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Features

Illinois agriculture could benefit
by refining vision

[MARCH 31, 2003]  URBANA -- A new definition of "agriculture" is being created by fresh demands on a broad front, noted Robert A. Easter, dean of the University of Illinois College of Agricultural, Consumer and Environmental Sciences.

While Illinois has significant competitive advantages in agriculture, including soils, climate and transportation, appearances can be deceiving. Easter offered an example used by Juan Enriquez in his book, “As the Future Catches You: How Genomics & Other Forces Are Changing Your Life, Work, Health & Wealth.”

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[University of Illinois news release]

[MARCH 27, 2003]  SPRINGFIELD -- Sen. Larry Bomke joined his downstate Republican colleagues Wednesday in voicing their opposition to any budget plans that would force farmers and agribusiness to pay sales taxes on seed, fertilizer and the equipment they use to grow food and develop other agricultural commodities.

The lawmakers made the announcement on Agriculture Legislative Day, March 26, in an effort to discourage Gov. Rod Blagojevich from repealing the state's agricultural sales tax exemption as a possible budget fix.

"Right now, lawmakers are considering legislation without any insight on the budget beyond what we read in the paper or see on TV," said Bomke, R-Springfield. "Repealing the agricultural sales tax exemption has been mentioned, and that worries those of us representing rural communities. Agriculture is an economic mainstay for downstate Illinois, and it is one of the few stable and thriving industries we have. I will not support any budget proposal that threatens that stability."

Currently, farmers and agribusiness do not pay sales tax on seeds, agrochemicals, fertilizer, farm machinery and equipment, and related products necessary for the production of a commodity.

Estimates show this would cost the agriculture industry $235 million, a price tag Bomke fears could jeopardize the future of Illinois agriculture.

"It is unrealistic to think we can balance the budget on the backs of farmers and agribusiness," said Bomke. "Chicago may think they are targeting a wealthy industry with money to spare, but the reality is that small family farm and line workers in small rural communities are the ones who will suffer. Agribusiness can operate just as efficiently in other states as they can in Illinois if we repeal this incentive, and that means Illinois will lose the jobs and the money this industry brings to our state. We don't want to lose those jobs and money to Iowa or Indiana."

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Blagojevich is scheduled to address lawmakers April 9 concerning his plans for the fiscal 2004 budget and the deficit for fiscal 2003 and 2004.

In an effort to boost Illinois agriculture, Bomke is sponsoring several measures to benefit farmers and agribusiness.

--Senate Bill 46, which gained approval March 26 in the Senate, extends the sales tax credit on ethanol and bio-diesel fuel blends, making them more competitive with traditional fossil fuels and strengthening the market for Illinois corn and soybeans, both of which are widely used to make the fuels.

--Senate Bill 1471, approved unanimously in the Senate March 20, allows farmers to purchase short-term license plates for farm trucks or trailers.

--Senate Bill 1166 helps more farmers and agribusinesses qualify for loans to finance or refinance debt. The Senate voted in favor of the measure March 24.

--Senate Bill 610, still before the Senate, will strengthen the solvency of the Grain Insurance Fund.

[News release]

War may impact fuel costs
in crop production

[MARCH 26, 2003]  URBANA -- Tillage costs this spring for Illinois farmers may increase from 5.6 percent to 8 percent per acre, planting costs from 2.2 percent to 5.1 percent and additional operations from 3.3 percent to 5.8 percent per acre due to increases in fuel-related costs said a University of Illinois Extension farm financial management specialist.

"Fuel prices have increased substantially primarily due to concerns over supply disruptions that may occur in the Middle East," said Gary Schnitkey. "These price increases have led to higher projected production costs for corn and soybeans in 2003."

Schnitkey's study, "Increases in Fuel Related Costs Lead to Higher Production Costs," is part of the Farm Economics Facts & Opinion series and may be found online at http://www.farmdoc.uiuc.edu/manage/
newsletters/fefo03_05/fefo03_05.html.

"Diesel fuel prices are currently hovering around $1.50 per gallon, an increase of about 50 cents per gallon over 2002 prices," he said. "Diesel fuel use for tillage, planting and harvesting operations vary from farm to farm, with most farms using between five and six gallons per acre. Fuel use of 5.5 gallons per acre and a $1 fuel price causes diesel fuel costs to be $5.50 per acre. An increase to a $1.50 per gallon price means fuel costs are $8.25 per acre, an increase of $2.75 per acre.

"This $2.75 increase only covers fuel for field operations. Other fuel is needed for general use and grain hauling, causing overall fuel costs to increase more than $2.75. Average increases in fuel costs are likely to be around $3.50 per acre, given that fuel prices do not decrease before the fall harvest period."

