About Reynolds Farm Equipment

Reynolds Farm Equipment has been an authorized John Deere dealer serving central Indiana since 1955. We are an authorized John Deere dealer that markets John Deere Tractors, John Deere Farm Equipment, John Deere Agricultural Equipment, John Deere Commercial Worksite Equipment, John Deere Golf and Turf Equipment, John Deere Lawn and Garden Equipment, John Deere New Parts, John Deere Used Parts, John Deere Tractor Parts, and John Deere Toys. Our blog, John Deere Stuff, will provide you with useful information related to our business in the farming equipment industry.

If you are looking for further John Deere information or products, visit the Reynolds Farm Equipment website.

Tuesday, November 9, 2010

Private Equity sees 'Buckets of Money' in Water Buys


Water scarcity will generate big returns for the irrigation sector once climate change and population growth take their toll on farming, private equity managers said on Tuesday.

Asked at an agriculture investing conference whether it is possible to make money from water, typically a public good rather than a bankable commodity, Judson Hill of NGP Global Adaptation Partners was unequivocal.

"Buckets, buckets of money," he told the meeting of bankers and investors in Geneva, a leading European hub for commodity trading. "There are many ways to make a very attractive return in the water sector if you know where to go."

Smart irrigation technology will be at a premium in arid regions and places where higher crop yields are needed to meet rising food demand, Hill said, also citing opportunities from water rights in Australia and parts of the United States.

"Irrigation is a big industry and it is growing. I think it's going to grow dramatically," he said, estimating the sector at $3.5 billion today. "In parts of the U.S. we still grow rice in the desert, as crazy as that is. I think that will change."

Gary Taylor, a partner with AgriCura, a fund focused on U.S. corn, soybean, cotton, rice and wheat farming, said water was fundamental to smart agricultural land investments.

"We have done extensive work to understand the aquifer system along the Mississippi river and do believe over the term of our fund that water will become increasingly important," Taylor, a former executive at Cargill, said.

For agricultural equipment manufacturers such as  John Deere, there are also opportunities in tailoring irrigation systems to drought-resistant seeds developed by companies such as Monsanto, Dupont and Syngenta.

"There are very efficient ways to approach irrigation," said Cory Reed, John Deere's director of strategic marketing, describing a need to water certain commodity crops with careful volumes on a fixed schedule.

Hill also named links with communities as critical to gaining traction in the "very, very local" water sector, where investments can involve negotiations with governments amid growing awareness about scarcity risks.

"The water business is very much like the energy business was 20 or 25 years ago," he said. "As the price of water increases we are all going to become better stewards, not because we all become environmentalists but because it will affect our pocketbooks."

Friday, November 5, 2010

School brings Farming to Big Apple

Kansas City Star

No one expects to find beets and carrots in a sliver of the South Bronx wedged between Metro-North Railroad tracks and a busy elevated highway.

But there they are, along with late-season eggplant, tomatoes, basil and habanero peppers, all growing in a pocket-sized farm called La Finca del Sur, Spanish for Farm of the South.

The formerly weed-choked vacant lot will be a classroom for a new venture called Farm School NYC: The New York City School of Urban Agriculture.

Starting in January, the school will offer a two-year course aimed at developing "the next generation of leaders who will work to use urban agriculture to transform their communities into healthy food communities," said executive director Jacquie Berger.

The school is not yet accredited, but Berger said a number of colleges have expressed interest in partnering with Farm School to offer accreditation in the future.

Once it is up and running, Farm School will join an urban agriculture movement that includes former professional basketball player Will Allen's Growing Power, which operates farms in Milwaukee and Chicago with the goal of creating "a just world, one food-secure community at a time."

The movement has a bimonthly magazine, Lexington, Ky.-based Urban Farm. Magazine editor Lisa Munniksma said Farm School would serve a useful purpose because "a lot of people who are interested in growing food for themselves or for others in cities or in suburbs don't have a lot of agricultural skills."

One of Farm School's instructors will be Karen Washington, a longtime urban farmer and a founder of La Finca del Sur, which sells its produce at a farmer's market.

Washington said she hopes Farm School will serve as a prototype for other urban centers by providing "the incentive to say, you know what? We can do the same thing."

On a crisp fall afternoon, Washington stopped by La Finca on her way to pick up chickens for a community garden in another Bronx neighborhood. It is legal to keep hens in New York City but not roosters - too noisy. Beekeeping was legalized this year.

She grabbed a handful of soil and said, "This is life here. This is what we call black gold because it's compost. Smell it."

Washington said she hopes to train students for jobs like working in the school system to oversee school gardens or canning and selling local produce.

A lifelong New Yorker who has grown food for 20 years, Washington also works as a physical therapist.

Her routine of rising early to farm before heading off to her day job is not so different from the lives of many small farmers in rural America, even if they till 300 acres instead of three.

According to the United States Department of Agriculture, the average family farm household in 2010 will receive just 11 percent of its income from farm sources. The rest is largely from off-farm jobs. Sixty percent of the nation's family farms are small farms with gross annual sales of less than $10,000.

For Farm School students who hope to scratch out a living in agriculture, the second year of the program will include training in setting up a business plan, Berger said.

But for many the overriding goal is to grow nutritious food in neighborhoods where a dearth of fresh produce contributes to health problems like obesity and diabetes.

"When you grow food in the city it's such a visible act," Berger said. "It has such a visceral impact on the neighborhood around it."

Farm School will start with 10 students who will commit to one evening and one weekend day each week. Another group of more casual students will take one class at a time. Tuition is on a sliding scale starting at $1 per course hour.

Farm School is a program of a nonprofit organization called Just Food, which also promotes other agricultural initiatives in New York.

Berger said the school will have classroom space at Just Food's Manhattan offices but most classes will be hands-on and outdoors.

One of the first students will be Tanya Fields, a Bronx activist who said she believes in urban agriculture "as a community development tool."

Fields didn't start out as a farmer. "I don't really have a green thumb," she said. "I don't know how my acrylic tips are going to feel about this."

Tuesday, November 2, 2010

Deere Lawnmowers Recalled


The U.S. Consumer Product Safety Commission announced a voluntary recall of John Deere mowers with foot lift option due to an injury hazard.

About 6,450 John Deere EZtrak Zero Turn lawnmowers were manufactured by Deere & Co. of Moline, Ill., and sold nationwide -- except in California -- from February 2009 through September 2010 for about $5,300.

