March 18 2013

HOUSE AND SENATE lawmakers are uniting to promote legislation that would help set the stag e for Midwest navig ation upgrades. ............................................2

THE FARMLAND market d i d n o t d r y u p l i ke m a n y o f the crops did during the historic drought last year in Illinois. ...................................4

THE MEDICARE Contribution Tax would burden farmers, the American Farm Bureau Federation told a House panel last week. ..............................................6

Do budget concerns put farmers, communities at risk?

Monday, March 18, 2013

BY MARTIN ROSS FarmWeek

Periodicals: Time Valued

These days, USDA is doing more with less, even as it anticipates even less.

However, new House budget proposals raise concerns about producers having to make do with reduced risk management resources, while an expiring continuing budget resolution and farm bill delays raise questions about funding for USDA rural community support programs.

USDA and farmers already face near-term, across-theboard cuts under budget “sequestration.” A new House spending plan unveiled last week by House Budget Committee Chairman Paul Ryan (RWis.) and incorporating sequestration cuts proposes $31 billion in farm program “savings” over the next 10 years.

“They’ve upped the ante” on proposed program-related cuts, Illinois Farm Bureau National Legislative Director Adam Nielsen observed. The Senate’s new budget plan proposes $23 billion in ag program savings; the president is expected to release his budget in April.

Ryan would grant the House Ag Committee discretion in deciding how to make

Two sections Volume 41, No. 11

needed cuts. But while Nielsen noted the chairman “backed away” from prescribing specific ag cuts, Ryan’s recent “Path to Prosperity” budget blueprint argued that “with farm profitability — and deficits — continuing at high levels,” it was time to “revisit” not only farm supports but also “the current structure of the crop insurance programs,” potentially including premium subsidies.

House and Senate ag committees have agreed to key reductions in commodity program spending (last year’s farm bill proposals offered roughly $16 billion in savings over 10 years, along with added cuts in

conservation and food stamps), but propose strengthening rather than weakening crop insurance.

Meanwhile, Colleen Callahan Colleen Callahan, USDA Rural Development (RD) state director in Illinois, reported her agency is bracing for further cutbacks under sequestration. However, given indications from Washington, Callahan does not anticipate short-term RD employee furloughs such as

those expected within USDA food inspection services.

Sequester and potential forthcoming budget cuts are merely the latest challenges for RD, where scale-backs and 2008 farm bill expiration and unfunded extension have forced “program-specific” personnel — community housing and facilities, rural business, and water specialists — to train for broader, shared duties, she said.

“Guidance is coming, we’re being told, as far as sequestration is concerned,” Callahan told FarmWeek at last week’s Global Agribusiness Summit in Decatur. “But over the last sev-

eral months, we’ve been doing more with less in preparation for the uncertainty.

“When I started at USDA Rural Development in 2009, we had 125 employees in Illinois.

Today, we have 98, and we have had a hiring freeze for nearly a year. We’re still doing the same work, and we’re doing it with different people. Fewer people are doing more and different work than they may have done at one time. But we still deliver the mission.”

The director nonetheless is concerned about how the lack of a new farm bill and thus

Since 2008, roadway collisions have been the second leading cause of Illinois farmrelated deaths, surpassing grain bin accidents as the No. 2 cause of ag fatalities behind tractor rollovers.

To combat what Illinois Farm Bureau board member Terry Pope termed “a real and growing danger,” the Illinois Farm Bureau, Illinois’ Department of Transportation, and the Illinois State Police (ISP) have launched Caution, Slow Down, Share the

Road — a rural roadway safety awareness program.

The program, conceived roughly two years ago by Adams and Madison County Farm Bureau members, is designed to boost motorist awareness of farm machinery movements on rural roads and identification of the ag slowmoving-vehicle emblem (SMV) as a signal to exercise caution around farm vehicles and implements.

IFB will encourage county

Farm Bureaus to place the 3by-20-foot banners at strategic rural intersections during planting and harvest. During a news conference promoting the new statewide program, Adams County Farm Bureau manager Shawn Valter stressed the temporary banners were developed rather than permanent postings because “we wanted the message to be fresh” during peak farm traffic periods.

Country Financial senior loss control representative Eric Vanasdale noted 29 Illinois residents have died in collisions with farm machinery over the past five years. Twenty six were rural motorists; the other three were farmers.

“We believe this program will save lives,” Pope told reporters in Bloomington. “This situation has occurred largely because of urban development that literally touches nearby farmland. Our members not only recognized the problem — they proposed the solution.”

Country Financial and GROWMARK participated in the news conference announcing the statewide initiative. The banner campaign will be accompanied by broadcast public service announcements and other safety awareness efforts.

The original Adams/Madison County program caught on quickly in five added counties; two dozen county Farm Bureaus have purchased banners since the program’s incep-

IFB, agencies embrace road safety program

Illinois Farm Bureau board member Terry Pope, left, displays a new “Caution, Slow Down, Share the Road!” banner that, under a new statewide initiative, would be placed at key rural intersections during planting and harvest. Joining Pope in Bloomington for a news conference last week to announce the new initiative were Madison County Farm Bureau manager Tom Jett, center, and Adams County Farm Bureau manager Shawn Valter. (Photo by Cyndi Cook)

FarmWeek on the web: FarmWeekNow.com

See Budget, page 6

FarmWeekNow.com

Check out our video of the IFB’s Caution, Slow Down, Share the Road safety campaign, at FarmWeekNow.com.

tion. The success of the initiative at the county level helped trigger the statewide effort.

ISP education officer Mike Kindhart emphasized “one driving fatality is one too many,” and acknowledged that “technology has put us in a huge situation of distracted driving.” Motorists “must focus on the task at hand,” and avoid using cell phones or audio players, “playing with the radio, eating, or drinking on roadways,” he told FarmWeek.

Kindhart stressed the need for “voluntary compliance” with rural safety rules. IFB is looking at measures designed to assist counties seeking to implement the banner program.

“We really envision this going completely statewide and maybe even farther than that some day,” Valter said. — Martin Ross

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

Quick Takes

FarmWeek Page 2 Monday, March 18, 2013

JAPAN ON TPP TEAM — In a long-awaited move, Japan is joining a collection of key eastern and western nations including the U.S. as a partner in Trans Pacific Partnership (TPP) talks.

Japan is the fourth-largest U.S. agricultural export market, with nearly $14 billion in purchases in 2012, and thus would “bolster the reach of the TPP for U.S. agriculture,” American Farm Bureau Federation President Bob Stallman said last week.

“This could be pretty incredible,” Washington trade consultant Paul Drazek told FarmWeek. “I never thought in my lifetime we’d see free trade negotiations with the (European Union) and the possibility of free trade with Japan.

“I’m not going to say we’re going to end up with total free trade in agriculture: I think Japan will simply not be able to go to free trade with a couple of products for several years. But I think there will be market openings with those products and that every product will be on the table.”

FARMER DOCUMENTARY COMING — Oscar and Emmy winning filmmaker James Moll has announced he will produce a feature-length documentary about the next generation of American farmers and ranchers.

The yet-to-be-titled documentary will profile farmers and ranchers in their 20s, all of whom have assumed the generational responsibility of running the family business.

Made in cooperation with the U.S. Farmers & Ranchers Alliance, the film plans to offer a personal look at some of the young farmers and ranchers who grow and raise the food we consume daily and into the latest farming practices and technologies that are changing and improving the landscape of modern agriculture.

For more information about the film, visit {www.AllentownProductions.com}.

Mull won an Oscar in 1999 for a 1998 documentary on the lives of five Hungarian Jews during the Holocaust. Examples of his more recent documentary work can be found at the website above.

FUELING EFFICIENCY — U.S. Reps. Randy Neugebauer (R-Texas) and Collin Peterson (D-Minn.) propose to exempt certain class A Commercial Driver’s License (CDL) holders from the burdensome requirement of obtaining a Hazardous Material endorsement for transporting more than 118 gallons of diesel fuel.

The House measure and its Senate companion bill would increase the maximum amount of fuel farmers, custom harvesters, and producers with class A CDLs could haul without an endorsement from a current 118 gallons to 1,000.

It is not uncommon for modern farm machinery to carry more than 250 gallons of fuel, which means current legal limitations hamper efficiency in the field.

(ISSN0197-6680) Vol. 41 No. 11

March 18, 2013

Dedicated to improving the profitability of farming, and a higher quality of life for Illinois farmers.

FarmWeek is produced by the Illinois Farm Bureau.

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

FarmWeek is published by the Illinois Agricultural Association for farm operator members. $3 from the individual membership fee of each of those members 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. © 2013 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 Margie Fraley (mfraley@ilfb.org) Business Production Manager Bob Standard (bstandard@ilfb.org) Advertising Sales Manager Richard Verdery (rverdery@ilfb.org) Classified sales coordinator Nan Fannin (nfannin@ilfb.org) Director of News and Communications Michael L. Orso Advertising Sales Representatives Hurst and Associates, Inc. P.O. Box 6011, Vernon Hills, IL 60061 1-800-397-8908 (advertising inquiries only) Gary White - Northern Illinois Doug McDaniel - Southern Illinois Editorial phone number: 309-557-2239 Classified advertising: 309-557-3155 Display advertising: 1-800-676-2353

THE RIVER

‘Good things happening’ in D.C. river policy push

BY MARTIN ROSS Farmweek

The nation’s commercial waterways interests are convening in Washington as a key Senate committee reportedly prepares to release a major new water projects package.

