AG Mag Central Iowa
High Stakes
The new farm bill provides two new options for revenue safety nets. Which is better for you?
BULL MARKET: Cattle farming surges as meat prices climb GREAT DEBATE: Have corn yields reached a plateau? RURAL LIFE: Wind projects and their impacts on farmland
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Index
AG Mag Central Iowa
Publisher Dan Goetz Advertising Director Jeff Holschuh Managing Editor Abigail Pelzer Magazine Editors Larry Lough, Jeff Rogers
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COVER STORY
Decision to make Central Iowa farmers are weighing their options for revenue safety nets in the 2014 farm bill. Beefing up Slowly but surely, the cattle industry is growing after drought years early in the decade.
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AG Mag
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Index 9
A sweets sister act
Growing pains on the farms
22
Sisters Amy Barton and Elaine Keuning turned a hobby into being All About Pies in Monroe.
Wind power projects have farmers concerned about the viability of their farmland after construction.
Fundraising phenoms
The great GMO debate
The Newton High School Future Farmers of America have proved to be prodigious at raising money.
Is there a need to label foods made with genetically modified ingredients as such?
14
12 Putting brakes on corn yields?
24 Experience that matters
26
Increases in corn prices have come to a halt in recent years. Some wonder whether the same is soon to happen to yields.
Students in the FFA program at Prairie City-Monroe High School do work that they can apply in the real world.
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Mell Morrissey herds cattle at his 75-head operation in Valeria, Iowa. The livestock producer’s operation has begun slow growth as high prices allow cattle to become his primary source of farm income. (Photo submitted to Central Iowa Ag Mag)
LIVESTOCK PROSPERS WITH HIGH PRICES Iowa producers see slow but steady growth after drought
I
BY MIKE MENDENHALL AND MATT MENCARINI For Central Iowa Ag Mag
n a large morton building on Morrissey Farms in Valeria, owner Mell Morrissey is reminded daily that cattle is in his DNA. An old black-and-white photo from 1969, printed on canvas, hangs on the steel wall. It depicts the farmer as a 5-year-old boy holding a cow with his two brothers and father at the Chicago Stock Yards. Morrissey runs a 75-head cattle operation in the small, incorporated town near the Polk/ Jasper County border. He said the past two seasons he’s been rebuilding from the 2011-12 drought. In 2014, he sold a portion of his larger steer, but held back some of the smaller steer and heifers planning for the future.
6 Spring 2015
The recent boom in meat prices has allowed established Central Iowa operations, including Morrissey Farms, to invest in heavy equipment that will benefit the local farm economies. ■■■ The Valeria farmer said when grain prices were high early in the decade, many pastures were forced to overproduce hay to compensate. During the 2011-12 drought, Iowa farmers had to buy grain at higher prices when pastures could not grow – squeezing bottom lines. Those extremes, coupled with high livestock prices, have made it difficult for new start-up operations to get off the ground. The percentage of Iowa’s farm economy taken by cattle and hog operations has been declining in the past decade, with $10.8 billion in revenue in 2012 versus $19.4 billion in corn and soybeans. Morrissey attributes that to producers exiting the industry as livestock is more labor intensive than row crops, but the Jasper County producer said for the established livestock farmers – who have self-sustaining herds and investment capital – 2014 was a lucrative year. CONTINUED ON 7
Photos by Mike Mendenhall/Central Iowa Ag Mag
Bred cows on Morrissey Farms graze in a pasture near Valeria, Iowa. High beef prices have been good for established Iowa producers but have created difficulties for young farmers trying to enter the industry.
‘‘
We’ve seen [the cow-calf business] increase dramatically. It depends on what economist you use, but profits have been as high as $700 a cow. That’s a huge, huge increase from what cow-calf producers are used to seeing. W. Travis Meeter, beef extension educator
4CONTINUED FROM 6 “I would say prices haven’t affected me too much because we already had a cow herd base started,” he said. “The folk that current prices are hurting are the ones who are selling out, and someone else is trying to take over that pasture and buy cattle. Up-starts are terrible. I feel sorry for anyone who’s young trying to get into cattle. I don’t think they can do it. “But I think the whole meat industry is going to be positive. The cattle can’t rebuild as fast as the hogs, turkeys and chickens, but I think it’s going to be a good and bright future.” That future is in the hands of young producers like 20-year-old Robbie Guthrie. The young farmer from Newton observed what many producers did after the drought – the hog industry has been much faster to rebound than cattle. Guthrie is the fifth generation of his family to raise hogs, entering the industry through 4-H while in sixth grade. He saw an average of $200 per hog in 2014, with feeder pigs averaging $85 per head. At the Mingo Meat Locker in western Jasper County, workers have processed beef, pork and lamb for individuals and the Des Moines Farmers Market for 33 years under current ownership. Man-
’’
ager Alex Frangopol has witnessed a new trend in Iowa’s meat industry, with families bypassing counter prices altogether to raise their own animals. Frangopol said that gives consumers peace of mind knowing how the animals were raised, fed and treated. “People want to know where their meat comes from,” he said. Ultimately, Guthrie sees the American consumer dictating the fate of both cattle and hogs, buying what’s the most cost-effective at the meat counter.
$150. It kept climbing, reaching $159 in August and $169 in November. W. Travis Meteer. beef extension educator with the University of Illinois at Urbana-Champaign, said the cow-calf business is traditionally a break-even business. But that changed last year. “We’ve seen it increase dramatically,” he said. “It depends on what economist you use, but profits have been as high as $700 a cow. That’s a huge, huge increase from what cow-calf producers are used to seeing.” Among those who have benefited is Dan Hanrahan, 38, current president of the Madison County Cattlemen Association. “It is really remarkable the prices we are seeing,” said Hanrahan, who farms about 120 head of cattle with his parents near Cumming, Iowa. “This year has really been a bright spot for us.”