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Schnitkey's study also examines nitrogen and liquefied petroleum gas prices, which have increased dramatically since last spring.

"As many farmers applied anhydrous ammonia in the fall, prior to most of the increase in price, per acre nitrogen costs for these farmers will increase less than the 40 percent increase in prices," he said.

"Between February 2002 and February 2003, LP gas prices increased over 100 percent. This could indicate that drying costs will increase dramatically if LP gas prices do not decrease between now and summer."

Schnitkey said that quick resolution of the war with Iraq might lead to substantial decreases in petroleum prices.

"While LP and nitrogen prices are impacted to some extent by uncertainties surrounding the Middle East, analysts believe that price increases are due to long-term increases in demand. If this is the case, there is less chance that nitrogen and LP prices will decline dramatically with an Iraqi resolution," he said.

The online version of Schnitkey's study includes a table reflecting per acre costs for various types of tillage, planting and row-crop cultivation, and additional operations.

[U of I news release]

[MARCH 25, 2003]  URBANA -- Beyond acreage, 2003 growing conditions and resulting average yields will be a large determinant of wheat prices, said a University of Illinois Extension marketing specialist.

"Large areas of below-normal subsoil moisture conditions exist in U.S. wheat growing areas," said Darrel Good. "However, the National Weather Service outlook for April, May and June indicates near-normal precipitation and temperatures for most growing areas. Smaller U.S. and world wheat inventories suggest that wheat prices could become more volatile over the next few months. It will likely take indications of another major shortfall in production, however, to reverse the lower price trend.

"In the short run, wheat prices might be influenced by the magnitude of food aid from the United States and other countries following the conflict in Iraq. It is believed that wheat could account for a large portion of aid packages."

Good's comments came as he reviewed wheat prices, which traded to the highest level in over five years in September 2002. December 2002 futures at Chicago traded to a high of $4.40, May 2003 futures reached $4.22, and July 2003 futures established a high of $3.80.

"The sharp increase in prices during the summer of 2002 reflected a large reduction in crop size in the United States and other major wheat exporting countries," said Good. "The 2002 U.S. crop was 17 percent smaller than the 2001 crop, 28 percent smaller than the 2000 crop and the smallest harvest in 30 years.

"Production in other major exporting areas -- European Union, Canada, Australia and Argentina -- was down by 7 percent in 2002, with the largest decline of 62 percent coming in Australia. Production in the EU was actually 13 percent larger than the small crop of 2001."

Wheat prices over the past six months have unfolded in a classic short-crop pattern, Good noted. From the highs in early September 2002, May 2003 wheat futures declined steadily through January 2003, mounted a small rally in February and moved lower again in March. At the close of trade on March 21, May futures were $1.36 below the contract high. July 2003 futures traded in a similar pattern and at the close of trade on March 21 were about 93 cents below the contract high.

"The impact of the small crops in traditional exporting countries in 2002 was partially offset by slightly larger production in traditional importing areas," said Good. "Production in those areas in 2002 was 0.7 percent larger than the 2001 crop but 16 percent larger than the 2000 crop. Much of that increase was in the former Soviet Union.

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"As a result, new wheat exports from the former Soviet Union are projected at 764 million bushels this year, up from 378 million last year and zero two years ago. In addition, production in other parts of the world, primarily India and Turkey, was up by more than 4 percent in 2002."

Wheat production outside the United States was down only 0.7 percent in 2002. As a result, U.S. wheat exports have been extremely disappointing during the 2002-03 marketing year. Those exports are now projected at 875 million bushels, 86 million less than shipped last year.

"At that level, U.S. exports will be at the lowest level in 31 years," said Good. "Projected U.S. wheat exports this year represent 23.24 percent of projected world exports. That is in the range of the U.S. share of world exports over the past six years but is well off the 40 percent share of the 1970s and early 1980s."

The USDA now projects that stocks of U.S. wheat at the end of the current marketing year (May 31, 2003) will total only 465 million bushels. That is 312 million less than stocks at the start of the year and would be the smallest year-ending inventory in six years. However, that projection is 117 million bushels larger than projected in December 2002.

"Disappointing U.S. exports and prospects of more abundant year-ending stocks have allowed wheat prices to decline sharply over the past six months," said Good. "In addition, world wheat production is generally expected to increase in 2003. That expectation is based on the assumption of a return to more normal weather and yields in the United States, Canada and Australia and on ideas that world wheat acreage may increase in response to high wheat prices."

U.S. winter wheat producers reported a 6 percent (2.5 million acre) increase in seedings for the 2003 harvest. The USDA's report on prospective plantings, to be released on March 31, will reveal producer intentions for seeding spring wheat.

