farmweek july 11 2011

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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 mark- up” Thursday, the Democ- rat-led Senate Finance Committee voted to sup- port the FTAs. Included in the mock vote was White House-sup- ported 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 main- tained “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 exacer- bate the losses for U.S. agriculture and the U.S. economy,” he said. In an RFD Radio-FarmWeek inter- view last week, freshman U.S. Rep. Adam Kinzinger, a Manteno Republican on the House Energy and Commerce Subcom- mittee on Commerce, Manufacturing and Trade, reported “we have most of the freshman ‘class’ on board” for FTA pas- 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 sum- mer,” 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 lead- ers to pass TAA as a condition of FTA approval. AFBF trade specialist David Salmonsen noted House leaders prefer to address TAA via separate legisla- tion, but argued “everybody has to be dealing at some point with the same legis- lation” to assure final presidential approval. “I think we’ll be able to come to a full agreement,” Kinzinger maintained. — Martin Ross Periodicals: Time Valued Monday, July 11, 2011 Two sections Volume 39, No. 28 FarmWeek on the web: FarmWeekNow.com Illinois Farm Bureau ® on the web: www.ilfb.org 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 THE pROCESS FOR approv- ing GMO crops in the European Union (EU) is so cumbersome no resolution is eminent, an EU ag counselor said last week. .................5 THE SEARCH is under way for a replacement for Country Financial CEO John Blackburn, who announced he will retire in January . .............................................2 ‘Dangerous precedent’ HSUS, egg group propose welfare legislation BY MARTIN ROSS FarmWeek In an effort purportedly aimed at establishing nation- wide poultry welfare stan- dards, 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 per- cent of the nation’s layer operations, agreed last week to work with HSUS — which spearheaded past animal wel- fare 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. ment to dictate production practices for other livestock species. In this case, (HSUS and UEP are) taking it a step fur- ther 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 Califor- nia’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 anoth- er bird or the sides of an enclosure. Echoing fears voiced fol- lowing passage of Prop 2, See Welfare, page 3 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 Ore- gon layer operations. UEP Chairman Bob Krouse deemed a national standard “far superior than a patch- work of state laws and regula- tions that would be cumber- some for our customers and confusing to consumers.” But National Pork Produc- ers Council (NPPC) President Doug Wolf fears the move ultimately could hurt pork and other livestock sectors. Wolf argued “such a one- size-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 con- sumer 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 Smith- field 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- Senate/House committees OK FTAs; president up next

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Page 1: FarmWeek July 11 2011

Congress last week moved a step closerto approving long-delayed free tradeagreements (FTA) with South Korea,Colombia, and Panama.

In a legislative “mock mark-up” Thursday, the Democ-rat-led Senate FinanceCommittee voted to sup-port the FTAs. Includedin the mock vote wasWhite House-sup-ported renewal ofTrade AdjustmentAssistance (TAA)designed to help U.S.workers affected byoffshore job movement.

The Republican-ledHouse Ways and MeansCommittee followed upwith a similar vote, omittingTAA. The non-binding “markups” servedas a recommendation to President Obamato submit FTA “implementing legislation”for a vote.

American Farm Bureau Federation(AFBF) President Bob Stallman main-tained “the process toward finalizing these

important trade deals is heading in theright direction.” Presidential action is now“imperative” to ensure the FTAs are votedon by Congress’ August recess.

Stallman warned inactionon the agreements over

the last four years “hasopened the door to

our competitors inthese markets.”Further delays“will only exacer-bate the losses for

U.S. agriculture andthe U.S. economy,” he

said.In an RFD Radio-FarmWeek inter-

view last week, freshman U.S. Rep. AdamKinzinger, a Manteno Republican on theHouse Energy and Commerce Subcom-mittee on Commerce, Manufacturing andTrade, reported “we have most of thefreshman ‘class’ on board” for FTA pas-

sage. He said he was hopeful “any of thedifferences between Democrats andRepublicans have been hammered out.”

“I expect we’ll see all three free tradeagreements come up for a vote, I thinkwithin the month but definitely this sum-mer,” Kinzinger said. “It’s high time, too.You look at South Korea, you look atColombia and Panama: Every day thatgoes by where we’re not exporting to thosecountries (under an FTA), we’re losing thatmarket share to nations like China.

“I think we have a great opportunity.My confidence level in these threepassing is sky-high right now.”

The administration reportedly hadreached agreement with House lead-ers to pass TAA as a condition of

FTA approval. AFBF trade specialistDavid Salmonsen noted House leadersprefer to address TAA via separate legisla-tion, but argued “everybody has to bedealing at some point with the same legis-lation” to assure final presidentialapproval.

“I think we’ll be able to come to a fullagreement,” Kinzinger maintained. —Martin Ross

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Monday, July 11, 2011 Two sections Volume 39, No. 28

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

An Ag CAREERS vidEOmade by a high school FFA chapterand chosen the winner in a recentcompetition is changing the wayagriculture careers are viewed. .....10

THE pROCESS FOR approv-ing GMO crops in the EuropeanUnion (EU) is so cumbersome noresolution is eminent, an EU agcounselor said last week. .................5

THE SEARCH is under wayfor a replacement for CountryFinancial CEO John Blackburn,who announced he will retire inJanuary. .............................................2

‘Dangerous precedent’

HSUS, egg group propose welfare legislationBY MARTIN ROSSFarmWeek

In an effort purportedlyaimed at establishing nation-wide poultry welfare stan-dards, the Humane Society ofthe United States (HSUS) andthe United Egg Producers(UEP) are seeking to codifyby law new federal animaltreatment measures.

But the move has sparkedanxiety among key livestockgroups.

UEP, a cooperative thatrepresents a reported 95 per-cent of the nation’s layeroperations, agreed last weekto work with HSUS — whichspearheaded past animal wel-fare initiatives in Arizona,California, Michigan, andOhio — toward passage ofthe first such federal law.

The prospective measurecalls for phased replacementof conventional layer cagesused by 90-plus percent ofthe industry with new“enriched housing systems”that would nearly double thespace currently allotted eachhen.

ment to dictate productionpractices for other livestockspecies. In this case, (HSUS andUEP are) taking it a step fur-ther and trying to codify it infederal law.

“After this, the HumaneSociety is not going to have tospend any money to try to getrid of (poultry) battery cages.They’re going to pour it allprobably on us. They’re goingto go after the pork industry.”

While no specific sponsorhas yet been identified, Rep.Earl Blumenauer (D-Ore.)praised the measure at aThursday news conference.Fellow Oregon DemocratPeter DeFazio previouslysponsored a failed proposal torequire producers supplyingfederal programs with meat,

milk, and eggs to comply withprescribed welfare standards.

If the HSUS-UEP planclears Congress, Warner fearsit could easily be amended toregulate swine practices.

HSUS was lead sponsorand the egg industry a keyopponent of 2008’s Califor-nia’s Proposition 2, which setnew housing requirements foroperations statewide.

By January 2015, Californiaproducers must ensure layersare able to sit down, stand up,turn around and extend theirlimbs without touching anoth-er bird or the sides of anenclosure.

Echoing fears voiced fol-lowing passage of Prop 2,

See Welfare, page 3

UEP estimates the cost ofthat change alone at $4 billionover the next 15 years. (seeadditional provisions page 3).

With the agreement, HSUSput a hold on planned stateballot measures that wouldaffect Washington and Ore-gon layer operations. UEPChairman Bob Krousedeemed a national standard“far superior than a patch-work of state laws and regula-tions that would be cumber-some for our customers andconfusing to consumers.”

But National Pork Produc-ers Council (NPPC) PresidentDoug Wolf fears the moveultimately could hurt pork andother livestock sectors.

Wolf argued “such a one-size-fits-all approach will take

away producers’ freedom tooperate in a way that’s best fortheir animals, make it difficultto respond to consumerdemands, raise retail meatprices and take away con-sumer choice, (and) devastateniche producers.”

“Whatever the HumaneSociety and Egg Producerswant to agree to is up tothem,” NPPC Washingtonspokesman Dave Warner toldFarmWeek. “When Smith-field announced it was goingto phase out sow stalls, wedidn’t have anything to sayabout it, other than that it wasa business decision they’dmade.

“But making it a federal lawsets a dangerous precedent,allowing the federal govern-

Senate/House committeesOK FTAs; president up next

Page 2: FarmWeek July 11 2011

TRUCK DISPUTE RESOLVED? — U.S. and Mexicanofficials have signed an agreement to allow Mexican trucks tohaul goods into the U.S. and that would, as a result, cut byhalf the tariffs Mexico imposes on U.S. exports.

When the first Mexican trucks are allowed later this sum-mer to carry products over the border, Mexican duties,including a 5 percent tariff on most U.S. pork, will be sus-pended.

North American Free Trade Agreement (NAFTA) truck-ing provisions were set to become effective in December1995, but the U.S. failed to abide by them. In 2001, a NAFTApanel ruled exclusion of Mexican trucks violated U.S. obliga-tions.

The U.S. temporarily delayed trade retaliation in 2007 byimplementing a pilot program that allowed a limited numberof Mexican trucks into America. The program was suspend-ed 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 puttariffs in place, putting the burden of non-compliance backon U.S. farmers,” American Farm Bureau Federation Presi-dent Bob Stallman stated.

DEBT LIMIT TRADEOFF — President Obama lastweek stressed the importance of raising the U.S. debt limitceiling “so that the full faith and credit of the United Statesof America is not impaired” on the international scene.

But freshman U.S. Rep. Adam Kinzinger, a MantenoRepublican, argued he and his colleagues must continue topush for a good-faith “plan of action” for future federalspending in exchange for raising the ceiling.

“After some of the discussions and meetings we’ve had, Ithink there will be an agreement pretty soon,” Kinzinger saidin an RFD Radio-FarmWeek interview. “But look, I’m notgoing to vote to increase the nation’s debt borrowing authori-ty without serious structural change in how we do business.

“We’re $14.5 trillion in debt. It’s been 800 days since theSenate’s passed a budget, and since then, we’ve added closeto $4 trillion in debt.”

ETHANOL PRODUCER USES WHEAT — Wheatoften is used to displace corn in livestock feed rations whenthe price of corn gets too high.

Now, the same concept is being used in the ethanol indus-try. The Andersons, which operates ethanol production facili-ties in Indiana, Michigan, and Ohio, recently started mixingwheat into production of the biofuel in an attempt to lowercosts and diversify its feedstock sources, Reuters news serv-ice reported.

The Andersons reportedly was blending up to 10 percentsoft red winter wheat into its ethanol formula. Spot prices onFriday at the Chicago Board of Trade were about a quarterper bushel cheaper for soft red winter wheat futures com-pared to nearby corn futures.

The strategy of displacing corn used for ethanol produc-tion is expected to diminish once corn harvest begins thisfall.

FarmWeek Page 2 Monday, July 11, 2011

(ISSN0197-6680)

Vol. 39 No. 28 July 11, 2011

Dedicated to improving the profitability of farm-ing, and a higher quality of life for Illinois farmers.FarmWeek is produced by the Illinois FarmBureau.

FarmWeek is published each week, except theMondays following Thanksgiving and Christmas, by theIllinois Agricultural Association, 1701 Towanda Avenue, P.O.Box 2901, Bloomington, IL 61701. Illinois AgriculturalAssociation assumes no responsibility for statements byadvertisers or for products or services advertised inFarmWeek.

FarmWeek is published by the Illinois AgriculturalAssociation for farm operator members. $3 from the individ-ual membership fee of each of those members go towardthe production of FarmWeek.

Address subscription and advertisingquestions to FarmWeek, P.O. Box 2901,Bloomington, IL 61702-2901. Periodicalspostage paid at Bloomington, Illinois, andat an additional mailing office.

POSTMASTER: Send change of address notices onForm 3579 to FarmWeek, P.O. Box 2901, Bloomington, IL61702-2901. Farm Bureau members should sendchange of addresses to their local county Farm Bureau.

© 2011 Illinois Agricultural Association

STAFFEditorDave McClelland ([email protected])Legislative Affairs EditorKay Shipman ([email protected])Agricultural Affairs EditorMartin Ross ([email protected])Senior Commodities EditorDaniel Grant ([email protected])Editorial AssistantLinda Goltz ([email protected])Business Production ManagerBob Standard ([email protected])

Advertising Sales ManagerRichard Verdery ([email protected])

Classified sales coordinatorNan Fannin ([email protected])

Director of News and Communications

Dennis VerclerAdvertising Sales RepresentativesHurst and Associates, Inc.P.O. Box 6011, Vernon Hills, IL 600611-800-397-8908 (advertising inquiries only)

Gary White - Northern IllinoisDoug McDaniel - Southern IllinoisEditorial phone number: 309-557-2239Classified advertising: 309-557-3155Display advertising: 1-800-676-2353

Quick TakesCOUNTRY

Country CEO announces retirementJohn Blackburn, 63, who has headed Country

Financial for 10 years, last week announced hewill retire in January.

