14:20:00
05/16/2012
By Lindsay Calvert
DTN Intern
OMAHA (DTN) -- U.S. farmers supplying corn to the ethanol industry are helping consumers keep money in their pockets at the pump, according to a study released Tuesday by the Center for Agricultural and Rural Development at Iowa State University.
The production of ethanol in the United States reduced wholesale gasoline prices by an average of $1.09 per gallon in 2011. The research, authored by Professors Dermot Hayes and Xiadong Du, is an update of a 2009 report from CARD based on the impact ethanol has on gasoline prices.
The report comes at a time when the U.S. ethanol industry faces increased pressure from members of Congress to change or eliminate the Renewable Fuels Standard. The RFS requires gasoline blenders to use billions of gallons of ethanol annually.
In addition, the 45-cent volumetric ethanol excise tax credit, or VEETC, expired at the end of 2011. The industry, however, has been taking steps to expand the ethanol market by moving E15 to the pump.
The study found that the main factors that contribute to ethanol's role in reducing gas prices include higher oil and gasoline prices, higher ethanol inclusion and ethanol being priced at a discount to gasoline. Ethanol's effect on gas prices increased by 20 cents from the 2010 savings of 89 cents per gallon, the study found.
"Growth in U.S. ethanol production has added significantly to the volume of fuel available in the U.S.," said Dermot Hayes, Iowa State University professor of economics and finance. "It is as if the U.S. oil refining industry had found a way to extract 10% more gasoline from a barrel of oil."
U.S. ethanol production reached a record high of more than 13 billion gallons in 2011. The average price of a gallon of regular-grade gasoline was $3.52 in 2011. Without that production, the study said, gasoline prices would have been closer to $4.60.
"While it's hard to imagine that gas prices could be even higher than they are now, this study clearly underscores that the current pain at the pump would be far worse without ethanol," said Bob Dinneen, president and chief executive officer of the Renewable Fuels Association, which helped fund the research.
"Because ethanol makes up 10% of our gasoline pool today, it significantly reduces demand for oil and puts downward pressure on gas prices."
Ethanol has helped keep gasoline prices an average of 29 cents cheaper per gallon since 2000. Based on these annual savings, American drivers and the economy saved more than $477 billion in gas costs, or an average of $39.8 billion a year, according to the study. On a smaller scale, ethanol saved American households an average of more than $1,200 in 2011.
"From coast to coast and border to border, ethanol is helping save consumers money," Dinneen said. "Without ethanol helping to keep some measure of control on skyrocketing energy prices, our economy and household budgets across the country would be in terrible shape."
Ethanol benefits at the pump vary across regions based on how much ethanol is produced locally. The Midwest has seen the largest gasoline price reductions with average savings of 45 cents per gallon from 2000-2011. The Gulf Coast showed the smallest gasoline price reduction with savings of 19 cents per gallon.
A summary of the report can be viewed at: http://ethanolrfa.3cdn.net/…
For the full report, visit:
http://www.card.iastate.edu/…
Lindsay Calvert can be reached at Lindsay.calvert@telventdtn.com
(TN/AG/CZ)
© Copyright 2012 DTN/The Progressive Farmer, A Telvent Brand. All rights reserved.
11:32:00
05/16/2012
DECATUR, Ill. (DTN) -- Insect pests are turning out to be peskier than normal this spring. "It's just one of those years where we are seeing strange things show up in the field," said Wayne Bailey, University of Missouri entomologist.
"Pests seem to be appearing earlier and populations developing quickly when they do appear. This is a year growers will really have to be on top of things," Bailey said in an interview with DTN.
Purdue entomologist Larry Bledsoe has reported observations of corn rootworm larvae (first instars) in Tippecanoe County, Ind., (north and west of Indianapolis) on May 8. That is the earliest he has found corn rootworm larvae in 35 years. Generally, the initial hatch occurs near the end of May and into early June -- last year first reports of larvae were in early June.
Pest alerts have been filling cyberspace this week as trapping programs within various states alert growers of potential problems. Bailey noted in a DTN interview that moth flights (carried by the wind) have been elevated in his state. The number of black cutworms has already been significant enough to cause some replanting of corn in the northern part of Missouri. Portions of the Missouri Bootheel region have seen beet armyworm in corn. Seedcorn beetles had also caused some issues.
Bailey urged soybean growers to be diligent as black cutworms can also mow down soybean seedlings. Bean leaf beetles have been reported in several states in early-planted soybean fields. Moth flights of many lepidopteron species have been high. Potentially significant captures of beet armyworm and fall armyworm have been reported in some counties, Bailey said.
Missouri uses predictive models designed to merge moth captures from pheromone traps with historic and current weather data to predict the date of damage. Bailey says moth captures don't always indicate treatment is necessary, but captures do show fields should be scouted. Famers should check with their state extension entomologists to see if similar alerts are available.