Cattle sell-off The cattle charge all started with a drought-stricken southern U.S. in 2011. Once cattle producers in the South lose water, they can’t maintain animals, Meteer said. They can bring in hay, but water is the issue, so a huge liquidation of cow herd occurred in 2011 in the Southwest, he said. The drought returned in 2012, again during the grazing season, but this time it affected a larger portion of the country, including much of the Midwest. CONTINUED ON 84
Record profits reported Current economic conditions for the cow-calf industry in the Midwest could be chalked up to simple supply and demand, or perhaps the cyclical nature of all commodities, or even the perfect storm of conditions that started in 2011. Or maybe all three. But the end result is the same: Historic profits. In 2013, the average hundredweight price for cattle in the U.S. was $126.83, up from $97.18 in 2010. But the highest month in 2013 – $132 – was dwarfed by the prices once the calender turned over into 2014. By March 2014, the average hundredweight price for cattle in the U.S. was
Meat from lamb and venison hangs in Mingo Locker during the closing weeks of Iowa’s deer-hunting season. Locker Manager Alex Frangopol said it is a growing trend for families to raise their own meat as counter prices rise. AG Mag
7
4CONTINUED FROM 7 When cattle operations don’t have water, cows get sold, Meteer said, and the industry went through two years of massive liquidation. That’s where the simple law of supply and demand comes into play, said Phil Reemtsma, who is president of the Iowa Cattlemen’s Association. And that was helped, he said, by some misfortune in Phil Reemtsma the pork industry with the spread of the porcine epidemic diarrhea virus, or PEDV, which killed off much of the pig supply. “We had sort of perfect storm there of a shortage of animal protein,” said Reemtsma, a veterinarian from Dewitt. That perfect storm resulted to record beef profits. And what cattlemen are doing with those profits can set them up for future success. Some operators are building new facilities. In Iowa, many are building indoor facilities that will not only reduce costs, but reduce the chance of run-off making its way into rivers or streams. “From a big picture standpoint, it’s great time to be in the cattle business,” Reemtsma said “There is going to be some up and down. But people investing in those operations, … I think it’s going to
be a good investment long term.” Others, like Dan Dykstra, vice president of Whiteside County Cattlemen’s Association, who also has 50 head of cattle, will keep back more heifers than he usually would on his farm about 5 miles northwest of Morrison in northern Illinois. While a heifer usually pays for itself in about 7 years, Dykstra said, he thinks he will cut that time in half with the animals he’s keeping. Cattlemen looking to reinvest their profits from 2014 should consider all their options and evaluate whether they’re already maxed out, in which case the reinvestment might be best used to secure wealth against future loses or to make small changes to improve efficiency. While starting up livestock operations on a farm that doesn’t already have them might be too expensive to take advantage of the current conditions, Meteer said, diversified farms with livestock and row crops may have an advantage over straight row crops. “It just needs to be approached with common sense and awareness,” he said. “It is a little bit of an unforgiving business.”
Cyclical business Lee Schulz, assistant professor of economics at Iowa State University who specializes in livestock, said production agriculture, and livestock in general, is
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notoriously cyclical. There was already a tight supply in the cattle industry before the liquidation happened, he explained, and that’s what triggered the high prices. Lee Schulz “If we look at the markets, the fundamentals of both supply and demand are really supporting record profits in the livestock industry,” he said. And 2015, Schulz said, looks like it could be on par with 2014. But just as the weather in other parts of the country contributed to the rise in prices for cattle in the Midwest, it can also contribute to its fall. “I just talked to a fellow in South Dakota,” Illinois cattleman Dykstra said. “They’re tickled to death with how things look this winter. If they have a normal year, a normal couple years, I say 2 to 3 years [of more high prices]. “If they experience another drought, it’ll extend it even more.” What might seem like uncertainty to some, Illinois extension educator Meteer said, is just another year in the cow-cattle business. “If you ever want a humbling experience in life, own cattle,” he said. “There are a lot of factors that can come into play.”
