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

a oNE-maN play, “FarmHands,” debuted in Chicago lastweek and could help finance theAgrAbil ity program in Il l inoisthrough future performances. .......8

IllINoIs Farm BurEau,the Illinois Corn Growers Associa-tion, and the Illinois Soybean Asso-ciation have launched a campaign toget the farm bill passed. ..................3

ThE NuTrIENT Researchand Education Council will directresearch funded by a new fertilizerassessment and support the KICnutrient stewardship program. ....2

Monday, November 12, 2012 Two sections Volume 40, No. 46

Incumbents upset, majorities remain

National election over;‘fiscal cliff ’ focus next?

BY MARTIN ROSSFarmWeek

When the dust cleared fromwhat many deemed one of theU.S.’ more acrimonious nation-al campaigns, President Obamahad reclaimed the WhiteHouse, Republicans held ontothe House, and Democratsstrengthened their hold in theSenate.

At the same time, Californiavoters rejected potentiallywide-ranging food labelingproposals.

And several of Illinois’ con-gressional incumbents suffereddefeat, raising concerns aboutthe state’s continued clout onthe House Ag Committee.

Meanwhile, the fates of thefarm bill and expiring federaltax measures remain uncertain(see page 3).

But as the ballots rolled inlast Tuesday, analysts at anational ag bankers conferencein Milwaukee cited at least oneabsolute certainty on the politi-cal horizon: the approaching“fiscal cliff.”

Congress and the presidentface impending expiration ofcurrent tax rates, dozens of tax

exemptions, payroll tax cuts,and unemployment benefits, aswell as major across-the-boardspending cuts under budget“sequestration” mandates. TheU.S. is rapidly approaching thefederal debt ceiling.

Andrew Busch, public poli-cy strategist with Chicago’sBMO Capital Markets and aCNBC analyst, said he antici-pated a six-month extension ofsoon-to-expire Bush-era taxcuts, but argued lame duckapproval of tax “extender” leg-islation affecting a variety ofnewer breaks would be “reallytough.”

Kansas State University ageconomist Barry Flinchbaughsaid he believes Bush cuts willbe restored by January and $1.2trillion in spending would besequestered, “half of whichwill be cuts to the military.”

By spring, “we’ll have (cur-rently AA-plus-rated) federaltreasury bonds rated ‘BB,’ thepresident will panic as willCongress, and we’ll finally get a(fiscal) solution,” he said.

At the same time, IllinoisFarm Bureau National Legisla-tive Director Adam Nielsensees Obama working “to makegood on his promise to addressimmigration,” opening thedoor to new Farm Bureau aglabor proposals, and continuingto support renewable fueldevelopment.

“The (recently approved)two-year highway bill willexpire before we know it, andwe really need to build supportacross the Midwest for water-ways legislation,” he added.Biotech and ballots

Meanwhile, ag interestsscored a major win in Califor-nia, where Proposition 37, aninitiative seeking labeling offood containing cropsimproved through biotech-nology, was defeated 53 per-

cent to 47 percent.Farm Bureau was a member

of the “No on Prop 37” coali-tion, which also included theCalifornia Chamber of Com-merce, and major retailers.

“We’re pleased with howdecisive the vote was and howmuch voter sentiment turnedonce the facts came out aboutthe proposition,” AmericanFarm Bureau Federation’sKevin Richards toldFarmWeek. “The agriculturalcommunity rallied to defendsound science and defend goodlabeling policy.”

Meanwhile, Virginia votersapproved Question 1, a proper-ty rights initiative that requiresgovernment and privateauthorities to assure any emi-nent domain condemnation“taking” is for public purposes,not for private gain. Illinois overhaul

On the home front, severalIllinois incumbents sufferedupsets as a result of a new statecongressional map and “theeffectiveness of the Democratground game,” Nielsen said.

Those included Rep. BobbySchilling, a Colona Republicanon the House Ag Committee,who lost to East MolineDemocrat Cheri Bustos in Illi-nois’ 17th District.

Also defeated were 8th Dis-trict Republican Rep. JoeWalsh, beaten by DemocratIraq War veteran TammyDuckworth; 10th DistrictRepublican Rep. Bob Dold,who lost to Deerfield Democ-rat management consultantBrad Schneider; and Rep. JudyBiggert, a Hinsdale Republicanwho lost her 11th District seatto physicist and former Demo-crat Rep. Bill Foster, who pre-viously served two years in theHouse.

See Election, page 3

USDA raises crop estimates

South America focusas U.S. harvest winds up

BY DANIEL GRANTFarmWeek

USDA on Friday raised its crop production estimates com-pared to last month by 111 million bushels for soybeans and19 million bushels for corn.

U.S. corn production was pegged at 10.725 billion whilesoybean production was raised 4 percent to 2.97 billionbushels.

The boost in production surprised many traders and sub-sequently cast a bearish shadow over the markets.

“USDA increased the size of the soybean crop evengreater than the trade expected,” Brian Basting, analyst withAdvance Trading, said during a teleconference hosted by theMinneapolis Grain Exchange.

Meanwhile, USDA raised ending stocks by 50 millionbushels for wheat, 28 millionbushels for corn, and 10 mil-lion bushels for beans. End-ing stocks currently total 647million bushels of corn and140 million bushels ofbeans.

Crop prices Friday morning declined about 25 cents perbushel for soybeans and a dime for wheat while cornremained steady.

“Typically, a short crop year tends to have a long tail, and Ithink that’s the pattern we’re seeing develop,” Basting said.

“We saw a spike (in the soybean market) and now we’reseeing lower lows and lower highs,” he continued. “I think atail is starting to form in corn, too.”

USDA on Friday lowered its season average price esti-mates for all three crops. The new price ranges are $13.90 to$15.90 per bushel for beans (down 35 cents), $6.95 to $8.25for corn (down 20 cents at the midpoint), and $7.75 to $8.45for wheat (down a dime).

“Export demand continues to be sub-par (for wheat andcorn),” Basting noted.

Nationwide, yields were projected to average 122.3bushels per acre for corn, up 0.3 of a bushel from lastmonth, and 39.3 bushels for beans, up 1.5 bushels from amonth ago.

In Illinois, harvest last week was nearly complete as 98percent of corn and 96 percent of beans were in the bin.

The state yield averages were pegged at 101 bushels forcorn, up 3 bushels from last month but down 56 bushelsfrom a year ago, and 43 bushels per acre for beans, up 4bushels from last month but down 4.5 bushels from a yearago.

Crop production in Illinois is expected to total 1.25 billionbushels for corn, down 36 percent from last year, and 378million bushels for beans, down 11 percent from a year ago.

“The bean market now will focus primarily on SouthAmerica and the potential for record crops,” Basting said. “Ifthere’s a problem (such as drought or an outbreak of rust),things could change (in the bean market).”

Basting characterized current conditions in South Americaas less than ideal.

FarmWeekNow.com

Listen to Brian Basting’s com-ments about the latest crop re-port at FarmWeekNow.com.

ThaNksgiviNg meal cosT up slighTly— The retail cost of menu items for a classic Thanksgivingdinner increased less than 1 percent this year, according tothe American Farm Bureau Federation (AFBF).

AFBF’s 27th annual informal price survey of classicitems found on the Thanksgiving Day dinner table indi-cates the average cost of this year’s feast for 10 is $49.48, a28-cent increase from last year’s average of $49.20.

The AFBF survey shopping list included turkey, breadstuffing, sweet potatoes, rolls with butter, peas, cranberries,a relish tray of carrots and celery, pumpkin pie withwhipped cream, and beverages of coffee and milk, all inquantities sufficient to serve 10.

The big ticket item was a 16-pound turkey, which camein at $22.23 this year. That was roughly $1.39 per pound,an increase of about 4 cents per pound, or a total of 66cents per whole turkey, compared to 2011.

coal pRoDucTioN up — Coal production in theIllinois Basin rose 13 percent during the first half of theyear compared to the same period in 2011, according to theU.S. Energy Information Administration.

The Illinois Basin, which ranges across Illinois, Indiana,and western Kentucky, produced 64.4 million tons. Theexpanded production came in response to domestic andinternational demand for cheaper coal. Production withinIllinois has been key to driving basin increases.

Illinois’ coal exports to international markets — 5.5 mil-lion tons — increased 120 percent last year compared to2010.

Domestic demand for the basin’s coal, particularly fromIllinois, grew as industry sought more low-cost, high-sulfurcoal. Utilities that have added scrubbers can burn high-sul-fur coal and stay in compliance with the governmentrequirement to cut sulfur dioxide emissions.

TheRe’s aN ‘app’ FoR ThaT — Scientists work-ing for USDA have released two mobile phone applicationsto make things easier for anyone who needs to adjust insec-ticide spray equipment. The apps were developed by Agri-cultural Research Service (ARS) scientists, and are designedto ensure that aerial and ground-based crews can hit targetsand minimize pesticide drift by keying in specifics on thetype of equipment and pesticide they are using.

With dozens of manufacturers producing dozens of dif-ferent types of spray technology — each with its own noz-zle type, flow rate and pressure setting range — the equip-ment setup can get pretty complicated.

The apps incorporate the latest science of spray tech-nology, including “spray nozzle atomization” models devel-oped by ARS at College Station. They can be used with asmartphone and accessed right from a field or the cabin ofa small aircraft.

The apps are available online through the Apple iTunesApp Store and the Google Play Android Marketplace bysearching for “Aerial Sprays” for the aerial application appand “Vector Sprays” for the ground-based sprayer app.