House and Senate lawmakers are uniting to promote legislation that would help set the stage for Midwest navigation upgrades.

Bipartisan Illinois lawmakers hope to open the door to public-private partnerships on the Mississippi River system and assure barge movements during drought or flood periods.

“Good things are happening,” Washington-based Waterways Council Inc. (WCI) spokesman Debra Colbert told FarmWeek last week as the group applauded reintroduction of “WAVE4” — the Waterways are Vital for the Economy, Energy, Efficiency, and Environment Act of 2013.

WAVE4, cosponsored by Midwest and Southern congressmen, including Chicago Democrat Rep. Daniel Lipinski, proposes new criteria to prioritize essential river construction and major rehab projects. It also would reform the U.S. Army Corps of Engineers’ project “delivery,” system and provide a

30 to 45 percent increase in barge fuel taxes that fund the industry Inland Waterways Trust Fund (IWTF). The trust fund covers 50 percent of navigation project funding, and

es Corps study of how to improve management coordination within the entire Mississippi River Basin during extreme weather periods; improved tools for Mississippi River forecast-

IFB National Legislative Director Adam Nielsen will attend the annual Waterways Council Inc. waterways seminar in Washington this week.

waning IWTF revenues have slowed approval of federal lock improvement funds.

At the same time, Springfield Democrat Sen. Dick Durbin, Highland Park Sen. Mark Kirk, Taylorville Republican Rep. Rodney Davis, and East Moline Democrat Rep. Cheri Bustos have introduced the Water Infrastructure Now Public-Private Partnership Act. That bill proposes a five-year pilot that would identify up to 15 authorized navigation, flood damage reduction, and disaster damage reduction projects in which private funding sources could partner.

A third measure, sponsored

by Durbin, Kirk, Davis, and Belleville Democrat Rep. Bill Enyart, would address river concerns raised by the 2012 drought.

The Mississippi River Navigation Sustainment Act propos-

ing; and new Corps authority to maintain sufficient depths in barge fleeting areas and access to docks, loading facilities, and other river infrastructure.

All three pieces could be incorporated into a comprehensive Water Resources Development Act (WRDA) waterways package. The Senate Public Works and Environment Committee reportedly may move a WRDA plan this week.

Meanwhile, IFB representatives are set to attend this week’s annual WCI “waterways seminars,” which culminates with river stakeholders lobbying on Capitol Hill.

“This year’s meeting is particularly important because of all of this legislative activity,” Colbert said. “Plus, the low-water crisis on the middle Mississippi really underscored the importance of the system.”

In a Friday teleconference, Schock noted House Budget Committee Chairman Paul Ryan’s (R-Wis.) support for NESP funding, but stressed the importance of bipartisan and White House agreement in nailing down essential river funds.

“To the degree something is in the House, the Senate, and the president’s budgets is the degree to which we’re going to

get something done on this,” Schock told FarmWeek.

“Our hope was, as river community congressmen, we could band together, R and D (Republicans and Democrat) to get this included in the president’s budget.”

The president is expected to release a budget plan by May, the lawmaker reported.

— Martin Ross

Schock: President needed ‘on board’ for river $$ Recognizing the dual commercial and environmental importance of the Mississippi River system, Peoria Republican Rep. Aaron Schock seeks to ensure the administration is “on board” with future river funding.

In a letter to the White House last week, Schock and Rep. Dave Loebsack (D-Iowa) led a group of 21 colleagues urging support for the U.S. Army Corps of Engineers’ Navigation and Ecosystem Sustainability Program (NESP) in the administration’s 2014 budget.

NESP supports infrastructure improvement and ecological restoration within the Upper Mississippi system — the only U.S. river basin cited by Congress as both a nationally significant commercial navigation system and river ecosystem.

Schock and company argued that ensuring locks and dams are capable of providing effective traffic flow “is critically important to the competitiveness of our agriculture and manufacturing industries and ultimately the consumer.”

Tuesday: • Ag weather with Chesapeake Meteorology • Susan Moore, director of the IAA Foundation • Troy Frerich, senior investment officer for Country Financial • Barry Nelson, chairman of the Agriculture Council of America Wednesday: • Tim Schweizer, Illinois Department of Natural Resources • Jim Bower, Bower Trading • Jerry Townsend, winner of the 2013 Rural Illinois Champion Award Thursday: • Jill Johnson, Illinois Beef Association • Philip Nelson, president of Illinois Farm Bureau • Kraft Foods Inc. representative Friday: • Sara Wyant, Agri-Pulse publisher • Josh Darr, Chesapeake Meteorology • Mike Doherty, IFB senior economist • Terry Smith, Adams County Farm Bureau To find a radio station near you that carries the RFD Radio Network, go to FarmWeekNow.com, click on “Radio,” then click on “Affiliates.”

GOVERNMENT

Page 3 Monday, March 18, 2013 FarmWeek

Illinois House panel reaches ‘fracking’ accord The Illinois House Revenue and Finance Committee last week announced the final piece of groundbreaking legislation to regulate hydraulic fracturing for oil and gas extraction, better known as “fracking,� had been outlined.

The final piece was creation of a “severance tax� on

the oil and gas extraction.

The severance tax would be collected by the first purchaser, the entity that gathers the oil and gas from the well site for further refining.

The tax would be assessed on the oil that is collected from wells at 3 percent on the total value of oil in the first two years of the life of the well.

In subsequent years, the tax would be between 3 percent and 6 percent based on a sliding scale related to the production of the well.

If a well produces fewer than 15 barrels of oil a month, a tax will not be applied. “During the hearing, numerous groups registered their support of the bill,� said Kevin Semlow, Illinois Farm Bureau director of state legislation. “The groups included the GROW Coalition, which includes oil industry companies and other related business groups, the trucking industry, labor groups, environmental groups, the Department of Natural

Resources, the Illinois Environmental Protection Agency, the Illinois attorney general, and the Illinois Farm Bureau.�

This legislation also includes regulatory protection measures, regulations for well construction, specific standards for the repair of lands impacted from drilling, and other regulations protecting natural resources. “Throughout the negotiations on this significant legislation, IFB maintained a consistent call for the legislation to include the items outlined by the grassroots policy established on hydraulic fracturing,� said Semlow.

Hydraulic fracturing is a process that uses high-pres-

sure mixtures of water, sand or gravel, and chemicals to crack rock formations to release oil and natural gas.

Opponents of the measure have sought a two-year moratorium on fracking.

Representative John Bradley (D-Marion), sponsor of the legislation, indicated the final language was being developed and would be offered to HB 2615 as an amendment in the coming days. “We expect that this issue will be brought before the House Revenue and Finance Committee and moved to the House floor this week prior to the deadline to move bills from committees,� said Semlow.

Free online class offered for well owners

The Illinois State Water Survey (ISWS) has developed a free online class to educate well owners.

Entitled the private well class, the course is a 10-module series that covers all parts of well management.

By understanding the basic science of water wells and following best practices to maintain and protect home water supplies, this class will provide the tools needed to ensure a safe water supply and help extend the life of a private well.

Course topics include understanding how groundwater gets into a well, the basics of well construction, how groundwater and wells get contaminated, testing well water to ensure the

Above, from left, Jon Mattern, Chase Barnard, and Austin Pletsch of Putnam County FFA and Jim Crank of Midland FFA fill baskets to be given to legislators at the Capitol in Springfield during the 43rd annual Agricultural Legislative Day last week. Hundreds of FFA members from across Illinois assembled baskets of Illinois food and other products and then delivered the baskets to legislators, many of whom are new this year. Representatives of many ag groups chatted with lawmakers over breakfast and then headed out for separate visits with their senators and representatives. Below: Gov. Pat Quinn chats on the Capitol steps with FFA state officers Joel Limestall, secretary; Darren Riskedal, president; Tyson Schulte, treasurer; and Courtney Gerstenecker, reporter. Quinn said he always attempts to meet with FFA members on Agricultural Legislative Day. (Photos by Cyndi Cook)

water is safe to drink, understanding test results and fixing water-quality problems, and where to find help and get questions answered locally.

To take the class, enroll online at {privatewellclass.org}. The 10 lessons will arrive by email. Webinars are available for additional information.

The course is part of a nationwide initiative funded by the Rural Community Assistance Partnership through a grant from the Environmental Protection Agency.

University of Illinois Extension educators collaborated with the ISWS in 2012 to provide well water samples throughout the state for testing. Those samples showed few problems other than slight to moderate hardness.