Every year entomologists urge growers to walk and scout fields for pest problems. With weeds running about a month ahead of schedule, Bailey worried that growers will be more pushed to juggle scouting with other responsibilities such as spraying.
"We're also seeing more beneficial insects in the field this year and it's important to consider those as you weigh economic thresholds," Bailey said. "Unless you are out there looking at the field, you don't really know what's going on."
Traits and seed treatments provide a level of protection for a variety of pests, but Bailey urged growers not to be complacent. Both drought and wet conditions have affected seed treatment efficacy. "There is also no in-seed or applied protection for some of the secondary pests and we are seeing a lot of those becoming bigger problems," he said.
Bailey used Southern corn rootworm (SCRW) as an example. "We've seen this pest increasingly showing up in alfalfa and corn fields in Missouri," he said. "We've also seen it moving into soybeans. Where they've fed on soybean flowers, we've had up to 100% losses."
University of Illinois entomologist Mike Gray commented on the potential implications of the early Western corn rootworm hatch in a news release May 10. Unlike in recent years, corn rootworm larvae this spring will be feeding on small rooted corn plants in drier soil conditions. Over the past few years, wet springs have been more normal in rootworm-prone areas and corn rootworm larvae have struggled to survive in saturated soils at the time of hatch.
"I anticipate good larval establishment this season and where densities are high, significant pressure will be exerted on the root systems of corn plants throughout May and into mid-June," he wrote. With the larval hatch three to four weeks early, adults will also arrive early, possibly by mid-June.
For an example of Missouri's pest alert service, go to: http://bit.ly/…
Pamela Smith can be reached at pamela.smith@telventdtn.com
(ES/SK)
© Copyright 2012 DTN/The Progressive Farmer, A Telvent Brand. All rights reserved.
06:52:00
05/16/2012
HADDONFIELD, N.J. (DTN) -- Economies of scale in farm equipment may be one of the biggest cost advantages large farmers hold over their peers -- and those savings can be a whopper.
Machinery costs varied by almost $450 per acre for more than 300 grain producers in the AgriSolutions' managerial accounting database between 2008-2011, the company's Sam Bachman found, a far bigger gap than other financial advisers have typically estimated. Most farm financial advisers preach that equipment, labor and marketing are the $100-an-acre differences between farm operators.
Some lean and mean producers in the AgriSolutions' system carried as little as $30 to $45 an acre in equipment depreciation based on the useful life of their machinery (not the generous Section 179 write-offs that have skewed cash accounting in recent years). At the other extreme, top-heavy operators shouldered equipment costs as high as $478 an acre, the Brighton, Ill., firm found.
"Anyone averaging more than $300-an-acre machinery costs would have great difficulty staying competitive," said Bachman. "There just aren't that many areas where you can make up cost differentials of this size."
Not surprisingly, many of those machinery masters were operating at about the 4,000-acre scale. One 7,000-acre producer had whittled his costs to about $42 an acre. However, all of the highest-cost producers operated farms under 2,000 acres, the AgriSolutions' study showed.
"The 4,000-to-10,000-acre farmers aren't always the lowest-cost producers when it comes to farm equipment," Bachman noted. "But they were never the highest-cost operators either, just because they can spread their total costs over a larger base."
In contrast, the real challenge for small operators is how to handle the year of a major repair or purchase. Small and mid-size operators can be formidable competitors if they manage their excess equipment capacity well, Bachman added. "Some hire themselves out for custom work or lease their machines to municipalities to help put more hours on their equipment." Others may find renting equipment less expensive than ownership.
"On average, we see 1,000-acre-and-under crop farms spending about $130 an acre on machinery expense annually, 5,000-acre farms about $113 an acre and 10,000-acre farms about $80 an acre," Bachman said. "Some operators keep machinery costs even lower with offsetting revenue from custom work. Still, if you're consistently in that range -- regardless of your size -- you're in the game."
Marcia Taylor can be contacted at marcia.taylor@telventdtn.com
Follow Marcia Taylor on Twitter@MarciaZTaylor
(AG/SK)
© Copyright 2012 DTN/The Progressive Farmer, A Telvent Brand. All rights reserved.
10:33:00
05/15/2012
May 14, 2012, was the first day in history that a brand new group of grain futures contracts became available to traders: the ICE contracts for corn, wheat, and the soybean complex.
For the past 135 years, four months and 12 days, there has only been one, standard, universally recognized, "official" source of prices for the future market values of corn and feed wheat within the United States. For soybeans, the reign of the single benchmark stretched 75 years, seven months, and nine days. Now, however, as of May 14, 2012, anyone looking for a futures price for dollar-denominated grain can look to either of two sources: the traditional Chicago Board of Trade or the IntercontinentalExchange headquartered in Atlanta, a.k.a. "The ICE."
