Ag Matters March 2018
• Ag economist sees a positive outlook for corn — Page 7 • Ag’s future on the menu at Chamber breakfast — Page 2 • Farmers urged to renew conservation contracts — Page 11
A publication of
Spring 2018
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SALUTE TO AGRICULTURE APPRECIATION BREAKFAST
Ag’s future on menu at Chamber breakfast Syngenta leader is keynote speaker BY JIM DUNN Shaw Media PRINCETON – The future of agriculture was an overriding theme at the Princeton Chamber of Commerce’s fourth annual Salute to Agriculture Appreciation Breakfast. High school students representing Bureau County’s three FFA chapters at Princeton, Bureau Valley and LaMoille spoke about their ag activities to about 300 people who attended the early morning gathering at The Barn at Hornbaker Gardens on March 16. Two FFA students, Clay Sundberg of LaMoille High School and James Bickett of Princeton High School, were presented ag scholarships to assist them in their future studies. And the keynote speaker, Jeff Rowe, a Princeton High School alum who is president of Global Seeds and North America Syngenta, a leading Swiss-based agriculture technolo-
Shaw Media/Jim Dunn
James Bickett (center), a senior at Princeton High School who plans to attend Iowa State University, was presented an agricultural scholarship by the Princeton Chamber of Commerce at the group’s fourth annual Salute to Agriculture Appreciation Breakfast at Hornbaker Gardens in rural Princeton. On hand for the presentation were Derek Fetzer (left) of the Chamber’s Ag Committee and Kim Frey (right), executive director of the Chamber. gy company, described his career and what the future might hold for American and global agriculture. Five macro trends will impact agriculture, Rowe said: • More output;
• Convergence of technologies; • Advanced farming practices; • Structural shifts; and • Sociopolitical and regulatory changes. Plus, changing demographics and
how agriculture is conducted in other parts of the world are important for U.S. farmers to be aware of. “We need to do a better job of understanding the rest of the Jeff world,” Rowe said. Rowe The digital disruption that has impacted retail, taxi and hotel businesses worldwide – Alibaba, Uber and Airbnb have risen to be the largest companies in their fields – has not impacted agriculture yet, Rowe said. He referred to the “ag lag,” or delay in how revolutionary trends that start elsewhere take longer to impact agriculture. But just as biotechnology changed agriculture, Rowe said, digital disruption will impact it, too. During his presentation, Rowe flashed several quotes on the overhead screen. George Washington, first U.S. president: “Agriculture is the most healthful, most useful, and most noble employment of man.”
See FUTURE, Page 3
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Your Locally Owned Petroleum Retailer Shaw Media/Jim Dunn
Clay Sundberg (center), a senior at LaMoille High School who plans to attend Lake Land College in Mattoon, was also presented an agricultural scholarship by the Princeton Chamber of Commerce at the group’s fourth annual Salute to Agriculture Appreciation Breakfast. On hand were Derek Fetzer (left) of the Chamber’s Ag Committee and Kim Frey (right), executive director of the Chamber.
• FUTURE Continued from Page 2 And Wayne Gretzky, the famed hockey player: “Skate to where the puck is going.” Rowe said he studied ag at Iowa State University and started working as a grain merchandiser before he decided to enhance his education by studying to become a lawyer.
This additional knowledge prepared him to work in the evolving field of biotechnology for ag companies such as Pioneer (where he worked 23 years and rose to be European regional director based in Switzerland) and Syngenta (for the past 18 months). Rowe said he lives in Minneapolis with his wife, Amy, and their four children, and he works in the United States, Latin America and China.
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PUTNAM COUNTY
They’re getting ready today for farming’s future FFA schools students through technology and communication BY DAVE COOK Shaw Media GRANVILLE — Future Farmers of America, better known as the National FFA, was founded in 1928. In the decades since, many changes have taken place to keep its members at the leading edge of agriculture. Many adaptations revolve around the great strides made through technology and science, and it’s apparent when looking at the curriculum . “The FFA and agriculture education have been at Putnam County High School for more than 40 years, and it’s changed a lot just in the classes offered, including agriculture communications and biotechnology,” said John Heiser, Putnam County ag science teacher. “The curriculum continues to evolve as agriculture becomes more
Shaw Media/Dave Cook
Putnam County High School FFA students are as likely to learn in a classroom as they are in the field, and the rapid growth of technology crosses over both environments. and more technology and advocacy focused,” Heiser said. Additionally, each year students can participate in the FFA’s Career Development Events and Supervised Agriculture Experiences. Heiser said these educational events let students work with industry insiders and apply what’s been
learned in the classroom to realworld scenarios, saying it gives them responsibility and also helps build their resumes. “Students also get to explore different career opportunities by doing CDEs and SAEs,” he said. “They have the opportunity to travel throughout the state, country
and to other countries, too. It also prepares them for college and the workforce.” Communication is another big way in which technology has changed the FFA. “Keeping everyone updated with pictures and posts is how we stay in contact, and I see technology becoming a bigger part in our chapter because students are becoming more acquainted with different programs and are wanting to keep up to date with what’s ‘in,’” Heiser said. Nolan Whitner, a junior at Putnam County High, commented: “FFA helped me become a better leader, an overall well-rounded person and helped me realize some of the aspects behind the business of farming. It’s also helped me develop good time management and communication skills.” After working in the FFA biotechnology class, sophomore Cassie Johnson was asked about what role she thought GMOs will play in farming’s future.