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Hobby makes just desserts Jasper County sisters are All About Pies BY KATE MALOTT For Central Iowa Ag Mag
Sisters Amy Barton (left) and Elaine Keuning started making pies as a hobby, mostly for their families. As their pies became more well known, they started All About Pies, based in Monroe, in 1995. (Photo submitted to Central Iowa Ag Mag)
With the right amount of talent and a dash of enthusiasm, Elaine Keuning and Amy Barton, two sisters from rural Monroe and Newton, have turned their well-known hobby into a well-known business – All About Pies. The two sisters, formerly Lewises, grew up on their family farm north of Monroe with their parents and three brothers. There they learned how to cook and bake for a family, family values that have been put into use and carried on as they both married, had children and are now grandparents. CONTINUED ON 10
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CONTINUED FROM 9 Amy married Earl Barton and they have two boys with grandchildren. Amy is a Maytag Dairy Farm employee in Newton. Elaine married Don Keuning and they have two boys, a girl and grandchildren. Elaine is a Mid Iowa Painting employee in Runnells. The two have been in the pie business since 1995, Keuning said. Their families, primarily sons, prefer pie rather than cake, so Keuning and Barton would make pies for their boys’ birthdays or graduations, which became well-known, liked and requested at future events. What started as a hobby between two sisters then turned into selling pies at their sweet corn stand or making special orders, and has further turned into a business with three locations. As the business grew, Keuning said, she and Barton still had fun baking. “The main thing I enjoy is getting together with my sister and my friendship with her, and also just all our customers from all over,” Keuning said. “We’ve made a lot of good friendships with people from all over.” Knoxville Nationals was a location where they started selling and gaining repeat customers each year. Area visits by RAGBRAI are big hits, as well as
Kate Malott/Central Iowa Ag Mag
Donna Baarda (left) and her daughter, Darla, both of Newton, enjoy the selection as they sampled All About Pie’s apple pie at the Maytag Dairy Farms Harvest Party in October. Monroe Bike Nights, and Maytag Dairy Farm has featured their pies at various events. “Those are a lot of fun to do, and
Look for our next edition of
AG Mag Central Iowa
July 2015 Featuring additional coverage in Jasper, Poweshiek, Marshall, Tama, Benton, Marion, Mahaska, Iowa & Keokuk Counties. 10 Spring 2015
we’ve been very lucky for those for the opportunities,” Keuning said. CONTINUED ON 11
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CONTINUED FROM 10
Photo submitted to Central Iowa Ag Mag
All About Pies’ made-from-scratch frozen fruit pies include apple, black raspberry, triple berry, and cran-raspberry. Elaine Keuning and Amy Barton, sisters who operate the business, also make blackberry, blueberry, cherry, gooseberry, mincemeat, peach, red raspberry, rhubarb and strawberry pies.
‘‘
The main thing I enjoy is getting together with my sister and my friendship with her, and also just all our customers from all over. We’ve made a lot of good friendships with people from all over. Elaine Keuning, co-owner of All About Pies
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All About Pies was recently featured on Iowa Public Television’s Iowa Ingredients and highlighted the sisters’ cranraspberry pie, which has turned into a unique favorite for many loyal and new customers, especially near the holidays. Triple berry is one of the most popular, but the apple is the favorite. “Apple is always our best seller,” Keuning said. “I don’t know what it is, but it’s a safe pie selection. Nobody’s scared of apple.” Besides apple, black raspberry, triple berry and cran-raspberry, Keuning and Barton also make blackberry, blueberry, cherry, gooseberry, mincemeat, peach, red raspberry, rhubarb and strawberry. All About Pies can be found in three locations in Jasper and Marion County: The Pie Kitchen in Monroe, PJ’s Deli in Newton, and Main Street Market in Knoxville. To order a pie, stop in one of the three locations, call 641891-9068, or visit allaboutpies. net for more information.
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FFA fundraising fabulous Newton chapter cleared $46,000 in 2014 fruit sales BY JASON W. BROOKS For Central Iowa Ag Mag
The Newton High School Future Farmers of America chapter sold more than $46,000 in its annual fall and first-semester fruit sales fundraiser. The amount is an all-time high for Newton FFA, chapter Secretary Macy Leonard said. The amount also covered sales of meats, cheese, candy and popcorn. The top three sellers for the chapter were Dylon Morrison, Macy Leonard and Logan Zaabel. “Fruit sales prepare the students for future careers in agricultural sales and also allows members to participate in numerous FFA activities throughout the year,”
Photo submitted to Central Iowa Ag Mag
A Newton High School Future Farmers of America team placed eighth among 24 squads and received a silver ranking at a September 2014 competition. The school has about 120 students active in FFA. Leonard said. The Newton FFA thanked everyone who donated money or bought fruit and other items to support the chapter, she added. The Newton program includes more than 120 students who are studying agricultural education. In September, Newton FFA placed
eighth out of 24 teams and received a silver ranking at the South Central District FFA Soil Judging Career Development Event, held at a Knoxville farm. The Agriculture Science III class competed with four members. Austin James, Mathew Bleakney, Benton Vest and Jacob Smith were required to judge the soil
from four pits and take a 40-question test. Newton High School is offering six agricultural courses in 2014-15 – Agriculture Science I, II, III and IV, as well as Horticulture and Agricultural Sales & Marketing. FFA is offered as an extracurricular program at NHS, while Supervised Agricultural Experience is classified as “intra-curricular.” Newton FFA hosted a chapter visit and attended the Iowa FFA Legislative Symposium in January. The chapter receives outstanding community support from farm families, civic organizations and area businesses. The Newton office of Underwriters Laboratories combined with LG electronics company for one donation. The two companies recently donated a 42-inch LG television to the Newton FFA Chapter for use in the school’s agriculture classroom.
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A CAP ON CORN? S
BY JASON W. BROOKS AND DAVE FOX For Central Iowa Ag Mag
ometimes, the only certainty in farming is uncertainty. Take corn, for instance. Both yields and prices in corn markets have seen record highs in recent years. Yields continue to fluctuate, ever upward, while prices seem to have corrected themselves – downward – after the golden grain hit an all-time high in recent years. For decades, farmers have seen yields rise, doubling since 1975 to record-breaking levels for many growers in 2014. “There’s a big debate within agriculture nationally: Do we have continued room for growth in yields?” said Chad Hart, a professor and crop market specialist from Iowa State University. “You look at state-level numbers, you see well over 200. Somewhere in the 200s is where I think we can plateau.” Mark Johnson, an Iowa State University field agronomist, said a plateau could create a major problem, since Iowa is such a large producer in the heavy corn-exporting U.S. “A plateau is highly unlikely,” Johnson said. “And if we had one, we wouldn’t be able to feed the world.”
