ALL WE WANT FOR CHRISTMAS: FARM PROFITABILITY

[Originally posted December 16, 2016]

We actually asked for more stable farm profitability last year, but Santa hasn’t brought it yet!  In fact, farming has gotten harder with more farmers losing money and more bankers refusing to loan farmers the cash to put in a crop based on their precarious budget sheets.

WE NEED FARM PROFITABILITY!

If you haven’t already read our Are Farmers Rich post, you’ll want to start there … remembering that this particular article and the economic conditions it presents are two years old.

The bottom line is, farmers are losing money.  Lots of it.  In fact, for many farmers, the more acres you farm the more you’re losing.  Luckily, this was a good year for crops and higher yields started to offset the extremely low prices, but that might not always happen.

Think about it: for every other business that creates something, they name the price for that product that includes how much it costs to produce it.  Competition in the marketplace might force them to lower their product cost to a lower margin, but they can always guarantee they are making at least a bit of profit.

Farmers are price takers, not price makers.  They don’t get to determine how much it cost them to grow a bushel of corn and set their price from there.  They have to just take whatever price the commodity markets dictate.  And right now, that cost is well below the cost of production.

Most of the other things on our list will help us price prices because they are about creating demand or minimizing costs of production.  Trade opportunities and that darn RVP waiver will create more demand in terms of selling more corn overseas or selling more ethanol in the summer months.  Better locks and dams will decrease the cost of getting corn to an international market.  More conservation will prevent regulations that will cost farmers money.

I swear Santa, we aren’t asking for much.  Please … farm profitability for 2017?

Mitchell_LindsayLindsay Mitchell
ICGA/ICMB Marketing Director

ALL WE WANT FOR CHRISTMAS: RVP WAIVER

[Originally posted December 15, 2016]

This Christmas list item gets complicated, so bear with me.

A RVP waiver – Reid Vapor Pressure waiver – is what Americans really need to use more renewable fuels and capitalize on the domestic, clean-burning fuel we have right at our fingertips.

SANTA, BRING THAT WAIVER FOR E15!

The back story on this request is that when it’s really hot, bad stuff (emissions) evaporate from your fuel (evaporative emissions) and can cause summertime air pollution.  The EPA doesn’t want that to happen.

They measure the evaporative emissions using the Reid Vapor Pressure (RVP) standard.  The higher the RVP of a fuel, the worse its emissions are.

The RVP of pure ethanol is 2.  The RVP of gasoline can range from 7 to 15.

But when blended, the RVP of an ethanol/gasoline blend can exceed the RVP standard.  The RVP of a 10% blend of ethanol into gasoline (the standard fuel today) is about 10.

In 1990, Congress amended the Clean Air Act to allow E10 a waiver – in other words, Congress gave EPA the authority to allow the use of E10 during the summer months.  But we’re still waiting on the waiver to allow E15 in the summer months, and the absence of that waiver is what makes E15’s movement into the marketplace so complicated.

By the way, the RVP of E15 is actually lower than E10 and straight gasoline.

So, Santa, I’m not sure if you understood all this, but we could really use that waiver in our hands on Christmas Eve.  The world stands to benefit from cleaner air, and consumers will definitely enjoy the extra cents per gallon in their pockets.

Mitchell_LindsayLindsay Mitchell
ICGA/ICMB Marketing Director

ALL WE WANT FOR CHRISTMAS: MORE CONSERVATION

[Originally posted December 14, 2016]

IL Corn and the ag industry has introduced some management practices and talked about some concepts that are different for farmers, trying to help them improve the water quality coming from IL farms.

Farmers are anxious to learn, some are trying out a few new practices, others are watching and learning from their neighbors, but …

WE NEED MORE FARMERS TO TRY MORE CONSERVATION PRACTICES.

Farmers are farming because they love it, but also because they need to provide for their own families.  So trying something completely new, and risking tens of thousands of dollars or more in the process, is a scary thing.

Research tells us that trying cover crops will cost *this much* and improve soil health *this much* while also decreasing nutrient loss *this much.*  But the research put into practice on some farms doesn’t always work out exactly the same.  Farmers get nervous to try new things … and that’s understandable!

But Santa, we’ve got to make our water quality better.  We’ve got to lose less of the expensive fertilizer we’re putting on our fields.  We’ve got to invest in our land and preserve it for future generations.  Farmers definitely want to do this!  It is their core value and the foundation of their farming business.

So one thing we’d love for Christmas is for more farmers to TRY a new conservation practice on their fields this year.  Maybe they just try it on one field, maybe they branch out to several.  Maybe they talk with a neighbor and try the same thing she had success with in 2016.  We’re making progress, but MORE progress would sure be nice.

Whisper in their ears – would you Santa?  We’ll keep providing the outreach, education, and programming in the meantime …

Note: In 2016, IL Corn offered several new educational programs for farmers!  These are just a few:

  • cover crop coupons – to try cover crops at a reduced cost for the first year
  • field days – to see how different management techniques were actually working on farms in Illinois
  • interactive maps – to help farmers understand when to apply nitrogen and when not to apply
  • Precision Conservation Management – a pilot program that helps farmers understand conservation practices AND the financial implications that correlate with them
  • water testing – to understand how much of the expensive fertilizer a farmer was losing from his/her field

Mitchell_LindsayLindsay Mitchell
ICGA/ICMB Marketing Director

ALL WE WANT FOR CHRISTMAS: TRADE OPPORTUNITIES

[Originally posted December 13, 2016]

It stands to reason that right after an investment in getting our grain to a global market, we’d like to see increased market opportunities, right?