Illinois Farm Bureau Presi-dent Philip Nelson, who also ispresident of Country, said thesearch for a new chief execu-tive officer already has begun.

“It has been my privilege tolead this organization for 10years. I have great confidencein our people and believeCountry is well-positioned toenhance and build upon our

long-standing history of superior customerservice,” said Blackburn.

In the past decade, the Country group dou-bled its geographic footprint, growing fromoperations in 23 states to cover most of thenation.

During the same period, assets for theenterprise grew from $8.1 billion to $14.3billion, while annual revenues increased from$2 billion to $3.3 billion. Country has beencontinuously ranked on the Fortune 1000 listsince 2004 and is currently ranked No. 624.

Blackburn began his career with Countryin 1982 as an agent in Christian County.

He served many field and home officecapacities, including agency manager, districtdirector of agencies, regional vice presidentof agency, vice president of agency, and sen-ior vice president of marketing.

Blackburn has served as CEO sinceAugust 2001. He also is retiring as chairmanof the boards of directors of Cotton StatesInsurance Group, Alpharetta, Ga.; HolyokeMutual Insurance Co., Salem, Mass.; andMiddlesex Mutual Assurance Co. of Middle-town, Conn.

John Blackburn

Landowners should check with Countryabout liability needs for recreation usesBY KAY SHIPMANFarmWeek

Landowners may request aliability coverage extension ontheir Farm or AgriPlus policyprovided by Country Financial,if they allow hunting on theirproperty.

However, landowners arepersonally responsible forknowing who and when peopleare allowed on their premisesand may earn up to $15,000annually directly from thathunting activity, according toCraig Conroy, Country’s man-ager of farm underwriting.

“We know how important itis for clients to not only beaware of their exposures butto be able to assist them inprotecting their assets. Whenpossible, we strive to providethe coverage our Farm andAgriPlus clients need,” Conroysaid.

Country handles liability

coverage differently if thelandowner leases the land to anoutfitter or some other secondparty, Conroy said. If thelandowner allows a secondparty to coordinate the hunt-ing activity, the companyrequires that the Farm orAgriPlus policyholder be listedas an additional insured partyon the second party’s or outfit-ter’s commercial insurance pol-icy, Conroy said.

The liability exposure asso-ciated with hunting can besevere. For instance, huntersmay fall out of a tree stand andsustain long-lasting injuries,Conroy explained.

“If our Country Farm andAgriPlus clients are workingwith an outfitter, we want tomake sure the clients are cov-ered, but our policy would notbe providing primary cover-age,” he explained.

“As our society becomes

more litigious, landownerswho allow people and huntingactivities on their propertyneed to be aware of theirincreased potential of beingbrought into a lawsuit,” hesaid.

Country’s Farm andAgriPlus policy can beendorsed to offer coverage tolandowners who lease theirproperty. That would providethe landowner client liabilitycoverage if the outfitter’sinsurance has lapsed. “It’s abackup plan,” Conroy said. Itis meant to serve as a safe-guard, he explained.

In recent years, Country hasseen an increase in interest forliability coverage for huntingoperations on farmland, espe-cially in Southern and South-western Illinois. For moreinformation, contact yourCountry Financial representa-tive, Conroy advised.

July 18University of Illinois Orr Center field day, nearPerry. Tours start at 4 p.m. For information,contact Mike Vose at 217-236-4911.

July 19University of Illinois Northern IllinoisResearch Center field day, near Shabbona.Tours to start at 4 p.m. For information, con-tact Russ Higgins at 815-274-1343.

July 20University of Illinois Northwest ResearchCenter field day, Monmouth. Tours start at 9a.m. For information, call the center at 309-734-7459.

Good agricultural practices workshop, 9 a.m.to 3 p.m., University of Illinois Extension cen-ter, Westchester. For information or to regis-ter, call 708-679-6889.

July 24Pull and Cast for Illinois AgricultureEducation, World Shooting and RecreationComplex, Sparta.

July 27Illinois Farm Bureau Commodities Conference,Marriott Hotel and Conference Center, Normal.

July 28University of Illinois Brownstown ResearchCenter field day, Brownstown. Tours start at 9a.m. For information, call 618-427-5239.

Aug. 3Western Illinois University Allison OrganicFarm field day, near Roseville, starting at9:30 a.m. Advance registration required formorning session and lunch. Call IllinoisOrganic Growers at 217-454-1204.

Aug. 4University of Illinois Dixon Springs AgriculturalResearch Center field day, 9 a.m. to noon,near Simpson. For more information, callDixon Springs at 618-695-2441.

Aug. 12-21Illinois State Fair, Springfield.

Aug. 16Agriculture Day and Sale of Champions, llinois State Fair, Springfield.

DATEBOOK

Page 3: FarmWeek July 11 2011

ENVIRONMENT

Page 3 Monday, July 11, 2011 FarmWeek

Farmers seeking nutrient solutions for watershed

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

BY KAY SHIPMANFarmWeek

Farmers voluntarily are test-ing different nutrient practicesand technologies to make adifference in their Central Illi-nois watershed.

Last week they and theirgovernment agency and indus-try partners shared what theyare doing and their ambitiousgoals.

Located primarily in Liv-ingston County, the IndianCreek Watershed is an 82-square-mile drainage area con-taining about 52,840 acres.

The watershed is in thenational spotlight as one ofUSDA’s Mississippi RiverBasin Initiatives. The goal ofthe program is to reduce nutri-ent loading in the river basin.

Fairbury farmer John Traubis experimenting with differentfertilizer rates and split appli-cations with strip tillage.

In addition to helping himbetter use the fertilizer heapplies, Traub also wanted theproject to send a messageabout farmers: “It shows we’reproactive and are interested in

our environment.”The Traub farm was one of

three stops on the watershed’sfirst field tour. A smorgas-bord of fertilizer applicationtechnology and practices, fer-tilizer products, and equipmentis being explored voluntarily byfarmer participants within thewatershed. Industry andagency partners are involved tohelp farmers use fertilizermore efficiently, increase

yields, and improve the waterquality.

“Our goal is to have 50 to75 percent of farmers in thewatershed doing a conserva-

tion system approach,” saidTerry Bachtold with the Liv-ingston County Soil and WaterConservation District.

“We’re doing demonstrationplots to fine-tune fertilizerapplications to what the cropsneed. Our long-term goal is tobenefit water quality.”

That long-term goal was

not lost on Fairbury MayorBob Walter, who serves onthe project steering committeeand joined the field tour. Wal-ter said he discusses thewatershed project and farm-ers’ efforts during city meet-ings.

“We need to work togetherwith the farming community

to make sure we have the bestwater available,” Walter said.

Traub echoed those senti-ments: “It’s my hope afterthree to five years, we canchange tillage practices and(fertilizer application) timingto make a difference on thewater coming to the treatmentplants.”

‘ I t shows we’rep r o a c t i ve a n dare interested inour environment.’

— John TraubFairbury farmer

The HSUS-UEP planA Humane Society of the United States-United Egg Pro-

ducers (UEP) proposal would require producers eventually toprovide hens a minimum 124 to 144 square inches of space.

Today, most U.S. birds are provided 67 square inches, withroughly 50 million receiving 48 inches, UEP stated. The groupswill ask Congress to require producers to increase space in atiered 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 themethod used to produce eggs — i.e., “eggs from caged hens,”“eggs from hens in enriched cages,” “eggs from cage-freehens,” and “eggs from free-range hens.”

• Prohibit feed- or water-withholding molting to extend thelaying cycle, a practice already prohibited by the UEP.

• Require American Veterinary Medical Association-approved 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.

Continued from page 1Warner suggests “the price of eggs is going through the roof ”with enactment of federal standards.

“The Humane Society probably told the egg guys, ‘We’regoing to go after you in other states,’” he said. “If they felt theywere going to lose in state after state after state, maybe this wasthe deal they wanted to make.”

WelfareFOOD SAFETY CHAT

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

Farm Bureaumembers interest-ed in Illinois agri-culture policyissues have untilAug. 11 to applyfor the IllinoisFarm Bureau

GrassRoots Issue Teams(GRITs) program.

The GRITs program pro-vides members the opportuni-ty to address emerging policyissues as well as identify neweducational programs. Thegoal is to identify emerging

policy issues and/or programopportunities to increase farmincome for members.

The eight teams are: con-servation and naturalresources; crop productionand trade; equine; livestockand dairy; renewable

resources and energy; riskmanagement and farm pro-grams; rural life; and specialtycrops and labor.

GRITs members meettwice a year. The first meetingis scheduled for Jan. 17 inBloomington and the second

will be in March.Interested members should

contact their county FarmBureau or visit the IFB web-site at {www.ilfb.org} toobtain an application.

GRITs members will beannounced in October.

Farm Bureau members: Still time to submit GRITs applications

Page 4: FarmWeek July 11 2011

goverNmeNt

FarmWeek Page 4 Monday, July 11, 2011

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

Senate proponents ofethanol tax credit eliminationand less drastic ethanol poli-cy reform announced a ten-tative agreement last week,raising measured relief andlingering concerns within thebiofuels industry.

Sens. Amy Klobuchar (D-Minn.) and John Thune (R-S.D.), who had supportedmovement to a “variablerate” ethanol credit and newethanol infrastructure fund-ing, and Sen. Dianne Fein-stein (D-Calif.), who hasbacked outright and immedi-ate credit elimination, agreedto a plan to end the current45-cent-per-gallon fuelblenders credit by July 31.

Instead, federal incentiveswould focus on small ethanolproducers, advanced cellu-losic biofuels, and invest-ment in ethanol “blender

Radio-FarmWeek interview.“But the tax credit went dead(in 2010), and a lot of peoplelost a lot of money.

“In investing, you have tobe able to predict the futureenvironment. If we begin to

get off of tax credits forethanol, we have to give timeand we have to give certaintyto a lot of people. Otherwise,we’ll lose private investmentin a very important technolo-gy.”

pumps” andother biofuelsinfrastruc-ture. Fundingfor continuedethanolincentivesnonethelesswould becapped annu-ally.

An esti-mated $1.33 billion in annualtax “savings” under the planwould be used for deficitreduction. An estimated $668million in added savingsreportedly would be chan-neled into extended tax cred-its for biofuels infrastructure.

National Corn GrowersAssociation President BartSchott suggested the com-promise “reflects both theimportance of the ethanolindustry to achieve energyindependence and the needfor fiscal responsibility,”

while Advanced EthanolCouncil Executive DirectorBrooke Coleman said it “hasenough of the right ingredi-ents to move the conversa-tion forward.”

However, Coleman argueda “last-minute switch from ayearly credit to a gallon-based, capped credit addsartificial and unnecessary lay-ers of uncertainty and risk forthe financing community.”

U.S. House Energy andCommerce Committee mem-ber Adam Kinzinger, a Man-teno Republican, agreed theexisting credit cannot “con-tinue indefinitely,” but favorsa more gradual, multi-yearphase-out or transition overpotentially “pulling the rug”out from under the industry.

“In biodiesel, people whoinvested a lot in plant (facili-ties) expected the (biodiesel)tax credit to be there,”Kinzinger said in an RFD

Rep. AdamKinzinger

New blendThe 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) pumpinstallation. The credit would be modified to allow for ethanolblends between E15 and E85 and cover the entire cost ofethanol “blender pumps” that dispense multiple blends. Thecredit currently is set to expire Dec. 31.

• Modify and extend through 2015 an existing $1.01-per-gal-lon tax credit for cellulosic biofuels that otherwise would expireon Dec. 31, 2012.

• Extends the small producer ethanol credit through 2012.Also scheduled to expire Dec. 31, the 7-cent-per-gallon creditapplies to the first 15 million gallons of ethanol produced annu-ally by any ethanol producer with production capacity below 60million gallons per year.

The proposal also would scrap a 54-cent-per-gallon ethanolimport tariff that prevents foreign biofuels producers from ben-efiting unduly from the tax credit.

ACRE viable option if direct payments chopped?

program outlays by $41.7 bil-lion over the fiscal 2012-2021period, relative to currentspending.