"Expectations for that report are mixed," said Good. "Higher wheat prices than those of a year ago would suggest an increase in spring wheat seedings. However, some private sources are anticipating a decline in spring wheat seedings due to the lower trend in prices and some agronomic concerns. Instead, an increase in feed grain or oilseed acreage in traditional spring wheat areas is expected."

[University of Illinois news release]

County fourth-graders experience
a 'Celebration of Agriculture'

[MARCH 22, 2003]  More than 300 fourth-graders from Logan County visited the Lincoln Park District Recreation Center Thursday. The fourth-graders attended a half-day agriculture fair designed to give the students knowledge of agriculture and its many uses in today's world. The fair focused on the need people have for agriculture and its importance in their daily lives. Nearly 100 percent of the county's fourth-graders participated. Students attended from 13 schools in the county.

The fair was sponsored by the Logan County Farm Bureau to coincide with National Ag Day.

"Many students from rural areas do not live on working farms," said Lynn Paulus of the Farm Bureau. "The fair gives students an opportunity to experience agriculture and the variety of uses farm products have."

Paulus said, "Three county FFA chapters, from Mount Pulaski, Lincoln and Hartsburg-Emden, helped present the fair."

The fair consisted of presentations that were spread out over two half-hours. The presentations included five breakout stations plus a sheep shearing demonstration.

The fourth-graders saw modern farm machinery, tractors, combines and a diesel truck.

"The tractors are really big," commented Cody Mathis, a fourth-grader from Mount Pulaski. Joe Rankin and Paul Stolzenburg agreed. All three students said that they were enjoying the fair and learning a lot.

The Hartsburg-Emden FFA presented a station that focused on safety and taking safety precautions around farm machinery.

Another breakout station was about corn and its many uses. Corn can be used in many ways, ranging from food products to ethanol fuel to making plastic and even clothing. A wedding dress was made using corn, and shirts are made from materials using corn.

The fourth-graders were very excited about what they did at the corn station. "We made plastic," Dylan Hughes and Ethan Cline said. Levi Clampet said, "It looks like burnt cheese." Connor Cruise said, "Mine looks like blood." The students were obviously enjoying the presentations. They were very excited about the interactive parts of the "celebration."

Other breakout stations covered dairy products, hogs and pork products, and soybeans and soy products.

Drew Olson from the Hartsburg-Emden FFA helped students make ice cream at the dairy breakout station. The students then got to enjoy tasting a sample of their product.

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John Erwin from Beason brought his 7-month-old calf named Topper for the students to meet. He also brought a portable milking machine. The fourth-graders put their thumbs all the way up the tubing on the machine and experienced the suction cows feel when they are being milked. This was one of the fourth-graders' favorite stations.

[photos by Bob Frank]

At the hog and pork station students sampled sausage, met a pig and learned about nonedible products made from pork.

Ben Rekart, a fourth-grader from Lincoln, said, "I learned that buttons can be made from pork."

Ben also learned about hog feed. The sample feed consisted of jellybeans that represented water, M&Ms that represented vitamins, peanuts and raisins that equaled protein, and candy corn and wheat for carbohydrates. These nutrients are what hogs need in their food.

The soy products station included a game of soy bingo featuring soy products as items on the bingo board. MaryLou Klokkenga of the Emden Farm Bureau women's committee also presented fourth-graders with samples of foods made from soy, ranging from soy chocolate milk to soy butter and soy crackers.

The final presentation of the agriculture fair was a sheep shearing demonstration. All of the fourth-graders sat in a circle watching as a sheep was sheared. There were some "oohs" from the audience as the shearing progressed. When the sheep was sheared, one fourth-grader asked, "Does that hurt?"

The fourth-graders from Logan County all seemed to enjoy the agriculture fair. They showed a large amount of interest in all of the stations.

The students will now be asked to write an essay about "The Celebration of Agriculture," which they must submit by April 1. Students from the Phi Theta Kappa honorary society at Lincoln College will judge which five essays are the best. The five winners selected will receive trophies. From the enthusiasm shown by all of the fourth-graders in attendance Thursday, judging the essay contest will be very difficult.

[Don Todd]

Honors & Awards

Ag Day scholarship winners

[MARCH 25, 2003]  Six area students received a total award of $4,000 in local Ag Day scholarships -- double the amount awarded four years ago on the first Ag Day.

$1,000 scholarship winners

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Jason Wrage -- college senior recently accepted into the U of I College of Veterinary Medicine; goal is to have a rural mixed veterinary practice

Ag Announcements

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