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AG MATTERS| Spring 2018
“I think GMOs will create more nutritious and faster-growing products to help support our growing population,” Johnson said. “Farmers will be able to grow more crops on one piece of land than they would with non-GM seeds. This will help them make money, so they don’t have to pay more for land.” She added scientists have been able to create crops with additional nutrition, such as golden rice. However, she said, there isn’t enough research to support any real drawbacks and that the research done so far is inconclusive and biased. “Therefore, the only drawbacks are that consumers are very misinformed about what GMOs are and how they’re developed,” Johnson said. Putnam County FFA students have also designed solar water heaters in their ag engineering class. “It’s a good idea to incorporate renewable energy because it’s great to find different ways to produce energy without wasting fossil fuels,” sophomore Carter Trone said. “We’ll soon run out of fossil fuels, so the more we incorporate it now, the better.” Students were also asked about the increasing popularity and need
“I think GMOs will create more nutritious and faster-growing products to help support our growing population. Farmers will be able to grow more crops on one piece of land than they would with nonGM seeds. This will help them make money, so they don’t have to pay more for land.” Cassie Johnson sophomore, Putnam County High School for conservation programs, soil and water practices, and natural habitat restoration. The answer received provided a clue as to how the FFA may next adapt to the future. “Most people my age don’t know what they are. I think they need to be talked about more in school and to the younger generation,” senior Kindra Shawback said.
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CROP PRODUCTION FORECAST
Potential lower acreage, higher consumption seen as favorable signs U of I Extension URBANA — A strengthening trend in corn consumption, smaller corn acreage, and the developing production issues in South America signify a positive outlook for corn in 2018. The expectations for corn in the 2018 crop year put forth in this analysis show lower production leading to decreased ending stocks in 201819. According to University of Illinois agricultural economist Todd Hubbs, “The big ending stocks projected for this marketing-year continue to hang over corn prices and an upward price movement in corn during 2018 appears likely under a reduced production scenario.” Corn consumption currently is showing signs of building strength in exports, ethanol production, and other domestic uses. As 2018 pro-
gresses, an expectation of continued growth in corn consumption is the baseline for this analysis. “Expectations for the 2018-19 marketing-year for consumption exceed projected production, which leads to a lower level of ending stocks by the end of the marketing year. Corn exports will be influenced by trade policy, world corn production, and economic growth,” Hubbs said. While changes in trade policy may impact corn exports over the next year, the following analysis assumes a minimal impact due to trade disruptions. “Corn export projections by the USDA for the current marketing-year sit at 2.05 billion bushels. Current production issues in South America and the competitiveness of U.S. corn export prices increase the probability of exceeding the current USDA marketing-year projection,” Hubbs said. Current corn production projections for Brazil (3.7 billion bushels) and Argentina (1.53 billion bushels) appear likely for downward revisions in the upcoming USDA reports
Shaw Media/Jim Dunn
It won’t be too long before planting season, with area farmers checking their fields soon after for how well corn plants have emerged. A U of I agricultural economist believes a strengthening trend in corn consumption, smaller corn acreage, and the developing production issues in South America signify a positive outlook for corn in 2018. due to adverse weather. The potential for 400 million fewer bushels is increasingly probable in the two major South American countries. With a revision in South American production, world production projections come in approximately 4.5 percent lower in 2018. Building
on the strength expected in export markets for the remainder of this marketing-year, 2018-19 corn export projections in this analysis sits at 2.025 billion bushels. Corn used for ethanol production during this marketing-year continues to show tremendous consumption potential. “Through February 28, an estimate of corn use for ethanol sits slightly above 2.8 billion bushels. An expectation of small increases in gasoline consumption in 2018 and 2019 combined with growth in the ethanol trade balance provide support to the continued increase in corn used for ethanol,” Hubbs said. Corn used for ethanol expectations increase to 5.57 billion bushels in the 2018-19 marketing-year. The potential for lower cor n acreage in 2018 combined with an increased consumption scenario presents a positive outlook for corn prices in 2018. While the corn price will continue to struggle with ending stocks, an upward price movement in corn during 2018 appears likely.