The benefit of having a single, standard pricing mechanism for a grain market isn't trivial -- it allows grain traders to compare the bids and offers for all cash grain markets everywhere relative to each other. Because all cash grain merchandisers hedge their purchases and sales against the same benchmark -- Chicago grain futures -- they can directly exchange those hedges through the clearing house and always agree on a benchmark futures price at all times. "Forty under the July" means the same thing mathematically to every trader everywhere, and is instantly and easily comparable to "twenty over the July," no matter what the July futures price may be at the instant the comparison is being made.
Fortunately, the introduction of ICE grain contracts isn't likely to disrupt that efficient cash grain pricing mechanism. The new ICE contracts will be cash settled at expiration, which is similar to the settlement process for CME livestock futures contracts, except that instead of basing the final settlement on a cash index, the ICE will be settling their contracts on "the settlement price of the corresponding trading month of the [Corn] futures contract at the Chicago Board of Trade on the Last Trade Date for the ICE contract." So in effect, both exchanges are trading the exact same market with identically structured contracts which, by definition, must match each other in price during at least one moment in time: expiration. If they're effectively identical assets, arbitrage theory would suggest they should match each other in price at all other points in time, too.
For instance, when I looked at the two quotes at 11:13 a.m. Monday, July corn futures at the Chicago exchange were trading at $5.82 1/4 per bushel. At the same instant, July corn futures on the ICE were lingering at $5.83 per bushel, but they hadn't experienced a trade since 11:11 a.m. You could have therefore conducted an arbitrage between the two markets by buying an "underpriced" Chicago contract and simultaneously selling an "overpriced" ICE contract. The offer in Chicago was $5.82 1/4 and the bid in Atlanta was actually $5.82 3/4, so your spread trade would have really been filled only 1/2 cent apart. Then, because the two assets represent exactly the same thing and logic dictates they must therefore match each other in price ... eventually ... at the point in time when those two prices snapped back to being equal, your net profit would be exactly the 1/2-cent spread between them. No matter if the whole market went up to $5.90 or down to $5.70, whenever the July futures contracts at both exchanges exactly matched each other in price, the net result of your profit in one trade and your loss on the other trade would be no more and no less than $0.0050 per bushel. That may not sound like much, but you could do this all day long with as many contracts as you could get filled, so that's pretty easy money (if your commission costs on a two-sided trade are equivalent to less than 1/2 cent per bushel). That's how theory goes, but there is always a risk of loss in commodity futures and options trading.
The complications, of course, are that you might not be able to get the orders filled quickly and advantageously, let alone simultaneously, unless you're one of those high frequency traders who have fast lines to the exchanges' computers. The ICE caters to such traders by touting cheaper margin requirements than the CME and sub-millisecond transaction times. So we must assume a number of traders are already doing these arbitrage trades. Overnight Sunday, reportedly only five July corn contracts and only seven July soybean contracts were traded on the ICE, but once the Chicago market re-opened Monday morning, the two markets tended to stay pretty close together throughout the day. By the end of the day, the volume of trade in July corn futures had risen to 411 contracts. 266 July ICE soybean contracts traded Monday, and only 33 July ICE wheat contracts traded.
I won't lie -- I was pretty excited to have the CBOT contracts start trading side by side with a replicated market at 9:30 a.m Monday. But I had to sit here twiddling my thumbs alllll morning waiting for it to happen, which was frankly too unpleasantly similar to twiddling my thumbs on USDA report mornings, waiting out the two hours between the 7:30 report release and the 9:30 market opening. When I was a merchandiser, it was also no fun to have to take protection or guess at a futures price if somebody wanted to make a trade with me before 9:30 in the morning.
On the morning of the most recent World Agriculture Supply & Demand Estimates release, I went from guessing all the grains might get pulled up a little by the tighter soybean ending stocks numbers, to watching orders pile in for limit-down corn and $15 old-crop beans, to seeing the pre-session bid-ask spread suggest corn would open down 17 1/2 cents and beans would open up 65 cents, to finally watching the actual open at 9:30 show July corn down only 11 1/4 cents and July soybeans up only 21 3/4 cents. One does wonder how that evolution in market opinion will play out with the markets actively trading while everyone is digesting USDA's newest proclamations.
Overall, however, I welcome the opportunities we now have with nearly round-the-clock trading. Once the grain contracts on Chicago's Globex platform start trading on the same 22-hour schedule as the ICE, which they are scheduled to start doing on May 20, farmers and commercial grain companies will be making and hedging trades against live CBOT grain futures (which are settled by physical delivery) at 7:35 in the morning or 2:05 in the afternoon as seamlessly as they do now between the hours of 9:30 a.m. and 1:15 p.m.
