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Monday, January 2, 2012 Two sections Volume 40, No. 1

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

Hog PRodUCERS saw aprofitable year in 2011 and 2012looks to be every bit as good andperhaps even better. .....................10

USdA’S lAST product ionreport for the 2011 crop will bereleased Jan. 12. No significantchange in yields is expected. .........4

PARTICIPANTS HAVE beenchosen for the Market Study Tour toCuba in March. One farmer hopes tointerest Cubans in sheep and prawns. ....2

Farm Bureau to set national ag policy goalsBY MARTIN ROSSFarmWeek

As the American FarmBureau Federation (AFBF) Res-olutions Committee (RC) draft-ed 2012 policy for national dele-gate debate, “there was notmuch debate about whetherdirect payments will be continu-ing,” an AFBF economist noted.

Instead, farmers gatheringnext week in Honolulu likely willfocus on the shape — andpotential scope — of the 2012farm bill safety net. AFBF’s 93rdannual meeting begins Sunday.

Acknowledging congression-al budget concerns that appear

discussion: support for a shal-low loss program that would“expand on the ACRE (Aver-age Crop Revenue Election)program” vs. a revenue pro-gram that functions more as “atype of insurance program.”

This fall, House/Senate AgCommittees put forward a $23-billion ag savings blueprint forthe super committee, agreeingto eliminate direct payments inorder to assure crop insurance-safety net funding.

While the super committeeultimately failed to reach anagreement, “most folks hadcome to the conclusion thatwe have to imagine a worldwithout direct payments,”Nigh told FarmWeek.

“If they do come to an end,what is our backup?” sheposed. “What would we like

farm policy to be? This is prob-ably a very critical point in poli-cy debate.”

Echoing IFB’s emphasis oncrop insurance, RC membersagreed insurance should serveas “the primary safety net foragriculture,” Nigh related.

They reasoned that withremoval of more catastrophic“systemic risk” from the equa-tion via the farm program, cropinsurance could function moreeffectively for southern growersand others “it hasn’t been sohelpful for in the past,” she said.

Ridgway producer and Illi-nois Soybean Association boardmember Bill Raben will close-ly follow the farm bill debate,especially as ag committees naildown safety net details.

See Policy, page 4

to signal a significant shift in agpolicy direction, the 10 stateFarm Bureau presidents com-prising the RC in Decemberreviewed a potential “changingaround of priorities,” accordingto AFBF economist VeronicaNigh.

Delegates will consider farmbill proposals keying on “strongand effective safety net/riskmanagement programs that donot guarantee a profit, butinstead protect producers fromcatastrophic occurrences whileminimizing the potential forfarm programs affecting pro-duction decisions.”

The RC incorporated notonly diverse policy offeringsfrom across the country butalso AFBF’s “systemic riskreduction program,” which wasdeveloped in the heat of con-gressional deficit “super com-mittee” speculation. AFBFoffered the revenue-based, dis-aster-type program as an alter-native to so-called “shallowloss” programs proposed byother commodity groups andfarm state lawmakers.

Illinois Farm Bureau Presi-dent Philip Nelson, an RCmember, thus foresees “twoavenues” of possible delegate

TALKING TURKEY

DeKalb County independent turkey grower Howard Kauffman, seenhere, is a proponent of judicious antibiotics use. He argues, howev-er, that “antibiotic-free” meat is an industry standard rather than aclaim that can be made only by niche marketers. See more detailson page 6. (Photo by Antony Boshier)

Mild winter for Midwest?

Dryness in South Americanow igniting crop markets

BY DANIEL GRANTFarmWeek

The corn and soybean mar-kets last week raced to six-weekhighs as dryness in SouthAmerica continued to threatencrop yield potential there.

Bryce Anderson, DTN agmeteorologist, reported soilmoisture is less than 10 percentof normal in much of the cen-tral crop belt in Argentina.

“I’d classify soil moisturethere as short to very short,”Anderson told FarmWeek.“With that kind of problem,it’s not looking good at all forthe majority of the corn crop(in Argentina).”

Concerns have escalated inrecent weeks as the South Ameri-can corn crop enters pollination.

“The situation is most con-cerning for the corn crop. Cornhas one shot to pollinate,”Anderson said. “Soybeans, onthe other hand, can hang on alittle more and take advantageof late-season showers.”

The crop markets respond-ed to the production concernsin South America by racing tosix-week highs. Futures priceslast week were above $6.30 forcorn, $12 for beans, and $6.40for wheat.

Anderson on Thursday fore-cast rain for south centralBrazil over the New Year’sweekend but little relief was insight farther south.

“La Nina has a high correla-tion with dry conditions inArgentina and southern Braziland we’re seeing that,” he said.

Elsewhere, weather condi-tions in the Midwest so far thiswinter have been unseasonably

warm and wet. Precipitation inIllinois the first three weeks ofDecember averaged nearly 3inches, 1.1 inches above normal,while the temperature averaged35.6 degrees, 4.5 degrees aboveaverage and 13.8 degreeswarmer than last December.

“With the warmer tempera-tures, we have seen lots of rainbut not much snow,” said JimAngel, state climatologist withthe Illinois State Water Survey.

The situation so far is asharp contrast to last winter(December through February)when snowfall totals rangedfrom 15 inches in Southern Illi-nois to 50-plus inches inNorthern Illinois.

“We’re seeing a differentpattern in North America thanwe’ve seen the past coupleyears,” Anderson said. “We’renot seeing any real pooling ofcool air over central Canada, sothere just isn’t any real mecha-nism to develop winter stormsin the Midwest.”

The weather pattern couldcontinue as the National Weath-er Service projected increasedchances of above-normal tem-peratures and above-averageprecipitation across much ofIllinois this month.

BEEFY BENEFITS — If eating a heart-healthydiet tops your list for 2012, a new study by Pennsyl-vania State University may provide some beefy moti-vation. The study, published in the American Journalof Clinical Nutrition, found that eating lean beefproducts including top sirloin, tenderloin, and 95 per-cent lean ground beef daily could improve LDL cho-lesterol (“bad” cholesterol) levels by 10 percent.

Researchers followed 36 men and women, ages30-65, who had moderately high cholesterol levels.The participants were divided and followed fourdiets.

Two of the diets, labeled “BOLD” and “BOLD-PLUS,” which included heartier servings of lean beef,proved to offer more protein and lower carbohydratelevels and provide about the same amount of fat asdiets with minimal lean beef.

U.S. WIND ENERGY ADVANCES — The U.S.wind energy industry noted milestones reached in2011. Iowa and South Dakota each generated 20 per-cent of their electricity from wind, a first for the U.S.Illinois’ renewable energy portfolio standards seek toobtain 25 percent of the state’s energy from renew-able resources by 2025, and wind power is to supply75 percent of that renewable energy.

Turbine technology continued to improve last year,allowing cost-effective harvesting of slower windspeeds and expanding potential areas of develop-ment.

However, the wind energy industry is lookingtoward Dec. 31, 2012, when the federal productiontax credit is set to expire. Some companies have saidthe uncertainty of the credit extension already has-cooled project development, according to windindustry organizations.

ED REFORM FUNDS COMING — The thirdtime was the charm for Illinois to secure U.S. Depart-ment of Education “Race to the Top” funding. Thestate will receive $43 million for school reforms. Illi-nois had been a finalist, in two previous rounds, butlost each time.

S t a t e S u p e r i n t e n d e n t C h r i s t o p h e r K o c hannounced in his online newsletter the money willallow the state to move forward with Science, Tech-nology, Engineering, and Math (STEM) initiatives.One proposed initiative is development of career-based learning about agriculture and eight otherindustry sectors in Illinois.

Koch said the state education board will use abouthalf of the funding “to build up the overall educa-tional infrastructure in the state.”

FarmWeek Page 2 Monday, January 2, 2012

(ISSN0197-6680)

Vol. 40 No. 1 January 2, 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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Quick TakesIFB IN ACTION

Participants selectedfor Market Study TourBY MARTIN ROSSFarmWeek

Grover Webb trades in sheep and “shrimp.”Someday, the Pope County producer hopes hemight trade with Cuba.

Webb, owner of Tangle-foot Ranch Prawns in Simp-son, is one of the “at-large”producers and two alternatesselected for Illinois FarmBureau’s 2012 Cuba MarketStudy Tour in March.

Because personal andcommercial travel to Cubaare coordinated through theU.S. Department of State, IFB applied last weekfor a commercial license in order to lead an agproducts marketing, sales, and sales-servicingdelegation to Cuba.

Formal approval of the travel license is notexpected before mid- to late February, so a March26-31 timeframe for the tour is planned.

The trip will focus on farmers representingpotential products they are interested in selling toCuba. Products represented by farmers selectedfor the tour include corn, soybeans, wheat,sorghum, pork, beef, live animals, fresh watershrimp, eggs, milk, dairy products, and vegetables.

