Farm News

$900,000 Still Available to Iowa Farmers through NRCS Organic Initiative; Deadline to Apply is June 1

Wed, 16 May 2012 00:00:00 EDT

AMES Iowa farmers thinking of adding another income stream in high-value organic production, or expanding certified organic acres, have until June 1 to apply for the Organic Initiative through USDA's Natural Resources Conservation Service (NRCS). The Organic Initiative, a sub-program of the Environmental Quality Incentives Program (EQIP), supports farmers during the transition with up to $20,000 per year, or $80,000 over six years, for practices like cover crops, crop rotation, boundaries and buffer zones, grazing systems, integrated pest and weed management, and seasonal high tunnels. The program also offers technical help developing transition, grazing and conservation plans. Beginning and limited resource farmers receive additional assistance. EQIP is a voluntary program that offers financial and technical assistance to farmers who implement conservation practices on agricultural land through contracts up to 10 years in length. Of Iowa's Organic Initiative program fund allocation, $900,000 is still available to eligible farmers. To be eligible, farmers do not need to be certified organic, but must be seeking to transition some portion of their farm to organic production. Certified organic farmers are also eligible, as well as those who meet organic standards but are exempt from certification because their gross annual organic sales are less than $5,000. Farmers interested in applying for EQIP Organic Initiative funds must do so through their local NRCS County office. NRCS offices are housed in the USDA Service Centers in every county in Iowa. Jim Petersen, a Practical Farmers of Iowa member who farms 2,400 acres near Knoxville, has a mixture of incomes from conventional row crop, livestock and organic production. He has received both Organic Initiative and EQIP funds, and says he thinks there's more profit potential with organics. "It's good to have different markets to sell to," Petersen says. "We've had opportunities to rent different farms where landowners wanted their farms farmed organically." Petersen first got involved in organic production in 2004, when three sisters (also PFI members) who own a nearby farm Shivvers Fair Acres approached him about renting 160 acres if he would farm it organically. "We did some investigating into the rules and regulations and decided to try," Petersen says. "I think there is a great enough demand for organics that more farmers could switch which would probably help organics in the long run because there would be a better supply." According to the USDA Agricultural Marketing Service, organic agriculture is one of the fastest growing segments of U.S. agriculture, and has maintained that status for more than a decade. Between 2002 and 2011, the number of certified organic operations in the U.S. jumped by 240 percent. Many Iowa farmers have started seizing on this strong market demand by transitioning a small portion of their land to organic production while keeping the majority of their acres dedicated to established income streams. This opens the door to receiving premium prices for organic crops while preserving the stability of familiar production systems. In addition, adding an organic enterprise such as hay, livestock, row crops or produce can be a viable way to involve the next generation in the family farm business. This scenario is exactly what played out for Petersen, who has been able to involve all four of his children in the family farm. The extra income from his organic enterprises has also allowed him to give up his day job to farm full-time. "Having the better market and different opportunities that came from organics has allowed our children to be more involved with the farm," Petersen says, "and I myself have been able to quit my off-farm job." For farmers already certified organic, the Organic Initiative can provide support in developing expansion plans, and ensuring environmental sustainability targets are being reached. More information about the Organic Initiative, including background information and Iowa success stories, is available online at www.ia.nrcs.usda.gov/programs/OrganicInitiative.html.

