Monday January 16 Ag News

Negotiating 2012 Cash Rents for Cropland
Bruce Johnson, UNL Professor of Agricultural Economics

Firming up 2012 cash rental rates is on the minds of many landowners and tenants these days. Coming off a very strong income year in 2011, it looks like cash rents for this year are moving higher. How much higher, though, is the big question. We really can’t answer that until early March when we have the results from our UNL Nebraska Farm Real Estate Market Survey. For now, we can offer a few suggestions that both tenants and landowners might want to consider.

First, in the dynamic times of the past few years, many cash leases have not been kept very current, with levels that are seriously lagging the “going rates” of local markets. In these situations, the parties involved need to work out fair adjustments—even if that means a significant jump from the old level. Our UNL cash rent series in the Resources section of our departmental website (http://agecon.unl.edu/realestate.html) can be a help in those kinds of adjustments.

Second, if the cash rent levels have been kept current, the adjustment from 2011 to 2012 may be rather minor. While high returns over the past few years will likely lead to some cash rent increases this year, look for other factors to dampen some of the enthusiasm. Recent crop commodity prices are volatile and suggest a year where prices and profit margins may not even come close to 2011 levels. Input costs are also higher. Of course, weather is always the wild card; and abnormally dry conditions through the winter across much of the state do not bode well for soil moisture levels going into this crop year. So, most market participants seem to be looking ahead with greater caution.

In instances where landowners are looking for potentially higher returns, they may need to consider sharing some of the risk through going back to the more traditional crop-share lease arrangement or a flexible-cash lease. Recently, we have been seeing particular interest in flexible cash leases, which are a good option in more volatile times.

Third, be sure to communicate well and strive to keep the rental arrangement current and fair. This is always important, but more critical than ever.



Hoegemeyer Hybrids Releases Three New Optimum® AQUAmax™ Corn Genetic Platforms for 2012

Three new corn genetic platforms designed to deliver a yield advantage in water-limited environments in the Western Corn Belt are now available from Hoegemeyer Hybrids for the 2012 growing season.

“Hoegemeyer Hybrids is excited to offer growers in the Western Corn Belt these new Optimum® AQUAmax™ hybrids for the 2012 growing season,” says Stephan Becerra, Hoegemeyer General Manager. “These hybrids provide growers additional choices to help minimize risk and maximize productivity under drought stress.”

Optimum® AQUAmax™ hybrids have demonstrated an average 5 percent yield advantage over leading commercial corn hybrids tested.

The Optimum® AQUAmax™ corn hybrids, available in the HPT® brand, are 7644 HX/LL/RR™,  7876 AM-R™, 7877 AMX-R™ and 7906 HX/LL/RR™.  This first offering of hybrids range in relative maturity from 106 days to 109 days, with plans to further expand the maturity options in future years.

“Optimum® AQUAmax™ hybrids come from a class of genetics developed using genes already native to the corn germplasm, using innovative marker assisted breeding methods known as Accelerated Yield Technology (AYT™) system from Pioneer. These elite hybrids have been screened across multiple years in true drought environments in the Western Corn Belt,” according to Hoegemeyer Corn Product Manager Ryan Siefken. “Along with their performance under drought stress, we have seen a positive yield response to higher planting populations in our agronomic trials.”



Government Payments to Farmers Hits 14 Year Low

Government payments paid directly to agricultural producers are expected to total $10.6 billion in 2011, a 14.4% decrease from the estimate of $12.4 billion paid out in 2010.  The largest decreases in payments are expected in disaster relief payments and Average Crop Election Program (ACRE) payments.  Whether expressed in nominal dollars or constant dollars, the 2011 forecast of government payments, if realized, will represent the lowest amount paid to producers since 1997.



NE SORGHUM SEMINARS PLANNED

The Nebraska Grain Sorghum Producers Association (NeGSPA) and Grain Sorghum Board announce their annual Sorghum Cropping Profitability Seminars to be held at two locations February 1-2, 2012.  Registration begins each day at 8:30 AM and will be held the following dates and locations:  Wednesday, February 1 at the Fairgrounds Exhibition Building, 56885 PWF Road, Fairbury, and Thursday, February 2 at the Community Center in Red Cloud, Nebraska.