Given Cuba’s growing tourist trade, evolvingappetites, and agricultural environment, Webbenvisions a possible new market for his freshwaterprawns and live “hair” sheep. Hair sheep, which,ironically, originated in the Caribbean, lack stan-dard wool and thus the oily lanolin that can affectthe taste of lamb from conventional breeds.

Further, hair sheep have a generally strongermaternal instinct than more heavily bred U.S.

sheep, and they don’t need grain to finish. Webbsuggests a lower-maintenance, better-tastingsheep might appeal to lower-income Cuban pro-ducers themselves in search of new markets.

“The hair sheep are very hardy — we let themlamb outside in the middle ofwinter,” he added. “It’s a verytough kind of animal; they’reeasy to raise. If anyone weregoing to go into the sheep busi-ness at this time, they ought tobe interested in hair sheep.”

While citizens of and visi-tors to the island nationalready have developed a

taste for seafood, Webb believes Illinois prawnscould provide an exotic taste profile for Cubansand their international guests. While Asianprawns are larger, they also often are a few yearsolder. Webb harvests shrimp annually to ensureimproved flavor, he said.

In addition to Webb, producers picked forthe Cuba tour include: Joe Bierman, JasperCounty; Kevin Green, Vermilion; Paul Hon-nold, Edgar; Robert Inman, Pulaski; GerryKopping, Cook; Tom Jennings, Sangamon;Glenn Leighty, Lawrence; Thomas Marten,Montgomery; Keith Mussman, Kankakee; HughScates, Gallatin; Doug Scheider, Stephenson;Grant Strom, Knox; Jamie Walter, DeKalb; BillWykes, Kendall; and Joe Zumwalt, Hancock.Alternates are Richard Gates from White Coun-ty and Kent Warren from Clay County.

IFB President Philip Nelson and District 14Director Steve Hosselton also will accompanythe group. IFB Director David Serven will serveas the Board alternate.

“Hair sheep” graze on the banks of Grover Webb’s Pope County prawn ponds. The Simpson-area producersees opportunities to market his unusual specialty products to Cubans. In addition, his flock, which does notgrow wool, controls vegetation around the ponds, eliminating the need for potentially treacherous equipmentuse. (Photo courtesy of Grover Webb, Tanglefoot Ranch Prawns)

The Illinois Farm Bureau Gov-ernmental Affairs LeadershipConference (GALC) will offertwo days of issue-oriented gener-al sessions and workshops Feb.29 through March 1 at theCrowne Plaza, Springfield.

Participants will be able to select from nearly 30workshop topics. Issues covered will include trans-portation, environment, legislative updates, localgovernment, the farm bill, and rural development.

Again this year, Farm Bureau leaders willhave an opportunity to talk with lawmakers dur-

ing a statewide legislative recep-tion on Wednesday evening.

Registration is being offeredfor either or both days. The costis $50 for Wednesday only, $30for Thursday only, or $70 for

both days. Online registration will be available after Jan.

15. Hotel reservations are due directly to thehotel by Feb. 1. To register for the conferenceor to obtain additional information, contactyour county Farm Bureau or go online to{www.ilfb.org}.

IFB’s Governmental Affairs LeadershipConference to focus on 2012 issues

FarmWeekNow.comGo to FarmWeekNow.com tolearn more about IFB’s 2012Governmental Affairs Leader-ship Conference.

goverNmeNt

Page 3 Monday, January 2, 2012 FarmWeek

Biodiesel tax credit early on 2012 agenda?BY MARTIN ROSSFarmWeek

Deprived of a Christmasmiracle, the biodiesel sector ishopeful Congress soon will actto help keep demand rolling.

The American SoybeanAssociation called Congress’recent failure to extend anexpiring biodiesel blender’s taxcredit “a disappointing end toan otherwise very positive yearfor the biodiesel industry.” Thecredit expired Saturday.

The industry set a productionrecord in 2011, with more than800 million gallons producedthrough October, and industryexperts continued to speculatethat year-end production couldreach 1 billion gallons.

That was after a year in limboas lawmakers delayed renewal ofthe $1-per-gallon biodiesel credit,which had lapsed Dec. 31, 2009.

The sector rallied followinga retroactive extension in late2010; hopes are high Con-

RFS2 biodiesel target for 2012.The federal tax credit helps

keep biodiesel price-competi-tive for mid-level blenders whothen may invest in biodieselfuel terminals, heated tanks,and retail pumps needed toexpand use of higher blends.

The third leg includes incen-tives such as Illinois’ recentlyextended biofuels tax credit,which are crucial in determin-ing “which states are thehotbeds for biodiesel blendingand use,” Clancy said.

REG’s Danville and Seneca

plants, which run on variousfeedstocks including soy andcorn oil, enjoyed “very strongdemand” in 2011, she said.

The sector sees promise innew oil crops such as Illinoispennycress, but REG and oth-ers have a stake in the ethanolindustry’s continued health, aswell, given the value of inedi-ble corn oil generated as anethanol coproduct.

“We see that being a veryquickly growing feedstockmarket for the biodiesel indus-try,” Clancy related.

gress will enact a retroactivetax extenders package earlythis year. A recently circulateddraft Senate package includedthe biodiesel credit.

Renewable Energy Group(REG) spokesman Alicia Clancy,whose company oversees 105million gallons in combinedbiodiesel production capacity atDanville and Seneca, notes cornethanol interests were willing toforego their 45-cent-per-gallonblenders credit (which alsoexpired Dec. 31) in favor ofethanol infrastructure incentives.However, U.S. ethanol productionis closing in on 13 billion gallons.

“The biodiesel industry in2003 only produced 14 milliongallons,” Clancy told Farm-Week. “In nine years, we’llhave gone from 14 million gal-lons to a billion gallons. Butthe industry is still young. Westill have a lot of room togrow and a lot of market pen-etration that can occur.

“If you keep in mind thatthe entire (diesel) distillate mar-ket in the U.S. is something like65 to 70 billion gallons, we’revery much just getting started.Having stable and sound federalpolicy is really important.”

The credit is a vital part ofwhat she terms a “three-leggedstool.” The federal RenewableFuels Standard (RFS2) setsrequirements for biodieselblending “from the top down”:Last week, the U.S. Environ-mental Protection Agencyannounced a 1 billion-gallon

Shimkus: Pipeline pushpackage’s only ‘positive’

Congress’ payroll tax cut compromise provides a merelytemporary reprieve for rural health care providers and hopesfor action on a plan to bolster North American energy security,according to U.S. Rep. John Shimkus, a Collinsville Republican.

President Obama has signed a measurethat keeps a reduced 4.2 percent Social Secu-rity payroll tax in place through Feb. 29. Thepackage — the product of intense debatebetween the Republican-controlled Houseand the Democrat-run Senate — also extendsunemployment benefits and heads off cuts inreimbursement to Medicare providers.

The measure further requires the president tomake a decision within 60 days on a permit toauthorize construction of a proposed Canada-to-Texas Keystone XL oil pipeline. For Shimkus,

a member of the House Energy and Commerce Committee,that’s one of the few silver linings in the measure.

The House originally proposed keeping the payroll tax cutin place through 2012.

“This is only a two-month compromise — I think that whenwe get to the end of February, people are going to be lookingaround saying, ‘Boy, I wish we would have had a one-year deal,’”Shimkus said in an RFD Radio-FarmWeek interview last week.

“As far as unemployment insurance extension, you go torural America, where they’re trying to hire folks, and they tellus that if we keep extending unemployment (benefits), they’regoing to continue to have trouble filling their jobs.

“The only thing positive here is an attempt to push the pres-ident to make a decision on the Keystone XL pipeline, whichwould bring more crude oil to the U.S. from our partner andfriend up north, Canada.

“They’re (Canadians) willing, ready, and able to sell us that oil.Look at what’s going on with the Iranians threatening to closedown the Strait of Hormuz. Think about how it would affectour producers if that area were cut off from crude oil supplies.”

As part of their compromise, lawmakers designated aHouse-Senate conference committee to develop legislation thatwould extend the payroll tax cut through 2012 and devise alonger-term extension of Medicare reimbursement provisions.

Farm Bureau monitored the payroll tax measure becauserural primary care doctors on average see a higher percentageof Medicare patients than their urban counterparts.

The Natural Rural Health Association argued Medicare“extenders” were “vital to ensuring that rural hospitals, doctors,and other professionals can provide needed emergency and pri-mary care.” Shimkus emphasized the need to build on what hetermed Congress’ mere “two-month ‘doc’ fix.” — Martin Ross

U.S. Rep. JohnShimkus

ISA to host transportation discussionsGroups seek infrastructure actionWith 2011 in the rearview mirror, Illinois agri-

cultural and commercial interests are looking toassemble a 2012 roadmap for federal transporta-tion priorities.

The Transportation for Illinois Coalition(TFIC) seeks a $500 billion, six-year congression-al transportation package early this session. Thelast surface transportation funding bill expired in2009 but has been extended repeatedly, mostrecently through March.

