FarmWeek Dec. 17 2012

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

FaRm ReTuRns are expect-ed to remain strong in 2013 asfarmers generally should havemore bushels to sell, barring arepeat of this year’s weather. ......10

The sloW paCe of U.S. cornexports is not the result of qualityissues with the drought-stressed crop,according to a recent U.S. GrainsCouncil report. .....................................8

The BioFuels seCToRoffers potential to launch “anotherboom in agriculture,” a universityof Illinois economist told farmerslast week. ........................................5

Monday, December 17, 2012 Two sections Volume 40, No. 50

Rock blasting imminent, seen as partial solutionBY MARTIN ROSSFarmWeek

As contractors ready topull rock out of the UpperMississippi River, IllinoisFarm Bureau pledges to “pullout all stops” to ensure grainand farm inputs continue toflow on the river.

IFB President Philip Nelsonhailed U.S. Army Corps ofEngineers indications that rockblasting in the Thebes reach ofthe Upper Mississippi couldbegin this week.

Removal of high rock pin-nacles in the Thebes-GrandTower area is seen as crucial toensuring an adequate nine-footnavigation channel in the St.Louis to Cairo region.

The Corps originally sug-gested work might not beginuntil February under theagency’s normal contractorbidding process, but U.S. Sen.Dick Durbin, Illinois Gov. PatQuinn, and others, pushed toexpedite rock blasting andremoval.

A pair of contractors hasbeen selected to remove rockin a two-step process over thenext 60 days, national Water-ways Council Inc. (WCI) VicePresident Paul Rohde toldFarmWeek last week in St.Louis.

IFB continues to seek expe-

“We complimented the sena-tor for pulling out the stops totry to make sure river traffic isnot shut down on the Missis-sippi,” Nelson said.

“We pointed out to him thetremendous amount of com-

merce that takes place on theriver. This is a huge commerceissue, and he knows it.

“Durbin hasn’t given up on(possible Missouri releases). He

See Blasting, page 4

dited pinnacle removal at a sec-ond Grand Tower site. WCIand the American WaterwayOperators jointly argue rockblasting is “only a part of thesolution to sustain shipping onthe Mississippi River.”

The Corps release of “suffi-cient water” from Missouri Riv-er reservoirs, in conjunctionwith pinnacle removal, is crucialto head off closure of the Mis-sissippi possibly by Dec. 24, thegroups maintained.

Corps officials maintain theylack authority to deviate fromwinter water withdrawal guide-lines for the Missouri River (seepage 4).

“We maintain they do,indeed, have the authority;they’ve done it before,” Rohdecountered.

IFB supports a presidentialemergency declaration thatwould enable agencies to takeneeded steps to ensure an opennavigation channel and WhiteHouse authorization to “devi-ate” from the Corps’ MissouriRiver Master Water ControlManual.

In Washington discussions

with Durbin last week, Nelsonprioritized the need to keep theMississippi channel open forwinter delivery of fertilizer sup-plies to ensure farmers are“prepared for the spring sea-son.”

In Washington last week, Illinois Farm Bureau President Philip Nelson, left, discusses concerns about naviga-tion on the Upper Mississippi River with U.S. Sen. Dick Durbin, a Springfield Democrat, who has intervenedwith the U.S. Army Corps of Engineers in the matter. Durbin is expected to provide an update on the situationtoday (Monday) in St. Louis. (Photo courtesy of Durbin staff)

Nearly two years after Congress pulledfamily farms and businesses from the brinkof potentially staggering estate tax liability,producers are staring into the murky depthsbeyond the “fiscal cliff.”

During last week’s Farm Economics Sum-mit in Champaign, University of IllinoisExtension ag tax specialist Gary Hoff notedthe “fine mess” currently confronting Illinoisfarmers “because Congress hasn’t acted.”

Hoff cited uncertainty about the futureof bonus depreciation or Section 179expensing, which he deemed “the taxpayer-businessman’s best friend” in terms ofenabling producers to reduce tax liability viainvestment in equipment.

He noted one Illinois operation that wasable to substantially offset 2011 income taxliability through a $3 million-plus bonusdepreciation deduction.

He said he is unsure where Section 179proposals may fall (the maximum deductionis set to drop from a current $139,000 to$25,000 in 2013), and has heard no realindication whether bonus depreciation will

be extended.“That gives the (Internal Revenue Serv-

ice) fits, it gives tax preparers fits, and itgives you fits, because you don’t know howto tax-plan,” Hoff told farmers.

Of particular concern is Dec. 31 expira-tion of the $5 million estate tax exemptionand 35 percent “death tax” rate. If Con-gress neither extends that exemption norestablishes a new one, the estate tax wouldfall back to a $1 million exemption and a 55percent rate. According to Rick Morgan,Country Financial senior financial securityconsultant, that would result in “a signifi-cant increase” in the number of Illinoisfamilies exposed to tax liability in 2013.

While Illinois’ estate tax is set to risefrom a current $3.5 million exemption to a$4 million threshold on Jan. 1, many fami-lies would face dual liability given risingstatewide farmland values, Morgan warned.

He recommends farmers explore basicestate planning strategies that reduce expo-sure “regardless of what the exemption is.”In the event a family can’t avoid hitting tax

thresholds, it should plan to ensure thedeath tax hits “the smallest percentage ofthe estate possible,” Morgan toldFarmWeek.

Each spouse receives the federal exemp-tion, and estate planning often focuses ondividing property between spouses and dis-tributing assets at the first spouse’s death tomaximize use of exemptions.

Producers also may use current “special-use valuation” provisions that factor in theexisting (and prospectively lower) produc-tion value of farm real estate rather thanmerely its conventional fair market value.

Other strategies for discounting estatevalue include use of family limited partner-ships or restructuring the percentage ofinterest various family members hold in afarm.

Further, a farm owner currently can giveup to $13,000 per year to as many people ashe or she chooses without those giftscounting against a $5 million lifetime gift

See Cliff, page 3

‘Fiscal cliff ’ uncertainties hinder farm planning

U OF I UNVEILS RUST TEST — University of Illi-nois researchers recently developed a method to determinethe viability of soybean rust spores.

Soy rust, which first appeared in the U.S. in 2004, ismostly concentrated in the Southern U.S., where it over-winters on kudzu. But spores from the fungus often blownorth into Corn Belt states.

A problem for farmers, until now, was the inability to de-termine if the spores were dead or alive. Soybean plants in-fected with living rust spores may need to be treated withfungicide to avoid potential yield loss.

“Finding spores is different from finding spores that areliving and able to infect plants,” said Glen Hartman, U of Icrop sciences professor and USDA Ag Research Servicescientist.

The U of I test uses two different staining techniques todetermine spore viability. The techniques are rapid and re-liable, according to Hartman.

MEAT ON THE MENU — Ag Secretary Tom Vil-sack told senators his department would do away with dailyand weekly limits of meats and grains in school lunchmenus. Several lawmakers wrote the department after newdietary guidelines went into effect in September, arguingchildren aren’t getting enough to eat.

School administrators also complained, saying set maxi-mums on grains and meats are too limiting as they tried toplan daily meals.

“This flexibility is being provided to allow more time forthe development of products that fit within the new stan-dards while granting schools additional weekly menu plan-ning options to help ensure that children receive a whole-some, nutritious meal every day of the week,” Vilsack saidin a letter to Sen. John Hoeven (R-N.D.).

The new guidelines were intended to address increasingchildhood obesity. They set limits on calories and salt, andphase in more whole grains. Schools must offer at least onevegetable or fruit per meal. The department also dictatedhow much of certain food groups could be served.

BIODIESEL CERTIFICATION — Fifty-four dieseltech and ag business students at Spoon River College inCanton earned biodiesel certifications Dec. 5 through atraining course funded by the Illinois soybean checkoff andthe National Biodiesel Board.

The workshop offered applied instruction on the relia-bility, performance and other benefits of biodiesel andbiodiesel blends in a variety of diesel engine technologiesto give students the background they need to understandand work with biodiesel in the future.

Students at five of the seven Illinois junior colleges withdiesel tech programs now have completed the program.Planning is under way to offer the course at the remainingschools this spring.

FarmWeek Monday, December 17, 2012

(ISSN0197-6680)

Vol. 40 No. 50 December 17, 2012

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Quick TakesSPECIALTY CROPS

Tuesday: • Ag weather with Chesapeake Meteorology• Lori Laughlin, director of issue management for Illinois Farm Bureau• Carol Portman, president-elect of Taxpayers Federation of Illinois• Rick Weinzierl, University of Illinois Extension specialistWednesday:• Brad Schwab, director of the National Agricultural Statistics Service

Illinois field office• Jim Bower, Bower Trading• Gary Hudson, vice president of the llinois Corn Growers AssociationThursday:• Paul Rohde, vice president of Waterways Council Inc.• Rodney Davis, newly elected congressman • Illinois Farm Bureau Young LeaderFriday: • Sara Wyant, AgriPulse publisher• Philip Nelson, Illinois Farm Bureau president• Alan Jarand, RFD radio director

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

Meetings help farmers exploremarkets, connect with buyersBY KAY SHIPMANFarmWeek

Seneca farmer GeorgeSchweneker reeled off manybenefits he has gained by at-tending “Meet the Buyer”events. He said he met whole-sale buyers and chefs andlearned about potential mar-kets for his organic specialtycrop.

