farmweek november 19 2012

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

A POssible ReduCTiONin barge shipments or temporary clo-sure of the Mississippi River betweenSt. Louis and Cairo could have seri-ous effects on the ag economy. .........5

A MediCARe suRTAx to beapplied on Jan.1 may affect manylandowners who cash rent their landand thus do not materially partici-pate in their farming operation. ......4

GROWMARK donated $75,000for the Illinois Agriculture in theClassroom program and encouragedits employees to buy special licenseplates to help the program. ................2

Monday, November 19, 2012 Two sections Volume 40, No. 47

No FarmWeeknext week

There wil l be no Farm-Week pub lished next week.

FarmWeek is published 50times a year, with no issueson the Mondays fol lowingThanksgiving and Christmas.

The next issue you receivewill be dated Dec. 3.

‘Fiscal cliff ’ debate has far-reaching implicationsBY MARTIN ROSSFarmWeek

As they peer into the uncer-tain landscape beyond the so-called “fiscal cliff,” farmers,manufacturers, dealers, andanalysts fear one of the U.S.’continued economic brightspots — agriculture — couldflicker or fade.

That’s a dark prospect forrural families and businesses,their communities, and workerswho supply the sector, IllinoisFarm Bureau President PhilipNelson warns.

That’s not to mention theproduction, distribution, andurban retail labor force thatdepends on consumer confi-dence and disposable income

demand and, by extension,investment and growth.

Andrew Busch of Chicago-based BMO Capital Marketssees vast untapped growthpotential — an estimated $1.4trillion in excess U.S. bankreserves and $500 billion in pri-vate pension fund liquidity. Butwith consumer confidence stillwaning, “we have a long way togo toward unleashing thatpotential,” he advised.

Whatever the true import offiscal debate, economic con-sultant Ross Korves argues“consumers are convinced it’s abig issue.” Congressional policyand tax gridlock “give business-es and consumers no confi-dence they can get anything

accomplished,” said IFB VicePresident Rich Guebert Jr. Taxing concerns

According to Busch, the U.S.edge over European economieslies in “super, fast-growing”smaller businesses that add andretain domestic jobs and payU.S. taxes.

Korves warns increased taxliability “directly impacts eco-nomic activity.” He noted apotential jump in the current15 percent capital gains taxrate, interest rate hikes, a pos-sible average 10 percentincome tax bump, and a “hugejump” in households requiredto pay AMT taxes.

See Cliff, page 3

for their livelihoods. Congres-sional tax and spending deci-sions over the next monthcould determine the future ofhomegrown fuels and con-sumer fuel prices and evenaffect the quality of the envi-ronment nationwide.

Lawmakers returned toCapitol Hill last week to consid-er lame duck measures aimed ataverting severe fiscal mandatesset to kick in in January andaddress a raft of expiring Bush-era, Obama stimulus-directed,and bioenergy tax provisions.

Nelson urged House Speak-er John Boehner (R-Ohio) toprovide “at least some assur-ance from Congress as it relatesto taxes.” He cited concernsabout pending expiration ofcapital expensing/first-yearbonus depreciation incentivesand temporary estate tax andmiddle-income Alternate Mini-mum Tax (AMT) relief meas-ures and possible loss of next-generation ethanol, biodiesel,and wind energy credits.

All are vital to the economy“because they touch so many

facets of it,” Nelson argued. “We’re a part of the whole

picture,” he noted. “Whenfarmers have a good year, theytend to spend money. Thatstimulates the economy,whether they buy equipment,they buy farmland, or they buya pickup truck.

“And they’ve utilized some ofthese tax provisions in the past.Farm equipment dealers are veryworried with the (Section 179capital) expensing option rollingback from $139,000 this year to$25,000 next year.”Confidence and construction

Economists at a recent agbankers conference stressed theconnection between consumerconfidence and potential

Now that lawmakers are back in the House,Illinois Farm Bureau President Philip Nelsonurged farmers to give them a call on behalf oflame duck farm bill passage.

Last week, IFB issued anaction request asking members tocontact lawmakers toll-free at 1-877-422-8424. The Illinois CornGrowers Association and the Illi-nois Soybean Association alsohave intensified a member pushfor a “farm bill now.”

“We want everyone to taketime to pick up the phone,” Nelsonstressed. “We’re trying to put pressure on(House Speaker) John Boehner (R-Ohio)to schedule time to take up the f loordebate in the House.”

Nelson cited “mixed signals” from Houseleadership regarding prospects for lame duckfloor debate vs. a mere one-year extension of

currently expired 2008 provi-sions.

In a Web chat last week, Amer-ican Farm Bureau Federationfarm policy specialist Mary KayThatcher said she saw about a 15percent chance Congress wouldpass a farm bill by year’s end. Themost likely scenario is a one-yearextension, “although there is also

talk of a six-month extension,” Thatcher said.“Either way, writing the bill next year will be

more difficult than this year, as there will be lessmoney available to write a bill with a good safe-ty net,” she said. — Martin Ross

Nelson: Pick up a phone

STATE DEBT WORSENS — The stateowed more at the end of the first quarter offiscal year 2013 than during the same quarter ayear ago, according to Illinois Comptroller JudyBaar Topinka.

She reported the bill backlog totaled $5.927billion, compared to $3.817 billion last year.

“One thing is certain, payment processingdelays will continue for the foreseeable future,”Topinka reported.

She warned underfunding of programs andservices likely will lead to pressure on lawmak-ers to pass supplemental appropriations as theydid last year. However, that would make a diffi-cult budget further unbalanced, she added.

DEER HUNTERS IN THE FIELD —The state’s busiest and most popular huntingseason opened during the weekend. The seven-day firearm deer season will conclude Dec. 2.

Last year, deer hunters in Illinois claimed98,820 deer during the season. The IllinoisDepartment of Natural Resources (IDNR) todate has issued about 334,000 permits.

The legal hunting hours for the firearm deerseason are one-half hour before sunrise to one-half hour after sunset.

TAGGING A TREE — Illinois Christmastree farms are preparing for the onslaught offamilies who tag their trees over the upcomingThanksgiving holiday season.

University of Illinois Extension horticultureeducator Ron Wolford recommended shoppersinclude the tree’s health as well as size andshape when making a decision.

“Choose a fresh tree, one that has a healthygreen appearance with few browning needles.Needles should be flexible and not fall off ifyou run a branch through your hand,” headvised.

The U of I Extension offers an online direc-tory of Illinois Christmas tree farms and otherinformation at {urbanext.illinois.edu/trees/}.

FarmWeek Monday, November 19, 2012

(ISSN0197-6680)

Vol. 40 No. 47 November 19, 2012

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

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© 2012 Illinois Agricultural Association

STAFFEditorDave McClelland ([email protected])

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Quick TakesAG LITERACY

Tuesday: • Live from the Commodity Conferencein Bloomington• Doug Reeves, biofuels key accountsmanager for Pioneer• Chesapeake Meteorology• Monsanto• Jim Williams, AgrAbility field coordi-nator• Jeff Adkisson, executive vice presidentof the Grain and Feed Association ofIllinois

Wednesday:• Alan Jarand and Rita Frazer• Illinois Department of Agriculture• Jim Bower, Bower Trading• John Hagenbuch, farmer and vicechairman of the Illinois SoybeanAssociation’s Animal AgricultureCommittee

Thursday:• Rita Frazer, RFD Network anchor • Martha Downey, site superintendent,Bishop Hill•Mike Vande Logt, executive vice presi-dent and chief operating officer forWinField Solutions

Friday: • Alan Jarand and Rita Frazer• Sara Wyant, Agri Pulse publisher• Joyce Fikri and Monica Nyman, St.Louis Dairy Council• Alan Jarand, RFD Radio director

To find a radio station near you that carriesthe RFD Radio Network, go toFarmWeeknow.com, click on “Radio,” thenclick on “Affiliates.”

Illinois Farm Bureau President Philip Nelson, left, and GROWMARK Chief Executive Officer Jeff Solberg dis-play an agriculture specialty license plate after GROWMARK’s presentation of $75,000 to the IAA Founda-tion last week. GROWMARK also is encouraging its employees and FS members to buy the ag plates. Nearly$25 from each plate renewal goes directly to support the Illinois Agriculture in the Classroom program. (Photoby Ken Kashian)

GROWMARK donation supportsag literacy program statewideFS helpinglocal effortsBY KAY SHIPMANFarmWeek

GROWMARK and its FSmember cooperatives last weekdonated $75,000 for Illinois Agri-culture in the Classroom (IAITC)programs during a formal pres-entation to the Illinois FarmBureau Board of Directors.

GROWMARK, the second-largest contributor in 2012behind Country Financial, hasmade annual contributions to theIAITC program since 2003.

“As more Americans are fur-ther removed from the farm,

bringing the facts about farmingto students at an early age isvital,” said Jeff Solberg, GROW-MARK chief executive officer.

GROWMARK’s annualcontribution — the 2012donation was a 15 percentincrease over last year — helpsfund 63 county ag literacycoalitions that teach studentsabout agriculture and farming.

Recently, local coalitionsreceived grants from IAITCtotaling $497,000, an increaseover the previous year, in partdue to GROWMARK’s contri-butions and commitment toIAITC.

On the local level, FS repre-sentatives serve on 24 county

AITC advisory councils.“The local FS serves as a

focal point to discuss what isgoing on in agriculture, whetherit is with the seeds that becomethe crop, with the nurse tanksapplying plant food, or what’shappening at the elevator. Thatlocal connection to agriculture iscritical across the state,” saidKevin Daugherty, IFB educationdirector.

Solberg added GROW-MARK is encouraging itsemployees, FS members, andothers to buy agriculture special-ty license plates. Nearly $25 fromeach plate renewal directly goesto support the IAITC program,according to Susan Moore, IAAFoundation director.

“That means free Ag Magsand other resources, mini grantsfor teachers, and funds to sup-port local ag literacy coalitions,”she explained.

EPA rejects ethanol waiver, cites minimal ‘economic harm’

The U.S. Environmental Protection Agency (EPA) Fridayannounced it would maintain 2013 corn ethanol requirementsunder the federal Renewable Fuel Standard (RFS2), citing no evi-dence biofuels use would cause severe “economic harm.”

Several state governors and key livestock groups had request-ed a waiver of ethanol blending targets in light of drought con-ditions that threatened potential corn supplies.

Gina McCarthy, assistant administrator for EPA’s Office ofAir and Radiation, recognized “this year’s drought has createdhardship in some sectors of the economy, particularly for live-stock producers.” But she reported “congressional requirementsfor a waiver have not been met and that waiving the RFS2 willhave little, if any, impact.”

