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Tightening margins will force tough decisions for farmers BY DIRCK STEIMEL A new government projection that U.S. net farm income will plummet nearly 27 percent in 2014 is a clear signal that farmers are likely headed into a period of tight margins and difficult management decisions, according to Dave Miller, director of research and commodity services for the Iowa Farm Bureau Federation.
“We are moving into a period of adjustments that we haven’t seen for a while,” s a i d M i l l e r, who also farms in Lucas and Clarke counties. “There is really going to be a crunch MILLER
on operational margins this year because expenses won’t adjust down as fast as income has, and it’s hard to know how long it will last.” The new projection, issued last week by the U.S. Department of Agriculture’s (USDA) Economic Research Service, pegs 2014 U.S. net farm income at $95.8 billion, down from an estimated $130.5 billion in 2013, which was a record.
Crop price factor
As expected, the biggest factor in the net income decline is sharply lower prices of corn, soybeans and other crops after last year’s big harvests and increased competition in world markets. The USDA projects crop cash receipts for 2014 will be down more than 12 percent, or about $17 billion nationwide. In contrast, cash livestock re-
Survey: Iowa land values down in 2013
FARM INCOME PAGE 2
Utility rules vary widely across Iowa Investor-owned and rural cooperative utilities have different policies on renewable energy and service upgrade costs.
BY DIRCK STEIMEL Sharply lower crop prices and difficult weather combined to drive Iowa farmland prices down slightly in 2013, according to a new survey of agricultural bankers by the Chicago Federal Reserve Bank. The Chicago survey mirrors several other reports that show that the price offered for Iowa farmland, and the overall demand for land, is starting to cool off after several years of sharp increases. The quarterly survey of bankers showed that prices of “good” Iowa farmland declined 2 percent during 2013, with the sharpest reductions coming in the northcentral and northwest regions of the state. The decline in the fourth quarter of 2013 was 1 percent statewide, and some parts of the state, particularly eastern counties, saw prices tick up at the end of the year. Iowa’s farmland price decline in 2013 was the only one in the Chicago Fed District, which includes parts of Illinois, Indiana, Michigan and Wisconsin, and was likely a result of difficult weather conditions in 2013, according to David Oppendahl, an economist at the bank. He noted that Iowa’s corn harvest last year was only 15 percent above the droughtreduced 2012 crop, while Illinois saw a 63 percent jump in its corn harvest and Indiana posted a gain of 74 percent. While land prices appear to be leveling off, rental rates remain strong, according to a report by Farmers National, a top agricultural real estate management company. The desire for farmers to expand their operations, combined with the trend of young people returning to the farm, is keeping land rental demand steady, according to David Englund, the company’s executive vice president. “As a result of these factors, lease rates for land should remain steady and strong throughout the year,” he said.
ceipts are expected to increase slightly, primarily due to strength in the dairy business. Cash receipts for pork are expected to be down slightly because of lower prices, while beef receipts will hold steady as high prices are offset by tight supplies. In addition, the new farm bill eliminated direct payments
STORY ON PAGE 4
Keep close contact with agency ofﬁces on conservation Changing enforcement practices and erratic weather mean farmers need to consult with local ofﬁcials. STORY ON PAGE 4
Clay County Farm Bureau member Dave DeJong, second from right, makes a point to Sen. David Johnson of Ocheyedan, second from left, during a Farm Bureau lobbying trip last week to the Iowa Legislature. With DeJong are Leo Stephas of Clay County, far right, and Kipp Fehr of Palo Alto County. PHOTO/GARY FANDEL
Members push road funding, conservation in statehouse visit BY TOM BLOCK
ore than 200 Farm Bureau members poured into the Iowa Capitol rotunda last week to talk to lawmakers about issues they want to see addressed during this legis-
lative session, including greater funding for road improvements and conservation practices. “Urban legislators aren’t going to take up our issues, so we have to represent ourselves and get that message across,” said David Fordyce, a Cherokee County Farm Bureau member.
The legislative visit was part of Farm Bureau’s annual Policy Information Conference, where members gathered to emphasize current policy priorities and learn about issues for this year’s grassroots policy development process. Last week’s legislative visit POLICY PAGE 2
Making connections at the Iowa Beef Expo The annual event at the state fairgrounds is a great place to make lifelong connections in the purebred cattle business. STORY ON PAGE 5
Overcoming fear and hype on big data Data management holds big promise for agriculture if it is used prudently to boost output and increase efﬁciency. STORY ON PAGE 8
STATE SEEKING ENVIRONMENTAL AWARD NOMINEES SURVEY HINTS AT SURGE IN IOWA SOYBEAN ACRES Iowa Gov. Terry Branstad and Lt. Gov. Kim Reynolds are encouraging Iowans to nominate for the Iowa Farm Environmental Leader Award farmers who have taken voluntary actions to improve or protect the environment and natural resources. Nominations are due June 15, and the nomination form can be found at www.iowaagriculture.gov/ EnvironmentalLeader.asp. The state environmental awards are designed to recognize the efforts of Iowa’s farmers as environmental leaders committed to healthy soils and improved water quality. An appointed committee of representatives from both conservation and agricultural groups will review the nominations and select the winners. The recipients will be recognized at the Iowa State Fair.
Iowa farmers plan to plant 10.3 million acres of soybeans this spring, an increase of 1 million acres from last year, according to a survey from the Iowa-Nebraska Equipment Dealers Association in conjunction with AgriSource Inc., a grain marketing, commodity brokerage and crop insurance company. The survey projects a 300,000-acre decline in corn acres in Iowa to 13.3 million acres, a drop of 2.2 percent. Across the United States, the joint survey projects 93.2 million corn acres, down 1.8 percent from 2013, and a record 81.75 million soybean acres, a 6.8 increase from last year. U.S. farmers have never planted more than 78 million acres of soybeans. Only about one-half of survey respondents said they were very confident of their planting intentions, compared to 75 percent in last year’s survey.