“It’s very worthwhile,”Schweneker told FarmWeek.“I am growing an elderberryplantation. I wanted to knowmore about the specialty crop(markets).”

Schweneker’s views wereshared by Benton farmer BrianCarollo and Shelbyville farmerBrad Halbrook. Each has par-ticipated in a couple of buyermeetings.

As a vegetable grower witha smaller operation, Carollosaid he appreciated learningwhat buyers require and learn-ing about the regulations withgrowers must comply.

“Even if you don’t thinkyou are to that point (of sellingto larger markets), it is all partof the learning process,” Car-ollo said. “You don’t knowwhere you’ll be in three or fouryears.”

Halbrook viewed the meet-ings as an opportunity to ex-plore potential markets for dif-ferent crops.

“There’s a lot of demand,”he added.

Farmers wanting to meet re-gional fresh produce buyersmay attend a Meet the Buyersevent from 9 a.m. to 5 p.m.Jan. 29 at the Kankakee Com-munity College, Kankakee.The registration deadline isJan. 25.

Participating buyers willprovide an overview of theirrespective organizations andprocurement needs, and farm-ers will have a chance to meet

one-on-one with those buyers. “The Meet the Buyer events

have proven to be popularvenues for farmers who wantto make contact with the deci-sion-makers of grocery stores,foodservice distributors,restaurants, and other types ofmarket channels,” said CynthiaHaskins, Illinois Farm Bureaumanager of business develop-ment and compliance.

The program will start withan introduction of Market -Ready and Good AgriculturePractices (GAPs) by JamesTheuri with the University ofIllinois Extension.

The Market Ready programteaches best commercial busi-ness practices used by growersand various retail markets.GAPs are a set of recommen-dations that can help improvethe quality and safety of theproduce grown.

Event hosts include theKankakee County Farm Bu-reau and surrounding countyFarm Bureaus, U of I Exten-sion, IFB, the Illinois Depart-ment of Agriculture (IDOA),

and Illinois Specialty GrowersAssociation.

Planned participants will in-clude grocery retailers, food-service distributors, a restau-rant chef, and an organizationthat prepares school menuitems.

“In this industry the diffi-culty for producers often liesin making the right connec-tions,” said Kendra Buchanan,IDOA local foods liaison.

“The expansion and interestin local food continues togrow,” said Chad Miller,Kankakee County Farm Bu-reau manager. “We are pleasedto make this event available inNorthern Illinois so farmerscan have a direct interactionwith buyers.”

He said the event wouldbenefit farmers who want toexpand or diversify their oper-ations.

The event is open at no costto farmers throughout Illinois;however, farmers need by reg-ister by Jan. 25 by calling theKankakee County Farm Bu-reau at 815-932-7471.

government

Monday, December 17, 2012 FarmWeek

tax exemption. Thus, in the event a producer “gifts” $12,000 toone individual and $20,000 to another, $7,000 of the $20,000 giftwould count toward the lifetime exemption and the $12,000 gifteffectively would be ignored.

Hoff suspects Congress ultimately may lean toward a $3.5million individual estate tax exemption, with “something inbetween” the current 35 percent tax rate and the 55 percent ratethat many lawmakers deem excessive.

A drop to $1 million or even $3.5 million “very possibly”could spur more widespread land sales to cover estate tax liabili-ty, Hoff advised.

“Estate planning wasn’t a big issue for about 10 years,” henoted. “All at once, it’s become a huge issue. When you can sellIllinois farmland for $15,000 an acre that used to be $8,000, andyou have a few hundred acres, that certainly adds to the networth.” — Martin Ross

Farm bill delaysmay threaten riskimprovements

Farm risk management and risk “innovation” could sufferif Congress can’t come to terms on a new farm bill.

Federal crop insurance itself is funded outside the farmbill. But with 2008 farm bill expiration and stalled efforts tomove a new farm bill, insurers and producers are concernedabout near-term funding for USDA Risk ManagementAgency (RMA) administration of and coordination with pri-vate companies.

Among other things, RMA is moving into the finalphase of its premium re-rating process for corn, soybeans,grain sorghum, spring wheat, rice, and cotton aimed atensuring insurance costs more accurately reflect realregional risks.

In addition, RMA works with insurers to develop andapprove new crop policies, products, and pilot pro-grams.

University of Illinois risk management specialist BruceSherrick reports RMA currently is “utterly swamped” withproposals for new policy “innovations,” and anticipatesintroduction of many more new products.

The farm bill crop insurance title “now eclipses conserva-tion,” Sherrick told farmers at last week’s Illinois Farm Eco-nomics Summit in Champaign. Only the farm bill’s nutritiontitle has a greater budget impact, he noted.

“Crop insurance is the big federal program — it’s the cor-nerstone of risk management for the government,” Sherricksaid. “It’s important to get this particular program right. Wereally have to get the premium structure built correctly forcorn and soybeans.

“There are 150 current crop policies. Corn and soybeansrepresent a vast majority of them. In Champaign County, wehave 37 different crop and coverage elections for corn alone.But there are eight different pumpkin programs. You caninsure near-shore oysters.”

Retired Lake County specialty grower Eric Nielsenemphasized RMA’s continued role in expanding protectionsfor weather- or price-sensitive crops and enterprises.Nielsen is a proponent of revenue-based, whole-farmadjusted gross revenue (AGR) insurance, which “works foreverybody” regardless of crop, livestock species, or farmscale.

Currently, Illinois growers are eligible for modified“AGR-Lite” coverage under an RMA-approved nationalpilot program. Nielsen acknowledges the complexity ofdeveloping policies for a variety of crops and enterpris-es with varying revenues and regional and individualrisks.

“Private industry has to have a backing to get started,” hetold FarmWeek. “Once they get it all figured out, they cando it on their own. But there has to be the initial set-up —they need the help, and that’s where the government has tostep in.” — Martin Ross

Cliff

New farm bill poised at edge of fiscal cliff ?BY MARTIN ROSSFarmWeek

University of Illinois ag economist NickPaulson told farmers the next farm bill hingeson “what’s shaping the debate for all thingsgoing on in Washington right now — the needto come up with savings and deficit reduc-tion.”

Paulson maintained “there probably justisn’t time” either for the House to vote onthe farm bill or even to simply ship theHouse Ag Committee’s proposal straight toconference and reconciliation with the Sen-ate.

Paulson instead sees the likelihood of athree-month to one-year extension of 2008

farm bill provisions, with ag savings targets — aproposed $23 billion in the Senate and $35 bil-lion in the House — “rolled into whatever fiscalcliff legislation we wind up with.”

Illinois Farm Bureau President Philip Nel-son noted concerns about fiscal and tax issuesand the need for a new farm bill during aWashington meeting last week with SpringfieldDemocrat Sen. Dick Durbin.

“It doesn’t take a rocket scientist to look atthe calendar and see that there are very few daysin which (the House) could have a farm bill

floor debate and get the fiscal cliff addressed atthe same time,” Nelson admitted Thursday.

“Congress is looking at the budget savingsthat have been proposed for the farm bill. Asa part of trying to get tax policy done and try-ing to come up with enough cuts as they relateto deficit reduction, as well as possibly newfederal revenue enhancements, there is a keeneye looking at the dollars potentially beingsaved by the farm bill.”

Nelson, in Washington last week for Amer-ican Farm Bureau Federation (AFBF) discus-sion of 2013 policy resolutions, also empha-sized IFB’s push for extension of estate taxrelief and other soon-to-expire tax provi-sions.

But he said he was uncertain when and howpolicymakers could break the continued fiscalstalemate between the president and Houseleaders.

Last week, the administration sought $1.4trillion in new tax revenues — a drop fromPresident Obama’s earlier $1.6 trillion target— but Nelson said he sees “no appetite” foroffering spending cuts in entitlement or otherprograms.

Meanwhile, House Speaker John Boehner(R-Ohio) has indicated he could considerhigher revenue targets but has demanded“meaningful cuts” in exchange.

“There needs to be some compromise onboth sides to get that done,” Nelson said.

In the absence of congressional progress,AFBF delegates who will gather next monthin Nashville, Tenn., may address farm policyand “fiscal responsibility” as well as suchissues as regulatory overreach and the aimsof and purported biases in the federal schoollunch program, Nelson reported.

Farm bill extension poses a number of con-cerns. Fiscally conservative House leaderscould arrive at “pretty prescriptive” spendingcuts “that could write the farm bill prettyquickly next year,” Paulson warned.

IFB National Legislative Director AdamNielsen questioned whether a year’s delay infarm bill approval might mean “another $33billion out of the farm bill baseline.”

While Paulson sees strong legislative sup-port for crop insurance (“Risk management isin”), he noted “the slant against commodityprograms seems more and more clear.”

“Short-term, the dairy producers are proba-bly the most concerned about any kind ofshort-term extension,” he told FarmWeek.

“They were looking at some fairly majorchanges in the next farm bill.

“The House Ag Committee’s version of thebill had a margin-based dairy protection pro-gram available. I think (dairy interests) felt thatwas a real success.

“They’ve experienced some pretty tightmargins, and in the press, they’re talking aboutthe bankruptcies that could occur if we don’tget something for the dairy producers.”