Ceremony launches plant

Tue, 15 May 2012 00:00:00 EDT

By BILL SHEA/For Farm News About 170 new jobs, better prices for farm commodities, and deeper ties between Iowa and South Korea were celebrated Monday afternoon with a groundbreaking ceremony that formally launched construction of the CJ Bio America plant in Webster County. The event began with traditional music performed by a six-member percussion group from the Korean American Resource and Cultural Center in Chicago, Ill. It ended with clumps of dirt flying off the ends of golden-colored shovels. About 200 people gathered in a large tent at the plant site in the North Central Ag Industrial Park for the ceremony. Between the music and the actual groundbreaking, a series of business and government leaders talked about the importance of the $323 million plant where corn starch from the nearby Cargill facility will be turned into amino acids, principally lysine, for use in livestock feed. ''It is our first manufacturing plant in the United States of America,'' said Tae Jin Jeong, the chief operating officer of the bio division of the local plant's parent company, CJ CheilJedang Corp. That parent company is based in South Korea. ''2,000 years ago, the proudest thing was to say I am a citizen of Rome,'' Tae added. ''Now, today, for CJ and me the proudest words we could say is we are part of Iowa community.'' Lt. Gov. Kim Reynolds greeted the company's leaders by saying ''welcome to the great state of Iowa,'' in Korean during her remarks. ''We are so proud that you chose to build here and make a substantial investment in Iowa,'' Reynolds added. ''This is truly a testament to our communities, to our work force and the hard work and dedication of so many people in this state.'' The CJ Bio America plant is the first of what local leaders hope will be many companies that will set up shop in the Ag Industrial Park to use byproducts from the Cargill plant. Cargill will use a wet milling process to turn corn into sugars, such as dextrose, and ethanol. That process generate byproducts and opportunities for other companies Cargill leaders call over-the-fence customers to use those byproducts to make even more things. Gov. Terry Branstad said the industrial park will become a bioscience complex. ''We are very excited about what this bioscience complex is going to mean,'' he said. ''The strength of our agricultural economy comes from Iowa farmers and from companies like Cargill and CJ which will produce safe and reliable products to help us feed the growing world population,'' he added. Dallas Tonsager, the U.S. undersecretary of agriculture for rural development, said agriculture creates one of every 12 jobs in the country. ''Thanks to the hard work of America's farmers and ranchers, we're able to count on agriculture and rural America to help drive this nation back from the deepest recession many of us have ever seen,'' Tonsager said. Greg Page, the chairman and chief executive officer of Cargill, said the corporate culture and values of CJ Bio America are very much like those of Midwesterners. ''We look forward to a long and prosperous partnership together,'' Page said. Fort Dodge Mayor Matt Bemrich thanked the City Council and Iowa Central Community College for their roles in economic development. When it came time to actually break ground, one of the ceremonial shovels was handed to a man who is neither an executive or an elected official. Don Jordison, of Fort Dodge, was chosen to participate in the ceremony because he is an Army veteran of the 1950-1953 Korean War. Chul Huh, the South Korean consul general based in Chicago, called Jordison a symbol of the close relationship his country has with Iowa. During the groundbreaking, dirt was tossed toward a field where the heavy duty groundbreaking has been going on for a little over a month. Earthmovers have been preparing the ground there since the last week of March. The plant is to open in early 2014. The company will hire 50 to 60 people this year, and hire another 100 people in 2013. Dennis Plautz, the chief executive officer of the Greater Fort Dodge Growth Alliance, was the master of ceremonies at the groundbreaking. People were brought to the site by buses that departed from the Best Western Starlite Village Inn & Suites. Contact Bill Shea at (515) 573-2141 or bshea@messengernews.net