Uneven trend
Iowa produced 181.81 bushels of corn per acre in 2014, Johnson said – much higher than the national average. He said ethanol production accounts for about one-third of that total. He said that while yields have not increased or decreased by the same amount in any two consecutive years, the trend has still climbed, in general, for more than 30 years. 14 Spring 2015
Farmers have mixed ideas on yield potential
In a few months, these grain silos in Sully, Iowa, will be at the center of a busy corn and soybean farming community. Iowa experts are not all of the same mind when it comes to predicting whether corn yields will plateau or continue to rise in 2015. Jason W. Brooks/Central Iowa Ag Mag
Dave Fox/Central Iowa Ag Mag
Corn is moved from one step to the next in the seed corn processing plant at Prairie Hybrids in Deer Grove, Illinois. In Iowa, farmers produced 181.81 bushels of corn per acre in 2014, much higher than the national average.
“There are no two years that follow the trend line,” Johnson said. “But we now have about 14 million acres of field corn in this state. There’s still a trend line.” Mark Hendrickson, of Grinnell, said he’ll Mark Johnson grow slightly less Iowa State field corn than last University field year, but that’s by agronomist says design and rotation, corn yields in not because of curIowa have been rent market factors. on the rise for more than 30 He said he thinks the years. amount of Iowa corn yield will plateau soon. “I think it will level off,” he said. “It’s hit a point where if it does continue to go up, it’s not going to go up very fast.” Hendrickson said his son, Ryan, pays more attention to markets, numbers and regional economic factors. Ryan Hendrickson said Mother Nature might have more to say about corn yields than any man-made influences. “A lot always depends on the weather,” Ryan said. “Consistency helps. I haven’t looked at an almanac for next summer yet, but I read a few months ago it could be a cold winter, and sometimes, colder is better.” Doug Bell, a longtime Iowa farmer whose son, David, is the manager of the Key Co-Op’s Le Grand location, said he won’t plant as much corn as he did in 2014, but that has been his 2015 plan for some time. “Prices influence things a little,” Bell said. “But there’s a lot else to consider besides that, such as how to get the best use out of the most hilly land in an acreage.” CONTINUED ON 164 AG Mag
15
CONTINUED FROM 15 Bell said he read a recent magazine article that said the potential top-out point is 500 bushels of corn per acre, under “greenhouse-perfect conditions.” He doesn’t think it will get there in real life – certainly not any time soon – but that type of optimism makes him realize a lot of people want to keep numbers rising. “Apparently, there’s still a lot of room for growth,” Bell said. “With even a little bit of fair weather, the yields should still at least inch higher.”
Market correction But after record yields and high prices, the market has worked to correct itself. There is somewhat of a downward trend on the number of corn acres being planted, according to USDA’s World Agricultural Supply and Demand Estimates report, which was released in January. According to that report, an estimated 97.3 million acres of corn were planted in the U.S. in 2012-13, with that number dropping to 95.4 million acres the next season. The agency estimates a drastically lower 90.6 million acres of corn being planted in the U.S. in the coming growing season amid corn prices at half of what they were less than
Jason W. Brooks/Central Iowa Ag Mag
Field corn seed sits in a warehouse at Key Co-op in Sully, Iowa, waiting to be deployed to Central Iowa fields in the spring. Some farmers and experts say Iowa’s corn yield must continue to rise in order to help meet the world food demand. three years ago. Iowa State agronomist Johnson said weather and long-range forecasts make an impact on planting choices. “A lot hinges on weather during the growing season,” he said. “Farmers only have about a three-week window in June, or close to it, when the
real meaningful plant growth happens,” Moisture levels also make a huge difference, Johnson said. “If it goes real hot or real wet, the crop and the yield are affected,” he said. CONTINUED ON 17
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CONTINUED FROM 16 “Corn needs oxygen to grow and flourish, and in standing water, there isn’t enough oxygen. And if it gets real hot for a few weeks in a row or more, the plant dries out.” Gilbert Hostetler, president of Deer Grove, Illinois-based Prairie Hybrids, said actual yield per acre would largely depend on the type of seed planted. “GMO [genetically modified seed] tends to produce slightly lower yields per acre than non-GMO,” he said. “Non-GMO corn generally produces about 15 bushels more per acre than GMO varieties,” he said. “Some of our non-GMO seed averages 200 to 225 bushels per acre, and we have had some go as high as 300.” But while GMO corn might not keep up with non-GMO in yields, it does lend itself to other advantages. “There tend to be less insects and other things,” said Dan Koster, president of Tettens Grain based in Galt, Illinois, “because GMO corn has traits built in that make it insect and fungus-resistant.