A new coalition study argues timely passage ofa new multi-year bill is crucial “in order for pub-lic agencies to appropriately plan for multi-yearcapital projects, in order for construction andengineering firms to make decisions regardinghiring and the purchase of equipment.”

Mike Steenhoek, executive director with themulti-state Soy Transportation Coalition (STC),sees a narrow political “window of opportunity”for the package. If lawmakers fail to act byMarch, transportation debate likely will be “over-whelmed by the 2012 elections,” he warnedFarmWeek.

Illinois Soybean Association (ISA) consultantScott Sigman reports freight issues are “frontand center” in a number of transportation pro-posals circulating in Washington. He sees politi-cal recognition “that it is freight that’s going todrive the economy — not just the consumer theeconomy has relied on in the past.”

Sigman urges attention to road, rail, river, andeven air resources “integral to the freight network.”However, Steenhoek sees “two strong and unfor-tunately competing developments occurring rightnow, as we look at our political landscape.”

“You have a strong and increasing aversion togoing into greater debt or increasing taxes on theAmerican people,” he said. “On the other hand,there’s this strong desire to pass legislation withsignificant job-creating potential that would helpfacilitate economic growth.

“Unfortunately, the surface transportation billtouches on both aspects, and there’s a real inherent

conflict with it right now. On the one hand, somemight say there’s no chance something like this willpass. On the other, someone could say that this isexactly what our economy needs right now.”

The TFIC report warns state roads are wear-ing out 33 percent faster than they are beingrepaired and predicted that by 2018, one out ofevery four miles will be in “unacceptable” condi-tion without much-needed, federally supportedrehab. At thesame time,“substantialportions” ofIllinois’ inter-state systemhave come toneed recon-struction rather than “simple resurfacing,” butthe state since 2005 has been able to fund only20 percent of the miles projected to needrebuilding, the study reported.

ISA plans a Jan. 17 focus group on soy trans-portation in Bloomington. The roundtable willdeal with multimodal infrastructure, container-ized shipment, truck weights, bridge needs, andefficiencies such as matching “head hauls”(incoming containers of manufactured goods)with “back hauls” — use of empty containers toship commodities back to those markets.

Slots on the roundtable may be available. Toinquire, e-mail Nancy Gargano atgarganon@ilsoy.org, by Jan. 10.

The roundtable is a sort of precursor to a Feb.16 ag export symposium sponsored by ISA andGovernors State University in Will County’s Uni-versity Park. The symposium will feature marketanalysis and insights into export procedures,multimodal capabilities for bulk commodities,and the impact of the Panama Canal on Midwestinland waterway demand.

Details of the February symposium will beavailable soon at {www.ilsoy.org/transporta-tion/events}. — Martin Ross

The U.S. Environmental Protection Agency(EPA) last week released renewable fuel require-ments under the federal Renewable Fuel Standardprogram (RFS2), following on the heels of a newreport on ethanol’s greenhouse “footprint.”

Under RFS2, annual renewable fuel volumetargets — including conventional and biomassethanol and biodiesel — are gradually increasedto reach 36 billion gallons in 2022.

Refiners and importers use the standard todetermine the minimum volume of renewable fuelthey must blend into transportation fuels.

For 2012, EPA has set a 1-billion-gallon target forbiomass-based diesel (see related story above),directed 8.65 million gallons of cellulosic (biomass)biofuels use, mandated 2 billion gallons of next-generation “advanced biofuels” use, and set anoverall renewable fuels goal of 15.2 billion gallons.

Corn-based ethanol accounts for nearly 13 bil-lion gallons of current annual renewable fuels pro-

duction. With expiration of the longstanding feder-al ethanol blenders excise credit Saturday, RFS2mandates are viewed as important in sustainingethanol demand as renewable fuel infrastructurecontinues to expand.

However, RFS2 corn ethanol requirements arecapped at 15 billion gallons, largely because it isnot deemed to offer sufficient greenhouse gasreductions to qualify as a “advanced” biofuel underEPA definitions. New findings from USDA, though,could help strengthen the case for conventionalethanol and its environmental benefits.

A new USDA study indicates that the country’stotal cropland decreased by 34 million acres from2002 to 2007, contradicting earlier predictions thatfarmers would cause “indire

ct land-use change” as ethanol production rose.The report found that the country’s rangeland,grassland, and forestland acres increased signifi-cantly during that period.

EPA sets biofuels goals; study adjusts footprint

FarmWeekNow.com

For details of the Illinois SoybeanAssociation’s Jan. 17 roundtableon soy transportation, go toFarmWeekNow.com.

production

FarmWeek Page 4 Monday, January 2, 2012

Continued from page 1“I’d like to see some sort of security blanket that can help us

in times where prices fall short of our breakeven price — some-thing that’s going to help us out a little bit,” Raben said. “Cropinsurance seems to be the best way to go, I think.”

Policy

Good: Acreagebattle unlikelythis seasonBY DANIEL GRANTFarmWeek

If the weather permits, farmers generally are expected toplant more acres of corn this year than last.

Darrel Good, University of Illinois ag economist, recentlypredicted farmers this year could plant an additional 2 millionacres.

“For the most part, expectations are farmers will plant moreacres of corn this year than they did in 2011,” Good saidrecently at the Illinois Farm Economics Summit in Galesburg.

Informa Economics made a similar projection when it esti-mated corn acreage this year could total 94 million acres, upfrom about 92 million last year.

But a possible jump in corn acres isn’t expected to heat upthe markets this spring in what seemingly has become an annu-al battle for acres.

Instead, planted acres of all crops are expected to get aboost this year from a return to production of a high numberof prevent-plant acres (9.5 million last year), previously aban-doned acres, and about 1.5 million acres recently released fromthe Conservation Reserve Program.

“It (the return of acres to production) suggests there will bea fair amount of acreage for planting crops in 2012, and cornwill get its fair share,” Good said.

The economist projected soybean plantings will remainsteady at about 75 million acres, which was close to Informa’sprojection of 76.1 million acres of soybeans.

Informa projected wheat seedings would total about 57 mil-lion acres.

If the estimates are realized this year, crop plantings stillwould total about 1 million fewer acres than what was seededin the 2008 season.

“I’m not envisioning an acreage battle,” Good said. “I thinkthere will be plenty of acreage to go around.”

Good projected increased corn acreage plus a return oftrend-line yields could push corn production to nearly 14 bil-lion bushels this year.

A boost in corn production, plus waning demand, coulddrag prices lower this year, the economist predicted.

“We’re not looking for a lot of demand growth,” Good said.“That suggests we’ll be looking at lower (but still profitable)prices” this year.

Weather will be the wildcard, though, as Good’s predictionswere based on a third consecutive record bean crop in SouthAmerica and normal planting and growing conditions in the U.S.

“The acres are there. The economic incentive will be there(for U.S. farmers to maintain or boost planted acres),” saidDale Durchholz, AgriVisor market analyst. “The unknown iswhether the weather will allow the acres to get planted.”

USDA to finalize 2011 crop numbers Jan. 12

“By November we have apretty good indication of whatyields will be,” he said. “As wego through harvest, the range oferror (in production estimates)decreases.”

Clayton Pope, AgriVisormanager, predicted the finalcrop production estimates willwind up close to the Novemberprojections of 12.3 billionbushels for corn and 3.05 bil-lion bushels for beans.

“(USDA) can make some bigchanges, still,” Pope said. “ButI’m not looking for anythingdramatic.”

USDA last month also rein-stated a number of crop reportsit planned to discontinue,including the July cattle invento-ry report and the January sheepand goat report.

USDA’s proposed report ondistiller coproducts for feed,however, remains on the shelf.

“This (coproducts report)would have allowed analysts toimprove their projections forcorn feed use in forward quar-ters and likely reduced thevolatility in livestock and poul-try prices relating to changes inthe price of corn,” authors ofthe CME Group’s Daily Live-stock Report noted.

Current estimates suggestethanol byproducts have dis-placed about 1.2 billion bushelsof corn from the national feedsupply and export markets.

Schwab at the summit alsoencouraged farmers to fill outUSDA NASS surveys and toprepare for the next Census ofAgriculture, which will bemailed in December 2012.

“Our numbers are only asgood as the farmers who take thetime to fill out the questionnairesand the information they give us,”Schwab added. — Daniel Grant

Farmers, traders, and othersin the grain industry shouldkeep an eye on Jan. 12 as USDAthat day will release its annualcrop production report.

Many analysts at this pointdon’t expect significant changesto yield estimates as 2011 pro-duction generally was a bit dis-appointing for corn and a pleas-ant surprise for soybeans.

The national yield averagesas of November were peggedat 146.7 bushels per acre forcorn and 41.3 bushels for soy-beans.

In Illinois, yield estimatesfrom August to Novemberwere lowered from 170 bushelsper acre to 156 bushels forcorn and from 48 bushels to46 bushels for beans as dryconditions late in the summertrimmed off the top end ofyield potential.

