower (price) range for awhile,” he said. “I’d be very well hedged heading into next year.”

USDA left its season average price range estimate for soybeans unchanged at $15 to $17 per bushel.

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

FarmWeek Page 2 Monday, September 17, 2012

Quick takes LFTB MAKER SUES ABC NEWS — Beef Products Inc. (BPI), the maker of lean finely textured beef (LFTB) has filed a defamation lawsuit against ABC News.

The South Dakota-based company claims in its lawsuit that ABC News misled consumers into believing LFTB, which was dubbed “pink slime” in news coverage, is unhealthy and unsafe.

The company is seeking $1.2 billion in damages for “false and misleading and defamatory” statements against LFTB. BPI attorney Dan Webb said the news reports had an enormous impact on the company. BPI reported it lost 80 percent of its business in 28 days. It was forced to close three of its four U.S. plants and lay off more than 650 workers.

Some of its customers have returned, but BPI said it still hasn’t restored its customer base to the point where it can rehire former employees.

MCDONALD’S CALORIE COUNT, FOOD CHANGES — Consumers will learn the calories in their McDonald’s burgers and fries this month, company executives announced last week.

At McDonald’s restaurants across the country, new menu boards will provide calorie information.

Many customers may not realize they also have been eating less salt at the Golden Arches. McDonald’s has reduced sodium in its core menu items by more than 11 percent since February 2011.

The company’s first nutritional report published last week noted McDonald’s is testing more seasonal fruits and vegetables and offers fruit and vegetable choices in Happy Meals.

ILLINOIS NETS GRANT FOR CHP — Illinois received a grant from the National Governors Association to increase use of combined heat and power (CHP) units in nine sectors, including food. Currently the state has 139 CHP units.

Among the newer CHP installations is a 3-megawatt CHP system at the Illinois River Energy ethanol plant at Rochelle. The Illinois Department of Commerce and Economic Opportunity also provided assistance to build CHP plants at a Stephenson County dairy farm and at wastewater treatment plants in Danville, Decatur, Downers Grove, and Fox Lake. `Under conventional CHP, fuel is burned in a prime mover, such as a gas turbine, and the waste heat is recycled to provide heating, cooling, and/or dehumidification.

Under Waste Energy Recovery, the fuel is burned in a furnace or boiler to provide heat to an industrial process, with excess heat “recycled” to generate electricity on-site.

(ISSN0197-6680) Vol. 40 No. 38 September 17, 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

environment

Progress, practices focus of gulf hypoxia task force the low flow rate of the Mississippi River and the drought in the river basin.

A national gulf hypoxia task force last week However, the measurement was taken before highlighted the progress being made to keep Hurricane Isaac stirred up the water and caused crop nutrients on fields and out of the Missisan increase in the oxygen in the zone. sippi River and the Gulf of Mexico, an Illinois During the meeting, researchers highlighted representative told FarmWeek. more than 670,000 nutrient data records from “In years past, we debated 12 states, including Illinois. science or argued over goals One goal will be to link the ... now we’re more focused on data points “and better what we’ve accomplished and ‘ We ’r e t r y i n g t o b e define where we are” in how we can collaborate to smart with the limited keeping nutrients on fields, accomplish even more,” said Goetsch said. r e s o u r c e s w e h ave Warren Goetsch, head of IlliIowa proved a benefia n d w i t h t h o s e w e cial meeting location nois Department of Agriculture’s (IDOA) environmental because researchers there expect to have.’ programs. could explain their study of Hypoxia is a depletion of available conservation pracoxygen in the water that can — Warren Goetsch tices and the impact they affect aquatic life. have on nutrients, accordIllinois Department Goetsch, acting Illinois of Agriculture ing to Goetsch.

Agriculture Director Bob Illinois’ Keep it for the Flider, Marcia Willhite of the Crop (KIC) by 2025 camIllinois Environmental Protection Agency, and paign to improve nutrient use was highlighted.

Dennis McKenna, a retired IDOA employee, Also mentioned was new state legislation that attended the task force meeting in Des Moines, created a nutrient research and education counIowa. cil.

The meeting included a technology demonGiven the size of the Mississippi River stration on an Iowa research farm. Goetsch said Basin, more thought is being given to targeting the conservation show-and-tell helped federal conservation practices in locations that will agency representatives and others better under- achieve the greatest results, Goetsch noted. stand the tools available to keep nitrogen and “We’re trying to be smart with the limited other nutrients in place. resources we have and with those we expect to As anticipated, the size of the gulf hypoxia have,” Goetsch said. “We’re making progress, zone was smaller this year in part because of but this is not going to be solved overnight.”

BY KAY SHIPMAN FarmWeek

RMA official: Claims audit process could be adjusted

BY MARTIN ROSS FarmWeek

The drought of 2012 unfortunately has raised the bar on crop damages. USDA’s Risk Management Agency (RMA) will take that into account, an agency official told Illinois farmers last week.

If a loss amount is equal to or greater than $200,000 per crop per county per claim type (such as a production loss claim), RMA normally requires a three-year Actual Production History audit before the claim can be settled.

Given this season’s drought conditions, a higherthan-usual number of such claims is possible or even probable.

Once an audit is ordered, farmers must submit a Farm Service Agency 578 report of acreage form for their operation and hard-copy production evidence for insured crops, such as delivery sheets, sales records, and/or seed purchase records.

However, Michael Alston, RMA deputy administrator

for insurance services, told Illinois Farm Bureau Leaders to Washington his agency may re-evaluate audit requireMichael Alston ments if an unusually high volume of $200,000-plus claims emerge this fall. At this point, fewer than 5 percent of claims submitted nationwide trip the audit trigger, Alston said.

“We’re monitoring things, and if we see a huge spike, then we could make some adjustments,” he told FarmWeek. “We’re looking at this state-by-state. If folks in Illinois are experiencing a major tick upwards, we can adjust that.”

As of last Tuesday, some $1.4 billion in spring crop claims had been paid, including roughly $29 million in Illinois losses, though Alston noted “the claims are just starting to roll in.”

Last year, under far less severe conditions, insurers

paid a total of $11 billion in largely early-season claims — $2.3 billion in Illinois.

Audit paperwork requirements will remain the same regardless of whether RMA scales back on audits, Alston said.

At the same time, RMA’s Springfield regional office plans to focus on quality loss claim eligibility requirements for Illinois corn growers whose crop is susceptible to mycotoxin.

Alston warned farmers who suspect fungal contamination in their grain to send samples to an approved testing facility rather than placing the suspect corn in storage and invalidating a prospective claim.

A list of regional test facilities is available at {www.rma.usda.gov} (click on the Springfield office).

Beyond claims eligibility, Alston noted the tendency for aflatoxin to “take over” grain inventories in storage.

“We don’t want anyone to get caught off guard dealing with aflatoxin,” he said.

Page 3 Monday, September 17, 2012 FarmWeek

government

IFB sees post-election push to prevent ‘big hit’

BY MARTIN ROSS FarmWeek

Farm groups fearing a potentially “big hit” in 2012 hope crucial tax legislation can fly in a lame duck session.

American Farm Bureau Federation’s Pat Wolff sees Congress moving after November elections to extend soon-to-expire tax provisions, including the $5 million individual estate tax exemption.

Both Democrats and Republicans agree to the need to extend tax relief measures, “but they disagree over who should get those cuts,” Wolff told Illinois Farm Bureau Leaders to Washington last week.

If the estate tax exemption and an accompanying 35 percent tax rate expire Dec. 31, farm families will face new tax liability for estates valued at more than $1 million, at a 55 percent tax rate.

Further, capital gains and income tax rates would jump and Section 179 expensing of depreciable assets would drop back to a $25,000 deduction limit.

That’s a “big hit” for Illinois farm families, IFB Government Affairs Director Mark Gebhards warned.

“There’ll be a huge tax increase on the first of the year” unless Congress acts,

Wolff told FarmWeek.

“Farmers have a huge amount at stake in whether or not Congress gets the job done before the end of the year. We need this tax bill done in December — no excuses, no finger-pointing.”

Lawmakers could wait for the new Congress to vote a retroactive extension of relief measures, but Wolff argued that approach is “very risky and not very good policy.”

The Senate Finance Committee cleared a tax “extenders” package that did not address the estate tax but did include a retroactive two-year extension of the $1-per-gallon biodiesel tax credit.

The estate tax as well as alternative minimum tax measures designed to relieve tax liability for middle income earners are expected to make it into a lame duck bill.

U.S. Rep. Bobby Schilling, a Colona Republican and former estate tax planning consultant, agreed to the need to quickly address the “death tax,” calling a return to pre-2002 estate tax levels under today’s economics “unbelievable.”

Meeting with Schilling, Henry County Leaders Deve Detloff Jr. and James Ufkin stressed the “social implications” of estate tax liability, as families debate the cost of

keeping farmland. Estate sales reverse conservation gains if “that land doesn’t stay in agriculture,” American Farmland Trust President Jon Scholl told the congressman.

“We lose an acre a minute, anyway,” Scholl said.

The biodiesel credit expired last Dec. 31. National Biodiesel Board spokesman Ben Evans told FarmWeek his industry has not yet seen the “calamity” that occurred when the credit disappeared in 2010, thanks to demand generated by the Renewable Fuel Standard (RFS2) (see page 7).

But individual operations are “really struggling to keep things going” amid uncertainty over credit continuation and RFS2 biodiesel goals for 2013, Evans said.

“Another year of this is really going to be hard on our members,” he said. “We built a lot of growth in momentum last year. Plants were hiring people, buying new equipment, buying loads of feedstock. It was clear the policies were working. But things started going flat this year.

“There are things Congress really has to do, needs to do before the end of the year to avoid real economic damage in a number of sectors. We believe the biodiesel tax incentive is one of those things.”

Quinn unveils new ag, tech ed partnerships $10 million awarded for career learning

BY KAY SHIPMAN FarmWeek

Illinois is investing more than $10 million of publicprivate money to prepare students for careers in science, technology, engineering, and math, Gov. Pat Quinn said Friday.

“We want all our students in every district ... to be strong in those subjects. A lot of businesses, and that includes agriculture, are Gov. Pat Quinn really involved in this” initiative, Quinn said in an RFD/FarmWeek interview.

The governor then joined state education officials and industry representatives at a news conference in Chicago’s Merchandise Mart.

The state is launching learning exchanges in manufacturing, health sciences, information technology, and research and development. A fifth will focus on ag, food, and natural resources.

Learning exchanges promote career education with

curriculum, career exploration, work-based learning, student groups, and internships or similar job experiences.

Friday, three additional sectors — energy, finance, and transportation and distribution — received money to plan learning exchanges.

Quinn said major Illinois agribusinesses, including John Deere and Archer Daniels Midland, always seek skilled workers, and his goal is to prepare Illinois students for those jobs.

Quinn recalled how Sam Allen, Deere’s chief executive officer, explained that modern combines contain more technology than the first space ship. Much science, technology, and math are part of careers related to agriculture and natural resources, the governor added.