The BM22809 Premium Foot Lift Kit, sold separately from mowers for about $80, is also being recalled, the commission said.

A bolt on the steering lever can catch on the tab of the foot lift stop and lock in place, the commission said. This can stick the steering lever in a forward position, which poses a risk of injury to users.

The recall involves numerous models of Z445 riding mowers with 54-inch-high decks and 7445 or 7465 Zero-Turn Mowers with Premium Foot Lift features.

Consumers were advised to stop using the mowers and contact a John Deere dealer to have the lift stop bracket removed.

Consumers can call 800-537-8233 for information.

Monday, October 18, 2010

Fair Showcases Alternative Fuel, Electric Vehicles

The Desert Sun

Turn on Nissan's new all-electric Leaf and here's what you hear — nothing.

“There's no rev,” said Greg Tabak, director of Business Sales for Enterprise Rent-A-Car, which is set to introduce the electric car into its rental fleet in 2011.

“There's no transmission (noise). When you hit the accelerator, it just goes,” he said.

Tabak and the Leaf were in Palm Springs Friday for the city's first Electric and Alternative Fuel Vehicle Fair, which brought a small fleet of electric, hybrid and alternative fuel vehicles — and more than 150 residents and visitors — to the Palm Springs Convention Center.

“I think it's the nicest,” said Mark Thomas, 46, of Cathedral City, who was checking out the Leaf. “It seems the back seat has a lot of space. The only problem is it's all electric so the range is going to be short.”

Tabak said the car has about a 100-mile range, a little more depending on how you drive.

Electric vehicles such as the Leaf and the supercharged Tesla roadster, which goes 0 to 60 mph in less than 4 seconds, can travel as fast as 245 mph and comes with a six-figure price tag, were the stars of the event.

“It's fantastic. I've never run out of juice,” said Tesla owner Gary Warner, 64, of Indio. “The only thing that makes noise is the battery for the air conditioning.”

But beyond the flash, the purpose of the event was to focus valley officials and businesses on getting ready for the range of electric and hybrid vehicles coming to the market in 2011.

Enterprise plans to add the Leaf to its rental fleets in San Diego and Los Angeles locations — where Nissan is introducing the car — before gauging the market in the Coachella Valley, Tabak said. The roll-out to smaller markets could be in 12 to 18 months, he said.

Hertz will also be offering the Leaf and Mitsubishi's i MiEV beginning the end of the year, but again in larger, metropolitan markets to start, said Annette Zackey, a sales representative for the company.

With more and more car companies introducing electric models, Michele Mician, sustainability manager for Palm Springs, says the valley needs a network of charging stations for visitors and residents.

“We have to have infrastructure,” she said. “You have to be able to run errands, to move around the valley and plug in.”

Valley residents ready to take the leap will be able to install chargers in their homes, sold by local businesses such as the Green Bay Group in Palm Desert.

The company has a 240-volt home charger that can recharge a car in six to eight hours, said Jeffrey P. Bay, company president. Installing the device is similar to installing a dryer hookup, he said.

And Dick Cromie of Southern California Edison, said electric models such as the Leaf would cost about $1,100 to $1,300 a year less to operate than comparable gas cars.

Assemblyman V. Manuel PĂ©rez said electric vehicles can only add to the valley's profile as a renewable energy powerhouse, with wind, solar and geothermal resources.

“We have a window of opportunity that has never existed in the past,” he said. “Let's incorporate electric vehicles; let's incorporate infrastructure. We can create good-paying jobs; we can recover as a state and a nation, while reducing our greenhouse gas and carbon emissions.”

Tuesday, October 12, 2010

Corn Prices Soar amid Supply Worries

Associated Press

Corn prices extended their rally Monday amid heightened concerns about tight supplies even as demand remains strong from ethanol producers, livestock owners and overseas buyers.

Corn rose 27.5 cents, or 5.2 percent, to settle at $5.5575 a bushel. It was the third straight gain for corn, which is at its highest price since the recession intensified in the fall of 2008.

Much of the trading action was driven by a U.S. Agriculture Department report issued Friday that lowered this year's production estimate to 12.7 billion bushels from last year's record of 13.1 billion bushels. Yields were forecast at 155.8 bushels per acre, compared with 164.7 bushels per acre a year ago.

Meanwhile, more overseas buyers are turning to U.S. corn to help feed their livestock after a drought ravaged Russia's wheat crop, including grains used to feed cattle and hogs. In addition, there is strong demand among ethanol producers and domestic livestock owners.

Barclays Capital analysts said in a report issued Monday that U.S. corn production is on track for the third-highest level on record. At the same time, high consumption levels and demand for corn exports is taking U.S. corn supplies to their lowest levels in 14 years.

"The global corn market ... suddenly finds itself on thin ice," the report concluded.

The impact of higher corn prices eventually may result in higher prices for bread and other products, but manufacturers and wholesalers also factor in other costs, such as labor and delivery, said Greg Grow, an Archer Financial Services broker who specializes in grains and livestock.

"The raw commodity price can be absorbed by wholesalers and manufacturers to a degree, but it will undoubtedly place upward momentum on wholesale and then retail prices for foods," he said.

In other grains contracts, November soybeans rose 17.5 cents to settle at $11.5250 a bushel while December wheat lost 10 cents to $7.0925 a bushel.

In December metals contracts, gold for December delivery rose $9.10 to settle at another record high of $1,354.40 an ounce; silver gained 24.4 cents to settle at $23.349 an ounce; copper added 1.5 cents to settle at $3.7895 a pound and palladium gained $1.15 to $588.75 an ounce.

Platinum for January delivery lost $17.90 to settle at $1,690.80 a pound.

Oil prices slipped Monday as the dollar strengthened and traders hunkered down ahead of some important economic news, due out later this week. Since crude and other commodities are priced in dollars, a stronger dollar makes crude, priced in dollars, less attractive to investors who buy it with other currencies.

Benchmark crude for November delivery dropped 45 cents to settle at $82.21 a barrel on the New York Mercantile Exchange.

Monday, October 11, 2010

Wheat Futures Drop Most in a Week in Chicago as U.S. Supply Concerns Ease

Bloomberg / BusinessWeek

Wheat prices fell the most in a week as U.S. supply concerns eased after futures soared the most allowed by the Chicago Board of Trade in the previous session.

The U.S. may produce 2.224 billion bushels in the year ending May 31, up 0.3 percent from last year, the government said Oct. 8. Futures surged 9.1 percent on that date after the Department of Agriculture slashed its estimate for U.S. corn production and said global wheat inventories were shrinking.

