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Weekly outlook

Cattle prices

[APRIL 22, 2003]  URBANA -- Fed cattle prices are expected to move lower seasonally to an average of about $75 per hundredweight in the second quarter of the year and make lows in the late summer in the very low $70s, said a Purdue University Extension marketing specialist.

"By the fall, reduced cow slaughter and continued small fed cattle supplies should result in a strong price recovery back into the higher $70s," said Chris Hurt.

Hurt's comments came as he reviewed the current state of the cattle market, which saw cattle prices above $80.

"These prices were as welcome as the warm spring temperatures but will be short-lived," Hurt said. "Seasonal price declines will push cattle prices lower through the summer. Still, fed cattle prices are expected to remain well above last year's prices, which averaged near $67 per live hundredweight. For 2003, the USDA projects the average price at $76."

In the first quarter of 2003, prices got off to a good start, with finished cattle averaging $78 and highs over $80 in February and again in early April. For the quarter, beef supplies were down only 1 percent, yet prices were 11 percent higher. Contributing to the smaller beef supply have been limited numbers of cattle in feedlots and lighter marketing weights as managers "pulled" cattle forward in response to high fed cattle prices.

"The primary reason for smaller beef production is the declining size of the cattle inventory," said Hurt. "Beef cow numbers are in a seven-year decline as a result of poor returns for brood cow operations in the early portion of that period and to drought conditions in much of the Plains and western United States, during the past four years, which have limited forage availability."

The liquidation of cows has been active so far this year. In the first quarter, cow slaughter was up 9 percent from the same period last year. This included both beef cows (up 4 percent) and especially milk cows (up 14 percent).

"If it had not been for the large cow slaughter, beef production in the first quarter would have been down another 2 percent, with even higher prices," said Hurt.

The direction of cow slaughter during the remainder of the year is an interesting question, he added.

"The key to beef cow slaughter will be range conditions and forage supplies on the Plains and in the western United States," he said. "Current forecasts are for improving moisture conditions for much of the Plains through July. Portions of the Rocky Mountain States, however, may see only modest or no improvement. If this forecast holds, a substantial slowdown in the beef cow slaughter should occur this summer."

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The high rate of milk cow slaughter is related to low milk prices, increased feed prices, and large losses. Current projections from USDA are for milk prices to remain depressed through the summer before some recovery in the fall. Also, a favorable growing season this summer will lower feed prices and encourage the high rate of milk cow slaughter to abate by this fall. Slowing beef and milk cow slaughter should ease total beef production further this fall.

"Fed cattle supplies will also remain small for the rest of the year," said Hurt. "Currently, USDA reports that cattle-on-feed numbers remain down 8 percent. However, placements in March were up by 5 percent.

"This was the first time this year that placements have been above the year-earlier level and is an indication that feedlot managers are feeling more confident about increasing numbers."

While fed cattle prices are much higher than at this time last year, the same is not true for calves and feeder cattle. Those prices averaged about 4 percent lower in the first quarter. Oklahoma City 500- to 550-pound calves, as an example, were $97 per hundredweight this year compared with $102 in the first quarter of 2002. The lower prices are a result of higher feed costs due to last summer's drought. Feedlot managers are also hesitant to bid, given large losses in 2001-02.

"Calf and feeder cattle prices will likely follow a similar price pattern, with weaker prices this spring but recovery in the late summer and fall, especially if the prospects for this year's crop yields are favorable," said Hurt. "Returns for brood cow operations should remain favorable for several years, as heifer retention may finally begin in 2004, but it will be 2006 before subsequent beef supplies will rise."

[University of Illinois news release]

Sustainable agriculture tours scheduled

[APRIL 21, 2003]  URBANA -- Six unique locations have been selected for this year's sustainable agriculture tours, representing the broad diversity of the topic. "Sustainable agriculture includes alternative farming practices, but it's also about ways to provide an adequate and dependable farm income," said Deborah Cavanaugh-Grant, a University of Illinois research specialist who is coordinating the tours. "So, for example, on the first tour to ethnic grocery stores in Chicago, we'll learn about specialty markets for alternative crops.  Growers need to be connected to these specialty markets so they can sell what they produce."

Cavanaugh-Grant said that the tours last year were so successful that the U of I Agroecology/Sustainable Agriculture Program decided to offer them again, this time to new locations around the state. "There are so many wonderful places in Illinois to visit that selecting only six was difficult, but I think the ones we chose represent a wide variety of topics that will give people a chance to see six very different sustainable operations in action."