That will give everyone better opportunities to react to outside market developments in real time -- everyone including the noncommercial (speculative) segment of the market, which has recently been bailing out of commodities to cover their losses elsewhere and generally express their risk aversion in today's economic environment. Anything the exchanges can do to encourage active, fair valuations of the real supply and demand situations for grain markets, I consider a welcome historic development.
Elaine Kub can be reached at ekub@agrisk.net
(CZ/SK)
© Copyright 2012 DTN/The Progressive Farmer, A Telvent Brand. All rights reserved.
09:27:00
05/15/2012
LANGDON, Mo. (DTN) -- Many U.S. manufacturers and retailers utilize a concept called "Just-In-Time" inventory management for reduced costs and higher profits. That's the same thing farmers do on their way to the field by picking up dealer-stored seed or fertilizer. But for View From the Cab farmers Ryan Brodersen of Randolph, Neb., and Katie Sanger Hancock of Water Valley, Ky., rain is one input that doesn't always arrive on time.
Earlier this spring, rain fell just in time to moisten Ryan's fields ahead of planting. Now earliest planted corn is 6 to 8 inches tall. Soybean planting was finished Saturday just ahead of more rain. All that's left is one custom planting job. In the meantime, Ryan will get ready to begin irrigating some fields with a light application. "It's getting a little dry here," he said.
A Sunday afternoon windshield survey of his cornfields left Ryan satisfied that all is well. Planter misses or poor emergence usually happen in the most visible parts of his fields. "I couldn't even find any bad spots by the highway," he told DTN.
Unfortunately he can't say that about alfalfa nipped by frost and dry weather earlier this spring. "It got singed pretty good. It doesn't look like a real great cutting." A custom swather will be by this week to cut it, but Ryan will do the baling himself in between post-emerge herbicide applications to the corn.
His antibiotic-free hogs continue to finish and come off the farm in a timely manner. Another load ships this week. But pasture can't get ready soon enough, because a couple of calves still in dry lot confinement with their mommas have come down with coccidiosis, a microscopic parasite that incubates in the soil while waiting for a host. The calves are being treated by a veterinarian.
Across the Corn Belt at Katie's farm, rain is late again. It's been that way most of this spring. One negative aspect of dry weather is that seedling corn needs to take up critical nutrients in early stages of growth. Dry growing conditions restrict that uptake. "The drought on my farm is 8 to 9 inches below normal rainfall. Our corn is growing, but showing signs of nutrient deficiency due to lack of moisture," Katie told DTN. She seems to be in a dry spot, because areas around her have been receiving better coverage.
Light showers fell over the weekend but offered no respite.
With no supply of moisture for germination in the top few inches of Katie's fields, soybean planting remains on hold. Pre-watering is an option in leveled, furrow irrigated fields that have been bedded for planting. But beds, or ridges with furrows in between, may not soak up enough water to help seeds germinate because the system is designed to water growing plants with established root systems.
Tillage has been restricted to save soil moisture, and herbicide resistant weeds continue to grow. Spraying of those will continue due to the critical need of controlling them early before they get too large. Earlier herbicide applications made last month are only good for 3 to 4 weeks.
June 10 is the usual date to harvest wheat at Sanger Farms. This year it looks like wheat will be ready the middle of May. "This is very unusual," Katie said. Harvest could start anytime, but test cutting done last week showed it was still a little early. Rain or no rain, soybeans will be planted as a second crop on at least one of those fields thanks to center pivot irrigation.
Perhaps the biggest news in the Corn Belt was USDA's projection of a record corn crop. DTN asked Katie and Ryan if they believe the report will prove accurate.
Katie believes high yields are possible, but not on her farm. She thinks localized problems like hers will be more than offset by yields in other areas with better rainfall and early planting dates. "I can agree that yields could be a couple bushels higher," she said, adding that even high N costs won't change things much. "I'd say nitrogen was still purchased at a minimum amount. Growers were likely conservative, but unlikely to short the crop."
On the other hand, Ryan is skeptical that acres planned for corn will all be planted. "I don't think we're going to get to 96 million acres. Some of that land will be marginal if we do," he said. And with soybean prices at the current level there is bound to be acre switching and more double crop. Over the last 3 weeks some of the farmers in his area have talked about just that, so projected soybean production could be below actual. But in the end, Ryan feels it all comes down to weather and whether or not rain makes it to fields on time.
"I guess we could say we're going to hit 166 (national average corn yield) but if weather changes, that will too. There's a lot of summer ahead of us," he said.
(CZ/BS)
© Copyright 2012 DTN/The Progressive Farmer, A Telvent Brand. All rights reserved.
09:05:00
05/15/2012
OMAHA (DTN) -- Wireless network developer LightSquared filed for Chapter 11 bankruptcy protection Monday in a move the company said will give it space to continue pursuing regulatory approval to provide wireless service to rural America. It had been feared that LightSquared's network would interfere with GPS signals and precision ag.