IOWA FARM BUREAU SPOKESMAN
FEBRUARY 19, 2014
Editorial Biofuels still essential in age of increased domestic fuel supplies BY ROBERT BROWN AND TRISTAN BROWN
n the face of criticism about ethanol, delays in the commercialization of advanced biofuels and the recent development of domestic supplies of fracked gas and petroleum, some people are asking, “Why are we producing biofuels?” The answer, quite simply, is BROWN that we have few other options for achieving a sustainable energy future. Besides quality and cost, future fuels will have to meet additional metrics including environmental, social and political sustainability. Biofuels are transportation fuels produced from biomass, which is the generic term for any kind of plant material used as an energy source. Corn ethanol and soy biodiesel were the first to emerge. The first decade of the 21st century witnessed an unprecedented boom in the U.S. biofuels industry with fuel ethanol production increasing by a factor of 10. This was only the beginning of a national effort to substitute domestically produced biofuels for petroleum-based fuels. Recognizing that even the whole U.S. corn crop converted to ethanol would only replace about 20 to 25 percent of national gasoline consumption, agronomists have been developing alternative crops for biofuels.
These include trees and tall prairie grasses, residues from traditional crop production, municipal wastes and even microalgae. Encouraged by federal mandates for the production of advanced biofuels, venture capitalists, corporations and governments have invested billions of dollars in start-up companies with business models built around cellulosic ethanol and drop-in biofuels. These investments are starting to bear fruit, with several advanced biofuels companies currently building commercial-scale plants.
Path to cut fossil fuels Conversion of biomass into biofuels is the best option for reducing use of petroleum and other fossil fuels. Why? Except for biofuels, none of the other fossil-fuel alternatives — coal, natural gas, tar sands, oil shale — has prospects for long-term sustainability as evaluated in terms of production costs, greenhouse gas emissions, water demand, impact on local communities or infrastructure investment. Although other kinds of renew-
able energy can be converted into fuels, most are more costly and less infrastructure-compatible than biofuels. Some critics of biofuels are calling for an overthrow of the legislation that made possible the successful introduction of alternative fuels into the U.S. energy infrastructure. Instead, we should be charting a path to sustainable energy that incorporates lessons learned in commercializing firstgeneration biofuels.
Changing the market What did we learn? We demonstrated that it is possible to produce renewable fuels at commercial scale — 14 billion gallons of ethanol per year is, after all, a lot of fuel. We discovered that increasing domestic fuel production, even though only displacing 10 percent of gasoline supply, could shake up the energy industry, with gasoline refining in the United States now facing a long decline and oil-producing nations realizing they are not the only players in fuel markets. We recognize that the first generation of biofuels is not the last. This in no way denigrates the
Immigration reform needed for food production An approach to agricultural labor reform that focuses solely on immigration enforcement would raise food prices over five years by an additional 5 percent to 6 percent and would cut the nation’s food and fiber production by as much as a staggering $60 billion. Fruit and vegetable production would be hit hardest, but dairy and livestock production would also see cuts. Those are among the results
Spokesman Editor DIRCK STEIMEL News Coordinator TOM BLOCK Senior Features Writer TERESA BJORK Ag Commodities Writer BETHANY BARATTA Photographer/Writer GARY FANDEL
of a report, conducted by World Agricultural Economic and Environmental Services. The report was commissioned by the American Farm Bureau Federation (AFBF) and released in conjunction with the #ifarmimmigration grassroots campaign. By far, the best scenario for farm labor reform both for consumers and farmers is one that includes immigration enforcement, a redesigned guest worker program and the opportunity for skilled laborers currently working
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To place a free exchange ad, contact your county office for information. The Iowa Farm Bureau Spokesman (ISSN 0021-051X) is published weekly by the Iowa Farm Bureau, 5400 University Avenue, West Des Moines, IA 50266. Subscription price of $2 per year for mailing in the continental USA included in the dues of Farm Bureau members in Iowa. Additional subscription fee required for mailing outside the continental USA. Periodical postage paid at Iowa Falls, Iowa. Members please send change of address to your county Farm Bureau office. Postmaster send address changes (POD FORM 3579) to Iowa Farm Bureau Spokesman, P.O. Box 670, Iowa Falls, Iowa 50126. Letters to the editor and statewide news articles should be sent to Editor, Iowa Farm Bureau Spokesman, 5400 University Avenue, West Des Moines, Iowa 50266. Reprinting of Spokesman articles and photographs is not allowed without permission.
in agriculture to earn an adjustment of status. U.S. agriculture depends heavily on falsely documented or undocumented workers. Regardless of the reform scenario studied, a legal workforce comes at a price, the study showed. “Status quo is not a viable option for anyone involved in this issue, and as a nation, we expect better,” said AFBF President Bob Stallman. “The bottom line of this study is that we either import our labor or we import our food.” Iowa Farm Bureau Federation: Craig Hill, President; Joe Heinrich, Vice President; Denny Presnall, Secretary-Treasurer and Executive Director; Edward G. Parker, General Counsel. Board of Directors: District 1 - Carlton Kjos, Decorah. District 2 - Charlie Norris, Mason City. District 3 - Phil Sundblad, Albert City. District 4 - Doug Gronau, Vail. District 5 - Mark Buskohl, Grundy Center. District 6 - Nick Podhajsky, Traer. District 7 - Andrew Hora, Riverside. District 8 - Calvin Rozenboom, Oskaloosa. District 9 - Jim McKnight, Afton.
existing ethanol and biodiesel industries, whose leaders understand that innovation is critical to the future success of their technology-driven enterprises. Biofuels need to be improved in terms of infrastructure compatibility; optimal use of land to supply both food and fuel security; increasing the energy efficiency of biomass agriculture and biofuels production and utilization in vehicles; and achieving prices that are competitive with other fuels.
Capturing solar energy Besides recognizing our profligacy in energy consumption, we need to acknowledge the grand challenge that lies ahead for future societies — harnessing solar energy. Nature already has it figured out, turning sunlight, carbon dioxide and water into energyrich carbohydrates, lipids and proteins, which were universally used by humans for both food and energy before the coming of the Petroleum Age. The U.S. Department of Energy has aspirations of not only emulating photosynthesis, but doing it more efficiently. In the meantime, nature goes about capturing solar energy in the form of biomass at a rate six times faster than modern societies consume all forms of energy. Those who argue that solar energy is not sufficiently efficient or economic should remember one thing: Fossil energy that we exploit today is solar energy captured by photosynthesis eons ago. Undoubtedly, we would declare fossil energy to be inefficient and uneconomic if nature had not done the hard work for us. As these stores are depleted, we will have to take responsibility for capturing and converting solar energy into replacements for fossil energy. Although we may argue over the details of achieving a sustainable energy future, one thing seems certain. We must learn how to harness solar energy to produce both food and fuel in a manner that benefits all people in the coming century. Robert Brown is director of the Bioeconomy Institute at Iowa State University. Tristan Brown is a research associate at the Institute.
