FarmWeek September 26 2011

NASCAR LAST WEEK announced it had accumulated more than a million trouble-free miles of driving on E15 in 2011. ..2

A dAiRy PoLiCy refor m proposal has shifted from a mandatory to a voluntary stabilization program, but concerns remain. ............4

SuNNy WEAThER is expected as harvest moves into full swing, and chances for a killing frost are slim for the next 10 days. ................7

Monday, September 26, 2011

Two sections Volume 39, No. 39

IFB promotes ag policy plan

Obama targets direct payments, insurance funding

BY MARTIN ROSS FarmWeek

As Illinois Farm Bureau released a farm bill “prioritization list” emphasizing crop insurance needs, President Obama took aim at both direct payments and insurance funding many see as crucial in the face of anticipated farm program reductions.

Last week, the IFB Board of Directors signed off on IFB Farm Policy Task Force (FPTF) recommendations that include proposals to bolster federal crop premium subsidies and institute insurance reforms that would better reflect trendline yields and offer “loss ratio fairness” across various insured crops.

The IFB plan also favors authorizing USDA’s Risk Management Agency (RMA) to develop new insurance-based programs such as farmer “savings accounts.”

IFB action came on the heels of a White House deficit reduction plan that would eliminate direct payments in order to achieve a purported $3 billion per

year in federal savings over the next decade. Taxpayers “continue to foot the bill for these payments to farmers who are experiencing record yields and prices,” the administration argued.

FarmWeekNow.com Listen to IFB President Philip Nelson’s comments on farm policy recommendations at FarmWeekNow.com.

The White House submitted proposals for review by a 12member congressional “super committee” charged with identifying $1.5 trillion in federal savings by Thanksgiving. Obama proposes $3.7 billion in 10year savings by trimming federal reimbursements for crop insurers and shaving 2 percent from premium subsidies that today exceed 60 percent.

Instead, the administration proposes to extend the nowexpired 2008 farm bill Supplemental Revenue standing disaster program or similar aid through 2016 (see page 4). However, the plan would require producers to purchase crop insurance to be eligible for emergency assistance.

Crop insurers took a $6 billion federal hit last year, and IFB President Philip Nelson warned continued “peeling back” could hinder existing insurance “delivery mechanisms” and future risk product development and further reduce the number of companies willing to offer risk protection.

“Given the volatility we’re seeing in the marketplace, this is one area where producers feel they can try to at least take out some of their risk by buying up (subsidized) coverage in crop insurance,” Nelson said.

“I think (the Obama plan) will take a definite toll on some of these new products (RMA) is looking at, particularly if there are not funds to roll these products out.”

Amid heightened super committee pressures, Nelson sees the timeline for development of the next farm bill being “condensed dramatically.” House and Senate ag committees reportedly could put forward an ag policy draft yet this fall.

Obama’s plan “sends a strong signal that direct pay-

Periodicals: Time Valued

U OF I GRADS, PRESIDENT

Illinois Farm Bureau Directors Chris Hausman, left, and Dale Hadden, center, both University of Illinois graduates, chatted with U of I President Michael Hogan last week after Hogan spoke with the IFB board. He addressed the university’s South Farms status and gave an overall update on the university. (Photo by Ken Kashian)

FarmWeek on the web: FarmWeekNow.com

ments probably are in jeopardy,” he conceded. In light of that growing threat, IFB and other groups have redoubled efforts to protect crop insurance and bolster revenue protections such as current Average Crop Revenue Election (ACRE) program.

The FPTF plan supports

efforts to improve and simplify ACRE in order to provide more timely producer payments based on regional rather than state revenue benchmarks and loss triggers and protect growers from “price volatility.”

See Policy, page 3

The secretary explains Ag Secretary Tom Vilsack reviewed administration budget-policy proposals with FarmWeek and RFD Radio last week.

What would President Obama’s proposed American Jobs Act do to revive the rural economy?

Vilsack: It offers an opportunity to help small businesses hire more people by providing tax relief. It helps families by extending the payroll tax holiday that started last December.

That will put roughly $1,500 in the pockets of Tom Vilsack Illinois families that they can spend next year.

It also helps small businesses and farmers with a 100 percent expensing option. That means any farm implement purchased or any piece of equipment a business purchases doesn’t have to be depreciated over a period of years — the entire purchase price can be written off in the year of sale.

The president’s deficit reduction plan would eliminate direct payments and reduce crop insurance funding. How would the administration address farm safety net needs?

Vilsack: Come Oct. 1, disaster programs under the farm bill go out of business because they were not adequately and fully funded by Congress in 2008. The president’s called for extension of those disaster programs, which are an incredibly important part of the safety net we have for producers who’ve been impacted negatively by floods or drought or tornadoes or hurricanes — all of which we’ve seen this year.

The president’s suggested that as a way of paying for extension of disaster programs, we ask crop insurance companies to give just a bit more than they’ve given. Right now, companies on average are set to get a 14 percent return on investment — they’ll be able to generate income levels of 14 percent, sufficient to pay off any claims.

We’ve calculated that about 12 percent is really what’s necessary for the industry to remain viable. The president’s proposing to bring (returns) down from 14 percent to 12 percent.

What about producer price and market risks?

Vilsack: I think there’s an appreciation by virtually everyone that the direct payment system isn’t going to work in the future, given the current situation of relatively strong prices combined with the need to get our fiscal house in order.

Having said that, there’s a recognition that a proper, strong safety net addresses not just loss of income as a result of natural disasters but also precipitous drops in market prices, which also can be devastating. That’s why you have programs like ACRE (Average Crop Revenue Election).

We’re providing technical assistance to House and Senate folks working on farm bill discussions, in terms of trying to figure out the right (program) combination. Do we do this based on a statewide (yield) basis, which has raised some concerns? Is a countywide or individual farmstead basis a more appropriate vehicle? There are ways in which we can look at improving ACRE to the point where it becomes a far more acceptable tool than it has been in the past.

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

FarmWeek Page 2 Monday, September 26, 2011

Quick takes DIALOGUE ON DISCONNECT — A town hallstyle discussion to address Americans’ questions about how their food is grown and raised was conducted at four locations and streamed on the Internet last week.

The “food dialogues,” presented by the U.S. Farmers & Ranchers Alliance, of which Illinois Farm Bureau is a member, also addressed findings from recent surveys of farmers, ranchers, and consumers. The surveys discovered there is a disconnect between consumer perception and reality.

Purpose of the dialogues (in Washington, D.C., New York, Indiana, and California) was to develop conversations among farmers, ranchers, and “anyone who is interested in learning more about how food is grown and raised in the U.S.,” said Bob Stallman, president of the American Farm Bureau Federation.

FTAS ON THE WAY? — The U.S. Senate last week passed legislation to renew the Trade Adjustment Assistance (TAA) program, which provides job training to workers who purportedly lose jobs due to trade. That ideally sets the stage for passage of pending free trade agreements (FTAs) with Colombia, Panama, and South Korea.

The TAA bill passed the Senate by a 70-27 vote and now goes to the House for approval. House Speaker John Boehner (R-Ohio) said the House would take up the measure after President Obama submits the long-awaited trade pacts for approval.

“We await the president’s submission of the three trade agreements sitting on his desk so the House can consider them in tandem with the Senate-passed legislation,” Boehner said in a statement. “If the president submits these agreements promptly, I’m confident that all four bills can be signed into law by mid-October.”

RESEARCH REVIVAL? — Bipartisan House-Senate measures would attempt to help bridge the ag research gap.

Senate Ag Committee Chairman Deb Stabenow (D-Mich.) and committee member John Thune (R-S.D.) have proposed establishing a legal structure for tax-exempt groups focusing on such research.

In the House, the measure was introduced by Rep. Devin Nunes (R-Calif.), with 15 original co-sponsors including House Ag Committee Chairman Frank Lucas (R-Okla.).

The bill would amend federal tax code to allow for the establishment of public charities focused on so-called “agriculture research organizations” or AROs. Modeled after similarly structured medical research organizations (MROs), AROs would be required to cooperate in research with a land-grant university or other college of agriculture.

There would be no tax differences between AROs and regular charitable organizations which allow donors to commit funds to ag research with tax advantages. Supporters of the bills believe their provisions could draw significant new funds to work that is receiving fewer and fewer public dollars — USDA notes ag research has fallen far behind other research since the 1970s.

(ISSN0197-6680) Vol. 39 No. 39 September 26 2011 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. © 2011 Illinois Agricultural Association

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

Richard Verdery (rverdery@ilfb.org) Classified sales coordinator

Nan Fannin (nfannin@ilfb.org) Director of News and Communications

Dennis Vercler 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

government

Trade key to life after ethanol credits?

BY MARTIN ROSS FarmWeek

There is life after the ethanol tax credit, the industry argues. But the makers of America’s “homegrown fuel” are looking farther afield to ensure continued biofuels growth.

There appears little chance of Congress rescuing the volumetric ethanol excise tax credit (VEETC). And with movement toward “E15” (15 percent ethanol gasoline) adoption sluggish at best, trade has become “one of our new issues,” Samantha Slater, national Renewable Fuels Association (RFA) vice president for governmental affairs, told Illinois farmers.