Abundance of corn Pioneer Seed’s Steven Long, based in Sterling Illinois, said there will likely be more beans and less corn planted this coming season, at least in the Midwest, as a step toward correcting the market. “It’s a little more economical to put out beans,” he said. “It’s a crop that costs less to produce than corn.” Once existing supplies shrink, prices could rise
Jason W. Brooks/Central Iowa Ag Mag
Propane sits ready at Key Co-op in Sully, Iowa. Retail prices for propane, gasoline and ethanol affect field corn prices, but Central Iowa farmers said prices are not the main factor in deciding how much corn to plant this year. again and more corn could be planted. But not this year, in all likelihood. “As there’s an abundant supply of corn, and less demand, the price will always go down,” he said. “Low prices cure low prices.” Hostetler, with Prairie Hybrids, agrees there will likely be less corn acres this season. “There will be definitely less corn in 2015,” he said. “Farmers are scared stiff they’ll be making a lot less money. The market is correcting itself.” Kevin Veneesta, whose farm lies between Grinnell and Lynnville, said yield fluctuations and corn prices he’s seen in recent years haven’t been enough to change any of his seeding decisions. “It would take a lot more of a price drop to make me want to plant any less corn,” Veneesta said. “And it would take a pretty significant [price[ increase
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to make me plant any more than I am now.” Veneesta said changing farming practices to hook a bigger profit margin isn’t part of the approach he takes to planting. “I wouldn’t change just to try and make more money,” he said. “I would mostly change only if I had to, to keep from losing what I’m
getting now.” Iowa State’s Johnson said ethanol is not having an impact yet on how much field corn farmers decide to plant, as their product can still be sold as food – just not necessarily for as much money. He said he could not imagine ethanol becoming so lucrative that farmers would want to stop producing corn for food – even though ethanol already accounts for one-third of field corn yields. It’s not a matter of how many farmers are in the corn business or which ones produced corn for what purpose – it’s more a matter of planting less if the price is low. Technology also sometimes plays a part in yields and planning, Johnston said. “A few years ago, no one was talking about drilling into shale [fracking], and getting tons of oil out of it,” Johnson said. “But look what’s happening in North Dakota now. No one really knows when a phenomenon like ethanol or shale oil is going to come along – even in the corn business.”
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Wait and learn Photo submitted to Central Iowa Ag Mag
Drew Weyers works in the field of his farm south of Monroe. Weyers said he is leaning toward going with Agricultural Risk Coverage as his revenue safety net but wants to learn more about his options before making a final decision.
Farmers still assessing safety net options provided in farm bill BY PAM EGGEMEIER AND JAMEE A. PIERSON For Central Iowa Ag Mag
Direct payments disappeared in the new farm bill, and farmers have until March 31 to choose between two new safety net programs. One of the programs modifies the previous farm bill’s target price program. The Agricultural Act of 2014 replaced the Counter-Cyclical Payment program with the Price Loss Coverage program. The other option, with two variations, changes the revenue safety nets. Agricultural Risk Coverage replaces Average Crop Revenue Election with ARC County and ARC Individual Farm. Those who don’t make a decision will automatically be enrolled in PLC; they will be paid for 2015, but not 2014 because CCP payments were based on the previous marketing year averages. CONTINUED ON 194 18 Spring 2015
Michael Krabbenhoeft/Central Iowa Ag Mag
Farmers look through information about the 2014 Farm Bill during a meeting in January at the Carroll County Farm Bureau in northwest Illinois. Farmers in Iowa, like those in Illinois and nationwide, have until March 31 to decide which revenue safety net they wish to use.
CONTINUED FROM 18 But before farmers make that choice, there is a more pressing informationgathering deadline coming. Farmers have until Feb. 27 to update their base acreage reallocation and yield history information. Jerry Quinton, executive director for the Lee County Farm Service Agency in northern Illinois, said farmers and landowners need to take care of the revisions before choosing a safety net option. FSA needs the yield data as bushels per acre between 2008 and 2012. “We take 90 percent of that and it becomes the new yield,” Quinton said. “That can then be used for the new PLC program.” Even if they choose ARC County, FSA still needs producers to certify their yields. To reallocate the base acres on a farm, FSA will use the average of the reported acreage from 2009 through 2012. “I would urge farmers to take advantage of the yield and reallocation opportunities because it’s the first time they could do it since 20022003,” Quinton said. If no action is taken before the deadline, the current base and yield will be used. Given the delay in crafting a new farm bill, the FSA offices are under the gun with the deadlines. Quinton said farmers should make an appointment with his office as soon as possible. “We didn’t get the green light to start this until after October 1,” Quinton said. “Given the current situation, we’d need to average 46 farms a day now to finish on time.” Several educational meetings were held in November and December. While ARC County seems to be the popular choice in northern Illinois, many farmers are still weighing the risk in their decisions. Some farm organizations in northern Illinois are pointing producers in the direction of the ARC County safety net option because they believe it favors Mid-
west grain producers. It uses a collective benchmark yield, for example, $1.70 for Lee County. An important difference between ARC and PLC is that ARC is a revenue program. PLC uses target and loan prices with a $1.75 spread. It covers only loss and doesn’t protect revenue. ARC Individual doesn’t receive much attention in Illinois because it is believed to be a better choice for farmers who have smaller farms where climate, soil types, and yield can vary greatly throughout a county. The only part of the safety net process that crop insurers are directly dealing with is the Supplemental Crop Option, which is available only as an add-on with PLC. “Right now I am leaning toward ARC,” Drew Weyers said, “but I am going to go to another meeting to make sure.” Weyers, who has farmed for seven years south of Monroe, mainly in Marion County, runs a cow-and-calf operation and does a crop rotation of corn and soybeans. “[ARC] looks to work better for my operation,” Weyers said. “In the current corn trading prices, ARC looks better because of the prices, but there are pros and cons to each program for all situations.” With a local meeting set by FSA approaching, he wanted to wait and get as much information as possible before deciding. Dirk Van Wyk, like many other farmers, is also waiting to make a decision. “I plan on visiting the FSA office and learning more,” Van Wyk said. The PLC option would seem to be better suited for farmers in the southern states, where crops like cotton and rice are king. Because PLC offers a deeper net, it might also be a better choice for new farmers who are just getting established. It’s important to note that neither program is intended to replace crop insurance. CONTINUED ON 20
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4CONTINUED FROM 18 Gary Schnitkey, an agriculture economist at the University of Illinois, breaks down the decision process into three parts: Which has the highest expected payments; how concerned you are about low prices; and what is the availability of the supplemental coverage? “ARC County probably has the highest expected payments for corn,” Schnitkey said. “This is best if you believe prices will be above $3.30 over 5 years, but you’d better be in PLC if you’re concerned corn will come in below $3.30.” Current corn prices have been in the $4 range. Schnitkey said the availability of SCO isn’t likely to be a big factor because it adds only about 1 percent to the mix. In Iowa, Dave Miller is a go-to guy on the safety net options. He is the director of research for commodity services at Iowa Farm Bureau. Because of the complexity of the programs, even an expert like Miller has changed his mind on some of the finer points. “A few months ago, I said ARC County is probably best for most people in Iowa, but now I believe PLC competes pretty well in southern Iowa,” Miller said. Miller believes efforts to educate farmers are starting to cut through the initial confusion. The hesitancy has backed up the process, adding to deadline stress at the FSA offices. “We had very good attendance at our state meetings,” Miller said, “and many people had gone to several meetings before they said they were finally getting it because it’s complex and difficult.” Miller still believes ARC County is best for soybeans in Illinois and Iowa, based on his calculations showing there is only about a 5 percent to 10 percent chance of getting PLC payments for soybeans in any of the 5 years. For corn, the decision is not so simple. Farmers are urged to remember that the safety net options will cover 5 crop years – a period from 2014 through 2018. ARC County is likely to provide a big-
‘‘
‘‘
[ARC] looks to work better for my operation. In the current corn trading prices, ARC looks better because of the prices, but there are pros and cons to each program for all situations.