We ar are are

Your FIR Your RST ST Ch Choic ce for Operat O ra atin atin tin ng Loa oa ans. an

ÂŽ

"HSJDVMUVSBM 'JOBODJOH t 3VSBM )PNF -PBOT t "QQSBJTBMT " H S J D V M U V S B M 'J O B O D J O H 3 V S B M ) P N F - P B O T " Q Q S B J T B M T --FBTJOH t "HSJCVTJOFTT BOE NPSF F B T J O H t "H S J C V T J O F T T B O E N P SF

t XXX TUGBSNDSFEJU DPN

t XXX TUGBSNDSFEJU DPN 1st FFarm arm C Credit redit Services Services is an equal opportunity opportunity pr provider. ovider.

FARMLAND VALUES

FarmWeek Page 4 Monday, March 18, 2013

Illinois farmland prices continue to break new ground

BY DANIEL GRANT FarmWeek

The farmland market didn’t dry up during the historic drought last year in Illinois.

In fact, farmland prices around the state broke new ground as the average value of excellent (prime) farmland from 2011 to 2012 increased 21 percent to an average of $11,400 per acre, according to the Illinois farmland values and lease trends report released last week.

Last year marked the third consecutive year of doubledigit increases for excellent farmland, during which time the value of that type of ground increased by 65 percent.

“We’re looking at a very large increase (in land prices)

FarmWeekNow.com

To listen to Dale Aupperle’s comments about the Illinois farmland market, go to FarmWeekNow.com.

compared to last year,” Gary Schnitkey, University of Illinois farm management specialist, said last week at the Illinois land values conference in Bloomington. The conference was hosted by the Illinois

Society of Professional Farm Managers and Rural Appraisers (ISPFMRA).

The average price of good ground in the state last year increased 17 percent to an average of $9,200 per acre, average ground increased 16 percent to $6,700 per acre, and the value of fair ground increased 17 percent to $5,400 per acre.

“We had one of the worst droughts in history, and the value of (prime) farmland goes up 21 percent,” said Dale Aupperle of Heartland Ag Group in Forsyth. He was chairman of the ISPFMRA team that compiled the land

values report. “There’s got to be a reason.”

There actually are a variety of reasons for the run-up in land prices last year, Aupperle and Schnitkey noted.

“Incomes were good last year (due in part to recordhigh crop prices),” Schnitkey said. “And crop insurance helped a lot.”

Aupperle said there was a surge in land sales/values the fourth quarter of last year as many sellers looked to avoid higher capital gains taxes that took effect this year.

Low interest rates also encouraged farmers and investors to bid up farmland

prices, he noted. “(Farmland) prices surged toward the end of last year,” Aupperle said. “Even though we have high prices, the return on investment remains strong.”

Aupperle said farmland prices have increased another 5 to 10 percent so far this year.

Recent sales illustrate the situation: Farmland recently sold for a record $15,375 per acre in Champaign County, $15,800 in Christian County, $14,550 in McLean County, and $14,500 in Shelby County.

The average cash rent increased from 2012 to 2013 by an average of $17 per acre

for excellent ground, $8 for good ground, $15 for average ground, and $17 per acre for fair ground.

Average cash rents now range from $179 to $447 per acre.

“Cash rents are up and continue to go up, although it wasn’t as large of increase (from 2012 to 2013) as the previous year (when cash rents increased by an average of $60 per acre),” Schnitkey said.

Farmland prices beyond 2013 were projected to fall back to more typical inflation of about 5 to 6 percent annually while cash rents were projected to be flat in 2014.

which is good.”

The debt-to-asset ratio in agriculture currently is hovering around a historic low of 10 percent. Farm problem-loans also are near historic lows, according to Blanchfield.

However, the ag lending environment has “all the makings of a hyper-competitive marketplace” due to farm concentration, he said.

About 270,000 farms in the U.S. account for an estimated 80 percent of production and hold 60 percent of all farm debt.

Meanwhile, the number of banking institutions insured by

the Federal Deposit Insurance Corp. in the U.S. declined from 17,325 in 1987 to 7,436 in 2011, Blanchfield reported.

“Total farm debt is about negligible today, but there is a concentration of debt in the upper level,” he said. “We’re not completely isolated in terms of risk.”

Other concerns for the land market moving forward include a stagnant U.S. housing market, the debt crisis in Europe, and the likelihood of higher interest rates in the future.

ISPFMRA’s farmland value and lease trends report

released last week showed a continuation of higher farmland values in the state. But the value of transitional (development) land last year was flat while prices for recreational land exhibited slight growth.

“The poor economy kind of kept a lid on prices (for recreational land),” said Dale Aupperle of the Heartland Ag Group in Forsyth.

“All the air’s out of the tire (for transitional land),” he noted. “It’s down to the level of farmland values. It wasn’t long ago it was $25,000 to $40,000.”

ISPFMRA reported the average value of prime farm-

land in 2012 was $11,400 per acre compared to an average of $11,000 per acre for transitional ground.

An ISPFMRA survey of its members also found a return to normal yields and $5 corn and $11 soybean prices this year could weigh on the market.

The majority of ISPFMRA members, 70 percent, believe that type of scenario would cause cash rents next year to decline, 27 percent predicted cash rents would remain the same, and just 3 percent believe rents would increase.

— Daniel Grant

Will supposed ‘bubble’ burst in farmland market?

Farm credit should be available for the foreseeable future despite the historic run-up in land prices and the possibility of lower crop prices later this year.

John Blanchfield, senior vice president of the American Bankers Association Center for Agricultural and Rural Banking, last week at the Illinois land values conference in Bloomington promoted that message and downplayed the idea of a bubble in the farmland market.

“Ag lending looks good right now,” Blanchfield said at the event, hosted by the Illinois Society of Professional Farm Managers and Rural Appraisers (ISPFMRA).

“Bankers are optimistic about opportunities in rural America.”

Farm loans last year totaled about $142 billion. But more than half of that total, $74 billion, was for farm production loans and not real estate transactions, according to Blanchfield.

“There’s been a great runup in (farm) real estate values, but bank lending has not surged in that area,” he said.

“What that tells me is (the runup in farmland prices) has been influenced by cash …

Congress watching for possible ‘bubble’

BY MARTIN ROSS FarmWeek

Lawmakers as well as farmers and investors are watching farmland markets.

Rep. Bill Foster, a Batavia Democrat on the House Financial Services Committee, notes significant bipartisan concern about farmland purchases and related prices and the extent to which they may represent speculative buying based on world economic or market forecasts.

If such trends are artificially inflating ag land prices, policymakers may need to consider safeguards to avoid taxpayer losses “when the bubble finally pops,” such as those related to secondary mort-

gage markets during the recent economic crisis, Foster said.

“When you look at the damage that resulted from the (general) real estate bubble, it was extreme,” he told FarmWeek.

“We just had a hearing where a lot of concern was expressed on both sides of the aisle about whether this is (farmland prices) a bubble and, if so, what, if anything, should the government do about it.”

Foster noted two key strategies some countries have employed to address perceived real estate bubbles: Tightening monetary policies or increasing downpayment requirements for real estate purchases. Proposals to “automatically turn up the

downpayment when a bubble happens,” at least in the case of government-backed mortgages, is circulating on the Hill, he said.

At the same time, Foster noted Farmer Mac (the Federal Agricultural Mortgage Corp.) “did just fine” through the economic crisis despite the public tumult surrounding “Fannie Mae” and “Freddie Mac.” All three shared similar business models, but “one worked wonderfully, but Fannie and Freddie failed spectacularly,” the congressman said.

“That highlights the importance of competent government oversight,” Foster suggested.

THE PLANET

Page 5 Monday, March 18, 2013 FarmWeek

Chinese explosion, Brazilian boom global preview?

BY MARTIN ROSS FarmWeek

Amid fundamental shifts in global demand and production dynamics, U.S. agriculture is in for “a very exciting time,” in terms of both opportunity and competitive pressure.

So says Mary Shelman, Harvard Business School director of agribusiness programs and keynote speaker at last week’s inaugural Global Agribusiness Summit at Decatur’s Millikin University.

Shelman sees Brazil, China, and, increasingly, Africa driving consumption and production trends over the next several decades. By 2050, agriculture will have to feed a projected 9.5 billion consumers, nearly 70 percent likely living in cities, she said.

More of those urban population centers will grow to staggering “megacity” status, especially in Asia, Shelman said. Add to that growth in middle-class “premium consumers” in now-devel-

oping and semi-developed nations who will be concerned about animal care, environmental stewardship, labor Mary Shelman ethics, and overall safety in food production.

Thus, not only will far more food be needed globally — an estimated 70 to 100 percent over current production — but diets and consumer offerings must be more diversified and customized, Shelman argued.

“China’s a great example of this,” she told FarmWeek. “You have a country with 1.3 billion people, a growing middle class of 800 million people — it will be the largest in the world. They’ve changed their diet: They’ve gone from eating basically rice and some pork grown in a very frag-

U.S. farmers advised to address sustainability

BY DANIEL GRANT FarmWeek

Most U.S. farmers find ways to be more sustainable through such things as reduced tillage, buying more fuel-efficient equipment, and implementing farming practices that increase crop/livestock output with fewer inputs.

But unless U.S. farmers improve communication efforts to promote their sustainable practices, they could be challenged to maintain or expand markets around the world, according to ag industry representatives who spoke about the issue earlier this month at the Commodity Classic.