‘It doesn’t take a rocket sci-entist to look at the calendarand see that there are veryfew d ay s i n w h i c h ( t h eHouse) could have a farmbill floor debate and get thefiscal cliff addressed at thesame time.’

— Philip NelsonPresident, Illinois Farm Bureau

Pork producers from acrossthe country this month servedpork meals to hundreds ofU.S. military families.

The effort was part of the2012 Snowball Express, a char-ity for the children of Ameri-ca’s fallen military heroes.

Forty-three pork producersfrom Illinois, Iowa, Massachu-setts, Minnesota, Oklahoma,Oregon, and Texas greetedmore than 1,200 children and700 adults from military fami-lies at a Snowball Expressevent this month in Texas.

The pork industry volun-teers distributed pork checkoffgift bags filled with coloringbooks, pork recipes, and more.

The volunteers servedmore than 1,000 pork burgers,1,000 hot dogs, and 750 porkchops during the event.

Pork producers serve military families

Dairy classes availableThe University of Illinois Department of

Animal Sciences will offer two 10-week onlinedairy classes beginning Jan. 28.

Advanced dairy nutrition will cover nutrientclasses, phase feeding, dry-cow feeding andhealth, and forages. The course will be coordi-nated by Mike Hutjens and team-taught by threeother instructors.

Milk secretion and mastitis will be coordinat-ed by Dick Wallace and taught by two other in-structors. The class will cover all phases of milkquality, secretion, nutrition, and mastitis controland prevention.

To review the class schedule, topics, and en-rollment details, visit the website {http://on-line.ansci.illinois.edu}.

the rivers


is monitoring the situation, and we’re making sure we have all theprocedures in place to keep the river open,” said Nelson.

Dennis Wilmsmeyer, executive director of St. Louis’ America’sCentral Port, noted barge operators has been coping for the pastfour months with low-water challenges. Barge operators favor a 10-foot draft for towboats, a foot above Corps channel depth require-ments.

The 2012 drought already “has cost them (operators) a lot ofmoney,” and in the absence of an emergency Missouri release ornear-term precipitation or upstream “snow melt,” losses could con-tinue to accumulate, Wilmsmeyer said.

Because channel depth and width are affected by drought,“you’re seeing one-way traffic in parts of the river where you nor-mally have two-way traffic with ease,” Rohde noted. Northboundbarge tows are being loaded lighter at the Gulf amid uncertaintyabout “what the situation’s going to be on that 180-mile stretchbetween St. Louis and Cairo,” he said.

“Light-loading barges has been the common theme throughoutthe middle Mississippi region from Cairo up to St. Louis,”Wilmsmeyer told FarmWeek. “Light-loading barges will continuehere.

“Obviously, with the lessening of the reservoir flows out of theMissouri River, the next two to three weeks is really when the riverlevel in St. Louis and southward is going to start dropping quickly.That’s going to be the tough issue for many of our operators.”

Wilmsmeyer warned limitations on the Upper Miss could impactfreight rates and regional grain prices potentially “until that nextharvest comes in.”

Nelson reported river grain bids “have somewhat dried up” atsome locations, noting rail and other alternative shipping bids “arefar out-pricing anything on the water system,” further eroding prof-its.

These seven rock formations nearThebes, south of Cape Girardeau,have been identified as potential chal-lenges in maintaining authorized nav-igation channel dimensions on the Up-per Mississippi River. The Thebes “pin-nacles” reportedly represent 90 per-cent of the issues related to rock for-mation on the Thebes-Grand Towerreach south of St. Louis. (U.S. ArmyCorps of Engineers aerial map)

Time for new plan to guide river uses?BY MARTIN ROSSFarmWeek

Amid growing concernsabout federal guidelines forthe Missouri River that impactMississippi River commerce,Pike County Farm BureauPresident David Gay suggestsa new river plan may be inorder.

In a letter to SpringfieldDemocrat U.S. Sen. DickDurbin, Assistant Secretary ofthe Army Jo-Ellen Darcyargued the U.S. Army Corps of

Engineers “lacks authority toalter the authorized purposes ofthe Missouri River MainstemReservoir System or to modifyoperation of the system.”

Under its guiding manual,the Corps cannot release addi-tional Missouri River reservoirwaters “for the express pur-pose of benefiting MississippiRiver navigation,” Darcy toldthe senator.

She warned a winter releasecould boost regional irrigationand hydropower electricalcosts, a “reduction in the qual-ity of (wildlife) habitat,” andimpede “recreation and result-ing local economic benefits.”

Gay sees potential forperennial navigation concernsunder a master manual that’sbeen revised to grant “moreweight to other users of theriver,” including recreationalinterests.

By effectively “shutting thegates” on upstream MissouriRiver reservoirs, he believesthe Corps has subverted a past“top priority” of flow man-agement — maintenance ofthe navigation channel on theMississippi.

Gay thus sees the need fora “national transportationplan” that recognizes the eco-nomic importance of bargetraffic, possibly in conjunctionwith an anticipated new con-gressional Water ResourcesDevelopment Act (WRDA).

“If we divert grain and com-modities off the river and try toput them onto rail or trucks,that’s going to be expensive,” hetold FarmWeek. “These kindsof issues need to be talkedabout. We need to have a long-term plan for transportation inthis country.”

In a Dec. 5 letter urging theCorps and the U.S. CoastGuard to expedite removal ofrock pinnacles on the Missis-sippi, Illinois Gov. Pat Quinnsaid he would encourage Con-gress “to enact the (WRDA)reauthorization as soon aspossible.”

In November, the SenateEnvironment and PublicWorks Committee resumedhearings on the next waterprojects bill.

Hog producers take advantageof lower river commodity bidsBY DANIEL GRANTFarmWeek

A difficult situation for some farmers inrecent weeks created an opportunity for oth-ers.

Low water levels on the Mississippi Riverreduced barge movements and subsequentlyreduced crop bids at numerous river termi-nals.

Crop farmers, shippers, and others couldtake a financial hit until crop shipments returnto normal. But some livestock producersseized the opportunity and purchased feed forthe winter.

“It’s actually benefitted us,” Steve Ring,general manager of Hog Inc. in Greenfield,told the RFD Radio Network. “The low riverlevels forced prices lower at terminals due tohigher barge freight, the (lack of) availabilityof barges, and the inability to move barges upand down the Mississippi River.”

Hog Inc. is an alliance of family farms.Ring said pork producers involved with

Hog Inc. avoided a feed emergency this yearwhen crops turned out a little better thanexpected, but high feed prices continue to bea challenge.

“With the cost of inputs, including corn

and soy meal, the diets (for hogs) are runningupwards of $300 a ton,” Ring said.

“But in a year like this, we feel very fortu-nate,” he continued. “We didn’t know goinginto August if we’d even have a crop. We hadslightly better yields (close to a 100-bushel-per-acre average for corn) than most feared.”

The drought’s impact on the crop will con-tinue to affect feed use all winter, though.

Corn in storage is at risk for developingelevated levels of aflatoxin.

“We recommend that if people are feedingcorn to livestock, they add some type ofbinder, which is effective at blocking the tox-ins,” Ring said.

Hog producers can feed corn with aflatoxinlevels up to 200 parts per billion (ppb) to fin-ished swine, 100 ppb to sows, but only up to20 ppb to nursery pigs due to their less devel-oped immune systems, according to Ring.

Overall, strong hog prices should help pro-ducers manage high feed prices.

“We had a counter-seasonal rally in hogfutures and the cash hogs are hanging inthere, which will help support the high feedcosts,” Ring added. “But it really gets back tohow well producers did with risk manage-ment.”

‘ W e n e e d t ohave a long-termplan.’

— David GayPike County Farm Bureau

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‘Advanced’ RFS2 needs may drive new biodiesel boom BY MARTIN ROSSFarmWeek

The biofuels sector offerspotential to launch “anotherboom in agriculture,” Universi-ty of Illinois ag economistScott Irwin suggests.

This time, however,biodiesel likely will power theboom, that is, if federalRenewable Fuel Standard(RFS2) mandates remain inforce, Irwin suggested at lastweek’s Illinois Farm Econom-ics Summit. However, corngrowers as well as oilseed pro-ducers should benefit from thenew boom, he argued.

Irwin doesn’t see theethanol “blend wall” — cur-

the fleet to use natural gas. “The total size of that diesel

market thus is up in the air. Butregardless of those kinds ofevents, there’s plenty of roomfor biodiesel, if it’s required bythe RFS2 over the next two orthree years.”

Irwin said he sees “reallyno upper cap” on the amountof Brazilian ethanol that couldbe imported to meet advancebiofuels targets. However,under “the arithmetic ofmeeting the RFS2” and thelimitations of the existingblend wall, imported ethanolmust displace U.S. production,he said.

Given the current cost of

biodiesel production relative toBrazilian ethanol, restorationof the $1-per-gallon federalbiodiesel tax credit would offerbiodiesel an advantage overBrazilian imports in the overalladvanced fuel blending market,Irwin said. The credit expiredlast January.

While Irwin said he believes“the long ethanol boom isover,” corn growers wouldbenefit from the biodieselboom through use of corn oilextracted from ethanol-deriveddistillers dried grains. Roughlya half-pound of oil is availablefrom each bushel of corn, and“that’s expected to grow,” henoted.

rent near-saturation of themarket for standard 10 percentethanol (E10) fuels — moving“substantially” over the nextthree years as a result of E15adoption or expanded E85demand.