“In August, we saw excellent(plant) populations and ears onabout every stalk,” BradSchwab, state statistician withthe National Agricultural Statis-tics Service’s (NASS) Illinoisfield office, said last month atthe Illinois Farm EconomicsSummit in Galesburg. “Butexpectations changed.”

Hot and dry conditionsaffected crops in much of thestate in July and August.

“This is the second year in arow (corn) production was a bitlower than expected,” said Dar-rel Good, University of Illinoisag economist.

The corn yield in Illinois thelast two seasons averaged 156.5bushels per acre compared tothe previous three-year averageof 176 bushels per acre from2007 through 2009.

Schwab predicted the currentyield estimates will be close tothe final numbers released nextweek.

outlook

Page 5 Monday, January 2, 2012 FarmWeek

Farm Credit chairman: Risk warrants caution

BY KAY SHIPMANFarmWeek

Livingston County farmersinvolved with the Indian Creekproject recently marked awatershed year and look for-ward to more results fromtheir conservation practices.

Fairbury farmer John Traubused strip-till in second-yearcorn and employed variablenitrogen rates, among otherpractices. In the first year,Traub, who serves on the pro-ject’s steering committee, saidhe saw some yield benefitsfrom the conservation prac-tices.

“At the end of three years, Ithink we’ll have a good data-base of proof,” Traub said ofthe information being collect-ed from his operation andthose of other participatingfarmers.

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

The watershed is in thenational spotlight as one ofUSDA’s Mississippi RiverBasin Initiatives.

The goal of that program isto reduce nutrients going intorivers and streams in the basin.

Supporters of the IndianCreek project can point tofarmer involvement and acresenrolled in the effort.

Nearly 40 percent of thewatershed’s farmers areenrolled in programs toincrease conservation throughsuch practices as planting cov-er crops, sidedressing nitrogen,splitting applications of nitro-gen, and using nitrogen stabi-lizer. A total of 32 percent ofthe watershed’s acres isinvolved.

In July, a tour of partici-pating farms attracted more

than 100 farmers.However, watershed farmers

aren’t the only ones who areworking to improve their nutri-ent efficiency. Forrest farmerMarcus Maier, another projectsteering committee member,farms just outside of the water-shed boundaries. He completedhis second year of sowing anoat-tillage radish cover cropinto soybean stubble.

Maier said he appreciatesthe fact that data are being col-lected from field trials anddemonstrations at specificlocations within the watershed.That will be helpful in buildingnutrient management systems,he noted.

“It’s important for farmersto be on the front end of thiswork with the IEPA (IllinoisEnvironmental ProtectionAgency) ... We want it (prac-tices) to make sense,” Maiersaid.

The new year will bring newdemonstrations to the mix ofwatershed projects. Those willinclude cover crop uses andbenefits, drainage management,and potassium management insoybeans.

Both Maier and Traub saidthey hoped the word — andthe excitement — spreadsamong area farmers and thenumber of participants willcontinue to increase.

“Maybe with time and con-tinued effort we will get morepeople on board,” Traub said.

Information about the Indi-an Creek Watershed projectwill be presented at the IllinoisFarm Bureau GovernmentalAffairs Leadership ConferenceFeb. 29-March 1 at the CrownePlaza in Springfield.

Additional informationabout the project is availableonline at {www.ctic.pur-due.edu/IndianCreek/}.

Central Illinois farmers assessnutrient ideas and look ahead

BY DANIEL GRANTFarmWeek

Record-high income in 2011 allowedmany U.S. farmers to pay down debt, updatemachinery, and help bid up land values.

But while the economic picture generallylooks bright in farm country, Leland Strom,chairman of the Farm Credit Administration

(FCA), recently advisedfarmers to proceed with cau-tion this year.

A number of factors —including the possibility oflower commodity prices,higher input costs, higherinterest rates, and changes incurrency values — couldsqueeze farm margins thisyear or in the future.

“This environment warrants extreme cau-tion by all parties,” Strom, a former IllinoisFarm Bureau Young Leader, told the IFBBoard of Directors during a recent meetingin Bloomington. “There are growing risks inthis market.”

Strom noted 2010 and 2011 marked thefirst time U.S. farmers harvested back-to-back below-trend corn yields since the late1970s.

A return to trend-line yields or better thisyear likely will boost corn supplies and pres-sure prices, he said.

Meanwhile, economic uncertainty causedby everything from the European debt crisisand instability in the Middle East to the MFGlobal meltdown also could pressure pricesor affect demand for farm products.

“The Farm Credit System as a wholeshould be able to weather this (collapse ofMF Global, which was the eighth-largestfutures commission merchant in the U.S.)due in part to its strong capital position,”

said Strom, who noted capital in the FarmCredit system has grown from $27.1 billionin 2008 to $35.9 billion in 2011.

“The biggest issue is the question of con-fidence the ag sector will have in the futuresindustry” moving forward, he said.

Strom said he believes it’s possible farm-ers who lost money through MF Globalcould have difficulty getting credit thisspring.

There also is concern in the industry thatif elevators wind up paying higher interestrates because of the debacle, lower cash bidsand a wider basis for crops could result.

Higher prices already have been witnessedat farmland auctions the past year-plus.Farmland values in the third quarter were up23 percent in Illinois and 31 percent in Iowa.

“Obviously there has been an extremepace of acceleration (in land values),” saidStrom, who does not believe the market hasentered a bubble.

“But from what we see, underlying eco-nomics in the farm sector support whatwe’ve seen in land values.”

The situation could change if commodityprices fall for an extended period, interestrates increase, or if the general economyimproves and investors leave the farm sectorand return to the stock market, according tothe FCA chairman.

Farmers, however, continue to buy a goodportion of farmland with cash and also havepaid down debt in the past year.

The percentage of acceptable loans in theFarm Credit system has increased from 90.4percent in December 2009 to 91.5 percent inSeptember 2011, Strom reported.

“Credit quality continues to graduallyimprove (in the farm sector),” Strom added.“Farmers are paying down some debt evenin the face of low interest rates.”

Leland Strom

Fairbury farmer Kevin Harms, left, describes the split-nitrogen trials onhis family farm to participants of last summer’s Indian Creek Watershedtour. (FarmWeek file photo)

EMERGING ISSUES

FarmWeek Page 6 Monday, January 2, 2012

‘Clean meat’ perceptions pose legislative riskBY MARTIN ROSSFarmWeek

As the CEO of a popularfast-food chain beats the drumfor so-called “clean meat” intheaters and in Congress,Northern Illinois turkey grow-er Howard Kauffman arguesclean meat can be found onany given day at the nearestgrocery.

In December testimony,Chipotle CEO Steve Ellisurged Congress to curb antibi-otic use in meat production.Ellis joined other specialtymarketers to back Rep. LouiseSlaughter’s (D-N.Y.) proposalto restrict use in livestock ofseven antibiotics that also havehuman applications.

Slaughter argues drug use infood animal production maybe raising consumer resistanceto antibiotics and thus lower-ing disease resistance.

She was in a stronger posi-tion to push the measure dur-ing Congress’ previous ses-sion, when she was chairmanof the House Rules Commit-tee, American Farm BureauFederation policy specialistKelli Ludlum told FarmWeek.

Antibiotic use generally isnot a partisan issue, but Lud-lum noted “more influentialDemocrats” support the legis-lation than Republicans, andthe debate thus has “been a lit-tle quieter.”

However, Ellis and otherkey food industry voices con-tinue to publicly press a vari-ety of animal care issues.

In movie theaters, Chipotlehas aired “Back to the Start,”an animated ad featuringmusic by Willie Nelson anddepicting a fictional farmer’smove from “factory” produc-tion to pasture-based produc-tion.

The ad depicts drugs beingpumped into cartoon hogs onan assembly line before theyare stamped into cubes ofpork.

Ludlum argued “smallfarms and local foods,” andconsumer perceptions relatingto them, are “in vogue rightnow,” potentially influencinglawmakers.

“This is obviously some-thing we’re still very con-cerned about — somethingwe’re watching and opposed

to,” she said DeKalb County’sKauffman Turkey Farms isone of the U.S.’ last independ-ent family turkey operations,boasting its own federally in-spected dressing plant.

Kauffman raises birds bothon the range and in the house,and his flock health programincludes early vaccination forroutine diseases.

He is sensitive to public de-bate over antibiotic use in ma-ture poultry, but will use vet-erinary drugs when unexpect-ed threats put consumers atrisk or may cause animal suf-fering.

He questions the conceptof “antibiotic-free” meat, cit-ing drug withdrawal standardsthat assure birds are clean andclear of drug residues whenthey reach the market.

“Go to any meat case: I’llshow you antibiotic-freemeat,” Kauffman challenges.

Illinois Farm Bureau hastried to educate Chicago-area“Field Moms” about judiciousantibiotic use.

During a recent Field Momstour of Hampshire-based Lin-dale Holsteins dairy, veterinar-

ian Brian Gerloff noted milkfrom treated animals is segre-gated until antibiotics are“cleared from the milk.”