FarmWeek Page 2 Monday, November 12, 2012

(ISSN0197-6680)

Vol. 40 No. 46 November 12, 2012

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

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© 2012 Illinois Agricultural Association

STAFFEditorDave McClelland ([email protected])Legislative Affairs EditorKay Shipman ([email protected])Agricultural Affairs EditorMartin Ross ([email protected])Senior Commodities EditorDaniel Grant ([email protected])Editorial AssistantLinda Goltz ([email protected])Business Production ManagerBob Standard ([email protected])Advertising Sales ManagerRichard Verdery ([email protected])Classified sales coordinatorNan Fannin ([email protected])Director of News and CommunicationsMichael L. OrsoAdvertising Sales RepresentativesHurst and Associates, Inc.P.O. Box 6011, Vernon Hills, IL 600611-800-397-8908 (advertising inquiries only)

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Editorial phone number: 309-557-2239Classified advertising: 309-557-3155Display advertising: 1-800-676-2353

Quick TakesNUTRIENT MANAGEMENT

Tuesday:• Harvey Freese, Freese-NotisWeather• Roger Webster, FMC• Troy Frerichs, senior investment offi-cer, Country Financial• Steve Worthington, crop claimssupervisor, Country Financial

Wednesday: • Tim Schweizer, Illinois Departmentof Natural Resources• James Corneleus, curator of theLincoln collection, A. LincolnPresidential Library and Museum

Thursday:• Illinois Corn Growers Associationrepresentative• Carolyn Sheridan, director ofAgriSafe• Dr. Eric Moore, Merck AnimalHealth

Friday:• Sara Wyant, AgriPulse publisher• Philip Nelson, Illinois Farm Bureaupresident• Alan Jarand, RFD Radio director

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

New fertilizer assessment to support research, educationBY KAY SHIPMANFarmWeek

A per-ton assessment on fertilizer will helpfund nutrient research and education as directedby the state Nutrient Research and EducationCouncil (NREC).

Illinois Farm Bureau Director Dale Haddenof Jacksonville represents IFB on the nine-member council. Hadden, who serves as theNREC secretary, is one of three voting farmerson NREC.

The others are Gary Hudson, Hindsboro,Illinois Corn Growers Association representa-tive, and Matt Hughes, Shirley, Illinois SoybeanAssociation representative.

Hadden noted farmers previously paid a 25-cent-per-ton assessment on fertilizer with halfof the money going into the state’s general rev-enue fund and the rest funding the former Fer-tilizer Research and Education Council (FREC).But since 2004, FREC funds repeatedly havebeen “swept” into the state’s general revenuefund, he added.

This year, legislation establishing NREC waspassed and signed into law. Starting on Aug. 15,a per-ton fertilizer assessment of 75 cents hasbeen directed to NREC and 25 cents per ton toIDOA. Under the legislation, the state will notbe able to sweep NREC funding.

NREC members will determine research top-ics and forward those to university researchers

who will submit specific proposals, Hadden ex-plained. NREC members will vote on whetherto fund proposed research, some of which maybe multi-year projects, he noted.

Voting NREC members and their affiliationsinclude: Howard Brown, GROWMARK; EdCorrigan, Brandt Consolidated; Matt Duncan,Crop Production Services; Dave Creech, certi-fied crop adviser; Chris Matlock, FS CustomTurf; and Jim Larkin, Illinois Department ofAgriculture (IDOA).

Non-voting NREC members are: GermanBollero, head of the University of Illinois cropsciences department; Marcia Wilhite, IllinoisEnvironmental Protection Agency; Mel Nicker-son, Environmental Law and Policy Center; andCindy Skrukrud, Sierra Club.

The research will include on-farm testing toprove agriculture can reduce nutrient lossesthrough voluntary, science-based practices.

In addition to funding research, NREC alsowill support the Keep it for the Crop (KIC) nu-trient stewardship program and the IllinoisCouncil for Best Management Practices(CBMP).

More information about NREC, including avideo describing the program, is online at {illi-noisnrec.org}.

Presentations about NREC will be given atthe Illinois Commodity Conference and otherfarm meetings this winter.

Crop insurance harvest pricesbrighten risk protection pictureBY MARTIN ROSSFarmWeek

Illinois crop claims contin-ue to roll in as farmersstatewide gain a clearer pic-ture of the protections theircrop insurance policies willprovide.

USDA’s Risk ManagementAgency has set 2012 crop in-surance harvest prices at$7.50 for corn and $15.39 forsoybeans, enabling crop in-surers to settle all RevenueProduct (RP) claims. RP ac-counts for the majority ofCountry Financial’s croppolicies.

Under RP, policyholdersautomatically qualify for thehigher of either a spring baseprice guarantee or a harvestprice guarantee.

For a reduction in premi-ums, farmers can reject theharvest price election.

Base prices for 2012 YieldProtection (YP) and RP cropinsurance policies were $5.68per bushel for corn and$12.55 per bushel for soy-beans.

Country crop adjustershad begun collectingstatewide harvest/loss datawell prior to October priceannouncements, CountryCrop Claims Supervisor

Steve Worthington reported.As of last week, Country

had fielded roughly 8,400production loss claims.

The company to date haspaid out some $18.5 millionto nearly 800 policyholders.

“A lot of the groundworkalready had been done onmany of the claims that hadbeen submitted,” Worthing-ton told FarmWeek.“Claims are rolling in prettysteadily right now. We didhave a few people whowanted an early payment,and we tried to accommo-date those folks.

“This price factor isgoing to be important tothose people who werecaught in this drought situa-tion.

Most of the losses we’veseen have been based on ayield situation, and there’sjust no doubt the additionalmoney they may receivebased on the harvest pricewill be beneficial.”

He urged farmers whohave not yet filed claims todo so quickly, and to let ad-justers know whether theywould prefer to receive losspayments in 2012 or 2013for tax purposes.

Country also is process-

ing quality loss claims con-centrated primarily in thestate’s southern tier, where“aflatoxin was a considera-tion in the loss.”

The insurer is working ona “case-by-case basis” withproducers unable to findmarkets for aflatoxin-conta-minated corn, Worthingtonsaid.

goVERnMEnT

Page 3 Monday, November 12, 2012 FarmWeek

Continued from page 1Urbana Republican House Ag Committee member Tim

Johnson and Rep. Jerry Costello, a Belleville Democrat,will retire at year’s end. Taylorville Republican RodneyDavis, a former aide to Collinsville Republican Rep. JohnShimkus, replaces Johnson in the 13th District, whileWilliam Enyart, a Belleville Democrat and former IllinoisNational Guard adjutant general, assumes Costello’s 12thDistrict seat.

Rep. Donald Manzullo, an Egan Republican, lost lastMarch’s 16th District primary to Manteno Republican Rep.Adam Kinzinger, former 11th District representative.

Rep. Randy Hultgren, a Winfield Republican, represents thenow-highly suburban 14th District and has expressed interest ina seat on the House Financial Service Committee — an assign-ment that likely would mean his departure from the Ag Com-mittee.

“We’re going to have to get to know six new people — threefrom the Chicago area, three of them downstaters,” Nielsensummarized. “One of them is someone we’ve known andworked with and who’s been a Friend of Agriculture in the past— Bill Foster. We hope to pick up where we left off. He under-stands renewable fuels and agriculture.

“Rodney Davis is someone who’s been on a congressionalstaff for many years, with (returning Collinsville RepublicanRep.) John Shimkus. We’re already off to a very good startbuilding that relationship.

“We’re going to encourage Davis to be on the AgricultureCommittee. That’s important — we don’t want to lose ourpresence on the committee. If we did, it would be the first timein memory that Illinois had no representation there.”

Bustos’ Western Illinois district is home both to a large ruralconstituency and key manufacturing centers, Nielsen noted.Enyart reportedly will employ many of Costello’s current staffmembers, raising hopes he may carry on Costello’s legacy as anag-friendly “champion on clean water issues” and infrastruc-ture improvements.

Democrats strengthen majorities in state Senate, HouseBY KAY SHIPMANFarmWeek

The election swept IllinoisDemocrats to strongermajorities in the Illinois Sen-ate and House.

In the Senate, Democratswill control 40 out of 59seats, creating a super-super

majority. House Democratswill fill 71 of 118 seats.

“Both Democratic caucus-es will have veto-proofmajorities,” said Kevin Sem-low, Illinois Farm Bureaudirector of state legislation.

In the Senate, one partyneeds only 36 seats for a

veto-proof majority while 71seats are needed in theHouse.

“There are a lot of ques-tions why Democrat candi-dates did so well throughoutthe state. Their get-out-the-vote organization made thedifference in close districtraces,” Semlow speculated.

The Democrat-drawn mapof legislative districts wouldhave helped maintain Democ-rat majorities in both cham-bers, but not to the extentthat occurred, according toSemlow.

With Democrats control-ling the Senate, House, andthe governor’s office, they

were able to draw new districtmaps without Republicaninput. The state Constitutionempowers members of theHouse and Senate to drawdistrict maps the year afterthe census.

Semlow illustrated hispoint of strong voter turnoutin closely contested districtsby highlighting two surpriseoutcomes.

In a new 48th Senate Dis-trict that includes Springfieldand Decatur, Democrat AndyManar from Bunker Hilldefeated Decatur’s Republi-can Mayor Mike McElroy.Meanwhile, Republicanincumbent Rich Morthland

was defeated by DemocratMike Smiddy for the House’s71st District seat.

A large influx of new law-makers — many with urbanbackgrounds — presents achallenge and opportunity forIFB.

“There will be at least 45new faces out of 177 (legisla-tors),” Semlow said.

“We look forward toreaching out and helpingthem learn about agricul-ture, and we’re hopingmany of the new legislatorsin the Cook County areawill become part of theAdopt a Legislator pro-gram,” he concluded.