The Sorghum Profitability Seminars, sponsored in part by the Sorghum Checkoff and the University of Nebraska Cooperative Extension Service, focus on new ideas and updates on production and management information to make sorghum production more profitable.  The program is designed to provide farmers information they can apply immediately to their operations and gives them a chance to offer input on the sorghum check-off.

This year’s topics include Current Markets, Defining Risk, Recognizing Opportunities by AgWest Commodities; Managing Sorghum for Success by Dr. Kraig Roozeboom, Kansas State University; Nutrient Management by Dr. Dave Mengel, Kansas State University and Randy Pryor, UNL Extension Educator; Focus on Pheasants by T.J. Walker, Nebraska Game & Parks Commission; Sorghum Checkoff-Renewed Optimism, Bill Greving, USCP Board Member, Prairie View, KS; Marketing Sorghum Beyond the Border by Kevin Roepke, U.S. Grains Council; Protecting Nebraska’s Agriculture by Duane “Dewey” Lienemann, UNL Cooperative Extension; and Weather Outlook-Will LaNina Bring Dry Conditions by Al Dutcher, UNL State Climatologist.

The noon meal will feature a sorghum soup and sandwich lunch.  Vendors will have exhibits to showcase new products, production/management information, and new technology.

Registration at the door is $5.00, however, members of the Grain Sorghum Producers Association will be admitted free.

Producers wanting more information are encouraged to contact their local Cooperative Extension Education Coordinator or the Nebraska Grain Sorghum Board/NeGSPA office at 402/471-4276 or email:  sorghum.board@nebraska.gov.



Iowa Beef Industry Council Elects Officers

Elaine Utesch, cow-calf producer and cattle feeder from Correctionville, was elected chairman of the Iowa Beef Industry Council (IBIC) at the January board meeting. Utesch will lead the group of cattle producers who oversee the Iowa beef checkoff program.

Scott Niess, Osage, will serve as vice-chairman with Roger Brummett, Bedford, as secretary and Daryl Strohbehn, Boone, as treasurer. Scott Heater, seedstock and cow-calf producer from Wapello, was seated as a new director on the Iowa Beef Industry Council (IBIC). Elected at the IBIC annual meeting in December, Heater will serve a three-year term.

Other members serving on the IBIC Executive Committee are Bill Northey, Iowa Secretary of Agriculture; Wendy Wintersteen, dean of the College of Agriculture and Life Sciences at Iowa State University; and Justin Gibson, Lamoni, representing the Iowa Livestock Market Association.

Eight cattle producers appointed to one-year terms include Nancy Couser, Nevada; Steve Rehder, Hawarden; Ed Greiman, Garner; Dan Cook, New Providence; Terri Carstensen, Odebolt; Scott McGregor, Nashua; Tom Hotz, Lone Tree; and Helen Wiese, Manning. Retiring IBIC directors include Bob Henderson, Albia and Ken Birker, Vinton.

Iowa has four producers serving on the Cattlemen's Beef Board: Will Frazee, Emerson; Kent Pruismann, Rock Valley; Dean Black, Somers and Jeff Clausen, Carson.

Cattle producers who represent Iowa on national beef promotion committees serve in leadership positions. Terri Carstensen, Odebolt, chairs the Advertising Committee and serves as Region III vice-president of the Federation of State Beef Councils; Jeff Clausen, Carson and a Beef Board member, chairs the Beef Safety Committee; Scott McGregor, Nashua, chairs the Foodservice Committee. Will Frazee, Emerson, serves on the Executive Committee of the Cattlemen's Beef Board.



Soybean association sponsoring “Master Marketing” short course

The Iowa Soybean Association (ISA), in partnership with DTN/The Progressive Farmer, encourages Iowa soybean farmers to take advantage of a unique opportunity to expand their grain marketing skills. “Marketing Through Mayhem, a one-day course designed for intermediate-level marketers, is scheduled for Friday, Jan. 20, at the Marriott Courtyard Hotel, Ankeny, Iowa.

Participants will increase their knowledge of marketing styles that have returned better-than-season-average performances over time. The goal is to provide operators with tools they need to implement an effective marketing plan for the year ahead and incorporate this plan with their crop insurance purchases. These skills should be especially valuable for young farmers who need documentation to secure the best rates and terms for their credit lines.