The first tour of the 2003 schedule will be to several ethnic grocery stores in Chicago on Tuesday, June 17. The tour will include stops in the Vietnamese and Indian neighborhoods of Chicago, the Muslim meat markets, an Arab sweet shop, and lunch at a Persian restaurant.

Tour guide Evelyn Thompson will provide information at each stop about the produce, ingredients, cooking procedures and history of the food cultures. "On my tours we also do a lot of munching of snack foods that overflow the counters. We try to sample something from each country, be it a pastry, a savory, a sweet or an interesting drink," said Thompson.

Monday, July 14, is the date for the second tour, which will visit several organic farms in Woodford County.

On Tuesday, Aug. 12, community-supported agriculture will be the topic with a tour of Angelica Organics in Caledonia.

Tuesday, Aug. 19, a tour will visit Tanglefoot Farm in Simpson to learn about prawn farming.

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On Wednesday, Sept. 10, the topic will be agritourism, with a visit to Hardy's Reindeer Ranch in Rantoul. The tour will include a hayride and lunch served in the style of the grand Old West.

The final tour is scheduled for Wednesday, Oct. 29, to Pike's Hunting Club in Marion, where the topic will be waterfowl fee hunting.

For a printable brochure that includes details about all six tours, visit
http://www.aces.uiuc.edu/~asap/
smallfarm/tourbrochure.pdf. [To download the Adobe Acrobat reader for the PDF file, click here.]

 For additional information, contact Deborah Cavanaugh-Grant at (217) 968-5512 or cvnghgrn@uiuc.edu. A small fee will be charged for each tour. Registration at least one week in advance is required. A registration form is available by contacting Cavanaugh-Grant or online at http://web.aces.uiuc.edu/asap/index.html.

The tours are sponsored by the Agroecology/Sustainable Agriculture Program in the College of Agricultural, Consumer and Environmental Sciences at the University of Illinois, the North Central Region Sustainable Agriculture Research and Education Professional Development Program, and the Illinois Small Farm Task Force.

[University of Illinois press release]

[APRIL 19, 2003]  SPRINGFIELD -- Gov. Rod Blagojevich announced on April 15 that federal financial assistance is available to farmers in 30 counties who suffered agricultural production losses last summer due to severe drought conditions.

"Farmers in many areas of the state were devastated last year by the effects of heavy rains followed by a hot, dry summer," Blagojevich said. "The loans that are key to this disaster declaration will help farmers recover and can be used to pay production costs, refinancing existing debt and essential family living expenses."

The U.S. Department of Agriculture this week approved a request made by the governor in February to declare Cass, DeWitt, Mason, Moultrie, Pike, Stephenson and Winnebago counties as natural disaster areas. The declaration makes farmers in those seven counties, as well as 23 contiguous counties, eligible for USDA assistance programs, including low-interest loans.

The contiguous counties impacted by the declaration are Adams, Boone, Brown, Calhoun, Carroll, Coles, DeKalb, Douglas, Fulton, Greene, Jo Daviess, Logan, Macon, McLean, Menard, Morgan, Ogle, Piatt, Sangamon, Schuyler, Scott, Shelby and Tazewell.

Livestock producers also may be able to receive assistance, including cash payments on a per-head basis, if they owned grazing animals during the drought period.

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In order to qualify for federal disaster assistance, counties must experience at least a 30 percent decline in production in any single crop. Assistance also can be provided if farmers no longer qualify for commercial credit due to disaster-related losses.

Farmers and others who believe they may be eligible for USDA assistance should contact their county Farm Service Agency office.

Last year, 63 other Illinois counties were approved for federal disaster assistance due to a wet spring and extreme heat and little precipitation in the summer. May 2002 was the eighth wettest May on record, and the summer was the 14th warmest since 1895. There was less than 5 inches of rain between mid-June and mid-August, about three inches below normal.

[Illinois Government News Network
press release]

Brazilian land rush mirrors
19th century U.S. experience

[APRIL 19, 2003]  URBANA -- As a farm family member who hopes one day to farm on his own, Jason Moss has a natural interest in soybean production in Brazil and its challenge to U.S. producers. But a summer-long stay in that South American nation left the University of Illinois student convinced that Brazil is indeed the new frontier of soybean farming.

"Soybeans have now become a Third World product," said Moss, a junior in the College of Agricultural, Consumer and Environmental Science's Department of Agricultural and Consumer Economics. "One challenge for U.S. farmers is how one can earn a First World income producing a Third World crop. The cost-of-production difference is nearly $2.50 per bushel in favor of the Brazilians.