Over the past year, agriculture education and the ag industry have prepared for learning exchanges by updating career education materials, outlining the classes needed for different ag careers, and developing new materials and partnerships.

The initiative is being funded with $2.3 million in federal Race to the Top funds and $8 million from private industry.

Constitutional amendment coming on the November ballot Illinois voters will determine the fate of a proposed amendment to the state Constitution in November.

The proposed amendment would require a three-fifths voter approval, or a super majority, to allow the enhancement of pensions by any government body, according to Kevin Semlow, Illinois Farm

Bureau director of state legislation. Currently, IFB does not have a position on the measure.

The Illinois General Assembly voted to put the proposal before voters before legislators adjourned the spring legislative session.

If approved by voters, the super-majority requirement would apply to the General

Assembly and all local units of government and school districts.

The proposal specifically defines pension enhancements as adding to employees’ base pay with time off, bonuses, incentives, or other compensation. Salary or wage increases would not require the threefifths approval.

State law requires every Illinois mailing address to receive

a summary of the proposed amendment with pro and con information.

Approval of the proposed amendment will require a favorable vote by three-fifths of voters who cast a vote on the proposed amendment or a majority of those who vote in the election.

Illinois voters have approved few constitutional amendments, Semlow noted.

Illinois Crop Improvement names Miller new CEO The Champaign-based Illinois Crop Improvement Association this month named Douglas Miller as the company’s chief executive officer.

Miller joined Illinois Crop in 1994 as a greenhouse supervisor. More recently he served as the company’s Douglas Miller seed technology manager and business

development director.

“I am pleased to be leading the Illinois Crop Improvement Association as it continues to expand and build upon its core values and expertise,” Miller said.

Miller will assume full responsibilities on Jan. 1, 2013.

Dennis Thompson, who is retiring, will continue to serve as CEO in the interim and will assist with the transition.

Thompson joined Illinois Crop in 1996 after working 20 years in the University of Illinois crop sciences department.

“By luck of the draw I started at Illinois Crop the first year commercialized Roundup Ready beans were planted,” Thompson told FarmWeek in a phone interview from the company’s research farm in Puerto Rico.

“Biotech has changed ag globally. It’s been an exciting period in the history of ag.”

Illinois Crop Improvement Association’s core work is the certification of seed. It provides seed testing and seed certification services.

The company under Thompson’s leadership expanded its role and collaborated with other groups; it received grant money for research projects to work on commodities such as high-oil corn, extractable starch, and wheat kernel hardness; and it expanded its third-party, seed research and development farm in Puerto Rico.

Illinois Crop also has exclusive agreements with Monsanto to work on some of the traits in that company’s product line.

Since the 1970 Constitution became effective, more than 900 amendments have been proposed in the state legislature.

Of those, only 16 were put on the ballot by lawmakers. A voter initiative put one proposal on the ballot.

Of the 17 proposed amendments put before voters, only 10 were ratified, according to Semlow. — Kay Shipman

FarmWeek Page 4 Monday, September 17, 2012

goverNmeNt

California GMO labeling vote spurs Midwest concern

BY MARTIN ROSS FarmWeek

Once again, California is at an epicenter of the farm and food industry debate, as West Coast voters mull a GMO labeling proposal on the fall ballot.

Proposition 37 would require mandatory labeling of foods that contain GMO ingredients. If passed in November, food manufacturers marketing in California would have 18 months to add that information to their ingredient lists.

Just as California Proposition 2 in 2008 set the stage for statewide poultry industry housing restrictions and similar proposals across the nation,

Illinois Corn Growers Association (ICGA) warns Prop 37 could “end up dictating what happens in other parts of the country.”

California Farm Bureau Administrator Rich Matteis noted a number of county and municipal anti-GMO proposals have surfaced across the state in recent years, though previous ballot initiatives were defeated in Humboldt, Butte, Sonoma, and San Luis Obispo counties.

Prop 37 supporters, including organic producers, argue the issue is one of consumer choice, and that consumers would reject foods with GMOderived content if products

Above, retiring U.S. Rep. Jerry Costello, left, a Belleville Democrat, chats with Illinois Farm Bureau Leader to Washington Mike Campbell of Madison County during last week’s Leader round of Capitol Hill office visits. Below, Colona Republican Rep. Bobby Schilling, right, accepts an American Farm Bureau Federation Friend of Farm Bureau award from Leaders Deve Detloff Jr., center, and James Ufkin, both of Henry County.

(Photos by Martin Ross)

were labeled so.

That’s despite currently widespread U.S. production of biotech corn and soybeans used in key food ingredients and, according to Matteis, the basic principle that “We don’t put warning labels on food — either it’s safe or it’s not safe.”

In the end, the initiative would do little to promote consumer choice but would force tough, costly choices across the food chain, on a national as well as state level, he advised.

Farmer-suppliers would be required to document that they do not raise GMO crops. Grocers would face new legal liabilityand that liability could extend down the food chain to growers as well..

“Obviously, with the labeling requirement, grocery manufacturers would have challenges in distribution,” Matteis told FarmWeek. “They’d have one set of labels for California and another for somewhere else. Many times, food products move out of a distribution center to a number of states, so it poses some commerce challenges from that standpoint.

“There’s a full regulatory regime that’s protective of food safety and the environment. We have multiple federal agencies that deal with these issues,” said Matteis. “We argue that if folks do not want to buy GMO, they can easily do that by buying organic and/or by buying products that are labeled as being ‘GMO-free.’

There are many of those products on the market now — there is the ability for people to make choices.”

Prop 37 would further complicate food distribution and marketing by restricting use of the word “natural” to describe food products, seemingly prohibiting processed foods from carrying that label, regardless of content.

If Prop 37 had a negative impact on consumer buying choices, that would “put a pall on the technology in general” and potentially deprive California growers of important future production “tools,” Matteis suggested.

He emphasized the role of GMO crops in reducing pesticide use —a key consideration for a self-proclaimed green state.

ICGA, meanwhile, is posting a series by University of California researcher Steve Savage, “Six More Good Reasons To Vote No on California Prop 37,” on its website {www.ilcorn.org}.

Rallying around policy: ‘We need a farm bill now’ Congressional leaders joined crop, livestock, conservation, nutrition, and allied groups at the U.S. Capitol reflecting pool last week to lead the call for a “farm bill now!”

Here are some of their thoughts: “There’s no reason that this farm bill can’t get passed by the House and get done in a conference committee. You just have to want to get it done. That’s it. The political will to get it done — that’s all this is about right now.”

U.S. Senate Ag Committee Chairman Deb Stabenow (DMich.)

“You have to get out there and get this grassroots effort going — get these calls and emails and letters out to these members of Congress and put the heat on them. If you don’t, we’re going to end up getting dragged into next year. And I’ll guarantee you, there is no good outcome of this situation if we get into next year.”

U.S. House Ag Committee Ranking Democrat Collin Peterson (D-Minn.)

“This is my third farm bill in my time in Congress. It’s more important now than it’s ever been because we’ve never experienced the weather our nation is experiencing in such a broad way in so many places and so severely for so long.”

Senate Ag Committee member Jerry Moran (R-Kan.) “Many of (Farm Bill Now’s 90-some member organizations) have different views of what ought to be in a farm bill. But we are all united about one thing: We need a farm bill, and we need a farm bill now. Why now? This farm bill isn’t just a farm bill. It’s a conservation bill; it’s a jobs bill; it’s a food and consumer bill; it’s a hunger bill; it’s an energy bill.”

National Farmers Union President Roger Johnson “We’ve recognized the need for major changes in dairy policy to meet the needs of the 21st century. Dairy farmers have worked FarmWeekNow.com closely with both the Senate and Go to FarmWeekNow.com to House Ag Committees in formu- view video from last week’s lating new dairy policy. We are farm bill rally. very grateful for their openness to change and their leadership in moving the farm bill this far within a very partisan atmosphere.”

Ken Nobis, National Milk Producers Federation spokesman and Michigan dairy farmer “Agriculture remains the only sector of the American marketplace that has proposed a concrete plan for deficit reductions within our programs. This is a bipartisan plan, and it should be acted on now.”

American Soybean Association President Steve Wellman “The 2012 bill contains a strong conservation title. At the same time, it provides critical funding in conservation programs that affect the landscape across this country. The farm bill affects every acre of this country.”

National Association of Conservation Districts President Gene Schmidt, an Indiana farmer “We have almost 50 million people in this country today who are going to bed hungry two, three, four days out of every month. This proposal, the farm bill, authorizes SNAP (the Supplemental Nutrition Assistance Program), which is used effectively by almost 47 million Americans. Farmers and ranchers, senior citizens, and working mothers with children depend on these programs. They shouldn’t be held hostage to a short-term (farm bill) extension.”

Alliance to End Hunger Executive Vice President Tony Hall, former chairman of the House Select Committee on Hunger

Farm bill

Continued from page 1 House Ag Ranking Democrat Collin Peterson (D-Minn.) maintained “we’re not going to get this bill done before the election,” but argued a House vote sets the stage for a postelection conference and at least some level of certainty.

Extending debate into 2013 would mean “rescoring” of ag spending, likely necessitating even greater program cuts and forcing lawmakers to “start over” with policy approval, he said.

Stabenow echoed producer rejection of a simple one-year extension of the current bill — according to Peterson, “a very bad idea and an unnecessary idea.”

“This (suggested) extension is not about giving any certainty to farmers, this is about getting into next year so (farm bill critics) can write a different kind of bill,” he warned.

“We have a lot of people who don’t like this bill, who want to have a whole different kind of bill. They think that if they get into next year, they might be able to do that.

“If we get into next year, we will not do anything until like August or September. We probably won’t get it done by then.”

Page 5 Monday, September 17, 2012 FarmWeek

production

Harvest pace accelerates; yields extremely variable

BY DANIEL GRANT FarmWeek

Nearly a quarter of the corn crop had been harvested statewide as of the first of last week.

And the results in most areas confirmed a significant yield hit due to the drought.

USDA last week in its September crop report reduced the Illinois corn yield estimate from 116 bushels per acre to just 110 bushels, down 47 bushels from a year ago.

“That’s a big drop,” said Emerson Nafziger, University of Illinois Extension crop systems specialist. “Especially in Southern Illinois.”

The corn yield averages in crop districts across the state ranged from just 55 bushels per acre in the southeast and 63 bushels in the southwest to 139 bushels in the northwest, the National Agricultural

Statistics Service Illinois field office reported.

An ongoing crop yield survey online at {www.farmweeknow.com} last week showed a range of yields from 0 to 145 bushels per acre. Yield

‘It’s time to get 2012 behind us.’

— Emerson Nafziger University of Illinois Extension

results are posted each week at the website in conjunction with USDA’s weekly crop progress report.

Illinois, unfortunately, was at the epicenter of the drought, and the yield results reflect it.