“Data show (Illinois farmers) are doing a better job of increasing their environmental efficiency,” said Craig Ratajczyk, CEO of the Illinois Soybean Association.

U.S. soybean yields the past two decades increased 29 percent while land use per bushel decreased 26 percent, according to the American Soybean Association. The energy used to produce soybeans decreased 48 percent during the same time while conservation efforts reduced the soil loss per acre by 31 percent.

Elsewhere in ag, U.S. corn yields have increased six times since the 1930s while the pork industry has cut its water use by 41 percent and decreased its carbon footprint by 35 percent.

U.S. farmers, however, must continue to improve their efficiency and the documentation process of sustainable practices.

The European Union has increased demands for sustainability certification from its suppliers, and other countries are expected to follow suit in the future.

“It is just a matter of time before more customers around the world ask farmers to prove their sustainability commitment,” Ratajczyk said. “That means it is important for farmers to continue making sustainability improvements in areas such as land use, energy use, greenhouse gas emissions, soil protection, and water use.”

Chris Brown, director of sustainable business for ASDA stores in Europe, which were acquired by Walmart in 1999, said sustainable labeling of food in Europe is being driven by customers.

“We get a lot of pressure,” Brown said. “When customers come in, they assume we’ve resolved all the issues (pertaining to food) for them.” he said.

The trend is driving more food production documentation and food labeling at the retail level.

“I have to make claims about my products (being environmentally friendly),” Brown said. “That’s going to work its way down through the chain (to farmers).”

Jim Call, vice chairman of the United Soybean Board (USB), said USB currently is focusing on research and marketing to address the sustainability issue.

“We need to find a way to tell our story,” Call said. “In order to protect our markets, we need to meet the increasing demand for sustainable products.”

mented kind of system.

“They’ve moved to cities; they buy from grocery stores.

Pork no longer can be produced underneath their houses.”

At the same time, with only 7 percent of the world’s arable land to feed 22 percent of the world’s population and roughly a quarter of the world’s average per capita water consumption, China faces serious land, water, and rural manpower constraints. Shelman acknowledges “they’re clearly going to have to import something,” and that’s where Brazil comes in.

Brazil has a population closer to 190 million but boasts as much available water as nearly all of Asia and some 250 million

Illinois Farm Bureau President Philip Nelson joined industry and state and federal agency heads at the Global Agribusiness Summit, which was emceed by the RFD Radio Network’s Rita Frazer.

untapped, non-rainforest production acres. The Brazilian government is investing wholeheartedly in farming, ag research, and “value-added” protein and branded product production.

Brazilian companies such as JBS (a multinational beef, chicken, and pork processor), and Brazil Foods have accelerated growth. Brazilian officials often have subordinated concerns about monopolistic corporate practices in the interest of eco-

nomic growth, she said.

China itself invested $12 billion in Brazilian production in 2011 and also has looked to Australian, New Zealand, and African investments to address growing needs.

“There’s clearly a lot of interest in Africa right now among supply companies, some of the branded food companies,” Shelman related. “There’s starting to be a lot of land investment there.”

Which leaves us where. . .?

Given formidable competition from Brazil and increased ag investment globally, the U.S. has a potentially tough row to hoe in the international marketplace.

However, Harvard agribusiness analyst Mary Shelman believes “the great, productive Midwest” is well-positioned to meet evolving global food needs — as long as the forces for sustainable productivity remain in place.

Shelman noted China’s key ag centers are located “right where the people are,” raising environmental, animal disease, and related concerns.

At the same time, a Chinese population that includes a billion cell phone users and some 250 million Internet “microbloggers” is developing increasingly particular, European-style consumer tastes, she said.

American technological advances, regulatory accountability, and ag stewardship put the U.S. in a key position to supply such markets, industry representatives told farmers at last week’s Global Agribusiness Summit. But Shelman noted “we are looking at resource constraints, as well,” from water

supply concerns to fertilizer use issues.

“Here we have (in the Midwest) this great breadbasket area,” she said. “We have to continue to promote productivity, but also continue to be aware of the sustainability piece behind it.

“That’s becoming a bigger concern all the way through the food chain. It’s not just something that’s nice to have; it’s actually a must to have.

“Do you want to see this as a penalty or as an opportunity? From the standpoint of sustainability, I argue it’s a tremendous opportunity.”

That said, Shelman argued other constraints, such as socially driven animal welfare guidelines or heightened federal regulation, could hurt the U.S. competitively.” She urged producers to “tell the positive story about why the systems that are being promoted are the best to be promoted.”

Farm bill conservation incentives and funding have helped keep the U.S. competitive, she said.

“If you take that way, the clear incentive is to plant as much acreage as you can,” Shelman told FarmWeek. “It’s had a very good effect in that way.” — Martin Ross

The New High Value Crop Be a part of making it happen. Take the challenge.

Soybean Growers! This is your opportunity to test new and innovative farming practices to boost soybean yields. Best of all, be recognized and rewarded for it.

2013

The Illinois Soybean Association created the Yield Challenge three years ago to boost yields.

Our goal is to help meet the growing worldwide demand and to make Illinois soybean growers the global leaders in soybean production. Soybeans can be the new high value crop. We are inviting growers from across Illinois to explore, strategize and test new methods and crop protection products. Each district will have a first and second place award of $500 and $250. Plus, each winner will receive a certificate and recognition at the annual Illinois Commodity Conference!

For more details and to register, please visit www.soyyieldchallenge.com or email yieldchallenge@ilsoy.org.

Registration Fee: Only $25 per participant!

GOVERNMENT

FarmWeek Page 6 Monday, March 18, 2013

North Carolina fraud unlikely in Illinois — economist

Davis: ‘We will do no harm to crop insurance’

BY MARTIN ROSS FarmWeek

U.S. Rep. Rodney Davis maintains crop insurance is “one of the main reasons I asked to be a member of the (House) Ag Committee.”

And that, according to the congressional freshman, is because crop insurance is the

INSURANCE NUMBERS

$2.584 billion Estimated 2012 Illinois corn insurance claims as of last week. That represents a 4.96 statewide loss ratio — about $4.96 in average payments for every dollar of premium paid.

$121 million Estimated 2012 Illinois soybean insurance claims. The statewide soybean loss ratio is 1.03, according to the University of Illinois’ Bruce Sherrick, a “phenomenal” outcome given last year’s drought impact.

$2.836 billion Total Illinois crop claims for 2012.

main reason many of his farm constituents are still in business.

Nationwide, 2012 season crop insurance payouts have topped $15.75 billion, spurring media criticism of the program as lawmakers prepare to draft a new farm bill.

Davis, a Taylorville Republican, has explained to critics “how crop insurance saved our agricultural sector in Central Illinois last year.”

“The federal government plays an integral role in disaster assistance,” Davis stressed, adding that crop insurance displaced the need for billions in “unbudgeted” ag drought aid.

“It helped save family farms and our ability in Southwestern and Central Illinois to continue to feed the world,” Davis added. “The New York Times doesn’t get crop insurance. We will do no harm to crop insurance.”

Last week, federal investigators unveiled a scheme by a

group of North Carolina farmers to defraud crop insurance to the tune of at least $100 million. The 41 producers have pleaded guilty or reached plea agreements related to false claims for tobacco, soybeans, wheat, and corn.

University of Illinois risk management specialist Bruce Sherrick rejects the notion that crop insurance fraud is “widespread or systemic.”

He noted USDA Risk Management Agency’s (RMA) investment in fraud investigation and production “data mining” resources that can flag suspicious claims and audit procedures triggered by unusually large claims.

“This type of fraud would be less likely in a place like Illinois, where there tends to be better records, a more intense (RMA) focus, more homogenous crops, and a better understanding of what anomalous yields really are,” Sherrick told FarmWeek.

“If we had McLean County averaging 185 (bushels of

corn) and a farmer turned in a claim of 120, you’d have to have a very clear understanding of how that would be possible. That would help deter the likelihood of making bad claims. You’d also have to have the complicity of the (claims) adjustor and others in order to pull that off.”

Sherrick said he sees nothing to suggest that the size of 2012 claims has a significant bearing in the North Carolina case. Nationally, the all-crop loss ratio — payouts relative to premium dollars — is estimated at 1.42, “well within expectations at this point,” he said.

Budget

Continued from page 1 extended program authorizations will impact RD’s efforts, particularly on behalf of farmers. While many community programs are funded through general congressional appropriations, Rural Energy for America Program (REAP) funding is authorized by the farm bill.

Through the soon-to-expire continuing resolution, RD has been able to sustain projects through REAP, which supports ag energy production and conservation initiatives, but Callahan admits “there are some uncertainties.”

Section 179 permanence, changes?

Farm Bureau argues Medicare ‘retirement tax’ is unhealthy

A new U.S. House tax policy draft “gets the conversation going” but raises several questions and leaves others open to larger congressional debate, American Farm Bureau Federation (AFBF) tax policy specialist Pat Wolff told FarmWeek.

A U.S. House Ways and Means Committee tax “discussion draft” proposes permanent Section 179 expensing for farmers investing in new equipment, albeit at reduced limits; and expansion of simpler, lower-cost “cash accounting” methods for businesses with $10 million or less in gross receipts.