“(EPA’s) decision reflects a thorough review of all the appro-priate data,” Illinois Corn Growers Association (ICGA) Presi-dent Jeff Scates said. “We believe that, as is indicated by EPA inits decision, the market system has done its job in this year ofunfortunate heat and drought, and the subsequent increase incommodity prices across the board.”

ICGA stated “the (ethanol) market has signaled for less cornusage.” More than 800 million gallons of production has beenidled this year, with Abengoa’s Madison and Aventine’s Pekinplants temporarily curtailing some operations.

Further, 2012 ethanol exports are expected in the 750- million-gallon range, down from more than 1 billion-plus gallons in 2011.

EPA’s decision was based on economic analyses and modelingdone in cooperation with USDA and the U.S. Energy Depart-ment. Analyses concluded that on average, waiving the RFS2mandate would reduce corn prices only by about 1 percent andthat a waiver would not impact household energy costs.

IFB IN ACTION

Monday, November 19, 2012 FarmWeek

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Aflatoxin, fracking, road authority on delegate agendaBY MARTIN ROSSFarmWeek

The 2012 drought, risinginput costs, and concernsabout ag transportation andaccess fueled Illinois FarmBureau Resolutions Commit-tee (RC) discussions thismonth.

As a result, IFB farmer del-egates will address proposalsdealing with reliability of afla-toxin testing, potential guide-lines for use of hydraulic frac-turing or “fracking” in naturalgas extraction, and river infra-structure needs both for floodprotection and commoditycommerce.

The RC focused on currentconcerns about aflatoxin incorn and its implications formarketing, feeding, and risk

for federal crop insurance losspayments.

In Texas, state officials havedeveloped the One SampleStrategy, a voluntary programthat allows participating eleva-tors to use the same aflatoxintest results for both gradingand crop insurance purposes.

This single test procedure isconducted at the initial point ofsale, and the test result istagged to the grain to satisfyregulatory requirements andensure collection of insurancepayments. USDA’s Risk Man-agement Agency has signed offon program use to determinecrop indemnities.

The RC also considered thepublic controversy over frack-ing — use of pressurized fluidsto create fractures that can

release natural gas from rocklayers.

Natural Resources Subcom-mittee Chairman Terry Smithnoted the “very promising”technology has been used at ashallow depth in oil explo-ration for decades. RC mem-bers mulled what Smith termed“commonsense regulations”that might allay fracking-relatedgroundwater and safety con-cerns.

Delegates also will considerrecommending state officialsdevelop a five- to 10-year planto move the Illinois State Fairup one week to avoid conflictswith the beginning of theschool year. “Neighboringstates have done it and foundthat attendance has actuallypicked up,” Brackmann said.

management especially inSouthern Illinois. The droughtraised issues regarding accuracyof and uniformity in aflatoxintesting technologies, false posi-tive results, and potential fornon-representative grain sam-pling.

The RC thus is asking dele-gates to review a proposalencouraging local elevators touse and accept test results fromUSDA-approved testing facili-ties when determining aflatoxincontent.

In some cases, a farmer maybe docked at a local elevatorbecause of the presence ofaflatoxin, though the grain sub-sequently may be found to befree of the contaminant whensamples are submitted for cropinsurance reimbursement.

“Aflatoxin can randomlyshow up in a load of corn,depending where a sample istaken from,” noted RC Agri-cultural Production/NationalIssues Subcommittee Chair-man Bob Brackmann. “Youcan take two samples from aload of corn and get differentreadings.

“Plus, not all elevators havethe same types of testingequipment. Some of thatequipment is newer andsophisticated, and may do a lit-tle better job of testing foraflatoxin. Some of it is olderand may be out of date.”

Current IFB policy supportslegislation aimed at standardiz-ing and certifying elevator test-ing equipment and personneland accepting their test results

Prairie du Rocher LeveeDistrict Commissioner RichGuebert Jr. offers some poten-tially grim math for a Ran-dolph County communityforced to weigh the value ofthousands of acres and dozensof homes against millions infederally mandated costs.

The Federal EmergencyManagement Agency (FEMA)has granted Guebert’s district“provisional” levee accredita-tion, neither recertifying thelevee as adequate to protectagainst a major 100-year floodevent nor revoking existingcertification until specific

structuralissues areaddressed.

The Prairiedu RocherLevee protectssome 16,000farmlandacres, 120homes, andthe historic

Village of Prairie du Rocher.Levee certification relieves res-idents and businesses offloodplain developmentrestrictions, removes floodinsurance requirements forproperties under federally

Levee policies force districts to race the clockinsured loans, and reduces cov-erage costs.

FEMA questions the levee’sslope stability and potential forwater seepage. Neither’s an“easy fix”: Renovation costscould run $5 million to $18million, and even the $1 mil-lion cost of related engineeringservices is prohibitively high,said Guebert, Illinois FarmBureau vice president.

Plus, the levee must berecertified before FEMAreceives congressional fundingit needs to draft new regionalFlood Insurance Rate Maps.Given the budget situation,that could be early next year,next fall, or even two yearsfrom now.

“We don’t have the fundsavailable to do this,” Guebertsaid. “If we have to do thiswith our limited funds, thenthe timeframe’s too short toreach our goals and get all ourdata to FEMA in time to getrecertified.

“We need to determine the

cost (of repairs) per acre andhome, and then decidewhether that’s justifiable. If weare decertified, the costs for allof those required to buy floodinsurance will skyrocket —probably threefold.

“And you can’t build in thatarea — there’s no new con-struction. You won’t be able torepair any existing homes.You’ve killed the community.And I can’t believe we are theonly levee district in this dire aneed.”

In Guebert’s view, an obvi-ous solution is to “send themoney with the mandate” —provide funding to help thedistrict meet federal guide-lines. As an alternative, poli-cymakers could authorize theU.S. Army Corps of Engi-neers to certify levees, he sug-gested.

Prairie du Rocher alreadyrequires an annual acceptablerating from the Corps in orderto remain in the P.L. 8499 pro-gram. In addition, a Corps

team conducts a comprehen-sive safety inspection everyfive years.

FEMA does not account forthe district’s past record inflood control or “flood fight-ing,” he noted. The levee hassurvived high water marks in1973, 1983, 1993, 2005, and2008 — the 1993 event “reallytested our levee for an extendedperiod of time,” Guebert said.

Meanwhile, the IFB Resolu-tions Committee (RC) hasaddressed recent Senate pro-posals to “arbitrarily” desig-nate special “flood hazardareas” behind the nation’s100,000 miles of levees and84,000 dams.

The RC will ask IFB mem-ber delegates in December toconsider supporting NationalFlood Insurance Programexemptions for propertybehind “properly designed,built, and maintained levees,dams, and other flood controlinfrastructure.” — MartinRoss

Rich Guebert Jr.

Continued from page 1Section 179/bonus depreciation provisions have provided

“an easy way for farmers to write off more of their equip-ment purchase,” said Mike Williams, North American Equip-ment Dealers Association vice president for government rela-tions.

He deemed tax policy “a supply chain issue,” arguing manu-facturers, union laborers, and rural communities “all benefitfrom a new purchase.” Newer models offer cleaner-burningengines and thus, “there’s an environmental benefit to encour-aging turnover in farm equipment,” Williams said.

“If the tax law changes and incomes do start to fall off,then we’ll probably see a reduction in some new farm equip-ment purchases,” Williams told FarmWeek.Land, legacies, and legislation

Korves suggests lawmakers ultimately may extend keyexpiring tax measures for three to six months, leaving long-term extensions to the new Congress.

Dec. 31 expiration of the $5 million federal estate taxexemption is a particular worry for farm families and ruralbusinesses. If Congress fails to act, the estate tax wouldrevert to a pre-2002 $1 million individual exemption and ahigh 55 percent rate. According to Korves, that is an alarm-ing shift for families who’ve seen land values soar over thepast decade.

“If it were left unchanged long-term, it would have a hugeimpact,” Korves told FarmWeek. “Look at those guys outthere who are paying $20,000 an acre. Ten acres would be$200,000, and at 50 acres, you’d hit the million-dollar mark.

“While this issue is just extremely important to farmers, inthe broader (deficit) context and particularly over the shortrun, it doesn’t mean very much. Some of the other tax provi-sions have much more immediate impact.”

Cliff

RISK MANAGEMENT


Medicare tax

twist issue

for farmersA wrinkle in new health care law could pose an added

tax hit for some Illinois landowners beginning nextyear.

Under the 2010 federal Patient Protection and Afford-able Care Act, a 3.8 percent Medicare surtax is to beapplied to unearned income (separate from wages and farmself-employment income) effective Jan. 1.

Further, the law uses an expanded definition of taxableunearned “investment income” to include not only divi-dends, interest, and capital gains but also annuity distribu-tions, royalties, and rents.

That raises questions about tax liability under varioustypes of farm lease agreements.

The surtax will apply to landowners who are not“materially participating” in farm operations. Accordingto Iowa State University Center for Agricultural Law andTaxation Director Roger McEowen, the Medicare surtaxthus may affect many landowners involved in cash rentagreements.

Some experts suggest landowners could avert surtax lia-bility by moving from cash rent arrangements to more par-ticipatory crop-share agreements.

But University of Illinois Extension tax specialistGary Hoff questions the extent to which lease structurewill impact net landowner liability in an overall tax con-text.

Further, Hoff is uncertain how broadly the surtaxmight impact Illinois producers, given that it will beassessed on so-called “high-income” taxpayers. The tax-able threshold is $250,000 for joint filers and $200,000for individual filers.

The surtax would apply to the lesser of either modifiedadjusted gross income above those thresholds or netunearned income.

Thus, a married farmer with $300,000 in annual adjustedgross income and $30,000 in dividend/interest incomewould pay the 3.8 percent tax on the $30,000 vs. the$50,000 in modified adjusted gross income over the taxthreshold.

“If I materially participate in my rental, it’s going to beearned income — I’m going to be reporting it on ScheduleF and paying self-employment taxes and Medicare taxes,”Hoff noted.

“If I’m not materially participating, then it’s passiveincome (subject to the surtax). Basically, they’ll get me oneway or another.

“One of the things farmers do need to be thinkingabout is whether this is the year to defer (2012) income. IfI have crop insurance payments, I can defer them to nextyear.

“But if I have this 3.8 percent hit, and if we don’textend any of the Bush tax cuts, I could incur substantiallymore tax by deferring income to 2013.”

Farmers can elect to defer income with their 2012 tax yearfiling. Given current tax policy uncertainty and the possibilitylawmakers could even retroactively extend expiring tax provi-sions, farmers may want to delay filing returns until Congresstakes definitive action, Hoff said.

To avoid an estimated tax penalty, a farmer may makeone estimated tax payment by Jan. 15.

Hoff noted some confusion over a purported new“sales tax” on the sale of a personal farm residence —in actuality, it is the Medicare surtax applied to suchsales.