Elsewhere, corn yields were projected to average 156 bushels

per acre in Minnesota, 152 bushels in Texas, 145 bushels in Nebraska, 140 bushels in Iowa, 130 bushels in Wisconsin, and 126 bushels in Ohio.

“Illinois (crop) conditions have been worse than the national average as it’s been at the center of the drought,” Brad Rippey, USDA meteorologist, told participants of the IFB Leaders to Washington trip last week.

Key corn-producing states with a lower average corn yield than Illinois include Indiana (100 bushels per acre), Missouri (75 bushels), and Kentucky (70 bushels).

“There are some good yields coming in at a few locations,” Nafziger said. “But it’s time to get 2012 behind us.”

Nafziger suggested farmers harvest fields with stalk quality or grain quality issues (aflatoxin) as soon as possible.

“The clouds of black dust we see flying are from mold spores

growing on the dead stalks and leaves,” he noted. “It’s not doing a lot of damage.”

Corn harvest in the state last week was 21 percent complete, more than three times ahead of the average pace of 6 percent. Soybean harvest was 1 percent complete.

USDA last week left its soy-

bean yield estimate for Illinois unchanged from the August forecast at 37 bushels per acre.

If realized, the state’s bean yield would be down 10 bushels from a year ago.

Rippey projected the cooler, wetter weather pattern could continue through the end of this month.

Grain elevators deal with less volume, aflatoxin issues Farmers aren’t the only ones impacted by severe yield losses caused by this year’s drought.

The grain elevator industry this year also is dealing with less volume and, in some cases, more grain-quality issues.

“Obviously, the yield is down substantially from average,” said Brent Ericson, GROWMARK vice president of grain. “So (crop) volumes are way down (at elevators).”

Grain elevators depend on an adequate volume of crops to make a profit.

This year, USDA projected corn production for grain in Illinois would total just 1.39 billion bushels, down 29 percent from last year.

Nationwide, soybean produc-

tion last week was projected to total 2.63 billion bushels, down 14 percent from a year ago.

GROWMARK’s grain retail units in Illinois as a result budgeted for an average of about 30 percent less volume this year.

But the situation is much more severe in Southern Illinois.

“There is a big difference between Southern Illinois compared to the central and northern parts of the state,” said John Cripe, director of MIDCO Commodities, a subsidiary of GROWMARK. There could be as much as a 30 to 40 percent difference in crop volume adjustments at elevators in various regions of the state due to yield variability.

Southern Illinois was the first area of the state to enter drought conditions this year and spent most of the summer locked in extreme to exceptional drought.

“Up north, some are thinking it could be about a 20 percent reduction,” Ericson said. “But in Southern Illinois, one unit in Effingham budgeted a 50 to 60 percent reduction in bushels.

They’re the hardest hit.”

The grain elevator industry also is dealing with aflatoxin issues which, so far, aren’t as bad as had been feared, Ericson said.

Farmers who think they have a field of corn infected with aflatoxin should contact their crop insurance agent prior to harvest.

Larry Huelskoetter unloads corn on his farm in Logan County. He grows 1,500 acres of corn and soybeans and operates a 5,000 head farrow-to-finish swine operation near Beason. Harvest was well ahead of the average pace in Illinois last week as 21 percent of corn was in the bin compared to the average pace of 6 percent. This year’s short crop and quality issues have created concerns on farms and at commercial elevators.

(Photo by Cyndi Cook)

Aflatoxin levels can increase in storage but losses are only insurable if the grain is tested at an approved facility before it’s moved into commercial or onfarm storage.

The combination of aflatoxin concerns and higher than expected harvest prices encouraged more farmers to sell their grain at harvest.

“We’re seeing more selling off the combine than normal,” Cripe said. “Price-wise, if (yield expectations) don’t get a lot worse from here, the corn mar-

ket may have topped for the time being.”

The lack of carry in the futures and forward cash bids a week ago indicated farmers should consider pricing corn across the scale instead of storing it, according to Dale Durchholz, AgriVisor market analyst.

However, if prices experience a hard break by the end of harvest (last week’s crop report was bearish for corn) farmers should consider short-term storage, the analyst added. — Daniel Grant

Storing mycotoxin-contaminated grain

Angie Peltier, University of Illinois Extension agriculture educator for Northwestern Illinois, and Kevin Black, GROWMARK insect/plant disease technical manager, offered the following tips for storing mycotoxin-contaminated grain: Mycotoxins present in grain are not broken down by the drying process, but farmers have several options to decrease the risk of mycotoxin concentrations increasing in stored corn, Peltier said. Mycotoxins can evolve into aflatoxin if left unchecked.

• Start with clean grain bins and store contaminated grain separately from uncontaminated grain.

• Set the combine to kick out lightweight kernels and minimize kernel damage during harvest.

• Before storing, clean the grain using a rotary cleaner if possible.

All of the mycotoxin-producing fungi can continue to grow and produce mycotoxins in grain with more than 21 percent moisture. Farmers who anticipate large-scale infections should harvest at higher moisture (up to 25 percent) levels and dry the corn rapidly at a high temperature.

“Start with a goal to get the moisture down to 15 to 15.5 percent,” Black said. “After that, it depends on how long you plan to store it.

“Bring it (the moisture level) down to 14 percent if you’re going to keep the grain for up to six months, and get it down to 13 percent if you plan to store (the grain) longer (than six months).”

Aflatoxin can continue to accumulate in grain with moisture levels above 15 percent. Cool all grain after heat drying as soon as possible. Long-term storage of aflatoxin- contaminated grain generally is not recommended.

Black also recommended use of a bin spreader when storing aflatoxin-contaminated grain.

FarmWeek Page 6 Monday, September 17, 2012

CROPWATCHERS Bernie Walsh, Durand, Winnebago County: Warm, dry weather last week helped the corn and beans dry down closer to being ready for harvest. We harvested one small field of beans last week that was planted early and matured early. It didn’t yield very well because it matured before the recent latesummer rains. Two different neighbors combined some small fields that averaged about 40 bushels per acre. Corn harvest hasn’t really started, as some of the corn that has been tested is still in the high 20s. One neighbor finished his fifth cutting of hay last week.

We got about 0.2 of an inch of rain here on Thursday.

Pete Tekampe, Grayslake, Lake County: It was a cool, wet Friday morning in Lake County.

We got 0.2 of an inch of rain Thursday night. Too little, too late.

Beans are about 10 days out yet.

Too many green beans in the low spots. Silage has been cut. Corn also has grass-green spots in the low areas. No corn has been picked. Second- and third-cutting hay has been done. The quality was good, but there was not much quantity. Remember, slow down. Be safe.

Leroy Getz, Savanna, Carroll County: A cool morning in Northwestern Illinois Friday with temperatures in the mid-40s. A few sprinkles of rain fell on Thursday. Fall is definitely on the way. More hay was made this past week. Everyone is trying to get all the available forage possible. Corn harvest activity has picked up, as stalks look nearly dead. I’ve heard of some near-normal yields. We’ll have more numbers later. Soybeans are dropping leaves and will be ready when the weather permits.

Ryan Frieders, Waterman, DeKalb County: The smell of fall is in the air. Night temperatures have been cooler and days have been comfortable. Harvest started for us on Tuesday with early-planted corn moisture levels at 26 percent and yielding a wide range of 100 to 150 bushels per acre.

Showers on Thursday afternoon brought much-needed precipitation to the area.

Larry Hummel, Dixon, Lee County: Still not a lot of harvesting done here in Lee County.

A few fields have been harvested with moisture in the mid-20s, but we haven’t found much below 30 until Thursday. Light showers all afternoon Thursday postponed our scheduled start to the 2012 harvest. I haven’t heard of any big surprises from those who have started.

Everyone was expecting highly variable yields, depending on soil types and whether you were lucky enough to get a few showers in July and August. Field averages that I have heard so far range from a low of 6 bushels per acre to a high of 180. The tough questions are how much of each is out there and what will it average?

Joe Zumwalt, Warsaw, Hancock County: It has been nice to wake up to some cooler mornings. Corn harvest rapidly continues. Several producers have finished and are now waiting for the beans to mature. I would guess that the bulk of soybean harvest is still two weeks away. Yields have continued to be all over the board. From 20 to 220 bushels per acre. Yes, that dirty word aflatoxin is still showing its ugly head. Elevators have been especially busy — surprising given a short harvest. Guess we all will see what’s left in the grain bins come next August.

Ken Reinhardt, Seaton, Mercer County: Light rain on Thursday slowed corn harvest for a day. Moisture levels are running 15 to 22 percent. Yields are variable. Corn on corn is disappointing, but there is 200-bushel-peracre corn on soybean ground.

That is, if there was a good stand.

There are fields where Pythium took out stands. There may be beans cut this week.

Ron Moore, Roseville, Warren County: We received 0.6 of an inch of rain last week in two different events. The recent rains made the yards and pastures turn green and start to regrow. That will help save some winter feed supplies. The rains have not started the tile lines flowing yet.

Aflatoxin has reared its ugly head here now. The local elevators are now only taking in what they can dry in 24 hours. Even low amounts of aflatoxin are growing in the wet holding bins. There are lines at the elevators, and they are closing at noon or sooner.

This is just adding insult to injury with the lower yields caused by the drought this year.

Jacob Streitmatter, Princeville, Peoria County: It seems harvest started last week for most around my area. For me, there are some varieties of corn with yields so poor a herd of deer would starve to death. Corn yields range from 0 to 200 bushels per acre, just depending which side of the farm I am on.

Tim Green, Wyoming, Stark County: It was busy around here last week. Corn harvest started pretty much everywhere on Monday (Sept. 10). Moistures were in the mid- to low 20s. Yields have been at or a little bit below what was expected. One field of beans in the area has been cut, and the yield was pretty disappointing. More beans will be cut this week.

Lodging is starting to be a problem in the beans, and the corn is starting to fall over. Be safe.

Mark Kerber, Chatsworth, Livingston County: It was a good week to help dry down this crop. Most everyone around here started corn harvest, as moisture levels have come down some.

Yields are at disastrous levels, except for a few areas that received some isolated showers this summer. Soybeans are ripening slowly. My neighbor combined whole fields with yields of 24 to 35 bushels per acre. Later soybeans look much better. The government has decided to print more money. This should inflate all commodities. Corn wants to drift back, but soybean demand is strong.

Ron Haase, Gilman, Iroquois County: The slow pace of harvest continues. Ten percent of the corn may have been harvested in the area. I haven’t seen any soybean fields harvested yet.

Corn yields have ranged from 1 to 200 bushels per acre. The range of 50 to 120 bpa will catch many fields. The variability within the field is just as wide. Corn development ranges from the R5 (dent) growth stage and the milk line 50 percent of the way down the kernel up to the corn being harvested. Local soybean fields are at the R7 (beginning maturity) or R8 (full maturity) growth stage.

Soybean harvest is getting close. The local closing bids for Sept. 13 were: nearby corn, $7.85; fall 2013 corn, $6.22 for nearby soybeans, $17.39; fall 2013 soybeans, $13.62.