Ag supporters retain leverage for future bills BY DIRCK STEIMEL The long wait for the new farm bill is finally over. After a lot of hard, grassroots-based work, a couple of false starts and some compromises, the new bill is signed. That means farmers have a bit more certainty and safety-net protection they’ll need heading into a much more difficult economic situation. But with the ink barely dry on the new farm bill, there’s already a bumper crop of speculation about whether Congress will be able to pass another one when this one expires in 2019. Given the amount of time and struggle it required to pass this one, it’s not idle speculation. Even in a time of dangerous government budget deficits, a bill that eliminated direct payments, reformed and streamlined several programs and saved the government billions of dollars wasn’t a slam dunk. So is there the legislative fortitude in Congress to do it again in five years? It’s hard to see right now, especially if Washington remains as dysfunctional as it is today.
Retaining leverage Still, as Craig Hill, Iowa Farm Bureau Federation president, said last week at the beginning of the organization’s annual Policy Information Conference, farm interests did retain a couple of tools that should help support passage of future farm bills. First, the permanent farm bill was not replaced by the 2014 edition. So once again, the prospect of returning to the permanent law, last passed in 1949, remains as leverage to get Congress to keep farm bills updated. The second thing working in favor of future farm bills is the fact that commodity and nutrition (food stamp) bills are still tied together. There were serious attempts to pull them apart, and the House actually passed a bill to do just that. But, in the end, those efforts failed. Sure, it’s often hard to explain that a measure called the “farm bill” actually spends 79 percent of its funding to help low income Americans mostly in urban areas make food purchases. But it’s politically essential to keep the links between commodity and nutrition programs to attract nonfarm support for farm bills. And with more of America becoming more urban all the time, it’s only going to be more important five years from now, when it’s time to do a new farm bill. And, as we all know from the struggle to pass the current farm bill, agricultural interests will need all the help they can get.
FEBRUARY 19, 2014
IOWA FARM BUREAU SPOKESMAN
Utility rules differ on renewable energy, service upgrades BY TOM BLOCK All utility service providers are not created equal, at least when it comes to how they handle billing for privately-owned renewable energy generation and service upgrades. Rates and policies for investorowned utilities, like MidAmerican Energy and Alliant Energy, are governed by the Iowa Utilities Board, while Rural Electric Cooperatives (RECs) and municipal utilities are governed by local boards or city councils. That can lead to differences in billing policies for customers who install wind turbines or solar panels to generate renewable electricity, Iowa Utilities Board general counsel David Lynch explained last week at the Iowa Farm Bureau’s Policy Information Conference in West Des Moines. Investor-owned utilities are required to offer net energy metering, which allows customers to use onsite renewable energy generation to offset their energy purchases during a billing period, Lynch said. Utility companies aren’t re-
quired to offer net metering for a second meter that a farmer or other customer may have, he pointed out. However, many companies, including MidAmerican and Alliant, do allow customers to carry over excess energy generation to offset energy purchases at retail rates during subsequent billing periods, Lynch said. Net metering policies for RECs and municipal utilities can be significantly different, he said. “We don’t really have good, firm information on what RECs
are doing or what the municipal utilities are doing,” Lynch said. Terry Murray, a Buena Vista County Farm Bureau member, said he receives a credit for renewable energy produced on his farm to offset his energy use during the same billing period. However, any excess energy produced is credited at a lower rate for future billing offsets, he said. Lynch said utility companies have concerns that net-metering customers who receive full retail rate credit offsets “may not pay the full cost of bringing service
to them.” Access fees often don’t cover the full amount of overhead costs like infrastructure and line maintenance, so renewable energy producers who are given full retail credits are effectively being subsidized by other customers, he said. Currently, the amount of privately-owned renewable energy production is rather small, but it could be a bigger issue if equipment costs drop to the point where it becomes commonplace, Lynch said. “If solar panel costs come down far enough, they’re going to appear on every house overnight,” he said. “We have some cushion before that happens, but the day could come, and we need to be ready for it.”
Service upgrades Investor-owned utilities and RECs can also have different charges for extending new service lines to customers, said Donald Stursma, safety and engineering manager for the Iowa Utilities Board. In general, utilities are required to provide basic single-phase ser-
vice to locations within their territory. But as farms install and use larger equipment, lines may need to be upgraded to three-phase service, which can cost $75,000 to $100,000 per mile. The cost of electrical line upgrade is usually higher for investor-owned utilities because of an income tax surcharge, which doesn’t apply to RECs, Stursma said. Under current practice, the cost of three-phase service can be assessed to the “last customer” whose added demand triggers the need for the upgrade. No additional costs are charged to the other customers already on the line who may benefit from the added capacity if they increase their electrical demand in the future. Electrical service capacity is something to consider for farmers who are planning to build new livestock barns or grain bin sites that will increase their electrical needs, Stursma said. “Before you build, talk to the utility provider about the cost of running service to that location,” he said. “Otherwise, it can be bad news.”