Learn more about the “Master Marketing” short course and find the registration form at www.iasoybeans.com/dtn-U/. 



Soybean Association and Iowa State University Extension publish Field Crop Insects

The Iowa Soybean Association (ISA) and Iowa State University (ISU) Extension and Outreach have released a collaborative publication, Field Crop Insects, the latest in a series of practical and valuable reference tools for farmers.

“Correct recognition and identification of insect pests is an important first step to making a proper management decision regarding any insects found in soybeans and corn,” says Erin Hodgson, ISU Extension entomologist and one of the publication’s authors. “Field Crop Insects is a comprehensive publication for farmers and ag professionals in a format they can easily use. In addition to help with identification, it provides useful information about sampling and treatment thresholds.”

The 74-page publication is filled with vivid, full-color images and descriptions of insect pests and the damage they cause to soybeans and corn. Management options are provided as well as web addresses for access to more detailed insect control recommendations.

David Wright, ISA director of contract research and strategic initiatives, says, “Insect pests are becoming more prevalent in Iowa as environmental conditions and cropping systems change. Minimizing yield loss from insects is essential for sustainable and profitable soybean and corn production. The imagery in this publication is incredibly detailed so it is easy to accurately identify problem pests. This resource is a great tool to have in the pickup, tractor or home office.”

Funding for printing and distribution of the publication was provided by the Iowa Soybean Association through the soybean checkoff and Iowa State University Extension and Outreach.

Printed copies of Field Crop Insects can be obtained by contacting the Iowa Soybean Association at (800) 383-1423; they can also be ordered from the ISU Extension Online Store at http://store.extension.iastate.edu or by calling (515) 294-5247 and requesting publication CSI 0014. The guide can be viewed online at www.iasoybeans.com/productionresearch/. 



Iowa pork producers to hold 14th annual Winter Pork Picnic in Des Moines Jan. 25

Iowa’s pork producers will be on hand to grill up a “free” pork lunch Jan. 25 in downtown Des Moines as part of the 2012 Iowa Pork Congress.  The Iowa Pork Producers Association will host its 14th annual Winter Pork Picnic from 11 a.m. to 1 p.m. at Capital Square and the public is invited.

Producers from several county pork organizations will brave the winter weather to grill and serve 3,000 ground pork and bacon burgers to celebrate the Iowa pork industry and thank consumers for purchasing pork and supporting the industry. Chips, pop, ice cream and samples of other pork products also will be served.  In addition to lunch, attendees will receive coupons for fresh pork at Fareway Stores and will have the chance to win various pork prizes.

IPPA will again team up with the Food Bank of Iowa in asking for donations at the Winter Pork Picnic to help feed Iowa’s hungry. All proceeds will be donated directly to the Food Bank of Iowa.

During the lunch, pork producers Ryan and Lana Reed from Ottumwa will receive the “Wergin Good Farm Neighbor Award.” The award, sponsored by the Iowa Department of Agriculture and the Iowa Ag Radio Network with financial support from the Coalition to Support Iowa’s Farmers, honors Iowa livestock producers for their commitment and dedication to the environment, their community and their livestock.

Other participating sponsors of the Winter Pork Picnic include Fareway Stores, Webster City Custom Meats, Rotella’s Italian Bakery, Frito Lay, Pepsi Americas, Cookies Food Products, Wells Blue Bunny, and Tyson Fresh Meat. 



Livestock Slaughter Bill Being Proposed... Again

U.S. Rep. Gary Ackerman (D-N.Y.), has introduced legislation to ban all nonambulatory livestock from entering the food system and require that they be euthanized.

Known as Downed Animal and Food Safety Protection Act (H.R. 3704) it would require all livestock that are unable to walk at the slaughter plant to be 'humanely euthanized.' If passed, the bill would amend the Humane Methods of Livestock Slaughter Act of 1958, and would include swine.

In 2004, USDA banned nonambulatory beef and dairy cattle from entering the food supply as part the federal government's bovine spongiform encephalopathy prevention program. It was extended further in 2009 when the USDA banned the slaughtering of downed cattle, forcing them to be euthanized.