Brian Schaumburg, Chenoa, McLean County: Harvest is 40 percent complete at our farm with field averages ranging from 50 to 90 bushels per acre.

Different hybrids vary widely.

Moistures are falling slowly into the mid- to low 20s. Test weights have been good, but aflatoxin remains a concern. Soybeans are a week away from maturity. Drivers, please use caution around large, slow-moving equipment on the rural roads. Corn, $7.86; fall 2013, $6.33; soybeans, $17.40; fall 2013, $13.63; wheat, $8.34.

Wilfred Dittmer, Quincy, Adams County: Not much news from Adams County, except enough rain on Thursday afternoon to wet the bottom of the gauge. Combines are running and the black dust looks like a contrail behind them. Yields are from 7 bushels per acre to 120 bpa. Beans are looking better every day and the pod-fill is improving, but the growing season is winding down with most fields showing some yellowing. The growing season is still ahead of schedule by about three weeks. Good hay will be in high demand this fall and winter.

Steve Ayers, Champaign, Champaign County: Harvest-ometer for our area is 16 percent with 79 percent of corn mature.

Lots of corn was combined last week, and some farmers are finishing corn and switching heads to start beans. Tip of the hat to area grain handlers for keeping grain flowing, as many farmers are bypassing their bins due to aflatoxin concern. Our harvest is at 50 percent and our first field averaged 109 bushels per acre dry corn at 19.7 moisture. With this summer’s pollination issues, we are thrilled with anything north of 100 bpa. We had 0.25 of an inch of rain Friday morning. We may have had our last 80degree day. Remember it’s Farm Safety and Health Week, so “Let’s be careful out there!”

Carrie Winkelmann, Tallula, Menard County: This year’s corn harvest is rapidly coming to an end. The fields are clearing out and farmers are looking toward their soybeans. It is a scary look, though.

Beans are already falling/jumping out of pods, and I am afraid that soybean harvest is going to be as lackluster as the corn harvest has been.

I hope to be proven wrong. Remember to walk around your equipment before getting in, and train your employees to do the same. Thirty seconds could save a life.

Tom Ritter, Blue Mound, Macon County: Corn harvest is wrapping up fairly quickly. We are down to the last 20 percent to be harvested. Yields have been all over the board: some very good, some just pretty much a disaster with yields below 50 bushels per acre. Good corn is considered anything from 120 bpa. The first field of soybeans in our area was harvested this past week, but the majority of the beans are still two weeks away from harvest. Farmers seem fairly optimistic that we have a chance for yields approaching 40 bpa, but soybeans are a hard guess. Late rains proved beneficial to the full-season beans, but the combine will be the true test of yields. A minimal amount of tillage is being done. Even though harvest was early, there is concern about volunteer corn if tillage is done too early. At this point, most farmers are holding off on tillage.

Todd Easton, Charleston, Coles County: The too little, too late rainfall keeps coming to Coles County farms. Bean fields are almost all in the process of turning, so precipitation we get now just works toward replenishing the dry ground for next year.

Because the ground is so dry, the 1 to 3 inches received last Friday (Sept. 7) didn’t stop harvesters for very long, which put corn harvest on the downhill slide for the year. Tillage work and fertilizer application are getting a good start, stirring up some optimism for the next crop of corn.

Jimmy Ayers, New City, Sangamon County: This past week, we got 0.2 of an inch of rain. For the most part, the week was pretty productive. A few beans were cut in the area. Quite a few of them are yellowing. Several farmers are done with corn harvest.

Some were chiseling last week.

Yields have been all over the board. Variety seems to be a large factor in determining yield. In some cases there is an 80-bushel difference in side-by-side checks.

I’m hearing some 80, 100, 120 bushels-peracre yield averages with an upper end of 140 bpa. In spots where rainfall was timely, things worked out pretty well. Aflatoxin is quite a concern, and most elevators are testing for it.

We’ve all become familiar with the black light test, but one of my fields looked pretty decent and still had 11 parts per billion (ppb).

Apparently 20 ppb is where they start turning loads away or docking them. Be safe.

Jeff Guilander, Jerseyville, Jersey County: It looks as if corn dried down a little more than a point last week. Everyone is finding a way to deal with it being a little wetter than normal. Looks like we’re over the hump in corn.

The good surprises in some fields are quickly balanced out by the expected yields in others, leaving the county average somewhere below 100 bushels per acre. Beans need a few bright, warm days to get them ready. Looks like the harvest crunch is on.

Page 7 Monday, September 17, 2012 FarmWeek

CROPWATCHERS Doug Uphoff, Shelbyville, Shelby County: Rainfall for September so far is 5.7 inches. Almost finished harvesting corn last week. We have 25 acres left that was replanted and it still is testing 34 percent moisture. Grain quality on the replant may not be very good.

Can’t believe we are almost done with corn by Sept. 12 and going to start chiseling cornstalks already. One guy told me he rode with a farmer who was harvesting corn and they went for an hour before they dumped in the truck, and he still didn’t have a full hopper. He said you could almost count the ears going into the combine. Beans are 10 to 14 days off, although some are being harvested north of here in Moultrie County. Hardly any bins are being used for the corn crop out of fears of aflatoxin. I have seen very few augers set up at bins this fall. I don’t know where the processors are going to get their corn other than from elevators.

Out of 100,000 bushels of storage we have, only 7,500 bushels are in a bin to haul to processors in January. I don’t think USDA is even close on its yield data.

Dan Meinhart, Montrose, Jasper County: Light showers moved through the area Friday morning. Otherwise it was a dry week with mild temperatures.

Corn harvest is continuing.

Some silage choppers are running in the later-planted corn.

Combines are running in the cornfields, especially those with chopper heads, merely to chop the stalks.

Yields are mostly in the single digits. Beans are starting to turn. Some isolated fields have been harvested. Temperatures are expected to be in the 70s this week with a slight chance of showers.

Dave Hankammer, Millstadt, St. Clair County: This past week was quite comfortable. Rain showers moved through the area on Sept. 7 and left almost 3 inches of moisture. The temperatures have been moderate as each weather front moves through. The cooler temps remind us that summer is coming to an end. Despite high rainfall received in the last few weeks, the soil continues to absorb the water. With the last round of showers, the soil surface was tacky for a day then harvest activities resumed.

Local grain bids are: corn, $7.37; soybeans, $17.27; wheat, $8.55. Have a safe week.

Rick Corners, Centralia, Jefferson County: Ahhh. Picking corn this year brings back memories of when I used to hunt Easter eggs. Ears are very scarce. Yields are laughable, or cryable — whichever way you look at it. Group III beans are turning yellow fast.

Kevin Raber, Browns, Wabash County: Corn harvest is progressing rapidly. There are several farmers done with corn and waiting for beans to get ready. I shelled my river bottom corn, and it has been my worst corn. Most of it was white corn, but yields are below 30 bushels per acre.

Dean Shields, Murphysboro, Jackson County: We had a pretty good week picking corn.

Yields were not good at all, but we had good weather. I see some yellow in a few beans, so we will have beans ready to harvest in a little while. I just wish our corn yields were a little better. We will see what the soybeans have for us. Take care this harvest.

Randy Anderson, Galatia, Saline County: We can say half the harvest is over. Finished corn harvest on Thursday, and I would estimate 90 to 95 percent of the corn has been harvested or disked down. Beans that I cut this past week were a little better than I expected, but not by much. The major problem is that they are popping out and have a lot of green leaves on them. The pastures are in good shape. We have not had to feed as much hay the past month.

Ken Taake, Ullin, Pulaski County: It was another busy week of harvest activities here in deep Southern Illinois. The weather has been cooler and drier with bright sunshine. It has been really pleasant weather for harvest. We managed to finish our corn harvest Thursday night. Probably the best thing I can say about it is that it’s over. Our yields ran all the way from 15 to 94 bushels per acre and it seems most tended to be on the low side. We hoped to start soybean harvest Friday. We have some early soybeans that are ready to harvest. Yields in the area for soybeans that I’ve heard of ranged from pretty good to very low, but it does seem like the overall average seems better — somewhere in the 30s. I’ll know more about how our early beans are going to do by next week’s report. Please take time to be careful, as we are in this busy season.

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

New report spurs questions about RFS2 ‘tradeoff ’

BY MARTIN ROSS FarmWeek

The latest U.S. corn projections raise questions about the need to curb 2013 ethanol requirements on behalf of the livestock sector, according to Illinois Farm Bureau Leaders to Washington and industry observers.

In Capitol Hill visits last week, IFB leaders raised concerns about U.S. Environmental Protection Agency (EPA) review of a proposed waiver of federal Renewable Fuel Standard (RFS2) ethanol use mandates for the coming year.

More than 100 congressmen suppor t the waiver, requested by several governors based on expected corn shortfalls. American Farm Bureau Federation (AFBF) energ y specialist Andrew Walmsley told the IFB leaders “we knew this fight was coming” — key oil interests have mounted a nearly $30 million campaign to “go after the RFS” — but the drought “sped things along.”

AFBF itself has been “walking a tightrope,” conscious of both crop and livestock concerns, and held a series of calls with livestock, poultry, and feed grains producers in early September, Walmsley said. He said he nonetheless is uncertain whether a 2013 waiver would significantly impact corn prices, especially given USDA’s new crop report.

USDA lowered its average

per-acre corn forecast by less than half a percent from the August report. Despite the drought, the crop still should be the eighth largest on record.

Sen. Dick Durbin, a Springfield Democrat, stressed he is carefully weighing waiver issues.

He acknowledged the role of distillers dried grains derived from ethanol production in offsetting corn diverted from feed to biofuels use.

“If I’m helping the poultry industry at the expense of farmers who are having a tough year, that to me is not a good tradeoff,” Durbin told IFB leaders.

Further, Walmsley noted

ethanol is trading roughly 50 cents cheaper than gasoline and thus remains “financially attractive” to petroleum blenders.

That raises questions about whether refiners would “switch out” even without RFS2 biofuels obligations, he said.

And Walmsley cited the “flexibility” the RFS2 offers blenders in the form of tradable renewable identification number credits that can be used in lieu of immediate biofuels purchases. He, therefore, questions whether a short-ter m wa ive r “ wo u l d h ave mu ch impact on corn prices.”

EPA is taking comments on

the proposed waiver until Oct. 11 and is expected to issue a decision in mid-November. But waiver rejection might not end the debate: Walmsley warned a proposal by former House Ag Committee Chair man Bob Goodlatte (R-Va.) to peg RFS2 targets to year-end corn stocks, could prove a “starting point” for a renewed push next year.

Also on the Hill last week was Dana Gustafson, political affairs director for Hennepinbased ethanol producer Marquis Energy and part of a delegation representing the biofuels group Growth Energy.

With nationwide ethanol

production down nearly 12 percent over the past two months, Gustafson argued “the market is already beginning to work itself out.”