"If Chicago Board of Trade prices go to $4, there is no conceivable way an Illinois farmer could afford to continue growing soybeans -- a crop many now heavily rely on for rotations and income."

Moss prepared a research report on his June 1 to Aug. 10, 2002, stay in Brazil as part of an internship course offered by Peter Goldsmith, an assistant professor of agribusiness and farm management.

"One of the things I find particularly interesting about Moss' report is the opportunities it identifies for young people interested in farming," said Goldsmith. "He's looking 20 or 30 years down the horizon and identifying opportunities.

"Young people interested in becoming agricultural producers face a stiff challenge, especially in the barriers to obtaining the capital needed to control land. Some might not look forward to competing for ground and slugging it out here when cheaper land is available in Brazil."

Goldsmith noted that ADM has a corporate presence in Brazil as well as the United States, as does one of the largest cooperatives, Cenex Harvest-States. So it makes sense that some U.S. farmers may decide to maintain farms in the United States and Brazil to take advantage of economic opportunities.

In addition to establishing a cooperating relationship with a Brazilian university, Goldsmith is part of a long-range U of I research project examining the future of the soybean and meat production complex worldwide.

Because of the large amount of land coming under cultivation and the low costs, Brazil is becoming a new frontier of agricultural development. The family Moss stayed with migrated from Holland in 1989, and immigrant farmers are common. Much of the growth is centered in the state of Mato Grosso.

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"It has become a magnet for several reasons," said Moss. "It is viewed as an area with cheap land, infinitely large fields and large amounts of cleared land. It has attracted considerable American investment. What makes Mato Grosso the center for direct foreign investment is the price of land and the potential for expansion.

"The land rush in Brazil is a mirror image of the United States in the 19th century."

Crunching numbers can reveal the Brazilian economic edge in soybean production.

For the 2000 crop year, variable costs to produce soybeans in central Illinois were $97 per acre or $2.16 per bushel. Fixed costs for the same period were $226 per acre or $5.02 per bushel. For the same period in Mato Grosso, the variable costs were $108.20 per acre or $2.21 per bushel.

"But fixed costs were only $48.10 per acre or 98 cents per bushel," Moss said.

Many areas in Mato Grosso average 60-65 bushels per acre, and the average farm size is considerably larger. While the cost of land is the largest cost for the central Illinois farmer, the cost of fertility is the highest cost for a Mato Grosso producer.

"Land costs in 2000 for the central Illinois farmer were 35.9 percent of his total costs, while the Mato Grosso producer's land costs were only 9.6 percent of his total costs," said Moss. "Fertility costs constituted 31.7 percent of the Mato Grosso producer's total costs, while accounting for only 5.3 percent of his Illinois counterpart's total costs.

"Labor provides another significant cost difference. U.S. labor costs $33 per acre, 10 times higher than the Brazilian labor cost of $3.92 per acre.

The Moss family operates a 3,500-acre operation near Quincy. Moss contemplates taking the family business international and is exploring opportunities in Brazil. He returns to Brazil this summer for another U of I internship and will work with Grupo Maggi, the largest direct farming operation in that nation.

[University of Illinois news release]

Olympia FFA report

[APRIL 18, 2003]  The Olympia FFA chapter had their banquet on March 15 at Olympia High School at Stanford. A social time and opening ceremonies preceded the barbecued pork dinner with trimmings.

In the program, Megan Ott of Danvers gave the FFA creed. Awards were presented to first-year FFA members and scholarship winners. Then Brian Springer of Minier gave the ag plot report, and Todd Wibben of Atlanta gave the FFA alumni report. Other awards were given in various areas: proficiency, foundation sponsors, certificates of appreciation and career development events. Bob Benson and Jeff Springer, both of Minier, received the honorary chapter FFA degree.

Other awards were presented: to the outstanding FFA member, participation awards, awards for second-year FFA members and the leadership awards. Lucas Deal of Danvers received the DeKalb award and the state FFA degree. Jackie Heck of Stanford and Brian Springer of Minier also received the state FFA degree.

Next year's FFA chapter officers were installed along with the closing ceremonies.

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In a labor auction at the end of the banquet, several FFA members and the two advisers were auctioned for a day's worth of labor. Jim Miller of Danvers was the auctioneer. Money raised from this auction will benefit the FFA chapter.