Ackerman contends that H.R. 3704 would protect the U.S. food supply from illnesses such as BSE. However, Ackerman's bill would include slow and fatigued hogs, which make up the majority of non-ambulatory hogs that occur at market. As the National Pork Producers Council points out, those hogs typically recover when allowed a short period (20 to 30 minutes) of rest. NPPC also emphasizes that hogs do not get BSE.

"There is no food-safety risk with processing such hogs, and all non-ambulatory or fatigued hogs are inspected by USDA Food Safety Inspection Service inspectors and veterinarians for their fitness for processing and entering the human food supply," NPPC points out. "Banning fatigued hogs would create disposal issues and affect the supply of pork products in the United States."

Ackerman's measure has been referred to the House Committee on Agriculture, where it is pending.



Agriculture Secretary Vilsack Highlights Vital Role of American Agriculture in Providing for Airline, Military Fuel Demands

Agriculture Secretary Tom Vilsack today led a business roundtable meeting and discussed the growing role American-produced biofuels is playing in the civilian aircraft and airline industry, and in the military. Today’s roundtable was held at Chicago-based Boeing Corporation and attended by representatives of United Continental Holdings and Honeywell.

"Advanced biofuels provide landowners, businesses and communities throughout the country the opportunity to pursue new energy advancements that create jobs and build a stronger economy," said Vilsack. "By working with the commercial airline industry, USDA is supporting new markets for these fuels and encouraging further research and innovations that will help reduce our nation’s dependence on foreign oil and lay a solid foundation for a strong rural economy.”

  During the roundtable, Vilsack noted that the Obama Administration has made great progress in assisting in the development of the biofuels industry. He also noted that the biofuels industry continues to evolve and that there is a concerted effort to develop second and third generation advanced renewable fuels. Title IX of the 2008 Farm Bills initiated programs that included financial and technical support to expand production and use of biofuels, which USDA is leveraging to support the developing industry.

   Vilsack said that the United States is particularly well positioned to now transition to a broader bioeconomy, which includes production of aviation fuel in commercial quantities, and that the American farmer has logged substantial productivity gains over time to meet growing demands for food and fiber and now biomass. He also said that a robust rural economy will result by implementing the Obama Administration’s vision for renewable fuel development which creates sustainable jobs by combining new markets, new technologies and better use of available natural resources.

Vilsack highlighted significant efforts the Obama Administration has initiated, including:
-    USDA has forged partnerships with the FAA and the aviation industry to promote aviation biofuels and has invested more than $80 million in research focused on developing aviation biofuels. This year, two commercial airlines flew their first domestic flights powered by biofuels.
-    USDA entered a partnership the Department of Energy and U.S. Navy to invest up to $510 million during the next three years to produce advanced, drop-in aviation and marine biofuels to power military and commercial transportation.  
-    Last month USDA and the Navy announced that the Defense Logistics Agency had signed a contract to purchase 450,000 gallons of advanced drop-in biofuel, the single largest purchase of biofuel in government history;
-    USDA is investing in research through a grant to the University of Washington, which received $40 million to focus on using sustainably grown woody energy crops to produce biogasoline and renewable aviation fuel.
-    USDA provided a $40 million research grant to Washington State University to convert closed timber mills into bioenergy development centers. The project aims to develop a regional source of renewable aviation fuel for Seattle-Tacoma International Airport.
-    USDA has invested a New Mexico facility in to produce "green crude" oil from algae which can be refined into transportation fuel.  USDA is also supporting efforts to build 5 biorefineries to produce advanced biofuels in states from Florida and Michigan to New Mexico, with investments worth about $310 million. 
-    To encourage the production of advanced biofuels from non-food sources, USDA made payments to 235 companies already producing biofuels from non-corn feedstocks in 42 states. 
-    To encourage feedstock production for renewable energy, USDA established a program to incentivize hundreds of growers and landowners farming nearly 50,000 acres to provide biomass to energy conversion facilities. 



CWB Sees Smaller World Wheat Crop

The world will grow slightly less wheat in the upcoming crop year, but Canada's production looks to rise modestly, the Canadian Wheat Board said on Friday in its first outlook of the year.  Global wheat production will slip nearly 2 percent to 677 million tonnes in 2012/13 from an estimated 688.8 million tonnes for the current marketing year, the CWB said at a farm conference in Saskatoon, Saskatchewan.