The USDA report “for wheat wasn’t nearly as bullish as it was for corn,” said William Bayer, a partner at PTI Securities in Chicago. Among corn, soybeans and wheat, the “fundamentals are probably the weakest” for wheat, he said.

Wheat futures for December delivery dropped 10 cents, or 1.4 percent, to settle at $7.0925 a bushel at 1:15 p.m. on the CBOT. That marked the biggest drop since Oct. 1. The most-active contract has soared 48 percent since the end of June after drought hurt crops in Russia and Eastern Europe.

On Oct. 8, wheat futures jumped 60 cents, then the exchange limit, after the USDA said global stockpiles will total 174.66 million metric tons on May 31, down 1.8 percent from the agency’s forecast last month. The department said the U.S. corn crop may be 3.4 percent smaller than last year.

Rain in the Plains

Rain in some winter-wheat growing areas in the U.S. Great Plains may boost soil moisture for crops being planted.

“Southwest Nebraska had very good rain over the weekend,” said Louise Gartner, the owner of Spectrum Commodities in Beavercreek, Ohio. Hard-red winter-wheat areas of Kansas and Oklahoma still need rain, along with soft-red regions in Ohio and Indiana, she said.

Parts of Oklahoma and Kansas, the largest winter-wheat producing state, got as much as 0.4 inch (1 centimeter) of rain in the past week, “not enough to end dry conditions,” Mike Tannura, the president of T-Storm Weather LLC in Chicago, said in a report. As much as 30 percent of the U.S. winter-wheat belt is experiencing “abnormally dry conditions,” he said.

Soft-red winter wheat is used to make cookies and cakes. Hard red-winter varieties are used in bread.

Wheat is the fourth-biggest U.S. crop, valued at $10.6 billion in 2009, behind corn, soybeans and hay, government data show.

Sunday, October 3, 2010

Move Over, Bedbugs: Stink Bugs Have Landed

NY Times

When they retreated from the Battle of Gettysburg, Confederate troops passed by the area that is now Richard Masser’s orchards. If only the latest enemy — the brown marmorated stink bug — would follow suit.

Damage to fruit and vegetable crops from stink bugs in Middle Atlantic states has reached critical levels, according to a government report. That is in addition to the headaches the bugs are giving homeowners who cannot keep them out of their living rooms — especially the people who unwittingly step on them. When stink bugs are crushed or become irritated, they emit a pungent odor that is sometimes described as skunklike.

Suddenly, the bedbug has competition for pest of the year.

Farmers in Maryland, New Jersey, Pennsylvania and other states are battling a pest whose appetite has left dry boreholes in everything from apples and grapes to tomatoes and soybeans. Stink bugs have made their mark on 20 percent of the apple crop at Mr. Masser’s Scenic View Orchards here. Other farmers report far worse damage.

“They’re taking money out of your pocket, just like a thief,” said Mr. Masser, flicking stink bugs off his shirt and baseball cap as he overlooked his 325 acres, a few miles south of the Pennsylvania border. “We need to stop them.”

No one seems to know how. Government and university researchers say they need more time to study the bug, which has been in the United States since about 1998. Native to Asia, it was first found in Allentown, Pa., and has no natural enemies here.

Some people noticed an increase in the stink bug population last year, but all agreed that this year’s swarm was out of control. Researchers say the bugs reproduced at a faster rate this year, but they are unsure why.

“These are the hot spots right now, but they’re spreading everywhere,” Mr. Masser said. “They even found them out in Oregon.”

Populations of the brown marmorated stink bug — different from the green stink bugs that are kept in check by natural predators here — have been found in 15 states, and specimens in 14 other states, according to the United States Department of Agriculture.

The bug travels well, especially as it seeks warm homes before the onset of cold weather.

“It’s an incredible hitchhiker,” said Tracy Leskey, an entomologist with the Agriculture Department’s Appalachian Fruit Research Station in Kearneysville, W.Va. “The adults are moving and looking for places to spend the winter.”

The research station is among three laboratories looking for a solution. Government and university researchers also formed a working group this summer. But Kevin Hackett, national program leader for invasive insects for the Agriculture Department’s research arm, said no immediate solution was in sight.

“We need to do considerable more research to solve the problem,” he said. “We don’t even have a way to monitor the pests. I’m confident that we have excellent researchers. I’m not confident we’re going to find a solution immediately.”

The department is spending $800,000 this fiscal year on stink bug research, double last year’s budget, Mr. Hackett said. But he estimated that seven more full-time researchers were needed, at a cost of about $3.5 million a year for salaries and research expenses.

In Asia, a parasitic wasp helps control stink bug populations by attacking their eggs. Unleashing those wasps here, however, is at least several years away because they would first need to be quarantined and studied.

There has been limited success using black pyramid traps in orchards, Ms. Leskey said. The traps contain scents that trigger sexual arousal. The nymphs, or young bugs, respond seasonlong, Ms. Leskey wrote in a recent report, but adults respond only late in the season, in late August.

Representative Roscoe G. Bartlett, Republican of Maryland, convened a meeting last week of officials from the Agriculture Department and the Environmental Protection Agency. He is pushing to have the stink bug reclassified, which would allow farmers to use stronger pesticides, and is advocating that the Agriculture Department reallocate $3 million of its budget for research.

A problem that can arise when more pesticides are used, experts and farmers say, is that many years’ worth of effective “integrated pest management” can be ruined in the process. Farmers kill some pests but allow others to live because they prey on yet other pests. Wasps, for example, eat worms that otherwise would kill crops.

“It is a way to use nature’s own defenses against pests in orchards,” said Steve Jacobs, an urban entomologist at Pennsylvania State University. “That’s been finely tuned and works well. This brown marmorated stink bug blows all that out the window. You kill them today, new ones come tomorrow. So this is a serious problem.”

Meanwhile, homeowners in the region are coping with this latest nuisance.

Vicky Angell of Thurmont, Md., said she first noticed the stink bugs last year, but “not in flocks” like this summer. She kills about six a day and suspects that they get inside her home when she leaves the door open to let the dog out.

Ms. Angell said she flushes them down the toilet after catching them in a napkin. Other people use their vacuum. And many have turned to exterminators.