Marquis continues to operate at full capacity. Gustafson stressed the plant’s continued contribution to the rural Illinois economy.

“We provide more than 50 jobs,” she told Far mWeek.

“Our minimum salar y and hourly rates are very good. All of our jobs have benefits, and our retention rate is high — we have at least 50 people who’ve been with the company for five years now.”

Biodiesel sector supportive toward ethanol counterparts When it comes to the “food vs. fuel” debate and the drought’s impact on feedstock supplies, the biodiesel and ethanol industries are somewhat different animals.

But both rely on the Re n e wa b l e F u e l S t a n d a r d (RFS2) to help sustain market growth as ethanol producers adjust to elimination of federal tax credits and the biodiesel sector continues to mature amid policy uncertainty.

T he National Biodiesel Board (NBB) thus is concer ned by a potential U.S. Environmental Protection Agency waiver of 2013 corn ethanol mandates. Corn may be the target of requests to

suspend blending requirements, but NBB spokesman Ben Evans fears biodiesel may be winged in the crossfire.

“Any waiver, even to just the conventional corn ethanol portion of the prog ram, is going to have a ripple effect o n a d va n c e d b i o f u e l s l i ke biodiesel,” Evans told FarmWeek.

“People are going to start to wonder how committed the federal government and Congress are to the RFS2. That affects investment and entrepreneurs as they’re trying to plan growth and hiring and building new capacity.”

In 2011, the U.S. biodiesel industry set a new production record of nearly 1.1 billion

gallons, reportedly supporting some 39,000 jobs. At midyear, 2012 biodiesel production had reached 557 million gallons.

The corn ethanol industry faces a triple-edged dilemma relative to biodiesel — its current reliance on a single fuel feedstock and impact on corn p r i c e s, a n d c o n c e r n s ove r diversion of corn from food, feed, and export channels.

The food market continues to drive the soy oil market, t h o u g h E va n s n o t e d s oy based biodiesel demand helps boost supplies of and potentially lowers prices for soy meal.

He cited his members’ feedstock diversity — plants

are using animal fats, restaurant grease, and other oils in addition to soy sources. That has proven an effective strateg y in coping with biofuels policy uncertainty and “the disr uptions caused by a drought,” Evans said.

And while ethanol producers are limited to plant-based feedstocks and have drawn f i r e f r o m m a j o r l ive s t o ck groups, Evans noted animal agriculture has become “essentially a partner” in biodiesel production through the use of animal fats.

“We add value to the lives t o c k i n d u s t r y,” h e s a i d .

“We’re always reaching out to the livestock industr y.” — Martin Ross

FarmWeek Page 8 Monday, September 17, 2012

safety

Safety in the blood: a family affair troy White has witnessed the hazards of farming firsthand. besides being a farmer, he has worked as a volunteer firefighter. the worst call he

answered occurred when a friend’s child suffocated in a grain bin.

“It really sits in your mind when it’s someone you know,” White said. he has responded to many

calls that underscore the dangers of farming. he and his wife, Dana, use incidents such as those to talk with their children, mikayln, 15, and Kadin, 10, about the importance of staying safe on their Washburn farm.

Dana, an X-ray technologist, also teaches a safety lesson with her mom, Cheryl Pfanz, as part of Agriculture in the Classroom presentations coordinated through the Woodford County Farm bureau.

With experience in farming, farm accident response, and safety education, the Whites could be a poster family for this year’s national Farm safety Week theme, Agricultural safety and

health: A Family Affair.” mikayln and Kadin have learned how to be safe around farm equipment and animals through 4-h projects and lessons from their parents and grandparents, Denny and Cheryl Pfanz. brake and signal checks, seatbelts, and safety lights are a few topics that can be overheard at the family dinner table. “safety always comes first. It’s drilled into their heads,” White said. “they know that buckling up is the first thing to do, and they know to always make eye contact with the person who is on the ground before the tractor moves.”

While Kadin continues to

IllInoIs: the numbers twenty farm-related deaths occurred in Illinois last year — the lowest number in more than 30 years, according to a Country Financial survey. the number of deaths is nearly half what it was the previous year when 39 farm-related deaths were reported. the leading cause of death continued to be tractor runovers and rollovers, while roadway collisions ranked second for the fourth year in a row. the tractor runover and rollover death rate decreased by three, but still accounted for nearly half of all farm deaths. roadway collision deaths rose by four, and accounted for 35 percent of reported Illinois farm deaths. electrocution caused the third highest number

of deaths, accounting for 15 percent of the total.

Grain bin accidents accounted for one death this year, the lowest number on record. last year’s national Farm safety and health Week campaign focused on preventing grain bin suffocations. “the increased awareness and publicity offered by the Illinois Grain handling safety Coalition certainly helped prevent accidents,” said eric Vanasdale, Country senior loss control representative. “A dry crop also worked in our favor last year. there wasn’t much reason for farmers to enter grain bins and break up crusted grain.”

Country tracks farm-related deaths through newspaper clippings and reports findings in conjunction with national Farm safety and health Week and the Illinois Press Association.

Denny Pfanz and granddaughter Mikayln affix a slow-moving-vehicle emblem to one of the family’s utility tractors to help ensure safety on their rural roadways. (Photo courtesy of Country Financial)

earn more responsibilities on the farm, mikayln will receive her driver’s permit this fall. For the Whites, roadway collisions are always a source of apprehension. mikayln said driving a tractor around the farm prepared her to be a safer driver when she gets her license. “once you’ve been in that position, it gives you more respect for the people who are driving the equipment,” the lowpoint-Washburn high school student related.

Deaths from rural roadwaycollisions continue to rank second only to tractor rollover/runover deaths. seven rural motorists died last year in roadway collisions with farm equipment, according to a Country Financial survey. last year, Denny Pfanz teamed with Woodford County Farm bureau manager Jolene

neuhauser to teach roadway safety to driver’s education students in surrounding high schools. students visited the Pfanz farm in the spring and fall to get a better appreciation of large, slow-moving farm machinery.

“We hope to expand the program to other schools in the county,” Pfanz said. If they’re aware of the danger, they will stay safer.”

Paying constant attention to farm safety has allowed the White family to remain accident-free on the farm, but the family knows there will always be risks. “the no. 1 rule is to be safe,” mikayln said. “We think about safety all the time. the first rule for operating equipment is turn off the key if anything happens. If something goes wrong, you should always know what to do.”

Check out checklists

How important is Federal Crop Insurance from COUNTRY Financial®?

Ask a COUNTRY client who has just experienced the worst drought we’ve had in years. For fast, fair claims, knowledgeable representatives and coverage that fits your operation, count on COUNTRY. See your COUNTRY Financial representative or Crop Specialist to make sure you’re covered for next year.

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Safety matters on the farm. Ask any farm family.

Equipment with moving parts, unpredictable livestock, and large machinery that allows only limited visibility post just some of the myriad dangers on the farm.

What can farm families do to stay safe? Identify and eliminate hazards, according to Eric Vanasdale, Country Financial senior loss control representative.

Country distributes “Safety Matters in the COUNTRY,” a checklist that identifies farm dangers. Because the checklist addresses potential hazards affecting all ages of farm employees and family members, Vanasdale suggests completing it this week — National Farm Safety Week.

After families answer the checklist questions, they receive a safety score. A “no” response indicates a potential hazard that should be eliminated.

Checklist questions include: • Do all vehicles have safety belts that are always used?

• Are all slow-moving-vehicle emblems clean and reflective?

• Does a professional electrician inspect your electrical system every five years?

• Are children always supervised while performing farm tasks?

• Does someone know where all farm workers or family members are at any given time?

Vanasdale urges farm families to be particularly aware of harvest dangers enhanced by drought conditions.

“The drought has added stress to farm life,” he said. “Many families are worried about yields and income.

“Make sure every tractor, combine, and truck contains at least one ABC dry chemical fire extinguisher. Teach farm employees and family members how to use it. Extremely dry conditions pose an increased possibility of field fires.

“One accident is one too many. Farm families can enjoy an injuryfree harvest if they keep safety at the forefront every day,” said Vanasdale.

For copies of safety checklists, visit {countryfinancial.com}.

Page 9 Monday, September 17, 2012 FarmWeek

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NOW IS THE TIME TO BUY With rebates up to $700 and financing as low as 2.99% — during the Polaris Factory Authorized Clearance Sales Event!* See your local dealer or visit polaris.com for details. *Offers end September 30th. Rebates vary by model. Financing and rates based on credit worthiness. See your participating Polaris dealer for details. Warning: The Polaris RANGER and RZR are not intended for on-road use. Driver must be at least 16 years old with a valid driver’s license to operate. Passengers must be at least 12 years old and tall enough to grasp the hand holds and plant feet firmly on the floor. All SxS drivers should take a safety training course. Contact ROHVA atwww.rohva.org or (949) 255-2560 for additional information. Drivers and passengers should always wear helmets, eye protection, protective clothing, and seat belts. Always use cab nets. Be particularly careful on difficult terrain. Never drive on public roads or paved surfaces. Never engage in stunt driving, and avoid excessive speeds and sharp turns. Riding and alcohol/drugs don’t mix. Check local laws before riding on trails. ©2012 Polaris Industries Inc.

FarmWeek Page 10 Monday, September 17, 2012

education

Bumper crop of Illinois high schools teaching ag 11 districts open new ag programs

BY KAY SHIPMAN FarmWeek

High school students are studying agriculture in more Illinois schools this fall.

Eleven schools opened new agriculture programs, higher than the average annual increase of three or four programs, according to Jess Smithers, Facilitating Coordination in Agricultural Education (FCAE) coordinator.

Forty-one openings existed in Illinois schools in addition to the teachers needed for new programs.

Smithers anticipated an influx of new programs will be positive for ag student num-

‘With more focus on career and technical education, it doesn’t hurt (agricuIture education) and it could help.’

— Jess Smithers Facilitating Coordination in Agricultural Education

bers statewide. “We’ve gone down ever so slightly the last few years. By adding 11 new programs, it should hold (enrollment) steady,” he said.

High schools around the state added agriculture programs. Two are in the Chicago area with a couple in Central Illinois. Six opened in Southern and Southwestern Illinois.

Agriculture is new to some districts, while in other cases,

Angie Schoenbein, Tremont High School’s new agriculture teacher, teaches students about the history of ag education funding last week. Tremont is one of 11 school districts that opened new agriculture programs this fall. (Photo by Cyndi Cook)

such as Spoon River Valley High School, ag programs are returning after an absence of several years.

Illinois not only has added more high school ag teachers, but those teachers also tend to be young.

More than half, 53 percent,

have 10 or fewer years of experience. Of those, more than a fourth, 27 percent, have taught for five years or less.

High school agriculture programs may find renewed interest as the state puts more emphasis on career and technical education.

The Illinois State Board of Education selected agriculture as one of the subjects for a new career initiative.

“With more focus on career and technical education, it doesn’t hurt (agriculture education) and it could help,” Smithers said.