Hoff cited the Section 121 exclusion on the sale of aprincipal residence — joint filers pay no income tax ongains up to $500,000, or $250,000 in gains in the case of anindividual.

As a result, surtax requirements should not affect mostproperty sellers, he said. — Martin Ross

Information, insurancecrucial for ‘go-go farmer’BY MARTIN ROSSFarmWeek

Robert Craven calls them “go-go farmers”— optimistic, aggressive producers caught up inthe excitement of the current ag “supercycle.”

Ag lenders may temper that excitement asthey gauge borrower liquidity, risk management,and contingency planning, according to Craven,director of the University of Minnesota Centerfor Farm Financial Management.

With the exception of a slight “dip” in 2009,farmers on average have seen increased annualprofitability for the last decade, he said.

However, financing remains a key concern forthe ambitious farmer, Craven stressed. In termsof “selling yourself to a lender,” the go-gofarmer needs to maintain scrupulous records, payattention to what lenders have to say, and pro-vide information as they ask for it, he said.

“As bankers think about the go-go farmer,they’re thinking about the hard-charging folksout there trying to rent additional ground whoare focused on expansion, who are probablywilling to take more risk than most farmerswould,” he told FarmWeek.

“For those guys, liquidity seems to always bean issue. As you’re expanding rapidly, it’s a realchallenge.

“As (lenders) analyze you as a go-go farmer,one of your first lines of defense is workingcapital, the difference between the current assetson your balance sheet and current liabilities.That’s more than just the cash in the bank. It’sthe grain in the bin; it’s the prepaid expenses.”

Ideally, lenders would like to see individualworking capital of at least 35 percent of annualgross income, Craven said. Anything less than

15 percent working capital is a “red-light situa-tion” for the banker, Craven suggested.

Thus, as farmers mull expansion — andrelated financing needs — “they need to keepliquidity in mind,” he said.

Craven deems a solid accrual analysis — acomprehensive accounting of yearly income,expenses, prepaid inputs, crop-livestock inven-tory changes, and the like — a key tool in build-ing lender confidence. Because a major goal offarm tax filings is “minimizing taxes,” he arguesa simple federal Schedule F may not accuratelyreflect operator profitability.

Further, amid recent availability of “prettygenerous” federal Section 179 tax deductionsfor depreciable assets, Schedule F depreciation“may well overstate the true economic deprecia-tion most operations are facing,” Craven said.

The farmer’s prospective business plan,including ongoing marketing and risk manage-ment strategies, also is crucial to lender appeal.Revenue protection — i.e., crop insurance — is“particularly important,” Craven said.

He studied yield and price risks for a 10,000-acre corn farm, concluding that in a “worst-casescenario” (140-bushel-per-acre corn at a priceof $4 per bushel), that farm could lose $4 mil-lion in a single year. With an 80 percent Rev-enue Product policy, that farm might lose closerto $1.3 million, Craven said.

He urged farmers to project the impacts of arevenue shortfall, a price drop, a bump in inter-est rates prior to meeting with their lender.

“Those are the kind of things your lender’sgoing to do, so you might as well do them aheadof time so you know what the answers are,”Craven said.

As lawmakers returned to the Hill last week,Farm Bureau and other ag groups applaudedHouse approval for Permanent Normal TradeRelations (PNTR) with Russia.

Congress must enact PNTR legislation toguarantee U.S. access to market-opening andlegal reforms under Russia’smembership in the World TradeOrganization (WTO). TheHouse passed the measure 365-43; Senate action is pending.

American Farm Bureau Fed-eration President Bob Stallmanargued U.S. farmers will see“more certain and predictablemarket access” as a result ofRussia’s new WTO commit-ment to hold import tariffs tonegotiated rates and to applyfood safety standards “in a uni-form and transparent manner.”

Ag exports to Russia are fore-cast at $1.4 billion for 2012, andRussia offers potential for signif-icant increases in poultry, pork,and beef purchases.

In discussions with FarmBureau prior to the country’s WTO accession,Russian trade delegates deemed PNTR passage“imperative,” Illinois Farm Bureau President PhilipNelson reported. At that point, the Russians werepushing for inspection of U.S. poultry and porkfacilities — a move many viewed as a “slowdowntactic” aimed at impeding meat imports as Russia’sown production grew, Nelson said.

As Russia and other key developingnations gain influence in the global market(see page 12), Nelson stresses the impor-tance of assuring through WTO complianceand bilateral trade relations that Russia doesnot impose market restrictions in the name

of suspect health concerns ora self-proclaimed need for“self-sufficiency.”

“Now that Russia has ascend-ed into the WTO, it’s imperativethat we have PNTR to striketrade deals going forward,” hesaid.

Nelson nonethelessacknowledged resistance toPNTR passage, particularlyamong congressional Democ-rats who seek to tie Russianhuman rights provisions totrade measures. PNTR requireslawmakers to lift the Cold War-era Jackson-Vanik amendment,which tied favorable U.S. tar-iffs on Russian goods to therights of Jews in the formerSoviet Union.

Currently, some lawmakers have proposedimposing visa or other sanctions on Russianofficials linked to the death of Sergei Magnit-sky, a lawyer who died in a Russian jail in2009. Last week, Russian officials warned ofpossible consequences if Congress passed“unfriendly and provocative” legislation. —Martin Ross

PNTR halfway home

‘Now that Russiahas ascended tot h e WTO , i t ’ simperat ive thatwe have PNTRto s t r i ke t r adedeals going for-ward.’

— Philip NelsonPresident

Illinois Farm Bureau

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River closure could affect crop, fertilizer pricesBY DANIEL GRANTFarmWeek

A possible reduction inbarge shipments or temporaryclosure of the Mississippi Riv-er between St. Louis andCairo could have a rippleeffect on the ag economy.

The U.S. Army Corps of

felt most heavily in the Mid-west.”

More than 500 million tonsof cargo is moved on the Mis-sissippi River each year, Philipsaid.

Among the cargo shippedon the river this time of yearis fertilizer. Disruptions tothat supply could affect prices,according to Chuck Spencer,director of government rela-tions at GROWMARK.

“As we work through thefall (fertilizer) application sea-son, then it’s time to rebuildsupplies for the spring sea-son,” Spencer said. “It’s a reg-ular cycle that could be dis-rupted” if barge shipmentsare reduced or temporarilyhalted.

Products instead may haveto be transported by rail ortruck, which isn’t as pricecompetitive. One barge carriesthe equivalent cargo of 60trucks or 15 rail cars, accord-ing to the Greater NewOrleans Barge Fleeting Asso-ciation.

“Barge transportation inbulk has a competitive advan-tage,” Spencer said. “When weput (fertilizer) on rail ortrucks, the demand (for thosemodes of transportation) goesup and prices follow.”

The loss or reduction ofriver transportation also couldhurt crop exports and wreakhavoc on local basis bids.

“It could really change theflow of grain,” said DaleDurchholz, AgriVisor seniormarket analyst. “Some farmerscould be winners and otherslosers from this. It depends onwhere you live (and the near-by) transportation structure.”

A temporary loss of theMississippi River market could

weigh on crop prices in Cen-tral Illinois and central Iowaand add a premium to pricesat locations near rail and alongthe Ohio River.

It also could cut into U.S.soy exports, which currentlyare on a record pace.

“It could be difficult tocontinue the pace of about 60million bushels (of beanexports) per week,” Durch-holz said. “It takes a lot oftrain cars to offset one bargeof beans.”

Engineers last week main-tained its intention to reducethe flow from an upper Mis-souri River reservoir into theMississippi from 17,000 cubicfeet per second to 12,000cubic feet per second, startingFriday.

The reduced flow could

suspend the Corps’ ability tomaintain a navigable channelfor barge traffic on the keyportion of the Mississippi thatruns along Southwestern Illi-nois. Barges lose about 100tons of load capacity for eachsix inches of reduced draft.

“The critical area isbetween St. Louis and Cairo,where we transition fromlocked river to open river andbefore we get all the waterfrom the Ohio,” Mike Peter-son, spokesman for the ArmyCorps’ St. Louis district, toldReuters news service.

“We can see flows changeby a couple of feet at St. Louisas those flows decrease fromthe Missouri.”

Disruptions to river naviga-tion are expected to occur byDec. 10. The situation isexpected to affect everythingfrom outbound crop exportsand prices to inbound fertiliz-er shipments.

“Slowing down or evensevering the country’s inlandwaterway superhighway wouldimperil the shipment of criti-cal cargo for export, signifi-cantly delay products fordomestic use, threaten manu-facturing production and pow-er generation, and negativelyimpact jobs up and down theriver,” said Craig Philip, CEOof Ingram Barge Co. “Itwould bring a ripple effect ofeconomic loss that would be

Groups seek to cut redtape, keep river openBY MARTIN ROSSFarmWeek

Commercial river interests propose what one barge industryspokesman calls a “really viable solution” to a potential economicdilemma on the Mississippi River.

Ag groups joined the Waterways Council Inc. (WCI) andAmerican Waterways Operators (AWO) in a push to maintainservice on the Upper Mississippi River during a crucial Decem-ber-March shipping period.

Under the U.S. Army Corps of Engineers’ Missouri River“master manual,” water releases from dams on the upper Mis-souri will be significantly scaled back later this month.

Reduced flows from the Missouri into the Mississippi, com-bined with low river levels and rock formations in the MississippiRiver channel, could halt barge movements on the middle Missis-sippi by Dec. 10.

WCI President Mike Toohey told FarmWeek “we’re deploy-ing our forces” to expedite removal of elevated rock “pinnacles”near Thebes and Grand Tower on the river’s Illinois side. TheCorps normally must conduct environmental impact assessmentsand a 45-day bidding-contracting period for such projects.

Rock removal could take 60 days, and those requirementscould delay startup until February. WCI and others, therefore, areasking lawmakers and respective Illinois and Missouri Govs. PatQuinn and Jay Nixon to seek a presidential emergency declarationthat would enable the Corps to bypass routine project require-ments.

“Until such time as they can perform that work, we’re asking (theCorps) to continue the flow of water from the Missouri into the Mis-sissippi so we don’t have any interruption of critical service,” Tooheyadded in an interview from WCI’s annual meeting in Texas.

“The Corps is doing a marvelous job of maintaining a nine-foot navigation channel, as authorized by Congress. But normaloperation of the Missouri River plan would begin the impound-ment of water on or about Nov. 23 (Friday). We would see theimpact of reduced flows on or about Dec. 10. We know there’s aproblem coming, so why don’t we get to it and get working?”

Beyond an expected uptick in grain shipments in January, Illi-nois Corn Growers Association field services director Jim Tar-mann is concerned about a possible shutdown on the Mississippi“at a time when our input providers are trying to move fertilizernorthbound” (see accompanying story).

