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	Archive of Illinois AgriNews Columns
	These columns were originally published in Illinois AgriNews during the month indicated and are reprinted here by permission.
		The Farm Bill Saga Continues as Congress Tries to Solve the Problem of Financing (April 2008) Both the House and Senate passed another short-term extension to the 2002 Farm Bill this week as lawmakers continue to work towards a new bill that can be agreed to in both chambers of Congress. A number of issues have slowed negotiations, the greatest of which have been disagreements over spending levels and financing across the Farm Bill titles. To further complicate the matter, the Bush administration has issued a veto threat unless the new Farm Bill exhibits serious levels of reform to farm policy to improve both program performance and the ability to justify U.S. farm support in trade talks among members of the World Trade Organization. Furthermore, the administration has also stated that they are unwilling to accept any legislation which finances additional spending through higher taxes. Click here to read the column...

		Soybean Basis Remains in the Tank (March 2008) The soybean basis at many interior locations has been generally weak for the past year. The weakness has accelerated in 2008. On March 20, 2008, for example, the overnight cash bids for soybeans in Illinois, as reported by the Illinois Department of Agriculture, ranged from $11.21 to $11.47, reflecting a basis relative to July 2008 futures of -$.60 to -$.86 per bushel. The basis was slightly weaker than that of a year ago, $.20 to $.30 weaker than the basis of two years ago, and $.40 to $.50 weaker than the basis of three years ago. Click here to read the column...

		Crop Insurance Decisions: Why Not the Same as Last Year? (February 2008) A good place to begin when making 2008 crop insurance choices is with 2007 choices. Most Illinois farmers chose revenue insurance products in 2007. Of the insured acres, 34 percent of corn acres where insured using Crop Revenue Coverage, 22 percent with Revenue Assurance (RA), and 29 percent with Group Risk Income Plan (GRIP). While changes to revenue products have occurred, one of these three revenue products will be a good choice in 2008. Click here to read the column...

		Corn and Soybean Costs Continue to Increase (January 2008) Production costs will be considerably higher in 2008 as compared to 2007 levels. Non-land costs for high-productivity farmland are estimated to be $370 per acre for corn, an increase of near $50 over 2007 levels. Soybean costs for 2008 are projected at $220 per acre, an increase of near $20 per acre over 2007 levels. Click here to read the column...

		A Shifting Biotechnology Policy: Federal and Industry Initiatives (December 2007) At first glance, the domestic regulatory structure for agro-biotechnology appears to function adequately as new genetically modified (GM) crops regularly receive government approval. While the current 20-year old system has led to a few trade disruptions and litigation, changes on the horizon present uncertainty to the regulated community. Unfortunately, these proposals, particularly regarding the presence of unapproved GM crops, could hamstring coexistence efforts and complicate international trade. The biotech industry, however, is attempting to fill this regulatory gap. Click here to read the column...

		Year-End Tax Planning (November 2007) Due to record breaking incomes in 2007, is this the year to establish a retirement plan? Many farmers have the attitude that excess income should be invested in additional farm land. However, this may require liquidation of the land at the time of retirement to produce income sufficient to allow the retiree to maintain his accustomed standard of living. A retirement plan, on the other hand, is designed to produce cash to meet retirement needs. Click here to read the column...

		Farm Incomes in 2007 and Beyond (October 2007) Higher commodity prices since the latter half of 2006 have led to relatively high farm incomes. In 2006, net incomes for grain farms enrolled in Illinois Farm Business Farm Management (FBFM) averaged over $100,000 per farm. Click here to read the column...

		The 2007 Farm Bill and the WTO Trade Negotiations (September 2007) The House of Representatives passed its farm bill in July, the Senate will take up its version this fall, and a deal is starting to emerge in the WTO agricultural trade negotiations. Unfortunately, the direction taken in the House farm bill is threatening to undermine successful conclusion of the trade negotiations. Click here to read the column...

		Investing Extra Cash Flows: Be Sure to Look at All Alternatives (August 2007) Strong projected yields through much of Illinois and higher than average commodity prices may result in higher levels of cash flow and income for many producers. A common question is how to allocate any excess profits and cash flows across potential alternatives. Click here to read the column...

