by Tim Alexander

New Era of Risk Management Begins

URBANA – A new era of farm risk management was ushered in last week when USDA Secretary Tom Vilsack unveiled highly anticipated new safety net programs, while also announcing new tools available to aid farmers in choosing a program. The online risk management decision tools were developed, in part, at the University of Illinois at Urbana as lead university for the National Coalition for Producer Education.

Farmers will be asked this winter and through the spring of 2015 to declare between two new risk management programs, Agricultural Risk Coverage (ARC) and Price Loss Coverage (PLC). These options signal the end of the “direct payment” era and offer farmers protection when market forces cause substantial drops in crop prices and/or revenue.

“We’re committed to giving farmers as much information as we can so they can make an informed decision between these programs,” Vilsack said of the online tools, which are now available at www.fsa.usda.gov/arc-plc. “These resources will help farm owners and producers boil the information down, understand what their options are, and ultimately make the best decision on which choice is right for them. We are very grateful to our partners for their phenomenal work in developing these new tools within a very short time frame.”

As of Sept. 29, 2014, farm owners are eligible to visit their local Farm Service Agency (FSA) offices to update their personal yield histories or reallocate base acres in advance of final program selection. Farmers’ risk management choices will be binding through the 2018 crop year. Illinois producers may want to visit the U of I’s www.farmdocdaily.illinois.edu/areas/2014_farm_bill/ website for more information on how each program might work.

Fertilizer, Pest Management Usage To Be Collected

SPRINGFIELD – Illinois corn and vegetable farmers will be asked about their usage of fertilizers and pesticides by the USDA over the next two months, the USDA-National Agricultural Statistics Service (NASS) Illinois Field Office announced Sept. 25. Data will be collected for field corn, fresh market sweet corn, pumpkins and snap beans for processing between Oct. 1 and Jan. 10 as part of the national Agricultural Resource Management Survey and the Vegetable Chemical Use Survey, according to Mark Schluesener, state statistician of the NASS Illinois Field Office.

“These surveys will give corn and vegetable producers the opportunity to explain how they use fertilizers, agricultural chemicals, and manage pests responsibly to produce a safe, high-quality supply of food and feed,” Schluesener stated in a USDA news release. “The (surveys) will help ensure that USDA and other agencies have the most accurate, up-to-date fertilizer and chemical use information, straight from the source– producers themselves.”

During the fact-finding period, NASS personnel will conduct “in-person interviews with growers to gather information on their fertilizer and chemical use and pest management practices,” according to the USDA news release. The news release does not state the specifics of how personal interviews between the USDA and farmers would be carried out.

Results of the survey, which USDA says is confidential for respondents, will be published next year.

Specialty Poultry, Meat Prices Supported By Consumers

BLOOMINGTON – Shockingly high prices paid by consumers at the supermarket for organic and other specialty types of beef, pork and poultry are supported by a consumer base that drives the thriving “local” and “pasture-raised” movement, according to Nic Anderson, livestock developer for the Illinois Livestock Development Group (ILDG). Anderson noted that more and more farmers are setting aside small amounts of acreage to produce free-ranging or portably-penned poultry, including chickens, turkeys, ducks and more.

“The cost of production for local, free-range and organic is higher than commercial production costs, but farmers can recoup some that through retail prices associated with what I call the ‘local production phenomena,’” Anderson said in a phone interview. “There is real excitement about that market, but the percentage of the marketplace is very miniscule– even though it creates a lot of local interest. People like to see the farmers and know who they are, making them more apt to purchase at a higher value. The challenge comes in compensating that farmer for his increased production costs.”

U of I Revises Crop Budget Outlook

URBANA – Revisions to the 2014 crop budgets indicate the need to conserve cash, the U of I’s Sept. of Agricultural and Consumer Economics announced through farmdocDAILY.com. The major change has been a reduction in commodity prices, noted U of I ag economist Gary Schnitkey, who posted an update on crop budgets on Sept. 23 based on CME futures prices in mid-September.

“(Lower) prices result in very low returns, and indicate the need to conserve cash,” Schnitkey stated, adding that current price levels suggest that soybeans will be more profitable than corn. “Of course, returns projections could change. For example, it is highly likely that prices will differ from from projections. Supply and demand factors could change resulting in higher prices. Obviously, prices could be lower. Another large harvest in 2015 could result in lower prices than those shown in 2015 budgets.

“In perspective, the low prices projected for 2014 and 2015 may be below the long-run average, just as the prices from 2010 through 2013 were above the long-run average. Swings in prices have occurred in the past, and are likely to occur in the future. These swings can also cause swings in profitability. The long-run profitability of agriculture has not changed. Now a period of low returns likely is occurring, just as above average returns occurred from 2010 through 2013.”

Schnitkey’s entire post can be found at www.farmdocdaily.illinois.edu.

Illinois Farm Fact:

Peoria County 4-H’s first-ever Poultry SPIN Club increased the total number of birds shown at the 2014 Peoria County 4-H Show by around 40. (Cathy Ludolph/U of I Extension)

(Tim Alexander is a freelance reporter who writes agriculture, news and feature articles for the News Bulletin, Farm World and many other publications.)