New conservation compliance rules demand greater attention from farmers BY DIRCK STEIMEL Iowa farmers need to keep in close contact with their county Farm Service Agency (FSA) and Natural Resources Conservation Service (NRCS) as erratic weather patterns, high commodity prices and changes in federal programs put additional scrutiny on conser-
vation compliance, representatives of the agencies said last week. “It’s always a good idea to talk to the county staff before you do things like fix gullies after a rain event,” Don Carrington, a soil conservationist with the NRCS, told Farm Bureau members at the annual Iowa Farm Bureau Federation Policy Information Con-
ference last week in West Des Moines. Vickie Friedow of Iowa FSA also addressed conservation questions at the conference. Under conservation compliance rules, farmers with highly erodible land (HEL) or wetlands must meet specific conservation requirements to be eligible for federal farm program benefits. Farmers with HEL
land have a conservation plan filed with their county NRCS office. Farmers may be eligible for weather variations from their conservation compliance plan after adverse weather events, such has heavy spring rains. Often, the variances allow farmers with no-till conservation plans to do limited tillage to help stem erosion, if the repair actions are pre-approved by the county office. While the weather variances may be offered, it’s also important for farmers to keep records of the conversation with county conservation officials, Carrington said. That’s because the conservation compliance reviews are now completed by committees of staffers from around the region and the local official who spoke with the farmers may not be directly involved in it, he said. Carrington said this committee approach, which brings in evaluators from outside the community, may be part of the reason that the number of conservation compliance violations have risen steadily in the past several years. “These
people are more often ready to make a decision against a producer,” he said. Another reason for the increase in violations is that high commodity prices have prompted some farmers to change farming practices, which can affect compliance, Carrington said. Several Farm Bureau members at the Policy Information Conference questioned the NRCS rules that allow anonymous complaints to trigger a reviews of a farmer’s compliance to conservation programs. “It just doesn’t seem right that somebody who may not really know what they are looking at can make an anonymous complaint against a farmer,” said Iowa County Farm Bureau member Craig Stallman. “It seems like we’re going to end up with a lot of frivolous complaints with this system.” In the new farm bill, conservation compliance was extended to farmers who are receiving subsidies for federal crop insurance premiums.
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As crop insurance becomes a bigger element of the federal agricultural safety net, farmers and others can expect more scrutiny of the program, an official with the U.S. Department of Agriculture’s Risk Management Agency (RMA) said last week. “We definitely have more eyes on us than eve r b e f o r e ,” Bill Bing, RMA policy administration branch chief, told Farm Bureau mem- BING bers at the Iowa Farm Bureau Federation Policy Information Conference last week in West Des Moines. A wide range of groups, environmental organizations, antitax groups and others are starting to keep a close eye on crop insurance as the program has grown, he said. At the same time, the range of
products offered by crop insurance continues to grow. Crop insurance today offers coverage on everything from traditional field crops to specialty crops and even seafood, Bing said. “Who would have every thought that we would be offering insurance on oysters,” he said. Another big change for the agency will be the new farm bill’s provision that conservation compliance is required for farmers using crop insurance and receiving premium subsidies. “We have never required conservation compliance before, so we are starting to get up to speed on it,” Bing said. The RMA official said the agency is continuing to refine its policies on prevented planting acres to make them workable for farmers and insurers. The agency also follows the guidelines of the USDA’s Natural Resources Conservation Service on terminating cover crops, he said.
IOWA FARM BUREAU SPOKESMAN FEBRUARY 19, 2014 5
Building lifelong connections at Iowa Beef Expo BY BETHANY BARATTA Last week’s Iowa Beef Expo gave Bob Bosch an opportunity to connect with other cattlemen and women and share his passion for the industry. The Indianola cattleman has been exhibiting his purebred Limousin cattle at the show, which was held in Des Moines, since 1992. Bosch started raising purebred Limousin cattle around 1979, though he didn’t set out planning a long-time association with the breed. “I went to the sale barn one time and just bought a couple calves. At the time, I never knew what Limousins were,” Bosch said. It wasn’t until a trip to the meat locker and a conversation with the butcher revealed a desirable large ribeye area that Bosch really got started. “I started doing some research and found that Limousins are known for being a carcass breed — for having big ribeyes and stuff. I thought that was great and just got started. A neighbor had some Limousin bulls, and I bought one of them and went from there,” he said.
Family affair Bosch’s 12-year-old grandson Jordan Gillette accompanied him to the show this year. Gillette has some cattle of his own that he
keeps at his grandparents’ farm. Gillette showed and then sold one of his bulls, Apollo, at the Iowa Beef Expo this year. And Gillette isn’t the first person that Bosch has helped in the cattle industry. Brian Haitt said he was “a 4-H’er that never left.” Bosch helped Haitt get started in his 4-H cattle project. When Haitt wanted to go to college at Iowa State, Bosch offered to keep Haitt’s heifers at his farm while he went to college. “So I went and he kept them, and we turned it into a business,” Haitt said. “And I never left.” Besides taking care of his own cattle at the farm, Haitt usually does the clipping and grooming for the cattle shows. Sometimes Gillette will help. “I like clipping a lot,” Gillette said. “It’s just fun, kinda. And I like being able to help my grandpa.”
Persistence and passion Bosch said it’s his persistence that keeps him in the industry. “I love working with the cattle, and basically our whole world is around the cattle. Our friends and everything are in the cattle business, and it’s hard to understand what we would do without it,” he said. Though cattle prices have been higher recently, Bosch said inputs have also gone up.
Madison County farmer receives Wergin Good Farm Neighbor award Mark Hollingsworth, who raises hogs and cattle in rural Madison County, has been named the February winner of the Gary Wergin Good Farm Neighbor Award. Hollingsworth and his wife, Brenda, farm with Mark’s brother and have a diversified row-crop operation and raise 100 head of Angus cows and have a wean-tofinish hog operation. Butch Wise nominated Hollingsworth for the award, saying, “As a friend and neighbor, I have seen first-hand the dedication and commitment Mark has for his family, neighbors, environment and community.
“The ground in Madison County has rolling hills, so Mark is very conservation-minded and implements numerous crop production practices to reduce the potential for erosion. He practices minimum-till farming, uses crop rotation, has installed grassed waterways and terraces on his farm,” Wise added. In addition to his work on the farm, Hollingsworth is involved with the Madison County Pork Producers and Madison County Cattlemen’s Association. The Wergin Good Farm Neighbor award is made possible through the financial support of the Coalition to Support Iowa’s Farmers.
