Page 1

THE SEARCH is under way for a replacement for Countr y Financial CEO John Blackburn, who announced he will retire in January. .............................................2

THE pROCESS FOR approving GMO crops in the European Union (EU) is so cumbersome no resolution is eminent, an EU ag counselor said last week. .................5

An Ag CAREERS vidEO made by a high school FFA chapter and chosen the winner in a recent competition is changing the way agriculture careers are viewed. .....10

Monday, July 11, 2011

Two sections Volume 39, No. 28

‘Dangerous precedent’

HSUS, egg group propose welfare legislation BY MARTIN ROSS FarmWeek

Periodicals: Time Valued

In an effort purportedly aimed at establishing nationwide poultry welfare standards, the Humane Society of the United States (HSUS) and the United Egg Producers (UEP) are seeking to codify by law new federal animal treatment measures. But the move has sparked anxiety among key livestock groups. UEP, a cooperative that represents a reported 95 percent of the nation’s layer operations, agreed last week to work with HSUS — which spearheaded past animal welfare initiatives in Arizona, California, Michigan, and Ohio — toward passage of the first such federal law. The prospective measure calls for phased replacement of conventional layer cages used by 90-plus percent of the industry with new “enriched housing systems” that would nearly double the space currently allotted each hen.

UEP estimates the cost of that change alone at $4 billion over the next 15 years. (see additional provisions page 3). With the agreement, HSUS put a hold on planned state ballot measures that would affect Washington and Oregon layer operations. UEP Chairman Bob Krouse deemed a national standard “far superior than a patchwork of state laws and regulations that would be cumbersome for our customers and confusing to consumers.” But National Pork Producers Council (NPPC) President Doug Wolf fears the move ultimately could hurt pork and other livestock sectors. Wolf argued “such a onesize-fits-all approach will take

away producers’ freedom to operate in a way that’s best for their animals, make it difficult to respond to consumer demands, raise retail meat prices and take away consumer choice, (and) devastate niche producers.” “Whatever the Humane Society and Egg Producers want to agree to is up to them,” NPPC Washington spokesman Dave Warner told FarmWeek. “When Smithfield announced it was going to phase out sow stalls, we didn’t have anything to say about it, other than that it was a business decision they’d made. “But making it a federal law sets a dangerous precedent, allowing the federal govern-

ment to dictate production practices for other livestock species. In this case, (HSUS and UEP are) taking it a step further and trying to codify it in federal law. “After this, the Humane Society is not going to have to spend any money to try to get rid of (poultry) battery cages. They’re going to pour it all probably on us. They’re going to go after the pork industry.” While no specific sponsor has yet been identified, Rep. Earl Blumenauer (D-Ore.) praised the measure at a Thursday news conference. Fellow Oregon Democrat Peter DeFazio previously sponsored a failed proposal to require producers supplying federal programs with meat,

milk, and eggs to comply with prescribed welfare standards. If the HSUS-UEP plan clears Congress, Warner fears it could easily be amended to regulate swine practices. HSUS was lead sponsor and the egg industry a key opponent of 2008’s California’s Proposition 2, which set new housing requirements for operations statewide. By January 2015, California producers must ensure layers are able to sit down, stand up, turn around and extend their limbs without touching another bird or the sides of an enclosure. Echoing fears voiced following passage of Prop 2, See Welfare, page 3

Senate/House committees OK FTAs; president up next Congress last week moved a step closer to approving long-delayed free trade agreements (FTA) with South Korea, Colombia, and Panama. In a legislative “mock markup” Thursday, the Democrat-led Senate Finance Committee voted to support the FTAs. Included in the mock vote was White House-supported renewal of Trade Adjustment Assistance (TAA) designed to help U.S. workers affected by offshore job movement. The Republican-led House Ways and Means Committee followed up with a similar vote, omitting TAA. The non-binding “markups” served as a recommendation to President Obama to submit FTA “implementing legislation” for a vote. American Farm Bureau Federation (AFBF) President Bob Stallman maintained “the process toward finalizing these

important trade deals is heading in the right direction.” Presidential action is now “imperative” to ensure the FTAs are voted on by Congress’ August recess. Stallman warned inaction on the agreements over the last four years “has opened the door to our competitors in these markets.” Further delays “will only exacerbate the losses for

U.S. agriculture and the U.S. economy,” he

said. In an RFD Radio-FarmWeek interview last week, freshman U.S. Rep. Adam Kinzinger, a Manteno Republican on the House Energy and Commerce Subcommittee on Commerce, Manufacturing and Trade, reported “we have most of the freshman ‘class’ on board” for FTA pas-

FarmWeek on the web: FarmWeekNow.com

sage. He said he was hopeful “any of the differences between Democrats and Republicans have been hammered out.” “I expect we’ll see all three free trade agreements come up for a vote, I think within the month but definitely this summer,” Kinzinger said. “It’s high time, too. You look at South Korea, you look at Colombia and Panama: Every day that goes by where we’re not exporting to those countries (under an FTA), we’re losing that market share to nations like China. “I think we have a great opportunity. My confidence level in these three passing is sky-high right now.” The administration reportedly had reached agreement with House leaders to pass TAA as a condition of FTA approval. AFBF trade specialist David Salmonsen noted House leaders prefer to address TAA via separate legislation, but argued “everybody has to be dealing at some point with the same legislation” to assure final presidential approval. “I think we’ll be able to come to a full agreement,” Kinzinger maintained. — Martin Ross

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


FarmWeek Page 2 Monday, July 11, 2011

Quick Takes TRUCK DISPUTE RESOLVED? — U.S. and Mexican officials have signed an agreement to allow Mexican trucks to haul goods into the U.S. and that would, as a result, cut by half the tariffs Mexico imposes on U.S. exports. When the first Mexican trucks are allowed later this summer to carry products over the border, Mexican duties, including a 5 percent tariff on most U.S. pork, will be suspended. North American Free Trade Agreement (NAFTA) trucking provisions were set to become effective in December 1995, but the U.S. failed to abide by them. In 2001, a NAFTA panel ruled exclusion of Mexican trucks violated U.S. obligations. The U.S. temporarily delayed trade retaliation in 2007 by implementing a pilot program that allowed a limited number of Mexican trucks into America. The program was suspended in March 2009, and Mexico imposed tariffs on 89 U.S. products. “Any effort by Congress to prohibit this (new agreement) from moving forward will cause Mexico to once again put tariffs in place, putting the burden of non-compliance back on U.S. farmers,” American Farm Bureau Federation President Bob Stallman stated. DEBT LIMIT TRADEOFF — President Obama last week stressed the importance of raising the U.S. debt limit ceiling “so that the full faith and credit of the United States of America is not impaired” on the international scene. But freshman U.S. Rep. Adam Kinzinger, a Manteno Republican, argued he and his colleagues must continue to push for a good-faith “plan of action” for future federal spending in exchange for raising the ceiling. “After some of the discussions and meetings we’ve had, I think there will be an agreement pretty soon,” Kinzinger said in an RFD Radio-FarmWeek interview. “But look, I’m not going to vote to increase the nation’s debt borrowing authority without serious structural change in how we do business. “We’re $14.5 trillion in debt. It’s been 800 days since the Senate’s passed a budget, and since then, we’ve added close to $4 trillion in debt.” ETHANOL PRODUCER USES WHEAT — Wheat often is used to displace corn in livestock feed rations when the price of corn gets too high. Now, the same concept is being used in the ethanol industry. The Andersons, which operates ethanol production facilities in Indiana, Michigan, and Ohio, recently started mixing wheat into production of the biofuel in an attempt to lower costs and diversify its feedstock sources, Reuters news service reported. The Andersons reportedly was blending up to 10 percent soft red winter wheat into its ethanol formula. Spot prices on Friday at the Chicago Board of Trade were about a quarter per bushel cheaper for soft red winter wheat futures compared to nearby corn futures. The strategy of displacing corn used for ethanol production is expected to diminish once corn harvest begins this fall.

(ISSN0197-6680) Vol. 39 No. 28

July 11, 2011

Dedicated to improving the profitability of farming, and a higher quality of life for Illinois farmers. FarmWeek is produced by the Illinois Farm Bureau. FarmWeek is published each week, except the Mondays following Thanksgiving and Christmas, by the Illinois Agricultural Association, 1701 Towanda Avenue, P.O. Box 2901, Bloomington, IL 61701. Illinois Agricultural Association assumes no responsibility for statements by advertisers or for products or services advertised in FarmWeek. FarmWeek is published by the Illinois Agricultural Association for farm operator members. $3 from the individual membership fee of each of those members go toward the production of FarmWeek.

Address subscription and advertising questions to FarmWeek, P.O. Box 2901, Bloomington, IL 61702-2901. Periodicals postage paid at Bloomington, Illinois, and at an additional mailing office. POSTMASTER: Send change of address notices on Form 3579 to FarmWeek, P.O. Box 2901, Bloomington, IL 61702-2901. Farm Bureau members should send change of addresses to their local county Farm Bureau. © 2011 Illinois Agricultural Association

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

Richard Verdery (rverdery@ilfb.org)

COUNTRY

Country CEO announces retirement John Blackburn, 63, who has headed Country Financial for 10 years, last week announced he will retire in January. Illinois Farm Bureau President Philip Nelson, who also is president of Country, said the search for a new chief executive officer already has begun. “It has been my privilege to lead this organization for 10 years. I have great confidence in our people and believe John Blackburn Country is well-positioned to enhance and build upon our long-standing history of superior customer service,” said Blackburn. In the past decade, the Country group doubled its geographic footprint, growing from operations in 23 states to cover most of the nation.

Landowners should check with Country about liability needs for recreation uses BY KAY SHIPMAN FarmWeek

Landowners may request a liability coverage extension on their Farm or AgriPlus policy provided by Country Financial, if they allow hunting on their property. However, landowners are personally responsible for knowing who and when people are allowed on their premises and may earn up to $15,000 annually directly from that hunting activity, according to Craig Conroy, Country’s manager of farm underwriting. “We know how important it is for clients to not only be aware of their exposures but to be able to assist them in protecting their assets. When possible, we strive to provide the coverage our Farm and AgriPlus clients need,” Conroy said. Country handles liability

coverage differently if the landowner leases the land to an outfitter or some other second party, Conroy said. If the landowner allows a second party to coordinate the hunting activity, the company requires that the Farm or AgriPlus policyholder be listed as an additional insured party on the second party’s or outfitter’s commercial insurance policy, Conroy said. The liability exposure associated with hunting can be severe. For instance, hunters may fall out of a tree stand and sustain long-lasting injuries, Conroy explained. “If our Country Farm and AgriPlus clients are working with an outfitter, we want to make sure the clients are covered, but our policy would not be providing primary coverage,” he explained. “As our society becomes

Nan Fannin (nfannin@ilfb.org) Dennis Vercler Advertising Sales Representatives

Hurst and Associates, Inc. P.O. Box 6011, Vernon Hills, IL 60061 1-800-397-8908 (advertising inquiries only) Gary White - Northern Illinois Doug McDaniel - Southern Illinois Editorial phone number: 309-557-2239 Classified advertising: 309-557-3155 Display advertising: 1-800-676-2353

more litigious, landowners who allow people and hunting activities on their property need to be aware of their increased potential of being brought into a lawsuit,” he said. Country’s Farm and AgriPlus policy can be endorsed to offer coverage to landowners who lease their property. That would provide the landowner client liability coverage if the outfitter’s insurance has lapsed. “It’s a backup plan,” Conroy said. It is meant to serve as a safeguard, he explained. In recent years, Country has seen an increase in interest for liability coverage for hunting operations on farmland, especially in Southern and Southwestern Illinois. For more information, contact your Country Financial representative, Conroy advised.