Slater noted standard E10 has hit a domestic demand “blend wall,” and emphasized that even with a slowdown in new production, current production “has to go somewhere.” Exporting is “not something our producers are used to doing,” and RFA is ramping up market education efforts for 2012.

Last year, some 200 million to 300 million gallons of the U.S.’ estimated 13 billion gallons of ethanol production moved into international channels, and Slater expects that volume to at least double this year and continue to expand into 2012. “One hundred percent of that is the blend wall,” she said.

Eventually, E15 use could help move the blend wall, as it takes hold in the Midwest and “cascades out” into other regions, she said. But E15 faces two major hurdles: approval of state fire codes and industry equipment certification necessary to reassure liability-minded fuel retailers and automaker willingness to warrant E15 use in vehicles.

Further, Slater predicts that congressionally, “there will not be any work on biofuels between now and the end of the year.” That means the likely demise of VEETC and the existing ethanol import tariff that has helped protect against an influx of cheap, U.S.-subsidized foreign biofuels, and producers “certainly should be prepared” she said.

“All this is driven by the budget situation,” American Farm Bureau Federation economist Matt Erickson told FarmWeek. “Right now, ethanol isn’t very popular on the Hill. I think VEETC and the import tariff are gone after Dec. 31.”

High South American sugar prices and an easing of Brazilian trade restrictions should allow the U.S. to overtake Brazil in ethanol exports during the second half of 2011, the U.S. Energy Information Administration predicts.

But placing corn ethanol production is only part of the industry’s challenge. The Federal Renewable Fuels Standard requires 21 billion gallons of non-corn “advanced biofuels” use by 2022, and VEETC has been seen as a key incentive to help ethanol producers move into new energy feedstocks.

In an RFD Radio-FarmWeek interview last week, Ag Secretary Tom Vilsack urged Congress to support farm bill programs aimed at spurring renewable development.

The Rural Energy for America Program (REAP) offers loans and grants for installation of blender pumps and 85 percent ethanol “flexfuel” pumps. The Biomass Crop Assistance Program (BCAP) encourages production of new energy feedstocks and development of regional biofuels projects.

BCAP could “reduce the criticisms that have been, I think, unfairly directed at the industry,” and foster a nationwide biofuels presence that will “help preserve the industry politically,” Vilsack suggested. The hitch: Neither REAP nor BCAP funding is included in the official budget “baseline” for the 2012 farm bill.

With even major baselined ag programs in jeopardy, Vilsack sees a key challenge in maintaining ag energy momentum. “If you continue those programs, you have to find additional resources, or you have to find (budget) reductions somewhere else to fund those efforts,” the secretary said.

NASCAR gives E15 green flag The ethanol industry hopes support from one of the nation’s top racing associations will help accelerate adoption of E15 (15 percent ethanol gasoline).

In a “white paper” issued last week, NASCAR announced it had accumulated more than a million miles of driving on E15 in 2011. Since the Daytona 500 in February, 328,632 gallons of the blend have been used in 1.3 million-plus miles of practice, qualifying, and racing laps in NASCAR Sprint Cup, Nationwide, and Camping World Truck series.

The report, One Million Competition Miles on Sunoco Green E15, notes a “seamless and successful” transition to E15 use, with improved horsepower and mileage. The blend was adopted as part of the racing circuit’s Green Initiative.

The U.S. Environmental Protection Agency recently approved E15 use for use in 2001 model year and newer vehicles, but a number of regulatory and industry hurdles have delayed its widespread commercialization.

“One of things we often hear criticism about is ethanol performance and mileage — ‘It’s not good for my car; my car’s going to conk out,’” Growth Energy CEO Tom Buis told FarmWeek.

“Those are just not the facts.

“Here you have very sophisticated automobiles going around the track for four hours at 200 mph for over a million miles thus far this year, and they haven’t had a single problem with E15. I think that helps send a message to the consumer — this is a good fuel, a great

fuel, and it’s better than gasoline.”

NASCAR first began testing E15 in 2010.

The NASCAR report was released in conjunction with National Pollution Prevention Week to highlight ethanol’s fuels emissions attributes. Growth Energy and the Renewable Fuels Association recently submitted required “health effects” data as part of the U.S. Environmental Protection Agency (EPA) process for registering E15 for retail sale.

Ethanol groups also are awaiting EPA approval of a “volatility waiver” that will allow blending of either 10 or 15 percent ethanol in the same gasoline stock in major air pollution “non-attainment” areas. That’s an important step in marketing E15 during the hotter summer months.

Further challenges include Underwriters Laboratories’ failure to date to certify existing fuel dispensing equipment for E15 use, and concerns about consumer liability among automotive and equipment manufacturers.

Last week, the Outdoor Power Equipment Institute, key automakers, and marine manufacturers announced a formal legal challenge to EPA rules meant to address concerns about potential “misfueling” of non-road equipment and older model-year vehicles.

“It’s like that carnival game, Whack-a-Mole,” Buis suggested. “We get one hurdle cleared and another six pop up. But we continue to try to have conversations with all these folks, to try to base this debate on facts.” — Martin Ross

Page 3 Monday, September 26, 2011 FarmWeek

GovErNmENT

Obama tax plan challenges farm ‘continuation’

BY MARTIN ROSS FarmWeek

Turning back the clock even to 2009 would hurt Illinois farm families who’ve seen land prices continue to soar, a Country Financial planning specialist warns.

As part of a deficit reduction plan released last week, President Obama has proposed dropping the current $5 million individual estate tax exemption back to 2009’s $3.5 million ($7 million per couple). The president also proposes boosting the current 35 percent top estate tax rate to 45 percent.

The estate tax was temporarily repealed for 2010 under Bush-era tax measures, but Congress was forced to act last December to prevent the return of a $1 million, pre-2002 exemption. Farm Bureau argued that threshold would expose a staggering number of farm families to tax liability, and lawmakers agreed to a $5 million exemption for 2011 and 2012.

Even with the two-year reprieve, Country Financial senior financial security consultant Duane Kolbus notes

continued uncertainty as families attempt to plan for farm succession. The focus of planning has shifted increasingly to “just saving the farm from being liquidated to pay taxes,” he told FarmWeek.

He questions whether a $3.5 million exemption would adequately protect an average Illinois farm “in the changing world of agriculture.” Illinois farm ground was selling for $3,000-$4,500 an acre a few years ago, when many producers hoped to “maintain” a $3.5 million exemption, Kolbus said.

Even then, he and others were beginning to realize “that wasn’t enough.”

“I was in Western Illinois, and a 40-acre piece of ground just sold for $14,000 an acre,” Kolbus said. “With values averaging anywhere from $8,000 to $11,000 an acre, it doesn’t take a lot of ground before you’d exceed $7 million.

“Farmers are very capitalintensive and heavily invested in their business. If we want to keep those businesses going, we need to not harm them when they pass from generation to generation.

Because they’re capital-intensive, they generally don’t have a lot of cash lying around to pay taxes.”

The president’s plan also seeks to increase the capital gains tax rate for individuals earning more than $200,000 per year and couples making more than $250,000.

Obama’s proposal would preserve the existing estate tax “step-up in basis,” which enables heirs to take fair market value of an estate for capital gains purposes and pay capital gains tax on the difference between the net sales price and that step-up when they sell assets.

Losing that step-up would prove a “tax nightmare” for heirs attempting to track basis (asset cost shifts) over previous generations, Kolbus said.

Also crucial, in his view, is continuation of “special use valuation” — special tax treatment for inherited farm real estate kept in ag use. However, while it is indexed for inflation, Kolbus stressed special use valuation “definitely has not kept up with the rapid appreciation of farm ground.”

Some families qualify for

Estate re-planning may be in order Farm families need to catch up with federal and state statutes and keep pace with rising land values if they hope to stay ahead of estate tax liability.

That’s according to Country Financial senior financial security consultant Duane Kolbus, who urges producers to develop, with professional guidance, a solid estate plan that anticipates current economic, legal, and tax challenges.

That may include revision of wills, retitling of family property to “more evenly rebalance” the eventual estate, or even review of life insurance options that could help cover potential taxes or provide future operational liquidity.

An attorney, CPA, or other financial adviser

can help families navigate recent or potential changes in federal or Illinois estate tax provisions.

“It’s really important for folks to have their estate plans reviewed, because land values have gone up so rapidly and because the laws have changed fairly dramatically over the last couple of years,” Kolbus advised.

“Most wills that were drafted prior to 2008 didn’t take into account the state estate tax exemption, and there can be wording in those wills, if an estate’s large enough, that would generate a state estate tax at the time of death and put the surviving spouse on the hook to make those payments.” — Martin Ross

TALKING SAFETY

Deputy Sheriff Todd Timmermann of the Clinton County Sheriffs Department explains the affects of methamphetamine and the potential hazards it may have on a person. Six area schools around Marion County participated in a Farm Safety Day held at the Marion County Fairgrounds in recognition of Farm Safety Week. Safety stations available to students included water, guns, animals, PTOs, and ATVs. More than 350 students attended the event. (Photo by Cyndi Cook)

Section 6166 election provisions that allow a business heir to spread federal tax liability over a 14-year period follow-

ing death of the previous owner. But Section 6166 cannot be used to buffer state estate tax impact (see below).