Election

LAWMAKER FIELD VISIT

State Rep. Elgie Sims, right, (D-Chicago) chats with Cook and Will County Farm Bureau members dur-ing a recent visit to the farm of Cook County Farm Bureau member Mark Yunker. Left to right are: JanetMcCabe, Yunker, and Kim Morton, all Cook County Farm Bureau members; and Glen Ginder, WillCounty Farm Bureau member. Later, Kankakee County Farm Bureau members joined Sims and thegroup for lunch. Under the new legislative map, Sims’ 34th Legislative District added portions of Willand Kankakee Counties. (Photo by Bona Heinsohn, Cook County Farm Bureau director of governmentalaffairs and public relations)

Illinois ag groups spur post-election farm bill pushBY MARTIN ROSSFarmWeek

As U.S. House leadersprevailed at the polls, Illi-nois ag groups launched apost-election farm bill push,and a leading ag economisttook lawmakers to thewoodshed.

At last week’s Ag Banker’sConference in Milwaukee,Kansas State Universityeconomist Barry Flinch-baugh lambasted congres-sional leaders for having“the audacity, in middle ofthe worst drought in 60years, to let the farm billexpire.”

Flinchbaugh anticipatespassage by April of a farmbill that includes a “strongfoundation” for crop insur-ance and a new farm revenuesafety net echoing Senateproposals.

He sees “a possibility” ofthe House passing a bill yetthis year.

House Ag Committee Chair-man Frank Lucas (R-Okla.)and ranking Democrat CollinPeterson (D-Minn.), both re-elected by solid margins,could wield similar Houseclout.

Beaudreau expects someclear indication of congres-sional intent in the next 40days, conceivably culminat-ing in a late December agree-ment.

“We’re going to have tofight like crazy to get our-selves considered in lameduck,” Crow stressed.

Supplemental NutritionAssistance Program(SNAP) funding remains amajor partisan divide. TheSenate proposes cuttingsome $4 billion in SNAP(food stamp) spending overthe next 10 years vs. aHouse-proposed $16 billionSNAP cut, and Crowemphasized “food stampproblems on the House

side have not gone away.”That’s led to proposals in

some quarters to strip SNAPfrom the farm bill — inFlinchbaugh’s view, a poten-tially fatal error.

Nutrition comprises 80percent of USDA’s budget,and its removal from agdepartment jurisdiction couldlead to USDA’s dissolution asa Cabinet-level department,he told FarmWeek.

That could mean reassign-ment of food, conservation,and other ag programs to theDepartment of Health andHuman Services, the U.S.Environmental ProtectionAgency, and/or the InteriorDepartment, Flinchbaughwarned.

“There are fewer than 50agricultural (House) districtsout of the 435,” he added.“How are you going to passthe farm bill if all that’s inthere are programs for farm-ers?”

Last week, Illinois FarmBureau, the Illinois CornGrowers Association(ICGA), and the Illinois Soy-bean Association launched acampaign to “pass the FarmBill NOW,” arguing farm billexpiration “puts farmers in atight spot.” Farmers can con-tact lawmakers toll-free at 1-877-422-8424.

David Crow and DavidBeaudreau Jr. representICGA on the Hill. Crow seesa “50-50” shot at a lame duckvote; Beaudreau suggests law-makers could opt for a five-or six-month extension of2008 farm bill provisions “orsimilar language.”

“It took the Senate, what,one or two days, to wadethrough roughly 400 (farmbill) amendments,” IFBNational Legislative DirectorAdam Nielsen said. “TheHouse can do it.

“I don’t know that a sim-ple extension would be easy.

You’re still going to havecalls on the House side fordeeper nutrition cuts. You’llhave to pay to extend thefarm bill; therefore, you’regoing to have to cut some-thing, too.”

A five-year farm bill couldbe wrapped into the upcom-ing “fiscal cliff ” solution,Beaudreau told FarmWeek.Depending on negotiationsbetween the president andHouse-Senate leaders, a fiscalagreement could prove thevehicle for addressing wide-ranging legislation includingexpiring tax measures, hesaid.

Farm state lawmakers willneed “access to the right peo-ple at the right time,” he said.

Beaudreau suggested Sen-ate Ag Chairman DebStabenow (D-Mich.) mayhave the “political momen-tum” to garner support fromSenate Majority Leader HarryReid (D-Nevada), while

Cycling down: the ag cyclone?Virginia Tech ag economist David Kohl cites five major factors that

cumulatively could generate a potential “bubble”-busting for U.S. agricul-ture.

• Reduced growth in key emerging export markets. According toKohl, that includes not only the larger developing “BRICS” bloc (Brazil,Russia, India, China, and South Africa), but also the less-publicized butnonetheless crucial “KIMT” (Korea, Indonesia, Mexico, and Turkey).

“If their (gross domestic product) is growing on average at 8 percent,commodities are going to see strong demand,” he said. “If (growth) dropsback to 5 percent, commodities will soften about 20 to 30 percent. If itever goes to 3 percent, commodities will collapse, including corn, soy-beans, oil.”

Andrew Busch, global strategist with Chicago-based BMO CapitalMarkets, anticipates China’s move from demand for “hard commodities”such as iron ore or copper to demand for “soft commodities” includingwheat and soybeans. China’s “starting to come back a little” after raisinginterest rates to slow expansion of the real estate sector, Busch said.

However, Kohl noted the BRIC keystone is “very interlinked with theEuropean economies.” Europe is the key export destination for the Chi-nese, and the European financial crisis hurt them, Busch told ag bankersgathered in Milwaukee last week.

• Interest rates. Agriculture’s “very susceptible to interest rates, bothon the farm income and the asset value side,” Kohl said. Brent Gloy, ofPurdue University, noted the impact of interest rates on farmland values.

“Low, low interest rates are like throwing fuel on this fire,” Gloy said.“As interest rates go down, you’ll pay a lot more for future earnings.When interest rates go up, it tends to hit farm incomes, which would tendto reduce farmland values.”

Federal Reserve Chairman Ben Bernanke’s pledge to hold the line onrates at least until 2015 has helped drive producer optimism, Kohlargued. However, if U.S. debt were downgraded, that would impact the10-year U.S. Treasury bond and, potentially, longer-term interest rates,he advised.

• Alternative energy. Ethanol remains “very, very critical” to crop sec-tor strength, Kohl said.

• The dollar. Kohl cited continued Federal Reserve efforts to spurdomestic growth “by keeping the dollar suppressed.” A strengthening ofthe dollar could disrupt U.S. export growth, he warned.

• The weather. Because “Mother Nature trumped us” in India and Rus-sia as well as in the U.S., corn prices remained high and “the supercyclekept motoring on,” Kohl told FarmWeek.

“Should we have a slowdown in these world economies, withincreased interest rates and a strengthening of the dollar, and should wego back to a ‘normal’ weather pattern and any changes in our biofuel ini-tiatives, those could be the ingredients for a major Category 3/4/5storm,” he said.

“Immediately, you would see farm profits goes down. But the optimisticfarmer says, ‘It’s going to be better next year.’ It would take multipleyears of all this happening before the storm would come in, and then thepsychology of land would shift.” — Martin Ross

ag ecoNomics 101


Multiple factors needed to slow ‘supercycle’BY MARTIN ROSSFarmWeek

A sustained perfect storm of economic, policy, and natural events likely wouldbe necessary to break a record ag “supercycle” and alter currently buoyant farmer“land psychology,” according to Virginia Tech ag economist David Kohl.

At last week’s American Bankers Association Agricultural Bankers Conference inMilwaukee, the focus was on currently aggressive farmland, market, and capitaldynamics.

The U.S. has seen four such supercycles since 1910, but at close to 10 years run-ning, the current cycle has lasted more than 2 1/2 times longer thanany other recent surge, Kohl noted.

Brent Gloy, director of the Purdue University Center for Com-mercial Agriculture, likens it to the recent “biofuel boom” —“There is so much exuberance in the sector.”

But Gloy sees relatively little correlation between current landvalues and traditional crop price or supply-demand factors, and sug-gests “we need to get back to fundamentals.” He sees possibledevelopment of a potentially sensitive economic “bubble” withinthe ag sector.

“A lot of investment decisions right now are based not on ration-ale — they’re based on fear and greed and fear and emotion,” Kohl told FarmWeek.“Because we’ve had a long-term supercycle, we are definitely seeing some of thisemotion and psychology being built into the marketplace, whether it’s in the form ofcash rents or land values.

“I would suggest there is a bubble. The bubble’s not on the East Coast or the WestCoast or the southern part of the United States — it’s right here in the Upper Mid-west. This is Ground Zero. The question is, how long will it last?”

While farmers today account for roughly 60 percent of U.S. farmland purchases,Kohl said senior investors who “don’t trust Wall Street” account for another nearly30 percent. Those older buyers provide a “tremendous floor” for land values, theeconomist-dairy farmer maintained.

Kohl nonetheless is concerned about a heightened level of institutional non-agland investment, which “usually tells me the market’s too hot.”

Any change in the farm income picture alone won’t trigger an immediate shiftin cash rents and land values, Kohl said. Instead, he sees five major factors thattogether could burst the bubble or at least slow the supercycle (see accompanyingdetails).

Should that convergence occur, the question would be whether the current boommerely levels out or “crashes,” he said. Kohl is inclined to believe farmers largelywould see a leveling out and argues “this crisis would be a lot different than the1980s.”