Identification of precisewithdrawal times is requiredunder U.S. Food and Drug Ad-ministration animal drug ap-provals. Gerloff said produc-ers have “tremendous eco-nomic incentives” to complywith withdrawal requirements:Each tank of milk that leavesLindale Holsteins is tested be-

fore it is unloaded, and milkwould be dumped if antibi-otics are found.

“Slaughter would say live-stock have a big role in con-tributing to antibiotic resist-ance in humans,” Ludlum said.

“The fact is, there are nopeer-reviewed scientific stud-ies that show a linkage be-tween antibiotic use in live-stock and resistance in hu-mans — at least not with thecurrent practices we use.”

USDA: Antibioticsposition unchanged

USDA has not changed itsposition on farm antibioticsuse (see accompanying story),despite recent comments byAg Secretary Tom Vilsack thatsome groups viewed as signal-ing a tougher stance, a depart-ment staffer says.

While unveiling a new re-port detailing the Obama ad-ministration’s food safety ef-forts, Vilsack stated, “It’s clearwe would like to see those an-tibiotics used in the context ofdisease control and disease re-sponse as opposed to anyother reason or purpose forusing them.”

USDA spokesman Courtney

Rowe stressed “Secretary Vil-sack’s comments do not reflecta change in policy for the de-partment.”

The USDA food safety re-port outlined stricter standardsto prevent bacterial contamina-tion of food, stronger surveil-lance to detect contaminationproblems early, and more rapidresponse to illness outbreaks.

However, Vilsack said,“We’re working with state vet-erinarians and veterinarians’associations and land-grantuniversities to ensure thatthere’s a better understandingof the importance of using an-tibiotics judiciously.”

AFBF board names five Illinois producers to advisory committees

The American Farm Bu-reau Federation (AFBF)Board of Directors hasnamed five Illinois producersto 2012 commodity advisorycommittees.

They are: Don Ahrens, la-bor; Pat Bane, swine; DeanCampbell, soybeans; KevinMiller, feedgrains; and CraigTanner, ag nursery and green-house.

The Illinois Farm Bureaurepresentatives will attend na-

tional meetings of the AFBFadvisory committees in Ana-heim, Calif., in February.

Commodity advisory com-mittees provide an opportuni-ty to discuss and recommendsolutions to problems that di-rectly affect the commodityfor which the member is ap-pointed.

The committees serve in anadvisory capacity to AFBFPresident Bob Stallman andthe AFBF board.

Page 7 Monday, January 2, 2012 FarmWeek

FarmWeek Page 8 Monday, January 2, 2012

FB IN ACTION

MAZIMIZING EVERY ACRE

BY KATIE BORUFFThe Henry, Mercer, Rock Island, Stark, and Whiteside coun-

ty Farm Bureaus recently wrapped up their second annual“Bushels for Hunger” grain drive for the RiverBend Foodbank,collecting $22,258.70.

The District 3 County Farm Bureaus began a relationshipwith the food bank several years ago when the Harvest for Allcampaign netted a check to the food bank for $750.

In 2010, Illinois Farm Bureau District 3 Director WayneAnderson and IFB District 3 Young Leader representative

Todd Verheeckedecided to see ifthere was interest ina districtwide graindrive for the regionalfood bank.

The first Bushels for Hunger kicked off in August 2010 withfarmers donating grain to any of the participating elevatorsuntil Nov. 30. The program that year yielded more than $9,500for the food bank.

Each of the county Farm Bureaus reviewed the first-yearproject and agreed to continue again in 2011 with increasedpublicity and more participating elevators to accept farmers’grain donations.

The 2011 Bushels for Hunger kicked off in August with 11participating elevators, including two ethanol plants.

Verheecke, a Henry County young farmer, said, “We werepleased with the amount of grain donated in 2010. We knew wecould grow in 2011. And, quite honestly, we’re ecstatic.”

Anderson said the program is a great way for farmers tohelp families in need during the holiday season and it is hum-bling for farmers to donate grain that will provide more than100,000 meals in the Quad Cities region.

The Farm Bureaus offered thanks to the following elevatorsand ethanol plants for their participation in the program: ADMGrain, Atkinson Grain, Big River Resources, Cargill, Gold StarFS, Hillsdale Elevator, Michlig AgriCenter, Patriot RenewableFuels and CGB, Kistler Prairie Mill, River Gulf Grain, RiverValley Cooperative, and Rumbold & Kuhn.

Katie Boruff is manager of the Henry County Farm Bureau. She canbe reached at 309-937-2411.

Food bank network seeks to work directly with farmersBY DANIEL GRANTFarmWeek

Feeding Illinois, a stateassociation of food banks, islooking to build on its positiverelationship with Illinois FarmBureau Young Leaders andwork directly with more farm-ers.

Tracy Smith, state directorof Feeding Illinois, toldFarmWeek her associationplans to source more foodfrom farmers in the state soneedy Illinoisans have accessto fresh, healthy foods.

Feeding Illinois plans toprovide more fresh fruit, veg-etables, and dairy products toits eight food banks that serveall 102 counties in Illinois. Theassociation hopes to source thefood items from around thestate.

“These are the (food items)we need to emphasize,” Smithsaid. “We’re not just filling bel-lies (with empty calories).”

Representatives from Feed-ing Illinois will be on hand to

network with IFB membersand others in the ag industryJan. 11-13 at the Illinois Spe-cialty Crops, Agritourism, andOrganic Conference and Feb.3-4 at the Young Leader StateConference. Both events willbe held in Springfield.

“We’re hoping to educatefarmers that the need (forfood) in communities is farbroader than most peoplethink,” Smith said. “And we’dlike to show farmers how theycan build (food donations) intotheir business model.”

Feeding Illinois the past twoyears reportedly has seen a 50percent increase in requests foremergency food assistance.

About 1.6 million Illi-noisans are food insecure, andabout 42 percent of the foodinsecure don’t qualify for fed-eral assistance programs,according to Smith.

“Service providers havebeen overwhelmed with thelevel of need,” Smith said.“Food insecurity exists inevery county in the state. Manypeople don’t have access tofresh fruits, vegetables, anddairy products.” A lack of

proper diet is believed to con-tribute to a rise in health prob-lems such as obesity and dia-betes.

Some of the specific foodproducts Feeding Illinoishopes to source around thestate include potatoes,onions, carrots, sweet corn,

apples, and cabbage.But Smith noted, “We’re

willing to take just about any-thing.”

IFB Young Leaders in thepast partnered with FeedingAmerica, and now Feeding Illi-nois, to raise funds, food, andgenerate volunteer hours to

benefit food banks around thestate.

Young Leaders last yearraised enough money to feedabout 950,000 Illinois residentsand won several nationalawards from the AmericanFarm Bureau Federation fortheir efforts.

Illinois Farm Bureau State Young Leader Committee District 3 representative Todd Verheecke, left, and IFB Dis-trict 3 Director Wayne Anderson, center, talk with River Bend Foodbank Executive Director Tom Laughlinabout food purchased with donations from the District 3 Farm Bureaus’ second grain drive. (Photo by DeAnneBloomberg, manager of Rock Island County Farm Bureau)

Five Farm Bureaus raise donation through grain drive

from the counties

Page 9 Monday, January 2, 2012 FarmWeek

BUREAU — The annualmeeting will be at 6 p.m.

Thursday, Jan. 19, at Wise GuysBar and Grill, Princeton. Dinnerwill be served. Tickets are $10and must be purchased by Mon-day, Jan. 16. Tickets are availableat the Farm Bureau office orfrom a director. Call the FarmBureau office at 815-875-6468for more information.

• The Bureau County FarmBureau Foundation has scholar-ships available to students major-ing in agriculture. The studentmust be a Farm Bureau memberor a dependent of a BureauCounty Farm Bureau member.Applications are available by e-mail and must be postmarked byFeb. 24 to the Farm Bureauoffice. Call the Farm Bureauoffice at 815-875-6468 for moreinformation or for an application.

• An agriculture internship isavailable for the summer and isopen to a Bureau County residentwho has completed two semes-ters in college. Preference is giv-en to applicants who have a farmbackground or are in an agricul-ture-related field of study. Sub-mit an application, a resume, andtwo personal recommendationforms to the Farm Bureau officeby Friday, Feb. 24. Call the FarmBureau office at 815-876-6468 ore-mail jillfrueh.bcfb@comcast.netfor more information.

CHAMPAIGN — TheYoung Leader commit-

tees from Champaign, Douglas,Edgar, and Vermilion CountyFarm Bureaus will sponsor theirannual Illini Farm Toy Show Fri-day through Sunday at theUrbana Holiday Inn. Showhours are 5 to p.m. Friday; 9 a.m.to 5 p.m. Saturday; and 9 a.m. to2 p.m. Sunday. Special events at9 a.m. Saturday include a farmtoy consignment live auction anda pedal tractor pull at noon.Contact Kurt Wolken at 217-202-2730 for exhibitor or auctioninformation and Steve Huls at217-202-4657 to enter a toy inthe auction.