DATEBOOK July 18 University of Illinois Orr Center field day, near Perry. Tours start at 4 p.m. For information, contact Mike Vose at 217-236-4911. July 19 University of Illinois Northern Illinois Research Center field day, near Shabbona. Tours to start at 4 p.m. For information, contact Russ Higgins at 815-274-1343. July 20 University of Illinois Northwest Research Center field day, Monmouth. Tours start at 9 a.m. For information, call the center at 309734-7459.

Classified sales coordinator Director of News and Communications

During the same period, assets for the enterprise grew from $8.1 billion to $14.3 billion, while annual revenues increased from $2 billion to $3.3 billion. Country has been continuously ranked on the Fortune 1000 list since 2004 and is currently ranked No. 624. Blackburn began his career with Country in 1982 as an agent in Christian County. He served many field and home office capacities, including agency manager, district director of agencies, regional vice president of agency, vice president of agency, and senior vice president of marketing. Blackburn has served as CEO since August 2001. He also is retiring as chairman of the boards of directors of Cotton States Insurance Group, Alpharetta, Ga.; Holyoke Mutual Insurance Co., Salem, Mass.; and Middlesex Mutual Assurance Co. of Middletown, Conn.

Good agricultural practices workshop, 9 a.m. to 3 p.m., University of Illinois Extension center, Westchester. For information or to register, call 708-679-6889. July 24 Pull and Cast for Illinois Agriculture Education, World Shooting and Recreation Complex, Sparta.

July 27 Illinois Farm Bureau Commodities Conference, Marriott Hotel and Conference Center, Normal. July 28 University of Illinois Brownstown Research Center field day, Brownstown. Tours start at 9 a.m. For information, call 618-427-5239. Aug. 3 Western Illinois University Allison Organic Farm field day, near Roseville, starting at 9:30 a.m. Advance registration required for morning session and lunch. Call Illinois Organic Growers at 217-454-1204. Aug. 4 University of Illinois Dixon Springs Agricultural Research Center field day, 9 a.m. to noon, near Simpson. For more information, call Dixon Springs at 618-695-2441. Aug. 12-21 Illinois State Fair, Springfield. Aug. 16 Agriculture Day and Sale of Champions, llinois State Fair, Springfield.


Page 3 Monday, July 11, 2011 FarmWeek

ENVIRONMENT

Farmers seeking nutrient solutions for watershed BY KAY SHIPMAN FarmWeek

Farmers voluntarily are testing different nutrient practices and technologies to make a difference in their Central Illinois watershed. Last week they and their government agency and industry partners shared what they are doing and their ambitious goals. Located primarily in Livingston County, the Indian Creek Watershed is an 82square-mile drainage area containing about 52,840 acres. The watershed is in the national spotlight as one of USDA’s Mississippi River Basin Initiatives. The goal of the program is to reduce nutrient loading in the river basin. Fairbury farmer John Traub is experimenting with different fertilizer rates and split applications with strip tillage. In addition to helping him better use the fertilizer he applies, Traub also wanted the project to send a message about farmers: “It shows we’re proactive and are interested in

our environment.” The Traub farm was one of three stops on the watershed’s first field tour. A smorgasbord of fertilizer application technology and practices, fertilizer products, and equipment is being explored voluntarily by farmer participants within the watershed. Industry and agency partners are involved to help farmers use fertilizer more efficiently, increase

‘It shows we’re proactive and are interested in our environment.’ — John Traub Fairbury farmer

yields, and improve the water quality. “Our goal is to have 50 to 75 percent of farmers in the watershed doing a conserva-

Fairbury farmer Kevin Harms, left, describes the split-nitrogen trials implemented on his family farm as part of the Indian Creek Watershed project in Livingston County. Research and nutrient field test projects were described to participants of a field tour around the watershed last week. (Photo by Kay Shipman)

tion system approach,” said Terry Bachtold with the Livingston County Soil and Water Conservation District. “We’re doing demonstration plots to fine-tune fertilizer applications to what the crops need. Our long-term goal is to benefit water quality.” That long-term goal was

not lost on Fairbury Mayor Bob Walter, who serves on the project steering committee and joined the field tour. Walter said he discusses the watershed project and farmers’ efforts during city meetings. “We need to work together with the farming community

to make sure we have the best water available,” Walter said. Traub echoed those sentiments: “It’s my hope after three to five years, we can change tillage practices and (fertilizer application) timing to make a difference on the water coming to the treatment plants.”

Welfare

FOOD SAFETY CHAT

Continued from page 1 Warner suggests “the price of eggs is going through the roof ” with enactment of federal standards. “The Humane Society probably told the egg guys, ‘We’re going to go after you in other states,’” he said. “If they felt they were going to lose in state after state after state, maybe this was the deal they wanted to make.”

The HSUS-UEP plan

State Rep. Michael Zalewski, left, (D-Riverside) who was “adopted” in 2009 by the Mason County Farm Bureau, discusses food safety research during a tour of the Institute for Food Safety and Health in Summit. Looking on left to right are: Robert Brackett, the institute’s vice president and director; Cook County Farm Bureau member Cindy Gustafson; and Mason County Farm Bureau President Randy Fornoff. Recently, the county Farm Bureau leaders toured Zalewski’s district that includes parts of the southwest side of Chicago and nearby suburbs. (Photo by Christina Nourie, Illinois Farm Bureau northeast legislative coordinator)

A Humane Society of the United States-United Egg Producers (UEP) proposal would require producers eventually to provide hens a minimum 124 to 144 square inches of space. Today, most U.S. birds are provided 67 square inches, with roughly 50 million receiving 48 inches, UEP stated. The groups will ask Congress to require producers to increase space in a tiered phase-in over an 15- to 18-year period. The proposed federal standard would: • Require that all layer environments allow hens to “express natural behaviors.” That could include installation of perches, nesting boxes, and scratching areas. • Mandate egg carton labeling to inform consumers of the method used to produce eggs — i.e., “eggs from caged hens,” “eggs from hens in enriched cages,” “eggs from cage-free hens,” and “eggs from free-range hens.” • Prohibit feed- or water-withholding molting to extend the laying cycle, a practice already prohibited by the UEP. • Require American Veterinary Medical Associationapproved standards for euthanasia of any egg-laying hens; • Prohibit excessive ammonia levels in henhouses. • Prohibit sale of eggs and egg products that don’t meet requirements.

Farm Bureau members: Still time to submit GRITs applications Farm Bureau members interested in Illinois agriculture policy issues have until Aug. 11 to apply for the Illinois Farm Bureau

GrassRoots Issue Teams (GRITs) program. The GRITs program provides members the opportunity to address emerging policy issues as well as identify new educational programs. The goal is to identify emerging

policy issues and/or program opportunities to increase farm income for members. The eight teams are: conservation and natural resources; crop production and trade; equine; livestock and dairy; renewable

resources and energy; risk management and farm programs; rural life; and specialty crops and labor. GRITs members meet twice a year. The first meeting is scheduled for Jan. 17 in Bloomington and the second

will be in March. Interested members should contact their county Farm Bureau or visit the IFB website at {www.ilfb.org} to obtain an application. GRITs members will be announced in October.


FarmWeek Page 4 Monday, July 11, 2011

goverNmeNt

Early end to ethanol credit rug-pulling or best deal? BY MARTIN ROSS FarmWeek

Senate proponents of ethanol tax credit elimination and less drastic ethanol policy reform announced a tentative agreement last week, raising measured relief and lingering concerns within the biofuels industry. Sens. Amy Klobuchar (DMinn.) and John Thune (RS.D.), who had supported movement to a “variable rate” ethanol credit and new ethanol infrastructure funding, and Sen. Dianne Feinstein (D-Calif.), who has backed outright and immediate credit elimination, agreed to a plan to end the current 45-cent-per-gallon fuel blenders credit by July 31. Instead, federal incentives would focus on small ethanol producers, advanced cellulosic biofuels, and investment in ethanol “blender

pumps” and other biofuels infrastructure. Funding for continued ethanol incentives nonetheless would be capped annuRep. Adam Kinzinger ally. An estimated $1.33 billion in annual tax “savings” under the plan would be used for deficit reduction. An estimated $668 million in added savings reportedly would be channeled into extended tax credits for biofuels infrastructure. National Corn Growers Association President Bart Schott suggested the compromise “reflects both the importance of the ethanol industry to achieve energy independence and the need for fiscal responsibility,”

while Advanced Ethanol Council Executive Director Brooke Coleman said it “has enough of the right ingredients to move the conversation forward.” However, Coleman argued a “last-minute switch from a yearly credit to a gallonbased, capped credit adds artificial and unnecessary layers of uncertainty and risk for the financing community.” U.S. House Energy and Commerce Committee member Adam Kinzinger, a Manteno Republican, agreed the existing credit cannot “continue indefinitely,” but favors a more gradual, multi-year phase-out or transition over potentially “pulling the rug” out from under the industry. “In biodiesel, people who invested a lot in plant (facilities) expected the (biodiesel) tax credit to be there,” Kinzinger said in an RFD

New blend The proposed Senate ethanol policy compromise (see accompanying story) would: • Extend to 2014 a 20 percent alternative fuel station tax credit that has supported E85 (85 percent ethanol) pump installation. The credit would be modified to allow for ethanol blends between E15 and E85 and cover the entire cost of ethanol “blender pumps” that dispense multiple blends. The credit currently is set to expire Dec. 31. • Modify and extend through 2015 an existing $1.01-per-gallon tax credit for cellulosic biofuels that otherwise would expire on Dec. 31, 2012. • Extends the small producer ethanol credit through 2012. Also scheduled to expire Dec. 31, the 7-cent-per-gallon credit applies to the first 15 million gallons of ethanol produced annually by any ethanol producer with production capacity below 60 million gallons per year. The proposal also would scrap a 54-cent-per-gallon ethanol import tariff that prevents foreign biofuels producers from benefiting unduly from the tax credit.

Radio-FarmWeek interview. “But the tax credit went dead (in 2010), and a lot of people lost a lot of money. “In investing, you have to be able to predict the future environment. If we begin to

get off of tax credits for ethanol, we have to give time and we have to give certainty to a lot of people. Otherwise, we’ll lose private investment in a very important technology.”