“Of the 2 million-some U.S. farms, only 270,000 generate 80 percent of the rev-enue and carry 60 percent of the U.S. farm debt,” Kohl related. “While people maysay U.S. farm debt is at record low levels, the key is, the debt is concentrated amongour bigger producers.

“If we do have a major ‘correction,’ it will impact the larger producers who’vebeen aggressively growing. The ‘alpha dogs’ sometimes get backed into a cornerwhen they don’t have the financial or risk management discipline.

“And when they go kaboom, they go kaboom. But they also take out landlords,machinery dealerships, and rural banks.”

Banking chief: Heartland key in financial reform Wall Street’s lost much of

it’s political capital on theHill. The Heartland’s “com-munity” bankers have a farhigher credit rating with poli-cymakers and regulators,American Bankers Associa-tion (ABA) President FrankKeating argues.

Keating opened last week’sABA Agricultural BankersConference in Milwaukeewith a call for “the best ideas,the brightest ideas” inaddressing federal and globalbanking regulations that

on “what’s best for MiddleAmerica.” In that regard,rural bankers currently are“on the side of the angels” inWashington, he said.

“If you talk to the (Officeof the Comptroller of theCurrency), talk to the (FederalDeposit Insurance Corp.), talkto the Fed, everyone inquires,‘What’s the feeling out thereamong community and obvi-ously rural bankers?’” he said.

Basel III would require

changes in the way banks treatsome loans, possibly forcinglenders to reserve more capitalagainst farm real estate mort-gages, ABA Center for Ag andRural Banking Senior VicePresident John Blanchfieldsaid. That could affect bankearnings and thus lender abili-ty or willingness to makeloans, he told FarmWeek.

Blanchfield sees congres-sional awareness of Dodd-Frank’s “overreach,” noting“we’ve been through some ofthe best times in agriculturein these guys’ careers.”

Iowa banker and ABAChairman-elect Jeff Plaggeacknowledges Congress willnever repeal or even signifi-cantly overhaul Dodd-Frank.But given its sheer “enormity,”he sees opportunity for a“rule-by-rule” review of itsrelevance to communitybanks. — Martin Ross

threaten rural lenders. He vowed “there will be

reform of Dodd-Frank nextyear,” referring to the 9,300-some-page financial reformbill passed in 2010 inresponse to the 2008 eco-nomic crisis. If burdensomeregulations limit credit avail-

ability for farms and ruralbusinesses, “communitiesblow away,” he warned.

Bankers also face potentialnew rules under “Basel III”global bank accounting stan-dards approved by the Euro-pean Basel Committee onBanking Supervision.

Basel III standards couldbe introduced beginning in2013, pending U.S. adop-tion.

Keating nonetheless seesthe administration and post-election Congress focusing

David Kohl

FarmWeekNow.com

L i s ten to Je f f P lagge’s com-ments about how rural bankersmay impact Dodd-Frank rulesat FarmWeekNow.com.

The Illinois Pork Producers Association(IPPA) this month will host a series of round-table meetings.

The meetings are designed to provide porkproducers with an update on activities at thestate and national levels and to gather inputfrom producers on current industry issues.

The meetings will be held in each of the 12IPPA districts throughout the state. The first

meeting is scheduled today (Monday).“We urge all those involved in the pork

industry to attend these meetings and shareyour ideas, views, and thoughts on currentissues of importance to pork producers,” saidJim Kaitschuk, IPPA executive director.

For a list of all the roundtable meetings, visitthe website {ilpork.com} or contact the IPPAoffice at 217-529-3100.

IPPA to host roundtable meetings

‘We ’ ve beenthrough some ofthe best times inagriculture in (law-makers’) careers.’

— John BlanchfieldCenter for Agricultural

and Rural Banking

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Analysts bank on economic, energy indicators BY MARTIN ROSSFarmWeek

Analysts from across theU.S. last week offered someconditionally good news for thegeneral economy, continuedbright prospects for agriculture,and raves about the nation’smove toward energy security.

At last week’s annual Ameri-can Bankers Association Agri-cultural Bankers Conference,Tulane University economistPeter Ricchiuti noted signspointing to “higher revenuefrom a rebounding economy.”

That recovery is in the earlystages, he cautioned, notingsteady — if relatively low —economic growth over the past13 quarters. But Ricchiuti rejects

the safety and environmentalimpact of “fracking.”

Chicago-based CNBC ana-lyst Andrew Busch hailed theU.S.’ “rising energy tide,” pre-dicting significantly reducednatural gas costs, electricity costreductions as utilities movefrom coal to natural gas, andrising near-term reliance ondomestically produced crude.

“Going back to the 1970s, we

thought, ‘It’s over for the UnitedStates — we’ll never increase theamount of oil we produce outof the ground,’” said Busch,public policy specialist withBMO Capital Markets.

“Wrong. We’re going to pro-duce as much as Saudi Arabiaby 2020. If you include biofu-els, we already do this — wealready generate 9 million bar-rels a day. That’s crazy good.”

fears that the U.S. is heading for“double-dip” recession, arguingthe housing market has bot-tomed and workers are beingassigned greater weekly hours.

The Louisiana analyst sees agenerally “bullish” outlook foragriculture, citing what hedeemed “a lot of pent-updemand from the consumer.”

“When you look at thedemand side, not only domesti-cally but internationally, you canhave little issues like some fearof a slowdown in China, butthe macro-picture is so posi-tive,” he told FarmWeek.

“The difficulty is in inputcosts. I think the prices of thingslike oil and fertilizer are going totake a chunk out of things. It’s

going to be a matter of (farmers)maintaining margins.”

That said, Ricchiuti sees“amazing” progress in naturalgas development as an eco-nomic “gamechanger.” Gasextraction via hydraulic fractur-ing “has changed the wholeequation,” he said, citing majorshale fields in Louisiana, NewYork, Pennsylvania, and Texas.

Natural gas prices havebecome temporarily depressed,but Ricchiuti predicts anyrecovery will “stall out” at the$4 level, where shale produc-tion will become profitable.Given the history of Louisianaoil and gas development, hebelieves new technologies canaddress public concerns about

Ethanol corndemand flatteningbut reliable?

The federal Renewable Fuel Standard (RFS2)should continue to spur grain demand, but ethanol’sappetite for corn is rapidly reaching a saturationpoint, according to Purdue economist Brent Gloy.

The U.S. Environmental Protection Agency wasexpected to rule this week on a request by severalstate governors and key livestock groups to waive2013 RFS2 corn ethanol targets.

The RFS2 is aimed at spurring 36 billion gallonsof biofuels use nationwide by 2022, including amaximum 15 billion gallons of corn ethanol use.

Waiver proponents argue suspension of ethanolmandates would relieve feed prices and suppliesfor drought-affected producers.

But Renewable Fuels Association President BobDinneen argued last week that both candidates forpresident supported the RFS2 “because theyunderstand U.S. ethanol production is not drivingup global food and fuel prices.”

During last week’s Ag Bankers Conference inMilwaukee, Gloy acknowledged the “huge ramp-up” in corn demand for ethanol in 2007-2008 — anear-doubling in consumption to slightly morethan 3 billion bushels. An average 689 millionadded bushels were needed annually to meet biofu-el demand during the 2005-2010 period.

But Purdue economists project a mere 215 mil-lion added bushels will be necessary annually tomeet anticipated demand over the 2011-2015 peri-od. At that point, demand should flatten out atsomewhere above 5 billion bushels, Gloy said.

“The big increases to meet the ethanol mandategenerally are over,” he told farm lenders last week.“There’s two sides to this story. The growth likely isgoing to slow for ethanol on the demand side for theag sector — we’re not going to see a lot moregrowth there.

“The other side of this is, hey, we’re talking 5billion bushels. That’s a lot. I don’t think we’relikely to lose that going forward. (Ethanol’s) agood, stable source of demand, and it’s probablygoing to be there for a long time. But it’s unlikelyto grow really rapidly unless cellulosic (ethanol)moves from science fiction to reality.”

Despite anticipated biomass biofuels startupsexpected for 2013-2014, Gloy remains skepticalabout near-term major demand for energy cropsand crop residues.

At the same time, he argued cellulosic produc-tion would be “very stimulative for agriculture.” —Martin Ross

The Louisiana analyst sees a gener-ally ‘bullish’ outlook for agriculture, citingwhat he deemed ‘a lo t o f pent -updemand from the consumer.’

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Winter wheat conditions in Illinoisamong best in nation, says USDA

Winter wheat ratings in Illinois are among the best in thenation so far this season.

USDA last week rated the condition of the state’s wheatcrop at 78 percent good to excellent, 21 percent fair, and just 1percent poor.

“Conditions have been almost ideal,” said Steve Ebelhar,agronomist at the University of Illinois Dixon Springs Agricul-tural Center. “We’re set up to be in good shape as long as wedon’t have any excessive warm spells between now and the endof the year.”

An extended warm spell in coming weeks could open the doorfor insect damage or promote excessive growth of the crop priorto dormancy that could leave it vulnerable to winter damage.

Illinois was one of six states that had 70 percent or more ofits winter wheat crop rated good to excellent last week byUSDA.

“We had good soil moisture at the time of planting, we hadsome good, timely rain after planting to get it out of theground, and we had fairly warm conditions prior to this lastcold front,” Ebelhar said.

On the flip side, winter wheat condition ratings in the Southand Plains were dismal last week.

The majority of the wheat crop in Kansas (63 percent),Nebraska (87 percent), Oklahoma (79 percent), and Texas (66percent) was rated fair to very poor.

“Wheat conditions will likely show significant deteriorationvery soon without rain,” said Derrell Peel, Oklahoma StateUniversity Extension livestock marketing specialist.