CJ Bio America building in central Iowa

Tue, 15 May 2012 00:00:00 EDT

By LARRY KERSHNER Farm News news editor FORT?DODGE - Sometime in early 2014, CJ Bio America, a new subsidiary of Korea-based CJ CheilJedang is expected to be in full operation. The company broke ground Monday to construct a $320 million lysine production facility at the North Central Ag Industrial Park west of Fort Dodge. For those with corn to sell in Webster and surrounding counties, the presence of the dry milling plant owned by Valero and the wet milling facility owned by Cargill, both in the ag park, competition for corn is expected to be intense. And competition for corn is expected to be just the beginning, according to those attending Monday's groundbreaking ceremonies. They also think that CJ Bio America is just one of additional new manufacturers that could locate in the park in the relatively near future. "When I was governor before, we were working on value-added products," said Gov. Terry Branstad. "Now we have the best of all worlds - Valero, Cargill and now CJ (Bio America), right in the midst of some of the most productive agricultural land in the world, raising more corn and soybeans than any American state." When asked where the park can go in the future, Branstad said, "(Cargill's) going to be buying and processing corn; but there are other biosciences (seeking) to replace petroleum products with bio-based products, including nutraceuticals. "I believe Cargill is looking for other partners. It'll be better for the environment and better for the economy. I would not be surprised to see other partners locate in this vicinity." Greg Page, chairman and chief executive officer of Cargill Inc., confirmed the possibility without mentioning specific efforts. "The bioscience industry is a very exciting area around the globe. There are people trying to make all types of chemical and latex replacements. A lot of people are looking for ways to use bioscience to create the same molecules as from petroleum products, whether its the outer lining of disposable diapers or something for the food supply. "(They're) trying to use corn to replace petroleum to provide (energy) security, create jobs and it's better economically." Bill Northey, Iowa secretary of agriculture, said: "It's a great story to tell. The area will need a lot of corn. It's going to be a corn-deficit area. The competition will mean a bump in price, it's got to be good for local farmers and I expect this to be one of the higher basis around here." Corn basis is the difference in price between the Chicago Board of Trade future price and what a local elevator will bid for corn on any particular day. Usually the basis is lower than CBOT futures, because producers have less of a distance to transport grain. Northey said the corn basis went down, meaning a better price for local producers, once Cargill opened a similar facility in Eddyville. "They have to bid to get the corn and have to compete for the corn. Farmers have been accustomed to finding someone who will take our corn; so it's nice to find someone willing to compete for it." Rep. Steve King, R-Kiron, said: "This ag industrial park (adds value to corn) three times before it leaves the community. With spin-off businesses in a year or two from now, I wouldn't be surprised to hear they're adding value five and six times before it leaves the neighborhood." There are more than 300 different products that corn is converted into and gets to be a high value on the food side. King said he expects to see a dramatic state of growth in the first several years within the park. Back in the pre-ethanol days, when ethanol plants were being proposed, King said, "I remember they said, 'we can add a nickel to the price of your corn.' We were thrilled about that nickel. "(Ethanol's) been very, very successful, and if you look at this situation, now you have two plants competing. They'll set the grain prices for a long ways around here." As the price gets better, he said, more grain will pour in from farther outside the immediate area, and even those areas' corn end users will compete to get grain within their customer bases. "Whenever you have strong markets," King said, "it increases prices even as you move away from Fort Dodge because of the basis. At the same time it rearranges land values to be worth more. These markets will be here a long time." He also credited the ethanol co-product, distiller's dried grain with solubles, as bringing more cattle feeding to Iowa. "There are 120 feedlots for sale in Oklahoma and Texas," King said, "because of the value of our grain and DDGS. "Cattle feeders can now use rough hay that they otherwise wouldn't bother with," because DDGS mixed into corn stocks or ditch hay makes forage more palatable to cattle. Renewable energy is an essential component of Iowa's economic success, King said. "You don't have this level of success in other states," he said. "Iowa is a center of prosperity. There's a place where every bushel can go to and we don't have to ship it out of the state." Contact Larry Kershner (515) 573-2141 or at kersh@farm-news.com