ACRE viable option if direct payments chopped? Eliminating direct payments likely would have a more major impact on federal budget outlays, farm income, and land values than specific commodity markets and food prices, a

new University of Missouri Food and Agricultural Policy Research Institute (FAPRI) report concludes. The wild card, in FAPRI’s view, is the impact of direct

RC seeks maximization of farm bill influence Farm bill a done deal? Not according to Keith Mussman. Illinois Farm Bureau’s policy-crafting Resolutions Committee (RC) is asking Farm Bureau members this summer to analyze 2012 farm bill/farm program priorities along with nutrient management, farmer image, and food safety issues. The RC reconvenes in November to finalize policy proposals for delegate review at IFB’s December annual meeting in Chicago. A policy discussion supplement to be included with the Aug. 1 issue of FarmWeek will address RC “discussion topics” in depth. With farm direct payments, crop insurance, and key conservation programs under the budgetary gun, Mussman, chairman of the RC’s Ag Production/National Issues Subcommittee, fears “a lot of farmers think it’s a done deal, that there’s nothing we can do to influence it.” Quoting baseball legend Yogi Berra, the Kankakee County poultry producer told FarmWeek, “It’s not over until it’s over.” Mussman called on IFB members to identify “what programs they don’t think they can live without.” “We have people going to Washington regularly, we’re in contact with legislators, and we do have influence,” he said. “We have to keep this dialogue open — we need our membership to tell us what it’s thinking, what it wants. Members have to reflect on programs that have not been helpful in the past, that maybe have been wasteful, that we can do without.” “We’re a big livestock producer, and selfishly speaking, there are some components of the farm bill that aren’t necessarily real good for livestock. But if grain farmers make money, livestock farmers eventually make money, too. It’s good for all of us to have a healthy farm economy.” Meanwhile, IFB’s Farm Policy Task Force will meet this summer to review the range of farm bill proposals that have emerged to date. See accompanying story for the national Food and Agricultural Policy Research Institute’s analysis of the implications of eliminating direct payments. — Martin Ross

payment elimination on the Average Crop Revenue Election (ACRE) program, the 2008 farm bill’s revenue safety net. ACRE has proven a mixed bag across commodity lines, and threats to direct payments have revived concerns about how ACRE might be refined to better serve nationwide needs and thus boost producer participation. “To say it’s a complicated program is an understatement,” American Farm Bureau Federation chief economist Bob Young admits. “There’s been a lot of discussion that we need to shift to a county (ACRE yield) trigger. “The challenge is that a lot of counties are not collecting that data any more. So now there’s discussion of going to a crop reporting district trigger.” An AFBF/Mississippi State University study suggests Illinois corn growers who would receive a $13.75-per-acre ACRE payment under an existing state trigger could see a $16.40 payment under a reporting district trigger or $16.53 under a county trigger. Soybean producers expecting a $10.96 payment under a state trigger reportedly could receive $13.42 under a district trigger or $13.12 under a county trigger. FAPRI noted federal budget savings resulting from direct payment cuts are “sensitive” to ACRE participation. Without any increase in participation, scrapping direct payments would reduce net farm

FarmWeekNow.com You can view the complete FAPRI report on direct payments at FarmWeekNow.com.

program outlays by $41.7 billion over the fiscal 2012-2021 period, relative to current spending. But FAPRI anticipates a “large offsetting increase” in ACRE expenditures if all producers chose to participate in the revenue program. In that case, the study assumed, fiscal 2012 2021 net outlays would decline by only $18.9 billion.

significant variable in the income impact of direct payment cuts. Rental rates likely would be “a tetch lower” under direct payment cuts, he suggested. “Rent to non-operator landlords — those with the Manhattan (New York) addresses — just leaves the sector,” Young noted. “Those folks charge a high rent because of direct payments. A $1 reduction in the deficit doesn’t necessarily lead to a full $1 reduction in farm income.” Because producers do not

‘To say it’s a complicated program is an understatement.’ — Bob Young Chief economist, American Farm Bureau Federation

FAPRI’s report concluded a major reduction in program payments would result in lower farm income and land values. Depending on ACRE participation, annual net income nationwide could decline by an average $1.9 billion-$3.2 billion, and land values could drop by an average 1.8 percent to 2.7 percent relative to current program baselines. Young sees tenant-landlord relationships as a potentially

have to produce a crop to receive direct payments, direct payments have less impact on crop production than do other programs where payments are more directly tied to production decisions. The effect of direct payment elimination would differ across crops because of differences in payment rates, projected market prices, and expected revenue volatility, FAPRI economists maintained. — Martin Ross


Page 5 Monday, July 11, 2011 FarmWeek

biotechnology

Policy choices seen as key to feeding hungry planet BY MARTIN ROSS FarmWeek

William Lesher realizes a deficit-conscious Congress can’t simply throw money at agriculture. But he believes policymakers can avoid throwing further roadblocks at future ag innovation and development. Lesher is executive director of the Global Harvest Initiative (GHI), a partnership of Archer Daniels Midland Co., DuPont, John Deere, and Monsanto that is focused on “sustainably closing the global agricultural productivity gap.” GHI’s latest policy issue brief estimates a $90 billion annual “agricultural investment gap” and outlines the significant role of the private sector in addressing global food security, creating economic growth, improving world incomes, and feeding a projected 9 billion people by 2050. GHI’s conclusions emerge as Congress eyes major cuts in funding for U.S. foreign assistance and public ag research —basic research scientists at a Washington biotech confer-

ence deemed vital to advanced genetic developments. Lesher also sees “lots of things (governments) can Roger Beachy do that will be helpful with regards to global food security that don’t cost anything,” including expanded trade and policies that “embrace new technologies that are safe.” It’s thus “important we get the policy right,” Biotechnology Industry Organization (BIO) CEO Jim Greenwood argues. The former congressman heralds the need for “more, not less, agricultural biotechnology” and a regulatory process “that’s rigorously science-based, not blown back and forth by the latest scare headlines and activist campaigns.” “We have to double output in the next 40 years,” Lesher told FarmWeek. “That’s not just growing (food); it’s expanding the roads, processing capacity, etc., to make this

happen. It’s mind-boggling. It can be done, but you’ve got to start now, and you’ve got to employ lots of different things. “You must embrace modern production agriculture like we have in the Midwest, but you also have to help ag development in Africa and elsewhere. To get that done, you’re going to have to have more private sector involvement.” U.S. policymakers should streamline biotech regulations “so innovators can make the next product that’s better for health or the environment or that would be good for manufacturing,” said Roger Beachy, founding president of the Danforth Plant Science Center. The St. Louis-based center spearheads research aimed at sustainably feeding the world. The U.S. has seen “wonderful success in technology” since initial GMO crop introductions in the mid-1990s, Beachy said. Products such as Bt corn and cotton have proven safe and effective in controlling pests and reducing costs in the U.S. and develop-

Shift in European GMO paradigm slow The European Union (EU) still holds some sway over global adoption of GMO crops and foods, and experts suggest that ultimately, what grows in Europe will go in Europe — and by extension, in EU-influenced nations. EU ag counselor Carlos Alverez Antolinez told FarmWeek the European Food Safety Authority conducts “very rigorous assessment” of GMO risks, and to date has affirmed the consumer safety of GMO-based foods. However, final product approval requires a “qualified” population-weighted majority vote of the EU’s 27 member countries, “and we never reach a qualified majority,” he stressed. Under the EU’s legal framework, policymakers are authorized to consider “other legitimate factors” in approvals beyond health or environmental risks, including cultural, ethical, or political concerns, Antolinez noted. Consumer perceptions continue to drive GMO policy. Recent surveys have found Europeans “optimistic” about biotech advances in human or animal health, but “when it comes to food, that’s not really the case,” Antolinez said. A plan by the European Commission (the EU’s executive body) would address the stalemate by enabling individual EU “states” to prohibit production of centrally approved GMO crops. The measure is under review by the EU Parliament and the European Council, which includes member country leaders. “It has to go through the whole complicated EU legal system — it may take some time before this is decided, and I don’t think anybody’s in a position to state the likely outcome,” Antolinez said. “But it’s a way to solve a problem which exists in the EU. We have a regulatory system

which is not working when it comes to (GMO crop) cultivation. “With the member states challenging approvals, the whole system is challenged. By separating approval from actual (country-bycountry) implementation, the commission believes we preserve the integrity of the approval process but deal with a reality: that some member states may exercise their right to decide whether or not they want to cultivate GMOs.” In a 2010 survey, European consumers nearly three-to-one were wary of or opposed to GMO foods. In Antolinez’ view, that sends “a very strong message that cannot be ignored.” He argues science-based regulation is easier in the U.S., where consumers on average appear “relatively indifferent” to GMOs. Amid advances in animal biotechnology, consumer views could pose a quandary for Europeans who have faced repeated livestock disease/meat safety concerns. Antolinez reported European consumers are heavily opposed to food use of cloned animals but more favorable toward biotechnology as a means to preserve endangered species and improve disease resistance. Scientists have touted cloning’s value in reproduction of disease-free animals. But in 2008, EU’s Parliament called on the commission to ban meat or dairy products produced from cloned livestock and even their noncloned offspring. “Our scientific assessment says that far as food safety is concerned, there are no issues — (cloning is) perfectly safe,” Antolinez said. “There are some concerns from the perspective of animal health and welfare.” — Martin Ross

ing regions. Thus he questions whether, 15 years later, federal agencies need to adhere to rigid, from-scratch approvals for every new Bt crop use. Scientists need a speedier path to crop improvements if

leaders “a well-fed world is a more stable world.” Poor policy choices risk “getting us into a difficult situation that even involves our national security,” Roberts advised. “Why on earth would you

‘We have to double output in the next 40 years.’ — William Lesher Global Harvest Initiative

they hope to help developing nations increasingly impacted by climate change, Beachy said. He believes the U.S. must lead the way in clearing that path and countering GMO fears. Senate Ag Committee Ranking Republican Pat Roberts (R-Kan.) told industry

want to propose spending cuts or tax policy changes or regulatory overkill that would be harmful to the man or woman whose job it is to produce enough food or fiber for the U.S. but also for a very hungry and troubled world?” he demanded.

GENE EXPRESSIONS New hope for Holsteins Bovine mastitis is a “$10 billion worldwide problem and a $2 billion problem in the United States,” according to Preston Linn, vice president of alliances with Advanced Animal Diagnostics. Linn’s small North Carolina company is developing a “point of cow” test that could help dairy producers pinpoint costly disease threats at the source. Tapping an $11 million grant from technology investment firm Intersouth Partners and industry giant Novartis, Advanced Animal Diagnostics seeks to determine “what’s going on” in individual animals. The company’s initial product is a disposable mastitis test. “This is a platform technology, so if we can do this, we believe there are a lot of other issues on farms — reproduction, productivity, food safety, etc. — that will offer opportunities for us,” Linn said.

Transgenics and transplants U.S. Food and Drug Administration Center for Veterinary Medicine senior biotechnology adviser Larisa Rudenko sees growing potential for genetically enhanced “xenotransplantation” — use of animals as organ donors. Xenotransplantation is nothing new — procedures have been attempted since the 1700s — but modification of animal cells, tissues, and organs offers new hope for crossspecies compatibility and thus human survival, Rudenko said. “There are something like 110,000 people today facing a transplantation waiting list,” she noted. “There will not be sufficient human donors for a very long time to fill that need. Xenotransplantation is a real societal need.”

Produce palatability Monsanto’s Susan MacIsaac highlights a somewhat less crucial but nonetheless pressing goal — getting children (and their parents) to eat their veggies. Beyond continued row crop improvements, the company is focusing on improving the aroma and taste of melons, tomatoes, and peppers. Monsanto already has partnered with Apio (a growerfounded company) to market Beneforte, a conventionally bred broccoli which boosts the body’s natural antioxidant capabilities. The nutritionally enhanced broccoli was developed using advanced genetic selection technology. Monsanto’s latest effort aims to “make consumers want to eat more fruits and vegetables,” MacIsaac said. Meanwhile, work continues on refining soy oil as a “land-based source” of essential Omega-3 fatty acids that normally are derived from fish, she reported. — Martin Ross