New ag teacher gives students opportunities she didn’t have

©2012 GROWMARK, Inc. A Farm Bureau Affiliate A12248Rev

Angie Schoenbein enthusiastically shares the history of FFA with her agriculture business and marketing students at Tremont High School.

With a wide smile, the first-year teacher helps the students understand how what was a fledgling farm club in 1928 became a standardized organization nationwide.

It’s a lesson Schoenbein couldn’t have studied when she attended Tremont High School. In fact, the district hadn’t offered agriculture classes since the late 1960s.

“I wasn’t able to have FFA when I was in high school,” said Schoebein, who grew up on a local farm. “My dream was to start an ag program here. I have been blessed, and I have been lucky. I couldn’t be happier.”

Schoenbein’s enthusiasm has been matched by that of her students. Of the 300-member entire student body, 93 are taking an agriculAngie ture class and 35 attended the first meeting Schoenbein about starting an FFA chapter.

The school is offering classes in introduction to agriculture, ag business and marketing, ag leadership and communication, plant and animal science, and ag mechanics and technology.

Schoenbein also teaches a general science course.

A couple of the ag business students said they took the class because it fit their schedules, but Lucy Wagenbach, a senior who lives on a farm, said she changed her class schedule so she could study agriculture now that it is being offered.

“I took this class so I could help my dad with marketing,” she said. Although Wagenbach is considering teaching math as a career, she said she “wants to stay involved with agriculture.”

Wagenbach’s classmate, Kaylie Black, said she would like a career working with animals. Black moved to Tremont from a farming area in Pennsylvania but did not grow up on a farm.

One of Schoenbein’s first goals has been to introduce students to the variety of ag-related careers.

“The kids are now realizing what all the opportunities are.

At first, they didn’t know,” she said. “It’s great to have them learn what FFA has to offer. Hopefully, we’ll get the word out.” — Kay Shipman

Page 11 Monday, September 17, 2012 FarmWeek

EDUCATION

WIU ag enrollments set back-to-back records

BY KAY SHIPMAN FarmWeek

Agriculture students this year enrolled in record numbers at Western Illinois University (WIU) for the second consecutive year, bucking a campuswide slide in enrollment.

Bill Bailey, head of WIU’s School of Agriculture, pointed to the strong agricultural economy and positive outlook for jobs.

“The agricultural economy is going super. Getting an education in agriculture translates into agriculture employment,” Bailey told FarmWeek.

A total of 360 undergraduates, a 3 percent increase, is majoring in agriculture. Meanwhile, WIU’s total enrollment declined by 2.7 percent.

Another trend: Bailey noted students majoring in non-agriculture subjects, such as chemistry and biology, “are rounding

Auction Calendar Wed., Sept. 19. 10 a.m. First Lot Closes. Online Only Unreserved Auc. www.bigiron.com Sat., Sept. 22. 10 a.m. Huge Old Country Farm Auc. Richard/Irene Bossler and Glenn Heberer Estates, MASCOUTAH, IL. Mark Krausz Auc. Service.

Sat., Sept. 22. 9 a.m. Clark Co Land Auc. Cecil Brasfield, WEST UNION, IL. Parrott Real Estate & Auction Co., LLC. www.sellafarm.com or www.parrottaucitons.com Sat., Sept. 22. 10 a.m. Farm machinery and misc. Est. of Marjorie Herriott/Plotner Trust, MAHOMET, IL. Gordon Hannagan Auction Co. www.gordyvilleusa.com Sat., Sept. 22. 9 a.m. Farm & Construction Eq Consignment Auc. TREMONT, IL. Cal Kaufman and Brent Schmidgall, Auctioneers. tremontconsignmentauction@yahoo.com Wed., Sept. 26. 10 a.m. First Lot Closes. Online Only Unreserved Auc. www.bigiron.com Sat., Sept. 29. 6 p.m. Pike Co. Land Auc. John C Shover Est., BARRY, IL. Sullivan Auctioneers, LLC. www.sullivanauctioneers.com Sat., Sept. 29. 11 a.m. Christian Co. Land Auc. Kirby Harris and Greg Buesking, KINCAID, IL. Cory Craig, Auctioneer. www.corycraig.com Tues., Oct. 2. 7 p.m. Crawford Co. Land Auc. John Wilbur & Elsie Coward Family Trust, ROBINSON, IL. Parrott Real Estate & Auction Co., LLC. www.sellafarm.com or www.parrottauctions.com Wed., Oct. 3. 6 p.m. Fulton Co. Land Auc. Robert D. Wilhelm Family Trust Farm, CUBA, IL. Sullivan Auctioneers, LLC. www.sullivanauctioneers.com Wed., Oct. 3. 10 a.m. Macoupin Co. Land Auc. Chuck and Linda Holzwarth, CARLINVILLE, IL. Sullivan Auctioneers, LLC. www.sullivanauctioneers.com Wed., Oct. 3. 7 p.m. Richland Co.

out their education” by taking an ag class.

The international component of agriculture courses and potential for studying abroad also attract non-ag students, he added.

Among the new ag students, the freshmen are outnumbered by students with community college credits who transferred to the Macomb university. Campuswide, freshmen enrollment decreased, while transfer student enrollment slightly increased.

“We’re also finding a larger number of incoming freshmen do not come from farm backgrounds,” Bailey said.

The transfer students are able to find their interests and fit into campus life thanks to the 15 ag-related student organizations, he said.

Land Auc. John Wilbur & Elsie Coward Family Trust, CLAREMONT, IL. Parrott Real Estate & Auction Co., LLC. www.sellafarm.com or www.parrottauctions.com Sat., Oct. 6. 10 a.m. Macoupin Co. Farmland. Charles J. Monetti, Charles & Helen Perrings Heirs and Fred Smith Jr. Est., CARLINVILLE, IL. Mike Crabtree, Auctioneer.

Thurs., Oct. 11. 6 p.m. Knox Co. Land Auc. David and Joni Blackburn, VINCENNES, IL. Parrott Real Estate & Auction Co., LLC. www.sellafarm.com or www.parrottauctions.com Thurs., Oct. 11. 7 p.m. Iroquois Co. Land Auc. Dan Tordai, MARTINTON, IL. Rosenboom Realty. www.rosenboomrealty.com Sat., Oct. 13. 10 a.m. Macoupin Co. Farm and Recreational Land.

Jim Ruyle and Judy Demenbrun, CARLINVILLE, IL. Mike Crabtree, Auctioneer.

Sat., Oct. 13. 9 a.m. Crawford Co. Land Auc. David and Joni Blackburn, FLAT ROCK, IL. Parrott Real Estate & Auction Co., LLC. www.sellafarm.com or www.parrottauctions.com Tues., Oct. 23. 10 a.m. Kankakee Co. Land Auc. HERSCHER, IL. Hertz Farm Mgmt. www.hfmgt.com Mon., Oct. 15. 6 p.m. Henderson Co. Land Auc. Shokokon Ac., LOMAX, IL. Sullivan Auctioneers, LLC. www.sullivanauctioneers.com Wed., Oct. 17. 7 p.m. Menard Co. Land Auc. Joan McElhattan and Janet Dickerson, PETERSBURG, IL. Sanert Auction Service. www.sanertauctions.com or auctionzip.com auction id #2473 Tues., Oct. 23. 10 a.m. Kankakee Co. Land Auc. HERSCHER, IL. Hertz Farm Mgmt., Inc. www.hfmgt.com Thurs., Nov. 1. McLean Co. Farmland. Hartzel Henline Trust Farm, COLFAX, IL. Soy Capital Ag Services. www.soycapitalag.com

Western Illinois University (WIU) senior Jessica Horton, far right, an animal science/pre-veterinary major from Lomax, assists with a class on the university’s research farm. WIU enrolled a record number of agriculture students for the second consecutive year. (Photo courtesy WIU School of Agriculture)

Agriculture business and general agriculture remain popular majors on campus. Interest also is strong in agronomy because students are aware of the job outlook.

Bailey did not foresee the

drought negatively impacting the short- or long-term job market for agriculture graduates. In fact, a record number of employers registered for the Oct. 10 agriculture career fair, he said.

WIU ag open house Friday Western Illinois University’s School of Agriculture will host prospective students and their parents or guardians Friday at its annual open house. The event will start at 9 a.m. and feature faculty and students tours of the Macomb campus, the university research farm, and ag-related fraternities.

Individuals who register will receive a free lunch. A $100 scholarship will be randomly awarded to one participating student.

To register, go online to {www.wiu.edu/cbt/agriculture/openhouse.php}.

All participants should park at the WIU Livestock Center.

A campus map and directions to the livestock center are available online at {www.wiu.edu/cbt/agriculture/openhouse.php}.

For more information, call the school at 309-2981080.

FarmWeek Page 12 Monday, September 17, 2012

cover cropS

High demand, tight supply challenging cover crop boom

BY KAY SHIPMAN FarmWeek

Illinois farmers are searching as far as Canada to find quality cover crop seed as demand outstrips domestic supply. “The No. 1 problem I’m seeing is a shortage of seed,� said Mike Plumer, an agriculture consultant from Creal Springs and retired University of Illinois Extension educator.

One farmer told Plumer he saved $4 to $5 per bag by importing two semi-truck loads of seed from the Canadian province of Saskatchewan. Plumer estimated the two truckloads would hold enough seed to plant 2,000 to 4,000 acres, depending on the crop species. “I’ve talked to guys planning to plant 4,000 to 5,000 acres (of cover crops) this year,� he added.

Cover crop benefits, especially in absorbing and holding nitrogen overwinter, fueled interest this year.

Plumer said he has seen yield increases in both corn and soybean crops on fields that had cover crops, compared to those without cover crops.

Joel Gruver, a soil scientist at Western Illinois Uni-

A cover crop of cereal rye emerges in a cornfield. Seed for cereal rye and other cover crops is in demand as farmers seek conservation solutions. (Photo courtesy Illinois Natural Resources Conservation Service)

versity, reinforced Plumer’s outlook: “Interest is high.�

Big demand coupled with a tight seed supply are resulting in some seed mixes that contain unsuitable cover crops, according to Plumer. “We’re seeing people selling all kinds of garden radishes — red and white garden radishes,� Plumer warned.

Unlike forage daikon radishes, garden radishes aren’t appropriate cover

crops. Plumer explained some unsuitable seed with a variety name, such as wonder radish, has been added to and sold in seed mixes.

Gruver said he was not surprised that questionable seed was being sold: “The cover crop seed industry is growing very quickly. Most growth has occurred in the last five years. (Daikon) radishes weren’t even known as a cover crop 10 years ago.�

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Seed mixes might be convenient for farmers who are new to cover crops, but the best way to ensure seed value is to buy separate species and do the mixing yourself, Gruver advised. “Most veteran cover crop farmers are not buying mixes. They’re buying seed and making their own mixtures,� he said.

A cover crop may not be a panacea, Plumer indicated.