Quinn and Nixon already have contacted Corps officialsregarding Missouri releases, but Tarmann said Corps officialswere “holding firm” to master manual requirements.

Rock pinnacles normally don’t interfere with navigation, butthe 2012 drought has resulted in reduced water levels within theriver system. Because of the drought, the Mississippi hasreceived as much as 78 percent of its water from the Missourithis year vs. 60 percent in a normal year.

Toohey estimates rock blasting would provide an added twofeet of navigable depth within the regional channel. The soonerpinnacles are removed, the less water shippers likely would needreleased via the Missouri, Tarmann maintained.

Current Corps funding would cover proposed rock blasting —Toohey said no new congressional spending would be necessary.

Further, he stressed waterways groups are proposing a “water-neutral” solution. In exchange for Missouri reservoir releases dur-ing the December-March period, they would support later adjust-ments in navigational water allocations.

“There would be no adverse effect on any other beneficial useof those waters — municipal and industrial water supplies,ecosystem restoration, fish and wildlife enhancement, or recre-ation,” Toohey said. “We’re very sensitive to the interests of oth-ers in this.”

‘It could bring ar ipp le e f fec t o fe c o n o m i c l o s sthat would be feltmost heavi ly inthe Midwest.’

— Craig PhilipIngram Barge Co.

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Harvest complete in Illinois; farmers prepare for next yearBY DANIEL GRANTFarmWeek

The 2012 harvest season iscomplete in Illinois, with theexception of a handful ofscattered fields.

The National AgriculturalStatistics Service’s Illinoisoffice reported that as of thethe first of last week 99 per-cent of the corn crop and 98percent of soybeans were inthe bin.

The harvest pace last weekwas 16 percent ahead of aver-age for corn while soybeanharvest was 4 percent aheadof the average pace.

Meanwhile, sorghumharvest in the state lastweek was 99 percent com-plete, 19 percent ahead of

half a corn crop,” Wykes said.“The beans were looking badin July, but we got some laterain that proved to be exceed-ingly beneficial. We finishedwith above-average beanyields.”

USDA earlier this monthraised the statewide yield aver-ages 3 bushels for corn (to 101bushels per acre) and 4bushels for beans (to 43bushels per acre) compared tothe October forecast.

The majority of the winterwheat crop (81 percent) hademerged as of last week andwas off to an encouragingstart.

The condition of the wheatcrop in Illinois last week wasrated 72 percent good toexcellent, 24 percent fair, andjust 4 percent poor to verypoor.

One of farmers’ top con-cerns at this point is the needfor additional rain to rechargesubsoil moisture prior tospring.

“It’s a real concern,” Wykessaid. “We want to make sure thesubsoil moisture is recharged. Itwas completely depleted. I don’tknow of anyone whose tiles arerunning yet.”

Topsoil moisture across thestate last week was rated just18 percent short or very short,78 percent adequate, and 4percent surplus.

But subsoil moisture lastweek was rated 56 percentshort or very short and 44 per-cent adequate, with no sur-plus.

the average pace.“With the exception of a

few fields here and there, (har-vest) is pretty well wrappedup,” said Bill Wykes, a farmerfrom Yorkville and chairmanof the Illinois Soybean Associ-ation.

Many farmers currently arepreparing fields and pricing orordering inputs for next sea-son.

“There’s still quite a fewguys chisel plowing, applyinganhydrous, or working on theirseed selection,” Wykes said.

Many farmers likely arehappy to put the 2012 cropseason behind them aftergoing through the worstdrought since 1988.

“We ended up with about

Bill Wykes, a farmer from Yorkville and chairman of the Illinois SoybeanAssociation (ISA), harvests corn on a bright fall day this season. Harvestin Illinois last week was virtually complete. Many farmers have turnedtheir attention to field preparation and input purchases for next season.(Photo courtesy of ISA)

Community gardencompletes harvest

The Illinois Farm ServiceAgency (FSA) Land of Lincolnand Partners Community Gar-den in Springfield was responsi-ble for more than 16,173pounds of produce, including afinal crop of turnips Nov. 7.The produce was donated to alocal food pantry.

“Despite the drought condi-tions that were handed us thissummer, the Illinois FSA Landof Lincoln & Partners Commu-nity Garden volunteers provedto be great sports and producedan enormous amount of vegeta-bles for those in need in the sur-rounding community,” saidScherrie Giamanco, state execu-tive FSA director.

Employees volunteeredtime in early morning and dur-ing lunch hours to work in thegarden.

The community gardenproject included volunteerwork of some local FFA chap-ters and members, Universityof Illinois Extension MasterGardeners, and several localbusinesses and organizations.

lIVESTOCK


Sow housing requirement contributes to decline of UK herdBY DANIEL GRANTFarmWeek

Legislation or requirementsthat limit farmers’ choices oflivestock production methodsmay not be the best for animalwelfare, consumers, farmers,or retailers.

A ban on sow gestationstalls in 1999 was the begin-ning of the end for many hogoperations in the United King-dom (UK), according to ZoeDavies, general manager ofthe National Pig Associationin the United Kingdom (UK).

Hog farmers in the UK inthe late 1990s already were deal-ing with low prices and poormargins when they were hitwith the legislation that requiredthem to change housing systemsin their swine facilities.

Gestation stalls werebanned, and farmers therewere forced to adopt grouphousing systems.

“People had to invest a lotof money (to change their hogfacilities in the UK to meet thenew requirement),” Daviestold the RFD Radio Network.“Many were losing money anddecided it was easier to get out(of the business) than get in alot of debt.”

The UK swine industry,which was reeling by the late

pened to the UK hog industry.“We were the first country

to do it. We didn’t know whatwe were doing,” Davies said.

“People were mixing sows atthe wrong time and (in somecases) the genetics werewrong.

“Changing from stalls togroup housing is all aboutmanagement,” she noted.

Many pork producers in the

UK have switched to contractproduction to continue theiroperations with less risk.Davies estimated half the herdthere is in contract produc-tion.

Environmental regulations“and pressure we’re gettingfrom welfare groups are hav-ing a big impact on people (inthe hog industry) actuallybeing able to put up newbuildings and invest in theirbusinesses going forward,” shesaid.

Many pork producers in theUK instead have improvedfeed efficiencies, genetics, ani-mal management, and healthmanagement to increase theiroutput and remain in business,she said

1990s, faced pressure frommajor swine disease outbreaksin 2000 (classical swine fever)and 2001 (foot and mouth dis-ease).

“By the time we (in the hogindustry) got to 2002, a lot ofpeople pretty much hadenough,” Davies said.

Hog production in the UKsince the 1990s has been cut inhalf, according to Davies. TheUK, which was about 75 per-cent self sufficient in porkproduction at the time the sowhousing law was enacted, nowis just 50 percent self suffi-cient.

“It’s difficult to extract onereason for the halving of oursow herd,” Davies said. “But(the ban on gestation stalls)

exacerbated a lot of otherproblems going on.”

The rest of the EuropeanUnion is scheduled to ban ges-

tation stalls after the first ofthe year. Meanwhile, a growingnumber of retailers in the U.S.plan to source pork only fromproducers who use grouphousing systems.

Davies hopes others canlearn lessons from what hap-

USDA awards National AgrAbility Project grant

Purdue University’s Break-ing New Ground ResourceCenter received a four-year,$1.9 million National AgrAbili-ty Project grant from USDA.

The new National AgrAbili-ty Project is a partnership thatincludes Purdue, the Universityof Illinois at Urbana-Cham-paign, Goodwill of the FingerLakes (New York), and theArthritis Foundation-Heart-land Region.

U of I ag safety specialistsChip Petrea and Bob Aherinare involved with the project;Aherin will be the evaluationproject director.

The new National AgrAbili-ty Project will involve new ini-tiatives, such as core trainingfor AgrAbility staff membersacross the country and region-al workshops to enhance serv-ices to disabled agriculturalworkers.

The National AgrAbilityProject also will triple thenumber of webinars it offersand continue to expand itswebsite {agrability.org}.

One of its most widely usedresources is “The ToolboxAssistive Technology Data-base” that contains informa-tion on nearly 1,000 commer-cial and homemade technologyproducts for farmers and agworkers with disabilities.

‘It’s difficult to extract one reason for the halv-ing of our sow herd, but (the ban on gestationstalls) exacerbated a lot of other problemsgoing on.’

— Zoe DaviesUnited Kingdom National Pig Association

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BY KAY SHIPMANFarmWeek

Many livestock farmersknow their animals’ rate offeed conversion and other keymeasurements, but few knowhow much energy they use toproduce a pound of meat,according to a University ofKentucky (UK) researcher.

When UK professor DougOverhults has asked livestockfarmers about their energycosts, he said those farmersdiscussed power bills or theamount of propane bought.

“Dollars are not really ameasure of energy,” Overhultssaid. “We need to get energyconsumption related to pro-duction. We need to get it on aper-unit of production basis.”

In other words, the unit ofenergy used per pound of ani-mal raised.

“That would let you know ifyou’re being more energy effi-cient instead of just trackingkilowatt hours (kwh) or LP gasused,” Overhults explained.

Case in point was his study

of several Kentucky broilerhouses and their energy use.On-farm assessments showedgrowers used 4 to 9 gallons ofLP gas and 25 to 55 kwh foreach 1,000 pounds of birdsproduced.

Overhults encouragedfarmers to track energy useover two or three years anddevelop two- or three-yearaverages.

Variables influence theamount of energy used, andno two years are the same, butthose fluctuations are reducedby using multi-year averages,he added.

To calculate the average

production energy efficiencyof electricity consumption,add all the khw used in a yearand divide that number by thetotal of animal weight pro-duced in the same year. Thesame calculation may be madefor LP used.

Determining an “energybaseline use is very impor-tant,” Overhults said.

“If someone says somepractice will save you 20 per-cent, 20 percent of what? Andwhat is the payback? If you’realready real (energy) efficient,it will be harder to generatesavings,” he explained.

Basing decisions on produc-tion energy efficiency is betterthan simply cutting energy use,which may be counterproduc-tive if the animals’ growth,feed conversion, or productivi-ty suffers, Overhults said.

“In some cases a changethat increases energy use butalso improves productivitycould actually be considered animprovement in energy effi-ciency,” he said.

Researcher plugging energyefficiency into livestock farms

‘Dollars are notreally a measureof energy.’

— Doug OverhultsUniversity of Kentucky

Bloomington farmer John Olson shows the proper protective garb farm-ers should wear when dealing with anhydrous ammonia. He donnedgoggles and gloves recently while hooking up an anhydrous ammoniatank. (Photo by Cyndi Cook)

OSHA checking for protective equipment Farmers, be sure to wear goggles, gloves, and other personal

protective equipment when working with anhydrous ammonia.Recently, a farmer in Northern Illinois was applying anhy-

drous ammonia when he was approached by an OccupationalSafety and Health Administration (OSHA) representative whileswitching from an empty nurse tank to a full one, according tothe Illinois Fertilizer and Chemical Association.