“Many cow-calf producers were hoping wheat pasturewould supplement hay supplies that are, in many cases, barelysufficient for winter feeding,” he continued. “The recent lackof rain (in the South) is beginning to re-advance drought con-ditions that had improved somewhat in the past few weeks.”

Nationwide, winter wheat conditions last week were rated39 percent good to excellent, 42 percent fair, and 19 percentpoor or very poor. Last year, 49 percent of the crop was ratedgood to excellent as of the first week of November.

The majority of the crop, 73 percent, had emerged as of thefirst of last week, which was the same total as a year ago.

Ebelhar projected the Illinois winter wheat crop will enterdormancy the last week of this month or first week of Decem-ber. — Daniel Grant

Rail crossing offenses may be costly for some individuals with CDLsBY KAY SHIPMANFarmWeek

Individuals with commer-cial driver’s licenses (CDLs)are reminded they face penal-ties for highway-rail crossingviolations, according to BobMeyer, Federal RailroadAdministration grade crossingmanager, based in Chicago.

Under theFederal MotorCarrier Regula-tions, statesmust disqualifydrivers whocommit certainviolations whiledriving across arailroad track ina commercialmotor vehiclefor which theyare required tohave a CDL.

The violations are:• Failure to slow down and

yield the right of way;• Failure to stop when

required by law;• Failure to check for a clear

track;• Failure to obey traffic

control devices or law

enforcement officials;• Crossing without suffi-

cient undercarriage clearance;and

• Crossing without havingsufficient space on the otherside to clear the tracks withoutstopping.

Those violations do notapply to drivers operating vehi-

cles weighingbetween 10,001and 26,000pounds that donot requireCDLs for oper-ation.

The penaltyfor violating anyof those offens-es is loss of theCDL for at least60 days for thefirst violation, atleast 120 days

for the second violation, and atleast one year for the third vio-lation.

An employer could be fined$10,000 if he or she is provento have knowingly allowed,required, permitted, or author-ized a driver to violate the lawor regulation.

Livestock producers adjust to feed challengesBY DANIEL GRANTFarmWeek

High feed prices, drought-induced crop losses, and tightcorn supplies provide majorchallenges for livestock pro-ducers this year.

But Dave Lidy, dairy enter-prise specialist with FS TotalLivestock Services, believesmost producers can getthrough the winter without sig-nificant herd liquidation.

Rainfall the past two-plusmonths not only saved agood portion of the soybeancrop, but it also revived pas-tures and allowed some farm-ers to produce quality silageand forage crops late this sea-son.

“We’ve got plenty ofroughage,” Lidy toldFarmWeek. “(Livestock pro-ducers) just need to find ener-gy sources to complement it.”

Lidy was one of the speak-ers last week during the FSTotal Livestock Services beeftour in Southern Illinois.

He noted many producersrecently harvested oat silagethat yielded 3 to 5 tons peracre. That should help makeup for lower-yielding corn

silage, which produced only 5to 10 tons per acre this yearcompared to 15 to 20 tons in anormal year.

“This was one of the bestyears for oats,” Lidy said. “Itproduced high-quality silage.”

An issue for some livestockproducers now is how to feedthe lower-yielding corn silage.

Much of the drought-rav-aged corn silage this year hasless grain compared to normalsilage, which means it is a low-er energy, higher fiber feed.Farmers who feed total mixedrations (TMR) aren’t used tofeeding large amounts of silageto their herds.

“Now that we’ve got moresilage, how do you get the

most value out of it?” Lidyquestioned.

He advised farmers to mini-mize the shrink and reducespoilage in bagged silage.

Feed bunk managementalso is critical to minimize loss-es and maximize herd output.

If farmers put too muchfeed in the bunk, feed on thebottom can get out of con-dition. Too little feed obvi-ously would impact dailygains.

“You need to have a goodfeel for how much the cattleeat every day,” Lidy said. “Ifyour TMR is just right, cattlewill perform at a peak level.”

Authors of the CMEGroup Daily Livestock Reportalso noted a recent improve-ment in feed conditions. Butproducers could be tested incoming months.

“As beef cow producerstransition from grass to hay,there is a fear we could seemore cows come to market inJanuary and February,” authorsof the report noted. “Hayinventories are the smallest inmany years and good-qualityhay remains a precious com-modity.”

‘ I f your TMR isjust r ight, cattlewill perform at apeak level.’

— Dave LidyFS livestock specialist

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Biofilter practical way to remove swine odor BY KAY SHIPMANFarmWeek

A biofilter offers a practicalway of removing odor fromhog confinement buildingexhaust air, University of Illi-nois researchers told farmersduring a livestock housing ven-tilation field day last week.

“We think there is a realpossibility of putting biofil-ters on Illinois farms. It helps

everyone be a good neighbor,reduces odor, and doesn’t pro-duce greenhouse gases,” saidTed Funk, U of I Extensionag engineer.

Since 2009, the U of I hastreated its swine buildingexhaust air with in-groundbiofilters. Funk has studied dif-ferent designs, constructionmaterials, and organic materials.

“It’s relatively simple,” addedRich Gates, U of I agricultureengineering professor.

Basically, exhaust air isblown through moist compost

material, allowing microbes toconvert ammonia and otherodorous gases.

The organic materials mustbe kept moist for the microbes’survival, but cannot get too wetor the bacteria may producenitrous oxide, Funk cautioned.

He recommended biofiltersbe used to filter smaller fansonly because big fans wouldrequire enormous biofilters.

Farmers may get helpdesigning a biofilter systemfrom U of I Extension orNatural Resource Conserva-tion Service engineers.

“The development of thesetechniques certainly is impor-tant,” said Jim Kaitschuk,executive director of the Illi-nois Pork Producers Associa-tion.

“Biofilters are something wehave talked about for years —if it proves to be a practiceproducers can use.”

Practicality and affordabil-ity top Funk’s list.

“Our hope is we will havesomething affordable forlivestock producers that willget rid of odor,” he said.

University of Illinois Extension ag engineer Ted Funk, left, explains how a biofilter removes odor, ammonia,and hydrogen sulfide from air exhausted from a livestock building. Funk said his goal is to simplify the biofil-ter practice for farmers. (Photo by Kay Shipman)

Researcher: Not all heat lamps are equal Heat lamps may appear to give off the desired warm glow for

little pigs, but a Mississippi State University (MSU) researcherwarned farmers that appearances can be deceiving.

Jeremiah Davis, MSU agricultural engineer, reportedresearchers found wide differences in the temperatures and thepattern of heat from heat lamps they tested.

“Not all incandescent heat lamps are equal,” Davis said duringa University of Illinois field day last week.

Testing has shown young pigs prefer temperatures above 86degrees Fahrenheit (F), but not higher than 112 F.

Two of the tested lamps produced large hot spots when hung18 inches above the floor. Davis showed how the hot spots cov-ered most of the floor space within a gestation stall.

The lamp produced only a small rim of comfortable tempera-ture for young pigs, causing them to crowd each other or pushinto the sow, he noted. Another lamp didn’t produce enoughheat to provide adequate warmth.

The most efficient heat lamp tested was the Retrolite 175watt. It produced an adequate amount of heat evenly across thesurface, according to Davis.

A Retrolite 100 watt heat lamp didn’t produce enough heat,and both a Phillips 175 watt and a SLI Lighting 250 watt pro-duced hot spots, he noted.

Davis said the MSU researchers have applied the researchresults on the university’s research farm. “These (heat lamp)research results have really played out in our operation,” he said.— Kay Shipman

DATEBOOK

Dec. 1-4Illinois Farm Bureau annual meeting, Palmer House, Chicago.

Dec. 10 Farm Economic Summit, I Hotel and Conference Center,Champaign. More information at {farmdocdaily.illinois.edu}.

Dec. 11 Farm Economic Summit, Illinois Center for Agriculture, Sycamore.More information at {farmdocdaily.illinois.edu}.

Dec. 12 Farm Economic Summit, Best Western Prairie Inn, Galesburg. More information at {farmdocdaily.illinois.edu}.

Dec. 13Farm Economic Summit, Holiday Inn, Mt. Vernon. More informationat {farmdocdaily.illinois.edu}.

Dec. 14 Farm Economic Summit, Doubletree Hotel, Bloomington. More information at {farmdocdaily.illinois.edu}.

FarmWeekNow.com

Visit FarmWeekNow.com to viewa video interview with the U of I’sTed Funk.

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Disabled farmer issues take center stage in Chicago theaterAgraAbility spotlighted BY KAY SHIPMANFarmWeek

From his wheelchair, a“farmer” shared the joys ofharvest and watching the sun-set from a combine cab withChicago theater-goers Mon-day evening (Nov. 5).

“No better view than mycab overlooking the pasture,”said farmer Mike, portrayedby Chicago actor Bob Ness.Ness, a quadriplegic, had beenlifted onto the stage by threefellow actors.

Audience members chuck-led when the actor-farmercompared the size of farmequipment he drives to aChicago cab. They reactedthoughtfully to his commentthat farm life might be theanswer for some city dwellers’anxieties. One man in theaudience dabbed away tears.

“Most urban people don’t

one-man play, “Farm Hands.” At one point during the

play, Mike refers to himself as“differently abled.” Whitesiderecalled her father, who haspolio, uses that term.

Whiteside not only is bring-ing the challenges of disabledfarmers to the forefront, butshe also wrote informationabout AgrAbility Unlimitedinto her script. Earlier, sheinterviewed Christian Countyfarmer R.D. Elder at his BlueMound farm and incorporatedsome of his comments intoher play.