Stink bugs, whose backs resemble knights’ shields, do not bite humans and pose no known health hazards — even the fruit they have gotten to is edible, once the hardened parts are cut out. They leave small craters on the surface of an apple or pear, and the inside can get brown and corklike. Females can grow to nearly the size of a quarter. “Marmorated” refers to their marbled or streaked appearance.

Still, sometimes they are just too close for comfort. Ms. Angell said she got a surprise when she put on her pants Friday morning, having washed them and left them to dry in her laundry room.

She felt something in the right rear pocket.

“I thought I left a piece of paper in them when I washed them,” she said.

But it was not paper.

“Pulled it out. He was alive. Stink bug. Flushed him down the toilet,” she said. “I thought, I’m glad I didn’t sit on that.”

Kelli Wilson of Burkittsville, Md., said her home had been overrun by the bugs, especially in the past week. In the afternoon sun, the north-facing exterior of the house “is black with stink bugs,” she said. “It looks like the wall is crawling.”

Mrs. Wilson’s husband, Raymond, skipped services on Sunday at St. Paul Lutheran Church in Burkittsville to remove stink bugs from the house. Mrs. Wilson discovered a little hitchhiker as she and her children arrived at the church. “I just pulled into the parking lot and there’s one on my purse,” she said. “They travel with me now.”

Mr. Jacobs, the urban entomologist, said the response to stink bugs so far is not an overreaction. “I’m standing here in my living room watching some of them crawl up my walls,” he said. “The best thing to do is make your house as tight as possible. Use masking tape to seal around sliding glass doors, air-conditioners.”

Mr. Masser, the Sabillasville farmer, said that he had not yet raised his prices to offset losses, but added that it was a possibility next year if a solution to the stink bug invasion was not found.

“Stink bugs are going to destroy a lot of food — it’s just starting,” he said. “When Joe Blow starts hollering because he can’t find the food he wants, they’ll respond then.”

Tuesday, September 28, 2010

Rush Enterprises sells Deere dealerships for $26M


Truck dealership operator Rush Enterprises Inc. said Friday that it has completed the sale of its John Deere construction equipment dealerships to Doggett Heavy Machinery Services LLC for $26.2 million.

Rush, the New Braunfels-based truck and commercial vehicle dealerships owner, announced the sale in June, saying its construction-equipment division was growing at a slower pace than desired. The sales prices listed in the June announcement was about $37 million.

W.M. “Rusty” Rush, president and CEO of Rush, said the closing provides resources that Rush can invest in its current businesses while and also use to evaluate new acquisitions. Those acquisitions could include construction equipment dealerships in areas of the country outside of those it served before the sale, he said.

The company has truck dealerships in 14 states.

Monday, September 27, 2010

Exelon Plans Debt Sale to Buy Deere Wind-Power Unit


Exelon Corp., the largest U.S. producer of nuclear power, plans to sell $900 million of 10- and 31-year debt to fund its purchase of a Deere & Co. wind-power unit.

The bonds may be issued as soon as today through Exelon Generation Co. according to a person familiar with the transaction. John Deere Renewables LLC will cost $860 million with an additional $40 million if Deere starts constructing three projects in Michigan, Exelon said today in a regulatory filing that didn’t specify the debt offering’s size or timing.

Exelon’s acquisition marks the Chicago-based company’s first foray into owning and operating wind projects, it said in an Aug. 31 statement. The 735 megawatts of wind capacity, enough to power as many as 220,000 homes in eight U.S. states, will add to 2012 profit and advances Exelon’s 2008 promise to reduce carbon-dioxide emissions, according to the statement.

“We took this deal to the rating agencies well in advance of doing it,” Bill Von Hoene, Exelon’s executive vice president for finance and legal, said at a conference on Sept. 15. “They concluded, as did we, that it was credit neutral.”

The notes may be rated A3 by Moody’s Investors Service and BBB by Standard & Poor’s, said the person, who declined to be identified because terms aren’t set.

The acquisition will make Exelon the 13th-biggest wind generator in the U.S., Von Hoene said in the call.

Thursday, September 16, 2010

Ace Buys Rain and Hail for $1.1 Billion to Add Crop Insurance Coverage


Ace Ltd., the Zurich-based insurer with operations in more than 50 countries, agreed to pay $1.1 billion in cash to buy a majority stake in Rain & Hail Insurance Service Inc. and expand coverage of crops in the U.S.

The price values the insurer at about 1.59 times its projected yearend book value of $840 million, Ace said in a presentation today on its website. Ace said the deal will add about 22 cents to earnings per share next year. Ace already holds about 20 percent of the common stock in the Johnston, Iowa-based insurer, which is majority-owned by employees.

Ace, led by Chief Executive Officer Evan Greenberg, is adding to the business of protecting U.S. farmers against losses after the government this year reduced subsidies for the policies. The company said in July that the changes could work in favor of the largest insurers in the business against regional competitors.

“It’s a good example of Evan Greenberg’s strategy of growing through all phases of the property-and-casualty pricing cycle,” said Daniel Theriault, an analyst at New York-based Portales Partners LLC who advises investors to buy Ace shares. “They are already a big player in the agricultural crop business so it’s a relatively low risk acquisition. It’s a pretty good feat in this current environment.”

Ace, which shuns shareholder buybacks, is expanding after remaining profitable through the credit crisis by sidestepping subprime mortgage-related securities. Greenberg said late yesterday that Ace would buy Jerneh Insurance Bhd. for about $210 million to expand in Malaysia.

‘Pretty Robust’

“Pipelines of opportunity are pretty robust right now” for acquisitions, Greenberg said in a conference call in July.

Ace advanced 68 cents, or 1.2 percent, to $57.36 at 4:01 p.m. in New York Stock Exchange composite trading. The company has climbed about 14 percent this year, beating the Standard & Poor’s 500 Index, which is little changed.

Ace competes with market leader Wells Fargo & Co., Australia’s QBE Insurance Group Ltd. and American Financial Group Inc. selling protection to farmers. Rain & Hail, with a market share of about 21 percent, ranks second to a Wells Fargo business, according to data released by Ace in the presentation.

Rain & Hail posted net income last year of $199 million, according to Ace. The company has about 400 full-time employees and sells coverage through a network of more than 11,000 agents.

“This is a business we know well,” Greenberg said in the statement. “We project a return on capital in excess of our 15 percent hurdle rate.”