According to court documents filed in the U.S. Bankruptcy Court for the Southern District of New York, LightSquared lists between $100 million and $500 million in debt and between 50 and 99 creditors. The company lists Boeing Satellite Systems Inc. in El Segundo, Calif., as its largest unsecured creditor at about $7.5 million. Alcatel-Lucent in Paris, France, is listed as the second-largest at about $7.3 million. The two companies far outdistance the third-largest creditor, Irvine, Calif.-based AnyDATA Corp. at about $690,000.
When released, LightSquared's proposal to build a wireless network drew opposition from a wide variety of interests, including farm equipment companies that claimed the proposal would interfere with precision agriculture dependent on global positioning satellite systems.
The company recently suffered a blow to the project when the Federal Communications Commission announced a decision to revoke a waiver for the company to build a terrestrial telecommunications network, based on tests performed by the National Telecommunications and Information Administration.
Those tests confirmed that LightSquared's network would interfere with GPS systems, including precision-ag applications.
LightSquared said Monday it plans to continue to pursue the project. Chapter 11 bankruptcy protects a company from creditors while efforts are made to reorganize debts.
"The filing was necessary to preserve the value of our business and to ensure continued operations," Marc Montagner, interim co-chief operating officer and chief financial officer of LightSquared said in a written statement.
"The voluntary Chapter 11 filing is intended to give LightSquared sufficient breathing room to continue working through the regulatory process that will allow us to build our 4G wireless network. All of our efforts are focused on concluding this process in an efficient and successful manner."
Philip A. Falcone, chief investment officer for Harbinger Capital Partners, the lead financier of the LightSquared project, said in a statement provided to DTN that the company had no other option.
"Today's filing was not an option the company embraced quickly or easily, but it was necessary to protect LightSquared against creditors who were looking for a quick profit, as opposed to our goal to create long-term market competition, job creation, and the promise of wireless connectivity for every American," Falcone said.
"The filing provides the company the additional runway it needs to resolve the regulatory issues necessary to move forward in building the nation's first integrated satellite-terrestrial 4G wireless network which, when complete, will increase competition and bring much-needed wireless service to rural areas. We remain committed to our original mission, and I remain steadfast in my belief that a path forward exists that will satisfy and benefit all constituencies."
TAXPAYER FUNDS
In April Sen. Charles Grassley, R-Iowa, and Rep. Michael Turner, R-Ohio, sent a letter to Lawrence Strickling, administrator of the National Telecommunications and Information Administration, questioning the use of taxpayer resources on the project and asking for specific plans on how to recoup the funds.
"This decision capped a long and winding process which saw the federal government conduct an extensive amount of testing in order to aid LightSquared's planned business model," the letter said. "In fact, Deputy Secretary of Transportation John Porcari testified before Congress that the Federal Aviation Administration alone spent $2 million and that it was 'quite unusual' for the federal government to spend so much money to assist a single private company.
"It is our understanding that despite the extensive federal funds spent evaluating and testing LightSquared's proposed network, the federal government has not recouped much of the costs expended."
Grassley and Turner expressed concern that taxpayer dollars may not be recovered if the company filed bankruptcy. They asked Strickling to provide information about how many federal dollars were spent, the number of federal employees involved in testing the network and whether the federal government will be reimbursed.
In addition, Grassley and Turner questioned whether the FCC has ever asked the NTIA to use government resources without reimbursement to "assist a single private company with its business plans."
Todd Neeley can be reached at todd.neeley@telventdtn.com
(CZ/SK)
© Copyright 2012 DTN/The Progressive Farmer, A Telvent Brand. All rights reserved.
17:52:00
05/14/2012
RAVENNA, Neb. (DTN) -- The end of corn planting was in sight at Hervert Farms LLC near Ravenna, Neb. The two green tractors that traveled steadily and decisively across black dirt were evidence the priority that day was to finish planting corn.
But in spite of the rush to finish planting, Greg Hervert took a little time out while waiting for a neighbor to pick up some corn seed to visit a little about his operation.
Hervert and his dad Randy Hervert farm almost 2,000 acres southeast of Ravenna, Neb.
Greg farms about 700 acres, Randy about 900, and the two cover an additional 300 that is custom farmed for a neighbor.
This year, approximately 75% to 80% of the farmland will be planted with corn, the rest in soybeans.
While in the past Hervert has raised wheat, this is the first time in several years there is no wheat in his fields. The decision was largely one of economics. This year Hervert said he can get better returns with corn and beans.
Part of the decision was that wheat didn't work into the crop rotation well this year.
"We usually run wheat after soybeans, but we didn't have a lot of soybeans last year," he said. "And the acres of beans we did have, we wanted to put into corn."
Another factor in the decision to plant only corn and soybeans was that Hervert has found challenges with wheat yields.