The draft has been submitted for industry comment.

Under Section 179, businesses can deduct the purchase price of equipment placed into service in the same tax year for which the deduction is taken. Section 179 currently offers a $500,000 expense deduction limit; the draft proposes a $250,000 limit.

The plan proposes uniform cash accounting allowances across the board, raising concerns for producers. Cash accounting currently is limited to businesses with gross receipts of less than $5 million, but farm corporations have enjoyed a special $25 million threshold.

AFBF, meanwhile, supports repeal of the 3.8 percent Medicare Contribution Tax applied to “unearned income” such as capital gains accrued by high-income taxpayers and the new 0.9 of a percent Medicare tax imposed on wages and self-employment income above set thresholds.

The Medicare Contribution Tax will burden farmers with capital-intensive businesses, AFBF told a Ways and Means Committee panel. Tax imposition when a farm is sold amounts to a “retirement tax” for many farmers, AFBF warned.

Illinois Farm Bureau National Legislative Director Adam Nielsen noted the contribution tax kicks in an annual $200,000 individual/$250,000 per-couple income level.

“If you sell a piece of ground, you’ll probably automatically be in that arena,” Nielsen said.

Further, adding the tax to capital gains taxes could make it difficult for beginning farmers to acquire land.

Wolff stressed the Ways and Means plan is merely the third of several “really narrowly focused” drafts designed to preview “what their version of ‘simplicity’ looks like.” Rep. Aaron Schock, a Peoria Republican committee member who contributed to the draft, decried today’s “bloated tax code.”

The House draft does not address health care tax provisions. However, Wolff notes it provides a starting point for a debate in which “everything’s on the table.”

“The big things for us are that they’re proposing to change cash accounting and lower 179 (thresholds),” Wolff said. “But we also have to look at what they do with individual tax rates, what they do with capital gains.” — Martin Ross

U OF I

Page 7 Monday, March 18, 2013 FarmWeek

ExplorACES connects students, U of I

New U of I center to focus on farm management, land

TIAA-CREF, a leading financial ser vices provider, last week launched the TIAA-CREF Center for Far mland Research at the University of Illinois.

The new center will enhance the university’s research and educational initiatives for its students and the agricultural community, including investors, far mers, researchers, and businesses.

It will conduct research and host academic symposiums focused on far mland prices and the financial aspects of far m management. The center will ser ve as a specialized academic unit within the university’s College of Agricultural, Consumer, and Environmental Sciences (ACES).

It also will support Far mdoc, the university’s online agricultural sector research program. An advisory board of TIAA-CREF and university representatives will provide guidance for the center.

“Far mers, educators, and investors rely upon the University of Illinois for leading-edge agricultural research,” said Robert J. Hauser, dean of the College of ACES. “The TIAA-CREF Center for Far mland Research will help us create the tools needed to promote sustainable and innovative agriculture practices and maintain our status as the premier source for far mland research,” said Hauser.

USB seeks farmers for director positions

The Illinois Soybean Board is seeking farmers who are interested in filling two of Illinois’ four director positions on the United Soybean Board (USB).

Any soybean grower who is affected by the soybean checkoff is eligible to serve on the USB. Farmers who are interested must complete an application and agreement to serve statement and return them to the Illinois Soybean Association (ISA) office by April 15.

The forms are available online at {ilsoy.org}. Contact the ISA office at 309-663-7692 for more information.

The secretary of agriculture will make the final appointments. Individuals who are selected to the USB will serve three-year terms, beginning in December. Those who are appointed to the USB will be eligible to serve a total of three terms.

More than 2,000 students, teachers, and parents toured the University of Illinois College of Agricultural, Consumer, and Environmental Sciences (ACES) during the ExplorACES event March 8 and 9. A student steering committee planned and organized the event for prospective and incoming students. Students toured college facilities, watched and participated in activities, and spoke with faculty and current students. Top left, U of I Ph.D. student Christina Lyvers checks how much carbon dioxide is being created by Tri-Valley High School, Downs, student Bethany Myszka while she sits inside a head box as part of

the Feeling Gassy exhibit. Tri-Valley was one of 34 school groups that attended the 2013 ExplorACES event. Above, U of I student Liz Blissett shows an ornamental citrus plant in one of the Turner Hall greenhouses to (front to back): Rod Fritz; his son, Casey; and their friend and pilot, Jerry Hose. The three had flown down from Carroll County early March 9 to allow Casey, a high school senior, to attend ExplorACES. Bottom left, ACES teaching associate Dianne Noland demonstrates how to hand-tie a floral arrangement to the tune “I’m a Wildflower” by the Jane Deere Girls.

RURAL RULES

FarmWeek Page 8 Monday, March 18, 2013

Landowners: Do homework in utility easement cases

BY KAY SHIPMAN FarmWeek

When facing utility easement agreements, landowners may help themselves by learning about the proposed project and working with fellow landowners, said an Illinois Farm Bureau attorney.

“Landowners need to get involved as soon as possible and to get the county Farm Bureau staff involved,” Ryan Gammelgard said during the recent Governmental Affairs Leadership Conference.

Gammelgard gave general advice gained through work with landowners on proposed utility projects across Illinois.

However, he encouraged farmers to meet with their own qualified attorney before signing any easement agreement.

First, landowners should learn about the proposed project. Frequently the utility company posts information, including maps, online. “The time you take to get well versed on the project will pay for itself,” he said.

Another early step should be to work with other landowners who also have been

approached about easements. “We found that landowners who work together tend to get better terms in the settlement,” he Ryan Gammelgard explained.

A landowner’s first concern should not be the amount of compensation he is to receive but the shortand long-term impact the project will have on his operation.

Those include: actions to minimize long-term impact on the farm and restoring the land’s condition as close as possible to pre-construction conditions.

Gammelgard advised landowners to make sure their easement agreement is specific and contains in detail their expectations for the utility company’s responsibilities.

In determining the compensation amount, a landowner should consider the loss of the use of the land before and during construction when the company will want a tempo-

rary staging area.

Gammelgard advised landowners to consider possible compaction problems and the easement’s impact on a possible future sale of the property. He recommended seeking advice from a farm manager or appraiser about the impact on future sales.

Those facts should be used to negotiate compensation with the utility company, Gammelgard said. “If you take solid, supportable information, the company may meet you — maybe not all the way, but halfway,” he added.

Other points to consider include: the party responsible for controlling vegetation around transmission line towers, landowner liability protection if a worker is injured during construction and the legal cost coverage if the landowner should be sued, funding to cover abandonment and any decommissioning costs and any property damage during decommissioning.

Gammelgard advised landowners to add to the agreement that the utility company

will abide by all federal, state, and local laws. If a company refuses to do that, “that’s a big red flag,” he warned.

Pipeline companies are required to have an agricultural impact mitigation agreement (AIMA) with the Illinois Department of Agriculture.

Gammelgard recommended landowners also incorporate

the AIMA terms and conditions into their own agreements, but to consider AIMA as the starting point and to add requirements specific to their land and situation.

“Think about everything possible (related to the land) and look out for future generations as well,” Gammelgard advised.

Rural emergency workers often at risk on roads

BY MARTIN ROSS FarmWeek

The loss of a spouse, a parent, or a child on a rural road or highway is especially tragic.

To Illinois State Trooper Dustin Pierce, who lost a law enforcement brother on a Southern Illinois highway last November, the unnecessary death of an officer or rescue worker responding to an accident call exponentially compounds the tragedy.

Illinois law requires any motorist approaching an emergency or maintenance vehicle on a road or highway either to move into the next lane or, when that’s not possible, significantly reduce speed while passing.

As of last July, motorists are prohibited from using a handheld cell phone within 500 feet of an emergency scene — i.e., when a police, fire, or emergency medical vehicle is stopped at the side of a roadway with emergency lights flashing. Drivers also may not take photos or videos of the scene while driving past emergency responders.

Pierce, a safety education officer with Illinois State Police’s Peoria District 8, attended the funeral last fall of 32-year-old Trooper Kyle Deatherage, who was struck by a car on Interstate 55 near Litchfield during a traffic stop. Deatherage left behind a wife and two young children.

The recent death of volunteer Hudson firefighter Chris Brown “really drives these (roadway safety) points home,” Pierce added. A semi-trailer skidded out of control and killed Brown and and injured five other firefighters at an accident scene on Interstate 39 north of Normal in McLean County.

“Every year, we have lots of squad cars and emergency vehicles hit,” Pierce told FarmWeek. “Every time emergency responders are out on a roadway, they’re putting their lives on the line to help people, whether it’s at a crash scene, providing motorist assistance for someone broken down, or with someone’s who’s been stopped for a violation.

“We really need motorists to be paying attention, slowing down, and moving over. It doesn’t matter whether you’re on a two-lane road or a four-lane road.”