He recalled problems when

cover crops were allowed to grow too long, absorbed moisture, and the corn and soybean crops suffered. “It goes both ways. You can’t say it’s all good,�

Plumer said.

Cover crops also may improve soil structure and break up tillage pan, allowing crop roots to grow deeper. In five- to six-year cover crop trials, corn roots grew 70 inches deep, according to Plumer. In compacted fields, corn roots may grow but 20 to 24 inches deep.

Timing and challenging weather are causing some farmers to wonder if a cover crop will be established before winter.

To Plumer, mid-September is the cutoff time for cover crop planting in Central Illinois, while Northern Illinois fields need to be seeded even earlier.

However, Gruver said he did not think it was too late to plant small grain cover crops, such as cereal rye, anywhere in the state. “I feel comfortable planting into November,� he added.

Both Plumer and Gruver noted certain cover crops, such as clover and daikon radishes and other brassicas, are the most sensitive to temperature change.

Researchers studying cover crop uses and their impacts Western Illinois University (WIU) and Illinois State University (ISU) researchers are conducting on-farm cover crop trials.

On WIU’s Allison Farm, soil scientist Joel Gruver is collecting data on replicated trials of individual cover crop species and of two-species mixes.

Gruver also is observing fields planted in various mixes of several cover crop species.

His trials include testing different production practices, such as precision planting. “We’re using a corn planter to place (tillage) radish seed in 30-inch rows and then will plant the corn close to those rows,� Gruver said.

Gruver also is starting a new study involving tillage radishes and soybeans. The radishes will be planted into a cornfield that will be planted into soybeans the following year. “We’ll see how the soybeans perform the next year

if they are planted on top or near the radish row,� Gruver explained.

On ISU’s research farm near Lexington, soil scientist Shalamar Armstrong is conducting nitrogen efficiency trials with cover crops and fall-applied nitrogen.

Armstrong is studying trials of tillage radishes, cereal rye, and crimson clover and also mixes of those species.

In the study’s first year, soil tests showed 36 percent less nitrate remained in the continuous cornfields with cover crops compared to those that had no cover crop, according to Armstrong.

Another part of his study is determining the rates at which cover crops release nitrogen during decomposition.

Early results show tillage radishes release nitrogen at a higher rate, he said.

Armstrong said he hopes to test the cover crops’ effectiveness in absorbing nitrate from field tile systems. — Kay Shipman

Page 13 Monday, September 17, 2012 FarmWeek

dairy Prairie Farms diversifies

Dairy industry faces economic challenges

BY DANIEL GRANT FarmWeek

A number of economic challenges have put the squeeze on dairy farmers this year.

Operating costs for the dairy industry nationwide increased about $4 per hundredweight the first six months of this year, according to USDA. Higher operating costs driven by tight crop supplies, due to the drought, resulted in higher feed expenses. USDA last week projected a national average corn yield of

just 122.8 bushels per acre, which would be the lowest since 1995.

Meanwhile, the farm price of milk the first six months of this year declined by an average of about $2.50 per hundredweight compared to the same time a year ago.

“This year has been very challenging for all producers,” Ed Mullins, CEO of Prairie Farms, told FarmWeek last week.

“They (dairy farmers) are facing extreme pressure and financial strain.

from the counties

B

OND — Farm Bureau will sponsor an informational meeting on flooding debasements on Bond County farmland assessments at 7 p.m.

Monday (today) at the Farm Bureau office. Call the Farm Bureau office at 618-664-3100 for more information.

OOK — Farm Bureau will sponsor a farmland lease webinar at 7 p.m. Tuesday, Sept. 25, at the Farm Bureau office. Topics will include lease instruments, trends and ranges, and farm economic trends that influence lease rates. Call the Farm Bureau office at 708-3543276 for reservations or more information.

• Farm Bureau will sponsor a two-day hunter education course from 9 a.m. to 3 p.m. Saturday, Oct. 6, and from 10 a.m. to 4 p.m. Sunday, Oct. 7, at the Farm Bureau office. Those attending need to bring their lunch. There is no charge for Cook County

C

Farm Bureau members. Included in the course is basics of hunter responsibility, wildlife conservation and identification, firearms and ammunition, and state regulations. Those who complete the instruction and final exam will receive a State of Illinois certificate of competency and a graduate patch. Call the Farm Bureau office at 708-354-3276 for reservations or more information.

EE — Deadline to purchase custom candles is Friday, Oct. 12. Payment is due with order. Delivery will be in November to the Farm Bureau office. Order forms are available online at {www.leecfb.org} or by contacting the Farm Bureau office at 857-3531 or leecfb.comcast.net.

L

“The price (of milk) is going down, input costs are going up and, if you grow your own inputs, the yields are down so (farmers) have to buy (feed) supplements,” he continued.

The hot, dry conditions this summer also increased the threat of aflatoxin in the corn, which can be transmitted to dairy cattle through feed.

Mullins stressed that Prairie Farms tests every load of milk for aflatoxin.

The dairy industry also is dealing with financial strain caused by changes in consumer purchasing and consumption trends.

Consumption of milk per capita trended down in the U.S. the past two decades.

Many consumers have been affected by the recession while others have chosen alternative products, such as a product made from soy.

The number of trips to the grocery store by the average U.S. consumer has declined by nearly 1 percent this year.

“Spending is down, even on staples such as milk,” Mullins said.

Prairie Farms responded by diversifying its product line to keep up with changing consumer demands.

Last year the Carlinville-based cooperative introduced reformulated flavored milk that is fat-free and contains less sugar.

More recently, Prairie Farms introduced cottage cheese that contains 50 percent less sodium

and new 4-ounce snack cups of yogurt.

The new yogurt cups, which come in blueberry, strawberry, raspberry, peach, plain, cherry vanilla, and strawberry/banana flavors, were designed for school lunches and the hotel industry.

USDA last week projected a slight increase in the all-milk price for 2013 ($17.85 to $18.85 per hundredweight) compared to this year’s range of $17.80 to $18.

“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.

CHALLENGE THE STATUS QUO

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©2012 GROWMARK, Inc. S13265

FarmWeek Page 14 Monday, September 17, 2012

proFitability

What happened in 2008 provides a history lesson 59 percent and soybean prices 52 percent. This collapse had nothing to do with (traditional) crop fundamentals.

And it wasn’t just ag prices that fell: all types of commodities were sold off in sync. Virtually every type of financial asset — including stocks and bonds — also collapsed.

BY KEL KELLY

It often is helpful to learn from history so that we might not be doomed to repeat it. It should help, therefore, to assess the agricultural collapse of 2008. In doing so, we can learn that the true cause was not what we thought.

From July to December of 2008, corn prices plummeted

Drought dampens income outlook Farm income could deteriorate this year due to significant crop losses caused by the drought.

The Federal Reserve Bank of St. Louis last week released the results of its first quarterly survey of ag credit conditions.

The 88 ag bankers surveyed predicted farm income in the third quarter will dip below last year’s level.

“The drought has caused FarmWeekNow.com more bank respondents to temFor information about the lat- per their expectations for farm est USDA county by county income in the current quarter,” c a s h r e n t s u r v e y , g o t o the Federal Reserve Bank noted FarmWeekNow.com. in its second quarter newsletter.

A projected dip in farm income was echoed by recent projections from University of Illinois economists.

The U of I predicted average crop prices next year could slip to $6 per bushel for corn and $12.50 per bushel for beans while non-land costs should be about the same as this year.

Total U.S. farm inputs this year were a record-high $104 billion.

“These fundamentals do not suggest that increases in cash rents should occur in 2013,” U of I farm management specialists noted.

The National Agricultural Statistics Service Illinois field office this month released a county-by-county report on cash rents that found the average cash rental rate in the state increased by 16 percent.

There were, however, some counties in which the average cash rent this year was unchanged from 2011 or decreased from a year ago.

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

40 lbs.

Range Per Head $11.54-$46.50 n/a

Weighted Ave. Price $36.09 n/a

This Week Last Week 124,620 98,997 *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 $63.73 $65.93 $47.16 $48.79

Change -2.20 -1.63

USDA five-state area slaughter cattle price Steers Heifers

(Thursday’s price) (Thursday’s price) Prev. week Change This week 127.01 121.80 5.21 127.06 121.70 5.36

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 143.13 141.80 1.33

Lamb prices Slaughter Prices - Negotiated, Live, wooled and shorn 123-180 lbs. for 97.65-118 $/cwt. (wtd. ave. 109.35).

Export inspections (Million bushels) Week ending Soybeans Wheat Corn 09-06-12 12.9 19.6 9.8 08-30-12 15.5 25.4 8.6 Last year 11.6 16.4 18.8 Season total 12.6 277.8 8.9 Previous season total 13.5 316.2 23.3 USDA projected total 1315 1025 1700 Crop marketing year began June 1 for wheat and Sept. 1 for corn and soybeans.

The sell-off in ag prices was the result of financing problems among large Wall Street institutions stemming from losses caused by the falling housing market.

As interest rates and variable-rate Kel Kelly mortgage rates rose during 2005-2006, many homeowners were unable to pay their mortgages.

Mortgage defaults and falling collateral value (the homes themselves) caused highly leveraged banks’ and investment firms’ assets to decline in value.

With high leverage, a mere 3 percent fall in assets can cause bankruptcy if a firm cannot

Fr o m Ju l y t o December of 2008, corn prices plummeted 59 percent and soybean prices 52 percent.

acquire fresh loans or sell enough assets to raise capital.

In fact, many financial firms sold investment and loan assets to prevent further losses and to raise capital. However, those in the worst financial shape were unable to roll over loans they desperately needed, because their lenders — similar firms in similar shape — had concerns about their creditworthiness.

This funding crisis caused losses for other leveraged firms. As fear increased in the system and as investment companies had their funding and asset purchasing power pulled, hundreds of firms rushed for the exits, selling their holdings of stocks, bonds, and commodities, thereby sending prices spiraling.

Other futures market participants interpreted all this selling as a “decrease in demand” for commodities because they were unable to distinguish between investors leaving with their money and end consumers no longer wanting to consume.

The primary lesson from 2008 is that actions by players outside our industry affect our industry: more than half of the contracts for corn on the Chicago Mercantile Exchange are purchased by investors and spec-

ulators, not by people who deal in agriculture.

These players channel such massive amounts of borrowed purchasing power into and out of the corn and soybean markets that they can dramatically alter prices.

The actual supply and use of a crop can remain unchanged

even while its price doubles or halves, solely due to the amount of purchasing power chasing or fleeing from that crop.

Kel Kelly is GROWMARK’s manager of economic and market research. His email address is kkelly@growmark.com.

USDA

Farm Service Agency UPCOMING NAP DEADLINE FOR 2013 CROPS — Farmers have until Sept. 30 to apply for Noninsured Disaster Assistance Program (NAP) for forage crops (mechanically harvested and/or grazed), barley, and rye.