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AG MATTERS| Spring 2018
Ag economist sees positive outlook for corn
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narrowed since last August as new capacity came online and continues to increase production. More competition among packers for hogs is helping strengthen bids for hogs and increasing the farmers’ share.” Finally, exports remain strong with 22 percent of U.S. production being exported in 2017. USDA is expecting exports to be 4 percent higher again this year. “The market has caught on to a strong demand, with live prices so far this year averaging about $1.80 per hundredweight higher than the same period last year. In addition, the lean hog futures market has been strong as well,” Hurt said. Using those futures prices and historic basis, expected live hog prices for 2018 would average about $53.50 compared to $50.48 last year. “The prospect of hog prices this year being $3 per live hundredweight higher is a reflection that the futures market recognizes the strong demand outlook for this year. Time will tell if the current optimism can turn into reality,” he said.
U of I Extension URBANA — The pork market has been favored by strong demand, and that remains supportive for hog prices this year. Prospects remain positive for higher producer prices again in 2018, even in the face of a 3 percent to 4 percent increase in supply. However, according to Purdue University agricultural economist Chris Hurt, a new threat to profit margins is being driven by dry weather in Argentina, therefore pushing up feed costs. On the demand front, all signals continue to be positive. So far in 2018, pork supplies have been up by 2.5 percent, yet hog prices have also been higher by nearly 4 percent. There are several signs of positive demand growth. “First, January retail pork prices were 18 cents per retail pound higher this year compared to January of 2017. This indicates that consumers are willing to pay more for pork even though there is more pork available,” Hurt said. “Second, packer margins have
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“Those expected prices are about $51 per live hundredweight for the first quarter, around $57 for the second and third quarters, and then near $48 for the final quarter.” Hurt continued: “Higher hog prices are a joyful sound to hog producers, but there are two catches. The first uncertainty is whether hog prices can actually be as strong as current markets expect, and the second uncertainty is feed cost.” The pork industry, like all animal agriculture, has believed that feed supplies are abundant and that corn and soybean meal will remain cheap. Why? For the four crop years from 2014 to 2017, farm-level corn prices received have averaged $3.49 per bushel, and in the past three calendar years from 2015 to 2017, high-pro soybean meal at Decatur has averaged $328 per ton. Since the beginning of this year, hog price prospects have increased, but so have anticipated feed costs. For hog producers, the increase in soybean meal prices has had a bigger impact on feed costs than increases
in corn prices. So far this year, hog price prospects are higher, but so are anticipated costs. The net effect is to reduce profit prospects modestly. Profits above all costs in 2017 were estimated at about $5 per head. Hurt concluded that pork demand should remain positive through the year with strong U.S. and world economic growth. Longer-term, however, higher wage rates, higher inflation, and higher interest rates may begin to constrain economic growth. “Global demand for feed ingredients continues to grow, but favorable weather has resulted in near record global yields for the last four years. A shift to less favorable global weather has obvious consequences for animal industries,” Hurt said. “As a reminder, the pork industry should strive to keep breeding herd expansion to around one percent per year. Keeping breeding herd growth to about one percent per year will increase production by about 2.5 percent per year, which seems to be a sustainable growth rate,” Hurt said.
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Hog prices increase, but so do feed costs
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Conservation Stewardship Program benefits • Improved water quality; • Improved cattle gains per acre; • Increased crop yields; • Decreased inputs; • Improved wildlife habitat and populations; and • Better resilience to weather extremes.
U.S. Department of Agriculture CHAMPAIGN — Agricultural producers wanting to enhance current conservation efforts are encouraged to renew their Conservation Stewardship Program (CSP) contract by the upcoming deadlines. Through CSP, the U.S. Department of Agriculture’s Natural Resources Conservation Service (NRCS) helps private landowners build their business while implementing conservation practices that help ensure the sustainability of their entire operation. Participants with existing CSP contracts expiring on Dec. 31, 2018, can access the benefits of the recent program changes through an option to renew their contracts for an additional five years, if they
DEADLINE APPROACHES NRCS will mail contract renewal notification letters to all participants whose contracts expire in 2018. The letters will contain instructions on how to apply for renewal. Applications to renew expiring contracts are due by April 13, 2018. agree to adopt additional activities to achieve higher levels of conservation on their lands. In Illinois, approximately 550 CSP contracts are reaching the end of their initial five-year contract peri-
od and may be renewed for an additional five years. NRCS will mail contract renewal notification letters to all participants whose contracts expire in 2018. The letters will contain instructions on how to apply for renewal. Applications to renew expiring contracts are due by April 13, 2018. Through CSP, agricultural producers and forest landowners earn payments for actively managing, maintaining and expanding conservation activities such as cover crops, nutrient management, buffer strips, and pollinator and beneficial insect habitat – all while maintaining active agriculture production on their land. CSP also encourages the adoption of cutting-edge technologies and new management techniques such as precision agriculture applications, on-site carbon storage and planting for high carbon sequestration rate, and new soil amendments to improve water quality. Some CSP benefits include: • Improved water quality;
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AG MATTERS| Spring 2018
Farmers urged to renew conservation contracts
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Spring 2018
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