Thursday, September 2, 2010

John Deere, Common Ground Alliance and US DOT join for Safe Digging

Quad Cities Online

Representatives from John Deere Construction & Forestry, the Common Ground Alliance (CGA) and the Department of Transportation (DOT) rang the ceremonial closing bell at the New York Stock Exchange on Friday, August 20, to promote awareness of underground utilities through the use of the national 811 call-before-you-dig phone number. Though awareness and use of 811 has significantly decreased the number of underground utility strikes in the U.S., the fact that there are still fatalities and damages from hitting gas and utility lines underscores the need for a continued safety campaign.

"It's not enough that the number of strikes has decreased in each of the last five years, because even one strike is too many," said Bob Kipp, president of the CGA.

In 2004, it was estimated that there were 450,000 instances of damage from striking underground lines. However, as a result of the work of CGA and its many supporters, that number has decreased by over 60 percent to 170,000 damages in 2009.

"Through our support of CGA and 811, we strengthen our commitment to our customers. Our customers are our first focus and this initiative saves lives," said Michael Mack, worldwide president, John Deere Construction & Forestry.

"Beyond personal safety concerns, the potential property damage, inconvenient service outages and the hefty fines to equipment operators resulting from digging accidents makes the 811 service incredibly valuable."

To further encourage safe digging, John Deere is also sharing portions of safety videos on YouTube beginning next month. The first video, featuring excavators, will be posted at http://www.YouTube.com/JohnDeere.

The FCC-designated 811 number was launched in 2007 by the CGA to eliminate the confusion of multiple call-before-you-dig numbers that were being used across the country. As a result, homeowners, farmers and contractors can call one easy-to-remember number to have crews mark a requested site for underground lines prior to any excavation.

Deere helped spread the word when the 811 number was first established in 2007 and has also been a driving force behind National 811 Day (each August 11) and the "Safe Digging Month" awareness campaign that occurs each spring. In addition to including information about 811 on its website, the company has featured the 811 logo prominently in its advertising and as part of its booth display during some of the construction industry's most prominent trade shows.

The DOT's Pipeline and Hazardous Material Safety Administration Administrator, Cynthia Quarterman, was also on hand at the bell-ringing event to lend support.

About John Deere

John Deere is a world leader in providing advanced products and services for agriculture, forestry, construction, lawn and turf care, landscaping and irrigation. John Deere also provides financial services worldwide and manufactures and markets engines used in heavy equipment.

Since it was founded in 1837, the company has extended its heritage of integrity, quality, commitment and innovation around the globe. John Deere Construction equipment & Forestry produces more than 120 machine models and distributes its construction, forestry and worksite products through a network of more than 1,300 dealer locations worldwide. For more information, visit www.JohnDeere.com.

About CGA

The Common Ground Alliance is a national association created to prevent damage to underground utility infrastructure and ensure public safety and environmental protection. It has designated each April as "National Safe Digging Month."

Saturday, August 28, 2010

Opposing Views on Cattle Rules Rounded up at CSU Meeting

Denver Post

FORT COLLINS — Save us. No, spare us your meddling.

Agricultural leaders heard two polar-opposite yet equally fiery pleas Friday at Colorado State University, where more than 2,000 ranchers, farmers and rural Americans rallied to urge either government action or inaction.

The meeting, hosted by Attorney General Eric Holder and Agriculture Secretary Tom Vilsack, was the fourth of five workshops around the country in the past six months addressing agricultural issues.

About half the audience supported sweeping change in how the government regulates the ailing cattle industry. They voiced adamant support for new rules that would harness the four major companies that dominate the industry.

The other half bemoaned the possibility of more regulation they fear will clog the industry with lawsuits and curtail cattlemen's ability to harvest top dollar for their herds.

At the center of the arguments are new rules floated by the Obama administration that would make the powerful meatpacking companies — Tyson Foods, JBS, National Beef and Cargill — provide evidence supporting the prices paid for contracted cattle and give small ranchers more opportunities to contest that pricing.

Contracted sales with the big meatpackers have grown from 20 percent of all cattle sales a decade ago to almost half in 2010. While some ranchers say those sales have benefited them, letting them get top dollar for their high-quality beef, others say it unfairly harms ranchers without the clout to negotiate those prices.

"Say there was a terrorist organization that wanted to do irreparable harm to our industry," said Paul Engler, the 81-year-old founder of a 500,000-head feedlot in Amarillo, Texas. "All they would have to do is follow through with the plan that this rule is calling for."

A chorus of boos met Engler's critique, mirroring the jeers that met Kenny Fox's support for the rule change.

"We need this protection. We need to keep our people on the land," said Fox, president of the South Dakota Stockgrowers Association.

While the two ideologies clashed, there was agreement on many issues, including the trouble facing the nation's cattle industry. The number of American cattle farms has dropped from 1.6 million in 1980 to 950,000 today. In 1980, cattlemen earned 62 cents for each dollar spent on their beef. Today, they get 42 cents.

And most troubling, the declines make ranching unattractive to young people.

Luring youth back to the family farm was a much-discussed topic Friday, with panelists and politicians agreeing that returning profitability to ranching would help.

But when discussion turned toward how to restore profitability to America's small ranchers, the discord grew.

"To get an open, robust market, you've got to get rid of concentration," said Taylor Haynes, a Cheyenne rancher and doctor who raises organic beef.

The new regulations could quash a meatpacker's willingness to pay premium prices for certain cattle, potentially installing flat-rate prices to avoid lawsuits from ranchers who didn't get the premium amount and question the pricing.

"I resent the implication that I need to justify a premium paid for my superior product," said Montana rancher Don Herzog.

Instead of fighting over American consumers, cattlemen should be courting international beef eaters, said Jerry Bohm, general manager of Kansas feedyard operator Pratt Feeders.

That's already happening, said ag chief Vilsack, noting the country's agricultural exports reached $105 billion in fiscal 2010, more than double the exports of 2000.

Celebrate the good news and recognize that everyone in the cattle industry is dedicated to offering the greatest product, said Robbie LeValley, a Hotchkiss rancher and president of the Colorado Cattlemen's Association, cajoling her peers to work toward solutions.

"We should not be circling the wagons and shooting inward," she said.

Thursday, August 26, 2010

Deere set for Crop Prices Boost

Financial Times

Farmers will benefit into next year from the rise in commodity prices prompted by severe drought in eastern Europe, John Deere, the world’s biggest tractor-maker, said on Wednesday.

“There’s no question that the recent run in commodity prices, driven by the events in ... eastern Europe, has supported the prospect for crop-farmer income,” said Marie Ziegler, Deere’s head of investor relations. “Overall, for the farm sector it would appear to be very positive as you look into 2011.”