		Thinking About the 2008 Corn Crop (July 2007) With 2007 corn acreage 2.4 million above intentions reported in March and crop conditions in mid-July near normal, it appears that the 2007 crop will be large enough to meet growing demand at “reasonable” prices for the year ahead. Click here to read the column...

		Whither Direct Payments? (June 2007) As Congress starts writing the 2007 Farm Bill, its biggest headache is the budget constraint. To get federal spending under control, Congress has adopted a pay-as-you-go policy. To spend more on some program, it has to reduce expenditures on something else. Click here to read the column...

		Illinois Farmland Markets: Recent Performance and Future Trends (May 2007) The Illinois Society of Professional Farm Managers and Rural Appraisers (conducts an annual survey to assess farmland valuesand trends in lease rates by land type and use in Illinois. Click here to read the column...

		Farm Tenants: Be Cautious with Permanent Improvements to Leased Land (April 2007) Farm tenants may identify how rented land could be made more productive (e.g., by installing drainage tile or applying lime), or how the farming operation could be made more efficient (e.g., by constructing on-farm grain storage). Such improvements often increase the value of the land, or at a minimum have multi-year benefits, and are typically the responsibility of the landowner. Click here to read the column...

		Will Corn Storage Be a Problem? (March 2007) Expectations of a large increase in planted acreage of corn in 2007 have resulted in some concerns about capacity to store the crop if average yields are also high. If planted acreage increases by 10 million, to a total of 88.3 million acres, area harvested for grain could be near 81 million acres. Click here to read the column...

		Crop Insurance Decisions in 2007 (February 2007) This year's higher commodity prices will have impacts on crop insurance products that are revenue based. Specifically, base prices used in determining revenue guarantees are going to be considerably higher than in recent years. Click here to read the column...

		Adjustable Cash Rents and Farm Program Payments (December 2006) Renewed interest in “adjustable cash rent leases” makes the legal issue of how such leases might affect the division of farm program payments between landowner and farm tenant even more important.Click here to read the column...

		Year-End Tax Planning (November 2006) Harvest is coming to an end as this article is being written. It appears yields are up and prices are well above average. Consequently, many producers will be faced with higher net farm profits. Along with higher profits come higher federal and state income taxes and self-employment tax. In order to defer these taxes, many farmers will prepay 2007 expenses or enter into contracts deferring the receipts from the 2006 crop until 2007. These transactions must be approached with caution to withstand IRS scrutiny. Click here to read the column...

		Projected Corn and Soybean Returns in 2007 (October 2006) At present, corn and soybean prices for 2007 are projected to be much higher than in recent years. Besides being higher, forecast prices for 2007 indicate that corn production will be more profitable than soybean production on many Illinois farms. Click here to read the column...

		Why Some People Question Our Farm Programs (September 2006) When U.S. farm programs began in the 1930s, we were deep in the Great Depression. Farm family incomes were below those of other Americans. The original objective of farm programs was to reduce poverty on the farm. Click here to read the column...

		Where Does a Crop Insurance Dollar Go? (August 2006) The Risk Management Agency establishes crop insurance premiums on a crop-by-crop and county-by-county basis with the intent to reflect actuarial or break-even costs of insurance over the long run. To make participation attractive, RMA subsidizes farmer paid premiums, and pays administrative and overhead (A&O) subsidies to insurance companies to insure that all products are offered on an equal basis to all eligible producers. To understand “where the dollars go”, it is important to understand premium subsidies, loss ratios, and market shares of products sold. Click here to read the column...

		Ready to Grow More Corn? (July 2006) The corn market in the US has historically been characterized by large supplies and generally low prices, often below the total economic cost of production, with occasional price spikes associated with production shortfalls. That landscape appears to be changing. The main driver is the rapid expansion in corn used for ethanol production, encouraged by a combination of political and economic forces. Click here to read the column...

		Whither Food Aid? (June 2006) One of the most important breakthroughs in the current WTO trade negotiations has been getting the European Union's commitment to eliminate all agricultural export subsidies. Export subsidies have been banned since the 1960s in everything except agricultural products. The EU is the main place that still subsidizes ag exports. After it buys agricultural commodities to support market prices, the EU uses subsidies to move the inventories out into the world market, often depressing world market prices in the process. If the EU can't subsidize exports, it will have to reduce its support prices enough to bring their production down into line with their market demand. This would be a good thing. Click here to read the column...