House Republicans target higher state estate tax exemptions

BY KAY SHIPMAN FarmWeek

Illinois’ estate tax exemption would again match the federal exemption level in a proposal offered by Illinois House Republican leaders last week. State lawmakers explained their goals during news conferences in Peoria, Decatur, and Milan.

Currently, Illinois allows a $2 million individual exemption for estates compared with the federal estate tax exemption of $5 million per individual.

Illinois Farm Bureau Director Troy Uphoff of Shelby County spoke at the Decatur news conference: “My generation and those that follow will be punished for having parents who worked hard, made smart decisions, and progressed their farming operation (if the exempTroy Uphoff tion remains at $2 million).”

Uphoff added that raising the state estate tax exemption offers “good opportunities to draw agri-business to the state.”

Those sentiments were echoed by IFB Director Wayne Anderson of Henry County, who addressed a news conference on the Kenneth Bush farm near Milan.

“The state estate tax puts a real hardship on families who are trying to keep small businesses and farms going after the death of their Wayne Anderson parents,” Anderson said. “It is unfair to tax people a second time on assets that they had paid taxes on when they bought them.”

IFB supports having the state match the federal estate tax exemption level so fewer family farms and other small businesses will be faced with a huge tax bill when one generation dies and passes the business to the next.

Increasing the state estate tax exemption to $5 million would save Illinois estates an estimated $88 million, according to the state Commission on Government Forecasting and Accountability.

The state separated or “decoupled” its estate tax level from the federal one, starting in January 2011, despite efforts by IFB and others to keep the two coupled.

Policy Continued from page 1 IFB’s plan stresses continued conservation support, focusing on use of filter strips, buffers, and other practices to protect sensitive areas while reducing overall costs. A share of any direct payment cuts could be redirected to some sort of “stewardship assistance,” the FPTF suggests.

Rural infrastructure improvement and broadband development also made IFB’s priority list. Rural development was to be the focus of an Illinois farm bill field hearing held Saturday by U.S. House Ag subcommittee Chairman Tim Johnson, an Urbana Republican.

Obama’s plan would cut $2 billion in conservation funding over 10 years, reportedly by targeting assistance to “the most cost-effective and environmentally beneficial programs and practices.”

The president, meanwhile, pledged support for rural infrastructure, research, export promotion, and other “discretionary” ag spending priorities. Given sustained budget pressure, Nelson remains skeptical.

“When you look at whacking about $33 billion (in total 10-year ag spending) under his proposal, that cuts significantly deep into a number of programs,” Nelson argued.

“Whether that’s in conservation, research, whatever, to come up with those dollars, you’re going to have to pare back a number of the programs we presently have in place.”

FarmWeek Page 4 Monday, September 26, 2011

risk management

Farm bill dairy plan changes deemed better; questions remain

BY MARTIN ROSS FarmWeek

Changes in a key dairy reform plan may make it more palatable, but a Northern Illinois dairyman harbors continued doubts the proposal would deliver for Midwestern producers.

Last week, the National

Milk Producers Federation (NMPF) approved key changes in its “Foundation for the Future” dairy policy reform proposal, including a shift from a mandatory to a voluntary proposed Dairy Market Stabilization Program.

NMPF argues the supply

management program would offer producers “options for managing risk on their operations.”

Further, the NMPF’s proposal to revise the current regional milk marketing orders has been simplified. The plan now merely would seek a USDA hearing to

Wheat insurance could be bargain this season Illinois wheat growers should receive significantly more protection for their crop insurance dollar this year.

According to USDA’s Risk Management Agency (RMA), Illinois’ 2012 projected price for wheat is $8.20 per bushel — $1.01 higher than in 2011.

Friday is sales closing date for 2012 wheat policies. As a result of the higher projected price, insurance guarantees will be higher for the same coverage in 2012 vs. 2011.

However, RMA reports a potential “volatility” factor of 0.27, compared with 0.32 in 2011. Volatility is a measure of price variation over time and a major factor in determining crop insurance premiums — the higher the volatility factor, the greater the perceived price risk for insurers.

This year, with a lower volatility factor, premiums will reflect a perception of reduced price risk exposure, according to University of Illi-

nois economist Gary Schnitkey.

“We’ll see substantially higher revenue guarantees per acre than last year, but premiums shouldn’t be much higher because volatility’s quite a bit lower,” Illinois Farm Bureau risk management specialist Doug Yoder explained. “Premiums in many areas will be basically identical to last year’s, though you’re getting substantially higher per-acre coverage.”

For a 75 percent Revenue Protection (RP) policy covering an insurable unit with an actual production history (APH) yield of 55 bushels, the minimum 2012 coverage level is $338 per acre (75 percent times 55 bushels times $8.20). That’s 14 percent higher than 2011’s minimum guarantee.

For that protection, a Washington County grower’s 2012 premium would be a mere 18 cents higher than last year’s, based on a 100-acre enterprise

unit. Buying insurance thus appears significantly more “cost-effective,” Schnitkey said.

A key incentive for crop coverage ends this season: The 2012 farm bill’s Supplement Revenue (SURE) standing disaster program was authorized through the 2011 crop year, and fall-planted wheat will not qualify for losses under the program.

However, President Obama recommends extending SURE or similar disaster assistance for 2012-2016 crops.

To be eligible for SURE, producers must insure all crops.

Further, Schnitkey notes annual “ad hoc” disaster assistance legislation typically offers higher payments to insured producers, and Yoder suggests 2012year ad hoc aid could well carry coverage requirements.

“We thought SURE was going away,” Yoder said. “Now, this may be something producers want to consider after all.” — Martin Ross

change the current end-product pricing formula for Class III manufacturing-grade milk to provide what NMPF terms a “competitive price.”

NMPF expects changes to be incorporated into legislation being spearheaded by Rep. Collin Peterson (D-Minn.).

The plan’s supply management thrust is a major sticking point for ag groups including Illinois Farm Bureau. The IFB Farm Policy Task Force’s farm bill priority proposal opposes the NMPF blueprint “in its current form, specifically the production supply management component.”

Movement to a voluntary program makes the proposal “much more palatable,” IFB director and South Elgin dairyman Mike Kenyon suggests.

Kenyon nonetheless questions whether the revised program would prove effective “if only a third or even 40 percent of the dairymen volunteered.”

Further, the prospect of U.S. supply controls could dampen enthusiasm among potential dairy importers, he said.

“If you were an importer overseas, and somebody threatened to control your supply, you might say, ‘I better look for some other supplier,’” Kenyon said.

He noted predictions that the overall dairy plan will continue to evolve, given disagreement among various regions and industry sectors. Farm Bureau has looked more favorably on NMPF’s proposed “margin protection” program, which aims to help producers cope with feed cost/milk price fluctuations.

Basic protection under NMPF’s newly revised Dairy Producer Margin Protection Program would be set at 80 percent of individual base production. Producers would be given the option of buying supplemental coverage on up to 90 percent of base production, as adjusted for milk production growth.

Woodstock producer Linnea Kooistra applauds efforts to “reform the whole dairy pricing system.” She noted concerns about supply management, but deemed risk management key, noting “feed costs are killing the industry as we speak.”

Kenyon sees margin protection as potentially “another tool in the toolbox” for a sector hit by rising crop prices.

However, he questions the availability of federal program dollars and is wary of the possibility policymakers could suggest using producer assessments to fund the program.

The USDA Farm Service Agency (FSA) last week designated 46 counties in Illinois as natural disaster areas because of losses caused by excessive rain, flooding, and flash flooding that occurred April 1 through July 31. Farmers in the 46 counties declared natural disaster areas, as well as the 27 contiguous counties, are eligible for low-interest emergency loans from FSA. Farmers in eligible counties have eight months, from Sept. 21, to apply for loans.

Page 5 Monday, September 26, 2011 FarmWeek

energy

Grass is king, but other biomass plants hold promise

BY KAY SHIPMAN FarmWeek

Prairie cordgrass is a high achiever in the ranks of perennial biomass crops, according to D.K. Lee, University of Illinois crop science professor.

The perennial grass grows well in less fertile soil, may yield an estimated eight to nine tons of biomass per acre, and can even survive standing in flood water for a month with “no problem,” Lee told participants at the U of I Energy Farm’s annual field day.

Lee and his fellow energy crop researchers offered the latest research results on potential biomass crops.

The predominant research subjects are perennial grasses, including miscanthus, switchgrass, and native prairie grasses.

The grasses are compared in side-by-side

research trials with corn and soybeans that are farmed with conventional practices.

Tom Voigt, crop sciences professor, explained the scientists’ main goal is to identify biomass feedstock for optimum growth with the least inputs and the least environmental impact.

“Our goal is to gain the most yield per acre for cellulosic ethanol,” Voigt said.

Researchers estimate 75 to 85 gallons of ethanol could be produced from one ton of dry miscanthus biomass, he added.

Woody biomass plants, such as poplar and willow trees, also are being studied for the bioenergy market.