Loebsack introduces bill to expand renewable fuel infrastructure Iowa Congressman Dave Loebsack has introduced legislation that would establish a grant program through the U.S. Department of Agriculture (USDA) to invest in renewable and alternative fuel infrastructure. The Renewable Fuel Utilization, Expansion and Leadership (Re-FUEL) Act (HR 4051) will help create new and retro-fit existing infrastructure, including pumps
for biofuels and hydrogen, tanks, piping and electric vehicle chargers. The legislation will not add to the federal deficit, Loebsack said. “Too often, infrastructure constraints are cited as the reason for not giving consumers the choices they deserve. This holds back the development of our renewable and alternative energy sources that create jobs in Iowa and across the country,” he said.
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“If you’re in it for the money, you’re not going to be there (in the industry). I mean, it’s a passion,” he said. Bosch said the Iowa Beef Expo allows his farm, Bosch Farms, the chance to advertise its herd and reconnect with customers. He also hosts an open house and private treaty sale on the farm in November. The camaraderie among the cattlemen and cattlewomen, especially those who raise Limousin cattle, keep Bosch in the industry despite weather challenges and changing input costs. “Just the passion and love for the cattle is what keeps me going.”
Bob Bosch and his grandson, Jordan Gillette, worked together to prepare and show a bull last week at the Iowa Beef Expo at the Iowa State Fairgrounds in Des Moines. Bosch has been showing purebred Limousin cattle at the expo for more than two decades. PHOTOS/GARY FANDEL
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6 FEBRUARY 19, 2014 IOWA FARM BUREAU SPOKESMAN
Report shows continued international crop demand
ast week’s World Agricultural Supply and Demand Estimates (WASDE) report by the U.S. Department of Agriculture (USDA) showed a slight decrease in the expected U.S. corn ending stocks for 2013-14 compared to the USDA’s January estimates. The USDA estimated the 201314 corn ending stocks at 1.48 billion bushels, down from last month’s 1.63 billion bushel estimate. Corn ending stocks were 821 million bushels at the end of the 2012-13 marketing year and 989 million bushels at the end of the 2011-12 marketing year. The corn stocks-to-use ratio for 2013-14 is now estimated to be near 11.1 percent by the end of the current marketing year, as compared to a stocks-to-use ratio of 7.4 percent for the 2012-13 marketing year. The decrease in corn ending stocks came from a 150-millionbushel increase in corn exports for 2013-14. The USDA estimated 1.6 billion bushels of U.S. corn will be exported for 2013-14. This is up from the 2012-13 U.S. corn exports of 731 million bushels, the report said. “For farmers, this was a little bit of good news out there that we continue to see international
demand for corn rebound from last year’s dismal levels to where we’re now projected to ship out nearly 1.6 billion bushels of corn,” said Chad Hart, Iowa State University economist and crop markets specialist. “That’s a really good sign that demand continues to build for this crop.” The season-average projected farm price for corn was raised 10 cents on both ends of the projected range to $4.20 to $4.80 per bushel. Corn production was lowered 1 million tons for Argentina as additional dryness in January trimmed yield prospects. Corn exports were raised 0.5 million tons each for Russia and Ukraine, but lowered 1 million tons for Argentina and 500,000 tons each for the European Union and India. Global corn ending stocks are projected 2.9 million tons lower. At the projected 157.3 million tons, world ending stocks remain at a 13-year high, the report
said. The USDA increased U.S. soybean supplies 5 million bushels to 3.46 billion on higher projected imports, mainly from Canada. U.S. soybean exports for 201314 were projected at 1.51 billion bushels, up 15 million bushels from last month, reflecting the record pace of shipments and sales through January, the USDA said. At 12 million bushels, projected residual use remains above the exceptionally low level of the past two marketing years. Projected soybean ending stocks were unchanged at 150 million bushels. The 2013-14 seasonaverage soybean price range was projected at $11.95 to $13.45, up 20 cents on both ends.
Deere layoffs About 120 workers at John Deere Harvester Works in East Moline will be placed on indefinite layoff effective March 31, Deere and Co. announced last week. Deere reported record first quarter earnings but said it expects the farm equipment industry in North America to see a 5 to 10 percent decrease from the record levels it reached in 2013. Harvester Works employs 2,800 with about 2,000 in production jobs.
Bunge may refuse trait The chief executive officer of Bunge Ltd., one of the world’s top grain traders, said last week there’s a chance the company will refuse
Weekly Average Price Comparison Sheet Price comparisons: Week ending: 02/14/2014 01/17/2014 Cattle - National 5 Area Confirmed Sales 8,144 89,913 5 Area 65-80% Choice Steers: Wtd Avg. $142.00 $144.20 Average Weights (Estimate) Cattle 1337 1338 Boxed Beef Choice 600-750 (5 day avg.) $207.68 $231.71 Boxed Beef Select 600-750 (5 day avg.) $206.96 $229.32 Five Day Average Hide and Offal Value $14.90 $14.88 Cattle - Interior Iowa - Minnesota Supply: 709 28,284 Average Price Choice Steer: Live Basis NA $141.82 Average Price Choice Steer: Dressed Basis $223.00 $228.36 Feeder Steers at River Markets (Neb. Feedlots) #1 Muscle Thickness 500-600# $220.78 $220.84 #1 Muscle Thickness 700-800# $176.40 $175.94 Hogs -- Interior Iowa - Minnesota ISM Friday Weighted Average Carcass Price $88.63 $76.51 Average Weights (Estimate) Hogs 281.0 282.6 Sows 1-3 300# and up: Average Price $61.07 $59.16 Pork Loins 1/4” trimmed 13 - 19 pounds $124.98 $114.87 51-52% 185 pound Pork Carcass (5 day avg.) $92.69 $84.80 Feeder Pigs: National Direct Delivered Feeder Pigs 10 Pounds Basis - Wtd Avg. $83.10 $86.33 Feeder Pigs 40 Pounds Basis -- Wtd Avg. $104.95 $95.35 Sheep -- National Slaughter Lambs Negotiated Sales 6,000 5,000 Choice & Prime Wooled and Shorn 130-150 lbs. $158.00 NA Iowa Large Eggs (cents per dozen) $1.23 $0.94 Young Hen Turkeys: 8 -16# - Eastern (cents/lb) 99.62 98.80 *Iowa Ethanol Prices $/gal $1.93 $2.03 Futures: Corn $4.45 $4.24 State Average Cash Corn Price $4.31 $4.15 Basis -$0.14 -$0.09 Futures: Soybean $13.38 $13.16 State Average Cash Soybean Price $12.91 $12.77 Basis: -$0.47 -$0.39 Slaughter Under Federal Inspection Estimates Estimates Hogs: 2,010,000 2,134,000 Cattle: 531,000 580,000 Sheep: 38,000 41,000 Estimated Numbers through Saturday Cash Corn and Soybean prices are the Iowa Average Prices as reported by IDALS. NA-No report at time of publication. Source: USDA Livestock and Grain Market News
02/15/2013 49,304 $121.62 1329 $181.95 $180.40 $13.68 8,607 $120.43 $196.00 $171.39 $143.12 $81.44 275.7 $46.23 NA $80.88
to handle corn containing a new genetically modified Syngenta AG trait unless it is cleared by China. “We handle crops that have been approved in major markets,” Chief Executive Officer Soren Schroder told Reuters. “That is our stand.” Grain merchants must decide whether to buy corn that contains Syngenta’s Agrisure Duracade strain because seed containing the trait is available for planting in the United States for the first time this year. The trait, engineered to fight corn rootworms, won U.S. approval for planting and cultivation in 2013 but has not yet been approved by China or the European Union. Schroder said he did not believe
Bunge had made a decision yet on whether it will handle corn containing Duracade. Seeds containing the trait will be planted this spring and harvested for the first time in autumn, leaving major importers some time to clear the product. China accounted for almost 14 percent of U.S. corn exports in 2011-12.