ger payout in the first 2 years, but not much protection on the back end of the contract. With PLC, if corn hangs around $4.25, farmers might get only one payment, but it would provide much deeper protection if prices were to drop off the table into the $3 range. PLC also seems to be a better choice in areas where yields are steadier. Miller said much of the decision should be about assessing debt load and risk tolerance. “If $3 corn could put you out of business, you should look at PLC,” he advised, “but others should get the max now with less protection in the back end. It’s kind of like sitting down at a poker game, and with ARC, you’re assured of winning your first two hands.” Some global issues at play are cause for concern when betting on corn prices. Weather is always the biggest wild
If $3 corn could put you out of business, you should look at PLC, but others should get the max now with less protection in the back end. It’s kind of like sitting down at a poker game, and with ARC, you’re assured of winning your first two hands.
20 Spring 2015
Drew Weyers (pictured above), who farms south of Monroe
David Miller, Iowa State University
’’
’’
card, and farmers have been blessed with a longer up cycle with prices than usual in such a cyclical business. Another record production year in 2014, nationally and in Illinois, could stoke worries about oversupply. “It’s not a big concern at the moment – we went from $3 corn in August to near $4 now – but if we have another good year in 2015, it could get back to $3 in a hurry,” Schnitkey said. Ethanol is another piece of the supply puzzle. Plunging oil prices and a trend toward reduced gas consumption present a potentially dangerous mix for the ethanol industry. “Oil’s effect on the markets will definitely be something to watch moving forward,” Miller said. “It could put a great deal of pressure on the ethanol industry.” Larry Hummel, a Lee County, Illinois, farmer and Farm Bureau crop watcher, said farmers are concerned about the effect of low gas prices on alternative fuels. “It doesn’t seem to be having too much of an impact here yet, but it’s a big question mark right now,” Hummel said. “The uncertainty about revising fuel standards makes it an even bigger concern.” Ethanol producers use about 10 percent of the corn produced nationally, with a similar mix reported in Illinois.
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LIVING ON THE
LINE
Photos by Mike Mendenhall/Central Iowa Ag Mag
There are 67 turbines on the Laurel Wind Farm near Laurel, south of the border of Jasper and Marshall counties. Iowa is second only to Texas in production of wind-generated power. According to the Iowa Utilities Board, Iowa generated about 27 percent of its power from wind in 2013. The development of wind power projects like the Laurel Wind Farm and Rock Island Clean Line have farmers in their paths concerned about the viability of their farmland after construction.
Construction date of RICL Iowa segment still unclear; developers filing for franchise agreements BY MIKE MENDENHALL For Central Iowa Ag Mag
Before construction begins on the 500-mile, 3,500-megawatt direct current transmission system of Rock Island Clean Line, project developers would like to win over land owners like Greg Gillespie. The O’Brien County resident filed a letter of objection to the project in March 2013, concerned about the viability of his farmland after construction. “They’re going buy the area at current land value, but we feel that that value is pretty low,” Gillespie said. Texas-based Clean Line Energy Partners – the company spearheading the project – has asked to utilize 75 feet of property on Gillespie’s land. The com22 Spring 2015
pany wants to negotiate easements with landowners in the 16 northern Iowa counties affected, but there is some resistance. Gillespie has joined the group Preservation of Rural Iowa, a nonprofit organization formed to assist landowners who oppose the 375mile Iowa stretch of the transmission line. Illinois has already approved 125 miles of transmission lines for the project, but withheld eminent domain authority. The line would carry windgenerated power from western Iowa to a substation in Grundy County, Illinois, for use in Chicago and eastward.. CONTINUED ON 234
Larry Wehrman, of Laurel, stands under a 263-foot-tall, 2.3-megawatt windmill on his acreage in Central Iowa. Developers are seeking approval from the Iowa Utilities Board for the Rock Island Clean Line project, which would transmit wind-generated energy produced on wind farms like the Laurel Wind Farm.