The manufacturer raised its crop price estimates for next year: to $3.90 a bushel for corn from its previous forecast of $3.60; $5.25 for a bushel of wheat from $4.75; and $9.25 for a bushel of soyabeans from its prior prediction of $8.75.

Ms Ziegler noted, however, that rising crop prices had increased feed costs for livestock farmers, who she said accounted for about half the European farm economy. Coupled with the uncertain economic recovery, that could act as a drag on growth in the agricultural sector next year.

She made her comments as Deere reported quarterly profits well ahead of Wall Street’s expectations, citing strengthening demand for big farm machinery in the Americas.

The company said its net profit was $617m, or $1.44 per share, in its fiscal third quarter to the end of July, up from $420m, or 99 cents per share, in the same period last year, beating analysts’ average forecasts of $1.22 per share. Net equipment sales were $6.2bn in the quarter, up from $5.3bn last year.

Deere struck a bullish note on the farm economy in the Americas, saying it expected growth of 5-10 per cent in North America for its full fiscal year and 25-30 per cent in Brazil and Argentina. The company expects equipment sales to rise 32 per cent in the current quarter compared with the same period last year.

Demand for farm equipment is partly driven by a rush by farmers to avoid what they expect to be higher prices for new tractors from next year, when the US government will raise carbon emission standards on such vehicles.

However, a main source of US agricultural equipment demand is expected to be increased farm receipts as a result of soaring prices for wheat and other crops, resulting from supply shortages around the world. Wheat has spiked because of severe drought in Russia, which Deere said would hit its sales in eastern Europe.

Overall, the company said farm equipment sales in Europe could fall in the current quarter by as much as one-fifth from last year because of weakness in livestock and dairy farming.

Thursday, August 19, 2010

Trouble Mounts for Iowa Firm as Egg Recall Expands

USA Today

The Iowa livestock industry giant that's being blamed for a multistate salmonella outbreak linked to its eggs has a long history of environmental, immigration and labor violations.

An egg recall first announced last week was expanded Wednesday to 380 million eggs — the equivalent of nearly 32 million dozen-egg cartons. Hundreds of people have been sickened in a salmonella outbreak linked to eggs in three states and possibly more.

Wright County Egg in Galt, part of the DeCoster family agribusiness operations, had shipped the eggs over a three-month period to wholesalers, distribution centers and food service companies in California, Illinois, Missouri, Colorado, Nebraska, Minnesota, Wisconsin and Iowa. The companies distribute eggs nationwide.

Wright County Egg is being sued for allegedly causing the salmonella poisoning of a Wisconsin woman, and a dozen more lawsuits linked to the outbreak are in the works, said Bill Marler, a Seattle lawyer who specializes in food poisonings.

The federal Centers for Disease Control and Prevention said this week that it had seen a fourfold increase in the usual number of cases of salmonella enteritidis, a strain associated with eggs. The CDC said it received reports of about 200 enteritidis cases every week during late June and early July. More than 260 illnesses in California have been linked to the outbreak. Minnesota has tied at least seven salmonella illnesses to the eggs.

No deaths have been reported, said Christopher Braden, a CDC epidemiologist.

The DeCoster operations have had several violations:

• The founder, Austin Jackson DeCoster, pleaded guilty to federal immigration charges in 2003 and paid a record $2.1 million in penalties.

• In 2002, the federal Equal Employment Opportunity Commission imposed a $1.5 million penalty for mistreatment of female workers, including charges of rape, sexual harassment and other abuse.

• In 2001, the Iowa Supreme Court ruled that DeCoster, a repeat violator of state environmental laws, could finance, but not build, hog confinement operations for his son, Peter DeCoster, who is now closely involved with the Wright County egg operations.

• Earlier this year, the elder DeCoster paid a fine to settle state animal cruelty charges against his egg operations in Maine.

Federal authorities have been on the DeCoster farms since last week investigating its henhouses and testing eggs to determine the source of the contamination, said Howard Magwire, an attorney for the United Egg Producers, a trade group that includes the DeCoster operations in its membership.

"The company itself is testing many thousands of eggs from the farms to see if they can find anything," he said.

He said the company had "erred on the side of safety" by making the recall as large as it is.

A woman who answered the phone at a number in Galt listed for both Wright County Egg and DeCoster Farms of Iowa referred a reporter to the government media representatives. They did not return phone calls.

A phone message for Peter DeCoster also was not returned.

The lawsuit filed in a state court in Kenosha County, Wis., alleges that Tanja Dzinovic was sickened in June after eating a cobb salad that included hard-boiled eggs. Tests showed she had been infected with salmonella enteritidis, according to the lawsuit. She was released from the hospital but continues to suffer from gastrointestinal symptoms, the lawsuit said.

State and local officials also are investigating salmonella cases that could be linked to the DeCoster eggs in Arizona, Connecticut, Massachusetts, Maryland, North Carolina, Nevada, Oregon, Pennsylvania and Texas.

Eggs were a major source of salmonella illnesses in the 1990s, but outbreaks had declined significantly over the past decade as farms took a number of biosecurity measures and other steps to prevent contamination. Last month, the Food and Drug Administration imposed mandatory safety regulations, including egg testing requirements, that many farms had already been following, according to industry experts.

"This outbreak really comes as a surprise, and it really seems to be going against the overall trend," said Caroline Smith DeWaal of the Center for Science in the Public Interest, a consumer advocacy group.

Kevin Vinchattle, executive director of the Iowa Egg Council, a producer trade group, said other egg farms were watching the latest case. The DeCoster operation is not a member of the group.

"Whatever is happening with this particular investigation, we're concerned about understanding what has happened so things like this don't happen in the future," he said.

Eggs can become contaminated via rodents or unsanitary conditions in henhouses. The Food and Drug Administration last month imposed new regulations on egg farms to prevent salmonella contamination. The rules include regular testing.

The recalled eggs were packaged under a variety of names, including Lucerne and Albertsons, brands of supermarket giants Safeway and Albertsons, respectively.

Dutch Farms of Chicago said Wednesday that Wright County Eggs "used unauthorized egg cartons to package and sell eggs under the Dutch Farms name without Dutch Farms' knowledge." The eggs were distributed to Walgreens stores in Iowa and six other states.

Hy-Vee Inc. said on its website that it did not sell the eggs.