Brazil sets up for record Brazil is expected to harvest more than 90 million tons of soybeans this year, overthrowing the U.S. as the leading soy-producing country, Officials said Brazilian farmers will harvest approximately 196.3 million tons of grain in total this season.
CME Class III Milk Futures Closing prices Feb. 14, 2014 Contract February 2014 March 2014 April 2014 May 2014
Settle $23.14 $21.04 $19.87 $19.23
Spot Prices Block Cheese Barrel Cheese Butter NFDM Extra Grade NFDM Grade A
Last Week $23.21 $21.05 $19.69 $18.96
$2.1050 $2.0625 $1.7700 $2.0200 $2.0175
Contract June 2014 July 2014 August 2014 September 2014
Settle Last Week $18.98 $18.85 $18.81 $18.81 $18.70 $18.66 $18.54 $18.62
Milk Prices Feb. Class III Feb. Class IV
Iowa Hay Auctions Dyersville, Feb. 12
Hay, large squares, premium, $195-250; good, $135-195; fair, $100-130; utility, $80120; large rounds, good, $125-170; fair, $90115; utility, $20-90. Oat hay, large rounds, good, $85-100. Straw, large squares, good, $27-45; large rounds, good, $30. Prairie grass, large rounds, fair, $90-105. Corn stalks, large rounds, good, $39-40. CRP, large squares, good, $97.50; large rounds, good, $80-100. Mixed, large squares, good, $160-250; large rounds, good, $120-165. Grass, large rounds, good, $100-130; fair, $80-100.
Ft. Atkinson, Feb. 12
Hay, small squares, 1st crop, $165-220; 2nd crop, $130-245; large squares, 1st crop, $95-145; 2nd crop, $140-250; 3rd crop, $130-180, large rounds, 1st crop, $85-120; 2nd crop, $90-160; 3rd crop, $115-210. Grass, large rounds, $65-150. Oat hay, large rounds, $80-120.
Perry**, Feb. 8
Alfalfa, small squares, premium, $6-7; large squares, $95; large rounds, $105;
small squares, good, $4.50-5; large squares, $60; large rounds, $65. Grass, small squares, premium, $4.50; large rounds, $65; small squares, good, $3.50-4; large rounds, $60; small squares, fair, $3.50; large rounds, $50. Straw, small squares, $3. Corn stalks, large rounds, $15.
Rock Valley, Feb. 13
Alfalfa, large rounds, supreme, $155-165, premium, $130-150; good, $110-125; fair; $95-105; large squares, premium, $130-140; good, $115-122.50. Grass, small squares, premium, $130-160; good, $115-120; large rounds, premium, $140-160; good, $112.50-125; fair, $85-105; utility, $75-80. Mixed: large rounds, fair, $80-100. Straw: large squares, $100. Corn stalks: large rounds, $40-47.50.
Yoder**/Frytown, Feb. 12
Grass, large rounds, $40-47.50; large squares, $40-80; small squares, $3-5. Alfalfa, large rounds, $52.50-67.50; small squares, $4-5.90; large squares, $52.
**Perry and Yoder hay auction prices are per bale. All other prices are per ton. Contacts: Dyersville, 563-588-0657; Ft. Atkinson, 563-534-7513; Perry, 515-321-5765; Rock Valley, 712-476-5541; Yoder, 319-936-0126
$48.39 $75.55 NA NA $0.78 95.00 $2.30 $7.00 $7.08 +$0.08 $14.25 $14.07 -$0.18 Actuals 2,082,000 584,000 38,000
Corn basis for the 2013 crop strengthened after harvest as shown by the example graph of a central Iowa elevator’s corn basis versus March futures. This is a traditional narrowing of basis (the difference between cash and futures prices) that occurs often as the bushels are harvested and locked away in bins. Depending upon when the corn was harvested, basis was able to narrow 15 to 20 cents in a very short time period (four to ﬁve weeks). Since that rally, this example basis has been steady to weaker.