"Wheat has been a good crop for us, but in this location it's been more difficult to get a consistent yield," he said. "Even if we irrigate, it's not as consistent as beans or corn."
Hervert said he has grown wheat under a pivot that did 125 bushels per acre, and in another year grew wheat under pivots that only did 55 bpa. There wasn't just one factor that seemed to define why the wheat had good yields or not.
It's just hard to gamble on that kind of inconsistency when corn or soybean yields are more predictable, he said.
Most of Hervert's irrigated corn has been yielding an average of about 200 bpa over the past 10 years.
He had some record-setting yields in recent years.
"Two years ago, we touched 300 bpa in one spot for the first time," he said. "It was a record-setter. I guess it was a combination of the perfect seed, the perfect fertility, and the perfect timing."
Yields on Hervert's dryland corn have been up to about 175 bpa, while his beans have been yielding between 50 and 55 bpa.
Hervert also raises about 45 head of cattle which he calves out, then sells the calves off grass in the fall.
This year, Hervert purchased a new 16-row planter, though it has most of the same technology as his previous planter: row shut-off, hydraulic seed drives and computerized prescription maps that automatically plant pre-chosen rates of seeds.
He mused that when the last planter was purchased in 1998, 16-rows were considered large. Now, he said, 16-row planters are fairly standard.
Availability of seed and fertilizer has not been an issue for Hervert this year, he said.
KEEPING RECORDS IS BIGGEST CHALLENGE
The biggest challenge in recent years has been the increasing amount of record keeping, Hervert said.
"The amount of records required from the Farm Service Agency has been more intense," he said. "You really need to keep in contact with your insurers more and be sure your numbers are the same everywhere."
Safety and equipment regulations are also intensifying, he said, such as totes for Roundup or other herbicides. Seals on the totes must be intact in order to be returned, and check valves in place so the liquid can't flow back into the container.
Insects are always a continuing challenge, though the type of insects varies.
"It seems like we have a different bug every year," he said. "A couple years ago, it was the wooly caterpillar. This year it is moths."
As far as marketing plans, Hervert said he will not vary from his standard philosophy this year.
"I try to sell ahead a little bit and keep some for later. I try to spread it out," he said. "I have a little bit sold for 2014. I also still have some 2011 crop left."
ALL IN THE FAMILY
A portion of the land Hervert and his dad farm was homesteaded in 1890 by his great great grandfather, Vencil Hervert. Vencil was originally from Czechoslovakia, then settled first in Iowa before purchasing land from the railroad near Ravenna.
Hervert is on the same farm and lives in the same house that he grew up in. He graduated from high school in Ravenna and was active in 4-H and FFA. He spent three years at Truman State University in Missouri as a biology major before he returned home to pursue his love of farming.
Hervert and his wife Courtney were married in 1998. He refers to Courtney as their "home manager" but said she does help him out with some of the paperwork for the operation.
The couple now has four children: Richard (12 years old), Colton (10), Brett (6) and Naomi (3).
A couple of the boys are definitely interested in farming, Hervert said.
"Brett is infatuated with tractors, and Richard, my 12 year old has definitely expressed an interest," he said.
Hervert said he would encourage any of his children to pursue farming if that is their interest. He just hopes the operation will be large enough to support more family.
"I aspire to have enough for them to do if they decide to go into farming," he said.
Sometimes, it is difficult to balance farming and his other responsibilities. It takes definite planning and setting priorities to find that balance, he said.
"My two oldest sons and I take taekwondo together and now we are all black belts," he said. "The purpose was so that we could lock in time as a family."
Hervert also serves as Secretary/Treasurer of the Farmers Cooperative Association of Ravenna, the local coop.
But despite the challenges, Hervert continues to farm because it truly is his passion.
"I love being out in the open, watching the crops grow and seeing how every year is different," he said. "I worked in a lumber yard for three years, but this is an operation I can run myself."
And there is one ulterior motive, he confessed.
"Hopefully, I will someday have something to pass on to my children," he said.
Each year DTN finds growers with different crop mix plans to feature in our Planting Choices series. We will visit these producers at planting time, during the growing season and at harvest to see how the year treats them. This was the first of the profiles.
Cheryl Anderson can be reached at cheryl.anderson@telventdtn.com
(ES/CZ)
© Copyright 2012 DTN/The Progressive Farmer, A Telvent Brand. All rights reserved.
17:11:00
05/14/2012
OMAHA (DTN) -- People who wear all kinds of different hats attend wheat tours -- millers, bakers, farmers, crop insurance agents. But one hat, a blue-and-white baseball cap emblazoned with the logos of Wal-Mart and Sam's Club, wasn't quite like the rest.