On a narrow two-lane rural road, where the shoulder or berm may be wet, soft, or steeply sloped, changing lanes can prove hazardous, Pierce noted. In that case, “the best thing you can do is slow down and be patient,” the trooper advised. — Martin Ross

IFB motor vehicle rule information online

©2013 GROWMARK, Inc. A Farm Bureau Affiliate A53560

The Illinois Farm Bureau semiFarmWeekNow.com nar series on transportation rules and crop insurance is nearing an Visit FarmWeekNow.com to end. However, information about view the latest information on trucking regulations distributed at motor vehicle rules for Illinois those seminars now is available farmers. online, said Kevin Rund, IFB senior director of local government.

Go online to {ilfb.org/policy-and-issues/current-issues/transportation-and-infrastructure/motor-vehicle-rules-booklet-2013.aspx}.

“It’s a little hefty at two megabytes, so downloads can take some time depending on users’ Internet access,” Rund noted.

The collection is not a complete look at all such rules applying to farmers, according to Rund. The topics tend to focus on newer transportation rules and regulations. The information also includes topics of continued interest.

Rund emphasized the information is applicable through this spring, but the documents are dated and all rules are subject to change.

FROM THE COUNTIES

Page 9 Monday, March 18, 2013 FarmWeek

C

ASS-MORGAN — Farm Bureau will host a meeting for Farm Bureau members who are landowners or tenants impacted by the FutureGen pipeline and or the Ameren transmission line at 6 p.m. Wednesday at the Jacksonville Community Center in Community Park. Please bring your membership card to the meeting.

HRISTIAN — Farm Bureau will sponsor an estate tax planning meeting at 6:30 p.m. Wednesday at the Farm Bureau office.

Reservations are requested.

• Farm Bureau will sponsor a trivia night at 6:30 p.m.

Saturday at the TMH auditorium. Call the Farm Bureau office at 824-2940 to register your team or for more information.

LARK — Farm Bureau Young Leaders will host a trapshoot and cookout at 2 p.m. Saturday.

The event is open to persons between the ages of 18 and 35. Call the Farm Bureau office for more information.

LAY — Farm Bureau will host a Farmer’s Share of the Dollar Breakfast from 6 to 9 a.m.

Wednesday at the Farm Bureau office.

• Farm Bureau will sponsor a master gardening seminar at 6:30 p.m. Thursday, April 4, in the Farm Bureau auditorium. Jim Heflin, certified master gardener, will give the presentation. Call 665-3300 by March 28 to register.

OOK — Farm Bureau will sponsor a will and trust workshop from 6:30 to 9 p.m. Wednesday, April 3, at the Orland Park Country Financial agency. Seating is limited.

Call the Farm Bureau office at 708-354-3276 for reservations.

• Farm Bureau will host a boating safety class for members from 9 a.m. to 3 p.m. Saturday, April 6, and from 10 a.m. to 4 p.m. Sunday, April 7, at the Farm Bureau office. Call the Farm Bureau office at 708-3543276 for reservations.

• Farm Bureau will offer soil testing kits. Call the Farm Bureau office at 708354-3276 for kits. Pricing is based on the soil sample test lab cost.

• The Illinois Agricultural Auditing Association will provide income tax return services for members. Call Katie at the Farm Bureau office at 708-354-3276 for pricing and to schedule an appointment.

ORD-IROQUOIS — Farm Bureau Founda-

C C

C

C

F

tion scholarships are available for graduating high school seniors who plan to continue their education in the field of agriculture.

Application deadline is April 1. Applications are available at the Farm Bureau office and through high school guidance counselors and FFA advisers.

ANE — Farm Bureau will sponsor a “Toucha-Tractor” event from noon to 4 p.m. Friday, April 5, and 10 a.m. to 4 p.m. Saturday, April 6, and Sunday, April 7, at the Farm Bureau office.

Michael Bihlmaier of Marengo, award-winning professional chainsaw carver, will create a custom sculpture to celebrate Farm Bureau’s 100 years in the community. Visit {kanecfb.com} or call 5848660 for more information.

ASALLE — Farm Bureau and the University of Illinois Extension will sponsor an iPad for Agriculture class from 6 to 8 p.m. Tuesday at the Farm Bureau office. Cost is $10 for members and $15 for non-members. Participants must bring their own iPad. Call 433-0371 to register.

• The county Farm Bureau board of directors will host a call-a-thon from 7 to 8 p.m. Thursday to collect ideas, concerns, and needs of the membership.

Members not receiving a call should contact their Farm Bureau district director or manager Jeff Hartman at 433-0371.

• Businesses celebrating National Ag Week, March 18-22, with extra savings are: Frank’s Lock & Safe Service in Ottawa, $5 service call; Hammer’s Hearing Care Center in LaSalle, $500 off any wireless hearing aid (not valid with any other discount offer); Wendy Sanders-Maubach, O.D., P.C. of LaSalle, 40 percent off sunwear; and Annette Barr Photography Studio in Ottawa, 50 percent off any photo session.

EE — Farm Bureau Public Relations Committee will sponsor a Farmer’s Share of the Food Dollar Breakfast from 8 to 11 a.m. Saturday at the Loveland Community Building in Dixon. Cost is 50 cents.

• The deadline to pay membership dues was March 1. A $10 late fee will go into effect on April 1. Call the Farm Bureau office at 8573531 if you did not receive a dues notice.

• Farm Bureau local discount program now includes Dr. Jacob Stegmaier with

K

L

L

NowCare in Dixon. Members will receive a free chiropractic consultation. Call NowCare at 285-2273 for more information.

IVINGSTON — Farm Bureau will sponsor “Straight Talk about Food & Farming” at 7:30 a.m. Thursday at the Pontiac Family Kitchen. Mike and Lynn Martz, host farmers for Illinois Farm Families, will be the speakers. Cost is $10. In honor of Agriculture Week, farmers may bring a city friend for free. Call 8445131 to register, and include name of friend when registering.

EORIA — Farm Bureau will host a Stroke Detection Plus Health screening from 9 a.m. to 4:30 p.m. Wednesday, March 27. Members will save $35 on screenings. Call Stroke Detection at 877732-8258 for an appointment or more information.

ANGAMON — The Farm Bureau Women’s Committee will host a spring fling dinner at 5:30 p.m.

Thursday at the Farm Bureau building. Call 753-

L

P S

S

5200 for reservations.

TARK — Three Foundation scholarships valued at $2,000 will be awarded this year. Applicants must be a Stark County Farm Bureau member, or a Stark County resident pursing a degree in agriculture, agribusiness, or an agrelated field. Applications must be delivered to the Farm Bureau office by 4:30 p.m. March 31.

ERMILION — Farm Bureau and 13 other agribusinesses will distribute 21,000 placemats to area restaurants this week.

The placemats feature information about farming and its impact on Vermilion County.

ABASH — Farm Bureau will host a Farmer’s Share of the Food Dollar Breakfast from 7 to 9 a.m. Friday at Hogg Heaven BBQ. Cost is 25 cents.

Breakfasts served will be limited.

• A Farm Bureau Foundation $500 scholarship is available to high school seniors and current college students majoring in agricul-

V

W

ture. Applications are available at the Farm Bureau office. Application deadline is April 1.

ASHINGTON — Far m Bureau will host a legislative breakfast at 8:30 a.m. on Saturday at the Little Nashville Restaurant. U.S. Rep. John Shimkus, a Collinsville Republican, and state legislators will be available to provide updates and answer questions. Call the Far m Bureau office by Wednesday to register.

OODFORD — Farm Bureau will sponsor a state legislative meet and greet at 6:30 p.m.

Tuesday, March 26, in the Farm Bureau auditorium.

Call the Farm Bureau office at 467-2347 for more information.

W W

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

PROFITABILITY

FarmWeek Page 10 Monday, March 18, 2013

Four reasons ethanol doesn’t drive corn prices

While it is reasonable to assume that the dramatic increase in corn used for ethanol production would affect corn prices, a far greater influence on corn prices is the volume of money flow channeled Kel Kelly into the corn market by investment firms.

The following evidence lends support to this argument: First, ethanol demand is smaller than other demand. For corn prices to rise from the average price of $1.85 per bushel in 2000 to the average price of $6.20 in 2011, there had to be an annual volume of $66.9 billion of additional spending over and above the $18.5 billion spent in 2000 to buy corn.

But ethanol buyers were responsible for only $29.8 billion of that additional spending. Their share of increased spending, by itself, could have driven the price only to $3.53, or 39 percent of the $4.35 price increase that caused corn prices to reach $6.20. In short, ethanol spending alone could have raised corn prices by $1.68 at most.

Second, ethanol demand has little impact on corn prices.

Demand for ethanol increased

BY KEL KELLY

303 percent between 1995 and 2005, while prices fell by 38 percent. By 2006, ethanol demand represented more than 19 percent of all corn consumption (compared to 36 percent in 2012), but prices were no higher than 10 years prior. Ethanol demand for corn increased 24 percent between 2008 and 2009, while corn prices fell 20 percent (the prices fell 60 percent from high to low).

Third, ethanol producers use only part of the corn kernel and return the rest of it to the market, where it is consumed by others.

Many traditional corn buyers, therefore, no longer compete with ethanol buyers in the

BY DANIEL GRANT FarmWeek

Crop scouts and farmers spend a good deal of time each growing season analyzing what’s going on with plants above the soil surface.