FarmWeek Page 6 Monday, July 11, 2011

CROPWATCHERS Bernie Walsh, Durand, Winnebago County: The main news this week is: “It hasn’t rained yet.” It has now been three full weeks since any measurable rain, and there isn’t much in the forecast for the coming week. The corn and beans still look pretty good and are growing despite a lack of moisture. The sandy soils and stony knolls are starting to show stress, though, and even the best ground has large cracks. No one in this area has tried any wheat yet, but it should be ready soon and will try combining this week to test the moisture level. The beans are blooming, but no tassels are showing in the corn yet, but they will be soon, as most of the early-corn is above our head. Have a good week and stay safe. Leroy Getz, Savanna, Carroll County: No rain last week. Again, it is getting very dry. Corn that is starting to tassel and beans are showing the effects on the thin soils and are burning up on the sand ground. Rye has been combined and wheat is ready. I see they are digging potatoes south of Savanna and that the peas there have been harvested and the ground replanted to sweet corn. Hay making has been very good. Growing degree units are 1,172 — this is about 130 less than it was in 2010. Ryan Frieders, Waterman, DeKalb County: It was a productive week on the farm. The wheat is being combined and there is still a little left to do. A small shower popped up late Wednesday night bringing 0.3 to 0.6 of an inch of rain to the area. Early soybeans have flowered for the first time. Replant soybeans have emerged after only a few days. The early-planted corn is close to tassel. Later corn is V-6. Crop development is very rapid due to warm weather and sunshine. Larry Hummel, Dixon, Lee County: The futures market has had a wild ride the last two weeks. Relatively speaking, the river basis has been on an even more dramatic ride. Back on June 22, the basis at the river was 11 under the futures. By the 5th of July, basis was 51 over. Since then, it has dropped back to a very respectable 21 over. The grain bins are now all empty, and we did have a little overrun after we filled their July contracts. I had been hoping that prices on our overrun would have an 8 in front of it, but even with a 6, I can make good money. Crops around this corner of the state look good. Some of the ground that has been too wet has dried up enough that the corn is getting a dark green color again. More and more, the neighbors are looking to the forecast to see if we can get some good July rains. Joe Zumwalt, Warsaw, Hancock County: Western Illinois ended June with a total of nearly 25 inches for the month, but luckily that pattern has broken leaving us with warm, dry weather. Crops in the area have really suffered the effects of too much water. The warm weather is helping to return good color to the corn and soybeans, but yield potential has been greatly reduced. Corn ranges from V-12 to full tassel. Several crop dusters have been in the area applying fungicide as well as adding nitrogen. Soybeans finally are beginning to take off. There are still some soybeans that need to be replanted in the area, and I am hoping to replant within the next few days. At this point, farming is really a gamble. We will just keep our fingers crossed that we don’t have an early frost. Ken Reinhardt, Seaton, Mercer County: Not a drop of rain for the period. There still is sufficient moisture for crops to thrive. There were soybeans planted for the first time along with replanting in the Edwards River bottom last week. Corn is very close to tasseling. I have some tassels showing in 102-day corn. Corn is looking very good or at least most of the drowned out spots are now out of sight. Pivots are running next to standing water in the bottoms. There is one report of armyworms down there. Japanese beetles are everywhere and will need to be watched for silk-clipping in corn.

Ron Moore, Roseville, Warren County: We did not have any rain in the past week. I have not been able to report that since last year. Lots of hay was baled last week. The early corn is now starting to tassel and some silks are out. There will be fungicide applied this week on most of our corn. The beans are flowering as well. The 30-inch rows are not closed in yet but will be soon. I am reluctant to say this, but we could use a nice shower. The cracks in the soil are starting to get big. Jacob Streitmatter, Princeville, Peoria County: The corn crop has grown a lot in the last two weeks. Some of the Aprilplanted corn that did not need to be replanted is tasseling, along with a few early varieties planted in early May. A few scattered rain showers passed through the area leaving most people with dust, but some were lucky to get rain. As much rain that fell early, it seems that the crop is in need of a drink. Soybeans have a long way to go. They have started to bloom, but now the Japanese beetles have started to work on them. Job security for chemical companies, sprayers, and spray planes, I guess. Mark Kerber, Chatsworth, Livingston County: It is July, and it is getting dry, as high pressure is dominating. Hopefully, when you read this it will be raining. Soybean spraying is complete with pretty fair weed kill, except for marestail. That weed seems to be getting glysophate resistant. Different herbicides added to Roundup does help kill some pesky weeds, such as morning glory. With a rain event, tassels will be popping out for pollination on corn. This is a critical time coming up. Markets will be volatile in the coming months. Will we run out of corn as fall approaches? Ron Haase, Gilman, Iroquois County: On July 1, rain brought farm activities to a halt. On our farms, we received a range of 0.3 to 0.9 of an inch. Other farms in the area received hail along with up to 4 to 5 inches of rain. After that, it had been dry until Thursday night. We received 0.1 of an inch of rain on a couple farms with the rest of our farms receiving nothing. After the soil dried out last week, farmers were busy applying post-emergence herbicides in corn and soybean fields, row cultivating in soybean fields, and harvesting wheat. Area cornfields range from the V-7 growth stage up to the R-1 growth stage. Only a few fields are beginning to show tassels and begin pollination. Those are the fields that were planted the first week of April. Most corn is V-10 to V-15. At V-10, the corn plant begins a rapid steady increase in nutrient and dry matter accumulation and water usage. We finished our herbicide application in corn and now will wait for our corn to reach R-1 to begin applying fungicides. Area soybean fields range from the V-5 growth stage up to the R-2 growth stage. The local closing bids for July 7 were nearby corn, $6.54; new-crop corn, $5.85; nearby soybeans, $13.51; new-crop soybeans, $13.06. Tom Ritter, Blue Mound, Macon County: Showers on Thursday evening were welcomed. We did not need a lot of additional moisture, but we did go for more than a week without any, which is the longest spell we’ve had this spring and early summer. Crops continue to advance. There are a lot of acres of stressed corn due to either standing water or saturated ground. We are seeing a lot more stress in the corn than in the beans. Corn is just beginning to tassel. Earlier-planted corn is starting to pollinate. The vast majority of the corn will be tasseling within the next week to 10 days. There is some spraying of fungicides on corn, but the majority of that will take place in the next two to three weeks. Soybeans continue to improve, needing the dry spell to overcome some of their problems. Overall, soybean crop looks good at this point. I would rate corn as very good and soybeans probably also very good, but definitely far from excellent.

Brian Schaumburg, Chenoa, McLean County: Wheat harvest is in its final stages with good quality, test weights, and yields reported. Corn and beans are at varying stages of development with some cornfields at tassel and others only waist-high and soybeans range from V-1 to R-1. Japanese beetles returned the first of the month and numbers have been growing. No economic damage as of yet. It has been two weeks since the last rain event, and we hope to change that trend soon. Crop ratings are good to excellent. Corn, $6.45; fall, $5.80; soybeans, $13.53; fall, $12.98; wheat, $5.89. Steve Ayers, Champaign, Champaign County: A normal weather week with 0.12 of an inch of rain Thursday night. Crops are looking good for now. We have more rain in the forecast for Monday through Wednesday this week. Our USDA crop reporting district is 3 percent very short and 9 short of top soil moisture. I saw the first corn tassels on July 4. Beans are sprayed with good control. USDA also has our crop reporting district at 1 percent corn silked and 2 percent soybeans blooming. Fair season continues with the Champaign County 4-H Expo and the Fisher Community Fair and Horse Show this week. Wilfred Dittmer, Quincy, Adams County: How does the song go? “Oh what a beautiful morning ... and the corn is as high as an elephant’s eye!” It could have been written for Friday morning. Warm days and nights have helped the corn keep growing. Some fields have tasseled and others are right about there. Some aerial application of N has been happening in the area. Sprayers also have been going in bean fields. A little wheat has been cut, but I have not heard any yield reports. The Japanese beetles are definitely back and a few of those pesky gnats are still around. No measurable rainfall for the week, just enough to wet the sidewalks Thursday afternoon. Have a safe week. Todd Easton, Charleston, Coles County: This year it is amazing what can happen in 10 days while you are away. The family and I had a nice trip out West. While we were gone, most of the beans got their muchneeded herbicide application, the wheat was harvested, double-crop beans were drilled, and the corn and beans grew a lot. The early-April planted corn almost has completed the early vegetative stages and is now entering the R1 stage. May-planted corn looks to be a week away from the VT tassel stage and has caught up to the earlier corn in height. All of the corn in the area benefited from the inch of rain we received last weekend (July 2-3) and, at this point, has great potential. The soybean fields are looking much better with the weeds among the beans finally turning yellow and disappearing. The crop generally is even at the R-1 to R-2 blooming stages and making great progress. The wheat crop is in the bin with mixed results as the crop for the most part showed the stress of the exceptionally dry fall last year. Most of the yields I overheard were in the 50s and 60s with the best being around 85 bushels per acre. Doublecrop beans went in right behind the combines and after the rain should be off to a good and timely start. As we traveled the I-80 corridor, the crop condition got noticeably better as we got closer to home. This state and especially this area is in very good shape, especially compared to many of the fields out West. David Schaal, St. Peter, Fayette County: We received a couple of light showers on July 4th weekend. On the evening July 7, the rain gauge caught 2.6 inches of rain, which flooded low-lying areas again. There were places that had up to 4 inches in the county. We are into the 34- to 35-inch range for the year. Big corn in the area still looks good, with some of that getting ready to tassel. A lot of soybean spraying is going on. A lot of other chemicals are being added to Roundup because of so many glysophate-resistant weeds. Cash corn, $6.55; beans, $13.41; wheat, $6.40. County fair starts this week.


Page 7 Monday, July 11, 2011 FarmWeek

CROPWATCHERS Jimmy Ayers, Rochester, Sangamon County: Last week we received close to 3 inches of rain on Thursday evening and some scattered showers passed through on Wednesday. It was dry the majority of the week. Taylorville, just to the south of us, had extreme flooding. The yellow spots are showing up in the corn and you can see them pretty well now. Corn has different heights in the fields. The majority looks great. It is pollinating in 30 to 40 percent of the fields. Many of the beans look like they have been stunted with the chemical applications, but some are looking pretty good. We actually got into some of our wheat last week. It is just doing a little over 50 to 55 bushels per acre. I’ve heard as high as 75 and 80. Several guys were attacking their hay fields trying to get some hay put up. Christian County Fair is July 12-17. We want to keep these fairs going. Ted Kuebrich, Jerseyville, Jersey County: Jersey County is still in a wet mode with 2.5 inches of rain for the week. The early corn, planted before all the rain, is looking very good. The later corn is more uneven due to low spots in fields where water has been standing. The bean crop seems to be slower developing because of all the rain and the wet soil conditions. Japanese beetles are here and are all over yard plants and ornamental trees. Prices at Jersey County Grain, Hardin: cash corn, $6.43; fall corn, $5.86; cash beans, $13.50; fall beans, $13; June/July wheat, $6.35. Dan Meinhart, Montrose, Jasper County: Showers moved through the area the weekend of July 2 and 3. Farmers got a break last week with a lot of beans going into the ground, nitrogen applied to corn, and post chemicals applied to both corn and beans. Wheat harvest was wrapped up along with straw baling. Some hay also was baled. Waterstressed corn and soybean fields are showing improvement. Showers moved through the area again on Thursday evening, leaving 0.25 of an inch to 2 inches. The week was very hot and humid. Showers are in the forecast for this week.

Doug Uphoff, Shelbyville, Shelby County: Beans have entered the reproductive stage as the days are now beginning to get shorter. Later-planted May corn is beginning to show tassels. The double-crop beans I planted were up in four days. I made a trip to St. Louis on the 4th and crops look terrible down there from Cowden to St. Louis with patches of good crops. When driving to Decatur from Dalton City to Route 105, I see the same short, uneven, yellow corn, and beans look the same. I would say there is an average crop at the most right now. Some by St. Louis are just now planting beans and there were no double-crop beans. Prices in Decatur at the processor: July, $6.63; August, $6.70; September, $6.05; January, $6.16; July, $13.71; August $13.66; September $13.28; January $13.43; diesel farm, $3.62; B11 farm, $3.37; truck, $4.09; B11 truck, $3.83; gas, $3.79. Call your congressman or woman on truck regulations. If we don’t speak up who will? Dave Hankammer, Millstadt, St. Clair County: Wanted – one slightly used ark. OK, that may be a bit of an exaggeration. However, since my last report, we received 2.5 inches of rain on July 3 dropping temperatures by 30 degrees for the evening. On July 8, we received another rainstorm dropping 3-plus inches of rain in the area. Flash flood warnings were issued for Clinton, Monroe, Randolph, and St. Clair counties. I witnessed water over the road due to excessive runoff from surrounding fields in the area. The creek bottom where we had just finished clearing driftwood flooded for the third time this growing season. Fortunately, wheat harvest was done before these rains. Most of the double-crop soybeans and additional first-crop beans were planted. Some post-herbicide application was done on some of the area soybean fields. The Japanese beetles have made an appearance in the area, although there are no reports of damage at this time. The corn crop is rapidly gaining height with the laterplanted corn catching up to the earliestplanted corn. Local grain bids are: corn, $6.41; soybeans, $13.73; wheat, $6.18. Have a good week.