But FAPRI anticipates a“large offsetting increase” inACRE expenditures if all pro-ducers chose to participate inthe revenue program. In thatcase, the study assumed, fiscal2012�2021 net outlays woulddecline by only $18.9 billion.

FAPRI’s report concludeda major reduction in programpayments would result in low-er farm income and land val-ues. Depending on ACREparticipation, annual netincome nationwide coulddecline by an average $1.9 bil-lion-$3.2 billion, and land val-ues could drop by an average1.8 percent to 2.7 percent rel-ative to current program base-lines.

Young sees tenant-landlordrelationships as a potentially

significant variable in theincome impact of direct pay-ment cuts. Rental rates likelywould be “a tetch lower”under direct payment cuts, hesuggested.

“Rent to non-operatorlandlords — those with theManhattan (New York)addresses — just leaves thesector,” Young noted. “Thosefolks charge a high rentbecause of direct payments. A$1 reduction in the deficitdoesn’t necessarily lead to afull $1 reduction in farmincome.”

Because producers do not

have to produce a crop toreceive direct payments, directpayments have less impact oncrop production than do otherprograms where payments aremore directly tied to produc-tion decisions.

The effect of direct pay-ment elimination would differacross crops because of differ-ences in payment rates, pro-jected market prices, andexpected revenue volatility,FAPRI economists main-tained. — Martin Ross

new University of MissouriFood and Agricultural PolicyResearch Institute (FAPRI)report concludes.

The wild card, in FAPRI’sview, is the impact of direct

payment elimination on theAverage Crop Revenue Elec-tion (ACRE) program, the 2008farm bill’s revenue safety net.

ACRE has proven a mixedbag across commodity lines,and threats to direct paymentshave revived concerns abouthow ACRE might be refinedto better serve nationwideneeds and thus boost produc-er participation.

“To say it’s a complicatedprogram is an understate-ment,” American Farm BureauFederation chief economistBob Young admits. “There’sbeen a lot of discussion thatwe need to shift to a county(ACRE yield) trigger.

“The challenge is that a lotof counties are not collectingthat data any more. So nowthere’s discussion of going toa crop reporting district trig-ger.”

An AFBF/Mississippi StateUniversity study suggests Illi-nois corn growers who wouldreceive a $13.75-per-acreACRE payment under anexisting state trigger could seea $16.40 payment under areporting district trigger or$16.53 under a county trigger.

Soybean producers expect-ing a $10.96 payment under astate trigger reportedly couldreceive $13.42 under a districttrigger or $13.12 under acounty trigger.

FAPRI noted federal budg-et savings resulting fromdirect payment cuts are “sensi-tive” to ACRE participation.Without any increase in partic-ipation, scrapping direct pay-ments would reduce net farm

RC seeks maximizationof farm bill influence

Farm bill a done deal? Not according to Keith Mussman.Illinois Farm Bureau’s policy-crafting Resolutions Commit-

tee (RC) is asking Farm Bureau members this summer to ana-lyze 2012 farm bill/farm program priorities along with nutrientmanagement, farmer image, and food safety issues.

The RC reconvenes in November to finalize policy propos-als for delegate review at IFB’s December annual meeting inChicago. A policy discussion supplement to be included withthe Aug. 1 issue of FarmWeek will address RC “discussiontopics” in depth.

With farm direct payments, crop insurance, and key conser-vation programs under the budgetary gun, Mussman, chairmanof the RC’s Ag Production/National Issues Subcommittee,fears “a lot of farmers think it’s a done deal, that there’s noth-ing we can do to influence it.”

Quoting baseball legend Yogi Berra, the Kankakee Countypoultry producer told FarmWeek, “It’s not over until it’sover.” Mussman called on IFB members to identify “what pro-grams they don’t think they can live without.”

“We have people going to Washington regularly, we’re incontact with legislators, and we do have influence,” he said.

“We have to keep this dialogue open — we need our mem-bership to tell us what it’s thinking, what it wants. Membershave to reflect on programs that have not been helpful in thepast, that maybe have been wasteful, that we can do without.”

“We’re a big livestock producer, and selfishly speaking, thereare some components of the farm bill that aren’t necessarilyreal good for livestock. But if grain farmers make money, live-stock farmers eventually make money, too. It’s good for all ofus to have a healthy farm economy.”

Meanwhile, IFB’s Farm Policy Task Force will meet thissummer to review the range of farm bill proposals that haveemerged to date. See accompanying story for the national Foodand Agricultural Policy Research Institute’s analysis of theimplications of eliminating direct payments. — Martin Ross

Eliminating direct paymentslikely would have a more majorimpact on federal budget out-lays, farm income, and landvalues than specific commodi-ty markets and food prices, a

‘To say it’s a complicated program is anunderstatement.’

— Bob YoungChief economist, American Farm Bureau Federation

FarmWeekNow.comYou can view the completeFAPRI report on direct pay-ments at FarmWeekNow.com.

Page 5: FarmWeek July 11 2011

biotechnology

Page 5 Monday, July 11, 2011 FarmWeek

Policy choices seen as key to feeding hungry planetBY MARTIN ROSSFarmWeek

William Lesher realizes adeficit-conscious Congresscan’t simply throw money atagriculture. But he believespolicymakers can avoid throw-ing further roadblocks atfuture ag innovation and devel-opment.

Lesher is executive directorof the Global Harvest Initia-tive (GHI), a partnership ofArcher Daniels Midland Co.,DuPont, John Deere, andMonsanto that is focused on“sustainably closing the globalagricultural productivity gap.”

GHI’s latest policy issuebrief estimates a $90 billionannual “agricultural investmentgap” and outlines the signifi-cant role of the private sectorin addressing global food secu-rity, creating economic growth,improving world incomes, andfeeding a projected 9 billionpeople by 2050.

GHI’s conclusions emergeas Congress eyes major cuts infunding for U.S. foreign assis-tance and public ag research—basic research scientists at aWashington biotech confer-

ing regions. Thus he questionswhether, 15 years later, federalagencies need to adhere torigid, from-scratch approvalsfor every new Bt crop use.

Scientists need a speedierpath to crop improvements if

they hope to help developingnations increasingly impactedby climate change, Beachy said.He believes the U.S. must leadthe way in clearing that pathand countering GMO fears.

Senate Ag CommitteeRanking Republican PatRoberts (R-Kan.) told industry

leaders “a well-fed world is amore stable world.” Poor poli-cy choices risk “getting us intoa difficult situation that eveninvolves our national security,”Roberts advised.

“Why on earth would you

want to propose spending cutsor tax policy changes or regula-tory overkill that would beharmful to the man or womanwhose job it is to produceenough food or fiber for theU.S. but also for a very hungryand troubled world?” hedemanded.

ence deemedvital toadvancedgenetic devel-opments.

Lesher alsosees “lots ofthings (gov-ernments) cando that will behelpful with

regards to global food securitythat don’t cost anything,”including expanded trade andpolicies that “embrace newtechnologies that are safe.”

It’s thus “important we getthe policy right,” BiotechnologyIndustry Organization (BIO)CEO Jim Greenwood argues.The former congressman her-alds the need for “more, notless, agricultural biotechnology”and a regulatory process “that’srigorously science-based, notblown back and forth by thelatest scare headlines andactivist campaigns.”

“We have to double outputin the next 40 years,” Leshertold FarmWeek. “That’s notjust growing (food); it’sexpanding the roads, process-ing capacity, etc., to make this

happen. It’s mind-boggling. Itcan be done, but you’ve got tostart now, and you’ve got toemploy lots of different things.

“You must embrace modernproduction agriculture like wehave in the Midwest, but youalso have to help ag develop-ment in Africa and elsewhere.To get that done, you’re goingto have to have more privatesector involvement.”

U.S. policymakers shouldstreamline biotech regulations“so innovators can make thenext product that’s better forhealth or the environment orthat would be good for manu-facturing,” said Roger Beachy,founding president of theDanforth Plant Science Cen-ter. The St. Louis-based cen-ter spearheads research aimedat sustainably feeding theworld.

The U.S. has seen “wonder-ful success in technology”since initial GMO crop intro-ductions in the mid-1990s,Beachy said. Products such asBt corn and cotton haveproven safe and effective incontrolling pests and reducingcosts in the U.S. and develop-

GENE EXPRESSIONSNew hope for HolsteinsBovine mastitis is a “$10 billion worldwide problem and

a $2 billion problem in the United States,” according to Pre-ston Linn, vice president of alliances with Advanced Ani-mal Diagnostics. Linn’s small North Carolina company is developing a

“point of cow” test that could help dairy producers pinpointcostly disease threats at the source.Tapping an $11 million grant from technology invest-

ment firm Intersouth Partners and industry giant Novartis,Advanced Animal Diagnostics seeks to determine “what’sgoing on” in individual animals. The company’s initial prod-uct 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 — repro-duction, productivity, food safety, etc. — that will offeropportunities for us,” Linn said.

Transgenics and transplantsU.S. Food and Drug Administration Center for Veterinary

Medicine senior biotechnology adviser Larisa Rudenkosees growing potential for genetically enhanced “xeno-transplantation” — use of animals as organ donors. Xenotransplantation is nothing new — procedures have

been attempted since the 1700s — but modification of ani-mal cells, tissues, and organs offers new hope for cross-species compatibility and thus human survival, Rudenkosaid.“There are something like 110,000 people today facing

a transplantation waiting list,” she noted. “There will not besufficient human donors for a very long time to fill thatneed. Xenotransplantation is a real societal need.”

Produce palatabilityMonsanto’s Susan MacIsaac highlights a somewhat

less crucial but nonetheless pressing goal — getting chil-dren (and their parents) to eat their veggies. Beyond con-tinued row crop improvements, the company is focusing onimproving the aroma and taste of melons, tomatoes, andpeppers.Monsanto already has partnered with Apio (a grower-

founded company) to market Beneforte, a conventionallybred broccoli which boosts the body’s natural antioxidantcapabilities. The nutritionally enhanced broccoli was devel-oped using advanced genetic selection technology.Monsanto’s latest effort aims to “make consumers want

to eat more fruits and vegetables,” MacIsaac said. Mean-while, work continues on refining soy oil as a “land-basedsource” of essential Omega-3 fatty acids that normally arederived from fish, she reported. — Martin Ross

The European Union (EU) still holds somesway over global adoption of GMO crops andfoods, and experts suggest that ultimately, whatgrows in Europe will go in Europe — and byextension, in EU-influenced nations.

EU ag counselor Carlos Alverez Antolineztold FarmWeek the European Food SafetyAuthority conducts “very rigorous assessment”of GMO risks, and to date has affirmed theconsumer safety of GMO-based foods.

However, final product approval requires a“qualified” population-weighted majority voteof the EU’s 27 member countries, “and we nev-er reach a qualified majority,” he stressed.

Under the EU’s legal framework, policymak-ers are authorized to consider “other legitimatefactors” in approvals beyond health or environ-mental risks, including cultural, ethical, or polit-ical concerns, Antolinez noted.

Consumer perceptions continue to driveGMO policy. Recent surveys have found Euro-peans “optimistic” about biotech advances inhuman or animal health, but “when it comes tofood, that’s not really the case,” Antolinez said.

A plan by the European Commission (theEU’s executive body) would address the stale-mate by enabling individual EU “states” to pro-hibit production of centrally approved GMOcrops. The measure is under review by the EUParliament and the European Council, whichincludes member country leaders.

“It has to go through the whole complicatedEU legal system — it may take some timebefore this is decided, and I don’t think any-body’s in a position to state the likely outcome,”Antolinez said.

“But it’s a way to solve a problem whichexists in the EU. We have a regulatory system

which is not working when it comes to (GMOcrop) cultivation.

“With the member states challengingapprovals, the whole system is challenged. Byseparating approval from actual (country-by-country) implementation, the commissionbelieves we preserve the integrity of theapproval process but deal with a reality: thatsome member states may exercise their right todecide whether or not they want to cultivateGMOs.”

In a 2010 survey, European consumers near-ly three-to-one were wary of or opposed toGMO foods. In Antolinez’ view, that sends “avery strong message that cannot be ignored.”He argues science-based regulation is easier inthe U.S., where consumers on average appear“relatively indifferent” to GMOs.

Amid advances in animal biotechnology,consumer views could pose a quandary forEuropeans who have faced repeated livestockdisease/meat safety concerns. Antolinez report-ed European consumers are heavily opposed tofood use of cloned animals but more favorabletoward biotechnology as a means to preserveendangered species and improve disease resist-ance.

Scientists have touted cloning’s value inreproduction of disease-free animals. But in2008, EU’s Parliament called on the commis-sion to ban meat or dairy products producedfrom cloned livestock and even their non-cloned offspring.