Use of higher-level blendscould contribute another fewhundred million gallons ofdemand, “when what we needis to move the wall out by sev-eral billion gallons,” he said.Plus, the RFS2 sets a 15-bil-lion-gallon cap on annual cornethanol blend requirementsbeginning in 2015.

The balance of 2022’s ulti-mate 36-billion-gallon RFS2target would be met by

“advanced” biofuels that offergreater greenhouse gas reduc-tions than corn ethanol.Biodiesel is one of three feder-ally classified groups ofadvanced biofuels, and the onlyone currently marketed on awidespread basis.

The U.S. EnvironmentalProtection Agency has set a1.28-billion-gallon target forRFS2 biodiesel use in 2013 —a 280-million-gallon increaseover 2012.

While several companies areset to launch cellulosic ethanolventures over the next twoyears, Irwin said he is uncertainhow quickly biomass-basedproduction — the second cate-gory of advanced biofuels —will grow.

That leaves a third, catch-allcategory: “undifferentiated”biofuels such as Brazilian sug-arcane-based ethanol or,according to Irwin, additionalbiodiesel.

“Right now, the U.S. con-sumes about 50 billion gallonsof diesel fuel,” he toldFarmWeek. “A 20 percentmixture takes you up to about10 billion gallons of biodieselin our existing fleet use.There’s plenty of room togrow biodiesel on the use side.

“The biggest component ofdiesel usage is the over-the-road trucking industry. There’ssome move there to takeadvantage of the decline innatural gas prices — to retool

New blends, trends,and innovationsoffer ‘diligent’ growth

The term “boom” has a dual connotation for the biofuelssector, as evidenced by the past ethanol investment boom, sub-sequent bust, and industry restructuring.

Thus, National Biodiesel Board Chairman Gary Haer is cau-tious in characterizing long-term biodiesel prospects.

Haer, vice president for sales and marketing with RenewableEnergy Group (REG), sees promising opportunities for biodiesel“spillover” into the burgeoning market for greener “advancedbiofuels.” REG operates biodiesel plants in Danville and Seneca.

But Haer stressed the need for sustainable, reasoned industrygrowth.

“Biodiesel has always had the opportunity to fulfill needs inthe undifferentiated advanced biofuels category (see accompany-ing story),” he said. “We think we can grow the industry in a dili-gent way.

“Presently, more than 2 billion gallons of (biodiesel produc-tion) capacity is registered with (the U.S. Environmental Protec-tion Agency). This year, we’ll probably produce in excess of 1.1billion gallons. Next year, the (RFS2’s) renewable volume obliga-tion for biomass-based diesel is 1.28 billion gallons.

“We have an opportunity in the advance biofuels category.But the market will decide just how much we participate in thatcategory.

“I don’t think I’d characterize this as a ‘boom’ opportunity.This is just a nice potential upside for our industry, to utilizemore of our capacity.”

Biodiesel market expansion will depend in large part on thesupply of and demand for renewable identification numbers(RINS) — essentially, the tradable currency of biofuels useunder RFS2 mandates.

But 20 percent biodiesel blends (B20) have become morecommon in on-road and farm diesel applications as engine man-ufacturers approve their use, and Haer notes a variety of “niche”applications where higher blends are being used.

For example, the mining industry uses blends above B20 toprotect workers exposed to higher diesel exhaust concentrations.

At the same time, he sees biodiesel-fueled diesel cars andlight-duty trucks as “a logical transition” toward improved U.S.vehicle fuel efficiency.

Haer also notes regional market expansion: REG in Novem-ber announced new biodiesel blending capabilities at four NewYork metropolitan fuel terminals, to provide improved accessfor on-road use and growing Northeast use of so-called “bio-heat.”

While some in the trucking industry may be eyeing conver-sion from diesel to cheaper natural gas, Haer notes the signifi-cant cost not only of “retooling the engine platform” but also ofbuilding a new fuel distribution infrastructure.

“We basically are seamlessly integrated into the current distri-bution pipeline for diesel fuel,” Haer told FarmWeek. “Fleetsthat are using biodiesel have a good diversity of blends andblend levels to fit the season, to fit applications, to fit overalleconomics.” — Martin Ross

This chart from Iowa-based Renewable Energy Group, which operatestwo Illinois biodiesel plants, shows renewable diesel keeping pace withgrowth in advanced biofuels. Feedstock diversification and a variety offavorable market trends continue to drive biodiesel’s success.

production


Crop production rebound seen in ’13It’s probably difficult for many farmers right now to envi-

sion a bin-buster harvest next year.This year corn yields nationwide averaged about 40 bushels

below trend due to the drought. And conditions still areextremely dry: As of Dec. 4, about 62 percent of the conti-nental U.S. remained in some form of drought.

But historical data show crop production usually bouncesback after a major shortfall, according to Darrel Good, Univer-sity of Illinois ag economist. He said he believes that could bethe case next year.

“I think we’re in the process of transitioning from a yearwith very short (grain and oilseed) supplies to a year (in 2013)

in which supplies likely will be more abun-dant,” Good said last week at the Illinois FarmEconomics Summit in Galesburg.

He predicted corn yields (nationwide)next year could spring back to an average ofabout 160 bushels per acre. He also predict-ed U.S. farmers in 2013 could harvest anadditional 2 million to 2.5 million corn acresthat were abandoned or chopped for silagethis year.

If harvested acres and yields increasenext year, Good said it is possible farmers could harvest arecord corn crop of 14-plus billion bushels. USDA lastspring prior to the drought projected a crop of that size.

“I’m putting that (possibility of a record corn crop)back on the table,” Good said. “I think the potential isthere.

“A lot of folks probably take exception to that right nowdue to the continued dryness,” he continued. “But it will bespring and summer rainfall that will make or break the (2013)crop.”

A return to trend-line yields for soybean growers next yearcould translate to a 3.3-billion-bushel bean crop that will com-pete with what could be a record crop in South America.

“Everything right now is pointing to a recovery in suppliesin the year ahead,” Good said. “(If realized), consumption like-ly will return to pre-drought levels.”

If crop production bounces back next year, Good said hebelieves crop prices will decline by the second half of theyear.

Average farm prices for corn were projected to slip from anaverage of $7 per bushel for the 2012/13 marketing year to$4.75 to $5.50 for the 2013/14 marketing year.

Bean prices were projected to decline from an average of$14.50 per bushel in the 2012/13 marketing year to $11 to $12in the 2013/14 marketing year.

In the meantime, crop prices are expected to remain strongdue to tight supplies.

“Tight supplies and concerns of dry soil will keep corn(and bean) prices well supported the first quarter of 2013,”Good said. “But as we move through the year (next year),prices could give way to lower, pre-drought levels.”

Farmers who believe crop prices could decline next yeardon’t have to rush to forward-price bushels now, though.Good predicted crop prices will remain high enough throughFebruary that farmers can lock in high-level revenue protec-tion through crop insurance. — Daniel Grant

USDA tweaks ending stocks, trims price forecastBY DANIEL GRANTFarmWeek

USDA’s projections for end-ing stocks last week went in avariety of directions.

The Ag Department in itsDecember crop report raisedwheat ending stocks by 50million bushels, lowered end-ing stocks of beans by 10million bushels, and left end-ing stocks of cornunchanged.

Grain and oilseed suppliesremain tight as ending stockscurrently are projected at 647million bushels (21 days ofsupply) for corn and 130 mil-lion bushels (about a 16-daysupply) for soybeans.

Overall, the report is notexpected to have a majorimpact on the markets,though, as the fundamentalsgenerally continue to sup-port prices heading intonext month’s highly antici-pated final crop productionreport.

“Early in the year (nextyear) prices very much will bedictated by old-crop funda-mentals,” said Darrel Good,University of Illinois ag econo-

mist. “We have historically lowinventories, rivaling those of1995/96.”

Louise Gartner, analyst withSpectrum Commodities, saidwheat was the “big loser” inlast week’s report as USDAlowered exports of the cerealcrop by 50 million bushels duein part to increased competi-tion.

“USDA took (wheatexports) down pretty hard,”Gartner said during a telecon-ference hosted by the Min-neapolis Grain Exchange.“That translated to increasedending stocks.”

Worldwide production andcompetition could cap pricesfor all three crops. USDA boosted Chinesecorn production by 8 millionmetric tons (312 millionbushels). Meanwhile, thetrade expects record soybeanproduction in South Ameri-ca.

“Once again, all eyes turn tothe Southern Hemisphere, aslarge corn and soybean cropsthere could ease the tight stocksituation in the U.S.,” saidTodd Davis, senior economistwith the American FarmBureau Federation. “Soybean

production in Argentina andBrazil is forecast 26 percenthigher compared to the priorcrop.”

USDA last week raiseddomestic soy crush by 10 mil-lion bushels due to strong for-eign demand.

“We’re using the (soybean)crop very quickly. It’s a pacethat cannot be sustained,”Good said. “The market is notmore concerned due to itsanticipation of a (record) largeSouth American crop thisspring.”