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

Rick Corners, Centralia, Jefferson County: Here we go again — the flash flood warning just came across the TV. Last Sunday afternoon (July 3), we had about 3.5 inches of rain in about 30 minutes. Down the road a mile, received about 5 inches. Needless to say, it was not pretty. I really think some of the beans, even on the high ground, are going to kick off. They sure have the creeping crud. Any wheat that has not been harvested sure looks nasty. I think there are going to be lots of acres that are not planted this year. Time is just running out. Kevin Raber, Browns, Wabash County: I had 2.75 inches of rain in my gauge Friday morning. This rain might close the window on any planting or replanting intentions. I had one double-crop, one first-crop, and several drowned-out spots that I was going to try to plant, but that might not happen now. The corn on welldrained areas looks good, but low areas not so good. They are stunted and sick looking. Randy Anderson, Galatia, Saline County: We got our weekly rain like clockwork now and hope we keep getting some the rest of the season. For the past week, we received 3.5 inches. We finished up most of the postspraying on the soybeans last week. The crop has a lot of holes in it. Bottom ground is not looking too well, but the rolling hill ground looks the best I have ever seen. I’d like to mow around fields and roadsides, but I figure most likely I’d get stuck. I need a vacation from all of this. Ken Taake, Ullin, Pulaski County: We had some nice showers last week. On Monday, July 4, we had 0.7 of an inch of rain in the morning and then Thursday afternoon and overnight we had 1.1 inches. It has really been beneficial for the crops that were planted. We do have some people in the area who were trying to finish planting, or probably more correctly, trying to finish replanting drowned out spots from the heavy rains we had two weeks ago. Our early-planted corn is just starting to tassel. Our last-planted corn is just barely waist-high, so there is a great variability in corn size. Soybeans look very spotty, to say the least. Their stands are not very good. I guess we will see what the weather does. Please remember to take time and be careful.

Several sources of soybean leaf tattering unveiled BY KEVIN BLACK

Bacterial blight infections have been observed across a wide area. These infections are a common cause of tattered leaves in soybeans.  Centers of bacterial blight lesions readily become brittle and drop out, Kevin Black weakening the leaf and allowing it to tatter in the wind.  When tattered soybean leaves are noted, however, it is wise not to jump to conclusions. We recently have had numerous violent storms crossing parts of the FarmWeek geography.  These storms, by themselves, are

capable of tearing the tender top leaves of soybean plants. If anything has weakened the leaves, leaf tattering becomes even more likely. Insects, such as grasshoppers, bean leaf beetles, and colaspis beetles, have fed on soybean leaves this season. The feeding holes caused by these insects weaken the leaves and encourage them to tatter in the wind.  This tattering can cause the original damage to look much worse

than it really is. Is a fungicide application advised when leaf tattering is observed? Fungicides are usually of little value following the appearance of leaf tattering, regardless of the cause.  Bacterial diseases are unaffected by fungicides, and fungal infection does not seem to be worse following leaf tattering.

Fungicides may have value if fungal diseases are truly threatening the crop, so scouting can help determine if fungicide application is appropriate. What about insecticides? Insecticides may have value if the suspect insect pest is present in economically damaging numbers. Since tattering of soybean

leaves can accentuate the appearance of insect damage to leaves, it is important not to overreact to the visible leaf damage, but to carefully assess damage caused by the insect pest(s) alone. Kevin Black is GROWMARK’s insect and plant disease technical manager. His e-mail address is kblack@growmark.com.

Chicago Farmers to tour dairy farm, compost business The Chicago Farmers will hold its summer tour starting at 9:30 a.m. July 27 in Wauconda. The group will tour Golden Oaks Farm, 27730 W. Bonner Road, and Midwest Organic Recycling, 29353 N. Darrel Road. Reservations are due by July 26. Golden Oaks Farm, established in 1948, is a dairy farm whose herd produces 18.2 million pounds of milk annually. Midwest Organics Recycling facility was established to compost manure and serve as a solution for Golden Oaks, one of the last dairy

farms in an urbanizing county. The two operations complement each other. Lunch will be at Docks Bar and Grill and is included in the registration fee. Adults and children are welcome. Tour participants will travel in their own vehicles. The registration fee is $20 for members and members’ children. The fee is $30 for nonmembers and $20 for non-members’ children younger than 16. To register, go online to {www.chicagofarmers.org} or call 312-388-3276.


FarmWeek Page 8 Monday, July 11, 2011

commodities IFB commodities conference July 27

Analyst: Skepticism about USDA crop estimates lingers

BY DANIEL GRANT FarmWeek

The crop markets last week absorbed some of the shockingly high numbers in USDA’s June 30 crop acreage/stocks report and some prices actually firmed up. But many analysts still

believe revisions will be made to at least some of the estimates that sent crop prices on a downward spiral after a fairly bullish spring. Clayton Pope, general manager of AgriVisor, addressed the situation last week. The market analyst will be a fea-

tured speaker July 27 at the Illinois Farm Bureau commodities conference in Normal. “There is a lot of skepticism about those numbers,” Pope said of USDA’s June estimates. “The first (market) reaction obviously was pretty violent.” USDA on June 30 shocked

IFB commodities conference to focus on food trends Pre-registration deadline July 15

Farmers who are the most successful in today’s highly competitive, global marketplace generally are the most well-informed about issues ranging from the markets to new technology. It, therefore, could be beneficial for producers to attend the Illinois Farm Bureau commodities conference in Normal on Wednesday, July 27. The theme of the event is “Local to Global: Knowledge is Power.” Participants may pre-register for the conference through July 15 online at {www.ilfb.org} or at their local Farm Bureaus.

“We’ve got an excellent slate of speakers,” said Mike Doherty, IFB senior economist and policy analyst. “There is a lot of buzz out there about food production, local food initiatives, food vs. fuel, and the ag and U.S. economy,” Doherty said. “This (conference) is the place to come to find out the real scoop.” The keynote speaker is Grady Bishop, director of the U.S. swine business unit at Elanco Animal Health. Bishop’s presentation is titled “Using Knowledge and Technology to Satisfy Local to Global Consumer Choices.” The keynote presentation will be followed by breakout sessions that will focus on pol-

icy issues, energy prices and their effect on ag, weather and market outlooks, animal rights and welfare, local food initiatives, and transportation. “It’s all about having knowledge about the flow of food products from local markets to global markets,”Doherty said. The closing presenter will be Jerry Carroll, an ag humorist who recently was featured in FarmWeek. Cost of the conference is $35 per person, which includes lunch. Those who do not preregister for the conference by July 15 may register on site at the Marriott Hotel and Conference Center in Normal beginning at 7:30 a.m. the day of the event. — Daniel Grant

the trade with its estimates of U.S. corn plantings (92.3 million acres) and quarterly stocks of corn (3.67 billion bushels), soybeans (619 million bushels), and wheat (861 million bushels), which significantly exceeded trade expectations. “With the gross-per-acre (for corn), I was not as surprised about the bigger acreage number as I was about the bigger stocks number,” Pope said. “It just doesn’t add up.” USDA did not include prevent plant data in its estimate and this month will resurvey farmers in flood-affected areas in North DakoClayton Pope ta, South Dakota, Minnesota, and Montana to get a better handle on acreage. Pope also noted USDA does not factor grain in transit into its stocks estimates and speculated the numbers may have been skewed if loaded barges

For additional reaction, see IFB President Philip Nelson’s commentary on Page 16. were tied up due to swollen rivers at the time of the estimates. “As bearish as the implications (of the June report) are, the market already is looking forward to a possible revision of those numbers,” Pope said. “Harvested acres may (decrease) if there is more abandonment” due to drought in the south and flooding/saturated fields in parts of the north. But even if there is an adjustment to planted acres, the key moving forward is crop yields. “The biggest deal now is yield,” Pope said. “We’re heading into pollination with a weather forecast that is hotter and drier than normal.” Pope at the commodities conference will advise farmers how to manage their risk and cope with high levels of volatility in the market.

Rabobank report: No bubble in U.S. farmland market

U.S. farmland values in farmland in the U.S. the last five recent years have skyrocketed, years has increased by 20 to 70 but the market is not in a bub- percent, according to the report. ble, according to research If farm margins remain released last week. strong, the trend of higher The Rabobank Internationfarmland al Food values and could conAgribusi‘(There is) significant tinue for ness another evidence there is not one or two Research and Advicurrently a bubble.’ years. But, sory group long-term, recently a decrease conducted — Sterling Liddell in land valCo-author Rabobank report research ues is a that condefinite cluded the possibility, steady increase in farmland particularly if and when values is not linked to specula- interest rates increase, tion or other factors that tradi- Rabobank reported. tionally lead to a bubble. “On a longer-term basis of three to seven years, the The advisory group released a report, “Blowing the probability of land values adjusting negatively outFarmland Bubble,” in which the research showed increased weighs the possibility of a commodity prices, low interest continued upward trend,” Liddell added. rates, and a limited supply of land available for sale are the key factors that have supported higher farmland values since 2005. “The increasing presence of farmers on the buyer side of agricultural land combined with a tight supply of land available for sale provides significant evidence there is not currently a speculator-fueled bubble,” said Sterling Liddell, co-author of the Rabobank report. The value of productive


Page 9 Monday, July 11, 2011 FarmWeek


FarmWeek Page 10 Monday, July 11, 2011

EDUCATION

Campaign selling ag careers to students BY KAY SHIPMAN FarmWeek

A winning multimedia campaign about ag careers convinced at least one 2011 high school graduate to study ag in college and is expected to swell her school’s ag class enrollments. And that’s just within the school whose FFA chapter created the campaign. Miriah Anderson, who recently graduated from Galva High School and spearheaded her chapter’s winning campaign, added animal science to her college major after she learned through her work on the campaign about the many careers ag offers. “I had fully decided to go into zoology (at Western Illinois University),” Anderson said, “but I decided to add animal science.” Trish Main, Galva High

School ag teacher, anticipates more students in her classes as a result of the campaign. “I truly believe that the recruitment efforts will pay off with an increase in student numbers,” she said. “The added bonus is that my current FFA members and students really have taken an active role in understanding how important it is for their input in recruitment efforts.” This year, the Illinois Farm

FarmWeekNow.com Learn more about the Galva F FA a g c a r e e r s v i d e o a t FarmWeekNow.com.

Bureau and Affiliates Youth Education Committee and the Illinois Department of Commerce and Economic Oppor-

U of I’s Orr Center to host July 18 field day

The University of Illinois Orr Center will have an agronomy field day July 18 at the Orr Center, near Perry. The first tour will leave at 4 p.m. with other tours leaving every 20 minutes. Each tour will last about two hours and include time for questions at each stop. U of I specialists will lead discussions on issues of interest to farmers, consultants, and landowners. Carl Bradley, plant pathologist, will discuss the threat of fungicide resistance. Brian Diers, soybean breeder, will talk about progress in soybean breeding programs. Mike Gray, entomologist, will focus on stink bugs and corn rootworms. Emerson Nafziger, agronomist, will talk about tillage in corn, and Fabián Fernández, soil fertility specialist, will discuss soil test variability. A free meal will be served following the event. The center is located on Ill. 104, about 4 miles west of the intersection of Ill. 107 and 104, north of Griggsville. For more information, contact the center’s Mike Vose at 217-236-4911 or e-mail him at mvose@illinois.edu.