Check out our first ask of Santa here.

The opportunities are there.  And Illinois believes we can compete with anyone in the world in terms of grain quality, quantity, and price.

WE JUST NEED GLOBAL MARKET ACCESS!

Trade deals are really important when it comes to selling more corn to more countries all over the world.  We’d definitely like to see trade agreements like the Trans Pacific Partnership (TPP) pass Congress and become effective.

TPP won’t increase the amount of corn we send overseas, but it will increase the amount of red meat we sell overseas.  More meat sold means more livestock production here in the U.S. which means more animals to eat more corn!  It’s a win for everyone involved.

Overall though Santa, we’d love it if you’d just create a blanket of positive trade talk over Washington, DC.  Will the incoming administration support trade in the end?  We’re just not sure and we’d love your help on this!

Note: Trade is so important to Illinois.  About half of our corn leaves the state – much of it to other countries like Mexico and Japan.  What leaves our state and doesn’t go overseas is feeding livestock in other states like Texas and THEN going overseas.  This is because of our position on the Illinois and Mississippi Rivers – we will never stop advocating for more and more trade!

There’s also this.  Trade is important from a humanitarian level.  We have to trade to get the food from where it’s produced (the U.S., Brazil, Argentina) to where the hungry people are.

Don’t ever forget about the hungry people Santa.

Mitchell_LindsayLindsay Mitchell
ICGA/ICMB Marketing Director

ALL WE WANT FOR CHRISTMAS: LOCKS & DAMS

 

[Originally posted December 12, 2016]

At this point, I sound like a broken record.  (And if you’re tired of hearing me talk about locks and dams, be glad you don’t know Jim Tarmann – an IL Corn staffer who has been working on this issue for 20ish years!)

Illinois farmers need updated locks and dams if the U.S. wants us to remain globally competitive.  There’s no ifs, ands, or buts about it.

WE NEED LOCKS AND DAMS!

We’re getting closer.  Congress has changed some funding equations and the industry (all the users of the river system) agreed to pay more in order to generate income to improve locks and dams.  This means that we’re closer than we’ve ever been and that’s exciting.

But we’re really REALLY hoping that Santa will whisper in the ears of the powers that be and include lock and dam construction in the potential transportation and infrastructure spending we keep hearing about in the new year.  This could be such a huge gain for IL agriculture!!

Want to learn more?  We’ve published some great articles on the need for upgraded locks and dams (click here).  Don’t forget, the locks and dams we’re using now were built in Mark Twain’s era for steam boats!!  At that time, we weren’t even dreaming about huge tows of grain headed to a global market!!

You might also enjoy this short video clip.

Please Santa!  Let’s start on a new lock in 2017!

Mitchell_LindsayLindsay Mitchell
ICGA/ICMB Marketing Director

WHAT WAS FARMING LIKE 10/25/100 YEARS AGO?

 

Change is the only constant in a perpetually evolving world.  Just as life and traditions change, so do farming practices. In today’s day in age, farmers have easy access to tractors and large machinery, which make the profession of farming much easier. Agriculturists also have the technology of fertilizers, that ensure the crops receive necessary nutrients. Advancements in chemicals such as herbicides and pesticides are used to rid fields of unwanted weeds and pests. However, farming has not always been this precise of a science. It’s interesting to look back and see how far farmers have come in the past century.

Early in the 20th-century farmers used a system of planting called hill dropping of checked corn. This system required a wire to be strung from one end of a field to the other, and it would be strung through a planter powered by a team of horses. This wire would release a small pile of corn, hence the term ‘hill’, in 42-inch rows. But why 42 inches? Because that’s the average width of a horse! These checked rows allowed for cultivators to be easily pulled through the field. Since there were no herbicides to kill weeds, farmers relied solely upon cultivators to uproot the nuisances. More in-depth information on this practice can be found here!

Fast forward to about 25 years ago, when farming seems to have vastly improved from the seemingly primitive ways of the early 1900’s. Instead of farming in 42-inch rows, corn grew within 30-inch rows. This allowed for more plants to grow in each field, which lead to an increase in yields. By this point in time, farmers were using tractors to pull their planters, which greatly increased the efficiency of their time and efforts.  However, these aren’t the only technological benefits! In the 1990’s farmers started utilizing satellite technology to increase their accuracy, which made the farming profession a very meticulous one. Additionally, the number of farmers trying conservation tillage methods continued to rise. This simply means that producers leave more plant residue in the field, with intentions to prevent erosion. This extra plant material will add organic matter to the soil, which will also improve the land’s productivity. On top of all these advancements, in 1997 the first insect and weed resistant crops become commercially available. If you’re particularly interested in learning more about how farming improved in the 90’s, I suggest you check out this link!

Farming in the early 2000’s… was it really that much different from farming today? To start off with, one of the most important pieces of legislation regarding farming practices was passed. The Food, Conservation, and Energy Act of 2008, also referred to as the Farm Bill, created rules and regulations for anything from conservation practices, to organic agriculture, to crop insurance. This bill promoted innovative solutions to resource challenges, established a new disaster assistance program, expanded the opportunities for farmers’ markets, and much more!  Further information about the full impacts of the 2008 Farm Bill can be found here. Without these past accomplishments, the agriculture industry would certainly not be the same as it is today.

Rosie Roberts
Iowa State University