But what’s happening below the topsoil could be just as important in determining final yields.

Agribusinesses unveiled a host of new products and product updates earlier this month at the Commodity Classic that take aim at improving plant health, particularly in the root zone, and reducing weed and insect pressure in an effort to deliver better crop yields.

Feeder pig prices reported to USDA* Range Per Head $31.91-$48.00 NA

Weighted Ave. Price $38.48 NA

This Week Last Week 107,830 81,877 *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 Change $72.85 $74.27 -$1.42 $53.91 $54.96 -$1.05

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

primary market but rather are able to buy corn first-hand from elevators.

This reduces ethanol producers’ need to out-compete other buyers in the primary corn market by bidding up prices.

Lastly, all commodity prices have risen and fallen together.

Increased ethanol use can’t explain the price movements in other crops and commodities that are similar to corn price movements but completely unrelated to biofuels or biofuel crops.

Kel Kelly is GROWMARK’s economic and marketing research manager. His email address is kkelly@growmark.com. Scott Hornblower, a GROWMARK associate, contributed to this column.

Michael Peterson, lead agronomist with Orthman Manufacturing, last season took part in a root dig at Monsanto’s Gothenburg Water Utilization Learning Center in Nebraska.

“We see that when we have a deeper root system, (corn) has a chance to get water from all of the soil profile compared with only taking it predominantly from the upper 20 inches,” he said.

Corn farmers can grow plants with deeper roots and better yields with DeKalb Genuity Droughtgard Hybrids, according to Rick Myroup of Monsanto.

Clay Scott, a farmer from Kansas, planted 80 acres of DroughtGard products last year and achieved a 7- to 10bushel yield bump on his farm.

He plans to plant about 400 acres of DroughtGard products this season.

“Even though it was the second year of a drought, I got good pollination and kernel set,” Scott said. “It (DroughtGard) is a good risk management tool to help farmers get through dry periods.”

Weed seeds and plants lurking in the soil also are a major threat to yields. BASF, therefore, developed Zidua herbicide, which is a new class of chemistry designed to control resistant weeds, such as Palmer amaranth and waterhemp.

Zidua, which has been approved for use in corn this year and soon could be approved for use in soybean and wheat fields, has a longer life in the germination zone of many weeds, according to Greg Armel, BASF technical marketing manager.

Marvel herbicide, produced

by FMC Corp., also was designed to offer a wide spectrum of weed control, including waterhemp and pigweed.

Marvel can be applied in

soybeans from pre-plant through flowering, according to Matthew Foster, FMC soybean segment manager.

“Controlling weeds early in the season is critical (to maintaining high yield potential),” he said.

FMC at the Commodity Classic also promoted Capture LFR, an insecticide for use at planting designed to increase stands and root size of crops through improved insect control.

Pioneer Field360 apps and tools allow farmers to improve planter performance and seeddrop accuracy, monitor real-time field conditions such as precipi-

tation and crop growth stages, and organize field-by-field agronomic information for communication between DuPont Pioneer agronomists and growers.

Meanwhile, Syngenta and Bayer CropScience recently applied for approval of a new herbicide-tolerant soybean product designed to help growers deal with challenging weeds such as waterhemp, pigweed, and lambsquarters.

MGI (Mesotrione, Glufosinate, and Isoxaflutole) herbicidetolerant soybeans will broaden herbicide options for growers by offering tolerance to Callisto, Balance, and Liberty herbicides.

Technology helping farmers get to root of yield issues

M A R K E T FA C T S Weight 10-12 lbs.

40 lbs.

Though ethanol likely had some effect on corn prices, the dominant effect has been from increased investment spending in the commodity markets by major Wall Street players who moved funds into this sector between 2002 and 2006.

These speculators invested tons of borrowed money, pushing prices higher, and they withdraw funds (causing selloffs) when their internal lending markets dry up.

This week Prev. week Change $127.00 $128.00 -$1.00 $127.00 $127.97 -$0.97

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 $137.19 $138.64 -$1.45

Lamb prices Slaughter prices - Negotiated, Live, wooled and shorn 80-207 lbs. for 107.49-135 $/cwt. (wtd. ave. 119.39)

Export inspections (Million bushels) Week ending Soybeans Wheat Corn 3/7/2013 17.1 27.9 14.4 2/28/2013 40.3 24.9 16.2 Last year 26.3 31.7 38.5 Season total 1164.5 721.2 379.1 Previous season total 934.8 775.4 874.5 USDA projected total 1345 1050 950 Crop marketing year began June 1 for wheat and Sept. 1 for corn and soybeans.

USDA

Farm Service Agency

As a result of reduced staffing levels in Farm Service Agency (FSA) offices, the Illinois FSA state office has reduced the operating hours to one day per week in the following locations: Alexander/Pulaski, Boone, Calhoun, Rock Island, Scott, Williamson, and Winnebago counties. Those offices will be open on Wednesday only. The Wabash office will be open on Thursdays only.

The effective date of reduced office hours is April 7 for Rock Island and Winnebago counties. The other locations already are operating on the indicated day each week.

FarmWeek submitted questions to the state FSA office concerning the reduced hours in some counties. Answers were provided by Scherrie Giamanco, the state executive director, and Rick Graden, the state executive officer.

FarmWeek: What is the procedure if a farmer/landowner comes into a county FSA office on a day when no one is there? Will the Natural Resources Conservation Service (NRCS) or another USDA agency be able to help that farmer?

FSA: Illinois FSA has been providing press information and notification to our farmers and the public that all of the part-time FSA offices (with reduced operating hours) are open only one day per week.

During this process, FSA customers are provided the opportunity to select a new administrative office and to transfer their farms to an adjacent FSA office that is open full time.

It has been suggested to our part-time FSA offices that they conduct business by appointment on that one day per week to avoid confusion and to provide the customer service that our FSA customers deserve.

NRCS or other USDA agencies in the building will not be able to intervene, nor should they be responsible in assisting producers with FSA business.

Editor’s Note: More questions and answers will appear in future issues of FarmWeek.

PROFITABILITY

Page 11 Monday, March 18, 2013 FarmWeek

CASH STRATEGIST Soybean export picture changing

The soybean complex is staring at changes everyone knew were coming but didn’t know just when. But it became readily apparent this past week that demand for soybeans has started its shift from the U.S. to South America.

Much has been made the last 3 to 4 weeks about the slow pace of early harvest in Brazil and its effect on the export market. Even then, February exports were significantly higher than any past year with the exception of a year ago.

A total of 959,600 metric tons of Brazilian soybeans (35.5 million bushels) were exported in February. The average of the five years prior to last year is 555,576 metric tons (120.5 million bushels).

But traders have been comparing the pace to the 1.568 million metric tons (57.7 million bushels) exported a year ago.

Since the talk of harvest delays started in January, there’s been a lot of talk about the number of ships waiting in port to load. Over the next one to two weeks, the number of vessels waiting to load is expected to surpass the record set a year ago.

There are 89 ships now at Paranagua, the main port, with another 20 expected next week.

At Santos, the other big port, there are 81 ships waiting to load.

But there’s talk those ship waiting numbers may have distorted reality. More than half the vessels at Paranagua had no contract to load when they arrived. The same can be said for Santos. That’s a function of the weak ocean freight market.

It appears ship owners sent vessels that already were idle to

South America looking to capture some of the expected business from the new soybean export campaign.

Maybe the most significant change is the shift in talk about the number of vessels waiting to load to the number of trucks waiting to unload. At an inland rail terminal, the queue of trucks waiting to unload was nearly 40 miles long.

There are queues of trucks waiting to unload at Paranagua and Santos too.

But it will take a lot of continued arrivals as the vessel line-up represents shipments of 9.1 million metric tons.

Even though road conditions have slowed trucks, soybean harvest is more than 50 percent complete. And with producers said to have priced 60 percent of the crop already, merchandisers own more than enough soybeans to accommodate the ships in port.

This past week’s U.S. soybean export inspections fit with the idea that business is rapidly transitioning away from the U.S. The 17.1 million bushels inspected was well under expectations.

And the loadings that were destined for China were all off the PNW Railroad because of the faster shipment time. With vessels now sailing from Brazil, that should decline fast.

And as we indicated a couple of weeks ago, there is reason to be suspicious of the current Chinese soybean import forecast. In February, the Chinese imported 2.9 million metric tons of soybeans, below the pace one would expect if their imports are to reach the 63 million-metric-ton forecast.

If March’s imports are light as well, it would indicate import forecasts need to be revised downward, further easing the world strain regarding soybean supplies.

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

Corn Strategy

ü2012 crop: The short-term shift in direction in wheat prices took pressure off corn prices.

With wheat competing with corn in all demand sectors, that is a necessary change if corn prices are to rebound. We’d still use rallies to $7.20 on May futures for catch-up sales. For now, we are going to wait to see if prices can move closer to $7.50 before adding to sales.