At Monday evening’s pre-mier, Meyers pointed out

AgrAbility and Illinois FarmBureau representatives in theaudience. IFB and AgrAbilitywere mentioned in the pro-gram, and AgrAbilitybrochures were distributed.

“Farm Hands” will be per-formed in late spring as part ofa play festival in Chicago.Information will be available at{americanbluestheater.com}.

As a gift, Whiteside hasgiven AgrAbility the rights toher play, allowing the organi-zation to receive royaltiesfrom future performances.

“I want to help out any wayI can,” she said. “I hope itraises awareness.”

consider what it is like to livein a rural area,” directorHeather Meyers of the Ameri-can Blues Theater toldFarmWeek.

“Our major goal was to tellthem (the audience) a story —

not to feel sorry, but to con-sider things they don’t person-ally experience,” Meyers said.

Chicago playwright WendyWhiteside wove memories ofher Kansas farmer father anddisabled grandfathers into her

Chicago playwright Wendy Whiteside, left, chats with Chicago actor Bob Ness, second from left; Bob Aherin,AgrAbility Unlimited project director; and Peggy Romba, Illinois Farm Bureau program manager. Aherin andRomba attended a Chicago performance of “Farm Hands,” Whiteside’s play about disabled farmers. (Photoby Kay Shipman)

FROM THE COUNTIES


BROWN — Deadline toorder Florida oranges,

tangelos, grapefruit, red deli-cious apples, and pecans is Fri-day. Delivery to the FarmBureau office will be Tuesday,Dec. 11. Call the Farm Bureauoffice at 217-773-2634 to placean order.

COOK — Farm Bureauwill sponsor a trim-the-

tree contest. Purchase a Christ-mas tree from a participatingCook County Farm Bureaufarm stand, decorate your tree,photograph it, and email thepicture along with an entryform to [email protected] voting will be from Mon-day, Nov. 19, to Monday, Dec.17. First place winner willreceive $250; second place willreceive $100. Call the FarmBureau office at 708-354-3276or go online to cookcfb.org forentry forms and additionalinformation.

• Spend Friday nights withthe Chicago Steel hockey team.Farm Bureau members maypurchase tickets for $5. Visitthe website {cookcfb.org} forgame dates and information onhow to order tickets.

EFFINGHAM — TheYoung Farmers Com-

mittee and South Central FSwill collect coats for local fami-lies in need. Drop off new orgently used coats until Nov. 21and receive a chance to win fourtickets to the Illinois vs. Purduefootball game Nov. 17 or threetickets to an Illini basketballgame. Donations may be takento the Fast Stop General Store,Effingham; Farm Bureau office,or Promark Advertising, Alta-mont. Call the Farm Bureauoffice at 217-342-2103 for moreinformation.

• Members are invited to par-ticipate in one of Farm BureauAction Teams, which meet twotimes a year. The teams are leg-islative, commodities/market-ing, and local affairs. The fallplanning meeting will be at 6p.m. Monday, Nov. 19, at theFarm Bureau office. Dinner

will be served. Call the FarmBureau office at 217-342-2103or email [email protected] by Monday (today) forreservations or more informa-tion.

HENRY — Henry andRock Island County

Farm Bureaus will sponsor amarketing dinner and seminar at6:15 p.m. Thursday, Nov. 29, atthe Geneseo Moose Lodge.Cost is $20 if pre-registered and$30 for walk-ins. Andy Shissler,Roach Ag Marketing, will be thespeaker. Call the Henry CountyFarm Bureau office at 309-937-2411 or the Rock Island CountyFarm Bureau office at 309-736-7432 for reservations or moreinformation.

• Bushels for Hunger contin-ues through Nov. 30 at partici-pating grain elevators in Henry,Mercer, Rock Island, Stark, andWhiteside counties. All pro-ceeds from the bushels of graindonated will be contributed tothe River Bend Foodbank.Contact your county FarmBureau office for more infor-mation.

LASALLE — Orderforms for Amish cheese,

Florida fruit, KD Creek Beef-sticks, and CC’s Specialty Foodsare available at the Farm Bureauoffice or on the website {lasal-lecfb.org}.

• The annual meeting will beat 6 p.m. Tuesday, Nov. 27, atPitstick’s, Ottawa. Dinner willbe served. Tickets are $10 andmay be purchased at the FarmBureau office or from a FarmBureau director. Call the FarmBureau office at 815-433-0371for more information.

LEE — Carroll, Lee,Ogle, and Whiteside

County Farm Bureaus, and SaukValley Bank will sponsor a mar-keting workshop at 7 p.m. Mon-day, Nov. 19, at the ComfortInn, Dixon. Steve Johnson,Iowa State University Extensionfarm management specialist,will be the speaker. Call theFarm Bureau office at 857-3531or email [email protected] by

today (Monday) for reservationsor more information.

MCDONOUGH —

Hancock and McDo-nough County Farm Bureaus;Brett Powell, Country Financialrepresentative; Citizens Bank;Haley Risk Protection andAgronomy Service; and SullivanAuctioneer LLC will sponsor amarketing outlook luncheonmeeting at 11:30 a.m. Tuesday,Nov. 20, at the Spoon RiverCollege Outreach Center,Macomb. Steve Johnson, IowaState University, will be thespeaker. There is no charge forvoting Farm Bureau members.Cost is $10 for non-members.Call the Farm Bureau office at309-837-3350 by Friday forreservations or more informa-tion.

MERCER — Mercerand Rock Island

County Farm Bureaus willsponsor an estate planningseminar from 10 a.m. to 3:30p.m. Monday, Nov. 26, at theReynolds American Legion.Erica Eckley, Iowa State Uni-versity Center for AgriculturalLaw and Taxation, will be thespeaker. Topics include estateplanning, planning for businesssuccession, and Illinois estatetax exemptions. Call the Farm

Bureau office at 309-582-5116or email [email protected] Friday for reservations ormore information.

• The Marketing Committeeis selling Florida citrus and TerriLynn nuts. Call the FarmBureau office at 309-582-5116or email [email protected] Thursday to order.

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

Tuesday, Nov. 20, at the St. PaulUnited Church of Christ,Pinckneyville. Entertainmentwill feature “Magicomedy” byChris Egelston. Call the FarmBureau office at 618-357-9355by Tuesday for reservations ormore information.

STEPHENSON — Flushots will be given from 9

a.m. to 3 p.m. Tuesday at theFarm Bureau office. Cost is $20for members and $25 for non-members.

• The Farm Bureau andStephenson Service Co. annualmeeting will be at 7 p.m. Tues-day, Nov. 20, at the FarmBureau office. Doug Scheiderwill give a program on his mar-ket study tour trip to Cuba.The Freeport High School Var-sity Choir will provide theentertainment. Call the FarmBureau office at 815-232-3186

for reservations or more infor-mation.

VERMILION — Ordersand payment for Florida

citrus, nuts and snacks, LudwigFarmstead Creamery gift boxes,Leiding’s Meats Bavarian hams,and honey are due by Monday,Nov. 19. Delivery will be Mon-day, Dec. 10, to the FarmBureau office. Call the FarmBureau office at 217-442-8713for more information. Orderforms are available on the web-site {vcf.info}.

• The annual meeting will beat 6 p.m. Tuesday, Nov. 27, atthe Beef House Banquet Cen-ter, Covington, Ind. (Illinoistime). Tickets are available atthe Farm Bureau office andmust be purchased by Wednes-day, Nov. 21. The VermilionCounty Farm Bureau Founda-tion will host its annual silentauction. Kevin Green willspeak about his participation inthe Illinois Farm Bureau marketstudy tour trip to Cuba. Callthe Farm Bureau office formore information.

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

For details & itinerary call 7 days a week:

1-800-736-7300

Travel with other farmers on this famous Hawaiian Farm Tour offered by YMT every year since 1974. You’ll visit all four islands with sightseeing on every island including Honolulu & Pearl Harbor, Punchbowl Crater, The Iao Valley, Lahaina; The Maui Gold Pineapple Plantation; the Wailua Riverboat Cruise & Fern Grotto; Kauai Steel Grass Farm, growing bamboo, vanilla and cacao; and on the “big island” a Hilo Orchid Nursery and Macadamia nut factory; Black Sand Beaches; a Giant Fern Tree Forest; Volcanoes National Park; Mountain Thunder Coffee Plantation; and The Natural Energy Laboratory of Hawaii, a reseach facility of ocean thermal energy conversion that not only generates electricity but enables Aquaculture to flourish. Next visit The Big Island Abolone farm that produces its own feed: 13 tons of home grown algae per week. Includes a flower lei aloha greeting, 14 nights in quality hotels, baggage handling, inter-island flights & transfers, plus your Polynesian tour director on every island. *Price per person/double occupancy. Airfare is extra.

Hawaiian Farm Tour2 Weeks - 4 Islands from $2098*

Depart February 20, 2013

profitability


Export inspections(Million bushels)

Week ending Soybeans Wheat Corn11-01-12 59.4 14.0 14.710-25-12 63.9 9.7 15.6Last year 52.1 13.7 24.3Season total 369.6 416.8 158.0Previous season total 260.2 475.9 250.4USDA 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. $32.25-48.79 $40.32 40 lbs. $46.00 $46.00

Receipts This Week Last Week 70,185 100,963*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 $79.10 $78.13 0.97 Live $58.53 $57.82 0.72

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

Steers 125.00 126.22 -1.22 Heifers n/a 127.00 n/a

USDA five-state area slaughter cattle price

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

This week Prev. week Change 144.17 144.70 -0.53

CME feeder cattle index — 600-800 Lbs.