CHRISTIAN — FarmBureau will sponsor an ag

outlook meeting at 6:30 p.m.Tuesday, Jan. 17, at Krieger’s,Taylorville. Curt Kimmel, BatesCommodities; Jacquie Voeks,Stewart Peterson Group; and BillMayer, Strategic Farm Marketing,will be the speakers. Dave Dick-ey, WILL Radio, will moderatethe panel. Dinner will be served.Call the Farm Bureau office at217-824-2940 for reservations ormore information.

DOUGLAS — TheYoung Leader commit-

tees from Champaign, Douglas,Edgar, and Vermilion CountyFarm Bureaus will sponsor theirannual Illini Farm Toy Show Fri-day through Sunday at theUrbana Holiday Inn. Showhours are 5 to p.m. Friday; 9 a.m.to 5 p.m. Saturday; and 9 a.m. to2 p.m. Sunday. Special events at9 a.m. Saturday include a farmtoy consignment live auction anda pedal tractor pull at noon.Contact Kurt Wolken at 217-202-2730 for exhibitor or auctioninformation and Steve Huls at217-202-4657 to enter a toy inthe auction.

EDGAR — The YoungLeader committees from

Champaign, Douglas, Edgar, andVermilion County Farm Bureauswill sponsor their annual IlliniFarm Toy Show Friday throughSunday at the Urbana HolidayInn. Show hours are 5 to p.m.Friday; 9 a.m. to 5 p.m. Saturday;and 9 a.m. to 2 p.m. Sunday. Spe-cial events at 9 a.m. Saturdayinclude a farm toy consignmentlive auction and a pedal tractorpull at noon. Contact KurtWolken at 217-202-2730 forexhibitor or auction informationand Steve Huls at 217-202-4657to enter a toy in the auction.

LEE — The applicationdeadline for the Lee

County Farm Bureau Foundationscholarships is Feb. 1. Scholar-ship applications are available onthe website {www.leecfb.org}.High school seniors and under-

graduate students who are pursu-ing degrees in agriculture areencouraged to apply.

• The annual meeting will beat 10 a.m. Thursday, Jan. 19, atthe Farm Bureau office. Votingmembers who cannot attendmay return their ballots andproxies to the Farm Bureauoffice by Thursday. The winnerof the Lee County FarmBureau Foundation raffle willbe selected during the meeting.

• A crop insurance meetingwill be at 10 a.m. Wednesday, Jan.25, at the Farm Bureau office.Doug Yoder, Illinois FarmBureau senior director of affiliateand risk management, will be thespeaker. Call the Farm Bureauoffice by Friday, Jan. 20, for reser-vations or more information.

LIVINGSTON — TheLivingston County Farm

Bureau Foundation has scholar-ships available for high schooland college students. Applicantsfor the $2,000 Elite scholarshipmust be enrolled in the fifthsemester and beyond in anundergraduate program. TheEthel K. Hoerner scholarshipsare up to $1,500 each and stu-dents must be entering the thirdsemester or beyond in college.Applicants for both scholarshipsmust be a resident or a depend-ent of a Livingston County FarmBureau member. Applicationsmay be submitted through thewebsite {www.livcfb.org} and

must be returned by Feb. 28.

MONTGOMERY —The Prime Timers will

meet at noon Wednesday, Jan. 18,at the Lion’s Club, Hillsboro. Aroast beef lunch will be served.Cost is $8. Tammy Braye, Doc’sMaytag, will be the speaker. Callthe Farm Bureau office at 217-532-6171 by Friday, Jan. 13, forreservations or more information.

PEORIA — The countyplat books are available at

the Farm Bureau office. Town-ship aerial maps are included inthe book. Farm Bureau mem-bers will receive a 40 percent dis-count. Call the Farm Bureauoffice for more information.

• The Prime Timers will meetat 11:30 a.m. Wednesday at theHometown Buffet, Peoria. TheMidland High School FFA willconduct a debate on animalantibiotics at the Farm Bureauoffice for the program.

SCHUYLER — Theannual meeting will be at

2 p.m. Monday, Jan. 16, at theRushville State Bank Annex.Call the Farm Bureau office formore information.

VERMILION — TheYoung Leader commit-

tees from Champaign, Douglas,Edgar, and Vermilion CountyFarm Bureaus will sponsor theirannual Illini Farm Toy ShowFriday through Sunday at theUrbana Holiday Inn. Showhours are 5 to p.m. Friday; 9

a.m. to 5 p.m. Saturday; and 9a.m. to 2 p.m. Sunday. Specialevents at 9 a.m. Saturday includea farm toy consignment liveauction and a pedal tractor pullat noon. Contact Kurt Wolkenat 217-202-2730 for exhibitor orauction information and SteveHuls at 217-202-4657 to enter atoy in the auction.

• The Marketing Committeewill sponsor a spring outlookseminar at 9:30 a.m. Monday,Jan. 16, at the Farm Bureauoffice. Paul Coolley, ADMInvestor Services; Dale Durch-holz, AgriVisor; and BlakeMiller, Illini FS, will be thespeakers. Call the Farm Bureauoffice for more information.

WHITE — The annualmeeting will be at 7:30

a.m. Wednesday, Jan. 11, at theFarm Bureau office. An all-you-can-eat pancake breakfast will beserved. A silent auction benefit-ing Ag in the Classroom will beheld. The Carmi-White CountyHigh School Choir’s “Singin’Six” will provide the entertain-ment. Call the Farm Bureauoffice at 618-382-8512 byWednesday for reservations ormore information. The website{www.whitecfb.com/press/annualmtg.html} will have thenotice of the meeting posted.

‘Grain for Groceries’ donationsbenefit nine local food pantries

Kris Reynolds, chairman of the Montgomery County FarmBureau Young Leaders Committee, recently presented a checkfor $6,320 to nine local food pantries.

This was the first year for the “Grain for Groceries” program,which allowed farmers todonate a portion of their grainthrough local elevators inMontgomery County to bene-fit the food pantries.

The grain was marketed at that day’s closing market price, and the pro-ceeds were collected at the end of November to be divided among foodpantries in the county based on the origin of the donations.

Reynolds thanked everyone for the work they did in the com-munity and said next year the Young Leaders Committee is look-ing to expand the program.

The nine local food pantries that received a portion of thedonations are: Grace Fellowship Church, Continuing RecoveryCenter, Litchfield Food Pantry, the Salvation Army, NokomisFood Pantry, St. Clare Food Pantry, Panhandle Food Pantry,Montgomery County CEFS, and Coffeen Food Pantry. —Robert Lentz

Robert Lentz is the Montgomery County Farm Bureau manager. Hemay be reached at 217-532-6171.

profitability

FarmWeek Page 10 Monday, January 2, 2012

Export inspections(Million bushels)

Week ending Soybeans Wheat Corn12-22-11 38.2 13.5 39.112-15-11 31.7 16.4 45.2Last year 34.0 21.4 45.0Season total 529.0 580.3 522.3Previous season total 778.1 643.4 557.4USDA projected total 1300 925 1600Crop 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. n/a n/a40 lbs. n/a n/250 lbs. n/a n/aReceipts This Week Last Week n/a n/a*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 $77.69 $79.09 -1.40Live $57.49 $58.53 -1.04

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

Steers n/a 123.00 n/a Heifers 124.00 122.98 1.02

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 $144.20 143.42 0.78

CME feeder cattle index — 600-800 Lbs.

Lamb prices

n/a

(Thursday’s price)

Warm weather builds propane stocks in U.S.BY RANDY MILLER

I know it’s Illinois, butrecent temperatures make methink we’re in Georgia! (Iwanted to say Florida, butthought that was taking it a bittoo far.)

After com-pleting one ofthe warmestDecembers inrecent history,one wouldthink fore-casts for early2012 mightcall for

below-normal temperatures.However, most forecasts arefor the remainder of the win-ter to be warm in the Midwest,which could make this winterone of the warmest in history.

Propane supplies, with thewarm December, are back inline with historic levels for thistime of year. Propane seemswell supplied at this pointthroughout the U.S., especiallyconsidering the current weath-er forecasts.

However, as I am remindedfrequently, I didn’t believe inthe Cardinals in August, either,so let’s not rule out a colderwinter just yet.

Currently, propane supply inthe Midwest (Conway, Kan.) isat 25 million barrels, some 6percent over the five-year aver-age. U.S. total propane stocksare about 59 million barrels,about 5 percent under the

five–year average, but as closeto the five-year average as wehave been in some time.

Gulf Coast stocks continueto remain short at 25.5 millionbarrels, which is 17 percentunder the five-year average,but only 6 percent behind lastyear. Those stocks remain lowdue to exports and a fairlystrong petrochemical demand.

Petrochemical demand forpropane is to produce olefinswhich are the building blocksfor materials such as solvents,detergents, and adhesives, andare the basis for polymers andoligomers used in plastics.