Gary Kling, crop sciences professor, described his study to harvest poplars and willows every three years for biomass.

The seedlings were cut

Nation’s energy needs will tap scientists, farmers Technology alone is not a silver bullet for the nation’s future energy needs, the U.S. under secretary for science told international researchers gathered at the University of Illinois last week.

“Technology alone does not a change make,” Steven Koonin, told the Association of Applied Biologists. “You can’t just invent new energy technology. You have to bring it to the commercial stage. Many scientists don’t understand that.”

Koonin’s audience was comprised of scientists who specialize in applications of biomass and energy crops. It was the first time the international scientific organization had held a conference in the U.S. However, scientists weren’t the only ones to be challenged by the under secretary. Farmers also will need to accept challenges, Koonin told FarmWeek.

“Farming is one of the great strengths of our country. It’s traditionally been about food and animal feed. We scientists think it can have a broader role to play in energy issues.

“We would like farmers to be open and technologically adventurous to new ways to meet energy needs,” Koonin said.

In response to an audience question about U.S. land resources and energy crops, Koonin said the overall cost to produce a gallon of fuel from energy crops will have to be lower. “It’s got to be competitive,” he emphasized.

“Once you’ve demonstrated you’re competitive, it will take off by itself, and somebody will make money, too,” Koonin added.

And the nation can’t rely strictly on corn to meet its energy needs, according to Koonin.

If the total U.S. corn crop could be converted into ethanol with 100 percent efficiency, that action would supply only 15 percent of the nation’s transportation fuel, he noted.

Dedicated biomass crops or algae will be needed to produce enough carbon to meet the nation’s energy needs, Koonin said.

In addition to meeting the nation’s transportation energy needs, Koonin said new solutions also are needed to meet energy needs for homes, commercial buildings, and other structures.

While the need is obvious, the answers are not.

Koonin acknowledged scientific challenges must be overcome to convert biomass crops into fuel. In addition, there are no clear choices for either optimal biomass crops or end products, he pointed out. — Kay Shipman

back the first year to force them to grow back more dense branches.

He explained the trees could be chopped and

chipped or they could be mowed at the base and baled into large round bales.

“We don’t plan for these (trees) to take the place of

corn and soybeans,” Kling said. “We plan to grow these in riparian areas and in places where corn and soybeans don’t do so well.”

University of Illinois crop science professor D.K. Lee, right, shows examples of some grasses he is studying for biomass production on the U of I’s Energy Farm during last week’s field day. Lee is focusing on switchgrass, prairie cordgrass, miscanthus, and big bluestem. (Photo by Kay Shipman)

FarmWeek Page 6 Monday, September 26, 2011

CROPWATCHERS Bernie Walsh, Durand, Winnebago County: We had another week of waiting for everything to dry down, and we are still waiting. The only thing going down these days is the corn and bean markets. The driest corn in our area is reportedly still in the 30s, and the soybeans are still pretty green. Everyone is busy finishing up repair projects and getting ready for harvest. Have a good week.

Leroy Getz, Savanna, Carroll County: Rain on Sunday (Sept. 18) of 0.55 of an inch.

There was another 0.5 of an inch in Jo Daviess County on Wednesday. Still not much harvest being done. Some high-moisture corn is being put away for livestock feed. The driest I have heard is at 20.5 percent moisture.

Soybeans are dropping leaves and will be ready soon. Our growing degree units stand at 2,754. This compares to 2,994 in 2010 and 2,650 in 2009 when nothing would dry it out.

Ryan Frieders, Waterman, DeKalb County: It feels like the first day of fall. The air is brisk and the days are much shorter. It has been dry and cool for the last week, but the forecast was for rain over the weekend. Corn harvest began in the area last week. The moisture content of the corn is nearly 30 percent. Yields are inconsistent across the field. Some soybeans also have been harvested.

Larry Hummel, Dixon, Lee County: Not much to report on for harvest activity in Northern Illinois. One neighbor started picking a few end rows and another picked some early corn for livestock feed. The early corn was at 21 percent moisture and yielded about the same as last year’s crop. Stalk strength on the winddamaged corn looks good for now, so we will wait and let it dry down. Hand-shelled ears tested about 26 percent moisture on our earliest variety. Some of the soybeans are very close to being ready. The 2.5 maturity beans should be harvestable sometime this week.

Thank goodness because I have been chomping at the bit after reading last week’s report of harvest progress from the Cropwatchers in Southern and Central Illinois.

Ken Reinhardt, Seaton, Mercer County: We had about 0.3 of an inch of rain Sunday (Sept.

18), but it hardly settled the dust.

Tillage and putting on NH3 are going to be real tough if it stays dry. Corn yields came in just below average on three of the four farms I have finished so far.

This is above what I anticipated.

Early hybrids on continuous corn suffered the most yield loss. There have been some beans cut, and I may have some ready to go over the weekend.

Ron Moore, Roseville, Warren County: We received 0.35 of an inch of rain last Sunday (Sept.

18). All that did was start my yard growing again so it will need to be mowed during harvest. Corn harvest is in full swing here now.

Moisture is in the low 20s. Yields are still variable but better than most farmers’ expectations. The market knows that as well and thus the huge drop in prices last week. We will start on soybeans this week. Some lime and fertilizer applications have started on the early harvested cornfields. Please be safe this fall as there have been several accidents and field fires in this area so far this year.

Mark Kerber, Chatsworth, Livingston County: Harvest has started for some, but the crop is still wet. Some earlier-planted soybeans were cut last week. We filled a drying bin half full of 24 percent corn to get everything set and working. The variety locater on the yield monitor is a great way to track yields of different hybrids. Now we need 80-degree days with wind to dry this corn down as we do the soybeans. We don’t need a repeat of 2009 where we were late and very muddy. Our government told us last week that our economy is shaky. This has led to all commodities on a downturn, including the stock market. Much chart damage. Will this end up like 2008?

Tim Green, Wyoming, Stark County: Harvest has gotten a nice start around here. A few beans were cut last week, and corn picking is starting to pick up.

Moisture levels in general are still on the higher end, but people are trying to get the downed corn out before it gets any worse. We are finding more of that than we thought we had. It is going to slow us up, no doubt. It is twisted and leaning in 15 different directions. Yields in those spots seem to be a little less. Yields in general seem to be lower — 20 to 25 bushels per acre off of last year. Cornon-corn guys tend to be seeing the worst yield reductions. I have heard yields of 120 bushels to 140 bushels on corn. Kind of disappointing.

Hopefully, we have our better corn to pick, but we haven’t found it yet. Have a safe fall.

Ron Haase, Gilman, Iroquois County: On Sunday, Sept. 18, we received 0.2 to 0.4 of an inch of rain on our farms. At the end of the week, a few combines were in the fields. Not much has been harvested. Local corn development is anywhere from the dent stage with the milkline 30 percent of the way down the kernel up to the few acres that have been harvested. The driest hand sample I had was 29 percent moisture, while the local elevator reported that most hand samples are ranging from 25 percent to 30 percent. Most corn would be 30 percent and above. Most soybean fields range from the R-7 or beginning maturity growth stage up to the R-8 or full maturity. Only a few fields of soybeans in the area have seen harvest activity over the past week. Harvest activity and crop development is ahead of 2009 but not by much. After Thursday’s big move down, the local closing bids for Sept. 22 were: nearby corn, $6.34; fall 2012 corn, $5.44; nearby soybeans, $12.52; fall 2012 soybeans $12.34.

Brian Schaumburg, Chenoa, McLean County: We have about 40 percent of our corn harvested and yield results are at the 10-year average. The area is 10 percent complete. Downed corn from the late July wind storm hampered harvest, caused cob rot, and robbed yield by as much as 100 bushels in places. Moisture ranges from 19 to 28 percent in the same pass. Market meltdowns worldwide leave us to remember that these are still good prices. Corn, $6.38; $6.53 January; $5.56 fall 2012; soybeans, $12.48; $12.65 January; $12.34 fall 2012; wheat, $5.93.

Steve Ayers, Champaign, Champaign County: Fall fell upon us at 4:05 a.m. Friday on a foggy, crisp Friday morning.

Looks like the crescent moon may be tipping some moisture on us through Tuesday. There are 50 percent chances of rain Sunday, Monday, and Tuesday.

We harvested a small patch of refuge corn Thursday that went down in a rare July storm. It yielded 134 bushels per acre at 20.7 moisture. The worst area pulled the average down 10 bushels per acre. Quite a contrast with some beautiful, full ears and others only 4 inches long with spotty pollination, all in the same field — same variety, same planting date. Beans are yellowing and dropping leaves, but we won’t do beans until next month. Let’s be careful out there.

Tom Ritter, Blue Mound, Macon County: A few light showers did very little to slow harvest last week, especially since everyone is concentrating on corn, and beans are just now starting to get ready.

Corn harvest is approaching 60 percent complete in Macon County. More has been harvested in the southern part of the county than the northern half, but fields are disappearing rapidly. Yields have been running 140 to 170 bpa with a few isolated fields taking it on the nose with yields closer to 100. Those with poor drainage, and especially fields of corn on corn, seem to be the biggest drag. There have been a few fields going above 170, but those are few and far between. Soybean harvest will start the first of the week, but probably very slowly. The majority of the beans are still a week to 10 days off.