USDA: Soybeans may be at record low

Mon, 14 May 2012 00:00:00 EDT

The U.S. Department of Agriculture last week issued its report on annual U.S. crop production, resulting in a bearish outlook for corn, a bullish soybean market ahead. Old crop corn ending stocks were increased to 851 million bushels, while the new 2012 national average corn yield estimate was set at 166 bushels per acre. Total U.S. corn production landed at 14.79 billion bushels, and the carry-out projection for new crop corn is at 1.88 billion bushels. Ending stocks for old crop soybeans came in at a decreased 210 million bushels, and on the new crop side, the 2012 national soybean yields is estimated at 44 bushels per acre, while increased exports are slated to bring ending stocks down for next year to145 million bushels, a mere 4.4 percent. Darin Newsom, senior analyst for DTN, said on May 10, said of the USDA's corn numbers, "The numbers don't add up. "If we look at the market signals going into this report versus what the USDA has released this morning, there is little resemblance in the outlook between the two, so it will be very interesting." He said the predicted bearish corn market was a result of an increase in old crop ending stocks, with decreased feed demand at the heart of it; plus higher-than-expected new crop ending stocks, with the new crop anticipated at being the largest producers have seen, and an increase in world ending stocks. "If you offered me odds on this happening, even the high pre-recorded estimates were not showing the possibility of increased old crop ending stocks," Newsom said. "You can go back to USDA's own quarterly stocks numbers and it shows there was very little chance at all of stocks remaining where they were, that they were going to have to decrease with even average demand over the second half of the marketing year. "So the fact that we saw an increase in old crop domestic and world corn ending stocks leaves you scratching your head." Newsom said the decrease in old crop soybean stocks was as curious as the old crop corn situation, adding that there has been good demand for soybeans, but not extraordinary demand. He said many of the daily sales are through 2012-2013, and that exports have been average at best. Corn supply, demand Newsom said the old crop corn situation is where most of the interest lies, with feed demand dropping by 50 million bushels. Along with that, ethanol production has decreased since 2010, and now is predicted to remain unchanged at 5 million bushels for the 2012-2013 marketing year. "This is a warning sign to me," Newsom said, "because there is a real risk that we're starting to develop a trend that (demand) may be topping out." The market that has been in place since 2005 may be showing this, and that the 2010-2011 report of 5.1 million bushels, for now, seems to be the peak in ethanol demand for corn. The report showed a 50-million-bushel decrease in feed demand for 2011-2012, while exports were left unchanged, and total use also dropped by 50 million bushels. Total supplies were left unchanged at 13.5 million bushels. It all combined to bring the carry-out number to 851 million bushels, compared to the April figure of 801 million bushels. Ending stocks use bounced up to 6.7 percent from the previous 6.3 percent. "By itself it's not a cumbersome number," Newsom said, "but where there was talk in the industry that we could see corn ending stocks down around 640 to 650 million bushels, this is going to be viewed as a bearish development. This is where it's going to get interesting." In the new crop corn, production estimates come in just short of 14.8 billion bushels. Ethanol demand is unchanged at 5 billion bushels, and the ending stocks-to-use figure lands at 13.7 percent for 2012-2013, up from the 6.7 percent figure for 2011-2012. Soybean supply, demand Ending stocks decreased by 40 million bushels according to the USDA's May 10 report. Figures showed an increase in soybean demand, with supplies left unchanged and reflecting a strong export demand. "Export demand was strong, but only strong enough to just meet this 1.2 million bushel figure," Newsom said. "We were slightly behind pace to meet the 1.29 million bushel (projection), so to put another 25 million bushels on there, we're going to have to see a pretty good pace increase for shipments," Newsom said. "We need to keep an eye on those to see if the pace begins to increase, if demand for U.S. soybeans gets as strong as what the USDA is looking for right now." Sorting it out Newsom said the old crop corn outlook is seeing an inverted market, with July corn at higher prices than September, indicating a bullish supply and demand situation. He said it has grown increasingly bullish over the last 30 days. "So the fact that we now have a less bullish supply and demand situation which flies in the face of the quarterly stocks numbers and what the market seems to be telling us in its own action by what traders themselves are doing, seems very curious to me. It just doesn't seem to fit." He said new crop corn is looking to be neutral to bearish based on the 2013 carryout showing up on the report. Newsom said the corn basis report shows an inverted forward curve, with prices now at 10 cents over the July futures contract, which is much higher, considering that prices at this point are usually 10 to 12 cents under the July futures contract. Newsom said the corn basis is 20 to 25 cents stronger than normal, but USDA numbers indicate corn stocks have grown by 50 million bushels, that the corn situation is not as tight as previous USDA reports have stated. The markets themselves have been saying that the situation has been tightening, he added. The soybean outlook summary shows that crush demand is up by 15 million bushels; export demand is up 25 million bushels for a total of 40 million bushels despite the pace that has been running behind, and ending stocks to use decreased to 6.8 percent. "If we look at the July, August and September contracts, we do see that same inverted forward curve. It would seem to suggest that we have seen a tightening of old crop ending stocks. Maybe that 210 million bushels of ending stocks for 2011-2012 could be realistic, it just seemed surprising, seeing the bulk of the increase in demand coming from export shipments," Newsom said. He said another surprise was the November-through-next-September's future spreads for new crop bushels. "Coming in at 145 million bushels for new crop ending stocks seems to be a bit more severe than what the market is telling us right now," he said. "(There) could be so much focus has been on the old crop for both corn and soybeans, that new crop has kind of fallen by the wayside. But if we are down to 145 million bushels, look for the forward to curve to get a bit more severe." As far as the old crop soybean basis, he said the market is flattening out, finding a comfort zone between the high and the average of the last five years, resulting in no extraordinary basis or demand for merchandisers right now. He said it would suggest merchandisers have been able to obtain soybean supplies to meet demand, and that demand hasn't picked up so much that they're having to push the cash market. "To drop 40 million bushels doesn't seem to agree with what we're seeing in the market place at this time," he said. " right now it doesn't seem to be as concerned as USDA would lead us to believe." An increase in the new crop soybean demand from 3.076 million bushels to 3.285 mb is due in large part to having a 10 mb increase in crush demand, and a 190 million bushel increase in exports, Newsom said. The projected export number of 1.5 million bushels is huge, he said, adding that the tight South American crop is a large contributing factor. Also, he said China will continue trying to build up enough ownership heading into what could a much tighter global supply and demand situation. The new crop soybean ending stocks of 145 mb is one of the tightest on record. Newsom said that leaves little margin for error when it comes to new crop soybeans. "This number could be the most bullish number we see all year because we are expected to see increased double crop acres;" Newsom said, "and particularly with the speed of maturity of the winter wheat crop, it's going to be coming off faster" leading to expanded double crop acres. "If so, this production number could climb, and that could add slightly to our ending stocks number. But for now, this could be the lowest ending stocks to use number that we see over the rest of the marketing year." Contact Karen Schwaller at kschwaller@evertek.net.