The farmer was not wearing gloves and goggles when hehooked the tank to the toolbar. That prompted the OSHA offi-cial to pull to the side of the road and tell the farmer about theneed to wear gloves and goggles when working around anhy-drous.

Although the OSHA official stopped because he thought thefarmer was a fertilizer dealer employee, the farmer still shouldhave been wearing proper protective equipment.

Use of proper personal protective equipment (PPE) is anOSHA requirement. In addition, Illinois Department of Agricul-ture rules related to anhydrous ammonia state that anyone mak-ing or breaking an ammonia connection must wear gloves andgoggles.

Ag Scholarship DigestIllinois Soybean Associa-

tion scholarship — The Illi-nois Soybean Association willoffer up to 10 scholarships of$4,000 each to students enter-ing their junior year at specificIllinois universities. The appli-cation period runs Dec. 1through Feb. 1.

Eligible students mustmajor in crop sciences at Illi-nois State University in Nor-mal, Southern Illinois Univer-sity in Carbondale, Universityof Illinois at Urbana-Cham-

paign, or Western Illinois Uni-versity in Macomb.

Recipients may reapply foranother $4,000 scholarshiptheir senior year.

Awards are based on excep-tional academic ability, leader-ship, and financial need. TheIAA Foundation administersthe scholarship program.

Guidelines, applications andan activities template will beavailable at{iaafoundation.org}.

Questions should be direct-ed to the program administra-tor at the IAA Foundation at309-557-2230 or [email protected].

OUTREACH


IFB annual meetingactivities announced

Illinois Agriculture in theClassroom (IAITC) will reapthe dividends of successfulsummer and fall fundraisingevents hosted by the IAAFoundation.

“A great year of fundraisingmeans the IAA Foundationwill contribute $136,425toward the IAITC programyear,” said Susan Moore, IAAFoundation director.

“This increased donation isattributed to the generosity ofour Farm Bureau members,county boards, and staff aswell as business partners whosponsor our events. We aregrateful for their contributionsto help fund ag literacy.

“The 2012 Illinois FarmBureau annual meeting willkick off the first event to helpsupport the 2013 IAITC year,and we hope to be off to agreat start for the newfundraising year,” Moore said.

All event proceeds supportthe IAITC program.

This spring’s 5K run netted$19,625 for the foundation andincluded a host of agriculture-awareness activities for chil-dren and adults.

In June, close to 200 golfersparticipated in the IAITC GolfOuting at the Wolf Creek GolfClub and Elks Country Club inPontiac. The event netted$39,416.

In September, cyclistsspread the message of agricul-ture and bike safety to 2,000

students through school stopsin McLean, Piatt, and DeWittcounties. The 17th annual BikeRide for IAITC netted $34,803for ag literacy.

Fundraising activities at theIFB annual meeting will startat 3:15 p.m. Saturday, Dec. 1,with an ice cream social spon-sored by Prairie Farms Dairy.A live auction will begin at3:45 p.m. Items up for bid maybe viewed online at the IAAFoundation website {iaafoun-dation.org}.

The silent auction will startDec. 1 and bidding will contin-ue until Dec. 3.

Currently, the foundation isaccepting donated items forthe silent auction either withan online form or by contact-ing the foundation office at309-557-2230.

The trivia contest will beDec. 2 with doors opening at7:30 p.m. and the contest start-ing at 8:15 p.m. This year’stheme is Dr. Seuss.

Teams of eight that registerbefore Nov. 26 will qualify fora reduced registration fee.After that date, teams will reg-ister at the door. Registration islimited to the first 45 teams.

Teams will compete forprizes in the county FarmBureau and the staff-corporatedivisions. A prize also will beawarded to the team with thebest costumes and table décor.

For more information or toregister a team, go online to{iaafoundation.org/iaaf/Events/AnnualMeeting.html}. —Kay Shipman

IAA Foundation caps fruitful fundraising year

BY KAY SHIPMANFarmWeek

Illinois farmer Katie Prattof Dixon said she’s willing toinvest a year as a national agspokesman for the future offarming.

Last week, the U.S. Farmers& Ranchers Alliance (USFRA)selected Pratt as one of ninenational finalists to serve as anagriculture spokesman. Threeor four persons will be chosenas USFRA’s “faces of agricul-ture” and spend a year makingpublic appearances, givingmedia interviews, and beinginvolved in marketing cam-paigns.

“My young son, who is 7,lives and breathes farming. Ithought to myself, ‘If I didn’tdo this, would he have theopportunity that we have asfarmers today?’ That helpedput it in perspective for me,”Pratt said of her decision toapply. She spoke withFarmWeek and the RFD

Radio Network from NewYork City where the announce-ment of the finalists was madelast week.

“I believe that by being aspokesman for agriculture, Iwill be helping to secure hisfuture as a farmer in America,”Pratt added.

Pratt and her husband,Andy, a seventh-generationfarmer, grow corn, soybeans,and seed corn in Lee County.They have two children, Ethanand Natalie.

The Pratt family has hostedschool groups and teachersthrough Illinois Agriculture inthe Classroom and communi-cate with Chicago-area stu-dents through the Adopt aClassroom program. They areactive in the Farm BureauYoung Leaders, and she wasone of four finalists in the2012 American Farm BureauYoung Farmer and RancherDiscussion Meet.

Pratt also served as a volun-

teer for the Illinois Farm Fami-lies (IFF). The coalition iscomprised of commoditygroups for beef, corn, pork,soybeans, and IFB.

Pratt was chosen as a finalistfrom more than 100 applicantsby a panel of judges thatincluded journalists, a chef, anda food-parenting blogger.

Online voting — each indi-vidual may vote once a day —

will contribute to the finalists’scores and end on Dec. 14.The national ag spokesmen willbe named in January.

To vote, go online to{FoodDialogues.com}. Regis-tration is required; however,email addresses will not beshared or sold to any third par-ties.

The other finalists are: TimNilson, turkey grower, Wilton,

Calif.; Daphne Holterman,dairy farmer, Watertown, Wis.;Chris Chinn, hog and grainfarmer, Clarence, Mo.; EricMcClam, specialty grower,Columbia, S.C.; Janice Wolfin-ger, cattle farmer, Morristown,Ohio; Bo Stone, grain and hogfarmer, Rowland, N.C.; WillGilmer, dairy farmer, Sulligent,Ala.; and Brenda Kirsch, diver-sified farmer, St. Paul, Ore.

National ag spokesman finalist

Illinois farmer wants conversations to secure the future of farming

Katie Pratt of Dixon is a national finalist to be an agriculture spokesman. Her family includes son, Ethan; hus-band, Andy; and daughter, Natalie. (Photo by Ken Kashian)

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FFA, IDOA project promotes Illinois products, ag careersBY KAY SHIPMANFarmWeek

Ag learning opportunitiesabound thanks to a new proj-ect of the Illinois FFA and Illi-nois Department of Agricul-ture (IDOA).

Not only will FFA memberslearn about Illinois food andagricultural products, but thosestudents will educate con-sumers about those productswhile learning about potentialcareers.

“If students learn horserad-ish is an Illinois product,they’ll learn about the scientif-ic process to grow and pro-duce the crop — and they canhelp educate the general pub-lic. It is a trickle up of educa-tion,” explained Jim Craft, Illi-

nois FFA executive secretary.Through the Illinois Prod-

uct FFA Challenge, FFA chap-ters and members are to raiseawareness of and promote Illi-nois food and ag productsthrough different activities,

said Jennifer Tirey, IDOA headof marketing and promotions.

Tirey’s list of possible activ-ities ranged from taste-testprograms to community pre-sentations to marketing cam-paigns.

“As a small staff, it’s hardfor us to get the word out;we’re hoping a lot of kids willhelp make connections for us.They are our ambassadors,”she said.

Craft viewed the project asan opportunity for students togain supervised agriculturalexperience in ag marketing,agriscience, ag communication,and other fields.

The project also helps pro-mote Illinois products and“helps connect students to theagricultural economy,” Craftnoted. “Our students need

opportunities for career explo-ration.”

Participating chapters willregister with IDOA and reporttheir activities to earn points.The top two chapters and topthree members with the mostpoints by April 16 will wincash prizes.

The prizes will be awardedduring the state FFA conven-tion.

To Craft, the project offersendless opportunities to con-nect students with retailers,farmers, manufacturers, andreal-world experiences.

Kevin Kapelski, left, account manager for Land O’Lakes, discusses feedingredients and nutrition for beef cattle during the recent FS Total Live-stock Solutions beef tour on the farm of Todd Slykuis in Saline County.Participants of the tour viewed a new monoslope facility and discussedfeed bunk management and feeding for maximum performance, amongother issues. (Photo by Jenette Mulcahy, South Central FS, Marion)

BEEF TOUR

Cattle numbers continue to shrinkBY DANIEL GRANTFarmWeek

The inventory of cattle andcalves on feed in the U.S. con-tinued to shrink last month.

Cattle and calves on feed onNov. 1 totaled 11.25 millionhead, down 5 percent from ayear ago, USDA noted Friday inits monthly cattle on feedreport.

Meanwhile, placements infeedlots in October totaled 2.18million head, down 13 percentfrom last year. It was the lowestnumber of cattle placements inOctober since at least 1996.

“The numbers were right onthe average trade guesses,which is neutral to the marketshort-term,” said Rich Nelson,director of research at Allen-dale Inc. in McHenry.

“But, longer term, we’re set-ting up for beef production andslaughter in the first and secondquarters of 2013 to be down,”he continued. “This is thefourth month in a row we’vehad a double-digit decline (inplacements).”

Marketings of fed cattle inOctober increased 3 percent toa total of 1.84 million head.

The marketings’ numberappeared negative to prices, butNelson noted there were twoextra weekdays of marketings

last month compared to Octo-ber 2011.

“If you take that out of theequation, marketings actuallywere less than last year,” hesaid.

The analyst predicted slug-gish beef demand, concernsabout the U.S. fiscal cliff, andthe fact that sale barns are fullof lightweight cattle could keepthe market in a sideways trendnear-term.

But, long-term, Nelson pre-dicted April cattle futures couldspike to $138 to $140 per hun-dredweight due to tighter sup-plies.

