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Features

New farm bill payments estimated
and compared in U of I study

[JULY 6, 2002]  URBANA — Illinois producers could receive between $12 and nearly $16 per acre more in federal assistance under the 2002 farm bill signed into law earlier this summer, according to a University of Illinois Extension study. The study assumed commodity prices at 2001 price levels. In 2001, commodity prices were below the government loan rates. If market prices are above the loan rates, government payments will be less.

"We’ve estimated that payments under the new bill are from $12 to nearly $16 per acre higher than under the 1996 bill," said Dale Lattz, U of I Extension farm management specialist who prepared the study with Gary Schnitkey, also an Extension economist. "The jump ranges from $12.13 per acre on northern Illinois grain farms to $13.72 on central Illinois farms to $15.97 in southern Illinois."

Caution must be used when interpreting the results because payments will vary depending on an individual farm’s program acres and yields. The study is based on data from the Illinois Farm Business Farm Management Association covering grain farms in northern, central and southern Illinois. The data includes crop yield and acreage information from 1998 through 2001. The 2001 crop year was used as a base to make the comparisons.

According to Lattz, there has been considerable discussion concerning the level of government expenditures estimated under the Farm Security and Rural Investment Act of

2002 compared with payments under the 1996 Federal Agriculture Improvement and Reform Act.

"Popular press articles have indicated as much as a 70 percent increase in government payments under the new bill," he said.

"Generally, these comparisons have not taken in consideration the additional marketing loss assistance payments that have been paid since 1998."

Lattz said that final regulations for the new law have not been released and the figures in the U of I study might change. He noted that southern Illinois farms have lower estimated payments primarily due to lower corn acre and yield program base.

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The new law contains provisions for direct and counter-cyclical payments. The old law contained provisions for production flexibility contract payments. Additionally, market loss assistance and oilseed payments have been made since 1998. For 2001, the flexibility contract payments and additional market loss and oilseed payments ranged in Illinois from $25 to $45 per acre, depending upon region. Both laws contain provisions for loan deficiency payments and marketing loan gains.

"When comparing per acre differences in payments between the 1996 and 2002 bills, one needs to remember that the counter-cyclical payments are not guaranteed and are dependent on commodity price levels," said Lattz. "On the other hand, market loss assistance and oilseed payments were not guaranteed."

Lattz said the new bill requires a number of decisions by producers.

"One of these is whether or not to update base acres," he said. "If acres are updated, producers will also need to decide whether to update yields or not. There are two alternatives available for updating yields. Which among these alternatives that will result in the maximum direct and counter-cyclical payment may also depend on the payment rate for the counter-cyclical payments. And this rate depends on the average marketing year price.

"The decision on which alternative to use when updating base acres and yields may not be easy."

A spreadsheet tool to help producers analyze such decisions is available on the U of I’s farmdoc website: http://www.farmdoc.uiuc.edu/
manage/FarmBill/decisiontool.htm. A complete draft of the comparison report is also available at farmdoc.

[U of I news release]

[JULY 3, 2002]  URBANA — Historically, weather markets tend to result in corn and soybean prices peaking in the pre-harvest period, said a University of Illinois Extension marketing specialist.

"However, there are some recent exceptions to that rule," Darrel Good added. "In 1993-94, the full impact of weather on production was not revealed until January after harvest, resulting in cash prices peaking later in the year — January for corn and May for soybeans.

"In 1995-96, a small crop was followed by extremely strong demand, resulting in cash prices peaking in July for both corn and soybeans."

Good’s comments came as he reviewed recent USDA reports. The USDA’s June report on acreage contained a larger-than-expected estimate of planted and harvested acreage of corn for grain in the United States this year. Planted acreage of corn is estimated at 78.947 million, nearly 3.2 million more than planted last year and only 100,000 less than revealed in the March report of prospective plantings.

"The market had anticipated more than a million-acre reduction from March intentions," said Good. "Acreage is less than indicated in March in Indiana and Ohio but exceeds intentions in Illinois, Iowa and Minnesota."