The application deadline is Nov. 20 for apples, asparagus, blueberries, caneberries, cherries, grapes, nectarines, peaches, pears, plums, rhubarb, and strawberries.

NAP provides farmers financial assistance for noninsurable crops when low yields, loss of inventory, or prevented planting occurs due to normal disasters, said said Scherrie Giamanco, Illinois Farm Service Agency (FSA) executive director.

To be eligible for NAP, crops must be noninsurable, commercially produced agricultural commodity crops for which the catastrophic risk protection level of crop insurance is not available. If the Risk Management Agency offers coverage for a crop in a county, NAP coverage is not available for that crop.

In cases of natural disaster, NAP covers the amount of loss greater than 50 percent of the expected production based on the approved yield and reported acreage.

Eligible farmers may apply using form “CCC-471, Application for Coverage” and must submit the application and service fee by the deadline. The fee is $250 per crop or $750 per farmer per administrative county, not to exceed $1,875 for a farmer with farming interests in multiple counties.

Contact your local FSA office for more information.

CONTINUOUS SIGN-UP FOR CRP HELI — FSA is accepting continuous sign-up for the Conservation Reserve Program (CRP) Highly Erodible Land Initiative (HELI). Illinois was allocated 50,000 acres for enrollment.

Offers will be accepted until the state acreage allocation is reached or Sept. 30, whichever occurs first.

Farmers may offer new cropland or CRP acres with contracts that expire Sept. 30 and with an erosion rate of at least 20 tons per acre per year. Existing grass stands that are not considered expiring CRP are not eligible.

Landowners enrolled in CRP receive annual rental payments and cost-share assistance. Incentive payments are not authorized under HELI. New land contracts approved during this continuous sign-up initiative will become effective the first day of the month following the month of approval and are valid for 10 years.

CRP contracts set to expire Sept. 30 may be offered for consideration and approved contracts will become effective Oct. 1 and be valid for 10 years.

For more information, contact your local FSA office.

BANKS RECEIVE PREFERRED LENDER STATUS — Illinois FSA has granted preferred lender status for USDA guaranteed farm loan programs to the Harvard Savings Bank and the Bank of Pontiac.

Both banks have been standard eligible lenders for FSA’s guaranteed loan program. The Harvard Savings Bank has made 28 guaranteed loans and the Bank of Pontiac has made 92 guaranteed loans. Those factors along with their good standing in the program made them eligible for preferred lender status.

The Preferred Lender Program (PLP) was developed to reward experienced lenders by streamlining and adding flexibility to the loan application and servicing requirements.

PLP lenders submit a one-page application and a narrative describing the loan applicant’s credit factors. Approval is automatic if USDA does not respond within 14 days of receiving a completed application.

Contact your local FSA office for more information.

Page 15 Monday, September 17, 2012

PROFITABILITY Corn Strategy

CASH STRATEGIST

USDA corn estimate is close As we implied in August, USDA may have pretty well “nailed” the size of this year’s corn crop. The September USDA estimates back that up, especially as far as yields are concerned. There’s still a lot of doubt about acreage, which could swing the production estimate higher or lower.

But as far as yields go, USDA has had two consecutive months to pull samples to estimate the ear weight. Normally, that doesn’t happen until it gathers data for the October report.

We normally look closer at the data USDA supplies for the 10 objective-yield states, but the history we have access to doesn’t extend into the 1980s. We are displaying the seven-state data so you can see how this

crop stacks up relative to 1988.

If anything, the ear counts and ear weights imply a potential yield in the high-120s, not the 122.8 USDA forecast in last week’s report. But that is based on 1988’s final yield estimate, not the September one.

In October, we will get some acreage clarification when USDA builds in the implications of the Farm Service Agency (FSA) planting data. That may alter the planting number but doesn’t have implications on the harvested acreage number.

Many still think the harvested acreage is too large based on the percentage relationship in a drought year. But this year’s plantings were 20 to 40 percent larger than some previous drought years. Using a percentage relationship this year implies an unusually large silage harvest number. Still, we think the harvested acreage number could drop half a million to 1 million acres.

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Cents per bu.

ü2012 crop: The December contract’s close below $7.88 suggests the trend is turning down into the 40-week low coming in mid- to late September. Use this post-report rally to boost sales to 80 percent.

Given quality issues, carefully consider whether you want to store any corn on the farm this year. And with prices near $8, we question the wisdom of storing any corn commercially. ü2013 crop: Use rallies on December 2013 futures for catch-up sales. vFundamentals: The USDA supply/demand report failed to generate fresh buying interest. Its 122.8-bushel yield and 10.727-billion-bushel production estimates exceeded expectations. More telling may have been its 733-million-bushel ending stocks forecast, up from 650 million last month. The implication is that high prices are rationing demand. Harvest continues to progress throughout the Midwest and yield reports continue to be varied.

Soybean Strategy

ü2012 crop: The soybean rally stalled short of the highs this past week, but the performance implies there could be a push to new highs ahead.

Still, we’d use current levels for catch-up sales. But make sure you don’t exceed your insurance guarantee. ü2013 crop: Use this push to a new contract high on November 2013 futures for catch-up sales. vFundamentals: Of the three crops, soybeans still have the best potential to move to a new high. The reduction in the production forecast in last week’s report implies an even tighter fundamental structure over the next 3 to 4 months unless Chinese demand doesn’t live up to expectations. But by no means is the smaller production assured. Early yield reports, and they have been few, have been a little better than expected. They do tend to reinforce the notion that late-season rains improved production potential. The final yield in 1988 was 4 percent larger than the August forecast. That would be 36.8

bushels per acre this year.

Wheat Strategy

ü2012 crop: The minor trend in wheat turned up when Chicago December futures penetrated $9.06 resistance. But the short-term trend is still sideways. It is positioned to test its July high at $9.53. Use rallies above $9.20 on Chicago December futures to make catch-up sales. ü2013 crop: Make catchup sales with Chicago July futures trading above $8.90.

Check the Hotline as we could add a sale at any time. vFundamentals: Concern

about tightening world supplies gave the wheat market the needed catalyst to spark another run toward price highs. Egypt has continued its buying spree, making purchases mostly from Russia and Ukraine. However, the last couple have included purchases from the European Union countries. The subtle shift invigorated speculation that Russia may have sold nearly all the wheat it will have available to sell this year, potentially pushing some business to the U.S. Ongoing dryness in Australia, particularly western Australia, is a part of the short-term bullish mix too.

FarmWeek Page 16 Monday, September 17, 2012

perspectives

FROM ONE TEEN TO OTHERS U.S. needs permanent

normal trade relations with Russia right now

A teenager reaches many milestones in just seven years.

First is the achievement of becoming a teenager at 13, then driving at 16, and of course, getting into an R-rated movie at 17. The biggest milestone of a teenager, however, is turning 18.

A lot of responsibility comes with becoming a legal adult, including the ability to vote.

Before we talk more about the PERRY right to vote as a teen, let me HARLOW first introduce myself.

I am Perry Harlow and currently am a 4-H member in Grundy County and a member of the Seneca FFA chapter. This year, I served on the Illinois Farm Bureau Youth Education Committee as a 4-H representative. Even greater, this year I turned 18, and I am finally able to vote!

It is the 26th amendment of the Constitution of the United States that gives you the right at age 18 to vote.

It is not just your right, it is your duty. Being able to vote is very important to me and many other people.

Voting essentially allows us to let our voices be heard. We vote for those we want in office, then our voice is heard in the Congress, the General Assembly in Springfield, county boards, and city councils.

I registered to vote for one reason: I wanted my voice to be heard!

I want my vote to count. I want my vote to count on a national level and a local level.

Although the presidential election is very significant, the local elections are important. The local elections impact everyone on a day-to-day basis.

Registering to vote was very easy. Each year, our high school requests representatives from county clerks’ offices in LaSalle and Grundy counties come to the school to help teens register to vote.

The paperwork is easy. All I needed were two forms of identification and to complete

some basic information, including name, address, and telephone number.

The representative from the clerk’s office took my information back to the office and processed the information. I received my voter’s registration card within a week. It was simply that easy.

Did you know that students who are 17 can pre-register to vote?

The paperwork is the same, but they will not receive their registration or voting card until they are 18. The advantage of pre-registering is teens do not have to remember to register after they turn 18.

Lately, I have been asking my 18-year-old friends if they will be voting in the presidential election this November.

I have been surprised; many of them are not voting. They think their votes will not count. I told them their vote does count and it will make a difference.

The next president will be running our country for the next four years. He will be making decisions that could affect us, not just for the next four years but for the rest of our lives.

It was then they realized that those decisions could affect them. I hoped that from that moment they would decide to vote in the next election.

Many of my friends do not vote because they feel they do not know what the issues are.

For those who feel that way, I suggest you watch, read, and listen to the news.

Do it on your way to work, school, or at home. Learn what is going on in Washington, D.C., and Springfield.

Become educated about the issues and bills.

Become an informed voter.

According to Young Democrats of America, 46 million 18 to 29 year olds are eligible to vote in 2012. Will you or be among those who vote?

I want to leave you with some advice: Go register and vote!

Perry Harlow, 18, Kinsman, is a student at Joliet Junior College (JJC). This fall he will be majoring in agriculture education at JJC.

Russia recently was welcomed into the World Trade Organization (WTO).

That was a very important step, which will require Russia to live by predictable, reasonable, and enforceable trading rules.

It should be celebrated as a big day for the U.S. because more exports will mean more jobs.

However, we don’t qualify to receive these advantages because we have in place an antiquated law dating back to the 1970s — the Jackson-Vanik Amendment.

That law restricts U.S. trade with countries that limit immigration rights. We were JOHN trying at the time to help thousands of Jews BLOCK leave the Soviet Union.

The time is well overdue to throw out that ancient, irrelevant law and extend permanent, normal trading relations (PNTR) to Russia.

Failure to extend PNTR to Russia won’t hurt Russia. It hurts us. It will cost us thousands of jobs.

We need legislation to get this done now. Other countries already are getting ahead of us.

We have been slow to act on trade the last four years.

It took forever to finally pass the free trade agreements with South Korea, Colombia, and Panama. And now, Russia is in the WTO and we aren’t positioned to take advantage of it.

We have had many trade conflicts with Russia over the years.

Remember the 1980 grain embargo? President Reagan lifted the embargo on April 24, 1981. A couple years later, I signed a long-term grain agreement with the Soviet Union.

We have had trading problems with Russia involving chickens and other food products.

It’s time to put in place the rules of the WTO. As U.S. Agriculture Secretary Tom Vilsack said, “PNTR is not a favor to Russia. It is a significant opportunity for America’s farmers, ranchers, and producers.”

Russia is one of the world’s fastest-growing markets.

It’s time for Congress to pass permanent normal trade relations for Russia.

John Block, former U.S. agriculture secretary, is a senior policy adviser with the Washington, D.C., firm of Olsson, Frank, Weeda, and Terman. His email address is jblock@ofwlaw.com.