“Our scientific assessment says that far asfood safety is concerned, there are no issues —(cloning is) perfectly safe,” Antolinez said.“There are some concerns from the perspectiveof animal health and welfare.” — Martin Ross

Shift in EuropeanGMO paradigm slow

‘We have to double output inthe next 40 years.’

— William LesherGlobal Harvest Initiative

Roger Beachy

Page 6: FarmWeek July 11 2011

Bernie Walsh, Durand, Winnebago County: The main newsthis week is: “It hasn’t rained yet.”It has now been three full weekssince any measurable rain, andthere isn’t much in the forecastfor the coming week. The cornand beans still look pretty goodand are growing despite a lack ofmoisture. The sandy soils and

stony knolls are starting to show stress,though, and even the best ground has largecracks. No one in this area has tried anywheat yet, but it should be ready soon and willtry combining this week to test the moisturelevel. The beans are blooming, but no tasselsare showing in the corn yet, but they will besoon, as most of the early-corn is above ourhead. Have a good week and stay safe.

Leroy Getz, Savanna, Carroll County: No rain last week.Again, it is getting very dry. Cornthat is starting to tassel andbeans are showing the effects onthe thin soils and are burning upon the sand ground. Rye hasbeen combined and wheat isready. I see they are diggingpotatoes south of Savanna and

that the peas there have been harvested andthe ground replanted to sweet corn. Hay mak-ing has been very good. Growing degreeunits are 1,172 — this is about 130 less thanit was in 2010.

Ryan Frieders, Waterman, DeKalb County: It was a produc-tive week on the farm. The wheatis being combined and there is stilla little left to do. A small showerpopped up late Wednesday nightbringing 0.3 to 0.6 of an inch ofrain to the area. Early soybeanshave flowered for the first time.Replant soybeans have emerged

after only a few days. The early-planted cornis close to tassel. Later corn is V-6. Cropdevelopment is very rapid due to warmweather and sunshine.

Larry Hummel, Dixon, Lee County: The futures market hashad a wild ride the last two weeks.Relatively speaking, the riverbasis has been on an even moredramatic ride. Back on June 22,the basis at the river was 11under the futures. By the 5th ofJuly, basis was 51 over. Sincethen, it has dropped back to a

very respectable 21 over. The grain bins arenow all empty, and we did have a little overrunafter we filled their July contracts. I had beenhoping that prices on our overrun would havean 8 in front of it, but even with a 6, I canmake good money. Crops around this cornerof the state look good. Some of the groundthat has been too wet has dried up enoughthat the corn is getting a dark green coloragain. More and more, the neighbors arelooking to the forecast to see if we can getsome good July rains.

Joe Zumwalt, Warsaw, Hancock County: Western Illinoisended June with a total of nearly25 inches for the month, but luck-ily that pattern has broken leavingus with warm, dry weather. Cropsin the area have really sufferedthe effects of too much water. Thewarm weather is helping to returngood color to the corn and soy-

beans, but yield potential has been greatlyreduced. Corn ranges from V-12 to full tassel.Several crop dusters have been in the areaapplying fungicide as well as adding nitrogen.Soybeans finally are beginning to take off.There are still some soybeans that need to bereplanted in the area, and I am hoping toreplant within the next few days. At this point,farming is really a gamble. We will just keepour fingers crossed that we don’t have anearly frost.

Ken Reinhardt, Seaton, Mercer County: Not a drop of rainfor the period. There still is suffi-cient moisture for crops to thrive.There were soybeans planted forthe first time along with replantingin the Edwards River bottom lastweek. Corn is very close to tassel-ing. I have some tassels showingin 102-day corn. Corn is looking

very good or at least most of the drowned outspots are now out of sight. Pivots are runningnext to standing water in the bottoms. There isone report of armyworms down there.Japanese beetles are everywhere and willneed to be watched for silk-clipping in corn.

Ron Moore, Roseville, Warren County: We did not haveany rain in the past week. I havenot been able to report that sincelast year. Lots of hay was baledlast week. The early corn is nowstarting to tassel and some silksare out. There will be fungicideapplied this week on most of ourcorn. The beans are flowering as

well. The 30-inch rows are not closed in yetbut will be soon. I am reluctant to say this,but we could use a nice shower. The cracksin the soil are starting to get big.

Jacob Streitmatter, Princeville, Peoria County: The corncrop has grown a lot in the lasttwo weeks. Some of the April-planted corn that did not need tobe replanted is tasseling, alongwith a few early varieties plantedin early May. A few scattered rainshowers passed through the arealeaving most people with dust,

but some were lucky to get rain. As muchrain that fell early, it seems that the crop is inneed of a drink. Soybeans have a long wayto go. They have started to bloom, but nowthe Japanese beetles have started to workon them. Job security for chemical compa-nies, sprayers, and spray planes, I guess.

Mark Kerber, Chatsworth, Livingston County: It is July,and it is getting dry, as highpressure is dominating.Hopefully, when you read this itwill be raining. Soybean spray-ing is complete with pretty fairweed kill, except for marestail.That weed seems to be gettingglysophate resistant. Different

herbicides added to Roundup does help killsome pesky weeds, such as morning glory.With a rain event, tassels will be popping outfor pollination on corn. This is a critical timecoming up. Markets will be volatile in thecoming months. Will we run out of corn as fallapproaches?

Ron Haase, Gilman, Iroquois County: On July 1, rainbrought farm activities to a halt.On our farms, we received arange of 0.3 to 0.9 of an inch.Other farms in the area receivedhail along with up to 4 to 5 inchesof rain. After that, it had been dryuntil Thursday night. We received0.1 of an inch of rain on a couple

farms with the rest of our farms receivingnothing. After the soil dried out last week,farmers were busy applying post-emergenceherbicides in corn and soybean fields, rowcultivating in soybean fields, and harvestingwheat. Area cornfields range from the V-7growth stage up to the R-1 growth stage.Only a few fields are beginning to show tas-sels and begin pollination. Those are thefields that were planted the first week ofApril. Most corn is V-10 to V-15. At V-10, thecorn plant begins a rapid steady increase innutrient and dry matter accumulation andwater usage. We finished our herbicide appli-cation in corn and now will wait for our cornto reach R-1 to begin applying fungicides.Area soybean fields range from the V-5growth stage up to the R-2 growth stage. Thelocal closing bids for July 7 were nearbycorn, $6.54; new-crop corn, $5.85; nearbysoybeans, $13.51; new-crop soybeans,$13.06.

Tom Ritter, Blue Mound, Macon County: Showers onThursday evening were wel-comed. We did not need a lotof additional moisture, but wedid go for more than a weekwithout any, which is thelongest spell we’ve had thisspring and early summer.Crops continue to advance.

There are a lot of acres of stressed corndue to either standing water or saturatedground. We are seeing a lot more stress inthe corn than in the beans. Corn is justbeginning to tassel. Earlier-planted cornis starting to pollinate. The vast majority ofthe corn will be tasseling within the nextweek to 10 days. There is some sprayingof fungicides on corn, but the majority ofthat will take place in the next two to threeweeks. Soybeans continue to improve,needing the dry spell to overcome someof their problems. Overall, soybean croplooks good at this point. I would rate cornas very good and soybeans probably alsovery good, but definitely far from excel-lent.

Brian Schaumburg, Chenoa, McLean County: Wheat har-vest is in its final stages withgood quality, test weights, andyields reported. Corn and beansare at varying stages of develop-ment with some cornfields at tas-sel and others only waist-highand soybeans range from V-1 toR-1. Japanese beetles returned

the first of the month and numbers have beengrowing. No economic damage as of yet. Ithas been two weeks since the last rain event,and we hope to change that trend soon. Cropratings 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 normalweather week with 0.12 of aninch of rain Thursday night.Crops are looking good for now.We have more rain in the fore-cast for Monday throughWednesday this week. OurUSDA crop reporting district is3 percent very short and 9 short

of top soil moisture. I saw the first corn tas-sels on July 4. Beans are sprayed with goodcontrol. USDA also has our crop reportingdistrict at 1 percent corn silked and 2 percentsoybeans blooming. Fair season continueswith the Champaign County 4-H Expo andthe Fisher Community Fair and Horse Showthis week.

Wilfred Dittmer, Quincy, Adams County: How does thesong go? “Oh what a beautifulmorning ... and the corn is ashigh as an elephant’s eye!” Itcould have been written forFriday morning. Warm days andnights have helped the cornkeep growing. Some fields havetasseled and others are right

about there. Some aerial application of N hasbeen happening in the area. Sprayers alsohave been going in bean fields. A little wheathas been cut, but I have not heard any yieldreports. The Japanese beetles are definitelyback and a few of those pesky gnats are stillaround. No measurable rainfall for the week,just enough to wet the sidewalks Thursdayafternoon. Have a safe week.

Todd Easton, Charleston, Coles County: This year it isamazing what can happen in 10days while you are away. Thefamily and I had a nice trip outWest. While we were gone, mostof the beans got their much-needed herbicide application,the wheat was harvested, dou-ble-crop beans were drilled, and

the corn and beans grew a lot. The early-Aprilplanted corn almost has completed the earlyvegetative stages and is now entering the R-1 stage. May-planted corn looks to be a weekaway from the VT tassel stage and hascaught up to the earlier corn in height. All ofthe corn in the area benefited from the inch ofrain we received last weekend (July 2-3) and,at this point, has great potential. The soybeanfields are looking much better with the weedsamong the beans finally turning yellow anddisappearing. The crop generally is even atthe R-1 to R-2 blooming stages and makinggreat progress. The wheat crop is in the binwith mixed results as the crop for the mostpart showed the stress of the exceptionallydry fall last year. Most of the yields I over-heard were in the 50s and 60s with the bestbeing around 85 bushels per acre. Double-crop beans went in right behind the combinesand after the rain should be off to a good andtimely start. As we traveled the I-80 corridor,the crop condition got noticeably better as wegot closer to home. This state and especiallythis area is in very good shape, especiallycompared to many of the fields out West.

David Schaal, St. Peter, Fayette County: We received acouple of light showers onJuly 4th weekend. On the eveningJuly 7, the rain gauge caught2.6 inches of rain, which floodedlow-lying areas again. There wereplaces that had up to 4 inches inthe county. We are into the 34- to35-inch range for the year. Big

corn in the area still looks good, with some ofthat getting ready to tassel. A lot of soybeanspraying is going on. A lot of other chemicalsare being added to Roundup because of somany glysophate-resistant weeds. Cashcorn, $6.55; beans, $13.41; wheat, $6.40.County fair starts this week.

FarmWeek Page 6 Monday, July 11, 2011

CROPWATCHERS

Page 7: FarmWeek July 11 2011

Rick Corners, Centralia, Jefferson County: Here we goagain — the flash flood warningjust came across the TV. LastSunday afternoon (July 3), wehad about 3.5 inches of rain inabout 30 minutes. Down theroad a mile, received about 5inches. Needless to say, it wasnot pretty. I really think some of

the beans, even on the high ground, aregoing to kick off. They sure have the creepingcrud. Any wheat that has not been harvestedsure looks nasty. I think there are going to belots of acres that are not planted this year.Time is just running out.

Kevin Raber, Browns, Wabash County: I had 2.75 inches ofrain in my gauge Friday morning.This rain might close the windowon any planting or replantingintentions. I had one double-crop,one first-crop, and severaldrowned-out spots that I wasgoing to try to plant, but that mightnot happen now. The corn on well-

drained areas looks good, but low areas not sogood. They are stunted and sick looking.

Randy Anderson, Galatia, Saline County:We got our week-ly rain like clockwork now andhope we keep getting some therest of the season. For the pastweek, we received 3.5 inches. Wefinished up most of the post-spraying on the soybeans lastweek. The crop has a lot of holesin it. Bottom ground is not looking

too well, but the rolling hill ground looks thebest I have ever seen. I’d like to mow aroundfields and roadsides, but I figure most likely I’dget stuck. I need a vacation from all of this.

Ken Taake, Ullin, Pulaski County: We had some nice showerslast week. On Monday, July 4, wehad 0.7 of an inch of rain in themorning and then Thursday after-noon and overnight we had1.1 inches. It has really been benefi-cial for the crops that were planted.We do have some people in thearea who were trying to finish plant-

ing, or probably more correctly, trying to finishreplanting drowned out spots from the heavyrains we had two weeks ago. Our early-plantedcorn is just starting to tassel. Our last-plantedcorn is just barely waist-high, so there is a greatvariability in corn size. Soybeans look very spot-ty, to say the least. Their stands are not verygood. I guess we will see what the weather does.Please remember to take time and be careful.