Of the few fields that have been harvested, I have heard no reports on yields. Beans are small in stature and look to be small in seed size, which didn’t help yield.

Wilfred Dittmer, Quincy, Adams County: Hi again from our little corner of the state where several combines are rolling while others are still waiting. Yield reports in corn seem to be a little better than expected, and that is a good thing, but the market certainly has gone south recently.

Are we heading for a freefall?

Most soybeans are turning now, but none has been combined yet. We still are dry despite a mere 0.6 of an inch that managed to hit the gauge last weekend (Sept. 17-18). My tape measure went down about 18 inches Thursday in a large field crack. Have a safe week.

Todd Easton, Charleston, Coles County: Harvest activity last week mostly switched from corn to soybeans with most early bean fields reaching full maturity.

Soybean yield reports across the area and what I have seen myself have been much better than anyone anticipated. Many producers expected 30s and 40s and instead are seeing a range of just below 50 to just above 60. The progress of the harvest is coming along nicely in spite of the rain showers we received on Sunday (Sept. 18) and Thursday. The best estimate I could give right now would put corn harvest at 30 to 40 percent complete and soybean harvest at 10 to 20 percent done. It also looks like this will be another big fall for lime application with all the piles across the countryside and service company spreaders already out in force. With the good news of the yields, we are getting blindsided with bad news from the trading pits.

If there is one thing I have learned, it is that global events always trump fundamentals.

Remember to think safety.

Jimmy Ayers, Rochester, Sangamon County: We had 0.4 of an inch of rain last week. There was quite a bit of corn shelled and several are starting to cut beans.

We are seeing anywhere from 130 up to 190 bpa on corn. It is pretty clear that the corn-on-corn is suffering much more than the corn-on-beans. I don’t know if it was a shortage of nitrogen, but there is a pretty good variance in the two. Beans look like they might be pretty good in areas. But in some areas the shorter 30-inch rows never closed and aren’t looking the greatest. There is some chiseling going on and fertilizer being applied. Stalks seem to be getting a little more brittle. They have been pretty healthy up until now. Moisture was 21 to 24 last week. We hope to cut a few beans this week. Be safe during this busy time.

Ted Kuebrich, Jerseyville, Jersey County: If I were to rate the progress of harvesting in Jersey County on a scale of 1 to 10, with 10 being going all out, I would have to say that the county is about at a 4. Most of the corn planted in April or early May is harvested. The corn moisture and yield are varying from one end of the field to the other. Moisture is running from 14 percent to 19 percent. The yield is doing the same thing — running from 100 bpa to a little over 200 bushel on the same round. The moisture in the later corn is running 25 percent to a low of 20 percent. The early beans look like they will be ready in about 10 days. Prices at Jersey County Grain, Hardin: cash corn, $6.28; fall corn, $6.19; January 2012 corn, $6.39; cash beans, $12.14; fall beans, $12.18; January 2012 beans, $13.67.

Dan Meinhart, Montrose, Jasper County: Light rain fell on Sunday, Monday (Sept. 18, 19) and Thursday. The total was about 0.75 of an inch. The rain was very welcome. The beans that are still green benefited greatly. Dense fog was in the area several mornings. Very little corn was harvested. Yields and moisture varied widely. Some beans were harvested in a very isolated area. Mild temperatures are expected for this week.

Rick Corners, Centralia, Jefferson County: Corn harvest is slowly getting started. Moisture on the mid-May-planted corn is running 18 percent plus. The earliest beans are still a ways off.

Page 7 Monday, September 26, 2011 FarmWeek

CROPWATCHERS Dave Hankammer, Millstadt, St. Clair County: This past week I observed the colors of fall as I traveled through the county — the dark green of late-planted soybeans to the yellows and browns of mature corn and a few fields of soybeans. Sometimes all these colors were in the same field. Last week we received 1.8 inches of rain, delaying corn harvest for a couple of days. Temperatures ranged from 60 to 80 degrees, reducing the drying of standing corn. Corn harvest pace has been moderate with the first-planted fields being removed. We opened up a field and found the moisture at 20 percent and the kernels appeared smaller than those from last year’s crop. Stalk health is good. There were a few fields of soybeans that I noticed had turned brown with most of the leaves dropped. These fields will probably be harvested soon. The recent rain is helping to fill out the pods on the rest of the bean crop.

Local grain bids: corn, $6.24; soybeans, $12.15; wheat, $5.72. Have a safe week.

Kevin Raber, Browns, Wabash County: Rain this past week kept harvest in low gear.

Rain amounts totaled about 2 inches on Sept. 18 and 19 and then more light rain fell Thursday afternoon and night. The corn is slow to dry with this weather, but I think it should be helping the late beans.

Dean Shields, Murphysboro, Jackson County: Last week brought about 2.5 inches of rain to our area in two different rains.

It was much needed as it has been pretty dry here. Hopefully, it will help some of the later-planted beans. We are real close to harvesting soybeans down here.

We probably will get started when the weather straightens up with a few days of sunshine. Corn harvest is continuing.

Yields are down compared to a normal year, so that is a little disappointing. A few guys have started to sow some wheat. Right now, we need a little sunshine to dry things out so we can start cutting beans and get back to the corn. Everybody have a safe harvest.

Randy Anderson, Galatia, Saline County: Harvest is progressing slowly. We are having to deal with different maturities on the corn, and not that much is ready to harvest.

Corn moisture is still running in the mid-20s on corn planted May 15 through 20. Very little bean cutting has been done. What reports I hear is beans have a decent yield. Not necessarily above average, but just kind of middle of the road. The main topic you hear producers talk about is the dollar-plus losses in the corn and in soybean markets. I guess the little bit of showers we got here in the last two or three weeks have somehow made more bushels. Everyone have a safe week and be careful out there.

Ken Taake, Ullin, Pulaski County: Harvest was slowed by rain last week. We had some drizzle last weekend (Sept. 17-18) and earlier last week. We only had 0.6 of an inch total, but it kept us out of the field until Wednesday.

Then we had a shower Thursday afternoon and evening that totaled about 0.2 of an inch.

We were trying to get back in the field late Friday afternoon. Corn yields are improving as we get further along, but I still hear a lot of variability. Moisture in the last field we cut ranged from 18 to 21 percent. The weather hasn’t allowed us to harvest any soybeans yet, but our early beans are ready to be cut whenever the weather cooperates. Please remember to take time and be careful during this busy season.

Reports received Friday morning. Expanded crop and weather information available at {www.farmweeknow.com}.

Combines expected to roar after slow start to harvest

BY DANIEL GRANT FarmWeek

The infusion of cooler temperatures and more consistent rainfall events in recent weeks provided some relief to drought-stressed areas of the state.

But it apparently slowed crop drying and harvest activity as well because farmers as of the first of last week had harvested just 11 percent of corn and 1 percent of soybeans statewide — well behind last year’s pace when 35 percent of corn and 9 percent of beans were in the bin as of Sept. 19.

This year’s harvest pace also was slightly behind the five-year average of 15 per-

cent for corn and 4 percent for beans.

“We’re probably another week or 10 days away from

Southwestern Illinois where 32 percent of corn was in the bin. Elsewhere, corn harvest was 19 percent com-

‘I think we’ll be very short on the corn side from the historic (yield) average, but I’m still hopeful for the beans.’

— Philip Nelson LaSalle County farmer and IFB president

seeing significant harvest activity take place,” Philip Nelson, Illinois Farm Bureau president and LaSalle County farmer, told the RFD Radio Network last week.

Much of the harvest progress to date was in

plete in Southeastern Illinois and 11 percent of the crop was shelled in the west.

But just 1 percent of corn was harvested in the northeast crop reporting district, the National Agricultural Statistics Service

(NASS) Illinois field office reported.

Yield reports so far are highly variable but, in general, the state’s corn yield average is expected to be below the recent trend.

“I think we’ll be very short on the corn side from the historic (yield) average, but I’m still hopeful for beans” due in part to lateseason rains that may have helped pod-fill, Nelson said.

Mark Prose, a farmer from Macoupin County, reported last week he completed about one-third of his harvest and corn yields were anywhere from 30 to 40 percent below trend.

“Corn and beans are a little better than I thought

they would be, but they’re still below the 10-year average,” Prose said.

“We had 11 inches of rain in June and then we went two months without rain,” he continued. “With that in mind, I don’t know how the crop can be as good as it is.”

Forty-one percent of the corn crop and 47 percent of beans in the state last week were rated in good to excellent condition.

On the flipside, 25 percent of corn and 18 percent of beans last week were rated poor or very poor. The remaining 34 percent of the corn crop and 35 percent of beans were in fair condition, NASS reported.

Weather projected to remain favorable for harvest The 2011 corn and soybean crops shouldn’t be as difficult to harvest as they were to plant for many farmers, based on a weather forecast last week.

Steve Hilberg, director of the Midwest Regional Climate Center in ChampaignUrbana, last week called for the recent trend of mild days and spotty rainfall to continue through this week.