Tuesday, August 17, 2010

Federal Ethanol subsidies will affect Industry, West Michigan Corn Growers


As an electronic sign by the road flashed messages last week about “America’s Clean Fuel” and “America’s Peace Fuel,” trucks lined the driveway into the Carbon Green BioEnergy ethanol plant on M-66 near the Barry-Eaton-Ionia county borders.

There were haulers from Vermontville and Clarksville, Portland and Woodland, Stanton and Sunfield, all delivering the source of the patriotic fuel touted for environmental and national security benefits: corn.

And the $60 million plant where a work force of 40 churns out 50 million gallons of ethanol annually is good for business in this rural area halfway between Grand Rapids and Lansing.

“We’re businessmen,” said Brian Haskin, whose Haskin Farms in Ionia County sends the plant  400,000 bushels per year from a distribution hub two miles down the road.
A scoop works in a corn product storage barn at the Carbon Green facility.

“We (farmers) are going to plant what makes us money. If they make it profitable, we’ll find a way to produce it.

“(Corn-based ethanol) is a boost to the local economy.”

No wonder Haskin hopes Congress extends the federal ethanol subsidies set to expire at the end of the year. The plant’s demand not only pushes up the price of corn, it creates a close-to-home market that reduces freight costs. Most of the plant’s 50,000 bushels of daily corn supply come from within 80 miles.

But the impact of the subsidies — a 45-cents-per-gallon tax credit for “blenders” who add ethanol to gasoline and a 54-cents-per-gallon import tariff — extends much further, to motorists and taxpayers.

The well-being of the world is at stake — at least, that’s the message the sign in front of the plant attempts to convey.

“No wars have been fought over ethanol,” the sign read.

Except, of course, the political battle under way.

“If this credit doesn’t go through, there’s a significant chance we’re going to lose some ethanol plants,” said Loren Koeman, a Grand Rapids agriculture consultant who farms about 3,000 acres near Holland and is secretary of the Lansing-based Michigan Corn Growers Association board.

“As it becomes more and more efficient, we need to keep supporting the industry. It’s not like we’re not spending money on the oil industry. We fight wars to protect oil. It’s naive to think there’s no government cost associated with oil.”

And those benefits come at a cost: $1.78 per gallon of gas replaced by a gallon of corn-based ethanol, according to the Congressional Budget Office.

U.S. Rep. Vern Ehlers, R-Grand Rapids, called the subsidies “a gift to the ethanol-producing industry” that need not be re-given.

“Obviously, it’s good for people to have jobs,” he said.

“It’s good for farmers to make money,” Ehlers said. “But is that an economically sound way to do it? It doesn’t generally pay off to give people make-work jobs.”

Besides, Ehlers added: “Should we really be using food to generate fuel in light of the food crisis in many parts of the world?”

A multiyear extension of the subsidies is key to short-term stability and long-term viability of the industry, Koeman said. The 4-year-old Woodbury plant in Eaton County is already on its fourth owner and closed for eight months before reopening in June 2009. This fall, the facility plans to add more than 1 million bushels of corn storage to its pair of 135-foot silos. Each holds 200,000 bushels.

Through the credit, the country’s investment in ethanol will continue to add cleaner-burning fuel into the energy supply and foster less dependence on foreign oil while retaining a productive agriculture base that enhances local economies, Koeman said.

Debate over food supply costs

There is another side to just about every aspect of the corn ethanol debate.

Sam Hines, executive vice president of the Michigan Pork Producers Association in Holt, said ethanol subsidies jack up the cost of feed for hogs, which, in turn, increases prices at the grocery store.

“It’s no secret that pork production, in particular, in recent years has taken a real hit primarily as a result of a diversion of a lot of corn into ethanol,” Hines said. “Now, we’re starting to see that reflected in higher prices in the store. We’re not necessarily averse to bio-fuels, but we need to be careful with how we play around with that. The ethanol industry has matured to where it should be able to stand on its own.”

Walking into a large storehouse with mounds of dried distillers grain, or DDG, Woodbury plant manager Edward Thomas downplayed the food-supply criticism of corn-based ethanol.

The plant generates more than 400 tons of DDG daily as a byproduct of the corn’s 60-hour journey from kernel to “corn beer,” including a lengthy bath in a 730,000-gallon fermenting tank. The “co-product” is sold for animal feed within a 200-mile radius, Thomas said.

“The misnomer is we take (the corn) and it’s gone,” he said. “It’s not.”

As for ethanol standing on its own, Carbon Green supports an idea to phase out subsidies in exchange for investments in infrastructure that would make the fuel more available to consumers.

Walker-based Meijer, for example, has E-85 pumps that contain fuel with 85 percent ethanol at more than 70 of its gas stations, including in Cedar Springs, Knapp’s Corner in Grand Rapids, Holland and Wyoming. Wyoming-based J&H Oil Co. has E-85 pumps at five of its 35 stations.

But with fuel sales down overall, there is little market incentive for gas stations to spend money installing more E-85 pumps, said Mark Griffin, president of the Michigan Petroleum Association/Michigan Association of Convenience Stores.

And, even with publicly funded incentives for pumps or flex-fuel vehicles capable of burning E-85, “where’s the customer going to come from?” he asked.

“The customer is not buying that type of product right now,” Griffin said. “The economies just aren’t there.

“We seem to be in a rush to always turn petroleum into the villain, and we forget that petroleum is here, it’s easy to process and it’s easy to use and it will be for a very long time.”

And there’s the crux: Even though “no beaches have been closed due to ethanol spills,” as the sign at the Carbon Green plant stated last week, will consumers en masse ever respond to that sales pitch?

Changing plans
Congress let biodiesel subsidies expire at the end of 2009 and, as it stands, that soy-based fuel cannot stand on its own.

Nowadays, Michigan Biodiesel does just about everything at its $8.8 million, 4-year-old plant in Bangor except produce the fuel for which it is named.

The plant, down to seven employees, is using its equipment to turn things such as cooking oil and mayonnaise into livestock feed.

It has not produced biodiesel in 18 months.

“The marketplace, I do not believe, has stepped up to make the tax credit so it is not necessary,” CEO John Oakley said. “I’m concerned for the ethanol people. That’s the reason you have subsidies, to take up that slack in the marketplace if you truly are concerned about the environment, air quality and all those good things.”

As a fuel distributor, Crystal Flash Energy, which invested in the biodiesel plant, will transport and sell whatever types of fuel are cost-effective for its customers, said Tom Fehsenfeld, company president.