Galva FFA Chapter member Lisa Wendel, third from right, discusses her chapter’s winning ag career campaign during the Illinois State FFA Convention. Assisting with the presentation, left to right, are Cassadee Hepner (seated), Seth Strom, Miriah Anderson, Wendel, Devon Peterson, and Matt Johnson. (Photo by Mariah Dale-Anderson, Illinois Farm Bureau youth activities manager)

tunity (DCEO) offered FFA chapters the first-ever opportunity to create a multimedia ag career campaign. The Galva FFA’s campaign netted the chapter $1,000 for first place. The campaign entitled, “Are You Looking? Agricultural Careers are Looking for You,” featured a video that linked potential ag careers with students’ interests. Pinckneyville FFA won $500 for second place and Morrisonville FFA received $250 for third place among six state chapter finalists. Prizes were donated by the Vision for Illinois Agriculture, which has put a priority on ag industry workforce development. The media campaigns will link students with the more than 300 agricultural careers available in Illinois, according to Jay Runner, state coordinator for Facilitating Coordination in Agricultural

Education (FCAE). “It’s important we connect students to those future career opportunities,” Runner said. Mariah Dale-Anderson, IFB youth activities manager, noted the digital media aspect appeals to students “and grabs their attention to make ag careers appear more lucrative and cool.” At Galva High School, the FFA presented its career campaign to all the students in sixth through 12th grades. Eighth graders reported they plan to take a freshman ag class in the fall after receiving recruitment letters in the mail as part of the campaign. The career campaign also inspired other Galva upperclassmen to enroll in ag classes, according to Anderson. “It was really cool to see” the campaign’s impact, she added. A side benefit of the cam-

paign project has been the influence on participating FFA chapters and ag programs, said Vern McGinnis, project coordinator for Vision for Illinois Agriculture. As campaigns are shown around the state, the student interest and career awareness will multiply, and Illinois ag programs “can be a substantial part of the ag employment pipeline,” McGinnis said. Main encouraged continued use of the talents of FFA members and ag students “to make others aware of the incredible opportunities that agriculture and the FFA organization have to offer.” The campaigns and related materials will be used as ideas for future career promotions about the state’s ag industry by DCEO and its Illinois Workforce Investment Board agriculture task force, McGinnis said.

LAWMAKER TOUR GOES DIGITAL

John Cardella, second from right, regional facilities manager for FujiFilm USA, describes digital printing technology used at the company’s manufacturing facility in Hanover Park to county Farm Bureau leaders and their “adopted” state legislator. Looking on, from left, are: Ann Larson, Cook County Farm Bureau intern; Steve Hosselton, Illinois Farm Bureau director from Clay County; Christina Nourie, IFB northeast legislative coordinator; state Rep. Michelle Mussman (D-Schaumburg); Marge Kessler, Clay County Farm Bureau member (partially obscured); Cardella; and Tish Clark, Mussman’s legislative assistant. Mussman was adopted by the Clay County Farm Bureau earlier this year and recently hosted members of the Cook, DuPage, and Clay County Farm Bureaus with tour stops at the Schaumburg Library and the Motorola Innovation Center. (Photo by Bona Heinsohn, Cook County Farm Bureau)


Page 11 Monday, July 11, 2011 FarmWeek

commodities

Use of options/futures escalates; more trades online BY DANIEL GRANT FarmWeek

Traders’ participation in the commodity markets at times has been blamed for increased price volatility. But increased volatility in the markets actually is driving up the use of various trading methods, according to Dave Lehman, managing director of commodity research and product development at the CME Group in Chicago. Options contracts at the CME Group so far this year are up 40 percent for corn and 28 percent for wheat. Meanwhile, live cattle futures and options on June 2 set an open-interest record of 713,379 contracts while hog options on June 8 set an openinterest record of 128,473 contracts. “Year-to-date we’ve had pretty strong growth in the agricultural markets,” Lehman told FarmWeek. “It’s pretty obvious what’s driving it is a

very tight supply and demand situation combined with a volatile weather environment.” A similar trend has occurred this year at the Minneapolis Grain Exchange (MGEX). June total trading volume for hard red spring wheat futures and options totaled 215,581 contracts, which was a record for the month and the third-highest volume month in the 130-year history of the Exchange. “June marked the 13th con-

Favorable weather aids crop ratings, 2011 wheat harvest Favorable weather conditions last week were just what many Illinois farmers needed to get back into the fields. The average temperature the first week of July was 75.7 degrees, 1.2 degrees above normal, while precipitation totaled just 0.8 of an inch. This followed the month of June in which rainfall statewide averaged 6.7 inches, 2.6 inches above the 1971-2000 average, according to Jim Angel, state climatologist with the Illinois State Water Survey. “Hot and dry conditions allowed for progress in wheat harvesting, corn and soybean spraying, and hay baling across much of the state,” the National Agricultural Statistics Service Illinois field office noted. Illinois farmers the past two weeks harvested a whopping 71 percent of the wheat crop. Harvest as of the first of last week was 75 percent complete, 5 percent ahead of the five-year average. “Wheat harvest (in McLean County) is in its final stages with good quality, test weights, and yields reported,” said Brian Schaumburg, a FarmWeek Cropwatcher from Chenoa. Meanwhile, many water-logged crops responded to the warm, dry weather as well. The corn crop in the state grew an average of 14 inches the first week of July. The average height of the corn crop — 48 inches as of the first of last week — still is behind the five-year average of 54 inches. The soybean crop also is slightly behind in development with 6 percent of the crop blooming as of last week compared to the average of 15 percent. Nationwide, the condition of the crops generally improved last week. The portion rated good to excellent totaled 69 percent for corn, 66 percent for beans, and 70 percent for spring wheat, which was up 1 percent for each crop compared to the previous week. “Now that surface soils are drying out, roots are actively taking up water from deeper in the soil,” said Emerson Nafziger, University of Illinois Extension agronomist. “This is keeping the plant functioning well.” Nafziger reported some corn is showing signs of nitrogen deficiency. He also noted crop yields still are very dependent on the weather in coming weeks. “We need to remember the effect of good conditions can be overcome if it turns dry and hot later in July,” he said. “If that happens, we will start to run out of water and kernel numbers will drop, along with yield potential.” — Daniel Grant

secutive month of year-overyar total monthly volume increases,” said Mark G. Bagan, president and CEO of MGEX. Traders also have taken advantage of new products and services. CME Group in 2006 launched side-by-side trading, in which trades could be executed either on the trade floor or electronically, and more recently it unveiled weekly option expirations for corn, wheat, and soybean contracts. The weekly options give traders a way to fine-tune their hedges or put in place more short-term protection. “The reason we’re seeing

this (strong interest in the weekly options) is related to this environment we’re in,” Lehman said. “Volatility is higher in the ag markets than it has been in the past.” Online trading also has made futures and options more accessible. About 85 to 90 percent of crop futures now are traded via computers. However, online trades have not put the traditional method of open outcry out of business in Chicago. About 75 to 80 percent of options still are traded on the trading floor. “Electronic (trades) grew and became the predominant

platform for trading futures grains contracts,” Lehman said. “But having both platforms is a strength of our business and gives our customers options.” MGEX last month also recorded new electronic and futures trading volume records. It closed its futures trading floor in December 2008. The trend of higher open interest in the markets for farmers probably seems like a blessing and a curse. “The more people you have in the market, the more you’re going to stretch the (price) extremes,” said Graham Utter, AgriVisor senior risk manager. But volatility is good. You get an opportunity to price (commodities) at higher prices. The downside is when the market crashes, they (traders) probably overdo it on the downside.” More players also have resulted in a market that is more liquid than ever, according to the analyst. “That’s an efficient market,” Utter added. “You can still use it as a risk management tool, and it works.”


FarmWeek Page 12 Monday, July 11, 2011

IFB IN ACTION

Cook County tax review commissioner gains farmer views BY BONA HEINSOHN

Cook County Board of Review Commissioner Dan Patlak recently discussed the agricultural and equine industries while touring Gerry Kopping’s horse farm in urban Lemont. Patlak’s farm visit was organized by the

Cook County Farm Bureau. Kopping, a county Farm Bureau board member, is one of three farmers in Lemont. The visit’s purpose was to provide Patlak with an onsite, hands-on overview of equine agriculture in an urban setting. Kopping discussed the economics of boarding horses and the history of his farm, which started boarding

Cook County Board of Review Commissioner Dan Patlak, right, learns about equine industry issues firsthand from County County Farm Bureau member Gerry Kopping, left, who operates a horse farm in Lemont. Patlak and County Farm Bureau leaders discussed ag-urban issues during his recent farm tour. (Photo by Bona Heinsohn, Cook County Farm Bureau)

horses in 1984. Tour participants also discussed how the urban setting has impacted the horse sta-

ble and agricultural industries. Patlak was elected to the Board of Review in 2010

and represents 1.8 million residents in suburban Cook County, including Lemont Township. Previously, he

served as the Wheeling Township assessor. The Board of Review is authorized to determine whether a property tax assessment is fair and accurate. In 2009, nearly 440,000 assessments were appealed in Cook County. About 75 percent of the appeals were successful. Kopping and his wife, Linda, operate Kopping Farm, where they board 110 horses. The farm has grown steadily since the first stall was built on the family farm in 1984. Kopping chairs the county Farm Bureau’s Commodities and Marketing Team. Bona Heinsohn is director of public policy for Cook County Farm Bureau. Her e-mail address is bona@cookcfb.com.

WIU School of Ag taking entries for the annual bull test program Entries are being accepted for the annual Western Illinois University (WIU) School of Agriculture’s bull test program. Entries for the 112-day test are open to any breed and are due by Aug. 31, according to Ken Nimrick, associate professor. However, bulls must be weaned and started on a preconditioning program no later than Aug. 19. “The WIU bull test program offers breeders the opportunity to compare their bulls against bulls from other breeders when fed and managed in the same environment,” said Nimrick. “Our last five sales have posted record averages and totals.” The program evaluates the performance of bulls in a common environment and provides information on scrotal circumference, pelvic area, rib eye area, fat depth and marbling. Nimrick said the bulls are also indexed, so the breeder gets a substantial amount of information in a situation that provides an unbiased comparison. At the conclusion of the test, a sale of the top bulls will be March 16, 2012. For more information about entering bulls in the program, contact Nimrick at 309-298-1288 or 309-337-4352.