The 2012/13 season-aver-age farm price forecast lastweek was lowered for all threecrops. The price range esti-

mates were $6.80 to $8 perbushel for corn (down 20cents), $13.55 to $15.55 forbeans (down 35 cents), and$7.70 to $8.30 for wheat (down10 cents). Corn prices have declinedby more than $1 per bushelsince the late-summer peakand bean prices havedeclined by more than $3,Good noted.

Dry conditions in the Plainscould keep pressure on wheatprices, though.

“There’s very dry condi-tions in the hard red winterwheat area,” Good added.“That crop is under a lot ofstress.”

Darrel Good

industry


Syngenta to expand at historic site in DeWitt CountyBY DANIEL GRANTFarmWeek

Illinois next year will behome to Syngenta’s largest cornand soybean trial site in NorthAmerica.

The firm last week unveiledplans for a major expansion atits corn/soybean research,development, and productionfacility at Wapella near Clintonin DeWitt County.

The facility is located on theformer Thorp Seed Co. proper-ty. Thorp Seed was founded onthe site in 1936. The companywas an associate of Funk’s Seeduntil 1973, when it became partof the newly formed GoldenHarvest brand. It remained partof Golden Harvest until Syn-genta acquired the Thorp familybusiness in 2004.

“This site has been knownfor corn and soybean researchand development since 1936,”said Nelson Thorp, Syngentasite manager at the Clintonfacility. He is the third genera-tion of the Thorp family mem-ber to manage the facility. “Thisexpansion represents more thana $12 million investment, whichwill help our local economy.”

Thorp plans to retire at theend of the year. But newopportunities at the site arejust beginning as Syngentaplans to triple the size of soy-bean growth rooms, increasethe existing site capacity, andbuild grain/seed cold storage,a new equipment maintenanceshop, and a machinery storagebuilding.

“Our goal is to providesolutions to help growersachieve at least a 70 percentincrease in food production by2050,” said Jerry Johnson,

Syngenta spokesman.Overall, Syngenta invests

about $1.4 billion worldwideeach year on research anddevelopment.

Tom Hieronymous, presi-dent of the DeWitt CountyFarm Bureau, believes theexpansion will help the localeconomy in his area and pro-vide research that is necessaryto help farmers boost food pro-duction around the world.

“We’ve got a growingworld to feed, and we need allthe technology we can get,” hesaid. “I think Syngenta andothers are investing heavily inthis part of the countrybecause it has some of thebest dirt in the world.”

Hieronymous said this pastgrowing season is a primeexample of what technologicalimprovements can do to helpfarmers boost crop production.

“As we saw this past sea-son, we can grow crops withhardly any rain at all (due inpart to technological advance-ments in hybrids),” he said.“If we had the same hybrids(in 2012) that we had in 1988,we probably would’ve had halfof what we got.”

The 700-acre Clinton siteeach year supports 144,000 soy-bean and 235,000 corn trials.

Since 2004, the number offull-time jobs at the facility hasincreased from 15 to 55. Theexpansion of the site will leadto a 20 percent increase in jobsplus Syngenta plans to hireabout 150 workers each sum-mer to work in the nursery,according to Thorp.

A grand re-opening of theClinton facility is in the worksfor next summer.

Ernest Thorp, left, one of the founding members of Thorp Seed Co. in DeWitt County, chats with his son, Nel-son, front right, Syngenta site manager, at the seed facility near Clinton. Syngenta, which acquired the Thorpfamily seed company in 2004, last week announced a major expansion that will make the facility Syngenta’slargest corn and soybean trial site in North America. Chatting in the background is Jerry Johnson, back left,Syngenta, and Tom Hieronymous, president of the DeWitt County Farm Bureau. (Photo by Daniel Grant)

National Soy Checkoff restructuresThe United Soybean Board (USB) this month elected new

leadership as the organization, which oversees the national soycheckoff program, moves toward a new structure.

Sharon Covert, a farmer from Tiskilwa (Bureau County), waselected to serve on USB’s executive committee while DwainFord, a farmer from Kinmundy (Marion County), was elected toserve on its Strategic Management Committee.

Congress established the national soy checkoff in 1990. USBplans to scrap its existing structure made up of committees in favorof action teams that will focus on building demand for U.S. soy,address issues involving the freedom for U.S. soy growers to oper-ate, and address demands of domestic and international customers.

“We’ve been in this structure for 20 years since the soy check-off was established,” Jim Stillman, a farmer from Iowa whorecently was elected chairman of USB, told the RFD Radio Net-work. “It’s time to change. The world doesn’t stand still, and wedon’t need to stand still, either.

USB also authorized the formation of a checkoff-industry part-nership to speed up the development of new U.S. soy varieties thatproduce more soy oil to meet demand from food companies andindustrial users. USB aims to have high-oleic soybeans available inmaturity groups that cover 80 percent of U.S. bean acres by 2020.

In other soy industry news, three Illinois farmers recentlywere elected to leadership positions with the American SoybeanAssociation (ASA).

Dean Campbell, Coulterville, will serve on ASA’s Membershipand Corporate Relations Committee while Mike Cunningham,Bismarck, and Ron Kindred, Atlanta, will serve on ASA’s TradePolicy and International Affairs Committee.

production


Corn quality good, but exports still remain softBY DANIEL GRANTFarmWeek

The slow pace of U.S. cornexports is not the result ofquality issues with thedrought-stressed crop, accord-ing to a recent report.

The U.S. Grains Council(USGC) this month releaseda corn harvest quality reportwhich found an improvementin average test weight, pro-tein levels, and density thisyear compared to the 2011crop.

The average test weight ofthis year’s crop, based on sam-ples collected in 12 states,averaged 58.8 pounds perbushel (up from a year ago),

east Asia have expressed con-cerns about aflatoxin levels inU.S. corn, according to LouiseGartner, analyst with Spec-

trum Commodities.Low water levels on the

Mississippi River, whichreduced barge load capacitiesand could increase shipping

prices, could exacerbate trou-bles with corn exports near-term.

“Corn exports have beenterrible,” Gartner said. “Get-ting corn to the Gulf has beena big problem due to slowerriver traffic.”

U.S. corn export inspec-tions the last week of Novem-ber totaled just 9.6 millionbushels, down from 38.9 mil-lion bushels at the same timelast year.

Good predicted a return ofaverage corn yields in 2013will rebuild supplies, reduceprices, and boost corn demandand consumption, includingexports.

the average moisture (15.3percent) was lower than a yearago, and findings of foreignmaterial and damaged kernelsdeclined this year compared tolast year.

“The samples testeddemonstrate that this year’sU.S. corn crop, while smallerdue to the drought, is of out-standing quality overall,” saidErick Erickson, USGC direc-tor of global strategies.

But the pace of cornexports this year declined to a38-year low due in part totight supplies and record-highprices, according to DarrelGood, University of Illinois ageconomist.

“High prices are pricing usout of the market,” he said.“And wheat is providing com-petition for corn.”

The corn harvest qualityreport hopefully will ease end-users’ concerns about qualityissues related to the drought.Some corn buyers in South-

Vilsack pushes for farm bill

USDA efforts freed 2.8 million acres, $200 million in forageUSDA measures to open

conservation land to emer-gency haying and grazingduring the 2012 droughtfreed up a record 2.8 millionacres and provided as muchas $200 million in forage forproducers facing criticalfeed shortages, Ag Secretary

actions taken by USDA andother federal agencies atthe height of the droughtprovided much-neededflexibility during a difficulttime.

“We also know thatdrought recovery is a long-term proposition, and wewill continue to partnerwith producers to see itthrough.”

At the height of the 2012drought, the secretaryannounced expanded use ofConservation Reserve Pro-gram (CRP) acres for hayingand grazing including a two-month extension for emer-gency grazing on CRP acreswithout incurring an addi-tional CRP rental paymentreduction.

USDA also lowered theinterest rate for emergencyloans and worked with cropinsurance companies toprovide flexibility to farm-ers.

USDA’s Farm ServiceAgency reported roughly2.8 million acres, under57,000 CRP contracts, usedthe emergency haying andgrazing option, comparedwith just more than 1 mil-lion acres in 2011.

In 2005, producers usedroughly 1.7 million CRPacres for emergency hayingand grazing, the previousrecord.

USDA estimates of thegross value of forage pro-vided in 2012 run from $140million to $200 million.

For the current fiscalyear, NRCS has madeavailable more than $16million through the Envi-ronmental Quality Incen-tives Program to farmersand ranchers for waterconservation, practices,and wildlife habitat that

have been affected by thedrought.

Those funds are in addi-tion to the more than $27million provided to farmersranchers in 22 states fordrought mitigation duringfiscal year 2012.

Vilsack nonetheless notedUSDA is hampered in itsefforts by lack of a farm bill,and he urged Congress totake action to implementfurther program efforts.

In recent months, USDAalso has:

• Purchased approximate-ly $170 million of pork,lamb, chicken, and catfishfor federal food nutritionassistance programs, includ-ing food banks, to helprelieve pressure on livestockproducers and bring thenation’s meat supply intoline with demand.

• Authorized up to $5 mil-lion in grants to evaluate anddemonstrate ag practicesthat help farmers adapt todrought.

• Transferred $14 millionin unobligated programfunds into the EmergencyConservation Program(ECP) to help farmers andranchers rehabilitate farm-land damaged by natural dis-asters and for carrying outemergency water conserva-tion measures in periods ofsevere drought.