EDuCATION


CREATIVE HAND-OFF

Danny Mielneckzek, Illinois Farm Bureau education specialist, shares corn starch with Parrish Smith ofAshland, a member of the A-C Central FFA Chapter, during the Elite Conference last week at HeartlandCommunity College, Bloomington. Smith was among 68 FFA and 4-H members who explored agricul-ture teaching careers at the event. Illinois Agriculture in the Classroom staff helped the students use cornstarch and other common materials to make teaching tools. Another 107 high school students exploredcareers in teaching business, industrial technology, health occupations, and family and consumer sci-ence. (Photo by Kay Shipman)

IAITC making difference for students and teachersBY KAY SHIPMANFarmWeek

Illinois Agriculture in the Classroom (IAITC) workedwith thousands of teachers and students, involved more vol-unteers, and created new educational resources from Sept. 1,2011, through Aug. 31, reported Kevin Daugherty, IllinoisFarm Bureau education director.

Since 2005, the funded county ag literacy coalitions havegrown from 46 to 63, a 34 percent increase. Those coalitionswork with schools in 77 counties.

While the number of students remained high, districts cuttransportation budgets for field trips and that decreased stu-dent participation in ag field days and expos, Daugherty not-ed. In the past, those types of events have exposed largenumbers of students to ag and natural resource topics.

IAITC directly worked with more than 31,300 teachers,which was down slightly. However, Daugherty projectededucators will continue to value ag-based educationalresources as the state transitions to new learning standardsand emphasizes the need for students to be ready for collegeand careers.

In an effort to reach more teachers, IAITC is exploringan online option for summer education programs with a vir-tual classroom session combined with a day of extendedfield trips, according to Daugherty.

In addition to educational materials and training, teachersare gaining a variety of benefits through county AITC.

He pointed to a 16 percent increase in professional devel-opment credits provided to teachers by many county AITCprograms. At the same time, the number of volunteers who workedwith local AITC programs increased slightly to 3,104.

New IAITC educational materials included school cafete-ria posters featuring Illinois farmers, ag-based achievementtest preparation materials, and lessons for libraries’ summerreading programs.

Henry County school, ag teacherreceives AFB foundation grant

Galva High School, Galva,and agriculture teacher TrishaMain recently were selected asa grant recipient by the Ameri-can Farm Bureau Foundationfor Agriculture with partner-ship from The Nutrients forLife Foundation.

Main and her school willreceive a class set of “TheMan Who Fed the World”about the life of Norman Bor-laug.

She also will receive ateacher’s guide of lesson plans.

An upcoming national essaycontest is open to high schoolstudents whose schools haveused the book.

Contest details are availableonline at {http://bit.ly/MGUr-RJ}.

Essays and an entry formmust be emailed to [email protected] or faxed to 202-314-5121 by April 1.

Still time to apply for advisory teamsFarm Bureau members have until Dec. 6 to apply for one of

three new advisory teams.Illinois Farm Bureau is developing Strength With Advisory

Teams (SWAT) to surface emerging issues in agriculture, pro-vide a vision for IFB and the agriculture industry, and helpguide issues.

The teams are: Conservation and Natural Resources, Farm-ing Production and Marketing, and Local and State Govern-ment.

For information, contact your county Farm Bureau, call IFBat 309-557-3984, or go online to {ilfb.org/swat}.

trade


January 9 Pre-Conference Workshops 1) Cover Crops 2) High Tunnels (including beneficial insects/biocontrol) 3) Basics of Orchard Establishment/Tree Fruit Production 4) Sweet Corn

January 10 - 11 Conference Tracks Fruit Vegetables Herbs Agritourism/Marketing Organic Production Business Management Irrigation

This program is overflowing with the resources you need to grow your business and your profits.

Go to www.specialtygrowers.org for full agenda

For more information: 309-557-2107 or [email protected]

Program Highlights Market Readiness Labor issues Insurance Legal issues Public Relations & Advertising

Dollar value should remain export friendlyBY DANIEL GRANTFarmWeek

The value of the dollarshould remain low enoughnext year that it will continueto be friendly to U.S. exports,according to a FederalReserve Bank economist.

That should be good newsfor the ag economy whichgenerally is strong in spite ofthe drought and lingering

issues with the overall U.S.economy.

“We’re in a (dollar-value)range that’s underneath wherewe were 20 years ago,” DavidOppedahl, business economistwith the Federal Reserve Bankof Chicago, said at the recentAgEngage farmland value andleasing conference in Decatur.

“The dollar’s value is not asstrong, which benefits

exports,” he continued. “Thevalue of exports is projectedto rise.”

USDA recently projectedfiscal year 2013 ag exports willreach a record-high value of$143.5 billion. Imports alsoare projected to set a newrecord ($117 billion), althoughit still would leave a significantag surplus of $26.5 billion.

“There’s a lot of growthpotential out there,” Oppedahlsaid. “And we have a competi-tive advantage in the Midwest”with high productivity soils, acentral location, and a viabletransportation system to pro-duce and ship ag commoditiesaround the world.

The export situation, nearterm, isn’t as positive. Soyexports are on a record pace,but corn exports haveslumped, wheat exports thismonth were cut by 50 millionbushels, pork exports inAugust declined 3 percent duein large part to weakerdemand from the Asian mar-kets, and the U.S. in 2013 isprojected to become a net

Changing global players, new market dynamicscomplicate trade pictureBY MARTIN ROSSFarmWeek

U.S. export prospects may be riding high (see accompanyingstory), but that doesn’t mean it won’t be a bumpy ride.

Jeff Hebble, market analyst with Clarendon Hills-basedAgYield, anticipates increased volatility in global trade as develop-ing economies hold greater sway in key markets, new playersemerge on the international scene, and sociopolitical ripples causestronger tremors in major commodity sectors.

Hebble, former president of Illinois Corn Products Interna-tional’s Asia/Africa division, noted the growing market influenceof such countries as Russia, Argentina, Brazil, and India.

“They’re a lot less transparent; they can do things overnightthat the U.S. couldn’t do in four years of policy,” he related.“They might ‘stop’ exports, for example. They see a shortage inwheat, so they just stop all their exports. It’s more disruptive totrade.

“Seemingly remote events can have a very local impact andvice versa. You talk about the ‘Arab spring’? I think that’s reallyFood Riots 2.0. It started in Tunisia, in a very small market,because of protests over high prices of wheat and other grains.Then it just evolved. They weren’t clamoring for democracy; theywere clamoring for cheap food.”

Hebble also sees more global “cross-correlational volatility”between commodities and products. A prime example is the bio-fuels market, where the fortunes of Brazilian sugar, U.S. corn,and ethanol have become heavily intertwined.

Further, Hebble notes a raft of major new players in worldtrade and ag commerce. India recently passed the U.S. as top beefexporter, thanks to a “dairy revolution” on the Indian subconti-nent. China has become a top beer exporter, Vietnam is com-mandeering the coffee trade, and Morocco provides 40 percentof the world’s phosphate supply.

Wilmar International, founded in 1991, is the world’s largestpalm oil merchandiser and currently one of the key companieson the Singapore Exchange. Singapore ag product-food ingredi-ent supplier Olam International nearly partnered with industrygiant Louis Dreyfus Commodities in 2010.

Meanwhile, CP (Charoen Pokphand), a Chinese-Thai con-glomerate, has surpassed Cargill in feed sales and has heavily inte-grated into specialty poultry production for high-end Europeanmarkets. On the equipment side, India’s Mahindra and Mahindrais the world’s largest tractor producer and a NASCAR sponsor.

And Orascom Construction Industries, an Egyptian company,has announced plans to build a $1.4-billion fertilizer plant inIowa. “Again, your world is changing,” Hebble advised.

importer of beef due to lowdomestic supplies and highprices.

In fact, USDA this monthincreased its estimate of U.S.corn imports this year by 25million bushels to a record-high 100 million bushels.

Meanwhile, growth of theU.S. economy was projected toremain sluggish to slightlyimproved in 2013.

“There definitely are con-cerns about getting the econo-my moving faster,” Oppedahlsaid. “Consumer confidencehasn’t come back to levels itwas at prior to the recession.”

The gross domestic productand industrial production werepredicted to grow about 3 per-cent next year and interestrates were forecast to remainlow through at least 2015.

But the U.S. unemploymentrate was projected to remain at

or above 7 percent for at leastthe next couple years.

“The outlook for the econ-omy is it will grow slightlyabove trend next year,”Oppedahl added. “Agricultureshould be healthy, althoughlingering effects from thedrought could be an issue.”

‘There’s a lot ofgrowth potentialout there.’

— David OppedahlFederal Reserve Bank

of Chicago

FROM THE COUNTIES


Get Your Gator On!At the IAA Foundation Live Auction

Up for bid at the IFB Annual Meeting in Chicago on Saturday, December 1 at 3:45

Full spec sheet and video may be viewed at www.iaafoundation.orgAll proceeds benefit Illinois Agriculture in the Classroom

Not attending IFB Annual Meeting? Contact the IAA Foundation for phone-in

The Details:

Valued at $14,205i820T2

CLARK — An informa-tional meeting on the

Ameren power line will be at 6p.m. Monday (today) at theClark County Extension office,Marshall. Call the FarmBureau office for more infor-mation.

EFFINGHAM — TheYoung Farmers Com-

mittee and South Central FSwill collect coats for local fami-lies in need. Drop off new orgently used coats until Wednes-day and receive a chance to winthree tickets to an Illini basket-ball game. Donations may betaken to the Fast Stop GeneralStore, Effingham; Farm Bureauoffice; or Promark Advertising,Altamont. Call the FarmBureau office at 217-342-2103for more information.

• Members are invited toparticipate in one of the FarmBureau Action Teams, whichmeet two times a year. Theteams are legislative, commodi-ties/marketing, and localaffairs. The fall planning meet-ing will be at 6 p.m. Monday(today) at the Farm Bureauoffice. Dinner will be served.Call the Farm Bureau office at217-342-2103 for reservationsor more information.

LASALLE — The annu-al meeting will be at 6

p.m. Tuesday, Nov. 27, at Pit-stick’s, Ottawa. Dinner will beserved. Tickets are $10 andmay be purchased at the FarmBureau office or from a FarmBureau director. Call the FarmBureau office at 815-433-0371for more information.

ROCK ISLAND —

Mercer and Rock Island

County Farm Bureaus willsponsor an estate planning sem-inar from 10 a.m. to 3:30 p.m.Monday, Nov. 26, at theReynolds American Legion.Erica Eckley, Iowa State Univer-sity Center for Agricultural Lawand Taxation, will be the speak-er. Topics include estate plan-ning, planning for business suc-cession, and Illinois estate taxexemptions. Cost is $10 formembers and $20 for non-members. Reservations andpayment are due Wednesday tothe Farm Bureau office. Callthe Farm Bureau office at 309-736-7432 for more information.

• Henry and Rock IslandCounty Farm Bureaus willsponsor a marketing dinnerand seminar at 6:15 p.m.Thursday, Nov. 29, at theGeneseo Moose Lodge. Costis $20 if pre-registered and $30for walk-ins. Andy Shissler,Roach Ag Marketing, will bethe speaker. Call the FarmBureau office at 309-736-7432for reservations or more infor-mation.