Preferred route for Rock Island Clean Line transmission project
4CONTINUED FROM 22 Before construction on the wind energy transmission project can move forward, it will have to get approval from the Iowa Utilities Board – a threemember, nonpartisan panel appointed by Gov. Terry Branstad. The IUB is currently considering approval of a hazardous liquid pipeline proposed by Dakota Access Pipeline LLC, which is slated to bring North Dakota crude oil through Iowa to Patoka, Illinois. Rob Hillesland, information specialist for IUB, said this is the first time in recent memory that IUB has considered two such significant statewide projects simultaneously. RICL completed the countywide informational meetings required by Iowa Code in 2013 and filed its permit to build in November of last year. Currently, project developers are petitioning for franchise agreements and hope to begin construction in 2016, taking five to seven years. Before the project
can reach approval, the IUB will hold a hearing in the county seat closest to the center of the transmission line. A date for the hearing and venue have not yet been decided by IUB. According to figures from Hillesland, 1,704 letters of support for the RICL – and 1,105 letters of objection – have been filed with the regulatory agency. Most of the debate surrounding the project is with eminent domain. The current project route takes the RICL through 2,000 parcels of land. Gillespie is concerned that construction crews will compress topsoil, making his land untillable and unplantable for years – although RICL would be responsible for a land reclamation process as part of the easement. Iowa is second only to Texas in production of wind generated power. According to the IUB, Iowa generated about 27 percent of its power from wind in 2013. Larry Wehrman owns a 160-acre row crop operation in the center of the
Laurel Wind Farm, a 121-megawatt project producing for Mid-American Energy in Marshall County. As with the RICL project, Wehrman and other property owners within the 11,000acre wind farm received easement offers from developers, but most felt the project was positive and did not have to fight an eminent domain claim. After developers approached the land owners, area land owners jointly hired a lawyer to represent all their interests at once. After construction, Wehrman said he was pleased with the reclamation process and noted that any damage to his land was promptly repaired by Mid American. As far as the noise and skyscape, Wehrman said he couldn’t be happier. “It’s like living next to train tracks after a while,” he said. “The only thing noticeable is you go outside at night and, if the weather is right, you can hear them. Just a little swish noise. But, heck, they don’t bother us a bit.” AG Mag
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Sarah Brown/Central Iowa Ag Mag
In response to consumer demand, General Mills announced its original Cheerios cereal is now made without the use of genetically modified ingredients. While there are no GMO oats, which is the primary ingredient in Cheerios, General Mills now uses only corn starch derived from non-GMO corn and non-GMO pure cane sugar.
Is GMO labeling worth it? Mandated GMO labeling bills in Iowa failed; debate continues BY SARAH BROWN For Central Iowa Ag Mag
Bills that would require the labeling of genetically engineered foods have been introduced in the Iowa Legislature but never emerged from committee. “I don’t think there is anything pending right now, but, that can always change,” said Ruth MacDonald, professor and chairperson in food science and human nutrition at Iowa State University. Senate File 194 was introduced in the Iowa Senate in early 2013. That same year, House File 463 was introduced in the Iowa House of Representatives. The Senate bill, authored by Sen. Joe 24 Spring 2015
Bolkcom, would have required “consumer labeling information for food, providing penalties, and including effective date provisions.” The House version – sponsored by nine Iowa representatives – proposed “food items to be labeled with information that identifies the food items as genetically modified.”
Why GMO labeling has failed Mandated labeling of genetically modified organisms has failed at the state level for a number of reasons. While the U.S. does not have a federal law to mandate labeling of GMOs, vol-
untary labeling by states is permitted. “You might not be able to win an individual state and do it [mandated GMO labeling],” MacDonald said, “but, if you get enough states to say ‘this is important to us’ and pass the laws, that would force the hand of the federal government.“ MacDonald said the FDA’s position on GMOs since the 1980s has been that the process of creating foods through genetic engineering does not change the nutritional or structural chemical composition of the food, therefore it does not need to be labeled. CONTINUED ON 254
CONTINUED FROM 24 “Adding a label that a product is produced by genetically modified technology does not change the safety or the quality of the food in any way,” MacDonald said. “It would become an additional regulatory factor for the food industry to manage for no benefit to the consumers.” Ruth MacDonald MacDonald said there is no evidence that non-GMO products are better or safer than GMO products. However, Howard Vlieger, an independent crop and livestock nutrition adviser, and a third-generation farmer, disagreed. “There are tremendous amounts of incidents of the ill effects that are being observed and documented by a growing number of pediatricians across the country,” Vlieger said. “I think it [GMO labeling] is a must for protecting the health of our future generations.” Vlieger, a self-described “student of the soil,” began using alternative farming practices in 1989 to decrease the Howard use of chemicals Vlieger on his crops. In 1992, Vlieger’s advisory work, which now spans 16 states, has helped farmers to decrease their dependency on chemicals and move to organic or biological farming practices. In Vlieger’s advisory work, clients started to recognize a change in their animals as BT, or genetically engineered corn, was removed from their feed. Problems causing gastrointestinal tract infections, ulcers, false pregnancies and bloody bowels went away. Vlieger’s concern: if this is happening in animals, what is it doing to humans? A long-term feeding study, co-authored by Vlieger, was published in 2013 in the
Journal of Organic Systems. Researchers found significantly higher rates of severe stomach inflammation and thickening of the uterus in pigs that were fed GMO corn and soy. “It proposes a real health risk,” Vlieger said.