Carroll County stream signs note watersheds

Sun, 13 May 2012 00:00:00 EDT

CARROLL (SWCD) - Starting last week, Carroll County residents could start looking for new signs near the bridges of their state and county paved roads. The new signs will show travelers the name of the stream they are crossing. Forty two new signs on 21 stream crossings will soon be appearing. Seven of the crossings are on state highways and will be installed by Iowa Department of Transportation crews. The remaining 14 crossings will be installed by Carroll Secondary Roads crews. The sign project is coordinated by the Carroll Soil and Water Conservation District for the purpose of identifying various watersheds by identifying the streams. The SWCD wants rural residents to be aware of the watershed they live in and share with their neighbors. "Everyone in a watershed shares the water quality of the stream." said John Klein, sign project coordinator. One side benefit is providing rural landmarks that can be used by motorists that need to describe their location. "If a traveling driver broke down on a county paved road, they may find it difficult to identify their location when they call for help," Klein said. "But if they could say they are near the Willow Creek Bridge, and the bridge is well marked, regular travelers would know where to find them." Funding for the signs, posts and hardware came from a combination of the local cities, county board of supervisors, county conservation board, Pheasants Forever, and SWCD funds. These local sources were matched by grants from the Timmerman Trust Fund and Community Foundation of Carroll County last fall. The cities of Breda, Carroll, Lidderdale and Coon Rapids contributed to install stream signs near their incorporated limits. The supervisors contributed to label the Middle Raccoon River at the Maple River Junction. The streams in Carroll County that will be signed this spring include (with numbers showing how many of bridges that will get signs): Willey Creek (1), Storm Creek (3), Willow Creek (1), Brushy Creek (4), Carnarvon Creek (1), Purgatory Creek (1), Dedham Creek (1), West Nishnabotna River (1), Missouri & Mississippi Watershed Divide (1) and Middle Raccoon River (7). The Soil and Water Conservation District is planning to complete the county's stream crossings on paved roads with 11 additional sites in the final phase of the project in 2013. "In Carroll County," Klein said, "we have streams in Breda and streams in Manning that will not join up until they both get to St. Louis, Mo. Everyone lives in a watershed."