“There’s not much of a change (in the weather forecast) from what we’re getting now,” Hilberg told the RFD Radio Network last week. “It looks like we could get a few more shots of cold weather, but it doesn’t look like fieldwork will get hampered” based on a spotty precipitation outlook.

The month began with two to three days of record heat in many areas of the

state but since then temperatures have dipped to more comfortable levels.

“As a whole, (the temperature) for the month of September (as of Sept. 20) was two to three degrees below average, even with those record-hot days,” Hilberg said.

“It looks like a pretty good harvest season, so far.”

U.S. farmers as of the first of last week had harvested 10 percent of the corn crop, which is in line with the five-year average.

Many portions of the the northern Midwest this month experienced a hard frost, and there were freezing temperatures in Northern Illinois, but Hilberg last week didn’t foresee a hard frost for much of Illinois through the end of the month.

“I don’t see any potential (of a hard frost) in the next 10 days,” he said last week.

“But, obviously as we get into October, the potential increases quite a bit.”

La Nina conditions have returned to the Pacific Ocean, which could increase the chances of colder tem-

peratures and precipitation this winter.

“La Nina started to return. It certainly was a factor last year” when historically high snowfall totals blanketed the state, Hilberg said. “Odds are we could have another interesting winter.”

Weather Services International last week predicted cooler-than-normal conditions in the northern and eastern U.S. for the fall period (October through December) with above-normal temperatures confined to the southwest U.S. — Daniel Grant

EPA names Marion County site Superfund National Priority The U.S. Environmental Protection Agency (EPA) last week added the Sandoval Zinc Co. site at Sandoval in Marion County, to the Superfund National Priorities List (NPL) of hazardous waste sites.

Superfund is the federal program that investigates and cleans up the nation’s most complex, uncontrolled, or abandoned hazardous waste sites.

The Sandoval Zinc smelting facility closed in 1985 and filed for bankruptcy in 1986. A large waste pile containing elevated levels of lead, zinc, and other metals covers five acres of the site.

Wind-blown contaminants from the plant settled onto numerous properties in the area, and cinder and slag material were used in roads and driveways in the community. A drainage ditch, a pond, and wetlands also are contaminated by material from the site.

Recently EPA collected soil samples on nearby residential properties and will be gathering additional data to develop a cleanup strategy.

Currently, 1,302 sites are on the Superfund NPL including 15 new sites added last week. Sixty-two additional sites await final action.

FarmWeek Page 8 Monday, September 26, 2011

productioN

U of I scientists explore biomass crop farming practices

BY KAY SHIPMAN FarmWeek

Illinois farmers are aware of the impact soybean cyst nematodes and other pests can have on crops, but those potential problems are less clear with biomass crops.

During the University of Illinois Energy Farm Field Day, several researchers described their work to study and analyze potential pests and other issues that may arise in production of biomass crops.

Christian Hillnhuetter, a research associate, is focusing on nematodes’ potential impact on biomass production in miscanthus, switchgrass, energy cane, and corn.

Hillnhuetter is conducting field trials on the Energy Farm, Urbana, and fields in Havana that have with more sandy soils.

Although his project is in its first year, Hillnhuetter reported a significant decrease in biomass production among plants that received no nematode treatments in his Havana plots.

On the Energy Farm, Hillnhuetter showed stunted plants that he had intentionally inoculated with nematodes and then replanted into

in-ground tubs.

“We want to get the idea of the most damaging nematodes on biomass,” Hillnhuetter said.

The nutrient needs of biomass crops and the crops’ environmental impacts also are being studied.

For example, several plots with tile drains are being studied for nitrate levels in tile drainage water. The plots were planted with miscanthus, switchgrass, a mix of native prairie grasses, and corn or soybeans on a corn-corn-soybean rotation.

In the first year of the three-year trial, nitrate levels were similar — from 10 to 20 parts per million (ppm) — in tile water that drained from all four crops, according to Candice Smith, a graduate student.

By the second year, the nitrate levels had dropped to less than 1 ppm in the tiles that were beneath the switchgrass and prairie plant plots, Smith reported. By the third year, the nitrate rates also were less than 1 ppm in the tiles beneath the miscanthus plots, she added.

Meanwhile, the nitrate levels did not show similar reductions in the tiles beneath the corn-soybean plots. Smith not-

Christian Hillnhuetter, left, a University of Illinois research associate, shows the impact nematodes can have on the growth of biomass energy grasses, during last week’s field day on the U of I Energy Farm. Hillnhuetter has measured significant decreases in biomass production during the first year of the study. (Photo by Kay Shipman)

ed the corn-soybean plots are fertilized at a standard rate before planting, and the switchgrass plots also are fertilized in April.

“We think the switchgrass is taking up the nitrogen that we are putting on,” she said.

“From an environmental process, this (crop production) is good to take up nitrates.”

Cattle report bullish

month’s increase of 8 percent.

“The big surprise is total USDA’s cattle on feed report placements were down from a released Friday had some bullyear ago whereas most people ish surprises for traders. expected them to be above last Placements in feedlots (2.25 year’s level,” Peel said. million head) were down 1 perPeel said the drought in the cent from a year Southwest is havago and lower ing some effect FarmWeekNow.com than pre-report on the market (a Complete details of the latest large volume of estimates. cattle-on-feed repor t are at lightweight Meanwhile, FarmWeekNow.com. marketings of placements are fed cattle (2.05 rolling into feedmillion head) were lots from Texas) up 7 percent and above trade but production in other regions expectations. of the country is offsetting the “This (report) has all the situation to some degree. things we’d consider bullish Looking ahead, Peel believes elements,” said Derrell Peel, cattle prices should remain at Oklahoma State University ag historically high levels. economist. “The on-feed num“Beef demand is slowly makber (10.7 million head) was ing progress despite sluggish lower than expected as a result macro-economic news,” he said. of those two factors (marketBut high feed costs will keep ings and placements).” pressure on producer marThe inventory of cattle on gins.“There is profit potential feed as of Sept. 1 was up 5 in this, but, obviously, it percent compared to a year depends on managing costs,” ago but lower than last the economist added.

BY DANIEL GRANT FarmWeek

Nov. 15 deadline to apply for state equine grants

The Illinois Equine Industry Research and Promotion Board (EPB) has set a Nov. 15 deadline for 2012 grant applications, according to Karen Freese, board chairman.

The EPB has awarded more than $460,000 in grants since its inception in 2004. Grants are funded by voluntary assessments of a nickel per 50-pound bag of horse feed sold at retail. By law, EPB funds must be spent on equine research, education, and promotion.

Any group, individual, company, or institution may apply for funding. Preference will be given to projects that would benefit the largest number of people and horses.

A detailed research application and a shorter application for projects are available online at {www.HorsemensCouncil.org} or from the EPB administrative office, 3085 Stevenson Drive, Suite 200, Springfield, Ill., 62703. The telephone number is 217-5296503.

“Projects vary from ground improvements for communitybased facilities to scientific research to benefit the entire species,” Freese said.

Page 9 Monday, September 26, 2011 FarmWeek

Fb IN ACTION AN APPLE FOR THE STUDENTS

The Schuyler County Farm Bureau has been teaching Rushville-Industry students about apples during the month of September. Pictured is Ag Literacy Coordinator Jean Barron, right, who is reading to Tara Terry’s Pre-K class. The students were taught there are many kinds of farmers that grow food, including apple farmers. An apple tree from Boehm’s Garden Center was taken to each class to show the students what an apple tree looks like and how long it takes for the tree to produce apples. A total of 391 students in grades Pre-K through third grade were reached with the apple lesson. Teachers and students enjoyed apple slices after the lesson and apple Ag Mags were sent home with each student to share with family. (Photo by Schuyler County Farm Bureau manager Kelly Westlake)

DRIVING FOR EDUCATION

Tractors come into Fairfield on North First Street from traveling the countryside during the third annual Wayne County Antique Tractor Drive earlier this month. The drive, which benefited the Wayne County Agriculture in the Classroom program, involved 24 antique tractors. The drive started at the Wayne County Fairgrounds in Fairfield and concluded at the David White Farm west of Geff. (Photo courtesy Wayne County Farm Bureau)

FROm THE COUNTIES

C

OOK — Farm Bureau will sponsor a farmland lease seminar conference call from 7 to 8:30 p.m. Tuesday.

Kevin Brooks, farm management consultant, will present the program. Call Peggy at 708-354-3276 to register or for more information.

L

EE — Farm Bureau’s annual custom candle orders and payment are due Friday, Oct. 14. Candles may be picked up Friday, Nov. 21, at the Farm Bureau office.

Order forms are available on the website {www.leecfb.org}, by calling the Farm Bureau

office at 857-3531, or e-mailing leecfb@comcast.net.

“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.

FarmWeekNow.com debuts search engine Visitors to {www.FarmWeekNow.com} now can search for used trucks, cars, and grain trailers by going to an improved “Equipment Mart.”

Earlier this year, a farm equipment search was unveiled that highlights inventory by implement dealers who advertise in FarmWeek.