Lamb prices

(Thursday’s price)

Slaughter Prices - Negotiated, Live, wooled and shorn 79-156 lbs. for88.66-111 $/cwt. (wtd. ave. 95.91)

Crop and farmland prices, which raced to recordhighs this year, could lose momentum in 2013.

Economists last week at the AgEngage farm-land value and leasing conference in Decatur pre-dicted crop production next year likely will bounceback and put downward pressure on prices.

“I’m absolutely convinced there is a supplyresponse with these high prices,” said Craig Dob-bins, ag economist at Purdue University. “Peoplearound the world are trying to produce more.”

An estimated 190 million acres of croplandhas been brought into production in Argentina,Brazil, China, India, and the Ukraine since 2000.

In the U.S., contracts in the ConservationReserve Program (CRP) totaling about 2.6 millionacres expired this fall and those acres could beput into production next year. Another 3.3 mil-lion acres of CRP contracts expire next year.

If crop production returns to normal levelsnext year, Gary Schnitkey, University of IllinoisExtension farm management specialist, predict-ed crop prices will decline.

He predicted prices next year will average $5.80per bushel for corn and $12.80 for soybeans com-pared to $7.40 and $15.30, respectively, this year.

“If we ever have a normal production yearand rebuild stocks, prices will decline,”Schnitkey maintained.

A rise in crop production and subsequentdecline of crop prices also could pressure farm-land values, which in recent years have shotthrough the roof.

“(Farm) income is a key driver (of farmlandvalues),” said Lee Vermeer, vice president ofreal estate operations for Farmers National Co.“Local demand is very important.”

Vermeer predicted farmland prices willremain strong next year. But the rate ofincrease could level off if there’s a rebound incrop production.

“The drought has not affected the (farmland)market yet,” Vermeer said. “But we certainly canoverproduce ourselves out of this market. It’ssomething to monitor going forward.”

Dobbins agreed the current run-up in farm-land prices could top out next year.

“We might be approaching a peak (in farm-land prices),” said Dobbins, who noted the onlymajor downturns in farmland prices in modernhistory occurred during the Great Depressionand in the 1980s. “Never say never. Farmlandprices can come down.”

Dobbins, however, believes a major marketcrash, similar to the burst of the U.S. housingbubble, is unlikely in the farmland market.—Daniel Grant

Will high crop, land prices curb high prices?

Propane balancing act will influence winter pricesBY RANDY MILLER

Summer, the time for fillingpropane tanks and buildinginventories to prepare for the

winter monthsand, hopefully,a grain dryingseason, hascertainly doneits job thisyear.

Propaneinventorieshave increased

by 30 million barrels since earlyApril.

Propane demand in Illinois,considering summer fill and asomewhat limited dryer season,was certainly below expecta-tions. However, demand inother parts of the country andother industries remains strong.

So the big propane questionheading into winter is: Whereis production headed and isdemand going to keep up?

The accompanying chartconfirms what industry sourceshave been predicting: that pro-duction of natural gas liquids(NGLs), particularly propane,continues to increase as shaleplays become more developed.

In the past year, increasedshale production from theBakken Shale Play (North Dako-ta)and the Marcellus Shale Play(Ohio, Pennsylvania, and NewYork) is starting to move intotraditional propane markets.

The chart shows some inter-esting breaks in production. In2005, Hurricane Katrina inter-

rupted production, and therecession with falling commod-ity prices in 2008 also slowedproduction levels. But sincethat time, production has beensomewhat static until about ayear ago. The chart shows anincrease of about 200,000 bar-rels per day. Where will allthat propane go?

Export facilities in the U.S.are continuing to expand, andwith current dollar values andworld demand, we expect tosee exports continue to grow.

August 2012 was the biggestpropane export month in U.S.history, with reports of exportsof just below 6 million barrels.

Petrochemical plants are

being expanded with thoughtsof plentiful and cheap NGLs,and throughout 2012petrochem demand has runnearly 25 percent above thefive-year average.

Autogas demand — for carsand passenger vans convertedto propane use — is still rela-tively light but promising, andwe expect to see growth in thisarea in the coming years.

What to make of this? Lookfor price volatility to be thenorm as increased demand andincreased production fall out ofbalance for periods of time.

Another warm winter wouldresult in another summer of highinventories and pricing pressure,but normal temperatures likelywill leave enough storage avail-able to keep prices in check.Keep in contact with your localFS member cooperative for pric-ing options to take the worry outof the winter heating season.

Randy Miller is GROW-MARK’s propane operations man-ager. His email address [email protected].

Randy Miller

Land in demand; market projected to remain strong in ’13BY DANIEL GRANTFarmWeek

Demand for farmland andthe prices buyers are willing topay for good ground have notdried up this year inspite ofthe drought.

In fact, land values and rentalrates in many areas of the CornBelt remain at or near recordlevels, according to economistsand real estate professionalsspeaking last week at the AgEn-gage farmland value and leasingconference in Decatur.

“One thing occurring inabout every area is recorddemand for land and recordvalues,” said Lee Vermeer, vicepresident of real estate opera-tions for Farmers National Co.

“There is a ton of cash pour-ing into this market.”

The value of good farmlandin the northern two-thirds ofIllinois increased 15 percentfrom July 1, 2011 to July 1, 2012,according to David Oppedahl,economist with the FederalReserve Bank of Chicago.

“Values now are higher thanthe peak of the 1980s (whenadjusted for inflation),” hesaid. “There doesn’t seem tobe tremendous slowing(because of the drought).”

Investors seeking a safe-haven for their money havemade their presence felt in thefarmland market, but the major-ity of buyers are local farmers.

Seventy to 80 percent offarmland buyers are farmers,Vermeer noted.

“Right now, we have strongdemand,” he said. “There aremore buyers than sellers.”

Farmers remain the domi-nant buyers due in large part torecord-high crop prices this

year and a strong run of prof-itability. U.S. farm incomesince 2007 increased about 30percent, Vermeer reported.

“Obviously, that’s been abig influence on (land) pricesand rents,” he said.

More farmland flowed tothe market in recent months.Real estate professionalsbelieve that’s because of highcrop prices and an extra incen-tive based on tax policy.

The capital gains tax on Jan.1 is set to rise from 15 percentto 20 percent.

“We’ve had a 30 percentincrease in sales over last year,”Vermeer said. “A lot of that isthe potential changes in tax law.”

The land market was projectedto remain strong next year as welldue in part to the expectations ofstrong farm income and the con-tinuation of low interest rates.

“The fundamentals of farm-ing support further increases infarmland values and rents,”Oppedahl said. “Interest rates

are forecast to remain very lowuntil at least 2015.”

Cash rents for 2013 wereprojected to be stable to higher.

“The leases I negotiated(this fall for 2013) we actuallysaw an increase in bids, upabout 10 percent from lastyear,” said Jerry Hicks, farmmanager with Agrivest. “Butevery farm is not created equal.There’s a wide variation in what(rental rates) people are after.”

Don Olson, executive vicepresident and chief credit offi-cer with Farm Credit Servicesof Illinois, reported cash rentsin East-Central Illinois rangefrom $200 to $500 per acre.

“Straight cash rents are themost common (rental agree-ment) we see,” he said. “Therange is very wide.”

The statewide average cashrent increased from $169 in 2010and $183 in 2011 to $212 peracre this year, according to GarySchnitkey, University of Illinoisfarm management specialist.

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CASH STRATEGISTCorn Strategy

ü2012 crop: Corn pricescannot seem to move out ofa sideways trend, bounded bythe $7.60s on top and $7.32on the bottom of the Marchcontract. At this point, weprefer to wait for Marchfutures to trade above $7.65before making catch-upsales.

ü2013 crop: Use rallies to$6.40 on December 2013futures for catch-up sales. Wecould use a push to $6.50 toadd another increment.

vFundamentals: The newUSDA production and sup-ply/demand fundamentalswere not changed much. Atthe same time, issues on thedemand side of the balancesheet remain weak. The corngrind for ethanol continues tobe mildly disappointing, evencompared to the USDA’s lowforecast. But more important,traders fear the persistence ofsluggish export demand even-tually will cause the exportforecast to be revised lower.And even though early prob-lems are underminingArgentina’s potential crop,good conditions in Brazil mayoffset them.

Soybean Strategyü2012 crop: The new

USDA production and sup-ply/demand projections maydictate a change in strategy.January futures of $16 may beout of reach, let alone $16.50.Use a rally back to $15.20 tomake catch-up sales. And giv-en this past week’s break, wemay add a sale at that time.

ü2013 crop: Friday’s breakmay have succeeded in turningthe short-term trend downagain. Use a rally to $13.30 onNovember 2013 futures forcatch-up sales. We are serious-ly considering adding anothersmall increment at that level aswell.

vFundamentals: Withouta doubt, Friday’s USDA soy-bean production estimatechanged the dynamics of themarket. It may have removedtalk about possibly runningout of soybeans before newSouth American suppliesbecome available. And eventhough the ending stocks pro-jection is still relatively tight, it

will be enough to bridge theshift to our new crop, espe-cially if the South Americancrop is as good as advertised.

Wheat Strategyü2012 crop: Wheat may

have put in a short-term top.A close below $9 in the Chica-go March contract would sig-nal additional weakness. Useprices above $9 for catch-upsales.

ü2013 crop: Make catch-up sales when Chicago Julyfutures are trading above$8.88. Check the Hotline fre-quently; we could add a sale atany time.

vFundamentals: TheNovember USDA report cast aslightly negative tone on wheat,with the cut in the export fore-cast reinforcing the lacklusterexport demand. Even withproblems in Australia andArgentina, there is a chance Indiawill replace part of those supplylosses. Our export forecast waslowered 50 million bushels, withending stocks increased a likeamount, now standing at 704million bushels. World stockswere increased slightly to 174.2million metric tons. Still, thedownside may be limited on con-tinued concern about dry condi-tions in the U.S. Plains.