The USDA projects harvested acreage of corn for grain at 72.081 million, 3.273 more than harvested last year. Harvested acreage of feed grains (corn, sorghum, oats and barley) is projected at 87.121 million, 3.535 million more than harvested last year. A decline in sorghum acreage is more than offset by an expected increase in harvested acreage of oats and barley.

"Even though planted acreage of corn exceeded expectations, the market remains concerned about the potential size of the 2002 harvest," Good said. "There has been a recent tendency for the final estimate of planted acreage to be less than the June estimate. That has been the case in each of the past seven years and in nine of the past 10 years.

"The difference has been as little as 24,000 acres and as much as 1.32 million in 1995. More than acreage, however, the market is concerned about potential yield of the 2002 crop. Late planting in the eastern Corn Belt is being followed by above-normal temperatures and lack of precipitation in many areas. That pattern is expected to continue in the first half of July."

In addition to concerns about crop size, the corn market has also received some support from the USDA’s June report on grain stocks. That report showed that June 1 inventories of corn totaled 3.594 billion bushels, 330 million less than on the same day last year and about 15 million less than the average trade guess. Exports during the third quarter of the 2001-02 marketing year were about 50 million bushels larger than during the same quarter last year, and domestic use was nearly 30 million larger.

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For soybeans, the USDA’s June report revealed plantings of 72.993 million acres, 1.112 million less than planted last year and only 27,000 more than indicated in March. The market had anticipated a much larger increase due to the lateness of planting the corn crop in the eastern Corn Belt.

"Soybean acreage is larger than March intentions in Arkansas, Indiana, Mississippi and Ohio, but those increases were offset by declines in Illinois, Iowa, Michigan, Minnesota and North Dakota," said Good. "The USDA projects harvested acreage of soybeans at 72.029 million, 971,000 less than harvested last year.

"Like corn, there is a tendency for the final estimate of soybean acreage to be less than the June estimate. That has been the case in each of the previous five years and eight of the past 10 years. Except for 2001, the changes from June to the final acreage estimate were generally small."

The USDA’s June report on grain stocks revealed June 1 soybean inventories of 684 million bushels, about 24 million less than on the same date last year and about five million less than the average trade guess. Exports were down nearly 70 million bushels in the third quarter of the marketing year compared to the same period last year, but the domestic crush was about 24 million bushels larger.

"The smaller-than-expected estimate of planted acreage of soybeans, along with less-than-ideal growing conditions, creates a lot of uncertainty about the potential size of the 2002 U.S. crop," said Good. "The crop may be small enough to require a reduction in the rate of use of U.S. soybeans during the 2002-03 marketing year."

For wheat, the USDA’s June report indicated that planted acreage of all classes of wheat was about one million more than indicated in March. Most of the increase, 877,000 acres, was in spring wheat other than durum. Still, harvested acreage of all classes of wheat is expected to be about one million less than harvested last year even though seedings are up by about 470,000 acres.

"Corn and soybean prices will continue to be influenced by weather conditions and crop conditions as reflected in the USDA’s weekly report," said Good.

[U of I news release]

Swine odor field day set

[JULY 2, 2002]  URBANA — A field day aimed at updating swine producers on the current situation regarding aspects of manure management and odors from swine units will be July 10 at the Illinois State University Farm on Gregory Street in Normal. Sponsoring the event are the Illinois Pork Producers, ISU, the Illinois Council on Food and Agricultural Research (C-FAR), and the University of Illinois.

"The bulk of the program will focus on the results of research being done in Illinois, some funded by the Illinois Department of Agriculture’s Sustainable Ag Grants Program and some by C-FAR as part of its research initiative on swine odor and waste management," said Michael Ellis, U of I professor of animal sciences, who heads the latter project.

A number of topics will be covered at the field day, which runs from 9:30 a.m. to 3:30 p.m. Included on the agenda are odor sampling and measurement, nutrient reduction and management techniques, odor reduction technologies, waste processing technologies, community and legal issues, producer education and training materials, and other swine management issues.