		Renting Money: Another Increasing Cost for Farmers (May 2006) Significant attention has been given to the increasing costs of fuel, fertilizer, chemicals, seed, and cash rent on Illinois farms. Rising interest rates, or the cost of “renting” money, have also lowered profit margins for Illinois farms. On May 10 th the Federal Open Market Committee of the Federal Reserve decided to raise its target for the federal funds rate by 25 basis points to 5%. This is the fifteen consecutive rate increase dating back to June 2004. The federal funds rate is closely linked to the interest rates of short-term loans. Click here to read the column...

		The WTO's Interim Decision in the US-EU Biotech Dispute: A Limited, Precautionary Ruling (April 2006) In May 2003, the United States, along with Canada and Argentina, filed a dispute with the World Trade Organization (WTO) alleging that the European Union's moratorium on the approval of genetically engineered agricultural products violated WTO rules. The alleged moratorium restricted the import of agricultural and food products into member states of the EU. The United States also challenged the refusal of some EU member states to allow the importation of genetically engineered products previously approved by the EU. For example, Italy prohibited the import of some varieties of Bt-11 maize despite approval by EU regulatory bodies. Click here to read the column...

		Do Fundamentals Matter? (March 2006) It is not uncommon to hear the comment that fundamentals are no longer important in determining prices of agricultural commodities. Soybean prices, in particular, have been the subject of such comments. Rather than fundamentals of supply and demand, it is believed that prices are determined by such things as the whims of fund traders and/or technical indicators. In fact, fundamentals are very much at the center of price determination. Click here to read the column...

		Changes to Crop Insurance Products in 2006 (February 2006) The Risk Management Agency did not make major changes to multi-peril crop insurance products except for Group Risk Income Plan (GRIP). Three changes have been made to GRIP, a revenue insurance that uses county yields in calculating its payments. Click here to read the column...

		Higher Crop Production Costs in 2006 (January 2006) Production costs for corn and soybeans will be higher in 2006 than in 2005. Increases in energy prices have caused large increases in per acre costs for fertilizer and fuel. In addition, per acre seed and pesticides costs are likely to increase in 2006. Click here to read the column...

		New Illinois Laws Create Triple Threat to Farm Trespassers (December 2005) Many Illinois farmers believe that trespassing is a growing problem, especially incidents involving ATVs or other vehicles. The Illinois legislature has responded with a triple threat. Click here to read the column...

		Some Farmers Entitled to New Deduction on 2005 Returns (November 2005) In an attempt to satisfy the World Trade Organization and its challenge of the Exterritorial Income Exclusion (ETI), Congress enacted Internal Revenue Code Section 199 (Domestic Production Income Deduction) as a part of the American Jobs Creation Act of 2004. At the same time, the ETI exclusion is phasing down in 2005 and 2006 and will be entirely eliminated by 2007. While ETI only applied to taxpayers who exported products outside of the United States , the new Domestic Production Activities Deduction applies to all manufacturers, including farmers. Click here to read the column...

		Lower Farm Earnings Projected for 2005 (October 2005) Illinois farm incomes in 2005 are likely to average over 50 percent lower than the very good incomes recorded in 2004. This projection is based on data from over 800 grain farms in which 2005 projected income is compared to 2004 actual incomes. Projections are made by personnel in the Department of Agricultural and Consumer Economics at the University of Illinois. Click here to read the column...

		Cash Rents in 2006 (September 2005) The level at which cash rents will be negotiated for the 2006 cropping year is an open question. Budgets suggest that 2006 cash rents should be lower than in previous years. However, lowering rents would go against historical trends of cash rent increases. Click here to read the column...

		The Performance of Illinois Farmland as an Investment (August 2005) The National Agricultural Statistics Service recently published their 2005 estimates of farmland values and rental rates, indicating that the average value of Illinois farmland increased by approximately 11.1% and generated cash rent of approximately 4.3% of value. Subtracting property taxes estimated at roughly .75% results in a total annual return of roughly 14.65% from the perspective of an Illinois farmland owner whose returns are in the form of cash rent and capital gains, less property taxes. This performance directly follows several years of strong appreciation rates and increasing cash rents, and naturally leads to the question: how does Illinois farmland compare to alternative investments? In evaluating investment performance, the level and variability of returns should be considered as well as the relationship to other investments held, and the role of the investment in protecting against inflation. Click here to read the column...