VERMILION — Theannual meeting will be

at 6 p.m. (Illinois time) Tues-day, Nov. 27, at the BeefHouse Banquet Center, Cov-ington, Ind Tickets are avail-able at the Farm Bureau officeand must be purchased byWednesday. The VermilionCounty Farm Bureau Founda-tion will host its annual silentauction. Kevin Green willspeak about his participation inthe Illinois Farm Bureau mar-ket study tour to Cuba. Callthe Farm Bureau office formore information.

GETTING DOWNSTATE EXPERIENCE

Jenna Kilgus explains the dairy operation she and her husband, Matt, own at Fairbury to students fromfour Chicago schools. The Cook County Farm Bureau Foundation recently hosted an Agriculture Leader-

ship Academy, a fully funded trip for 40 urban students who attendschools with approved ag programs on ag tour in Central Illinois. Theobjective was to let the students explore ag career opportunities. Inaddition to the dairy farm, the students toured the Joliet Intermodal

and visited Pontiac High School, where the Pontiac FFA students and the Chicago students participated inleadership games. (Photo by Diane Merrion, Cook County Farm Bureau ag coordinator)

profitability


Export inspections(Million bushels)

Week ending Soybeans Wheat Corn11-09-12 64.1 10.5 9.511-02-12 60.0 14.0 15.4Last year 54.1 12.9 37.7Season total 434.2 427.3 168.2Previous season total 314.3 488.8 288.2USDA projected total 1055 1200 1250Crop marketing year began June 1 for wheat and Sept. 1 for corn and soybeans.

Feeder pig prices reported to USDA*Weight Range Per Head Weighted Ave. Price10 lbs. $32.25-50.59 $41.60 40 lbs. n/a n/a

Receipts This Week Last Week 79,653 70,185*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 $72.85 $79.10 -6.25 Live $53.91 $58.53 -4.63

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

Steers 124.90 125.00 -0.10 Heifers n/a 127.00 n/a

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 143.48 144.17 0.69

CME feeder cattle index — 600-800 Lbs.

Lamb prices

(Thursday’s price)

Slaughter Prices - Negotiated, Live, wooled and shorn 127-170 lbs. for88.88-115 $/cwt. (wtd. ave. 102.05)

USDA

Farm ServiceAgency

NAP CLOSING DATES — Tuesday is theNoninsured Crop Disaster Assistance Program(NAP) sales closing date for the 2013 year forapples, blueberries, caneberries, cherries, grapes,peaches, pears, plums, and strawberries.

March 15 is the NAP sales closing date forall spring-and summer-planted crops. Contactyour local Farm Service Agency (FSA) officewith any questions.

NEW ACREAGE REPORTING — Thenew acreage reporting dates are in effect for the2013 crop year. Filing an accurate, timelyacreage report for all crops and land uses,including failed acreage, can prevent the loss ofFSA program benefits.

Prevented planted acreage must be reported nolater than 15 calendar days after the final plantingdate for the applicable crop. Failed acreage mustbe filed before the crop’s disposition.

Dec. 15 is the acreage reporting date for FSAand Risk Management Agency (RMA) purposesfor perennial forage and fall-seeded smallgrains, such as barley, rye, and wheat.

Other acreage reporting dates and the affect-ed programs/crops are:

Jan. 2 — honey.Jan. 15 — perennial fruits, such as, apples,

peaches, nectarines, pears, plums, strawberries,and grapes.

July 15 — spring cabbage, corn, grainsorghum, green peas, hybrid seed corn, springoats, popcorn, processing beans, pumpkins,soybeans, sweet corn, and all other crops.

2009, 2010 AVERAGE ADJUSTEDGROSS INCOME REVIEW — The adjustedgross income (AGI) verification and compliance

reviews for 2009 and 2010 are ending. Compli-ance reviews were conducted on farmers theInternal Revenue Service (IRS) indicated mayhave exceeded the adjusted gross income limita-tions described in regulation.

If a farmer was determined to have exceed-ed the AGI limit of $500,000 of nonfarmincome, $750,000 of farm income, or $1 millionnonfarm income for conservation benefits, thenreceivables were established for paymentsearned directly or indirectly by the farmer sub-ject to the applicable limitation. The IllinoisFSA state office did the reviews and made thedeterminations.

Any concerns should be directed to the Illi-nois state FSA office at 217-241-6600. Farmerswho received initial debt notification letters mayappeal only the amount of the debt to theirlocal FSA office.

MARKETING ASSISTANCE LOANS —Marketing Assistance Loans, also known asCommodity Loans, are available to farmers whoshare the risk of producing a crop. To be eligi-ble, you must maintain beneficial interest in thecrop through the time of application.

Once beneficial interest in a commodity islost, the commodity is ineligible for loan —even if you regain beneficial interest.

Violating provisions of a marketing assis-tance loan may trigger administrative actions,such as assessing liquidated damages, calling theloan, and denial of future farm-stored loans.

The most common violations are removingor disposing of a commodity being used as loancollateral without prior authorization and pro-viding an incorrect quantity certification.

Look at crop yield data more critically this yearBY LANCE RUPPERT

In most areas, harvest isnow complete and fall tillage isunder way. With the 2012growing season “in the books,”

it is now timeto start mak-ing decisionsfor 2013.

Most of usbase our busi-ness decisionson informa-tion, facts, andobservations.Today, infor-

mation is everywhere. Wehave more information at ourfingertips than ever before.

We get bombarded every

day via television, radio, web-sites, email, Twitter, and textmessages. Sometimes we evenlearn things from face-to-faceconversations with anotherperson!

Do you ever wonder aboutthe validity of the informationyou receive? Have you startedto become skeptical of all infor-mation, especially from certainsources? Coming off the elec-tions, I think we can all relate.

As you receive this year’s plotdata, take a minute to ask criticalquestions of that data so youcan make good, fact-based deci-sions for next year’s crop.

Fundamentally, hybrid andvariety plots are good. They give

seed companies and growers away to evaluate and compareproducts across a large geogra-phy and varied environments.

How was your growingenvironment this year? Inmost areas of Illinois, thegrowing environment wasn’tideal, with different and multi-ple factors working againstyour crop yield.

Extreme environments cancause extreme differences inproduct performance, becausenot all genetics are the sameand react the same in thoseenvironments.

Be cautious when looking atand making decisions basedsolely on plot data. Ask ques-

tions about what happenedthroughout the growing seasonthat may have affected theplant’s ability to perform: rota-tion, soil types, size of the plot,tillage/compaction, and droughtcan all affect performance.

Also, find out when the plotwas planted. That will have adirect correlation to pollina-tion/flowering date and theenvironmental effects duringthose important times in theplant’s life. This year, be criticalof plots with huge yield swings.This could be more related tosoil type than genetics.

Consider looking at multiplelocations and multiple years ofdata. Every year and location

is different. With extremeenvironmental conditions likewe saw this year, every hybridor variety will fail somewhereand shine somewhere else.

Don’t put too much empha-sis on data from one plot orfrom one year. Try to look atdata compiled from multiplesites and from multiple years,if possible.

Your local FS crop specialistcan help you gain informationto assist you in makinginformed decisions for 2013.

Lance Ruppert is FS Seed salesand marketing manager His emailaddress is lruppert@growmark. -com.

Lance Ruppert

Record farm income doesn’t tell whole story; distribution highly variableBY DANIEL GRANTFarmWeek

The USDA farm incomeforecast, which calls for arecord-high $122 billion for2012, looks really good on thesurface.

But the reality is 2012 likelywill go down as a feast orfamine year on many farms.

Record-high crop prices andrecord-large crop insurancepayments are expected to morethan offset drought-inducedcrop losses on some farms.

But farmers who took outlow levels of crop insurance,have no insurance at all, orwho hedged their crops atmuch lower prices early in theseason and then didn’t have

enough bushels to cover thehedges, could experiencemajor losses this year.

Livestock farmers who ranlow on feed and faced muchhigher feed prices also had amore difficult time this year.

“The drought impactedfarms very differently,” saidGary Schnitkey, University ofIllinois Extension farm man-agement specialist. “Gross rev-enue in 2012 is near recordlevels, but some will be lookingat financial stress.”

Darrel Good, U of I ageconomist, also noted anextreme amount of variabilityin farm income.

“The USDA numbersalways look at total income

and not the distribution ofthat,” he said. “There is a hugeamount of (income) variabilityin the crop sector. And if youinclude the livestock sector,the picture is very different.It’s not nearly as rosy.”

The two keys to income thisyear in the crop sector wererainfall patterns and cropinsurance.

Farms that received timelyrainfall and produced adequatecrops obviously put farmers inan advantageous position dueto record-high prices.

Farmers who had majorcrop losses but took out highlevels of insurance also areexpected to have a good year.

“Low yields aren’t necessar-ily bad for income,” Schnitkeysaid.

About 60 percent of Illi-nois’ cropland acres had a highlevel of crop insurance, 20 per-cent of acres was modestlyinsured, and another 20 per-cent had no insurance cover-age, according to Schnitkey.

“The acres that have a highlevel of insurance will offset

the yield declines,” Schnitkeysaid. “Most (farmers) took rev-enue protection guarantees andit worked exactly like it should,although (high payouts) willcause some bad publicity.”

Schnitkey and Good nextmonth will discuss the outlookfor 2013 commodity pricesand farm income at the IllinoisFarm Economics Summit tobe held at five locationsaround the state Dec. 10-14.Information about the summitis available online at {farmdoc-daily.illinois.edu}.

PROFITABILITY

AgriVisor Hotline Number

309-557-2274

AgriVisor endorsescrop insurance by

Policies issued by COUNTRYMutual Insurance Company®,

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AgriVisor LLC is not liable for any damageswhich anyone may sustain by reason of inac-curacy or inadequacy of information providedherein, any error of judgment involving anyprojections, recommendations, or advice orany other act of omission.

CASH STRATEGISTCorn Strategy

ü2012 crop: Corn futuresbroke below the recent nar-row trading channel, but heldthe late-September 20-weeklow. The market is in a win-dow for a six to seven-weeklow, which might spark a rally.But this latest break hints thetrend for the current 20-weekcycle might have turned down.Use a rally to $7.50 on Marchfutures for catch-up sales.

ü2013 crop: Use rallies to$6.25 on December 2013futures for catch-up sales. Wecould add another incrementat that level, too. Check theHotline if prices get back there.

vFundamentals: Sluggishexport demand and demand togrind into ethanol have beenpulling prices lower. The U.S.Environmental ProtectionAgency’s rejection of requeststo waive the Renewable FuelStandard (RFS) was a psycho-logical plus, but the currentgrind rate is still below the levelallowed by the RFS. Producerselling has been suppressed bylow prices and by talk thatexport demand should pick upas the marketing year progress-es. Weather has cut Argentinepotential, but it could favor croppotential in Brazil this spring.