Doug Uphoff, Shelbyville, Shelby County: Beans haveentered the reproductive stageas the days are now beginning toget shorter. Later-planted Maycorn is beginning to show tas-sels. The double-crop beans Iplanted were up in four days. Imade a trip to St. Louis on the4th and crops look terrible down

there from Cowden to St. Louis with patch-es of good crops. When driving to Decaturfrom Dalton City to Route 105, I see thesame short, uneven, yellow corn, andbeans look the same. I would say there isan average crop at the most right now.Some by St. Louis are just now plantingbeans and there were no double-cropbeans. 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 womanon truck regulations. If we don’t speak upwho will?

Dave Hankammer, Millstadt, St. Clair County: Wanted –one slightly used ark. OK, thatmay be a bit of an exaggeration.However, since my last report, wereceived 2.5 inches of rain on July3 dropping temperatures by 30degrees for the evening. On July8, we received another rainstormdropping 3-plus inches of rain in

the area. Flash flood warnings were issuedfor Clinton, Monroe, Randolph, and St. Claircounties. I witnessed water over the roaddue to excessive runoff from surroundingfields in the area. The creek bottom wherewe had just finished clearing driftwood flood-ed for the third time this growing season.Fortunately, wheat harvest was done beforethese rains. Most of the double-crop soy-beans and additional first-crop beans wereplanted. Some post-herbicide applicationwas done on some of the area soybeanfields. The Japanese beetles have made anappearance in the area, although there areno reports of damage at this time. The corncrop is rapidly gaining height with the later-planted corn catching up to the earliest-planted corn. Local grain bids are: corn,$6.41; soybeans, $13.73; wheat, $6.18.Have a good week.

Jimmy Ayers, Rochester, Sangamon County: Last weekwe received close to 3 inches ofrain on Thursday evening andsome scattered showers passedthrough on Wednesday. It was drythe majority of the week.Taylorville, just to the south of us,had extreme flooding. The yellowspots are showing up in the corn

and you can see them pretty well now. Cornhas different heights in the fields. The major-ity looks great. It is pollinating in 30 to 40 per-cent of the fields. Many of the beans look likethey have been stunted with the chemicalapplications, but some are looking prettygood. We actually got into some of our wheatlast week. It is just doing a little over 50 to 55bushels per acre. I’ve heard as high as 75and 80. Several guys were attacking their hayfields trying to get some hay put up. ChristianCounty Fair is July 12-17. We want to keepthese fairs going.

Ted Kuebrich, Jerseyville, Jersey County: Jersey Countyis still in a wet mode with 2.5inches of rain for the week. Theearly corn, planted before all therain, is looking very good. Thelater corn is more uneven due tolow spots in fields where waterhas been standing. The beancrop seems to be slower devel-

oping because of all the rain and the wet soilconditions. Japanese beetles are here andare all over yard plants and ornamental trees.Prices at Jersey County Grain, Hardin: cashcorn, $6.43; fall corn, $5.86; cash beans,$13.50; fall beans, $13; June/July wheat,$6.35.

Dan Meinhart, Montrose, Jasper County: Showers movedthrough the area the weekend ofJuly 2 and 3. Farmers got a breaklast week with a lot of beansgoing into the ground, nitrogenapplied to corn, and post chemi-cals applied to both corn andbeans. Wheat harvest waswrapped up along with straw bal-

ing. Some hay also was baled. Water-stressed corn and soybean fields are show-ing improvement. Showers moved throughthe area again on Thursday evening, leaving0.25 of an inch to 2 inches. The week wasvery hot and humid. Showers are in the fore-cast for this week.

Page 7 Monday, July 11, 2011 FarmWeek

CROPWATCHERS

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

Several sources of soybean leaf tattering unveiledBY KEVIN BLACK

Bacterial blight infectionshave been observed across awide area.  These infections are

a commoncause of tat-tered leaves insoybeans. 

Centers ofbacterialblight lesionsreadilybecome brittleand drop out,weakening the

leaf and allowing it to tatter inthe wind.  When tattered soy-bean leaves are noted, howev-er, it is wise not to jump toconclusions.

We recently have hadnumerous violent stormscrossing parts of theFarmWeek geography.  Thesestorms, by themselves, are

Fungicides may have value iffungal diseases are truly threat-ening the crop, so scouting canhelp determine if fungicideapplication is appropriate.

What about insecticides?Insecticides may have value ifthe suspect insect pest is pres-ent in economically damagingnumbers. 

Since tattering of soybean

leaves can accentuate the appear-ance of insect damage to leaves,it is important not to overreactto the visible leaf damage, but tocarefully assess damage causedby the insect pest(s) alone.

Kevin Black is GROWMARK’sinsect and plant disease technicalmanager. His e-mail address [email protected]. capable of tearing the tender

top leaves of soybean plants.If anything has weakened theleaves, leaf tattering becomeseven more likely. 

Insects, such as grasshop-pers, bean leaf beetles, andcolaspis beetles, have fed onsoybean leaves this season.The feeding holes caused bythese insects weaken theleaves and encourage them totatter in the wind.  This tatter-ing can cause the originaldamage to look much worse

than it really is.Is a fungicide application

advised when leaf tattering isobserved?  Fungicides are usu-ally of little value following theappearance of leaf tattering,regardless of the cause. 

Bacterial diseases are unaf-fected by fungicides, and fungalinfection does not seem to beworse following leaf tattering.

Kevin BlackThe Chicago Farmers will hold its summer

tour starting at 9:30 a.m. July 27 in Wauconda.The group will tour Golden Oaks Farm, 27730W. Bonner Road, and Midwest Organic Recy-cling, 29353 N. Darrel Road. Reservations aredue by July 26.

Golden Oaks Farm, established in 1948, is adairy farm whose herd produces 18.2 millionpounds of milk annually.

Midwest Organics Recycling facility wasestablished to compost manure and serve as asolution for Golden Oaks, one of the last dairy

farms in an urbanizing county. The two opera-tions complement each other.

Lunch will be at Docks Bar and Grill and isincluded in the registration fee.

Adults and children are welcome. Tour par-ticipants will travel in their own vehicles.

The registration fee is $20 for members andmembers’ children. The fee is $30 for non-members and $20 for non-members’ childrenyounger than 16.

To register, go online to {www.chicagofarm-ers.org} or call 312-388-3276.

Chicago Farmers to tour dairy farm, compost business

Page 8: FarmWeek July 11 2011

commodities

FarmWeek Page 8 Monday, July 11, 2011

Pre-registration deadline July 15

Farmers who are the mostsuccessful in today’s highlycompetitive, global market-place generally are the mostwell-informed about issuesranging from the markets tonew technology.

It, therefore, could be bene-ficial for producers to attendthe Illinois Farm Bureau com-modities conference in Nor-mal on Wednesday, July 27.

The theme of the event is“Local to Global: Knowledgeis Power.” Participants maypre-register for the conferencethrough July 15 online at{www.ilfb.org} or at their localFarm Bureaus.

“We’ve got an excellentslate of speakers,” said MikeDoherty, IFB senior econo-mist and policy analyst.

“There is a lot of buzz outthere about food production,local food initiatives, food vs.fuel, and the ag and U.S. econo-my,” Doherty said. “This (con-ference) is the place to come tofind out the real scoop.”

The keynote speaker isGrady Bishop, director of theU.S. swine business unit atElanco Animal Health. Bish-op’s presentation is titled“Using Knowledge and Tech-nology to Satisfy Local toGlobal Consumer Choices.”

The keynote presentationwill be followed by breakoutsessions that will focus on pol-

icy issues, energy prices andtheir effect on ag, weather andmarket outlooks, animal rightsand welfare, local food initia-tives, and transportation.

“It’s all about having knowl-edge about the flow of foodproducts from local markets toglobal markets,”Doherty said.

The closing presenter willbe Jerry Carroll, an aghumorist who recently wasfeatured in FarmWeek.

Cost of the conference is$35 per person, which includeslunch. Those who do not pre-register for the conference byJuly 15 may register on site atthe Marriott Hotel and Confer-ence Center in Normal begin-ning at 7:30 a.m. the day of theevent. — Daniel Grant

IFB commodities conference to focus on food trends

IFB commodities conference July 27

Analyst: Skepticism about USDA crop estimates lingersBY DANIEL GRANTFarmWeek

The crop markets last weekabsorbed some of the shock-ingly high numbers in USDA’sJune 30 crop acreage/stocksreport and some prices actuallyfirmed up.

But many analysts still

believe revisions will be madeto at least some of the esti-mates that sent crop prices ona downward spiral after a fairlybullish spring.

Clayton Pope, general man-ager of AgriVisor, addressedthe situation last week. Themarket analyst will be a fea-

tured speaker July 27 at the Illi-nois Farm Bureau commodi-ties conference in Normal.

“There is a lot of skepticismabout those numbers,” Popesaid of USDA’s June estimates.“The first (market) reactionobviously was pretty violent.”

USDA on June 30 shocked

the trade with its estimates ofU.S. corn plantings (92.3 mil-lion acres) and quarterly stocksof corn (3.67 billion bushels),soybeans (619 million bushels),and wheat (861 millionbushels), which significantlyexceeded trade expectations.

“With the gross-per-acre(for corn), I was not as sur-prised about the bigger acreagenumber as I was about the big-ger stocks number,” Pope said.“It just doesn’t add up.”

USDA did not include pre-vent plantdata in itsestimate andthis monthwill resurveyfarmers inflood-affectedareas inNorth Dako-ta, South

Dakota, Minnesota, and Mon-tana to get a better handle onacreage.

Pope also noted USDA doesnot factor grain in transit intoits stocks estimates and specu-lated the numbers may havebeen skewed if loaded barges

were tied up due to swollenrivers at the time of the esti-mates.

“As bearish as the implica-tions (of the June report) are,the market already is lookingforward to a possible revision ofthose numbers,” Pope said.

“Harvested acres may(decrease) if there is more aban-donment” due to drought in thesouth and flooding/saturatedfields in parts of the north.

But even if there is an adjust-ment to planted acres, the keymoving forward is crop yields.

“The biggest deal now isyield,” Pope said.

“We’re heading into pollina-tion with a weather forecastthat is hotter and drier thannormal.”

Pope at the commoditiesconference will advise farmershow to manage their risk andcope with high levels ofvolatility in the market.

Clayton Pope

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

U.S. farmland values inrecent years have skyrocketed,but the market is not in a bub-ble, according to researchreleased last week.

The Rabobank Internation-al FoodandAgribusi-nessResearchand Advi-sory grouprecentlyconductedresearchthat con-cluded thesteady increase in farmlandvalues is not linked to specula-tion or other factors that tradi-tionally lead to a bubble.

The advisory groupreleased a report, “Blowing theFarmland Bubble,” in whichthe research showed increasedcommodity prices, low interestrates, and a limited supply ofland available for sale are thekey factors that have support-ed higher farmland valuessince 2005.

“The increasing presence offarmers on the buyer side ofagricultural land combined witha tight supply of land availablefor sale provides significantevidence there is not currentlya speculator-fueled bubble,”said Sterling Liddell, co-authorof the Rabobank report.

The value of productive

farmland in the U.S. the last fiveyears has increased by 20 to 70percent, according to the report.

If farm margins remainstrong, the trend of higher

farmlandvaluescould con-tinue foranotherone or twoyears. But,long-term,a decreasein land val-ues is adefinitepossibility,

particularly if and wheninterest rates increase,Rabobank reported.

“On a longer-term basis ofthree to seven years, theprobability of land valuesadjusting negatively out-weighs the possibility of acontinued upward trend,”Liddell added.

‘(There is) significantevidence there is notcurrently a bubble.’

— Sterling LiddellCo-author Rabobank report

For additional reac-tion, see IFB PresidentPhilip Nelson’s com-mentary on Page 16.

Page 9: FarmWeek July 11 2011

Page 9 Monday, July 11, 2011 FarmWeek

Page 10: FarmWeek July 11 2011

EDUCATION

FarmWeek Page 10 Monday, July 11, 2011

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

Campaign selling ag careers to students BY KAY SHIPMANFarmWeek

A winning multimedia cam-paign about ag careers con-vinced at least one 2011 highschool graduate to study ag incollege and is expected to swellher school’s ag class enroll-ments. And that’s just withinthe school whose FFA chaptercreated the campaign.

Miriah Anderson, whorecently graduated from GalvaHigh School and spearheadedher chapter’s winning cam-paign, added animal science toher college major after shelearned through her work onthe campaign about the manycareers ag offers.