		Anticipating South American Soybean Production (July 2005) Entering the final two months of the 2005 growing season there is still considerable uncertainty about the size of the US soybean crop. Declining crop ratings and forecasts for additional stressful weather, along with insect and disease pressure, suggests that the crop will be small enough to result in a significant decline in US stocks by the end of the 2005-06 marketing year. The important question is whether the crop will be small enough to also require a reduction in the rate of use of US soybeans during the year ahead. The price implications of adequate supplies but small year-ending stocks are much different than a short supply situation that requires rationing of use. Click here to read the column...

		History of High Priced Soybeans (June 2005) Soybean prices moved sharply higher from mid-May through mid-June. The average spot cash price in central Illinois increased by $1.12 and November 2005 futures increased by $1.32 from May 13 through June 17. During that same period, November futures moved from a $.05 discount to July futures to a $.17 premium. Several fundamental factors supported the month long rally, including the higher than projected rate of consumption. Year-ending stocks will be more than adequate, near 300 million bushels, but well below the early season projections that were as high as 460 million bushels. Click here to read the column...

		An Agricultural Perspective of Consumer Credit Reporting (May 2005) There has been a recent surge of media attention regarding consumers accessing their credit information. Consumers are using credit at an increasing rate and institutions are using credit information for many purposes beyond acquiring credit. So what does this mean for the agricultural producer? What information is being stored? Who has access to the information? How long is the information stored? Click here to read the column..

		Performance of Market Advisory Services For Corn and Soybeans, 1995 Through 2003 (April 2005) Surveys suggest that farmers believe market advisory services are important in managing price risk, implying a need for information on the performance of market advisory services to assist in the selection and use of advisory services. The Agricultural Market Advisory Service (AgMAS) project at the University of Illinois has evaluated the pricing performance of market advisory services for the 1995 through 2003 corn and soybean crops, with no fewer than 23 market advisory programs included each year. Click here to read the column...

		Focus on Biotechnology—Farmer Liability for Commingled Biotech Crop Shipments (March 2005) Emerging regulations for overseas grain shipments ultimately may result in farmer liability for the commingling of even trace amounts of genetically engineered crops. The European Union now requires labeling of all products (including bulk grain shipments) that contain more than 0.9% of genetically modified organisms (GMOs). Moreover, there is zero tolerance for unapproved biotech products in the European Union, such as StarLink corn. Click here to read the column...

		Crop Insurance Decisions in 2005 (February 2005) Illinois farmers and share-rent landowners have until March 15 th to make changes to their crop insurance programs. If no changes are reported to insurance agents, the same products and coverage levels used in 2004 will be in affect for 2005. Click here to read the column...

		Production Costs Rise in 2005 (January 2005) Costs of producing corn and soybeans will be higher in 2005 than in 2004. Projections of variable costs are made for northern, central (high productivity farmland), central (low productivity farmland) and southern Illinois . These projections are available from the “Crop Cost from 2000 through 2005” tool in the management section of farmdoc .Click here to read the column...

		Dog-Bite and Landlord's Liability Risk (December 2004) If tenant's dog bites a guest of the tenant, is the tenant's landlord liable for injuries arising from the bite? In May 2004 an Illinois appellate court considered this question in a way that should make landlords happy. Click here to read the column...

		Taxability of Non-Starlink Litigation Payment (November 2004) Farmers have now received their debit card if they participated in the non-StarLink litigation and their claim was accepted. Questions have arisen regarding how the payment should be reported to the Internal Revenue Service. Click here to read the column...

		Early Indications Suggest Improved 2004 Farm Earnings (October 2004) Illinois farm incomes in 2004 are likely to average over 20% higher than in 2003. This projection is based on data from over 750 grain farms in which 2004 projected income is compared to 2003 actual incomes. Projections are made by personnel in the Department of Agricultural and Consumer Economics at the University of Illinois. Click here to read the column...