Chemical plants produceolefins by steam cracking natu-ral gas liquids, namely ethaneand propane. Petrochemicaldemand for propane, shown in

the accompanying chart, hasbeen well above the five-yearaverage over the last severalmonths and is likely to contin-ue.

Exports continue to be a

strong demand source forpropane as well, with exportsin November 2011 the fourthlargest month in history. Butpropane exports from the U.S.have occurred only with the

additional production fromU.S. shale plays and the currentweak dollar, making ourpropane prices attractive toother parts of the world.

Exports in 2011 likely willbe greater than the previoustwo years combined.

Look for propane prices toremain fairly steady through-out the winter of 2011-12,providing forecasts are correctfor normal or above normaltemperatures. Look forexports and petrochemicaldemand to keep prices andinventories supported at cur-rent levels.

Randy Miller is GROW-MARK’s director of propane oper-ations. His e-mail address isrmiller@growmark.com.

Randy Miller

U.S. hog inventory up slightly; profitable year predictedBY DANIEL GRANTFarmWeek

U.S. hog producers in 2011made an average profit ofabout $5 per head, accordingto Steve Meyer, president ofParagon Economics.

But economics don’t seemto favor major expansion inthe industry any time soon,despite the profitable year, asthe U.S. hog inventory postedjust modest gains in USDA’squarterly hogs and pigs reportlast month.

All hogs and pigs in the U.S.as of Dec. 1 totaled 65.9 mil-

lion head, up 2 percent fromlast year but down 1 percentfrom the previous quarter.

The breeding inventory (5.8million head) was up 0.4 of apercent from last year whilethe market hog inventory (60.1million head) was up 2 percentfrom a year ago.

“The numbers came inabout as expected,” Meyer saidduring a teleconference hostedby the National Pork Board.

Analysts predicted U.S. porkproduction will grow slightlythis year — hog slaughter wasprojected to increase 1 to 2percent the next two quarters— but much of the growthwill be due to efficiency gains.

Pigs saved per litter lastquarter was a record-high10.02 compared to 9.89 a yearago.

“The story the last fewyears is the efficiency dis-played by hog producersthrough genetics and herdmanagement,” said VictorAideyan, senior risk manage-ment consultant for a com-modities firm in Ontario,Canada. “Efficiency is whatseems to be driving theincrease in pork production.”

Farrowing intentions, onthe other hand, were projectedto increase 1 percent fromDecember through Februarybefore declining 1 percent inthe spring.

Consolidation in the hogindustry in many cases hasshifted production decisionsfrom a farm-by-farm basis to aregional business decision bylarger companies, according toAideyan. “The short-run numbersindicate modest growth,”Aideyan said. “But, long-run,profitability is what drivesthese companies’ decisions.”

Meanwhile, record-highfeed costs and volatile hogprices also could keep a lid onexpansion plans.

“There is enormous risk inthe hog business,” said RonPlain, ag economist at the Uni-versity of Missouri.

The breakeven price last yearfluctuated from $81 to $90 perhundredweight, Meyer reported.

This year, the analysts pro-jected hog prices will averagebetween $84 and $85 per hun-dredweight in the first quarter,$91 to $92.33 in the secondquarter, $90 to $91.67 in thethird quarter, and $75 to$83.67 in the fourth quarter.

“The competing meat sup-ply will be down (and porkproduction is expected toincrease slightly),” Plain said.“You can make a case for prof-its in the year ahead.”

USDA previously forecast a5 percent drop this year in beefproduction while broiler pro-duction the past six weeksdipped 5 to 10 percent.

Current economics suggestan average profit this year forhog producers of about $9.70per head, Meyer added.

Three regional Illinois tillage seminars set this month

Three Illinois tillage seminars will focus on conservationtillage and agronomic stewardship from 8:50 a.m. to 3:30 p.m.Jan. 23 in Mount Vernon, Jan. 24 in Springfield, and Jan. 25 inUtica. Registration begins at 8:30 a.m. for each.

National and state-recognized agronomists, environmentalleaders, and researchers will be featured speakers. The speakersand topics have been chosen specifically for each area. Each sem-inar will include farmer panels discussing tillage management.

In Springfield and Utica, the topics will include nutrientplacement in strip till and the “Keep it for the Crop” (KIC)2025 program.

The Mount Vernon seminar will offer similar topics plusnutrient placement on karst and sodic soils and issues withPalmer Amaranth.

A $25 pre-registration fee is due by Jan. 18. Seating is limit-ed with registration on a first-come, first-served basis.

Register online at {www.ccswcd.com} or send your name,check, and seminar location to the Champaign County Soil andWater Conservation District, 2110 West Park Court, Suite C.,Champaign, Ill., 61826.

The seminars are co-sponsored by the Association of Illi-nois Soil and Water Conservation Districts, Natural ResourceConservation Service, the Illinois Department of Agriculture,University of Illinois Extension, Farm Credit Services, and theIllinois Environmental Protection Agency.

For more information, go to {www.ccswcd.com} or call217-352-3536.

‘Efficiency is whatseems to be driv-ing the increasein pork produc-tion.’

— Victor AideyanMarket analyst

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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

ü2011 crop: The rally con-firmed the trend for the 40-week cycle turned higher, posi-tioning prices to rally over thenext number of weeks. Targeta move to $6.65-$6.75 to makecatch-up sales, and possibly addto sales. We don’t expect to seeprices reach that until late Janu-ary at the soonest. We still likespring hedge-to-arrive (HTA)contracts for farm stored grain.Commercial storage is a closercall depending on your storagerate. Compare your options onthose inventories.

ü2012 crop: The turn upwas too quick to recommendbuying call options. Makecatch-up sales if Decemberfutures hit $5.95. We may addto sales at that level, too.HTA contracts still are thebest tool for making sales, butconsider forward contracts ifthe basis is good.

vFundamentals: SouthAmerican weather triggeredthe surge. Until forecastschange, prices will be support-ed. End users haven’t chasedthe market yet, but farmershave been steady sellers onstrength. The Jan. 12 USDAreports loom on the horizon.

Soybean Strategyü2011 crop: Gains in soy-

bean prices have been strongenough to turn the short-termtrend higher. Wait on a moveto $12.50-$12.75 on Marchfutures to make catch-up sales.We may add to sales at that lev-el as well. A HTA for springdelivery for farm-stored soy-beans has become more attrac-tive with the spread widening.Compare your alternatives forcommercial storage.

ü2012 crop: Target a moveto $12.50-$12.75 on Novemberfutures for making catch-upsales. We might add to themthere as well. For new-cropsales, we prefer HTA contracts,but would use a cash contractif the basis level is good.

vFundamentals: SouthAmerican weather problemshave fueled gains. But becausethere’s still time for weather tochange and the crop to recov-er, end-users don’t have asense of urgency to coverneeds. Because of that,exports still are being accumu-

lated at a subdued pace. Chi-nese buyers are being morecareful as well because of signstheir economy is slowing.

Wheat Strategyü2011 crop: Wheat prices

are riding the coattails of thesurge in corn prices. Eventhough prices are higher, wheatfundamentals and demandremain weak. Target a move to$6.75-$7 for making catch-upsales. We may even add anothersmall sale at that level. The car-ry in futures still pays for com-mercial storage, making springHTA contracts the best tool.

ü2012 crop: Use a

rebound to $6.95 on ChicagoJuly futures to make catch-upsales. We may use a rally abovethat to add to sales.

vFundamentals: Slowly,the production prospects forour crop, and those around theworld, continue to improve.We wouldn’t expect anotherbumper crop, but it’s reason-able to expect a crop largeenough to cover demand, keep-ing supplies very comfortablefor the next year. USDA willrelease a winter wheat plantingestimate on Jan. 12. Tradition-ally, the USDA number comesin below expectations.

Cents per bu.

Corn price is high compared to soy, wheat

Cash Strategist sales recommendationsBeans Corn Wheat

'11 '12 '11 '12 '11 '12

Prices are new cropor nearby futures

7/13/10 10% 6.00

7/21/10 15% 6.60

7/30/10 10% 6.98

8/6/10 15% 7.35

8/8/11 10% 6.68

11/17/11 20% 6.343/49/13/10 10% 4.61

Prices are new cropor nearby futures

10/11/10 10% 5.28

1/24/11 10% 5.87

4/25/11 10% 6.76

5/31/11 10% 6.79

8/1/11 10% 6.771/2

11/15/11 10% 6.45

11/15/11 10% 5.671/2

9/13/10 10% 10.27

30% unsold

Prices are new cropor nearby futures

10/11/10 10% 11.54

1/31/11 10% 13.31

4/25/11 10% 13.76

5/26/11 10% 13.75

8/1/11 10% 13.7111/15/11 10% 11.99

11/15/11 10% 11.99

8/29/11 10% 6.65

30% unsold20% unsold

8/29/11 10% 13.50

80%unsold

80% unsold80% unsold

11/17/11 20% 6.30

Page 11 Monday, January 2, 2012 FarmWeek

prices have the least upsidepotential or most downside riskin the months ahead.