“I had fully decided to gointo zoology (at Western Illi-nois University),” Andersonsaid, “but I decided to add ani-mal science.”

Trish Main, Galva High

School ag teacher, anticipatesmore students in her classes asa result of the campaign.

“I truly believe that therecruitment efforts will pay offwith an increase in studentnumbers,” she said.

“The added bonus is thatmy current FFA members andstudents really have taken anactive role in understandinghow important it is for theirinput in recruitment efforts.”

This year, the Illinois Farm

Bureau and Affiliates YouthEducation Committee and theIllinois Department of Com-merce and Economic Oppor-

tunity (DCEO) offered FFAchapters the first-ever opportu-nity to create a multimedia agcareer campaign.

The Galva FFA’s campaignnetted the chapter $1,000 forfirst place. The campaign enti-tled, “Are You Looking? Agri-cultural Careers are Lookingfor You,” featured a video thatlinked potential ag careers withstudents’ interests.

Pinckneyville FFA won $500for second place and Mor-risonville FFA received $250for third place among six statechapter finalists.

Prizes were donated by theVision for Illinois Agriculture,which has put a priority on agindustry workforce develop-ment.

The media campaigns willlink students with the morethan 300 agricultural careersavailable in Illinois, accord-ing to Jay Runner, statecoordinator for FacilitatingCoordination in Agricultural

Education (FCAE).“It’s important we connect

students to those future careeropportunities,” Runner said.

Mariah Dale-Anderson, IFByouth activities manager, notedthe digital media aspectappeals to students “and grabstheir attention to make agcareers appear more lucrativeand cool.”

At Galva High School, theFFA presented its career cam-paign to all the students insixth through 12th grades.Eighth graders reported theyplan to take a freshman agclass in the fall after receivingrecruitment letters in the mailas part of the campaign.

The career campaign alsoinspired other Galva upper-classmen to enroll in ag class-es,

according to Anderson. “Itwas really cool to see” thecampaign’s impact, she added.

A side benefit of the cam-

paign project has been theinfluence on participating FFAchapters and ag programs, saidVern McGinnis, project coor-dinator for Vision for IllinoisAgriculture.

As campaigns are shownaround the state, the studentinterest and career awarenesswill multiply, and Illinois agprograms “can be a substantialpart of the ag employmentpipeline,” McGinnis said.

Main encouraged continueduse of the talents of FFAmembers and ag students “tomake others aware of theincredible opportunities thatagriculture and the FFA organ-ization have to offer.”

The campaigns and relatedmaterials will be used as ideasfor future career promotionsabout the state’s ag industry byDCEO and its Illinois Work-force Investment Board agri-culture task force, McGinnissaid.

FarmWeekNow.com

Learn more about the GalvaF FA a g c a r e e r s v i d e o a tFarmWeekNow.com.

U of I’s Orr Center to host July 18 field dayThe 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 andinclude time for questions at each stop.

U of I specialists will lead discussions on issues of interestto farmers, consultants, and landowners.

Carl Bradley, plant pathologist, will discuss the threat of fun-gicide resistance. Brian Diers, soybean breeder, will talk aboutprogress in soybean breeding programs. Mike Gray, entomolo-gist, will focus on stink bugs and corn rootworms.

Emerson Nafziger, agronomist, will talk about tillage incorn, and Fabián Fernández, soil fertility specialist, will discusssoil 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 [email protected].

LAWMAKER TOUR GOES DIGITAL

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

Page 11: FarmWeek July 11 2011

commodities

Page 11 Monday, July 11, 2011 FarmWeek

Use of options/futures escalates; more trades onlineBY DANIEL GRANTFarmWeek

Traders’ participation inthe commodity markets attimes has been blamed forincreased price volatility.

But increased volatility inthe markets actually is drivingup the use of various tradingmethods, according to DaveLehman, managing director ofcommodity research andproduct development at theCME Group in Chicago.

Options contracts at theCME Group so far this yearare up 40 percent for corn and28 percent for wheat.

Meanwhile, live cattlefutures and options on June 2set an open-interest record of713,379 contracts while hogoptions on June 8 set an open-interest record of 128,473contracts.

“Year-to-date we’ve hadpretty strong growth in theagricultural markets,” Lehmantold FarmWeek. “It’s prettyobvious what’s driving it is a

very tight supply and demandsituation combined with avolatile weather environment.”

A similar trend hasoccurred this year at the Min-neapolis Grain Exchange(MGEX). June total tradingvolume for hard red springwheat futures and optionstotaled 215,581 contracts,which was a record for themonth and the third-highestvolume month in the 130-yearhistory of the Exchange.

“June marked the 13th con-

Favorable weatheraids crop ratings,2011 wheat harvest

Favorable weather conditions last week were just what manyIllinois farmers needed to get back into the fields.

The average temperature the first week of July was 75.7degrees, 1.2 degrees above normal, while precipitation totaled just0.8 of an inch.

This followed the month of June in which rainfall statewideaveraged 6.7 inches, 2.6 inches above the 1971-2000 average,according to Jim Angel, state climatologist with the Illinois StateWater Survey.

“Hot and dry conditions allowed for progress in wheat harvest-ing, corn and soybean spraying, and hay baling across much of thestate,” the National Agricultural Statistics Service Illinois fieldoffice noted.

Illinois farmers the past two weeks harvested a whopping 71percent of the wheat crop. Harvest as of the first of last week was75 percent complete, 5 percent ahead of the five-year average.

“Wheat harvest (in McLean County) is in its final stages withgood quality, test weights, and yields reported,” said BrianSchaumburg, 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 of14 inches the first week of July.

The average height of the corn crop — 48 inches as of the firstof last week — still is behind the five-year average of 54 inches.

The soybean crop also is slightly behind in development with 6percent of the crop blooming as of last week compared to theaverage of 15 percent.

Nationwide, the condition of the crops generally improved lastweek. The portion rated good to excellent totaled 69 percent forcorn, 66 percent for beans, and 70 percent for spring wheat, whichwas up 1 percent for each crop compared to the previous week.

“Now that surface soils are drying out, roots are actively takingup water from deeper in the soil,” said Emerson Nafziger, Univer-sity of Illinois Extension agronomist. “This is keeping the plantfunctioning well.”

Nafziger reported some corn is showing signs of nitrogen defi-ciency. He also noted crop yields still are very dependent on theweather in coming weeks.

“We need to remember the effect of good conditions can beovercome if it turns dry and hot later in July,” he said. “If thathappens, we will start to run out of water and kernel numbers willdrop, along with yield potential.” — Daniel Grant

secutive month of year-over-yar total monthly volumeincreases,” said Mark G. Bagan,president and CEO of MGEX.

Traders also have takenadvantage of new products andservices.

CME Group in 2006launched side-by-side trading,in which trades could be exe-cuted either on the trade flooror electronically, and morerecently it unveiled weeklyoption expirations for corn,wheat, and soybean contracts.

The weekly options givetraders a way to fine-tune theirhedges or put in place moreshort-term protection.

“The reason we’re seeing

this (strong interest in theweekly options) is related tothis environment we’re in,”Lehman said. “Volatility ishigher in the ag markets than ithas been in the past.”

Online trading also hasmade futures and options moreaccessible.

About 85 to 90 percent ofcrop futures now are traded viacomputers.

However, online trades havenot put the traditional methodof open outcry out of businessin Chicago. About 75 to 80percent of options still aretraded on the trading floor.

“Electronic (trades) grewand became the predominant

platform for trading futuresgrains contracts,” Lehmansaid. “But having both plat-forms is a strength of ourbusiness and gives our cus-tomers options.”

MGEX last month alsorecorded new electronic andfutures trading volumerecords. It closed its futurestrading floor in December2008.

The trend of higher openinterest in the markets forfarmers probably seems like a

blessing and a curse.“The more people you have

in the market, the more you’regoing to stretch the (price)extremes,” said Graham Utter,AgriVisor senior risk manager.But volatility is good. You getan opportunity to price (com-modities) at higher prices. Thedownside is when the marketcrashes, they (traders) probablyoverdo it on the downside.”

More players also haveresulted in a market that ismore liquid than ever, accord-ing to the analyst.

“That’s an efficient market,”Utter added. “You can still useit as a risk management tool,and it works.”

Page 12: FarmWeek July 11 2011

IFB IN ACTION

FarmWeek Page 12 Monday, July 11, 2011

BY BONA HEINSOHN Cook County Board of

Review Commissioner DanPatlak recently discussed theagricultural and equineindustries while touring Ger-ry Kopping’s horse farm inurban Lemont. Patlak’s farmvisit was organized by the

Cook County Farm Bureau.Kopping, a county Farm

Bureau board member, isone of three farmers inLemont.

The visit’s purpose was toprovide Patlak with an on-site, hands-on overview ofequine agriculture in anurban setting.

Kopping discussed theeconomics of boarding hors-es and the history of hisfarm, which started boarding

served as the WheelingTownship assessor.

The Board of Review isauthorized to determinewhether a property taxassessment is fair and accu-rate.

In 2009, nearly 440,000assessments were appealedin Cook County. About 75percent of the appeals weresuccessful.

Kopping and his wife,Linda, operate KoppingFarm, where they board 110horses.

The farm has grownsteadily since the first stallwas built on the family farmin 1984.

Kopping chairs the countyFarm Bureau’s Commoditiesand Marketing Team.

Bona Heinsohn is director ofpublic policy for Cook County FarmBureau. Her e-mail address [email protected].

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

Cook County tax review commissioner gains farmer views

horses in 1984.Tour participants also dis-

cussed how the urban settinghas impacted the horse sta-

ble and agricultural indus-tries.

Patlak was elected to theBoard of Review in 2010

and represents 1.8 millionresidents in suburban CookCounty, including LemontTownship. Previously, he

WIU School of Ag taking entriesfor the annual bull test program

Entries are being accepted for the annual Western Illinois Uni-versity (WIU) School of Agriculture’s bull test program.

Entries for the 112-day test are open to any breed and are dueby Aug. 31, according to Ken Nimrick, associate professor. Howev-er, bulls must be weaned and started on a preconditioning programno later than Aug. 19.

“The WIU bull test program offers breeders the opportunity tocompare their bulls against bulls from other breeders when fed andmanaged in the same environment,” said Nimrick. “Our last fivesales have posted record averages and totals.”

The program evaluates the performance of bulls in a commonenvironment and provides information on scrotal circumference,pelvic area, rib eye area, fat depth and marbling. Nimrick said thebulls are also indexed, so the breeder gets a substantial amount ofinformation in a situation that provides an unbiased comparison.

At the conclusion of the test, a sale of the top bulls will beMarch 16, 2012.

For more information about entering bulls in the program, con-tact Nimrick at 309-298-1288 or 309-337-4352.

Page 13: FarmWeek July 11 2011

CHAMPAIGN — FarmBureau wi l l sponsor

toolshed meetings Wednesdayat the fol lowing t imes andloca t ions : 8 a .m. Gi f ford ;noon, Champaign; and 3 p.m.Villa Grove. Mark Gebhards,Illinois Farm Bureau directorof governmental affairs andc o m m o d i t i e s , w i l l b e t h espeaker. Call the Farm Bureauoffice at 352-5235, see the Julynewsletter, or visit the website{www.ccfarmbureau.com} forspeci f ic locat ions or moreinformation.

• The Tractor Safety Schoolwill be Aug. 5-6 and Aug. 19-20 with classes from 4:30 to7:30 p.m. Fridays and from 8a.m. to 3 p.m. Saturdays. Costis $40 for Champaign Countyresidents and $80 for out-of-county res idents. Cal l theFarm Bureau office at 217-352-5235 or visit the website{www.ccfarm bureau.com} formore information.

CL A Y — T h e F a r mBureau annual mem-

bership picnic will be from 5to 7 p.m. Saturday, July 30, atFlora Library Park. Call theFarm Bureau office at 618-665-3300 for reservations ormore information.

EDGAR — The EdgarCounty Fair will be July

2 4 - 3 0 . Fa r m B u r e a u w i l ls p o n s o r t h e a n n u a l A gOlympics at 7:30 p.m. Monday,July 25, at the g randstand.Age groups are 3 to 6 yearsold; 7 to 9; 10 to 13; 14 to 17;18 to 25; and 26 and older.Call the Farm Bureau office at217-465-8511 for more infor-mation.