Soybean Strategyü2012 crop: As we implied

last week, the newsupply/demand projectionschanged the market attitude.And China canceled 10 cargoes,which further undermined opti-mism. Use a rally back to $14.80to make catch-up sales. And giv-en the extent of this break, wemay add a sale at that level.

ü2013 crop: The short-term trend is down; now it’s amatter of how far a reboundmight carry. Use a rally to$12.90 on November 2013futures for catch-up sales. Weare seriously consideringadding another small incre-ment at that level as well.

vFundamentals: The con-tinued price decline should betelling you the market nolonger perceives the need toration soybeans. The increasein our crop assured users sup-plies will be plentiful until thenew South American cropsbecome available. And theshift to more favorable weather

across South American grow-ing regions made buyers morecomfortable with soybean fun-damentals until our next crop.

Wheat Strategyü2012 crop: The break to

the lowest levels since lastsummer keeps the short-termdowntrend intact, and maysignal the long-term trend hasturned down, too. The nextlevel of support on the Chica-go March contract comes at$8.25-$8.35. Use a rally to$8.75 for catch-up sales.

ü2013 crop: Make catch-up sales when Chicago Julyfutures are trading above $8.50.

Check the Hotline frequently;we could add a sale at any time.

vFundamentals: The toneof the market has remainednegative since USDA releasedthe November supply/demandforecasts. Downside riskshould be limited to somedegree because of tighteninginternational supplies andongoing dry conditions in theU.S. Plains. The most recentweekly condition report indi-cated 36 percent of the winterwheat crop, primarily the hardred winter crop, was in good toexcellent conditions, the lowestrating it has had prior to goinginto dormancy.

Cents per bu.

Monday, November 19, 2012

Last week we discussed howour larger-than-expected cropwould impact the demand struc-ture until the new South Ameri-can crops become available.With the shift in South Americanweather, we think it is importantto lay out how a good crop therewill impact world buyers.

Specifically, what might thepace of the South Americannew export campaign look like?One can look at all of thatarea’s drought and post-drought years, but the onlyperiod we believe is applicableis 2009/2010 because of theshare of world output SouthAmerica now commands.

Even then, that’s not a greatanalog to use as there was onlya modest drought in Brazil in2009 with yields only 6 percentbelow the record set the prioryear. And that was partly offsetby larger plantings. Argentina’syield was 32 percent off fromthe prior year, a year that alsohad a near-record yield.

The year following 2009’sdrought had larger plantings,record yields, and record pro-duction in Brazil and Argentina.Argentine plantings and produc-tion have flattened somewhat,but Brazilian output is stillgrowing sharply. This year’scrop could be 15 to 20 percentlarger than it was in 2010 with

good to average yields.Like this year, exports from

those two trickled to near noth-ing from November 2009through January 2010. But byFebruary, exports started toincrease rapidly, building to apeak in May before subsiding.

If anything, shipments couldbuild a little faster this February ifweather and output hold upbecause producers in earlier-har-vest areas were said to have plant-ed more shorter-season soybeans.

By March, certainly by April,exports should expand dramati-cally, provided the crops are asbig as currently expected.Starting in April 2010, ourexports slowed to a trickle, withmost weekly shipments at 5 mil-lion bushels or less.

There is a question as towhether Brazil has the load-outcapacity to allow our shipmentsto come to a virtual halt. Butworld demand, especially fromChina, could fall short ofexpectations too.

Sluggish demand for soybeanmeal and soybeans was a part ofthe mix behind this past week’scancellations. And the Chinesegovernment always has thewherewithal to sell soybeansfrom inventory to supplementneeds if supply would pinchimports for the short term.

No doubt, the key is SouthAmerican weather. But if it’sgood, and production is large,end users will not be inclined tobook ahead. And that couldtake a little more pressure offthe world trade, making the sit-uation workable.

A look ahead at soybeans

perspecTives


Fall is hard upon us. It istime to turn our thoughts todomestic matters and theupcoming holidays.

Much has been writtenabout the first Thanksgiving,and the foods that wereenjoyed. Much has changedover the years, and modern

Thanksgivingsdiffer fromthose celebrat-ed even 20 or30 years ago,with such sta-ples as broccolicasserole andcrispy kalechips nowadorning many

tables during the holiday sea-son.

Recently, I was thinkingabout the small things that giveour favorite foods their specialflavor — the spices. I wasthinking particularly of thespices that go into a goodapple or pumpkin pie: cinna-mon, nutmeg, cloves, and all-spice.

Cloves are actuallyunopened flower buds of atree that is native to Indonesia.They were exported and used

in China as early as 2,200 yearsago.

A major use during the HanDynasty (220-206 B.C.) was tocombat halitosis. The nameclove comes from the Frenchword clou, meaning nail, dueto their resemblance to thatpiece of hardware. They areused in such a manner in cook-ing ham.

They also are used as a fla-voring in chewing gum, ciga-rettes, herbal tea, and the mix-ture of spices known asGaram Masala.

The bark of several speciesof Cinnamomum trees are thesource of our cinnamon. It hasbeen in use for at least as longas cloves.

Sri Lanka (Ceylon) is thenative land of true cinnamon,Cinnamomum verum. Othertypes of cinnamon are com-monly called cassia, which isalso known as Saigon, Chinese,or Indonesian cinnamon.

Cinnamon production is afascinating process. Whentrees are 2 years old, they arecut back to a stump and cov-ered with soil. This process isknown as coppicing.

It has the effect of causing

the tree to send out numeroussprouts.

These new young shootsare harvested and laid out todry, at which point they curl upinto the cinnamon sticks thatwe know.

These sticks, or quills, canbe ground up to make thefamiliar cinnamon powder.Cinnamon is an anti-oxidant,which may help fight cancer. Italso serves as a blood thinnerand should be used in modera-tion.

The nutmeg tree actuallyproduces two spices: nutmegand mace. The nutmeg portionof the fruit is larger, and somace tends to command ahigher price.

Nutmeg has a fascinatinghistory that figures into thepurchase of Manhattan fromNative Americans by theDutch. It has also beenclaimed that nutmeg couldcure or prevent the BlackPlague, if worn around theneck. In Trenton, N.J., nutmegwas prohibited in kitchens offederal prisons due to its sus-pected hallucinogenic proper-ties.

Allspice is the unripe berry

of the Pimenta dioica tree. Ithas the flavors of cinnamon,nutmeg, and clove all wrappedinto one.

Of all the spices consideredso far, this is the only one thatis native to the Western Hemi-sphere, specifically, theCaribbean region.

Even today, Jamaica domi-nates in world production ofallspice. Columbus took all-spice back to Spain, probablyfrom his first voyage in 1492.

I do not know whetherthese spices were present dur-ing the first Thanksgiving —or how long it took until theywere commonly available atAmerican tables.

By all accounts, though, theBritish, Dutch, Portuguese,and others already had beenusing them, trading them, andensuring their continued agri-cultural production.

All such efforts required nosmall amount of effort andtime.

So, while enjoying your holi-day feasts this year, take amoment to give thanks forthese small but importantthings.

Mari Loehrlein is a professor of hor-ticulture and landscaping at WesternIllinois University’s School of Agri-culture, Macomb. Her email addressis [email protected].

MARILOEHRLEIN

Giving thanks for small things that add spice to life

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Another U.S. presidential campaignhas come and gone. Every four yearswe go through the throes of choosingthe individual entrusted to lead theUSA.

By the time we get to exercise ourcherished privilege of voting, we haveendured many months of campaignrhetoric. Paid political advertisements,

candidate debates, yardsigns, letters to news-papers, opinion polls,and even advice fromgrandma are designedto influence our choiceof candidates. It is acostly and mind-numb-ing process.

Insects also have theneed to put new leaders

in place. Social insects have queens that rule

the colony. Insect queens don’t liveforever, even though some have verylong lives when compared to otherinsects. Honey bee queens can livefour to five years. Mound-building ter-mites of Africa have queens that arereported to live up to 50 years.

In spite of a long life relative totheir loyal subjects, social insectcolonies do have to replace rulers fromtime to time. Insects don’t vote fornew rulers or for anything else, forthat matter.

So the transition of power in thesocial insect colony is accomplishedthrough other means — some ofwhich equal the dirty tricks that some-times haunt human political cam-paigns.

Leadership in the honey bee colonyis a matriarchal kind of thing. Here’show the system works: The queen ofthe colony has only one function — tolay eggs. She is really good at her job.

On an average day during the egg-laying season, a honey bee queen candeposit 2,000 eggs. That means thequeen produces an egg every 45 sec-onds or so all day long.

That feat is more remarkable whenyou consider that the queen has toinspect a cell in the comb to ensure itssuitability prior to depositing the egg.

Fertilized eggs hatch into grubs thatwill become female bees. Unfertilizedeggs of honey bees become males,which are called drones.

Whether the female grub developsinto a queen or a worker depends onthe type of food it consumes duringdevelopment.

Worker bees, which serve as nurse-maids, determine the food that eachgrub receives. Thus, the workers dic-tate which of their sisters becomequeens.

But there is more to the story. Sev-eral new queens generally are producedat the same time in a hive. This resultsin a situation similar to having severalcandidates declare for the same politi-cal office when only one from eachparty can compete.

So the contending candidates mustbe narrowed to one in some way.Think of our political system andnominating conventions.

In a hive it happens this way: Thefirst queen to emerge seeks out otherqueens and stings them to death

before they emerge. If by chance twoqueens emerge at the same time, theyfight a duel to the death.

It is a winner-take-all scenario! Butthe spoils will go to the victor only ifshe can successfully complete a matingflight and return to the hive.

If that happens, an orderly transitionof power begins. The queen motherabdicates the throne in favor of herdaughter.

The former queen and an entourageof loyal workers leave and seek a newhome to call their own. This process isknown as swarming.

Ants are another group of socialinsects that sometimes engage in behav-iors that resemble those of humansrunning for political office. Forinstance, there is a species of ant thatonly survives when a queen parasitizesthe nest of another species of ant.

The parasitic ant manages to get intothe nest by adorning herself in theodors of that nest and bribing guardswith a gift or two.

Does that sound a bit like a politi-cian changing positions and buyingfavors as the need dictates?

Once into the nest, the invadingqueen then works her way to the queenchamber. There the invader manages tobehead the resident queen. The perpe-trator of the evil deed then assumescontrol, and the workers begin to raiseher offspring. Cutthroat politics, forsure!

Tom Turpin is an entomology professor atPurdue University, West Lafayette. His emailaddress is [email protected].

The art of cutthroat politics — insect style

TOMTURPIN

farmweek november 19 2012

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