Page 13 Monday, July 11, 2011 FarmWeek

from the counties

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HAMPAIGN — Farm Bureau will sponsor toolshed meetings Wednesday at the following times and locations: 8 a.m. Gifford; noon, Champaign; and 3 p.m. Villa Grove. Mark Gebhards, Illinois Farm Bureau director of governmental affairs and commodities, will be the speaker. Call the Farm Bureau office at 352-5235, see the July newsletter, or visit the website {www.ccfarmbureau.com} for specific locations or more information. • The Tractor Safety School will be Aug. 5-6 and Aug. 1920 with classes from 4:30 to 7:30 p.m. Fridays and from 8 a.m. to 3 p.m. Saturdays. Cost is $40 for Champaign County residents and $80 for out-ofcounty residents. Call the Far m Bureau office at 217352-5235 or visit the website {www.ccfarmbureau.com} for more information. LAY — The Far m Bureau annual membership picnic will be from 5 to 7 p.m. Saturday, July 30, at Flora Library Park. Call the Far m Bureau office at 618665-3300 for reservations or more information. DGAR — The Edgar County Fair will be July 24-30. Far m Bureau will sponsor the annual Ag Olympics at 7:30 p.m. Monday, July 25, at the g randstand. Age groups are 3 to 6 years old; 7 to 9; 10 to 13; 14 to 17; 18 to 25; and 26 and older. Call the Farm Bureau office at 217-465-8511 for more information. FFINGHAM — The annual member appreciation picnic will be at 6 p.m. Sunday, July 17, at Evergreen H o l l o w Pa r k , E f f i n g h a m . Dinner will be ser ved. Ice cr ea m wi l l b e p r ov i d ed by Country Financial representatives and drinks by Effingham-Clay Service Co. Members may swim free of charge from 7 to 8 p.m. at the Effin-

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gham Area Kluthe Pool. A drawing for a gift certificate to Niemerg’s Steakhouse will be held. Call the Farm Bureau office at 217-342-2103 for reservations or more information. ORD-IROQUOIS — A marketing tools workshop will be at 7 p.m. Monday, July 18, at the Farm Bureau office. Doug Yoder, Illinois Far m Bureau senior director of affiliate and risk management, will demonstrate the Growers Edge website. Call the Farm Bureau office for more information. ANCOCK — The annual Conservation Tillage Field Day will be from 4 to 8 p.m. Tuesday, July 19, at L i n d a A s h e r ’s f a r m , s e ve n miles south of Hamilton on state highway 96. Equipment exhibitors will discuss their tools, such as the McFarlane Reel Disk, Great Plains TurboTill, etc. The Soil and Water C o n s e r va t i o n D i s t r i c t a n d Natural Resources Conservation Service will discuss compliance, how to measure residue, and equipment usage. A pork chop sandwich will be served by the Hancock County Pork Producers. Rain date will be Thursday, July 21. Call the Far m Bureau office at 217357-3141 for more information. ACKSON — The Young Far mers tractor pull will be at noon, Sunday, July 24, at Vergennes Equipment. Call the Farm Bureau office for more information. E E — Fa r m B u r e a u and the Lee County Fair Association will sponsor an American Red Cross Blood drive from noon to 6 p.m. Thursday, July 28, during the Lee County 4-H Fair and Junior Show, Lee County Fairg r o u n d s. C a l l t h e Fa r m Bureau office at 815-857-3531 or e-mail leecfb@comcast.net if your can volunteer or donate. Walk-ins are welcome.

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Farm Talk meetings slated around state Illinois Farm Bureau President Philip Nelson and IFB Vice President Rich Guebert Jr., accompanied by various IFB staff members, will conduct five regional Farm Talk meetings later this year throughout the state. The dates, times, and locations are: • Tuesday, Aug. 2, 5 p.m., Hamilton’s Hall (the Fireside Room), 110 N. East St., Jacksonville. • Wednesday, Aug. 3, 5 p.m., Round Barn Banquet Center, 1900 Round Barn Road, Champaign. • Thursday, Aug. 4, 11 a.m., Elk’s Lodge No. 779, 1279 Franklin Grove Road, Dixon, and 5:30 p.m., Joliet Junior College, Weitendorf Ag Ed Center, 17840 W. Laraway Road, Joliet. The Dixon meeting location is different than previously was announced. • Thursday, Sept. 1, 5 p.m., DuQuoin State Fairgrounds, Southern Illinois Center Lobby, DuQuoin. Please register to attend by contacting your county Farm Bureau or the IFB president’s office at 1-800-676-3217.

• The Young Leader Committee at 10 a.m. Friday, July 22, will tour the Patriot Renewable Fuels plant in Annawan and Mowers Soil Testing Plus Inc. Lunch will be provided. Call the Far m Bureau office at 857-3531 or e-mail leecfb@comcast.net for reservations or more information. ERCER — The Governmental Affairs Committee will sponsor a legislative breakfast from 9:30 to 11 a.m. Saturday at Central Park, A l e d o . U. S . R e p . B o b b y Schilling (R-Colona) will attend. Call the Farm Bureau office for more information. ONTGOMERY — The Prime Timers will meet at noon Wednesday, July 20, for a barbeque pork luncheon and meeting at the Far m Bureau office. Jer r y Dowding will provide the entertainment with flute music. Call the Farm Bureau office at 217-532-6171 by Friday for reservations or more information. • T he Prime Timers will sponsor a bus trip Tuesday, Aug. 2, to Fair mount Park, C o l l i n s v i l l e. C o s t i s $ 3 2 ,

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which includes bus and buffet meal. Betting and cocktails are extra. Call the Far m Bureau office at 217-532-6171 by Friday for reservations or more information. E O R I A — A Pe o r i a County Equine Directory of Services is available to members on the website {www.peoriacountyfar mbureau.org.} • Far m Bureau has an exhibit at the Heart of Illinois Fair Friday through July 16 at Exposition Gardens, Peoria. The display features the Spin the Wheel game. There is an opportunity for pictures at the Talking Barn during scheduled times. ICHLAND — Far m Bureau will sponsor a bus trip Tuesday, Aug. 30, to the Farm Progress Show. Cost is $15 for members and $20 for non-members. Registration is due to the Farm Bureau office by Monday, July 25. Call the Farm Bureau office at 618393-4116 for more information. ERMILION — T he Vermilion County Farm Bureau member appreciation night will be Friday to see the

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Danville Dans vs. the Nashville Outlaws baseball game. Free tickets for Farm Bureau members are at the Farm Bureau office. • Fa r m B u r e a u i s t a k i n g orders for Southern Illinois peaches. A 25-pound box cost is $23 for members and $28 for non-members. Orders are due by Tuesday, Aug. 2, with delivery the middle of August. Rendleman Orchards will supply the peaches. Call the Farm Bureau office at 217-442-8713 or visit the website { w w w. vc f b. i n f o } f o r m o r e information. OODFORD — An on-the-road seminar will be at 7 p.m. Tuesday, July 19, at the Farm Bureau office. Ke v i n Ru n d , I l l i n o i s Fa r m Bureau senior director of local government, will provide an update on trucking and transportation of grain. Call the Far m Bureau office at 4372347 for reservations or more information.

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


FarmWeek Page 14 Monday, July 11, 2011

profitability

Schnitkey: Future looks bright for farm economy BY DANIEL GRANT FarmWeek

The farm sector generally has outperformed the U.S. economy in recent years, and that trend could continue at least into next year. An ag index compiled at the University of Illinois from 2007 through the first quarter of this year increased in value by 8.6 percent. The ag index is made up of 21 companies in the fertilizer, equipment, seed/genetics, crop protection, and first processor sectors. The S & P 500 (an index made up of a basket of 500 large U.S. companies), by comparison, declined 2.7 percent during the same time.

‘We’re still in a pretty strong situation in the cropping sector (despite a recent break in the market).’ — Gary Schnitkey U of I Extension farm management specialist

“If you look at the companies that have done the best, it’s been fertilizer companies followed by equipment companies,” said Gary Schnitkey, University of Illinois Extension farm management specialist, who recently provided an economic outlook to the Illinois Farm Bureau board. “Both sell products to farmers.”

U of I’s Browntown Center sets July 28 field day University of Illinois Extension specialists and researchers will discuss agronomic research July 28 at the Brownstown Agronomy Research Center field day. The date is firm, rain or shine. The event will consist of a five-stop field tour starting at 9 a.m. The last tour will depart at 9:20 a.m. Steve Ebelhar, U of I research specialist, will talk about whether insecticide seed treatments and foliar fungicides affect corn’s response to nitrogen. Fabian Fernandez, U of I Extension specialist in soil fertility, will discuss soil testing variability. Pest management topics will be palmer amaranth and fungicide resistance while production topics will include tillage in corn production. A free meal will be served to participants. The research center is located on Ill. 185 south of Brownstown. Call 618-427-5239 for information.

M A R K E T FA C T S Feeder pig prices reported to USDA* Weight 10 lbs. 40 lbs. 50 lbs. Receipts

Range Per Head Weighted Ave. Price $13.00-$46.74 $33.33 $38.00-$66.32 $64.14 n/a n/a This Week Last Week 36,039 29,773 *Eastern Corn Belt prices picked up at seller’s farm

Eastern Corn Belt direct hogs (plant delivered) Carcass Live

(Prices $ per hundredweight) This week Prev. week $91.62 $94.65 $67.80 $70.04

Change -3.03 -2.24

USDA five-state area slaughter cattle price Steers Heifers

This week 114.00 n/a

(Thursday’s price) Prev. week Change 110.50 3.50 110.47

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 134.02 3.46

This week 137.48

Lamb prices Slaughter Prices - Negotiated, Live, wooled and shorn 110-155 lbs. for 194.96-212 $/cwt. (wtd. ave. 201.35); dressed, no sales reported.

Export inspections (Million bushels) Week ending Soybeans Wheat Corn 6-30-11 4.5 26.1 34.6 6-23-11 8.9 23.8 30.7 Last year 3.2 18.4 41.1 Season total 1423.4 103.9 1484.0 Previous season total 1370.2 73.1 1533.1 USDA projected total 1540 1295 1900 Crop marketing year began June 1 for wheat and Sept. 1 for corn and soybeans.

Schnitkey noted an increase in corn acres in recent years boosted demand for nitrogen and equipment. Strong commodity prices also provided income for farmers to invest back into their businesses. USDA projected U.S. net farm income this year could total close to $95 billion, up about 20 percent from 2010. USDA in May also boosted its ag export projection for the year to a record $137 billion, up $28.3 billion from a year ago. “In general, I think those (ag) companies will do pretty

well going into the future,” Schnitkey said. “We’re still in a pretty strong situation in the cropping sector (despite a recent break in the market). I expect that to continue.” Strong commodity prices also support higher land values, according to Schnitkey. There has been some concern in recent years that escalating land prices could lead to a bubble followed by a major collapse in value, similar to what occurred in the housing market. “I don’t think we’re in that (bubble) situation,” Schnitkey

said. “Land prices are supported by where we’re at in (farm) returns and interest rates.” A boost in interest rates, however, would change the outlook for land prices and the farm economy. Schnitkey projected a 2.5 percent increase in interest rates, which would put rates slightly below the historical average, could lead to as much as a 30 percent decline in land prices. “That’s a big deal,” he said. “I’d list (a rise in interest rates) as the biggest threat. We’re at historical lows now.” Farm incomes also are under pressure from higher input prices. USDA projected total U.S. farm expenses this year will increase 7 percent after rising 2.2 percent in 2010. If realized, U.S. farm expenses this year would exceed $300 billion for the first time in history.

Is painting structures on your to-do list? BY MATT THOMAS

Summer is here and fieldwork is almost complete. That means it’s time to tackle your list of summer maintenance projects. As we repair fences, mow ditches, and paint grain bins, machines sheds, and outbuildings … wait a minute — painting wasn’t on the list of things to do this summer. Painting may not have been on your list, but neglecting a building that needs painting could decrease the life span of that structure. Paint is the first and often the only line of defense against Mother Matt Thomas Nature. Your participating FS member cooperative can provide you with knowledge and expertise as well as a quality product from the FS paint line, which includes products for painting all types of building material, from quality metal primers to wood barn and fence paint, allowing you to protect your structures from all Mother Nature can produce. There are a few simple guidelines to follow in surface preparation and paint selection to ensure you are applying the best quality product to your structures. The most important step in painting a structure is proper surface preparation. Paint

labels have ample information concerning how a surface should be prepared for that particular type of paint. In some cases, your metal building might have areas of surface rust that cannot be removed with a wire brush or acid wash. Rust converter can convert those surfaces from rust to a paintable primer using the surface rust to perform a chemical reaction, protecting the surface from further rust development. Once your surfaces have been prepared correctly, it is now time to select a primer for your application. Soy zinc is the most durable primer in the maintenance paint industry, with longevity of up to 15 years. As you approach the final top coat stage, paint selection is crucial, and it can directly affect the long-term quality of your structure. Contact your local FS member cooperative to ensure you are selecting the right paint for your application. In closing, your to-do list might not have painting on it yet, but if you have a structure in need of repainting, you might want to add it to the list. Quality painted structures are not only aesthetically pleasing but also are protected from the elements, thus increasing their life span. Matt Thomas is GROWMARK’s facility equipment product manager. His e-mail address is mthomas@growmark.com.