EFFINGHAM — Theannual member appre-

ciation picnic will be at 6 p.m.Sunday, July 17, at EvergreenH o l l ow Pa r k , E f f i n g h a m .Dinner will be served. Icecream wi l l be provided byCountry Financial representa-tives and drinks by Effing-ham-Clay Service Co. Mem-bers may swim free of chargefrom 7 to 8 p.m. at the Effin-

which includes bus and buffetmeal. Betting and cocktailsa r e e x t r a . C a l l t h e Fa r mBureau office at 217-532-6171by Friday for reservations ormore information.

PEORIA — A Peor i aCounty Equine Directo-

ry of Services is available tom e m b e r s o n t h e w e b s i t e{www.peoriacountyfarmbu-reau.org.}

• F a r m B u r e a u h a s a nexhibit at the Heart of IllinoisFair Friday through July 16 atExposition Gardens, Peoria.The display features the Spinthe Wheel game. There is anopportunity for pictures at theTalking Barn during scheduledtimes.

RICHLAND — FarmBureau will sponsor a

bus trip Tuesday, Aug. 30, tothe Farm Progress Show. Costis $15 for members and $20for non-members. Registra-tion is due to the Farm Bureauoffice by Monday, July 25. Callthe Farm Bureau office at 618-393-4116 for more informa-tion.

VERMILION — TheVermilion County Farm

Bureau member appreciationnight will be Friday to see the

D a n v i l l e D a n s v s . t h eNashvi l le Outlaws basebal lgame. Free tickets for FarmBureau members are at theFarm Bureau office.

• Far m Bureau i s t ak ingorders for Southern Illinoispeaches. A 25-pound box costis $23 for members and $28for non-members. Orders aredue by Tuesday, Aug. 2, withdelivery the middle of August.Rendleman Orchards will sup-ply the peaches. Call the FarmBureau office at 217-442-8713o r v i s i t t h e w e b s i t e{www.vcfb. info} for moreinformation.

WOODFORD — Anon-the-road seminar

will be at 7 p.m. Tuesday, July19, at the Farm Bureau office.Kevin Rund, I l l ino is Far mBureau senior director of localgovernment, will provide anupdate on trucking and trans-portation of grain. Call theFarm Bureau office at 437-2347 for reservations or moreinformation.

“From the counties” items are sub-mitted by county Farm Bureau man-agers. If you have an event or activityopen to all members, contact your countyFarm Bureau manager.

gham Area Kluthe Pool. Adrawing for a gift certificate toNiemerg’s Steakhouse will beheld. Call the Farm Bureauoff ice at 217-342-2103 forreservations or more informa-tion.

FORD-IROQUOIS —A m a r k e t i n g t o o l s

workshop wil l be at 7 p.m.Monday, July 18, at the FarmBureau office. Doug Yoder,Illinois Farm Bureau seniordirector of affiliate and riskmanagement, will demonstratethe Growers Edge website.Call the Farm Bureau officefor more information.

HA N C O C K — T h eannual Conservation

Tillage Field Day will be from4 to 8 p.m. Tuesday, July 19, atL inda Asher ’s far m, sevenmiles south of Hamilton onstate highway 96. Equipmentexhibitors will discuss theirtools, such as the McFarlaneReel Disk, Great Plains Turbo-Till, etc. The Soil and WaterConser vat ion Dis t r ic t andNatural Resources Conserva-tion Service will discuss com-p l i a n c e , h o w t o m e a s u r eresidue, and equipment usage.A pork chop sandwich will beserved by the Hancock CountyPork Producers. Rain date willbe Thursday, July 21. Call theFarm Bureau office at 217-357-3141 for more informa-tion.

JA C K S O N — T h eYoung Farmers tractor

pull will be at noon, Sunday,July 24, at Vergennes Equip-ment. Call the Farm Bureauoffice for more information.

LEE — Far m Bureauand the Lee Coun ty

Fair Association will sponsoran American Red Cross Blooddrive from noon to 6 p.m.Thursday, July 28, during theLee County 4-H Fair and Jun-ior Show, Lee County Fair-g r o u n d s . C a l l t h e F a r mBureau office at 815-857-3531or e-mail [email protected] f y o u r c a n v o l u n t e e r o rdonate. Walk-ins are welcome.

• The Young Leader Com-mittee at 10 a.m. Friday, July2 2 , w i l l t o u r t h e Pa t r i o tRe n e wa b l e F u e l s p l a n t i nAnnawan and Mowers Soi lTesting Plus Inc. Lunch will bep r ov i d e d . C a l l t h e Fa r mBureau office at 857-3531 ore-mail [email protected] forreservations or more informa-tion.

MERCER — The Gov-e r n m e n t a l A f f a i r s

Committee will sponsor a leg-islative breakfast from 9:30 to11 a.m. Saturday at Central Park,A l e d o . U. S . R e p . B o b b ySchilling (R-Colona) will attend.Call the Farm Bureau office formore information.

MONTGOMERY —T h e P r i m e T i m e r s

will meet at noon Wednesday,July 20, for a barbeque porkluncheon and meeting at theFar m Bureau off ice. Jer r yDowding w i l l p rov ide thee n t e r t a i n m e n t w i t h f l u t emusic. Call the Farm Bureauoffice at 217-532-6171 by Fri-day for reservations or moreinformation.

• The Prime Timers wi l lsponsor a bus trip Tuesday,Aug. 2, to Fairmount Park,Co l l in sv i l l e . Cos t i s $32 ,

from the counties

Page 13 Monday, July 11, 2011 FarmWeek

Farm Talk meetingsslated around state

Illinois Farm Bureau President Philip Nelson and IFB VicePresident Rich Guebert Jr., accompanied by various IFB staffmembers, will conduct five regional Farm Talk meetings later thisyear throughout the state. The dates, times, and locations are:

• Tuesday, Aug. 2, 5 p.m., Hamilton’s Hall (the FiresideRoom), 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, 1279Franklin Grove Road, Dixon, and 5:30 p.m., Joliet JuniorCollege, Weitendorf Ag Ed Center, 17840 W. Laraway Road,Joliet. The Dixon meeting location is different than previouslywas announced.

• Thursday, Sept. 1, 5 p.m., DuQuoin State Fairgrounds,Southern Illinois Center Lobby, DuQuoin.

Please register to attend by contacting your county FarmBureau or the IFB president’s office at 1-800-676-3217.

Page 14: FarmWeek July 11 2011

profitability

FarmWeek Page 14 Monday, July 11, 2011

Feeder pig prices reported to USDA*Weight Range Per Head Weighted Ave. Price10 lbs. $13.00-$46.74 $33.3340 lbs. $38.00-$66.32 $64.1450 lbs. n/a n/aReceipts This Week Last Week 36,039 29,773*Eastern Corn Belt prices picked up at seller’s farm

MARKET FACTS

Eastern Corn Belt direct hogs (plant delivered)(Prices $ per hundredweight)

This week Prev. week ChangeCarcass $91.62 $94.65 -3.03Live $67.80 $70.04 -2.24

Export inspections(Million bushels)

Week ending Soybeans Wheat Corn6-30-11 4.5 26.1 34.66-23-11 8.9 23.8 30.7Last year 3.2 18.4 41.1Season total 1423.4 103.9 1484.0Previous season total 1370.2 73.1 1533.1USDA projected total 1540 1295 1900Crop marketing year began June 1 for wheat and Sept. 1 for corn and soybeans.

(Thursday’s price)This week Prev. week Change

Steers 114.00 110.50 3.50Heifers n/a 110.47

USDA five-state area slaughter cattle price

This is a composite price of feeder cattle transactions in 27 states.(Prices $ per hundredweight)

This week Prev. week Change 137.48 134.02 3.46

CME feeder cattle index — 600-800 Lbs.

Slaughter Prices - Negotiated, Live, wooled and shorn 110-155 lbs. for194.96-212 $/cwt. (wtd. ave. 201.35); dressed, no sales reported.

Lamb prices

U of I’s Browntown Center sets July 28 field day

University of Illinois Extension specialists and researcherswill discuss agronomic research July 28 at the BrownstownAgronomy Research Center field day. The date is firm, rain orshine.

The event will consist of a five-stop field tour starting at 9a.m. The last tour will depart at 9:20 a.m.

Steve Ebelhar, U of I research specialist, will talk aboutwhether insecticide seed treatments and foliar fungicides affectcorn’s response to nitrogen. Fabian Fernandez, U of I Exten-sion specialist in soil fertility, will discuss soil testing variability.

Pest management topics will be palmer amaranth and fungi-cide resistance while production topics will include tillage incorn production.

A free meal will be served to participants.The research center is located on Ill. 185 south of Brown-

stown. Call 618-427-5239 for information.

Schnitkey: Future looks bright for farm economyBY DANIEL GRANTFarmWeek

The farm sector generallyhas outperformed the U.S.economy in recent years, andthat trend could continue atleast into next year.

An ag index compiled at theUniversity of Illinois from2007 through the first quarterof this year increased in valueby 8.6 percent. The ag index ismade up of 21 companies inthe fertilizer, equipment,seed/genetics, crop protection,and first processor sectors.

The S & P 500 (an indexmade up of a basket of 500large U.S. companies), by com-parison, declined 2.7 percentduring the same time.

“If you look at the compa-nies that have done the best,it’s been fertilizer companiesfollowed by equipment compa-nies,” said Gary Schnitkey, Uni-versity of Illinois Extensionfarm management specialist,who recently provided an eco-nomic outlook to the IllinoisFarm Bureau board. “Both sellproducts to farmers.”

Schnitkey noted an increasein corn acres in recent yearsboosted demand for nitrogenand equipment. Strong com-modity prices also providedincome for farmers to investback into their businesses.

USDA projected U.S. netfarm income this year couldtotal close to $95 billion, upabout 20 percent from 2010.USDA in May also boosted itsag export projection for theyear to a record $137 billion,up $28.3 billion from a yearago.

“In general, I think those(ag) companies will do pretty

well going into the future,”Schnitkey said. “We’re still in apretty strong situation in thecropping sector (despite arecent break in the market). Iexpect that to continue.”

Strong commodity pricesalso support higher land val-ues, according to Schnitkey.There has been some concernin recent years that escalatingland prices could lead to abubble followed by a majorcollapse in value, similar towhat occurred in the housingmarket.

“I don’t think we’re in that(bubble) situation,” Schnitkey

said. “Land prices are support-ed by where we’re at in (farm)returns and interest rates.”

A boost in interest rates,however, would change theoutlook for land prices and thefarm economy.

Schnitkey projected a 2.5percent increase in interestrates, which would put ratesslightly below the historicalaverage, could lead to as muchas a 30 percent decline in landprices.

“That’s a big deal,” he said.“I’d list (a rise in interest rates)as the biggest threat. We’re athistorical lows now.”

Farm incomes also areunder pressure from higherinput prices. USDA projectedtotal U.S. farm expenses thisyear will increase 7 percentafter rising 2.2 percent in 2010.

If realized, U.S. farmexpenses this year wouldexceed $300 billion for thefirst time in history.

‘We’re still in a pretty strong situation in the croppingsector (despite a recent break in the market).’

— Gary SchnitkeyU of I Extension farm management specialist

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

Summer is here and fieldwork is almost com-plete.

That means it’s time to tackle your list ofsummer maintenance projects.

As we repair fences, mow ditches, andpaint grain bins, machines sheds, and out-buildings … wait a minute — painting wasn’t

on the list of things to dothis summer.

Painting may not have beenon your list, but neglecting abuilding that needs paintingcould decrease the life span ofthat structure. Paint is the firstand often the only line ofdefense against MotherNature.

Your participating FSmember cooperative can provide you withknowledge and expertise as well as a qualityproduct from the FS paint line, whichincludes products for painting all types ofbuilding material, from quality metal primersto wood barn and fence paint, allowing youto protect your structures from all MotherNature can produce.

There are a few simple guidelines to followin surface preparation and paint selection toensure you are applying the best quality productto your structures.

The most important step in painting astructure is proper surface preparation. Paint

labels have ample information concerninghow a surface should be prepared for that par-ticular type of paint. In some cases, your met-al building might have areas of surface rustthat cannot be removed with a wire brush oracid wash.

Rust converter can convert those surfacesfrom rust to a paintable primer using the sur-face rust to perform a chemical reaction, pro-tecting the surface from further rust develop-ment.

Once your surfaces have been prepared cor-rectly, it is now time to select a primer for yourapplication. Soy zinc is the most durableprimer in the maintenance paint industry, withlongevity of up to 15 years.

As you approach the final top coat stage,paint selection is crucial, and it can directlyaffect the long-term quality of your structure.Contact your local FS member cooperative toensure you are selecting the right paint for yourapplication.