It was the first time the world'stop retailer sent scouts on the tour and it may be the first retailer to ever attend, said tour organizer Ben Handcock. It's a sign Walmart leaders are trying to better understand production agriculture as the company tries to lower its carbon footprint and force suppliers to reduce energy usage and inputs as well.
The Wheat Quality Council's hard red winter wheat tour gives flour millers and bakery companies an early glimpse at the crop's protein and gluten potential, while farmers, traders and insurance companies get a sense of the crop's size and condition.
"We were all out there in the field, basically trying to educate ourselves more about the industry," said Tim Robinson, Walmart's senior buyer of baking commodities, essentially the gallon jugs of oil and 5 pound bags of flour and sugar that stock the baking aisle.
"Two, (we wanted to) meet more people in the industry because we mostly deal with -- the retailer mostly deals with the supplier. We never have a chance to talk to people who are like the Monsantos dealing with the seed technology or the K-State folks who are doing agricultural research for the farmer. So we thought this was a really cool opportunity to engage with them and just meet them."
Robinson, and his counterpart Rob Kaplan, also attended to get a better understanding of what it would take to put more sustainably produced flour on the shelves without raising the price.
GOAL: SELL SUSTAINABLY PRODUCED FLOUR AT SAME PRICE
Robinson and Kaplan work in different divisions at Walmart. Robinson is a commodities buyer who keeps up on market fundaments and macroeconomics as part of his job. Kaplan works under Walmart's sustainability umbrella and aims to get more sustainable products on the shelves.
Kaplan works on a supply chain and product innovation team that hopes to eliminate 20 million metric tons of greenhouse gas emissions from across Walmart's massive supply chain. Greenhouse gas emissions are "really a sign of inefficiency within our supply chain and an opportunity for product innovation," he said.
From a carbon perspective, the most intensive category is food, beverage and agriculture. "You look at why food, bev and ag is so carbon hot, it's because of fertilizer by several orders of magnitude," Kaplan said.
Kaplan and Robinson attended the tour to help get ideas on how to put more sustainably produced flour on the shelf without charging customers a premium.
Robinson said several of his suppliers offer products similar to Horizon Milling's EcoFlour, which is made from identity-preserved wheat from farms that use precision agriculture techniques to cut down on fertilizer consumption. But to Robinson, those seem like branded products that would command a premium price.
"And for me, hearing that I was just like, eh, I'm not really that interested because I don't think our core customer, while they love things to be more organic or more sustainable, we know that the economy has been tough," Robinson said. "We all know that Walmart has a relatively lower-income customer than some other retailers. So they're under a tight situation, and when they're at the shelf, we don't want to force them to buy things that are more sustainable by charging them more to do it."
So he and Kaplan got to thinking: it's all about the scale. They set out on the wheat tour to learn more about the challenges facing farmers and what they're doing to reduce fertilizer applications.
"I think a lot of people are doing it," Robinson said. "Some call it EcoFlour, some call it something else. Some say that's just the way I do business because it saves me money. I'm more interested in that side of it. How can we make this a more common way to do business, using precision agriculture techniques, and less about the branding of it?"
Robinson and Kaplan challenged their suppliers to think about it. And Kaplan said the wheat tour was one of the first exploratory steps. Now, it's about finding the opportunities and having conversations with a roundtable of suppliers and farmers about how to make it happen.
"It is, for us, all about innovation. And finding those sources of innovation can happen anywhere," Kaplan said. "It can happen at the farm level, it can happen at the milling level, it can happen at the commodity market level, and that's sort of where we've started. It's our first step in the right direction."
RETAILER PADS ATTENDANCE RECORD
Walmart's presence on the tour contributed to this year's record attendance of more than 100 participants. Last year was also a record-setting year with about 75 participants.
Before the tour, Kansas Wheat Executive Director Justin Gilpin told DTN he thought companies see the educational value of the tour -- scouts spend all day in a car with an expert sampling fields and asking questions. Combine that with social media, a healthy agriculture sector and the unique networking opportunities, and "it's a good investment for companies to send out their young people to," Gilpin said.
But it was an unusually large year-over-year jump in attendance, and Walmart likely gave it a boost. Robinson said he was invited on the tour by one of his suppliers. He then extended the invitation to his other suppliers.
At least one tour participant from one of the nation's largest flour milling companies came purely because of Walmart. He cannot be quoted by name because it's a violation of his company's policy, but he told DTN he learned in mid-March that Walmart was going to attend the tour. His company recently lost Walmart as a customer, and his sole purpose in attending was to improve the relationship.
"Most retailers want the end price," he said, and aren't interested in the supply chain. But it was the opportunity to better understand the supply chain -- by spending three days driving around Kansas sampling wheat fields -- that attracted the world's largest retailer.
"This was certainly not anything where I was going to learn everything all at once," Robinson said. But he learned so much, he's considering going on the corn and soybean tour later this summer.