Canada's wheat production looks to edge up almost 2 percent to 25.7 million tonnes in 2012/13 from 25.261 in the current year.

The outlook for wheat is bearish amid global economic uncertainty and increased winter wheat plantings in most Northern Hemisphere countries, said Bruce Burnett, the CWB's director of weather and market analysis.  "Global supplies are moving from tightness to surplus, especially for wheat," Burnett said at the Crop Production Week conference. "Weather can change this quickly, but currently the winter wheat crops in the Northern Hemisphere are in good shape, with a couple of exceptions."

Markets will closely watch winter wheat crops in the United States and Ukraine in the coming months, as crops in both countries have seen dry conditions, he said.

The Wheat Board's marketing monopoly over Western Canada's wheat and barley will end after the current 2011/12 year.



France Upholds Ban on GE Maize

The French government said on Friday it would uphold its ban on a strain of genetically engineered maize developed by U.S. biotech firm Monsanto in 2012, even though France's highest court overturned the moratorium last year.

The ecology and agriculture ministers said in a statement they would maintain the ban on MON810, an insect-resistant strain of maize which is sold in several European countries, after meeting with farming groups.

In November, France's highest court overturned the 2008 ban after finding that the government had not produced enough evidence to prove that Monsanto's genetically engineered maize posed a significant risk to health or the environment.

The court's decision followed a ruling by the European Court of Justice from early September saying that France had based its ban on the wrong European Union legislation.

President Nicolas Sarkozy, facing a tough battle for re-election in April, had responded by saying that the government would study ways of extending the ban, invoking the need to defend farmers' health.

The brief government statement provided no explanation for the move.

France, the EU's largest grain producer whose citizens are among the staunchest biotech skeptics, imposed the ban after protests by local green groups, citing a "serious risk to the environment."



Looking Ahead in 2012
Senator Mike Johanns

As the Senate comes back into session for 2012, our country continues to face significant challenges. Chief among them remains our debt and deficit, and the need to rein in spending to get our country back on a sustainable path. Our economy still struggles, recovering from the 2008 crisis while bracing for the impact of sweeping new regulations. We still have a long way to go to get the federal government on the right track in 2012. Congress has an important role to play, and several things will have my particular attention.

Though we were successful in cutting spending in 2011, it was only the tip of the iceberg relative to what needs to be done. I was tremendously disappointed that the Joint Committee on Deficit Reduction failed to produce a viable way forward. We cannot afford to give up, and I will continue to help find solutions; this includes working with any responsible efforts to come up with a deficit reduction plan. Tax reform – including lowering our corporate tax rate, one of the highest in the world – should be part of the plan. Additionally, we cannot make any significant forward progress without recognizing the current structure of our entitlements is unsustainable and must be a part of any meaningful solution.

With fiscal responsibility in mind, I also plan to cosponsor an important bill regarding earmarks the first day the Senate comes back into session. I remain committed to refraining from earmarks, and it would be prudent to officially eliminate them from Senate practice. The Senate should be about straightforward, transparent policy, not special spending projects slipped into large bills behind closed doors, which often influence votes.

The coming year will be a big one for our economy. American jobs have come under assault thanks to the increasingly aggressive regulatory regime being rolled out by the Environmental Protection Agency (EPA). Fortunately, an appellate court recently delayed one rule, the Cross-State Air Pollution Rule, which would have hammered many of our power producers and likely led to job cuts and skyrocketing electricity costs for many Americans. Despite this ruling, I suspect the EPA will continue to pursue its overreach in many other areas, and we must therefore remain vigilant.

Another misguided policy will face judicial scrutiny in 2012 – the new health care law. In March the Supreme Court will hear arguments on the law's constitutionality, a welcome development. The flawed law is not only responsible for higher insurance costs, but is harming our job creators and the sustainability of Medicare. I continue to believe the law is an unprecedented, unconstitutional piece of federal policy. I recently signed a brief to the Court urging it to strike down the entire law if it deems the individual mandate unconstitutional.

Though great challenges await us, so does great opportunity. The economic downturn and our country's fiscal condition have brought difficulties, but we are a great country with the power to correct course. I am optimistic about the work we can do to achieve much-needed solutions.