Still, check the Hotline frequently. ü2013 crop: Upside potential for rebounds has declined because of the depth of the break. Use rallies to $5.70 for catch-up sales. We may add a sale if December hits that level. Check the Hotline. vFundamentals: Not only is corn coming into the U.S. from Canada and South America, but corn is having to compete with wheat in nearly all demand sectors. Unless that changes, increased consumption of wheat could mitigate the potential for tight supplies this summer. The quarterly grain stocks report coming on March 28 looms as a significant event.

Cents per bu.

Soybean Strategy

ü2012 crop: The market is sensing world trade is shifting from the U.S. to South America. And once that becomes entrenched, there’s little to support soybean prices at current levels. Use rallies to $14.40 on May futures for catch-up sales. ü2013 crop: New-crop prices remain weaker than oldcrop prices on expectations of a significant increase in supplies. Use a rally to $12.65 on November futures for catchup sales. vFundamentals: In Brazil, the talk has shifted from the number of boats waiting to load to the number of trucks waiting to unload at the ports. That infers soybean supplies have become abundant enough to begin loading boats. In the U.S., this past week’s 17.1 million bushels of inspections were well below expectations. And all of the Chinese shipments were loaded at Pacific Northwest ports. The combination indicates our export campaign is coming to an end. ûFail-safe: If May futures

close below $14.20, make sure old-crop sales are at recommended levels.

Wheat Strategy

ü2012 crop: Recent market activity suggests a nearterm low may have been established. Use rallies above $7.30 on Chicago May futures to make catch-up sales. ü2013 crop: Wait for Chicago July to trade above $7.35 before making catch-up sales. vFundamentals: The recent surge in wheat prices is linked to a pickup in export demand with U.S. wheat finally becoming competitive in the

international market. This past week’s good weekly export sales, 653,300 metric tons (24 million bushels), were a good sign of a shift in attitude.

Going forward, traders will monitor closely the condition of the hard red winter wheat crop, as it’s started to come out of dormancy. It’s essential the crop receives timely rains this spring to keep the output from being decimated. The most recent weekly progress reported indicated that on average 39 percent of the Kansas/ Oklahoma/Texas wheat crop was rated poor to very poor.

PERSPECTIVES

FarmWeek Page 12 Monday, March 18, 2013

Making a business case for healthier food options

F

or years, America’s childhood obesity crisis was viewed as an insurmountable problem, one that was too complicated and too entrenched to ever really solve.

According MICHELLE to the convenOBAMA tional wisdom, healthy food simply didn’t sell — the demand wasn’t there and higher profits were found elsewhere — so it just wasn’t worth the investment.

But thanks to businesses across the country, today we are proving the conventional wisdom wrong.

Every day, great American companies are achieving greater and greater success by creating and selling healthy products. In doing so, they are showing that what’s good for kids and good for family budgets also can be good for business.

Take the example of Walmart. In just the past two years, the company reports it has cut the costs to its consumers of fruits and vegetables by $2.3 billion and reduced the amount of sugar in its products by 10 percent.

Walmart also has opened 86 new stores in underserved communities and launched a labeling program that helps customers spot healthy items on the shelf. And today, the

company is not only seeing increased sales of fresh produce, but it also is building better relationships with its customers and stronger connections to the communities it serves.

Walmart isn’t alone in discovering that healthier products sell.

Disney is eliminating ads for junk foods from its children’s programming and improving the food served in Disney theme parks.

Walgreens is adding fresh fruits and vegetables to its stores in underserved communities.

And restaurants around the country are cutting calories, fat, and sodium from menus and offering healthier kids’ meals.

These companies and so many others are responding to clear trends in consumer demand. Today, 82 percent of consumers feel that it’s important for companies to offer healthy products that fit family budgets, according to the Edelman public relations firm.

Meanwhile, a study conducted by Nielsen revealed that even when many families are operating on tight budgets, sales of fresh produce actually increased by 6 percent in 2012.

And in 2011, the Hudson Institute reported that in

recent years, healthier foods have generated more than 70 percent of the growth in sales for consumer packaged-goods companies — and when these companies sell a high percentage of healthier foods, they deliver significantly higher returns to their shareholders.

These trends don’t just matter for businesses that produce

nesses until this problem is solved once and for all.

That’s why American businesses are stepping up to invest in building a healthier future for our kids. In doing so, they are joining leaders from every sector across the country.

Over the past few years, through Let’s Move! — our

and sell food. They matter for every business in America.

We spend $190 billion a year treating obesity-related health conditions like diabetes and heart disease, and a significant portion of those costs are borne by America’s businesses.

That’s on top of other health-related costs like higher absenteeism and lower worker productivity, costs that will continue to rise and threaten the vitality of American busi-

nationwide campaign to help kids grow up healthy — we’ve seen teachers bringing physical education back into schools.

We’ve seen mayors building safe spaces where children can play, faith leaders educating their congregations about healthy eating, and parents preparing healthier meals and snacks for their kids. And we’ve seen Republicans and Democrats working together in Congress to pass groundbreaking legislation to

improve school lunches.

We’re starting to see real results.

In Mississippi, obesity rates have dropped by 13 percent for elementary school-aged kids. States like California, and cities like New York and Philadelphia have also seen measurable declines in childhood obesity.

So it’s clear that we are moving in the right direction.

But we also know that the problem is nowhere near being solved.

We need more leaders from all across the country to step up, and I stand ready to work with business leaders who are serious about taking meaningful steps to forge a healthier future.

We need every business in America to dig deeper, get more creative, and find new ways to generate revenue by giving American families better information and healthier choices. We know this can be done in a way that’s good for our kids and good for businesses.

That’s why, even though we still have a long way to go, I have never been more optimistic about our prospects for solving this problem. And I am confident that, with leadership from America’s business community, we can give all our children the bright, healthy futures they so richly deserve.

Michelle Obama is the first lady of the United States.

Protecting innovation even from underdogs a necessity Everyone loves an underdog, which is why Indiana farmer Vernon Hugh Bowman received such good press recently.

NPR called his recent trip to the U.S. Supreme Court “a classic case of the little guy taking on the big one,” because he’s the defendant in a lawsuit filed by Monsanto, the seed company. USA Today compared the legal battle to “David vs. Goliath.”

In this telling, however, we should MARK JACKSON guest columnist

view the consequences should Bowman win. His effort to circumvent intellectual property rights threatens the future of modern agriculture and food production in the United States and around the world.

He may look like a little guy, but he’s fighting against the interests of little guys everywhere.

Not unlike like Bowman, I grow soybeans on a family farm in the American heartland. My fifth-generation farming legacy has taught me the asset of legitimate investment of time and money.

Building from a strong foundation pays its own rewards, and my ability to

purchase high-yielding, pest-resistant seed has more benefits than just my farm’s profits. Clean air, water, and ample food to feed the world’s growing population are also at the heart of this conversation.

When high-technology seed came to the marketplace in the late 1990s, I quickly recognized the value it brought to my farm. Because of this, I’m currently able to select from a broad selection of cutting-edge seeds capable of adapting to my farm’s variable planting and growing challenges.

Today, I’m growing more food on less land than ever before. The seed trait called into question by Bowman is the same that has allowed me to switch to no-till farming methods while using fewer chemical sprays.

On a broad note, the biotech seed in question has allowed Iowa to employ no-till across nearly 60 percent of its soybean acres.

This has a direct reduction on soil erosion, leading to clean waters — an essential advantage in our part of Iowa, where rolling hills define the terrain.

The genetically modified (GM) crops we produce are safe, healthy, and beneficial tools of scientific innova-

tion. Their high yields allow me and other American farmers to compete in world markets.

A new report from the International Service for the Acquisition of AgriBiotech Applications states that 17.3 million global farmers (more than 15 million are small, resource-poor farmers from developing countries) planted more than 420 million acres with GM crops last year, a new record.

Biotech seeds exist because seed companies pour billions of dollars into research and development. They strive to come up with higher-yielding products that help farmers fight pests and weeds. Their efforts empower farmers as we grow more food and contribute to environmental sustainability.

In the U.S., it can take 10 years and a $100 million investment to develop a single seed trait cleared for full seed production.

Intellectual property patent rights give seed companies the security and incentive to invest these millions.

We can’t recycle seeds from the plants we’ve already grown. Biotech seeds may be self-regenerating products, but they’re also protected by patent.

Just as it’s against the law to pirate

DVDs, computer software, and digitalmusic files, it’s against the law to pirate patented seeds.

This principle is so broadly accepted that dozens of organizations have called on the Supreme Court to protect the integrity of patented seeds, including farm and technology groups as well as a coalition of top universities.

At the oral arguments Chief Justice John Roberts made the point plainly: “Why in the world would anybody spend any money to try to improve the seed if as soon as they sold the first one anybody could grow more and have as many of those seeds as they want?”

Justices of differing political persuasions appeared to agree with this sentiment.

Experts say that it can be a mistake to read too much into oral arguments. Yet I’m hopeful that justices will issue a ruling that preserves a system of scientific and agricultural innovation — and supports the millions of “little guy” farmers whose livelihoods depends on planting the best seeds.

Mark Jackson grows soybeans and corn on a family farm in southeast Iowa. He is a volunteer member of the Truth About Trade & Technology Global Farm Network www.truthabouttrade.org).