• Authorized haying andgrazing of WetlandsReserve Program easementareas in drought-affectedareas where haying andgrazing is consistent withconservation of wildlifehabitat and wetlands.

• Simplified the secretarialdisaster designation processand reduced the time it takesto designate counties affectedby disasters by 40 percent.

Tom Vilsack announced lastweek.

Vilsack made theannouncement at the nation-al drought forum in Wash-ington co-sponsored bynumerous federal agencies,governors’ associations, andacademic partners.

“The Obama administra-tion remains committed todoing everything it can tohelp farmers, ranchers, busi-nesses, and local and countygovernments meet drought-related challenges,” Vilsacksaid.

“Now we know that the

‘High prices are pricing us out of themarket.’

— Darrel GoodUniversity of Illinois

from the counties


DOUGLAS — The Dis-trict 12 Young Leaders

Committee will sponsor itsannual Illini Farm Toy ShowJan. 4-6 at the Holiday Inn andConvention Center, Urbana.Dates and times are Friday, 5to 9 p.m.; Saturday 9 a.m. to 5p.m.; and Sunday, 9 a.m. to 2p.m. Cost is $3 for adults, $2for children ages 6-12; andunder 6, free. A live auctionwill be at 10:30 a.m. Saturday.Admission on Sunday is freewith a free-will donation to thelocal Ag in the Classroom pro-grams.

FULTON — TheWomen’s Committee

will sponsor an American RedCross blood drive from 1 to 6p.m. Thursday, Dec. 27, at theFarm Bureau office. Call theFarm Bureau office at 547-3011 to make an appointment.

LEE — The YoungLeaders will play Walley

Ball at 5 p.m. Sunday, Dec. 30,at Plum Hollow, Dixon. Din-ner will follow. Membersbetween the ages of 18 and 35may attend. Call the FarmBureau office at 857-3531 oremail leecfbcomcast.net byThursday, Dec. 27, for reserva-tions or more information.

• Applications for theLee County Farm BureauFoundation scholarshipsmay be obtained from thewebsite {leecfb.org}, bycalling the Farm Bureauoffice at 815-857-3531, orby emailing [email protected]. Scholarships areavailable to high schoolseniors and undergraduatestudents who are in an agri-culture-related field ofstudy. Deadline to returnapplications to the FarmBureau office is Feb. 1.

• Applications for the LeeCounty Farm Bureau’s Foun-dation’s “Books by the Bushel”program are available on thewebsite (leecfb.org}, by callingthe Farm Bureau office at 815-857-3531, or by [email protected]. LeeCounty organizations are invit-ed to apply to receive a freebushel basket of agriculture-related children children’sbooks. Application deadline isFeb. 1.

“From the counties” items aresubmitted by county Farm Bureaumanagers. If you have an event oractivity open to all members, contactyour county Farm Bureau manager.

Auction CalendarMon., Dec. 17. 9 a.m. Farm &Construction Eq. Con. Auc.

TREMONT, IL. Cal Kaufman andBrent Schmidgall, Auctioneers.

calkaufmanauction.com,brentschmidgallauction.com or

www.auctionzip.com id #28362 or#25285

Tues., Dec. 18. 10 a.m. Farm, Hayand Livestock Auc. Ron Friend, KIL-

BOURNE, IL. Sanert AuctionService. www.sanertauctions.comTues., Dec. 18. 6:30 p.m. MarshallCo. Real Estate Auc. Donald HattenEstate, WASHBURN, IL. KaufmanAuction Service. www.calkauf-

manauction.comWed. Dec. 19. Online Unreserved

Auc. www.bigiron.comWed., Dec. 19. 9 a.m. AbsoluteDealer Closeout. Faivre Imp.,STEVENS POINT, WI. Gehling

Auction Inc.www.gehlingauction.com

Sat., Dec. 22. 9:30 a.m. Farmmachinery and misc. Donald HattenEst., WASHBURN, IL. KaufmanAuction Service. www.calkauf-

manauction.comWed., Dec. 26. Online Unreserved

Auc. www.bigiron.comFri., Dec. 28. 11 a.m. Estate Auc.John Wood, PETERSBURG, IL.Sanert Auction Serv. www.saner-

tauctions.comFri., Dec. 28. 10 a.m. McDonoughCo. Land Auc. Wendell WissleadFarm, COLCHESTER, IL. SullivanAuctioneers, LLC. www.sulli-

vanauctioneers.comSat., Dec. 29. 11 a.m. AbsoluteMachinery Auc. Ryan Springer

Farms, PITTSFIELD, IL. CurlessAuction. www.curlessauction.comThurs., Jan. 10. 10 a.m. McLeanCo. Land Auc. BELLFLOWER, IL.Hertz Farm Mgmt. www.hertz.agFri., Jan. 11. 10 a.m. Closing OutFarm Auction. Kent and Norm Elliott,

LAKE CITY, IL. Bauer AuctionService.

Mon., Jan. 14. 10 a.m. Adams Co.Land Auc. Genevieve M. ReuschelEstate, CAMP POINT, IL. SullivanAuctioneers, LLC. www.sulli-

vanauctioneers.comMon., Jan. 14. 1 p.m. Adams Co.Land Auction. The Albert H. BastertTrust, CAMP POINT, IL. SullivanAuctioneers, LLC. www.sulli-

vanauctioneers.comMon., Jan. 14. 4 p.m. Adams Co.Land Auc. Agnes E. Voss Trust

Farm, c/o Frank Voss Jr., LORAINE,IL. Sullivan Auctioneers, LLC.

www.sullivanauctioneers.comWed., Jan. 16. 10 a.m. Bureau Co.Farmland Auc. Cluskey Family Trust,WYANET, IL. Rediger Auction Serv.

and Brummel Realty LLC.www.rickrediger.com orwww.brummelrealty.com

Sat., Jan. 19. 10 a.m. Franklin Co.Land Auc. ST. CLAIR, MO. Buy A

Farm. buyafarm.comSat., Jan. 19. 10 a.m. Grundy Co.

Farmland Auc. Family Trust,MAZON, IL. Richard A. Olson &Assoc. richardaolson.com

Fri., Jan. 25. 10 a.m. Bureau Co.Farmland Auc. Lucille Pinter Est.,CHERRY, IL. Rediger Auction

Service and Brummel Realty, LLC.www.rickrediger.com orwww.brummelrealty.com

‘Bushels for Hunger’ yields record donationWestern Illinois farmers last week donat-

ed a record amount to the River BendFoodbank. Geneseo farmer and IllinoisFarm Bureau Director Wayne Andersonpresented the donation of $38,845.18 toTom Laughlin of River Bend Foodbank last

week at the food bank in Moline. It is thethird year the farmers have made a dona-tion.

“Thanks to the generous donations ofover 4,376.93 bushels of grain to the‘Bushels for Hunger’ campaign, local farm-ers worked together to fight hunger in the

Quad Cities community with these funds,”Anderson said.

Fellow farmer and Illinois Farm BureauState Young Leader Committee memberTodd Verheecke added, “Local neighborsand farmers in the five-county area of Illi-nois were anxious to pitch in and help fighthunger in their community — this moneywill help provide over 40,000 meals in theRiver Bend Foodbank area.”

The program is jointly coordinated by theRock Island, Henry, Stark, Whiteside and Mer-cer county Farm Bureaus in conjunction withthe following 12 area grain elevators andethanol plants: ADM, Atkinson Grain, Big Riv-er Resources, Cargill, CGB, GoldStar FS, Hills-dale Elevator, Michlig Grain, Patriot Renew-ables, River Gulf Grain, River Valley Coopera-tive, and Rumbold and Kuhn.

GROWMARK essay contest announcedThe theme for the 2013

GROWMARK essay contest is“Fighting Domestic and Glob-al Hunger.” The contest isopen to all high school FFAmembers.

This is the 20th year for theprogram, sponsored by theGROWMARK System and FSmember cooperatives, in con-junction with state FFA lead-ers, to help young peopledevelop their writing skills,learn about current issuesaffecting agriculture, andunderstand the unique role ofcooperatives.

This year, students willfocus on four questions:

• What agricultural tech-nologies and practices willincrease food production?

• How do local agricul-tural cooperatives helpfarmers combat domestic

and world hunger? • What kind of partner-

ships can help fight hungerworldwide?

• What can you personal-ly do to impact worldhunger?

Essays should be approxi-mately 500 words, typed, anddouble-spaced. The postmarkedentry deadline is March 15.Additional program details havebeen sent to agriculture teachersand are online at www.grow-mark.com (click on Our Com-mitments/Youth & YoungFarmers/Essay Contest).

“Students who write essayswill learn how agriculturalcooperatives help combatdomestic and world hunger,”said Jane Castellano, GROW-MARK corporate communica-tions and cooperative educa-tion specialist.

The winner will receive$500 and his or her FFAchapter will receive $300.Four runners-up each willwin $125.