IOWA FARM BUREAU SPOKESMAN
Too much emphasis put on USDA baseline forecasts
he U.S. Department of Agriculture (USDA) figured heavily in the grain markets this past week, first with its February supply/demand reports and then its annual baseline market forecasts. Itâ€™s the latter that are not well understood, but ones the soybean trade quickly grabbed onto as they supported the tradeâ€™s bullish bias. The baseline forecasts the USDA releases just ahead of its annual outlook forum werenâ€™t developed to be market forecasting tools. They were developed by the USDA to provide benchmarks to build longrange budget forecasts for commodity programs. They are model driven, not market driven; hence, they do not pick up the changing short-to-intermediate term parameters that market-driven forecasts do. By the time they are released, they are outdated as well. They are based on the data and long-term prices that were available in November. The acreage numbers on the baseline forecasts were significantly different than what the trade had been thinking, soybeans in particular. On this report, the USDA projected 93.5 million acres to be planted to corn and 78 million to soybeans. The trade has been using numbers near 92 million for corn and 81 million for soybeans. Informa Economics last forecast 93.3 million acres for corn planting and 81.3 for soybeans. The soybean number caught the most attention, as the smaller than expected acreage projected by the USDA would keep balances relatively tight, increasing the pressure for good yields this year. Some analysts talked about how close the baseline forecasts have been to the final planting numbers the last two years. However, the soybean corn ratio was closer to 2:1 both times, whereas this year, itâ€™s still hovering near 3:1. With producers generally pessimistic about corn price prospects and the high cost of production, weâ€™re inclined to think price relationships will bolster plans to plant more soybeans this year. A better insight to the planting mix should come from the forecasts the USDA analysts will present at their outlook forum this week, Feb. 20-21. Weâ€™d expect those planting numbers to be closer to the levels the trade has been using since last fall. And looming on the horizon is the survey for the Prospective Plantings report and the report itself on March 31. 5.0 ĎąÍŹĎĎľĎłĎŻ
3.0 2.5 2.0
The push over the January report high confirmed the trend on the 20-week cycle had turned up.
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Î¨Ď˛Í˜ĎŽĎŻĹŻĹ˝Ç March futures have stalled at the first resistance at $4.51. They should correct into a 6- to 7-week low due near March 1. After that, futures should move up to resistance from $4.65 to $4.79.
continues to be a dominant driver of the corn market. The 150 million bushel increase in the export forecast on the new USDA supply/demand forecast caught many in the trade by surprise. But export sales and shipments, especially the former, have been good since the January USDA reports. There is speculation that the Environmental Protection Agency
200 160 120 80 40 0 Basis Chicago Futures
may be reconsidering its proposal to lower the biofuel requirements in the Renewable Fuels Standard this year.
2013 CROP: Use rallies to
price old-crop soybeans you still own. With Brazilian harvest accelerating, and exports starting to surge, $13 prices will not be long lasting.
2014 CROP: Use the current strength to price another 10 percent of your new crop, taking sales to 30 percent. Even though the new-crop USDA baseline estimate temporarily altered attitudes, they are long outdated, and not meant to be market-driven forecasts.
Weekly Corn Futures
past week, the market shook off Brazilian soybean harvest and
see better opportunities ahead to begin new-crop pricing. The $4.75 to $5 range on December futures remains our target area.
F U N D A M E N TA L S : T h i s
Soybean/Corn Price Ratio
2013 CROP: Corn prices con-
2014 CROP: We continue to
Cash Strategist Hotline: 1-309-557-2274
CORN STRATEGY tinue to trade just underneath the first strong resistance at $4.50$4.51 on March futures. While we think thereâ€™s potential for prices to eventually move higher, we think it important to pare risk, boosting sales to 60 percent. Given the modest carry, use a hedge-to-arrive (HTA) contract based on July futures to capture some storage returns for corn stored on farm.
FEBRUARY 19, 2014
Weekly Soybean Futures
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export shipments, but both were good. At weekâ€™s end, Mato Grosso had harvested 36.4 percent of its crop, one-third more than this time last year. The first week of February, Brazil shipped 273,100 tons of soybeans, putting them in position to ship 3 million metric tons this month. Last year, Brazil shipped less than 1 million metric
320 280 240 200 160 120 80 40 0 -40 3/5/13
Basis Chicago Futures
tons. There are signs Argentine producers are starting to price remaining old-crop soybeans, too.
Iowa Corn & Soybean Basis CORN: (basis vs. March futures, 2/12/14)
SOYBEANS: (basis vs. March futures, 2/12/14)
NW $4.23 -0.17 SW $4.15 -0.25
NW $12.79 -0.44 SW $12.80 -0.43
NC $4.30 -0.10 SC $4.28 -0.12
NE $4.25 -0.15 SE $4.26 -0.14
NC $12.79 -0.44 SC $12.83 -0.40
NE $12.71 -0.52 SE $12.84 -0.39
1.0 Jan-70 Jan-75 Jan-80 Jan-85 Jan-90 Jan-95 Jan-00 Jan-05 Jan-10 Jan-15
Cash Strategist Positions CORN
7-16-12 â€” 10% sold @ $6.35
at a glance 2014
8-21-12 â€” 10% sold @ $6.50 4-29-13 â€” 10% sold @ $5.36 5-13-13
â€” 10% sold @ $5.33
6-3-13 â€” 10% sold @$5.27 2-10-14 â€” 10% sold @$4.42 1/4 40% unsold
7-11-12 â€” 10% sold @ $12.92
12-23-13 â€”10% sold @ $11.72
8-1-12 â€” 10% sold @ $12.90
12-31-13 â€” 10% sold @ $11.35
2-4-13 â€” 10% sold @ $13.35
4-22-13 â€” 10% sold @ $12.06 6-3-13 â€” 10% sold @ $13.25 10-28-13 â€” 10% sold @ $12.78 11-11-13 â€” 10% sold @ $13.00 12-9-13 â€” 10% sold @ $13.34 1-21-14 â€” 20% sold @ $12.99
Iowa Farm Bureau members have free 24/7 access to AgriVisor daily updates through the Members portion of the IFBF website: www. iowafarmbureau.com. The AgriVisor link is on the homepage under the Daily Market chart.
Neither AgriVisor LLC nor the Iowa Farm Bureau Federation is liable for any damages that anyone may sustain by reason of inaccuracy or inadequacy of information provided herein, any error of judgment involving any projections, recommendation or advice or any other act of omission. This publication is owned by the Iowa Farm Bureau Federation with advice provided by and copyrighted by AgriVisor Services LLC, 1701 Towanda Avenue, Bloomington, Ill., 61701. No reproduction of any material in whole or in part of this page may be made without written consent.