In closing, your to-do list might not havepainting on it yet, but if you have a structure inneed of repainting, you might want to add it tothe list. Quality painted structures are not onlyaesthetically pleasing but also are protectedfrom the elements, thus increasing their lifespan.

Matt Thomas is GROWMARK’s facility equip-ment product manager. His e-mail address [email protected].

Matt Thomas

The latest crop sciencesresearch being conducted atthe University of IllinoisNorthern Illinois ResearchCenter, near Shabbona, will bediscussed July 19 during theField Day. The free event willstart at 4 p.m.

Tours will leave at 20-minute intervals, with the finaltour leaving at 4:40 p.m.

U of I specialists will pro-vide updates on current cropchallenges and the research

being done to address thosechallenges.

U of I Extension entomol-ogist Mike Gray will talk aboutcorn rootworm beetles andstink bugs. Fabián Fernández,U of I Extension soil fertilityspecialist, will discuss how todeal with variability in soiltests.

Emerson Nafziger, U of IExtension agronomist, willfocus on tillage for corn, andCarl Bradley, U of I Extension

plant pathologist, will revisitthe potential to develop resist-ance to fungicides.

A meal will be provided.The 160-acre Northern Illi-

nois Agronomy Research Cen-ter is located at 14509 Univer-sity Road, about 5 miles northof U.S. Route 30 on UniversityRoad.

For more information, con-tact Russ Higgins at 815-274-1343 or e-mail him at [email protected].

U of I’s Northern Illinois Research Center plans field day

Page 15: FarmWeek July 11 2011

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CASH STRATEGISTCorn Strategy

ü2010 crop: If you stillhave old crop, lock up thebasis now. Use rallies above$6.20 on December to com-plete pricing.

ü2011 crop: Corn priceshave rebounded from thepost-report break. However,the trend still points lowerinto the 20-week low due inearly August. Strong resist-ance on the December con-tracts starts at $6.35. Use ral-lies above $6.20 for catch-upsales. We might recommendadding a small sale at any time;check the Hotline frequently.

vFundamentals: Thetrade has turned its attentionaway from the recent reportsand to the export market withtalk of Chinese purchases.The size of business may havegotten exaggerated, but theChinese did buy 840,000 met-ric tons (32.8 million bushels)last week. Still, supply willreturn to center stage againthis week with newsupply/demand forecasts.There’s underlying fears aboutthe warm, dry weather pat-tern, but at this stage, it’s ben-eficial for the crop. Conditionratings are near average forthis time of year.

Soybean Strategyü2010 crop: The burden

of higher prices continues toremain with the new-crop fun-damentals. With the market-ing year winding down, userallies above $13.30 on Augustfutures to complete sales.

ü2011 crop: Smalleracreage keeps production riskin the picture, but unlessthere’s an extended weatherproblem, prices will struggleto maintain gains. Use ralliesabove $13.30 on Novemberfutures to make catch-up sales.

vFundamentals: Thesmaller-than-expected plant-ings have put a lot of burdenon yield to produce an ade-quate crop to meet demand.The warmer, drier pattern thathas settled into the Corn Belthas sparked concern it couldbe develop into an extendedsituation. But there’s little evi-dence to support that at thistime. Export demand haspicked up a little, but at this

time last year it started toaccelerate, and we alreadyhave good Chinese purchaseson the books.

Fail-safe: Make sure salesare at recommended levels ifNovember closes below$12.86.

Wheat Strategyü2011 crop: It appears a

short-term low may have beenestablished in wheat. Themarket should gain upsidemomentum as seasonal har-vest pressure starts to wane.Plan to increase sales to 65percent on the next major ral-ly. We prefer hedge-to-arrive

contracts for winter delivery ifyou have the capability to storewheat because the large carry.

vFundamentals: The mostrecent crop progress reportindicated winter wheat harvestwas 56 percent complete, withthe current weather conditionsallowing for further progresslast week. Some of the upsidemomentum is being capped by alackluster export market. Thetrade was hopeful the recentbreak in U.S. prices would stirup business. However, itappears the majority of recentpurchases are being sourcedfrom the Black Sea region.

debated, but the early condi-tion ratings show a near-aver-age crop. Given that, a trendyield should be an appropriatestarting point, putting the cornyield in a 160- to 163-bushelrange and the soybean yield ina 43.5- to 44-bushel range.

Other than the SouthernPlains and the extreme areasof the Midsouth and South-east, moisture supplies gener-ally are in good shape. Thatwould support the argumentthat trend yields are possible ifweather is relatively normalthrough the end of summer.

Using the lower harvestedacreage numbers and the mid-point of the trend yields, onecan project a 13.63-billion-bushel corn crop and a 3.23-billion-bushel soybean crop.

Put in the perspective ofthe June USDAsupply/demand estimates, it’seasy to build a case for thenew-crop corn ending stocksto be projected near 1 billionbushels. New-crop soybeanending stocks still should beclose to the 190-million-bushel June estimate. Bothtake into account the expecta-tion old-crop ending stockswill be raised.

Neither is what we would callburdensome inventories, butneither is tight, either. That willleave the trade prone to makingsharp moves in either directionwith perceived changes in pro-duction and demand. We haveseen both this past week withthe USDA reports and the Chi-nese corn buying.

Against this background,it’s important to weigh theimpact of the weak macro-economic situation in the U.S.and the world.

At the same time, grains,crude oil, and commodityindices have long-term cycliclows due in the latter part of2011, implying trends have, orare in the process of, turninglower.

There’s been a lot of deri-sion of the June 30 acreage andgrain stocks numbers from theanalytical, as well as the farm,communities. The commercialcommunity has been strangelysilent, however, the lowerprices tend to work in its favor.

Interestingly, analysts at acouple of major investmentbanks took issue with theUSDA assessments and rec-ommended clientele see theprice decline as an opportunityto re-establish long positions.

But a private firm that basesanalysis on satellite imagery hasindicated the USDA acreagenumbers are close to that firm’sassessment of crop plantings.

Other than the resurvey inthe Northern Plains, the pri-mary uncertainty probably lieswith the number of acres to beharvested for each of the crops.Those adjustments can show upon each of the individualmonthly USDA crop reports.

Most of those changes willbe tied to flooding along theMissouri River, as well aschanges resulting from theresurvey of the NorthernPlains states. As we indicatedlast week, the early assess-ments of flood losses werebetween 300,000 and 500,000acres each for corn and soy-beans. USDA could haveaccounted for some of theimpact, but looking at the rela-tionship between planted andharvested acres, we are notinclined to think so.

Eliminating flooded areas,the harvested acreage for cornwould be in the 84.4-million to84.6-million-acre range, withsoybeans in a 73.75-million to74.95-million range.

Weather and yields are being

Cents per bu.

Grain fundamentals coming into focus

Page 15 Monday, July 11, 2011 FarmWeek

Page 16: FarmWeek July 11 2011

Nothing makes a farmerquite as angry as a USDAreport that he thinks is

flawed.Such was the case for many of us

after June 30. A report that seems tohave contained too many acres of

corn combined withunderlying marketweakness to takeabout a buck out ofthe market.

Some farmers, inthe heat of themoment, went so faras to suggest eliminat-ing USDA cropreports. But thewhole world needs

these reports, and they should simplybe done in a better fashion.

The 6/30 report begs some otherquestions. In an age when satellitesand infrared cameras can spot ahuman running over rough terrain,why can’t we have more accurate aeri-al assessment of a growing crop?Are we investing enough in our mar-ket analysis systems?

Why is there such a lag timebetween observing a crop in the fieldand the date when acreage or yield isestimated by USDA? Are we usingthe best and latest technology tomeasure the size and quality of ourcrops?

There were many additional unan-swered questions that accompaniedthis report.

Acres were added compared to theMarch planting intentions report, butacres that were flooded or thosefarmers couldn’t get planted becauseof wet weather were not part of thisreport.

The National Agricultural Statis-tics Service indicated certain stateswill be resurveyed but did not men-tion eastern Corn Belt states such asIndiana and Ohio.

These are not just questions forfarmers and commodity investors.As the gap narrows between availablesupplies of grain and global demand,real-time information about growingcrops could be the differencebetween life and death for millions.

Look back on the 20th century foran answer as to how important foodinformation can become.

Communist nations then hadreporting systems rife with corrup-tion and official incompetence. Foodshortages and famine were commonand devastating.

Americans traditionally haveenjoyed a crop reporting system thatused both objective human observa-tions and the latest tools available.Instead of just complaining aboutthe shortcomings of the current sys-tem, we as a nation should be willingto invest what we need to improve itand increase confidence in thesereports.

Philip Nelson is president of Illinois FarmBureau.

perspectives

FarmWeek Page 16 Monday, July 11, 2011

What’s wrong with the recovery? It’s been two years since the end of

the Great Recession in July 2009. Therecession ended in the sense that theeconomy stopped declining and start-ed growing. But growth has been veryslow.

Funny thing, the last time we had a“Great Recession,” in 1981-82, the

recovery was fast.Maybe if we comparethe two recoveries,we can figure outwhat went right backthen and what iswrong now.

Our recession hitbottom in July 2009;the 1981-82 recessionhit bottom inNovember 1982. Let’s

compare what happened for nearlytwo years after the economy hit bot-tom for both recessions.

Now the unemployment rate is 9.1percent, down from a high of 10.1percent. Two years after the 1982 bot-tom, the unemployment rate was 7.4percent, down from 10.8 percent atits worst. Unemployment was falling alot faster back then.

The odd thing is, industrial pro-duction has risen at nearly the samerate now as it did then. It seems thatindustry is increasing output withouthiring many new employees. Instead,investment in software and equip-ment is rising almost as fast now as in1984. Perhaps businesses are takingthe opportunity to invest in moreproductive equipment. Output risesbut employment doesn’t.

One thing businesses aren’t doingnow is building houses. Housing con-struction is still near record lows,with no recovery since mid-2009.Housing starts were up 16 percent atthis point in the recovery in 1984.Today, there’s a glut of houses forsale, left over from the housing boomof the 2000s. This depresses newconstruction and reduces homeprices.

Last time oil prices were falling.This time they are rising.

Fewer jobs, falling home prices,rising gas prices: all this makes con-sumers gloomy. Consumer sentimentis up just 5 percent since 2009. In1984 it was up by more than 30 per-cent two years into the recovery.

Gloomy consumers don’t spend.Consumer spending was up 9 percentafter two years last time; it’s up only 3percent this time.

Federal spending on social benefitsis rising faster now, partly due toSocial Security and Medicare and

partly because unemployment is stillhigh. Federal non-defense spendinggrew faster this time, partly becauseof stimulus programs.

Oddly, though, federal defensespending was rising faster in 1984, asthe defense buildup got started. Ithasn’t changed much in this expan-sion, despite two or three wars. Butthis time, state and local governmentspending is declining, enough to justabout cancel out the rise in federalspending.

We’ve got one advantage over our-selves back then. Then, the exchangevalue of the dollar was rising andexports were falling. Now the value ofthe dollar is up and down, andexports are rising.

Part of the difference is interestrates. Last time interest rates werehigh, and the world demanded dollarsto lend in the United States. Thatincreased the dollar’s value, whichmade our exports more expensive.That’s not happening this time. Per-haps exports will help get this recov-ery going.

Last time the recession got startedwhen the Federal Reserve jacked upinterest rates to choke off borrowingand spending to bring down double-digit inflation. It worked. Inflationdropped. Then the Fed eased off.Interest rates fell some and the recov-ery began.

This time the collapse of the hous-ing boom kicked off the recession,and the Fed cut interest rates trying tostop the downturn from becoming adepression. You can raise interestrates as high as needed to restrainspending - the mortgage rate topped18 percent in late 1981. But interestrates can only go so low - zero, in thecase of the federal funds interest ratethat the Fed controls. Maybe zeroisn’t low enough for banks and bor-rowers to get past their gloom.

So, what’s wrong with our recov-ery?

A glut of housing. Business expan-sion without hiring. Rising oil prices.Downsizing of state and local gov-ernments. Gloomy consumers.

But maybe most important, lasttime the Fed held the economy back,and when it let go, the recovery tookoff. This time the recession camefrom a financial crisis. The Fed hastried to encourage more lending andspending. But banks and businessesand consumers just aren’t buying.

Larry DeBoer is a professor of agriculturaleconomics at Purdue University, WestLafayette, Ind. His e-mail address is [email protected].

PHILIPNELSON

LARRYDEBOER

What’s wrong with the recovery?

Let’s make USDA crop reports more reliable

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