		LDPs Are Back (October 2004) Just over 5 months ago, cash corn prices in Illinois were over $3 and cash soybean prices were over $10. Now, corn prices are well under $2 and soybean prices are under $5. Prospects for large crops, following soybean shortages and early crop worries for corn, have been the primary factor driving prices down. Corn and soybean prices have dropped below the Commodity Credit Corporation loan rate and Loan Deficiency Payments (LDPs) are once again in positive territory. Click here to read the column...

		Retooling Your Farm Management Decision Toolkit (August 2004) Technology has changed our wor king environment. Yield monitors, GPS equipment, and cellular phones are common farm investments. The Internet has provided a wealth of information at our fingertips. Growth in electronic commerce continues to exceed forecasts. How has your decision toolkit kept pace? Are you ta king advantage of computer and hardware technology? Are your calculator, pencil, and back of the envelope still your most valuable tools? Click here to read the column...

		Understanding and Using USDA's Weekly Report of Crop Conditions (July 2004) The USDA's weekly report of crop conditions is one of the most widely followed indicators of corn and soybean yield potential. The survey and estimating procedures for this report are much different than for most surveys conducted by the USDA. For example, the monthly corn and soybean production forecasts rely on a June acreage estimate based on a survey of farmers and on a separate area frame sample. Monthly yield forecasts are also based on a survey of farmers and objective yield estimates based on an area frame sampling design where fields are randomly selected for observation and measurement. Click here to read column...

		Are Consumers Fat Because of Agricultural Subsidies? (June 2004) The recent passing of President Reagan has prompted numerous media sound bites and para phrases on the philosophy (or at least the rhetoric) that less government is better than more. Of course, as a taxpayer, it is easy to buy into the concept of "less government."As a policy analyst, however, the challenge is often in assessing more practical questions involving impacts of government intervention. We will always have intervention, so the relevant question is, "how much should we have?" Click here to read the column...

		What's Keeping Illinois Farmland Markets so Strong? (May 2004) What factors are contributing most to strong farmland values? While traditional explanations of farmland values focus on farm income as a primary determinant of farmland values, it is increasingly important to account for factors unrelated to the value of farm production. Click here to read the column...

		Crop Costs Higher in 2004 (April 2004) Variable costs for producing corn and soybeans are projected to be higher in 2004 when compared to costs in 2003. Variable costs, which include fertilizer, pesticides, seed, drying and storage, and machinery (repair, fuel, and hire) categories, are projected to increase by $5 to $7 per acre for corn and $3 to $4 per acre on soybeans.Cost projections are made for corn and soybeans in northern, central, and southern Illinois . Central Illinois projections are further broken down into projections for high productivity farmland (167 bu. average corn yield) and low productivity farmland (157 bushel average corn yield).These projections are available at farmdoc in the management section from the historic crop cost tool which compares 2004 projections to actual costs from 1999 through 2003. Actual costs are obtained from farms enrolled in Illinois Farm Business Farm Management (FBFM). Click here to read the column...

		Tracking Corn Market Fundamentals (March 2004) The record US corn crop of 2003 was not enough to satisfy domestic and world needs, resulting in high prices and declining stocks. Early prospects suggest a continuation of strong demand in the 2004-05 marketing year, led by increases in ethanol production and declining Chinese exports, requiring another large harvest in 2004. This environment of strong demand and uncertain production suggests a continuation of high, but volatile prices and marketing challenges for producers over the next several months. It will be important to keep current with changing supply and demand prospects and the implication for prices. Click here to read the column...

		New Prices and Products for Crop Insurance (February 2004) Premiums on many crop insurance products will be higher in 2004 than in 2003. In addition, Group Risk Income Plan – Harvest Revenue option (GRIP-HR) is available for the first time in 2004. An updated is provided below. Click here to read the column...

		Sizing Up Farm Bill Safety Nets (January 2004) How does the commodity program of the current Farm Bill stack up against past programs? The good news for Illinois corn and soybean producers is that, under reasonable price expectations, the current program provides a larger safety net than those provided by past programs. The bad news is that this increased support creates a political risk that needs to be fully recognized when making long-term investments. Click here to read the column...