People interested in attending should contact Paul Walker, ISU Department of Agriculture, 5020 AGR, ISU, Normal, IL 61790-5020; phone (309) 438-3881; fax (309) 438-5653; or e-mail: pwalker@ilstu.edu.

[U of I news release]

Farms granted centennial status

[JULY 1, 2002]  SPRINGFIELD — The Illinois Department of Agriculture has designated farms owned by John Warner IV of Clinton and Elizabeth H. O’Herin, principal partner of C.H. Moore Farms L.P., as Centennial Farms.

To qualify as a Centennial Farm, a straight or collateral line of descendants must own the agricultural property for at least 100 years.

"I am pleased to be able to recognize John Warner IV and Elizabeth H. O’Herin," said Agriculture Director Joe Hampton. "This designation honors them today and their ancestors of yesterday who labored through prosperity and adversity to maintain their family farms.

"The Centennial Farm program helps to reinforce that family farming remains a viable entity in Illinois agriculture."

The Illinois Centennial Farms program has recognized more than 7,000 farms since its inception in 1972.

John Warner IV is president of Moore & Warner Farm Management in Clinton, Ill. The firm currently manages farmland in Illinois, Iowa, Kansas and Colorado. They offer professional farm management services for landowners anywhere in the United States.

[News release]

Honors & Awards

Hartem FFA brings home awards

[JUNE 29, 2002]  Hartsburg-Emden FFA members recently attended the 74th Illinois FFA Convention. Chapter members received numerous awards and recognitions as well as enjoying the main session.

Brittney Kavanaugh received a blue ribbon for her agri-science fair project at the state competition.

Kent Leesman was recognized for his outstanding achievements this past year as a top chapter president, Star Farmer finalist, Grain Production Proficiency winner, and National Risk Management Essay winner.

Natalie Coers was recognized for her achievements as a top ten chapter reporter, as well as participating in the state FFA band.

Nic Coers, Daniel Eeten and Kent Leesman were honored to receive their state FFA degrees at the convention.

Although individual chapter members brought home the awards, the Hartem FFA chapter also gained recognition. Hartem FFA won the Co-op Award, Triple Crown Heritage Award, Century Challenge Sweepstakes Award, and was named a Gold Emblem Chapter. The convention proved to be a show of excellence for all of the FFA members and chapters from across the state.

[News release]

Ag Announcements

Special baking contests at state fair

[JULY 1, 2002]  Contestants are invited to prepare gingerbread houses and Spam recipes to enter at the Illinois State Fair in August.

Awards will be given for the most creative entries in the Brer Rabbit® Molasses Gingerbread House Contest at the state fair. Both beginners and gingerbread house enthusiasts are invited to compete for cash and prizes. In 2001, judges picked winning entries ranging from traditional to elaborate, including a castle, a detailed tree house with garden and another resembling the "Old Woman in a Shoe." Any theme entry is welcome that uses Brer Rabbit molasses and is up to a foot tall, wide and deep, base not included. Entrants must also bake and enter one dozen gingerbread cookies.

Winners are selected based on appearance (50 percent), originality and creativity (40 percent), and taste (10 percent). Creators are awarded $150 for first place, $75 for second and $25 for third. People of any age may enter, with one entry per person or group. Several people may work on one entry, but one person represents the group. 

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The Illinois State Fair will be one of 70 fairs hosting the Spam® Oven Roasted Turkey Contest. Using the Spam turkey and up to nine other ingredients, contestants are to create an original main dish, appetizer, casserole, stew, stir-fry, salad sandwich or any other recipe. To focus on convenience, cooking time may not exceed 30 minutes.

Judges select winners based on taste appeal (40 percent), appearance (30 percent) and originality (30 percent). The three best entries win cash awards of $150, $50 and $25, and first-place winners advance to national judging for a $2,500 shopping spree and an all-expense-paid trip to Minneapolis.

To enter either contest, contact the entry department at the Illinois State Fair, 782-6661, by July 15. More details for the gingerbread contest are on page 90, and those for the Spam contest are on page 86 of the general premium book.

[News release]

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