OSHA backs off on plan to inspect grain bins on farms The Department of Labor (DOL) is withdrawing a 2011 memo that expanded its authority over grain drying and storage operations on farms with fewer than 10 employees. In a letter to Congress dated Feb. 10, the Labor Department said it has removed the memo and will work with the Department of Agriculture and farm organizations to develop any new guidance. â€œThe Department of Laborâ€™s decision to withdraw enforcement of the Occupational Safety and Health Administrationâ€™s small-farm grain bin guidance is a positive step forward for agriculture,â€? said American Farm Bureau Federation President Bob Stallman. â€œFarm safety is a top-of-mind
priority for our farmers. But we believe that the key to improving farm safety is a collaborative, cooperative process that was not helped by enforcement under the 2011 guidance document that was not consistent with the law.â€? Stallman commended the House Education and Workforce Committee, along with Sen. Mike Johanns (R-Neb.) and Rep. Adrian Smith (R-Neb.), for coordinating bipartisan letters drawing attention to the issue. Johanns and 42 other senators had complained to DOL that the departmentâ€™s Occupational Safety and Health Administration (OSHA) was enforcing regulations on small farms, despite a 1976 law that exempted those farms from such regulation. Johanns was alarmed after
OSHA assessed a $132,000 fine for grain bin safety violations against a Nebraska farm with only one non-family employee. He called the fine a â€œblatant overreach in violation of the law.â€? Brian Kennedy, the DOLâ€™s assistant secretary of the Office of Congressional and Intergovernmental Affairs, said the 2011 memo was meant to provide clarification, not change OSHA policy after a â€œdramatic increase in the number of workers entrapped and suffocated in grainstorage structures while performing grain-handling operationsâ€? in 2010. However, he said the Labor Department is removing the memo to avoid any confusion â€œand intends to fully comply with the small farms exemption.â€?
FEBRUARY 19, 2014
IOWA FARM BUREAU SPOKESMAN
Time to move beyond the hype and fears about big data BY DIRCK STEIMEL Farmers need to move beyond the hype and fears about the evolving use of large database management — commonly called big data — so they can use this promising technology to make meaningful improvements to their production and management systems, a leading consultant said last week. “There is a lot of fear and anxiety about big data now that it’s on the cover of every farm magazine. But there is going to be a tremendous amount of value in it,” said Matt Bechdol, president of GeoSilos, an Indiana-based consulting firm specializing in data applications and technologies for agriculture. “You do not want fear to get in the way of innovation,” he told Farm Bureau members at the Iowa Farm Bureau Federation Policy Information Conference in West Des Moines. While the tools to collect large amounts of data have been around for a while, farmers and others are just beginning to aggregate and use it, Bechdol said. “We are really moving from just collecting
ing and financial management systems. It will also help them study current and future demand trends to gain access to new markets. “ I t ’s r e a l l y about using data to make better decisions,” the consultant said. “It’s not about replacing the manager. Matt Bechdol of GeoSilos told Iowa Farm Bureau mem- It’s really about bers that the use of data management, or big data, can letting you take help farmers increase yields, improve efﬁciency and tar- off some of the hats that you are get consumer markets. PHOTO/DIRCK STEIMEL wearing so you information on things to moving can focus on what really can make to a predictive agriculture.” Big data will, in time, help your farm better.” He noted that many livestock farmers improve their operations farmers are already well down in a number of ways, Bechdol the path of using big data as they predicted. It will help farmers find ways work to meet the stricter demands to become more efficient in how of meat processors. The crop side they use land, equipment, labor has been slower to adopt the data and other inputs. It will allow management processes, Bechdol farmers to improve their account- said, even though there has been a
big push to install precision agriculture equipment. Bechdol, who also is a partner in his family’s 2,600-acre Indiana farm, said the key to understanding and successfully using data is treating it like an asset on your farm. “It’s like corn in your bin, and you have to turn it into something valuable.” And many farmers who have already started the process of using data to analyze and manage their operations are becoming increasingly convinced of its value, he said. “I hear from a lot of farmers who say ‘if I have to choose between more iron and data, I’m going to choose data every time’.” Still, Bechdol predicted that there would be a “period of disillusionment” with big data as some of the hype begins to wear off and early results don’t meet all of the lofty predictions.
Remaining vigilant It’s important for farmers to be careful about how they share their data, and who they share it with, Bechdol said. And it’s important for everyone to read data sharing
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agreements before signing them, he said. He noted that delegates of the American Farm Bureau Federation adopted language designed to help farmers protect their data. Still it’s important for farmers to keep an open mind about using data and working with trustworthy partners, Bechdol said. “At the end of day, almost every one of the companies want you to be successful and wants to make you more money and your farm more sustainable.”
Iowa legislature moves toward ﬁrst funnel date The first funnel of the 2014 session is set for Feb. 21. That means House bills must be moved out of House committees and Senate bills must be moved out of Senate committees. (Budget, appropriations and government oversight bills are exempt from the funnel rules.) Both the House and Senate are expected to release their respective budget targets as early as this week. The budget targets represent the general amount each chamber would like to spend in the next fiscal year, and 10 separate budget bills will make up the complete budget target. The agriculture and natural resources budget will include funding for the Nutrient Reduction Strategy (Water Quality Initiative). The governor’s budget proposed to increase the funding by $2 million, bringing the total to $4.4 million for fiscal year 2015. However, the increase is less than the $6.65 million requested by the Iowa Department of Agriculture and Land Stewardship, which is supported by the Iowa Farm Bureau. Farm Bureau is working with legislators to secure one-time money (ending fund balance) for the Iowa Nutrient Reduction Strategy, conservation cost-share backlog and the ag drainage well closure program. The initial budget proposal from the governor didn’t include any of this one-time money. A new bill, Senate File 2125, requires the notice for all new rules and adopted emergency rules to include a financial impact of the rule for both the cost of implementing the rule and the cost for the persons or businesses impacted by the rule. It also sunsets all rules after five years.
USDA plan to aid water fowl habitat
Sniff out the truth at
The U.S. Department of Agriculture (USDA) has allocated up to $35 million over the next three years to help landowners conserve grasslands and wetlands in the Prairie Pothole region, which includes parts of Iowa. Farmers, ranchers and conservation partners will have access to a mix of financial and technical assistance opportunities to restore wetlands and grasslands in this area, which provides critical water fowl habitat.
Published on Feb 17, 2014