Cents per bu.

Page 11 Monday, November 12, 2012

Occasionally, a USDAreport comes along thatchanges a market’s trajectory.Regarding soybeans, Friday’sUSDA production and sup-ply/demand report may be oneof those instances.

The changes implied by theUSDA numbers could havemajor consequences, especial-ly with prices breaking to newlows. No longer can anyonesuggest that prices need tomove higher to rationdemand enough to keep theworld from running out ofsoybeans before the newSouth American cropsbecome available.

Thanks to record large podweights, the 111-million-bushelincrease in expected produc-tion was more than enough forthe USDA to raise demandestimates and yet increase theending stocks number slightly,too.

The 140-million-bushel end-ing stocks is not a comfortablesupply by any means, but in theera of big South Americancrops, it may be enough fordomestic crushers to success-fully cross the bridge from oldcrop to new crop.

Maybe just as important wasthe reduction in USDA’s sea-sonal price forecast to $13.90-$15.90. The midpoint of thatrange, $14.90, is where Januaryfutures were trading before thenew estimates were released.

The 111 million bushelsadded to production thismonth is the equivalent toadding 3 million metric tons(mmt) to midyearU.S./Brazilian/Argentinestocks when South Americansupplies will begin to enterthe pipeline.

Since the low water mark inthe Sept. 12 USDA report, theincrease in the forecast forour soybean production hasadded 9.17 mmt back to sup-plies available until the newSouth American crop starts toenter the world pipeline. Ourlarger Sept. 1 soybean stocksadded another 1 mmt to themix.

The 3 mmt addition thispast month is the equivalent ofadding six days to average win-ter demand. The 10 mmt shiftis enough to cover half amonth of average winterdemand from the three majorproducers.

In short, the larger U.S. cropmay have removed any needfor prices to rally significantlyto ration demand.

As far as price action is con-cerned, the additional bushelspresent another problem. Thebig hedge funds still are longnearly 1 billion bushels of soy-bean futures and options.

The break to new lows inthe wake of the report likelywill trigger more liquidation ofexisting long positions by thebig trading funds.

And by early this week, the50-day moving average willdrop below the 100-day mov-ing average, potentially signal-ing an even more negative turn.That doesn’t necessarily indi-cate the funds will liquidatepositions at these lower levels,but it will lower the price levelsat which they will exit longpositions.

In the end, we not only havea situation in which end-usershave little need to chase themarket but one in which specu-lative money will more aggres-sively exit long positions.About the only factor thatcould reignite the bull marketwould be another major cropproblem in South America. Atpresent, there is no indicationof that happening.

Complexion of bean prices changes

perspectIves


HSUS action resultsin on-farm pig audits The pig auditors are on the way. Get ready for them.Yes, it’s a fact.Recently, I received a letter from Tyson Foods stating

that company representatives will be coming to my farm toperform an audit to see how we raise andcare for our pigs.

We sell most of our market hogs toTysons, but an audit?

I’ve never heard of such a thing.Tyson intends to audit all of its major

suppliers. I guess they have that right, if Iwant to continue to sell them pigs.

The pressure from the animal rightsorganizations is powerful. We have foodcompanies of all kinds bowing to their cry.

In one respect, I don’t mind the audit.My hogs are happy and well cared for. We

don’t even use gestation stalls, which is one of the HumaneSociety of the United States’ (HSUS) main complaints.

Our sows run in the field. We should be a “poster child”for the People for the Ethical Treatment of Animals(PETA).

By the way, even though Tyson has announced that it willbe auditing its hog suppliers to ensure humane treatment,HSUS is not satisfied since Tysons has not outlawed gesta-tion stalls.

Along with the letter to alert me, Tysons sent me a list ofquestions to see if my employees working with the pigsknow how to handle them.

Here’s one of the questions:How do you pick up a baby pig?A. By the earB. By the tailC. By the hind legD. By the front legAnyone who has worked on a pig farm knows you pick

up a little pig by its hind leg. I knew that when I was 3years old.

Where are we headed with this stuff ? California has a law that eggs sold in the state must be

produced by laying hens with a prescribed minimum space.In the future, McDonald’s will not use pork from farmsthat use gestation stalls.

These kinds of demands are offensive to me. Livestockproducers do all they can to keep their animals happy. Anunhappy, mistreated animal will not be an efficient produc-er of meat, eggs, or milk.

It’s that simple, and we are smart enough to know that.

John Block, former U.S. agriculture secretary and a hog farmer fromGilson in Knox County, is a senior policy adviser with the Washington,D.C., firm of Olsson, Frank, Weeda, and Terman. His email address [email protected].

As if 2012 hadn’t beentough enough on farmersbecause of the severedrought, Mother Nature

thought she’dhave onemore go at itbefore callingit a year.SuperstormSandywreaked hav-oc along theEast Coast,threateningfarmers once

again.Fortunately, the overall

impact on agriculture may

be less dire than the proper-ty damage and lost businessin urban areas.

Since the growing seasonwas essentially complete onmuch of the East Coast andmany farmers sped up har-vesting ahead of Sandy, theoverall picture isn’t so muchblack as it is grey. But that’snot to underestimate local-ized crop damage that issevere in places.

Some farmers are facingmassive flooding while oth-ers are challenged with adomino effect of thestorm’s aftermath.

For example, in Maryland

and Delaware, both rankedhigh in young chicken meatproduction, power outages,transportation disruptions,and a potential lack of feedpotentially were detrimentalto poultry farmers.

In New Jersey, whereSandy made landfall, somefarmers are challenged withdirect losses to crops andlivestock, as well as struc-tural and property damageand lost business.

New Jersey Farm Bureauofficials estimate that 80percent of the state’s cropsalready were harvested,which makes the situation

less ominous than it couldhave been.

The Virginian-Pilot news-paper reported that agricul-tural damage in the Chesa-peake Bay area was minimal,estimating potential damageto 2,000 acres of smallgrains, including wheat, bar-ley, and oats.

Some wheat that farmersin Virginia Beach just plant-ed will be included in thatnumber.

In Virginia’s Suffolk andWestern Tidewater region,where 60 percent of thecotton crop had not beenharvested, Sandy could have

been disastrous. Fortunately, it’s estimated

that the total cotton losswill only be several hundredpounds in that area.

As for food prices, agri-cultural economists havesaid there likely will be onlya short-term shock and nolong-term effects. Somerestaurants and grocerystores could be challengedwith a lack of local foodproducts.

Tracy Taylor Grondine is director ofmedia relations for the AmericanFarm Bureau Federation. Heremail address is [email protected].

Western Illinois University’s Allison OrganicFarm is currently going through a lengthyprocess that eventually will permit it to certifyits products are being grown organically.

To say a product is organic is easy. But toprove it, so you may advertise it as USDAorganically certified — like a note from yourmother that says this really, really is organic —is not easy.

Nor, in my opinion, should it be. USDA is directly involved in

the organic approval process. It defines organic produc-

tion as a production systemthat is managed in accordancewith a variety of rules and reg-ulations “to respond to site-specific conditions by integrat-ing cultural, biological, andmechanical practices that fostercycling of resources, promoteecological balance, and con-serve biodiversity.”

And the Allison Farm, to gain organic certifi-cation, has to prove it does all of the above, andit must have records to support the claim.

Being aware of the lengthy organic certifica-tion process, I noticed with interest a new slicedcheese product for sale at a local grocery store.

The label on the product proclaimed thecheese was both organic and unprocessed.Because of the efforts by the Allison Farm toprove it is organic, I understood the organicpart of the product’s label.

But to declare that cheese was unprocessedgave me pause.

Milk comes from a cow. To make that milkinto cheese requires some type of processing,doesn’t it?

I can envision unprocessed apples, carrots,and kiwi fruit. But cheese?

After a little research, I learned that cheese isnot only types such as Swiss, cheddar, or Parme-san.

There are cheese products officially classifiedby the Food and Drug Administration (FDA).

Those products include pasteurized processcheese, pasteurized process cheese food, andpasteurized process cheese spread.

In fact, FDA classifies 94 different types ofcheese and cheese products including cheesescalled sap sago and nuworld.

Unprocessed cheese is not among the classi-fied cheese products listed.

Is there such a thing as unprocessed cheese?Thinking that perhaps I had missed the FDA

classification, I contacted the company thatmakes the organic unprocessed cheese.

Company officials chose not to call me backand discuss their product, leaving their cheeseboth unprocessed and undefended.

Labels matter. That is why the new cheese product dis-

cussed has, in large letters, organic andunprocessed, on its label.

That clearly is information the companybelieves is important to the buying public.

But we need to trust what is on the label.Consequently, there are complex governmentrules and regulations detailing what may — andmay not — be put on labels for food.

Meeting those exacting standards is part ofthe regulatory process for the Allison OrganicFarm so that it eventually will be permitted toput “USDA Organic” on the products it sells.

The unprocessed cheese claim is not as clear.In fact, what does unprocessed mean?

Does peeling a potato result in it being classi-fied as processed? Are bake potatoesunprocessed? Hard-boiled vs. fried eggs?

Labels should clarify, not confuse.

William Bailey is director of the School of Agricultureat Western Illinois University, Macomb. His emailaddress is [email protected].

WILLIAMBAILEY

JOHNBLOCK

Is it or isn’t it?Labeling of processedcheese foods not clear

Hurricane Sandy hit East Coast farms, too

TRACYGRONDINE

Documents

FarmWek November 12 2012