U of I’s Northern Illinois Research Center plans field day The latest crop sciences research being conducted at the University of Illinois Northern Illinois Research Center, near Shabbona, will be discussed July 19 during the Field Day. The free event will start at 4 p.m. Tours will leave at 20minute intervals, with the final tour leaving at 4:40 p.m. U of I specialists will provide updates on current crop challenges and the research

being done to address those challenges. U of I Extension entomologist Mike Gray will talk about corn rootworm beetles and stink bugs. Fabián Fernández, U of I Extension soil fertility specialist, will discuss how to deal with variability in soil tests. Emerson Nafziger, U of I Extension agronomist, will focus on tillage for corn, and Carl Bradley, U of I Extension

plant pathologist, will revisit the potential to develop resistance to fungicides. A meal will be provided. The 160-acre Northern Illinois Agronomy Research Center is located at 14509 University Road, about 5 miles north of U.S. Route 30 on University Road. For more information, contact Russ Higgins at 815-2741343 or e-mail him at rahiggin@illinois.edu.


Page 15 Monday, July 11, 2011 FarmWeek

PROFITABILITY Corn Strategy

C AS H ST RAT E GI S T

Grain fundamentals coming into focus There’s been a lot of derision of the June 30 acreage and grain stocks numbers from the analytical, as well as the farm, communities. The commercial community has been strangely silent, however, the lower prices tend to work in its favor. Interestingly, analysts at a couple of major investment banks took issue with the USDA assessments and recommended clientele see the price decline as an opportunity to re-establish long positions. But a private firm that bases analysis on satellite imagery has indicated the USDA acreage numbers are close to that firm’s assessment of crop plantings. Other than the resurvey in the Northern Plains, the primary uncertainty probably lies with the number of acres to be harvested for each of the crops. Those adjustments can show up on each of the individual monthly USDA crop reports. Most of those changes will be tied to flooding along the Missouri River, as well as changes resulting from the resurvey of the Northern Plains states. As we indicated last week, the early assessments of flood losses were between 300,000 and 500,000 acres each for corn and soybeans. USDA could have accounted for some of the impact, but looking at the relationship between planted and harvested acres, we are not inclined to think so. Eliminating flooded areas, the harvested acreage for corn would be in the 84.4-million to 84.6-million-acre range, with soybeans in a 73.75-million to 74.95-million range. Weather and yields are being

debated, but the early condition ratings show a near-average crop. Given that, a trend yield should be an appropriate starting point, putting the corn yield in a 160- to 163-bushel range and the soybean yield in a 43.5- to 44-bushel range. Other than the Southern Plains and the extreme areas of the Midsouth and Southeast, moisture supplies generally are in good shape. That would support the argument that trend yields are possible if weather is relatively normal through the end of summer. Using the lower harvested acreage numbers and the midpoint of the trend yields, one can project a 13.63-billionbushel corn crop and a 3.23billion-bushel soybean crop. Put in the perspective of the June USDA supply/demand estimates, it’s easy to build a case for the new-crop corn ending stocks to be projected near 1 billion bushels. New-crop soybean ending stocks still should be close to the 190-millionbushel June estimate. Both take into account the expectation old-crop ending stocks will be raised. Neither is what we would call burdensome inventories, but neither is tight, either. That will leave the trade prone to making sharp moves in either direction with perceived changes in production and demand. We have seen both this past week with the USDA reports and the Chinese corn buying. Against this background, it’s important to weigh the impact of the weak macroeconomic situation in the U.S. and the world. At the same time, grains, crude oil, and commodity indices have long-term cyclic lows due in the latter part of 2011, implying trends have, or are in the process of, turning lower.

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Cents per bu.

ü2010 crop: If you still have old crop, lock up the basis now. Use rallies above $6.20 on December to complete pricing. ü2011 crop: Corn prices have rebounded from the post-report break. However, the trend still points lower into the 20-week low due in early August. Strong resistance on the December contracts starts at $6.35. Use rallies above $6.20 for catch-up sales. We might recommend adding a small sale at any time; check the Hotline frequently. vFundamentals: The trade has turned its attention away from the recent reports and to the export market with talk of Chinese purchases. The size of business may have gotten exaggerated, but the Chinese did buy 840,000 metric tons (32.8 million bushels) last week. Still, supply will return to center stage again this week with new supply/demand forecasts. There’s underlying fears about the warm, dry weather pattern, but at this stage, it’s beneficial for the crop. Condition ratings are near average for this time of year.

Soybean Strategy

ü2010 crop: The burden of higher prices continues to remain with the new-crop fundamentals. With the marketing year winding down, use rallies above $13.30 on August futures to complete sales. ü2011 crop: Smaller acreage keeps production risk in the picture, but unless there’s an extended weather problem, prices will struggle to maintain gains. Use rallies above $13.30 on November futures to make catch-up sales. vFundamentals: The smaller-than-expected plantings have put a lot of burden on yield to produce an adequate crop to meet demand. The warmer, drier pattern that has settled into the Corn Belt has sparked concern it could be develop into an extended situation. But there’s little evidence to support that at this time. Export demand has picked up a little, but at this

time last year it started to accelerate, and we already have good Chinese purchases on the books. Fail-safe: Make sure sales are at recommended levels if November closes below $12.86.

Wheat Strategy

ü2011 crop: It appears a short-term low may have been established in wheat. The market should gain upside momentum as seasonal harvest pressure starts to wane. Plan to increase sales to 65 percent on the next major rally. We prefer hedge-to-arrive

contracts for winter delivery if you have the capability to store wheat because the large carry. vFundamentals: The most recent crop progress report indicated winter wheat harvest was 56 percent complete, with the current weather conditions allowing for further progress last week. Some of the upside momentum is being capped by a lackluster export market. The trade was hopeful the recent break in U.S. prices would stir up business. However, it appears the majority of recent purchases are being sourced from the Black Sea region.


FarmWeek Page 16 Monday, July 11, 2011

perspectives

Let’s make USDA crop reports more reliable

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othing makes a farmer quite as angry as a USDA report that he thinks is

flawed. Such was the case for many of us after June 30. A report that seems to have contained too many acres of corn combined with underlying market weakness to take about a buck out of the market. Some farmers, in the heat of the moment, went so far as to suggest eliminatPHILIP ing USDA crop NELSON reports. But the whole world needs these reports, and they should simply be done in a better fashion. The 6/30 report begs some other questions. In an age when satellites and infrared cameras can spot a human running over rough terrain, why can’t we have more accurate aerial assessment of a growing crop? Are we investing enough in our market analysis systems? Why is there such a lag time between observing a crop in the field and the date when acreage or yield is estimated by USDA? Are we using the best and latest technology to measure the size and quality of our crops? There were many additional unanswered questions that accompanied this report.

Acres were added compared to the March planting intentions report, but acres that were flooded or those farmers couldn’t get planted because of wet weather were not part of this report. The National Agricultural Statistics Service indicated certain states will be resurveyed but did not mention eastern Corn Belt states such as Indiana and Ohio. These are not just questions for farmers and commodity investors. As the gap narrows between available supplies of grain and global demand, real-time information about growing crops could be the difference between life and death for millions. Look back on the 20th century for an answer as to how important food information can become. Communist nations then had reporting systems rife with corruption and official incompetence. Food shortages and famine were common and devastating. Americans traditionally have enjoyed a crop reporting system that used both objective human observations and the latest tools available. Instead of just complaining about the shortcomings of the current system, we as a nation should be willing to invest what we need to improve it and increase confidence in these reports. Philip Nelson is president of Illinois Farm Bureau.

“Wasn’t worth selling him, so I decided to put him to work.”

What’s wrong with the recovery? What’s wrong with the recovery? It’s been two years since the end of the Great Recession in July 2009. The recession ended in the sense that the economy stopped declining and started growing. But growth has been very slow. Funny thing, the last time we had a “Great Recession,” in 1981-82, the recovery was fast. Maybe if we compare the two recoveries, we can figure out what went right back then and what is wrong now. Our recession hit LARRY bottom in July 2009; DEBOER the 1981-82 recession hit bottom in November 1982. Let’s compare what happened for nearly two years after the economy hit bottom for both recessions. Now the unemployment rate is 9.1 percent, down from a high of 10.1 percent. Two years after the 1982 bottom, the unemployment rate was 7.4 percent, down from 10.8 percent at its worst. Unemployment was falling a lot faster back then. The odd thing is, industrial production has risen at nearly the same rate now as it did then. It seems that industry is increasing output without hiring many new employees. Instead, investment in software and equipment is rising almost as fast now as in 1984. Perhaps businesses are taking the opportunity to invest in more productive equipment. Output rises but employment doesn’t. One thing businesses aren’t doing now is building houses. Housing construction is still near record lows, with no recovery since mid-2009. Housing starts were up 16 percent at this point in the recovery in 1984. Today, there’s a glut of houses for sale, left over from the housing boom of the 2000s. This depresses new construction and reduces home prices. Last time oil prices were falling. This time they are rising. Fewer jobs, falling home prices, rising gas prices: all this makes consumers gloomy. Consumer sentiment is up just 5 percent since 2009. In 1984 it was up by more than 30 percent two years into the recovery. Gloomy consumers don’t spend. Consumer spending was up 9 percent after two years last time; it’s up only 3 percent this time. Federal spending on social benefits is rising faster now, partly due to Social Security and Medicare and

partly because unemployment is still high. Federal non-defense spending grew faster this time, partly because of stimulus programs. Oddly, though, federal defense spending was rising faster in 1984, as the defense buildup got started. It hasn’t changed much in this expansion, despite two or three wars. But this time, state and local government spending is declining, enough to just about cancel out the rise in federal spending. We’ve got one advantage over ourselves back then. Then, the exchange value of the dollar was rising and exports were falling. Now the value of the dollar is up and down, and exports are rising. Part of the difference is interest rates. Last time interest rates were high, and the world demanded dollars to lend in the United States. That increased the dollar’s value, which made our exports more expensive. That’s not happening this time. Perhaps exports will help get this recovery going. Last time the recession got started when the Federal Reserve jacked up interest rates to choke off borrowing and spending to bring down doubledigit inflation. It worked. Inflation dropped. Then the Fed eased off. Interest rates fell some and the recovery began. This time the collapse of the housing boom kicked off the recession, and the Fed cut interest rates trying to stop the downturn from becoming a depression. You can raise interest rates as high as needed to restrain spending - the mortgage rate topped 18 percent in late 1981. But interest rates can only go so low - zero, in the case of the federal funds interest rate that the Fed controls. Maybe zero isn’t low enough for banks and borrowers to get past their gloom. So, what’s wrong with our recovery? A glut of housing. Business expansion without hiring. Rising oil prices. Downsizing of state and local governments. Gloomy consumers. But maybe most important, last time the Fed held the economy back, and when it let go, the recovery took off. This time the recession came from a financial crisis. The Fed has tried to encourage more lending and spending. But banks and businesses and consumers just aren’t buying. Larry DeBoer is a professor of agricultural economics at Purdue University, West Lafayette, Ind. His e-mail address is ldeboer@purdue.edu.

FarmWeek July 11 2011  

FarmWeek July 11 2011

FarmWeek July 11 2011  

FarmWeek July 11 2011

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