Chapter officers for 2003-04 are Brian Springer of Minier, president; Megan Mussleman of Danvers, Seth Schneider of Armington and Dena Wibben of Atlanta, vice presidents; Brandon Usherwood of Atlanta, secretary-treasurer; Megan Ott of Danvers, reporter-historian; and Greg Deal of Danvers, sentinel.

Alumni chapter officers are Todd Wibben of Atlanta, president; Jeff Springer of Minier, vice president; David Deal of Danvers, secretary; Jeff Schneider of Armington, treasurer; Kyle Haning of Delavan, reporter; and Melvin Springer of Armington, member at large.

The chapters are under the direction of Heather Obert and Chris Embry Mohr.

[News release provided by Kyle Haning]

• Farmers urged to safeguard anhydrous from drug dealers
  (Posted April 14 on LDN Top Stories page)

Consider electrical hazards
during spring planting season

[APRIL 14, 2003]  URBANA -- Many farm workers are killed each year when their farm equipment makes contact with overhead power lines. These tragic accidents are preventable. Before heading back into the fields, Safe Electricity urges farm workers to review farm activities and work practices that take place around power lines.

"Make sure everyone who works on the farm knows the location of power lines and keeps farm equipment at least 10 feet away from them," said Molly Hall, director of Safe Electricity, a statewide electrical safety public awareness program.

"Keep in mind, the minimum 10-foot distance is a 360-degree rule below, to the side and above lines. It may take a little more time, but ensuring proper clearance can save lives."

"Many farm electrical accidents that involve power line contact happen when loading or preparing to transport equipment to fields or while performing maintenance or repairs on farm machinery near power lines," said Bob Aherin, University of Illinois agricultural safety specialist. "It can be difficult to estimate distance, and sometimes a power line is closer than it looks. A spotter or someone with a broader view can help."

Today's larger farms require transporting tractors and equipment to fields several miles away. Before transit, avoid raising the arms of planters, cultivators or truck beds near power lines.

Be aware of increased height when loading and transporting larger modern tractors. Also, many tractors are now equipped with radios and communications systems and have antennas extending from the cab to 15 feet above the ground that could make contact with power lines.

Some other equipment safety considerations:

* Always lower portable augers or elevators to their lowest possible level -- under 14 feet -- before moving or transporting; use care when raising them.

* When moving large equipment or high loads near a power line, always use a spotter or someone to help make certain that contact is not made with a line.

* Never attempt to raise or move a power line to clear a path.

As in any outdoor work, be careful not to raise any equipment such as ladders, poles or rods into power lines.  Remember, nonmetallic materials such as lumber, tree limbs, tires, ropes and hay will conduct electricity depending on dampness and dust and dirt contamination.  Do not try to clear storm-damage debris and limbs near or touching power lines or near fallen lines.

The overhead electric wires aren't the only electrical contact that can result in a serious incident.  Pole guy wires are grounded to the neutral; but, when one of the guy wires is broken, it can cause an electric current disruption. This can make those neutral wires anything but harmless. If you hit a guy wire and break it, call the utility to fix it. Don't do it yourself. When dealing with electrical poles and wires, always call the electric utility.

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"It's also important for operators of farm equipment or vehicles to know what to do if the vehicle comes in contact with a power line," Hall said. "It's almost always best to stay in the cab and call for help. Warn others who may be nearby to stay away, and wait until the electric utility arrives to make sure power to the line is cut off."

"If the power line is energized and you step outside, your body becomes the path and electrocution is the result," Aherin said. "Even if a power line has landed on the ground, there is still the potential for the area nearby to be energized. Stay inside the vehicle unless there's fire or imminent risk of fire."

In that case, the proper action is to jump, not step, with both feet hitting the ground at the same time. Do not allow any part of your body to touch the equipment and the ground at the same time. Continue to shuffle or hop to safety, keeping both feet together as you leave the area.

Once you get away from the equipment, never attempt to get back on or even touch the equipment. Many electrocutions occur when the operator dismounts and, realizing nothing has happened, tries to get back on the equipment.

Farmers may want to consider moving or burying power lines around buildings or busy pathways where many farm activities take place. If planning a new outbuilding or farm structure, contact your power supplier for information on minimum safe clearances from overhead and underground power lines.

For more information on farm and home electrical safety, visit www.SafeElectricity.org.  Spanish versions of farm electric safety information are also available on this website.

The Safe Electricity program was created by a coalition of nearly three dozen organizations, including the University of Illinois, rural electric cooperatives and investor-owned electric utilities from throughout the state. All are members of the Illinois Electric Council, a not-for-profit organization dedicated to promoting electric safety and efficiency.

[University of Illinois news release]

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