Current options A 2013 study on consumer behavior, conducted by Harris Interactive on behalf of the Iowa Farm Bureau, concluded consumer decisions, when selecting meat and dairy products, were based on three primary factors – price, taste and nutrition. Less than 20 percent of consumers were concerned with how the products were produced. “If you are worried about some particular ingredient or have a logical reason of why you want to avoid that ingredient, that is your decision,” MacDonald said. MacDonald said there is already a way to avoid GMOs without the rigmarole, regulatory processes, and mandates on the food industry that are already in place: Eat organic. Organic labeling is voluntary, but any producer who chooses to label products as organic are subject to strict verifiable guidelines by the U.S. Food and Drug Administration. “Anything that is made in the United States out of corn or soybeans, and any of the ingredients that come from that, pretty much are going to be GMO,” MacDonald said. “So, if you don’t want to eat GMO stuff, don’t buy things that have those ingredients.” However, some people avoid buying organic produce because of its higher price. MacDonald said the cost of mandated GMO labeling would be absorbed by the consumer. Despite being against mandated GMO labeling, MacDonald said “consumer knowledge is a good thing,” but, is against a labeling program being adopted “just because” someone wants to know.
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Featuring additional coverage in Jasper, Poweshiek, Marshall, Tama, Benton, Marion, Mahaska, Iowa & Keokuk Counties. To receive your free copy please email jholschuh@newtondailynews.com AG Mag
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Produce, pigs, production High school FFA program strives for real-world application BY MIKE MENDENHALL For Central Iowa Ag Mag
The waning months of summer can get toasty in the PCM Diamond Trail FFA greenhouse. In late September it was 91 degrees, and Mustang vocational agriculture instructor Nicole Gent knows heat rises. She climbed a ladder atop the glass-andsteel structure – power drill in her belt holster – to remove aging glass paneling. “It’s to the point where it needs replaced,” she said. “[Students will] help me with it, but it’s going to be a lot of me after school to get it done.” Coinciding with the hothouse updates, Gent prepared to add the final piece of metal to face the outside of 12 welding booths. A new exhaust system was also recently installed. The 2014-15 school year is Gent’s second to lead the FFA class. The program has been part of the PCM curriculum since Feb. 28, 1947. Its 12 courses vary from agronomy to farm business management to welding and public speaking. The program also provides students opportunities – such as the greenhouse, events testing parliamentary procedure, and soil-nutrient judging – to exercise skills they’ve gained in class with practical application. CONTINUED ON 274
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ABOVE: Prairie City-Monroe High School senior Aaron Hegwood and agricultural science teacher Nicole Gent remove glass paneling from the top of the Diamond Trail FFA greenhouse in Monroe, Iowa, last fall at the Monroe school. ON PAGE 27: Gavin Branderhorst, 12, of rural Prairie City, cleans his pig after a walk through the pasture at his home July 12. The 4-H member was getting his animal ready to show at last year’s Jasper County Fair.
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4CONTINUED FROM 26 Wearing hard hats and safety gloves, FFA students moved the long, rubber, honeycomb-topped tables out of the hothouse below. Students helped with the repairs to ready the greenhouse for a farm business analysis. Farm business management students looked at expenses versus the income and profit of their project from the 2013-14 growing season to forecast for the current school year. After the greenhouse prep, the farm business class will create a flow sheet of greenhouse income vs. expenses. During the winter months, students will begin to grow vegetables, flowers and perennials, readying the goods for sale in April. Students will sell the produce and non-edibles straight from the greenhouse. PCM Senior Connor Warrick is the school’s FFA president – currently taking ag business in the program. He does not plan to have a career in agriculture, but does intend to take over his family’s farm in the future. Because he comes from a family that raises hogs, the class allows him to learn more of the technical side of the trade his father enjoys. In his four years at PCM, the senior has been a part of the program’s livestock judging and horticulture teams and public speaking events. Warrick said the Diamond Trail FFA program adds a realworld value to his education. “It has the value of getting a hands-on experience,” Warrick said. “Not many classes other than shop or welding give you
hands-on job experience. “We can take the stuff we do in agronomy class and put that into our future professions. We can take something like welding, or anything like that, and use it as a trade and actually have a job in it.” In late September, six of PCM’s FFA students competed in the soils judging contest in Knoxville, Iowa. Teams from around the region competed in analyzing the different layers and horizons of soil makeup from pits dug in fields. The students looked through the soil makeup for the organic matter necessary for viability. The Diamond Trail team came in 16th among 24 teams, a silver metal ranking. “Once we came back, we went over each of the individual results,” instructor Gent said. “We talked about those, what [judges] looked for, what they should have seen, things like that to help them improve.” Gent felt the performance suffered from simple nervousness and inexperience. Many of the students had not participated in soils before the event. But since the September contest, FFA has had multiple conventions and conferences, all of which is a draw for students interested in STEM fields, she added. “I think there are a number of benefits for someone interested both in science and in ag,” she said. “Not only do they develop skill within the ag industry, but they can use it in any career that they choose to pursue. They can take the knowledge they gain in science or math and apply it to a contest or project they do within FFA.”
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Creston (641) 782-7032
Macedonia (712) 486-2441
Hamburg (712) 382-1862
Massena (712) 779-2228
Indianola (515) 962-1234
Pacific Junction (712) 622-8217
Knoxville (641) 828-0570
Red Oak (712) 623-4858
Lenox (641) 333-2288 Winterset (515) 462-3115
1 Offer valid until March 31, 2015. Subject to approved installment credit with John Deere Financial, some restrictions apply, so see your dealer for complete details and other financing options. Prices and model availablitiy may vary by dealer. Some restrictions apply. other special rates and terms may be available, so see your dealer for details and other financing options.