“The new search feature includes online inventories of vehicles from current FarmWeek advertisers, updated daily,” said John Hawkins, Illinois Farm Bureau farm information web editor. “We have just added inventory from the Ridings Auto Group, a Central Illinois-based dealer network that handles Ford and other brands.”

IFB members are eligible for a $500 discount on new Ford vehicles.

Visitors to the FarmWeekNow.com vehicle search can select products by year, price, and manufacturer. There also is a keyword feature available for more specific searches, including model or special equipment.

The farm equipment and vehicle search pages can be found by going to FarmWeekNow.com and clicking on the Equipment Mart icon on the home page menu.

FarmWeek Page 10 Monday, September 26, 2011

proFitability

Don’t let old fuel transfer pump limit efficiency

BY MATT THOMAS

Harvest season has arrived, and in a few short months the fields will be nothing but chopped stalks and bean stubble, combines and auger wagons will be back in the machine shed, and the deer Matt Thomas will be the only thing harvesting what is left in the fields.

Before harvest is completed, we first have to fill up our combine, tractor, and semi

fuel tanks — all of which are getting larger with every model year.

Year after year, operations are upgrading their machinery, grain storage, fuel storage systems, but still using their fuel pump from years ago.

That fuel pump can slow down an operation considerably over the course of a year.

Each time a piece of machinery needs to be fueled, the other machinery used in conjunction with it comes to a stop as well.

Most machines now are manufactured with 300-plusgallon fuel tanks which are a

drastic step up from the 75gallon fuel tanks of the 1970s and 1980s.

Upgrading your fuel transfer pump from a 12- to 15-gallon-per-minute (GPM) pump to a 25- to 30-GPM pump can save an operation up to 40 man hours per year per machine.

Simple calculations show a saving of $400 for a $10 per hour worker, multiple that by three or four machines and we are looking at a savings of up to $1,600 per year.

The average list price of a 25- to 30-GPM pump is $1,450, which ends up being a

savings of $150 the first year, and the full $1,600 going forward.

Over the last several years, operations have grown in size substantially, and the distance these new locations are from the home base has grown with them.

This has created a demand for another style of fuel transfer — portable fuel transfer pumps.

Since it is not economical to return all machinery to the main fuel source, the fuel source needs to go to them.

Twelve-volt fuel transfer pumps have provided a fuel source that

is not only reliable but also high in GPM. This gives you the option to fuel at the same 25 GPM, but on location.

Overall, the fuel transfer pump might be easy to overlook, but no matter how big the machines get, they are always going to need fuel. And the shorter that refueling time, the less time you are spending waiting to finish your work.

Have a safe and smooth harvest season.

Matt Thomas is GROWMARK’s facility equipment product manager. His e-mail address is mthomas@growmark.com.

Survey: Farmers optimistic now, but concerned about future profitability combined with future commodpositive, although (the ACI) did USDA earlier this month ity price uncertainty and rising come down a little since last lowered its corn production Farmers generally are optiinput costs resulted in a more spring,” said Linda Smith, estimate by 3 percent, commistic this harvest about the uncertain view of DTN/The Prooverall health of their operathe future. gressive Farmer tions despite the prospect of The ACI markets edi‘Fertilizer and seed (costs) are going up widespread yield reductions totaled a pestor/analyst. and (farmers) expect it to continue.’ due to weather challenges. simistic 94 when Farmers six The DTN/The Progressive farmers were months ago Farmer Agriculture Confidence were more asked to rate — Linda Smith their prospects Index (ACI) released last week optimistic as DTN/The Progressive Farmer had an overall score of 108. for the next 12 the spring ACI Any ACI score above 100 is was 111. months. considered an optimistic out“There does Smith look; scores below 100 are seem to be more (commodity) believes farmers still are optipared to August, with an averconsidered pessimistic. price uncertainty, especially in mistic about the near-term out- age yield of 148.1 bushels per The most recent survey of look due to high commodity acre, which would be about 13 the last couple weeks,” Smith 500 farmers nationwide was said. prices but less confident now bushels below trend. conducted the first two weeks “Other factors of concern than they were in the spring as Lower-than-expected yields of September. the result of weather-induced “Farmers overall are still yield losses.

U.S. consumers are expected to see a modest seasonal decline in gasoline prices in coming months as refiners Feeder pig prices reported to USDA* switch from summer grade to Weight Range Per Head Weighted Ave. Price lower-cost winter grade gas.

BY DANIEL GRANT FarmWeek

include inflation and input prices,” the analyst continued.

“Fertilizer and seed (costs) are going up and (farmers) expect it to continue.”

Two major seed companies this month announced seed price increases for 2012 that are expected to range between 5 and 10 percent.

Meanwhile, USDA this month reported cash rents, on average, increased 8 percent this year statewide. Gary Schnitkey, University of Illinois Extension farm management specialist, predicted average cash rents in the state could increase again in 2012.

Will world demand keep pressure on energy prices?

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

40 lbs.

50 lbs.

Receipts

$15.00-$43.80 $28.19 $31.50-$35.00 $34.61 n/a n/a This Week Last Week 22,752 24,687 *Eastern Corn Belt prices picked up at seller’s farm

Eastern Corn Belt direct hogs (plant delivered) Carcass Live

(Prices $ per hundredweight) This week Prev. week $84.22 $81.80 $62.32 $60.53

Change 2.42 1.79

USDA five-state area slaughter cattle price Steers Heifers

(Thursday’s price) Prev. week This week 115.97 117.15 116.03 117.74

Change -1.18 -1.71

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 132.48 -0.92

This week 131.56

Lamb prices Slaughter Prices - Negotiated, Live, wooled and shorn 84-184 lbs. for 170-200 $/cwt. (wtd. ave. 185.56); dressed, no sales reported.

Export inspections (Million bushels) Week ending Soybeans Wheat Corn 9-15-11 10.0 33.3 22.4 9-08-11 12.0 16.4 18.8 Last year 12.9 33.5 35.9 Season total 23.9 349.6 45.7 Previous season total 23.5 329.8 96.1 USDA projected total 1540 1295 1900 Crop marketing year began June 1 for wheat and Sept. 1 for corn and soybeans.

FarmWeekNow.com To check out the full energy outlook repor t online, go to FarmWeekNow.com.

The Energy Information Administration (EIA) this month in its short-term energy outlook projected gas prices nationwide in the fourth quarter would average $3.47 per gallon after topping out around $4-plus in early summer.

But, overall, energy prices in general are expected to remain strong and even accelerate next year as world energy consumption continues to grow.

“Developing nations are going to keep driving demand,” said Brian Milne, Telvent/DTN energy editor and analyst.

EIA in its international energy outlook released this month estimated China and India would account for about half the global energy growth from 2008 through 2035.

The two countries were projected to consume 31 percent

of the world’s energy by 2035 compared to 21 percent in 2008.

“Strong economic growth leads China and India to more than double their combined energy demand by 2035,” EIA noted in its report.

China was projected to use 68 percent more energy than the U.S. by 2035, according to EIA. Overall, energy consumption in the world from 2008 to 2035 was projected to grow by an annual rate of 1.6 percent.

Consumption of crude oil, as a result, was projected to increase 3.1 percent in 2011 and by 3.8 percent in 2012.

Oil prices subsequently were projected to increase from an average of $100 per barrel in

2011 to $103 per barrel next year.

“World oil prices will remain high,” according to EIA. Investors have supported high oil prices but they’re not driving the market, Milne noted.

“They (speculators) clearly are a force in the market supporting higher prices,” Milne said. “But I would not assign (speculators) as the No. 1 reason prices are higher.

“It still reverts back to fundamentals,” he continued.

“Market fundamentals are underpinning buying and selling by speculators. When the market is tight, that increases buying (opportunities) for speculators.” — Daniel Grant

Page 11 Monday, September 26, 2011 FarmWeek

PROFITABILITY Corn Strategy

C AS H ST RAT E GI S T

Does CRB hold clues?

World economic events finally caught up with markets this past week, grain markets included. It wasn’t that there was a big shift in fundamental economic news, but how the news that surfaced affected the investment community.

Increasing worries about Greece and the implications for the European Union already had made investors cautious. But when Federal Reserve Chairman Ben Bernanke indicated there was risk of the U.S. economy sliding into recession, investment money started to flee any assets that had risk tied to them.

On the quote screen that we normally watch that has a variety of commodity and financial markets on it, there were only two markets that were higher on Thursday, the U.S. dollar and U.S. Treasury bonds. All others were moderately to sharply lower.

And that trend continued Friday in the precious metals markets, placing a drag on other markets at week’s end, whether they were lower or not.

The accompanying CRB Futures Index chart may hold some clues as to what lies ahead.

The rally into the 370.72 peak in May failed to push through the 62 percent retracement point of the 2008-2009 decline. The

quick reaction down off that peak hinted the general move up in commodity prices may have come to an end.

Last week’s collapse in commodity markets dropped that index below the 89-week moving average, a technical benchmark that tends to have some importance for commodity indices in general. The uptrend off the early 2009 low is still a little below the current level, currently standing at 295.

