In this week’s farm and rural news roundup, we have info about how the trend of nontraditional loan sources may affect farm finances. We also have perspective from one solar power proponent who feels community solar can benefit farmers and landowners, and a report on how the on-and-off trade war with China might affect grain reserve sales. Please read on …
Time to move the corn — or not?
BLOOMINGTON — What is traditionally a time for producers to sell off their stored grain has devolved into another guessing game for sellers, courtesy the on-again, off-again trade war with China. This is according to grain storage professionals including Scott Stoller, vice president of the Grain and Feed Association of Illinois, who told RFD Radio’s Deloss Jahnke last week that during June, it is traditionally ‘ready or not, here comes the corn time’ for growers looking to make room for this year’s crop. But with last week’s news of the U.S. government pursuing tariffs and punitive measures against China, farmers might be more reticent to unload their grain at current prices, said Stoller and Dale Durchholz, senior advisor for Agrivisor.
“I think there were a lot of things in the mix here to cause people to be defensive,” Durchholz stated. “All of this dovetails.”
Corn lost 6 cents per bushel while soybeans lost 10-11 cents per bushel on the heels of the China trade news. In addition, the Dow is down at the same time European markets are struggling, the market analysts pointed out. This is causing many farmers to wait until the market sends signals before they decide to make sales. (Ill. Farm Bureau news)
Callahan: Community solar a boon for farmers
PEORIA HEIGHTS — More than 600 Illinois dairy farmers in the constituency of the American Dairy Association of the Midwest recently announced an initiative to accelerate the adoption of renewable energy, specifically, solar energy usage on dairy farms. The effort will align the farmers with the Future Energy Jobs Act of Illinois in an effort to reach the dairy industry’s goal of further reducing on-farm greenhouse gas emissions by 25 percent by the year 2020. FEJA will substantially expand renewable energy efficiency programs in Illinois, protect 4,200 jobs and preserve $1.2 billion in annual economic activity, according to proponents, while positioning the state as a leader in zero-carbon electricity.
Trajectory Energy Partners, based in Highland Park, is helping farmers and landowners take advantage of opportunities presented by FEJA, which was passed by the Illinois General Assembly in December 2016. Colleen Callahan of Trajectory Energy Partners is a big proponent of community solar, which can be developed on 15 to 20 acres of available land and provide power to 400 to 500 homes. “As a lifelong farm resident and former state director for USDA Rural Development, I see community solar as an opportunity for community development in our rural areas. Producers have a chance to guarantee an income on a portion of their land for three decades,” Callahan said. “That may mean the difference in bringing the next generation into the operation, or keeping him or her there. It means another family contributing to the community. It could also mean the difference in getting an off-farm job to sustain the farm and/or pay for health insurance coverage.
“The (FEJA) puts Illinois on a path to become a leader in renewable energy generation,” said Callahan, who spoke to a group at Forest Park Nature Center in Peoria Heights about solar installations and opportunities created by FEJA in mid-May. “The initial goal is ‘25 percent by 2025,’ generating 25 percent of our energy needs from renewable sources by the year 2025. This process is underway, with the construction of the first community solar projects likely to begin in the first quarter of 2019.”
Illinois Farm Fact:
Cattle can detect smells from up to six miles away. (Illinois Ag in the Classroom)
Dealer financing causing debt stress?
URBANA — The recent trend toward implement dealer and other nontraditional financing sources for large machinery purchases may be causing additional farm financial stress, a recent report indicates. A series of recent articles posted on the University of Illinois farmdocDAILY website examines the subject, concluding that implement dealer financing has increased substantially in recent years, especially on smaller farms.
“Implement dealers currently provide nearly one-third of the agriculture sector’s long-term non-real estate debt,” according to farm finance experts from the USDA National Agricultural Statistics Service, University of Illinois and Cornell University. “We find that farms that use implement dealer financing have similar indicators of potential financial stress than those that do not.”
The researchers discovered that implement dealer financing increased from about 11 percent of long-term non real estate lending in 2003 to 27 percent in 2016. “The growth of implement dealer financing has raised concerns about the risk associated with higher debt levels during a downturn,” the authors concluded, albeit with a caveat: “Data also suggest that farms using implement dealer financing have similar levels of financial stress as farms who do not use implement dealer financing.”
To read the entire essay, “Implement Dealer Financing and Farm Financial Stress,” see the farmdocDAILY website. Another article of interest, “America’s Farmers Turn to the Bank of John Deere,” was published July 18, 2017 in the Wall Street Journal.
Crop report shows outstanding progress
SPRINGFIELD — Illinois’ amazing turnaround in crop progress was reflected in the USDA-NASS Illinois Crop Progress and Condition report for May 29, 2018. After a very slow start due to a persistent cold and rainy start to early spring, there were 5.5 days suitable for field work across Illinois during the week ending May 27. Corn emerged was at 89 percent, compared to the five-year average of 81 percent, while soybeans planted was at 90 percent, opposed to 60 percent in 2017 and the five-year average of 62 percent.
Corn condition was rated at 1 percent very poor, 2 percent poor, 14 percent fair, 52 percent good and 31 percent excellent. Soybean condition was not yet rated. An area of concern for growers in some areas of the state, however, is topsoil moisture, which was rated two percent very short and 25 percent short, and subsoil moisture, which was rated two percent very short and 22 percent short due to a recent lack of precipitation.
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