Many agriculture teachersuse the essay contest as partof their class curriculum.Past topics have includedrenewable fuels, biotechnol-ogy, and the cooperativeprinciples.

profitability


Export inspections(Million bushels)

Week ending Soybeans Wheat Corn12-06-12 46.6 13.9 7.911-29-12 51.9 14.6 10.5Last year 29.9 16.8 37.0Season total 647.9 475.4 217.1Previous season total 459.1 550.4 438.1USDA 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-$60.79 $44.3540 lbs. $62.50 $62.50

Receipts This Week Last Week 124,968 104,354*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 $75.88. $82.00 -6.12 Live $56.15 $60.68 -4.53

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

Steers 124.32 123.86 0.46 Heifers 124.46 123.86 0.60

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 147.22 146.53 0.69

CME feeder cattle index — 600-800 Lbs.

Lamb prices

(Thursday’s price)

Slaughter Prices - Negotiated, Live, wooled and shorn 120-160 lbs. for91.30-115 $/cwt. (wtd. ave. 105.61)

In just four years, U.S. ag conservationistshave enrolled 50 million acres in the Conserva-tion Stewardship Program (CSP), a programthat helps farmers, ranchers, and forest ownerstake conservation to the next level.

CSP is aimed at producers who already areestablished conservation stewards, helpingthem to deliver multiple conservation benefitson working lands, including improved waterand soil quality and enhanced wildlife habitat.

“Farmers and ranchers throughout thecountry are making USDA’s voluntary Conser-vation Stewardship Program a major force forconservation,” Ag Secretary Tom Vilsack saidlast week.

“The protection of natural resourcesthrough conservation programs such as CSPcreates outdoor and wildlife recreation oppor-tunities that provide crucial jobs and bolstereconomic growth in rural American communi-ties.”

The land enrolled in CSP totals more than

78,000 square miles — an area larger thanPennsylvania and South Carolina combined,making the program one of the largest volun-tary conservation programs for private landsoffered by USDA’s Natural Resources Conser-vation Service (NRCS).

Nearly 12.2 million acres, or 18,750 squaremiles, was added to the program’s rolls this year.

Eligible landowners and operators in allstates and U.S. territories may enroll in CSP.NRCS local offices accept CSP applicationsyear-round and evaluate applications duringannounced ranking periods.

A CSP self-screening checklist is availableto help producers determine if the program issuitable for their operation. The checklist high-lights basic information about CSP eligibilityrequirements, stewardship threshold require-ments, and payment types.

The checklist is available from local NRCSoffices and on the CSP website at{go.usa.gov/g9dx}.

U.S. farmers reach 50 million-acremark in voluntary conservation

The ‘fiscal cliff ’ and its effect on agricultureBY KEL KELLY

The so-called “fiscal cliff ”poses different problems for

different peo-ple. For politi-cians, theproblem ishow to fundthe govern-ment.

For econo-mists, it ishow to “keepthe economy

going.” For most of us common cit-

izens, is is a possible reductionof our standards of living.

The fiscal cliff consists ofexpected higher tax rates com-bined with expected lowergovernment spending. Mosteconomists see both of theseas bad because they reduce therate of consumer spending andconsumption, which theybelieve grows the economy.

However, it is not spendingand consumption of goodsand services that grow aneconomy but, instead, the pro-duction of new and additionalgoods and services.

Production results not fromspending on consumer goods,but from investing in capitalgoods (tools, machines, tech-nology, etc.) and labor, whichcreate both more capital goodsas well as more consumergoods.

These investments are madewith money saved; from mon-

ey not spent on consumption.Businesses access saved fundswhen lenders/savers buystocks, bonds, insurance poli-cies, bank deposits, or CDs.

Therefore, higher taxes areindeed harmful because theyreduce spending on capitalgoods, not because theyreduce spending on consumergoods. But reduced govern-ment spending is helpfulbecause it leaves more capitalin the private sector for pro-duction.

Regardless, we likely will seeboth higher taxes and contin-ued government spendingbecause voters continue todemand unsustainable govern-ment benefits. The eventualresult — aside from lower liv-ing standards — will be afunding shortfall.

The government will “reme-dy” this shortfall by printingits own money, which in turnwill result in price inflation(i.e., stealing purchasing powerfrom us citizens).

However, due to the currentconstructs of the financial sys-tem, most newly printed mon-ey — and thus inflation — willcontinue to go into the finan-cial markets, including com-modities, in the form of risingasset prices. Ag prices andprofits, therefore, will be everhigher.

Crop production, due to areduced capital stock, will belower than it would be withoutthe higher taxes and continuedgovernment spending.

But producing less thanwould otherwise be the case isdifficult to observe, and reduc-tions will be offset by higherselling prices. For these rea-sons, I believe the ag industrywill continue to benefit at theexpense of a bad real econo-my, just as it has in recentyears.

Kel Kelly is GROWMARK’smanager of economic and marketresearch. His email address is [email protected].

Kel Kelly

U of I projects above-average farm returns next yearBY DANIEL GRANTFarmWeek

The University of Illinoisexpects crop prices, whichraced to record levels duringthis year’s drought, to level offnext year.

But farm returns areexpected to remain strong in2013 as farmers generallyshould have more bushels tosell, barring a repeat of thisyear’s weather disaster.

“The outlook continues tobe good in 2013,” GarySchnitkey, U of I farm man-agement specialist, said lastweek at the Illinois Farm Eco-nomics Summit in Galesburg.“We’re looking at above-aver-age income in 2012 and 2013.”

The U of I projected farmreturns on high-productivitysoils in Central Illinois nextyear could average $621 per

acre for corn and $422 per acrefor beans.

This year average returns onthe same ground were forecastto be $585 per acre for cornand $452 for beans. Thoseprojections would be above thefive-year averages.

“Lower yields obviouslyresulted in higher prices (thisyear) and crop insurance is mak-ing payments,” Schnitkey said.“Without crop insurance, wewould’ve had a lot more farm-ers in financial stress this year.”

About 20 percent of Illinoisfarms weren’t covered by cropinsurance this year, Schnitkeyreported.

Next year, the U of I pro-jected average crop priceswould decline from this year’srecord levels but remain abovethe five-year averages. The

drop in prices is expected to bemade up, though, by increasedbushels, assuming productionreturns to normal.

Schnitkey said the chancesof another major drought nextyear are between 1-in-25 and1-in-50.

The outlook for next year ispositive at this point due to thefact that crop prices still arewell above $6 per bushel forcorn and $12 per bushel forbeans.

“If we keep (corn) prices inthe $6 range through February,farmers can use crop insuranceto lock in some pretty good rev-enue guarantees,” Schnitkey said.

The farm management spe-cialist is not concerned aboutthe so-called farmland bubblecrashing next year because theland market is being driven by

fundamentals and most of theland is being purchased with-out much debt.

However, a steep drop incrop prices next year could putfarmers with high cash rents orfewer assets into financialstress.

“The next (non-weather-related) difficulty likely willfocus on farms where there’shigh growth, a high percentageof cash rents, and high rentlevels,” Schnitkey said. “If wesee prices back to $4.50 (forcorn) and $10.50 (for beans),$400 cash rents don’t work.”

The average statewide cashrent increased from $169 peracre in 2010, to $183 in 2011,and $212 this year. Schnitkeypredicted cash rents in 2013could increase by an average of$15 per acre.

‘Farmers can use crop insurance to lock in somepretty good revenue guarantees.’

— Gary SchnitkeyU of I farm management specialist

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CASH STRATEGISTCorn Strategy

ü2012 crop: March cornfutures broke to the downsideof the consolidation pattern,setting up the possibility of ashort-term rebound. Makecatch-up sales with Marchfutures at $7.45. Plan to add anincrement on a move to $7.60.

ü2013 crop: $6.40-$6.50 isproving to be tough resistanceon December 2013 futures.Use a bounce to $6.35 tomake catch-up sales. Plan toadd another increment iffutures reach $6.40 again.Check the Hotline frequently.

vFundamentals: Slowexport demand has been aplague for the corn marketthis year. But South Koreastepped up purchases on themost recent break and sourcedsome of it out of the U.S. forthe first time in a long time.The slide in wheat prices hasbeen a depressant as well, butprices appear set to rebound.The South American outlookis OK, but not great. Duringthe holidays, the looming Jan.11 USDA reports may start toget more discussion.

Soybean Strategyü2012 crop: Soybean prices

appear poised to move moder-ately higher, but unless signifi-cant problems develop withthe South American crops,there’s little reason to expect amajor move up. Target a rallyto $15.20 on January 2013futures to make catch-up sales.We could add a sale at that lev-el. Check the Hotline.

ü2013 crop: Use pricesabove $13.30 on November2013 futures for catch-up sales.We are considering addinganother increment on strength,but continue to exercise shortterm patience while the picturedevelops. Check the Hotlineoccasionally for an update.

vFundamentals: Short-term demand for soybeanssupports potential for moreshort term price strength. Butthere is the risk that Mississip-pi River problems are under-mining our ability to ship soy-beans, a feature that couldcause exports to fall short ofexpectations. Crush demandwill remain good another oneto two months. But if prob-lems don’t develop for South

American crops, upside poten-tial may be limited.

Wheat Strategyü2012 crop: The most

telling situation is the oneplaying out in the Kansas CityJuly 2013 contract. Pricespenetrated the $8.84 support,despite a friendly fundamentalpicture. However, the down-side should be nearly exhaust-ed for now. Wait for a recov-ery bounce before making anycatch-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 lat-

est decline in wheat prices canbe linked to the negativeUSDA supply/demand report.Domestic wheat ending stockswere raised 50 million bushelsfrom the November forecastand now are expected to reach754 million bushels. Theincrease in stocks was tied toongoing weak export demandfor U.S. wheat. However,short-term downside riskshould be limited by concernabout the hard red winterwheat crop in the Great Plains,where it remains extremely dry.