For months, wheat hasencroached on corn’s feeddemand base around the worldbecause wheat was abundantand more attractively priced.In the soybean complex, wecould say something similar,with cheap soybean meal shift-ing rations away from corn tothe maximum possible extent.

But primarily, it’s the com-petition for acreage that corn iswinning away from soybeansbecause of the relative returnsfor each. That’s true in Northand South America, and maybesome other areas as well.

We can only guess what fun-damental changes will occur tomove these relationships back tomore normal levels. But overthe long haul, corn should havethe most difficulty sustainingrallies and have the least upsidepotential and the most downsiderisk. That dictates you need tobe a disciplined marketer ofcorn the next couple years.

The accompanying graphicsbest illustrate one of the majorfactors that could be a large partof the grain markets over thenext couple of years. Whenyou look at the relationships,you can see wheat and soybeansare both cheap relative to corn.Or to put it another way, corn ishigh priced compared to theother two.

And as much as one wants tobelieve the environment is differ-ent today because of the changesin the industry, notably corn’sdemand for fuel, the current lev-els are close to what has provento be the historical extreme.

More important is that theserelationships tended to moveback toward historical normswithin a number of months.Because of that, the present sit-uation suggests that either corn

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1701 Towanda Ave.Bloomington, Ill., 61701

Thanks IFB for helpon cemetery law changesEditor:

I wish to thank the IllinoisFarm Bureau on behalf of themany church-owned cemeter-ies for its help in gettingchanges made to the IllinoisCemetery Oversight Act toexempt religious cemeteriesfrom the regulatory require-ments in the original law.

Those requirements wouldhave bankrupted the perpetu-al-care funds that maintainedthese cemeteries. If thesechanges had not been made,we would have had to deedour cemetery to the State ofIllinois and would no longerhave a place to bury the Chris-tian dead.

Please continue your sup-port to make sure that Gover-nor Quinn signs these changesinto law.VERNON L. HENZE,Mt. Carmel,Chair of St. John’s LutheranCemetery Association

LETTER TO

THE EDITOR

I’m thankful for faith, family, and richtraditions of Christmas. To that list, I’mtempted to add the fact that I’m thankful Idon’t live in Norway — a country thatsuddenly found itself without butter.

Over the holidays, butter was not justan option for me. At mydaughter’s home, we bakedsugar cookies with a lot ofit. It’s one of our Christ-mas traditions.

We’re hardly alone.Around the world, millionsof others have their ownrituals involving Christ-mas and food, includingcookies. Many of them

use good, wholesome butter.But not in Norway, where people

found themselves trapped in an awfulpredicament at precisely the wrong time.

During the Cold War, the Soviet Unionused to have bread lines. In December,Norway witnessed butter lines. Accordingto some reports, desperate Norwegianshave paid as much as $500 for a pound ofbutter.

Norway’s butter shortage was an entire-ly man-made political problem. There’s nosensible reason why Norwegians, whoenjoy one of the world’s highest per-capi-ta gross domestic products, ought to runout of something as basic as butter.

The rest of us should learn from Nor-way’s mistake — and support trade poli-cies that will allow us not only to bake

delicious cookies, but also to maintain ourfood security year round — especiallywhen we are talking about food staples.

Norwegians lack butter now becausetheir government uses tariffs as steep as afjord’s cliffs to keep people from import-ing it.

In a normal year, high tariffs wouldlead merely to artificially inflated con-sumer prices. However, last summer itrained a lot in Norway, hurting the qualityof animal feed and leading to poor pro-duction on dairy farms. Meanwhile, manyNorwegians are choosing low-carb, fat-rich diets. Norway’s demand for butter ishigh, but its supply is low.

The current shortfalls are the result.They’re expected to last into this month.

The rational solution would be to buybutter from foreign producers. This iswhat many ordinary consumers havedone. They are turning to supermarkets inSweden, where butter is plentiful and gro-cers love the extra business. There areeven reports of butter smuggling: A Russ-ian man was arrested when he tried tosneak 200 pounds of butter into Norway.

In fairness, it must be said that Nor-way’s conundrum isn’t a case of ordinaryprotectionism. Norway imposes high tar-iffs to prop up the Norwegian dairy indus-try — and not for entirely bad motives, asMatthew Yglesias observed in an articlefor “Slate.”

Much of the country’s wealth comesfrom oil, which generates a high-value

currency, and the possibility that high-octane purchasing power will create aflood of imports that destroys the domes-tic production of just about everythingexcept North Sea oil drilling.

Even so, Oslo seems to understand itsbutter tariffs have become a big problem,has cut them by 80 percent, and promisesto keep them at this level at least untilMarch.

A nation that takes pride in awardingthe Nobel Prize in Economic Scienceseach year probably should realize thatmeddling in markets invites serious risks.Protectionism of any sort always comeswith a steep price.

Norway’s population is less than 5 mil-lion. Maryland and Minnesota have morepeople. A country so small can’t produceeverything it needs and also maintain ahigh standard of living. This is especiallytrue when the country is cold, limiting itsagricultural potential.

Even if Oslo were to eliminate its but-ter tariff, the U.S. probably wouldn’t takeover the Norwegian butter market. Den-mark is a big dairy producer and is closer.

However, we can all profit from Nor-way’s butter fiasco by learning the rightlesson: High tariffs create shortages andlow tariffs create abundance.

Carol Keiser owns and operates cattle feedingoperations in Illinois, Kansas, and Nebraska.She is a Truth About Trade and Technologyboard member.

CAROLKEISER

For thousands of yearshumans have taken advantageof what has been called the“food of the gods.” We’re talk-ing about honey.

Honey is asugar-laden sub-stance producedby a few speciesof bees as theirfood. And some-where in our his-tory, ancienthumans got ataste of honey,and we have

been eating it ever since.Of course, bees don’t will-

ingly share their food storeswith humans — or other ani-mals, for that matter. So thefirst honey eaters had to resortto stealing from the bees. Andsuch pilferage wasn’t a pleasantthing because, as Shakespearewrote, bees are “armed in theirstings.”

Nonetheless, first as honeygatherers and then as beekeep-ers, humans and bees haveforged a close association. Astestimony to this enduring rela-tionship, bee-related folklore iscommon.

Consider the following:“Where there is honey, thereare bees.” “He who wouldgather the honey must bear thesting of the bees.” “The beefrom his industry in the sum-mer eats honey all the winter.”

Folklore about bees includesthe practice of “telling thebees” that, in a nutshell, pur-ported colonies of honey beesmust be “told” when theirkeeper had died. The origin ofthis activity is obscure but cer-tainly existed in England dur-ing the Middle Ages and was

brought to North America bythe early European settlers.

A plausible explanation forthis belief is rooted in the factthat ancient people did not ful-ly understand the biology ofhoney bees and created ideasconsistent with religious beliefsor other notions prevalent atthe time.

For instance, ancient peoplebelieved honey bees originatedfrom the carcass of an ox. Lat-

er, the concept arose that babybees were gathered from flow-ers.

In spite of these and manyother misconceptions regard-ing the biology of the honeybee, humans admired andrespected the creatures. Conse-quently, peasant farmers began

to equate human characteristicsto the bee.

One practice became knownas “telling the bees.” It mightbe as simple as tapping on thehive and announcing that thecurrent master is dead and say-ing the name of the personwho would become the newowner. The idea was that sensi-tive bees would be assured theywould be cared for and wouldnot leave the hive.

As part of the activity, somepeople held that the hives hadto be turned so the bees wouldnot witness the funeral proces-sion.

Sometimes an additional rit-ual would be to drape the hivesin black cloth, just as thehuman mourners would adornthemselves in black clothing.

America’s “Quaker poet,”John Greenleaf Whittier, wrotea poem appropriately entitled,“Telling the Bees.” Whittier’spoem is the story about a mangoing to visit his girlfriend — abeekeeper — who lived withher father at Fernside Farm.

The following three stanzasfrom the poem capture theprocess and the reason fortelling the bees:

“Just the same as the monthbefore —

The house and the trees,The barn’s brown gable, the

vine by the door —Nothing changed but the

hives of bees.Before them, under the gar-

den wall,Forward and back,Went drearily singing the

chore-girl small,Draping each hive with a

shred of black. Trembling, I listened: The summer sun Had the chill of snow;For I knew she was telling

the bees of one

How a butter tariff Grinch nearly stole Norway’s Christmas

Gone on the journey we allmust go!”

The biological reality of“telling the bees” long ago hasbeen proven baseless. Buttoday a museum exhibit called“Tell the Bees” at the LosAngeles Museum of JurassicTechnology, or an acousticBritish band called “Telling theBees,” perpetuate the idea.

My question is, “If we tellthe bees, will they listen?”Any bee whisperers out there?

Tom Turpin is a professor of ento-mology at Purdue University, WestLafayette, Ind. His e-mail addressis turpin@purdue.edu.

TOMTURPIN

If you tell the bees, will they listen?