There is a chance the CRB Index could rebound off support at 295-300. However, any short-term turn higher may only be a rebound. Historically, there’s a tendency for commodity indices to trend down during the latter part of calendar years into a seasonal low near year’s end.

The recent rise in the dollar’s value tilted the odds in favor of it having passed its 36- to 39month cycle low in May. And if the dollar continues up, it would be counterproductive to seeing commodity prices remain strong, fitting with the possibility of the general trend in commodity prices remaining down over the next few weeks or months.

Even though commodity prices have declined significantly from their peaks, they’re still mostly at relatively high historical levels. In this risk-averse environment, investment capital may choose to stay away because of that, and that undermines the potential for commodity rallies to sustain gains.

AgriVisor endorses crop insurance by

AgriVisor LLC 1701 N. Towanda Avenue PO Box 2500 Bloomington IL 61702-2901 309-557-3147 AgriVisor LLC is not liable for any damages which anyone may sustain by reason of inaccuracy or inadequacy of information provided herein, any error of judgment involving any projections, recommendations, or advice or any other act of omission.

Policies issued by COUNTRY Mutual Insurance Company®, Bloomington, Illinois AgriVisor Hotline Number

309-557-2274

Cents per bu.

ü2011 crop: The hard break in commodity prices in general should exhaust itself soon. Wait for December to rebound to $6.90 before making catch-up sales. Plan to use the next rally to add to sales if you are comfortable with expected supply. Storing unpriced grain may not pay this year because of high early prices. Due to the modest futures carry, hedge-to-arrive (HTA) sales for late winter/spring delivery still work for farm-stored grain. ü2012 crop: Use rallies to $6.10 on December 2012 futures for catch-up sales, and maybe add to them. vFundamentals: Corn fundamentals haven’t played as much of a part in the recent decline as has concern about the domestic and international economic situations. The competition from wheat as a feed in the world may continue to subdue export interest in U.S. corn. Chinese demand going forward will be a wildcard, but they’ve only shown an inclination to buy modest supplies at these higher prices.

Soybean Strategy

ü2011 crop: This decline has dropped soybean prices back to a level that should be good support. However, it also may portend lower prices yet this winter.

Use rallies to $13.25 on November 2011 futures for catch-up sales. We may add another increment at that time if you are comfortable with your supply situation. A HTA for winter/spring delivery may pay if you can store soybeans on the farm. ü2012 crop: Use a rally to $13 on November 2012 futures for catch-up sales. We may add another sale in the $13-$13.40 range. vFundamentals: Fundamentals appear to have taken a back seat to financial/economic influences this past week, but fundamentals still aren’t that good for soybeans. Frost reduction in the Northern Plains may be the most positive feature, and it’s unlikely to be big enough to impact prices. New-crop interest in soybeans and products generally is lackluster. The 16 percent decline in the Brazilian real in September is making

Brazilian soybeans and products more attractive.

Wheat Strategy

ü2011 crop: Wheat prices remain in a downward trend, but they are approaching levels that should offer good short-term support. Nevertheless, some timing indicators still suggest prices should remain weak into year’s end. Use rallies to $7.25 on Chicago December for catch-up sales. We may recommend another 20 percent sale if December gets back to that mark. Check the Hotline daily.

The carry in futures more than pays for commercial storage. We

still prefer HTA contracts for winter or spring delivery for sales. vFundamentals: The central focus in all commodity markets has been outside market influences, rather than specific fundamentals. The U.S. Federal Reserve’s downbeat assessment of the U.S. economy cast a bearish blanket on all markets.

Wheat export competition remains fierce with the majority of business still being sourced from the Black Sea region. The trade remains uneasy about winter wheat seeding in the Southern Plains because of the ongoing drought.

FarmWeek Page 12 Monday, September 26, 2011

perspectives

Harvest numbers tell interesting stories about farming Corn harvest has begun.

And it is expected to be a big harvest — both across the country and in Illinois.

But it certainly hasn’t been easy getting to harvest with this year’s crop. Despite the terrible earlyseason planting conditions, despite the hot temperatures during pollination, and despite the dryness durWilliam Bailey ing the summer, combines are harvesting what USDA estimates to be the third largest national corn crop in history.

The key to having such a large national corn crop is the near-record amount of corn planted — 92 million acres — the largest planted acreage since 1944.

This summer’s weather problems did reduce yield around the country — a lot. It is estimated that the national corn yield this year will be

down more than 10 percent from 2009 levels and 3 percent below last year. But it is the large number of acres planted that were an effective hedge against the consequences of crop problems this year.

In Illinois, the corn yield actually will be higher than last year and the size of the corn crop also is expected to be about 2 percent larger than last year. The situation here is just the reverse of the national trend — the higher yield

compensated fewer less planted acres. Not a lot less, about 100,000 acres, but corn plantings in Illinois were lower than last year.

Acres planted to soybeans in Illinois also were down from last year. The key reason they were down probably is because of the horrible weather during the early part of the season.

But unlike corn yield, which is up from last year, soybean yields around the state are down. Of the nine

crop districts in Illinois, soybean yield is up from last year in only one — the west district.

The above discussion is mostly about numbers, but numbers such as these often tell very interesting stories, if one listens carefully.

For example, the USDA report noted that the U.S. will import more oats than it produces and that less than 1 million acres of oats will be harvested in the U.S. — down 50 percent from just six years

ago; sorghum yield is down almost 25 percent from last year, and production is down almost 30 percent; and durum wheat production is expected to be almost 50 percent less than last year.

One interesting story about the reduced national corn yield for both this year and last is that back-to-back yield reductions are very rare. In fact, in the last 50 years, that has happened only once — 1973 and 1974. The recurrence of back-to-back yield reductions will be fodder for a lot of people as they attempt to sort out what happened — climate change, consequence of using new biotech seeds, bad luck?

And one may wonder, with the corn harvest just under way, what sort of stories will the final numbers for this year’s corn crop tell us?

W illiam Bailey is chair of the School of Agriculture at Wester n Illinois University, Macomb. His e-mail address is WCBailey@wiu.edu.

Insect stalkers frequent fall flowers Insect numbers in temperate climates show a significant decline during September compared to July and August.

Biologically, insects are cold-blooded creatures and by necessity have completed their adult life when the calendar flips to September.

Some people dislike insects, and the arrival Tom Turpin of fall is reason enough to breath a sigh of relief. On the other hand, a few people are on the prowl for insect specimens during early fall. These are students who are required to make an insect collection.

Collections have long been a method used by middle school and high school educators to teach aspects of biology, including curatorial techniques and biodiversity. Leaves and insects serve such a purpose nicely. So once school begins, many are the students who traipse the lawns, parks, and byways in search of leaf or insect.

Unfortunately, the beginning of the school is not the best time of the year for either quality leaves or abundant insects. This means that some parents have encouraged their children to begin such collections over summer vacation.

It also means that some specimens are passed down from older to younger siblings for use in such an assignment.

That, of course, is not the way teachers think collections should be made and has prompted such devious teacher techniques as dusting submitted collections with a powder that will glow under ultraviolet light. Such insects can then be easily detected should they

show up in subsequent collections.

The entrepreneurial spirit of students also shines through in such times.

I refer, of course, to students who discover that they can earn money by selling extra specimens to those in need. Insect collections also are an important aspect of some college entomology courses.

I know for certain at that level a number of dollars have changed hands in order to complete a collection with a given number of insect orders represented.

And there are other ways to procure an insect or two for the class requirement.

I remember one fifth-grade student who had a periodical cicada in her collection. No periodical cicadas had emerged in our area that year. So expecting to hear a story of a family vacation to the Eastern Seaboard, I asked her where she had collected the specimen. To which the student replied, “At a garage sale.” There is more than one way to collect an insect, I guess!

One of the best places to collect insects in the fall is on the blossoms of late-blooming flowers, such as goldenrod. As it turns out, human insect collectors are not the only creatures to have discovered that late-blooming flowers are good insect-stalking locations.

Insects that are predators on other insects also gather on the blossoms.

Two of the most common of such predators are praying mantids and ambush bugs.

These insects are aptly named. Praying mantids are so dubbed because they

often appear in a prayerful pose. It is from this stance that the mantids reach out with their front legs — called raptorial, because, like the talons of a hawk, they function to catch things — and procure their next meal.

Ambush bugs get their name by being masters of the surprise attack.

The coloration and shape of these bugs allow them to blend into the surroundings and not be visible to other insect visitors to the flowers. Ambush bugs also have raptorial front legs to facilitate capture of their prey.

Fall flowers could be considered nature’s summary statement for the season — the last blossoms, the last nectar, the last insects — before the

declining temperatures put a stop to the growth of plants and the activity of cold-blooded animals, such as insects.

These flowers could be considered a temperate region’s fall equivalent to a desert oasis.

It is here where the flower feeders, including bees, find their last pollen and nectar. It is here that insect predators can find a last meal. It is here that insect collectors capture the last few insects for their collections. Unless, of course, they decide it is more convenient to purchase a specimen from a friend!

Tom Turpin is an entomology professor at Purdue University, West Lafayette, Ind. His e-mail address is turpin@purdue.edu.

“It’s a photograph of the little woman...”