Cents per bu.

Monday, December 17, 2012

Will soybean demand remain strong?If South America has a

good soybean crop this spring,there are parallels to be drawnwith the experience the indus-try had in 2010/2011 market-ing year. Having said that,though, there are two big dif-ferences.

Spring 2011 was the secondconsecutive year of a record-large Brazilian soybean crop,while the Argentine crop wasthe second largest on record,trailing only the prior year’srecord. The last serious prob-lem with the South Americancrops in spring of 2009, prob-lems that lifted the market outof the late-2008 lows.

The point in looking at2010/2011 is that demand forU.S. soybeans will need to falloff just as fast as it did in thespring of 2011, if not evenfaster. But unless weatherimpacts South American out-put again this spring, Brazil-Argentina-Paraguay soybeanoutput will be 30 percent larg-er than it was last year. It wasonly 2 percent larger in spring2011 than the year before.

The surge in supply shouldput more of a drag on demandfor U.S. soybeans and productsthan it did in 2011. In addi-

tion, especially in Brazil, anunusually large portion of thenew crop has been presoldbecause of high prices. Thisshould allow more of the newcrop to move into the worldpipeline quicker than it did in2011.

There has been some talk asto whether South Americaninfrastructure can handle thepotential volume, but we seesome signs of preparation fora big spring campaign, espe-cially in Brazil.

The second factor that willcome into play is Chinesedemand. Over the last coupleof months, Chinese crushmargins have dropped to mod-erately negative levels. Nega-tive margins were a problem inearly 2011 as well, sparking aslowdown in Chinese importsin the early part of that year.

If the market lines up in asimilar fashion this year,demand for our soybeans andproducts could fall even fasterthan what occurred in 2011.Going forward, the keys towatch are South Americanweather and Chinese crushmargins, as well as soybeanimports.

The situation continues tosuggest the best marketingopportunities looking forwardcould lie just ahead, maybeeven before the Jan. 11 USDAreport. And at this point, thetiming of price cycles tends toagree with that.

perspectives


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Farming in India has reached a verycrucial phase. In a scenario of risingconsumption needs and aspirations,and dwindling or varying natural re-sources, it has become imperative forIndia to innovate or access appropriatetechnologies that will enhance our agri-cultural productivity efficiently.

Since the Green Revolution in the1960s, researchers, government, andthe private sector have been workingrelentlessly to improve the efficiencyand productivity of agriculture in ourcountry, blending science with tradi-tional knowledge so the farming sys-tem will be more responsive to theneeds of its farmers.

Today, the progress we have made isin jeopardy. Weare under attackfrom severalanti-technology

activists. They have gone so far as torequest that our Supreme Court place a10-year ban on biotech crop field trialsin India. That is an ignorant proposalat a time when farmers must growmore food just to keep up with a popu-lation that recently boomed past 1.2billion people.

Thankfully, the Supreme Court re-jected this idea.

The worst may be yet to come, how-ever: The court appointed a TechnicalExpert Committee (TEC) to assess thebenefits of biotechnology, but theTEC lacks a single member who is an

India must start listening to its farmers

V. RAVICHANDRAN

guest columnist

Are anti-biotech activiststrying to keep India poor?

expert on how biotechnology can im-prove farm productivity.

So the “expert” committee lacks ex-pertise.

Early next year, the TEC will issue anew, more detailed report that will re-ceive full consideration.

Enough is enough. Why must India’sfarmers always be held back? Weshould enjoy the right to grow the foodour country desperately needs.

India must transform its attitude to-ward biotechnology and embrace thescience that is helping farmers in theU.S. and other countries achieve recordfood production.

Around the globe, farmers have har-vested more than 3 billion acres ofbiotech crops that are part of conven-tional diets. Both farmers and con-sumers benefit.

Yet India’s government has failed tokeep up with the times. A decade ago, itpermitted the commercial cultivationof transgenic cotton and ever since,yields have soared, both on my 60-acrefarm in Tamil Nadu and across the na-tion. The proof can be seen in ourfields, where cotton production wentup by 154 percent.

Instead of trying to repeat this suc-cess by allowing farmers to grow otherbiotech plants, however, the govern-ment has permitted political protestorsto dictate agricultural policy.

More than 6 million of us now growtransgenic cotton, but we’re still forbid-

den from growing the kinds of cropsthat farmers in Argentina, Canada, thePhilippines, and elsewhere take forgranted.

Nearly three years ago, we wereabout to take a big step forward withtransgenic brinjal, a vegetable knownelsewhere as eggplant. Scientists recom-mended it and farmers wanted it. Butthe government said no, simply becauseof a few loud voices.

As I write this, I am battling on myfarm to salvage my rice crop. This year,I’ve had to contend with a drought, fol-lowed by a monsoon, and then anotherdry spell.

Modern technology holds out thepromise of seeds that can endurethe worst that weather can throw atus.

In addition to the challenges ofclimate, farmers also must beat theirtraditional foes: weeds, pests, anddisease. I am convinced biotechnol-ogy can help with that, too.

But only if we enjoy access to

the best agricultural tools thatscience can del iver.

India is a poor country, and some-times I’m forced to wonder if anti-GMactivists want to keep it that way.

The choice is clear: We can remainpoor, and always be reaching for thebegging bowl, or we can work togetherto come up with 21st-century solutionsto our most pressing problems.

Up until now, we have for the mostpart chosen foolishly. To reverse course,our Supreme Court must continue totreat the advice of its own TEC withthe skepticism it so richly deserves.

The next step is to choose wisely.That means listening, at long last, to thepeople who appreciate the true poten-tial of biotechnology — India’s farm-ers.

V. Ravichandran grows rice, sugar cane,cotton, and small grains on his farm in TamilNadu. He is a member of the Truth AboutTrade & Technology Global Farmer Network(truthabouttrade.org}.

The word ugly is a negative termthat can be used to describe appear-ance, behavior, or even morals.

Hans Christian Anderson used theword in his tale, “The Ugly Duckling.”In this story, the ugly duckling ultimate-ly becomes a beautiful swan.

To many people, the term is an aptexpression of their feelings regardingthe appearance of insects. I haven’tdone a formal survey on the subject,

but in my experience,people often expresstheir feelings about in-sects using the words“ugly” and “gross” —especially if the en-counter is up close andpersonal.

Both “ugly” and thedirect opposite “beauti-ful” are subjective

terms. What one person might considerbeautiful is ugly to another and viceversa.

The saying, “Ugly is as ugly does,” issaid to express the idea that true beautyis found in the actions of people, notin the way they look.

So is ugly an appropriate descriptiveterm for the way insects appear? I sus-pect that we two-legged, soft-skinnedhumans think the six-legged, exoskele-ton-skeleton-covered insects are ugly

mainly because they look much differ-ent from us.

The physical structure of insects isan important reason these creatures aresome of the most successful animalson earth. As it turns out, ugly can bebeautiful in the world of insects.

Here’s why.Large, bulging, eyes are dominant

features of some insects. Each of sucheyes can have up to 3,000 lenses, allow-ing an insect to see in many directionsat the same time.

Such peepers might not be consid-ered beautiful by fashion-conscious hu-mans who squint at the world througha pair of single-lens eyes.

But excellent vision is not only im-portant to insects, it is essential. That’sbecause insects must constantly be onthe alert for predators and their eyesare a first line of defense.

Insects also possess a pair of protru-sions on their head.

These are called antennae, whichmake insects look somewhat other-worldly.

Whether these structures resemblebeads on a string, a feather duster or asaw blade, insect antennae might not beconsidered pretty by most people.

But pretty or not, insect antennaefunction to pick up odors that are use-ful in locating food or mates. Once

again, functiontrumps form.

Insect bodies alsoare often adornedwith a variety ofspines and pegs.These devices aresometimes associat-ed with the sense oftouch.

Sharp spines alsocan function to pro-vide defense againstpredators. For exam-ple, the spines on thelegs of grasshoppersare powerful weapons and, in associa-tion with kicking behavior, can be usedto effectively discourage an animal in-tent on having an insect meal.

Then there are the mouths of in-sects. Insect mouthparts can vary fromthe chewing type that are most likehuman mouths because of the pres-ence of mandibles.

Cockroaches and grasshoppers havemouths of this type that are good foreating solid food such as the leaves ofplants.

Other insects including mosquitoesand plant bugs have piercing and suck-ing mouths. These insects feed on liq-uid food that must be extracted fromthe source, such as blood from a mam-

mal or sap from a plant. Butterflieshave a coiled tube mouth good for sip-ping nectar from a flower.

All told, the combination of eyes,antennae, mouths and spines make in-sects look like insects. That is a lookthat some humans find downright ugly.

But remember that ugly is as uglydoes. In this case, that ugly is associat-ed with functions that allow insects tobe successful organisms.

Besides, I don’t think insects reallycare about whether we humans thinkthey are ugly.

Tom Turpin is an entomology professor atPurdue University, West Lafayette, Ind. Hisemail address is [email protected].

Ugly is as ugly does in insect world

TOMTURPIN

FarmWeek Dec. 17 2012

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