Katie Micik can be reached at katie.micik@telventdtn.com
(CC/AG)
© Copyright 2012 DTN/The Progressive Farmer, A Telvent Brand. All rights reserved.
15:35:00
05/14/2012
OMAHA (DTN) -- Crop progress continues to gallop along, well ahead of last year and the five-year average, according to USDA's weekly report.
Corn is 87% planted and 56% emerged, compared to 56% and 16% last year and 66% and 28% averages, respectively. The planting figure was in line with pre-report expectations, according to DTN Analyst John Sanow.
"The big five Illinois (95% vs. 65%), Indiana (93% vs. 53%), Iowa (90% vs. 79%), Minnesota (88% vs. 70%) and Nebraska (91% vs. 71%) are all running well ahead of the average pace, and should be all but wrapped up next week at this time," Sanow said. "The fast pace of planting and emergence coupled with a mostly benign weather pattern should be considered bearish."
Soybean progress is also moving along at a rapid clip. Forty-six percent of the crop is planted, compared to 17% last year and a 24% average. Pre-report expectations were for 50% of the crop to be planted, Sanow said. Sixteen percent of the nation's soybeans are emerged, compared to 3% last year and a 5% average.
"This report should be considered bearish, particularly with corn planting nearing the finish line, allowing producers to focus almost strictly on bean planting," Sanow said.
Spring wheat planting is 94% complete, compared to 33% last year and a 64% average. Sixty-eight percent of the crop is emerged, compared to 10% last year and a 32% average.
"Spring wheat planting is all but finished at 94%," Sanow said. "Minnesota and South Dakota are done while North Dakota is 94% complete. This report could be considered bearish."
Winter wheat is 72% headed compared to 50% last year and a 46% average. Winter wheat condition continues to fall, rated 14% very poor to poor this week compared to 12% last week, but as DTN Senior Analyst Darin Newsom points out, this is merely the browning effect. As the crop moves along in maturity and the green of the growing season fades, eyeball condition ratings tend to drop.
"There are no surprises here with traders more likely to pay attention to the hot, dry trend and possible damage associated with it in the Southern Plains this week," Sanow said.
Sorghum is 38% planted, compared to 30% last year and a 29% average. Barley is 93% planted and 56% emerged, compared to 46% and 20% last year and 68% and 35% on average, respectively. Oats are 97% planted and 88% emerged. Last year they were 70% planted and 53% emerged and the average is 86% and 68%.
Thirty-six percent of the oat crop is reported heading. This is the first week this year heading was reported. Last year the crop was 33% headed and the average is also 33%. Oat condition is reported steady at 75% of the crop rated good to excellent.
| National Crop Progress Summary |
| |
This |
Last |
Last |
5-Yr |
| |
Week |
Week |
Year |
Avg |
| Corn Planted |
87 |
71 |
56 |
66 |
| Corn Emerged |
56 |
32 |
16 |
28 |
| Soybeans Planted |
46 |
24 |
17 |
24 |
| Soybeans Emerged |
16 |
7 |
3 |
5 |
| Sorghum Planted |
38 |
29 |
30 |
29 |
| Cotton Planted |
48 |
36 |
38 |
39 |
| Rice Planted |
80 |
77 |
65 |
77 |
| Rice Emerged |
73 |
67 |
49 |
58 |
| Barley Planted |
93 |
83 |
46 |
68 |
| Barley Emerged |
56 |
36 |
20 |
35 |
| Oats Planted |
97 |
94 |
70 |
86 |
| Oats Emerged |
88 |
78 |
53 |
68 |
| Oats Headed |
36 |
NA |
33 |
33 |
| Spring Wheat Planted |
94 |
84 |
33 |
64 |
| Spring Wheat Emerged |
68 |
47 |
10 |
32 |
| Winter Wheat Headed |
72 |
63 |
50 |
46 |
| National Crop Condition Summary |
| (VP=Very Poor; P=Poor; F=Fair; G=Good; E=Excellent) |
| |
This Week |
|
Last Week |
|
Last Year |
| |
VP |
P |
F |
G |
E |
|
VP |
P |
F |
G |
E |
|
VP |
P |
F |
G |
E |
| W Wheat |
5 |
9 |
26 |
46 |
14 |
|
4 |
8 |
25 |
48 |
15 |
|
23 |
21 |
24 |
26 |
6 |
| Oats |
2 |
3 |
20 |
59 |
16 |
|
2 |
3 |
20 |
58 |
17 |
|
15 |
8 |
25 |
46 |
6 |
| Rice |
1 |
5 |
23 |
56 |
15 |
|
1 |
7 |
26 |
55 |
11 |
|
3 |
14 |
29 |
48 |
6 |
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(AG)
© Copyright 2012 DTN/The Progressive Farmer, A Telvent Brand. All rights reserved.