But there is intangible value in renewable fuels such as ethanol, he said.

Hence, a tax incentive is needed to overcome what Fehsenfeld calls the “hidden subsidies” of conventional fuels — the environmental, health and security costs of burning foreign oil.

“If we charged all of these hidden costs against conventional fuels in the form of taxes, we would probably not need subsidies on alternative fuels,” he said. “We all have to be concerned about the type of world we are passing on to our children and grandchildren.

“It has become clear that some types of fuels are better for the environment and
for national security than others.”

And, surely, some types of fuel are better for Haskin Farms and other corn growers who unload their heaping stores of grain at the Carbon Green plant.

Whether it pays to put ethanol in your tank remains less clear.

“I wish (ethanol) could be self-sustaining but, at this point, it obviously isn’t,” Haskin said. “I’m sure if they do not extend the (subsidy) program, it’s going to be devastating for a lot of farms.”

The arguments

Federal ethanol subsidies are scheduled to expire at the end of the year, and Congress is debating an extension. Here are some of the issues:

    * Ethanol can be made from domestic farm products such as corn and may have environmental and national security benefits.

“It’s a very positive thing for the whole country, not just farmers. It’s a win-win situation.”
— Brian Haskin, Ionia County farmer

    * An existing tax credit spurs demand by giving incentive to blend ethanol into gasoline, while an import tariff shields domestic producers from lower-cost sugarcane ethanol in Brazil. Removing the subsidies could hamper the viability of U.S. ethanol.

“The failure of Congress to maintain ethanol and biodiesel subsidies at consistent levels is severely undercutting those (alternative energy) goals.”
— Tom Fehsenfeld, Crystal Flash Energy president

    * Maintaining the subsidies inflates the price of corn and the cost of meat production, for example.

“If you have to pay 10 percent more for your steak, I guess we feel that trade-off is worth all the benefits.”
— Loren Koeman,Agriculture consultant and Holland-area farmer

    * Dried distillers grain, a byproduct of the ethanol-making process, is billed by the industry as suitable livestock feed.

“We have found that, if you use above a certain level (of DDG), it has an impact both in productivity of the hogs and on meat quality.”
— Sam Hines, Executive vice president of the Michigan Pork Producers Association

    * Eliminating the subsidies could cause an 8 percent drop in corn prices.

“We’re just afraid the bottom would fall out from under us. We’d see a lot of American jobs lost.”
— Jamie Cook, Michigan Corn Growers Association’s ethanol and new use coordinator

    * One proposal from a pro-ethanol network would phase out subsidies in favor of government investment in infrastructure to make the fuel more available to consumers.

“Let’s get it so that all cars can burn a higher blend of ethanol so we can get more of this into the stream.”
— Koeman

    * Can the subsidies spark enough demand for ethanol to stand on its own? And is it worth the cost to U.S. taxpayers of $1.78 per gallon of fuel that is replaced by ethanol?

“No one quite knows what to do with it. It’s hard to know when they’re competitive. It’s pretty hard to say when you won’t need the subsidy anymore.”
— U.S. Rep. Vern Ehlers, R-Grand Rapids

Monday, August 9, 2010

Antique Tractors, Farm Machinery takes Admirers Back


PILESGROVE TWP. — The collecting of antique machinery is a hobby for many locals in this area, but behind the glimmering paint of a freshly restored John Deere tractor is a sense of nostalgia that brings residents of Salem County back to a simpler time.

Not unlike other years at the Salem County Fair, the machinery display was a big hit with the crowds of thousands that visited the fairgrounds last week. Both young and old took in the different styles, sizes and makes of equipment on display.

John Deere ag equipment had a big showing as two collectors brought some very rare pieces from their collection to this year’s fair.

Other makes of tractors at the fair included Minneapolis Moline, Ford, Oliver, Silver King, and McCormick.

“It’s just really a hobby for me,” said Don Marshall of Vineland about his collection of John Deere tractors. “I brought only half of what I actually own.”

Two of Marshall’s tractors from his extensive collection were a 1936 John Deere D and a 1949 John Deere A. Both were restored to their original condition with the familiar grass green and banana yellow paint shining in the sun.

Freeholder Julie Acton holds a special place in her heart for antique tractors. The displays at the fair brought back memories from when her children were young.

“We would come here and they would sit up on these tractors all day,” said Acton. “They loved it.”

Another tractor collector exhibiting at the fair was Deerfield resident Neil Lang who had two very unique displays. His 1937 and 1938 John Deere LS’s were put side by side with one in its original state and the other was fully restored. Often, the challenge can be finding a good John Deere parts store.

Lang also had on display the first tractor he ever brought which was a 1951 John Deere M. He bought it used in 1961 for $450.

“I still use that one today,” Lang said.

The 1956 John Deere 420 S on display was one Lang bought locally from Kathleen Camp in Elmer.

“This exact tractor was used at Palatine Park,” said Lang.

If there was a prize for bringing the most equipment it would have gone to Bridgeton resident Peter Shestakoff.

Among the numerous pieces brought by Shestakoff one of the big show stoppers was a 1913 International eight horsepower engine. The belt style engine was hooked up to a New Holland Rock Crusher.

He also had on display an old-time laundry machine run by crank and a number of old engines, one which was used on an oyster boat to pull in nets.

Logan Maurer, 3, of Deepwater took an interest especially in the antique corn plate mill and the bur mill grinder. Mauer used the crank on the plate mill to strip the corn and then the bur mill to grind it into cornmeal.

“Kids like these pieces of equipment because they are hands-on,” said Shestakoff. “But if they had to do this all day it would be another story.”

Shestakoff said he enjoys bringing his equipment to the fair because of its traditional agricultural roots. He also said the reason behind the large fair display is the joy he gets when children take an interest in the antique equipment.

“It’s not easy getting all this stuff down here. It takes me about two days to haul everything,” said Shestakoff. “But people love to see how things work and that’s why I bring as much as I do so people can come and visit.”  

Thursday, August 5, 2010

The Best Tractor - is it Green or Red?

Sioux City Journal

H. Ferguson, Massey, Minneapolis-Moline, Oliver, Ford, Field Marshall and Dexter.

All were once familiar brand names on American farms. But, much like the auto industry, agricultural equipment manufacturers have folded under national and international competition or consolidated to better compete in the world market. For example, McCormick became International Harvester and, more recently, Case IH. Massey Ferguson and Allis-Chalmers are still available at some U.S. ag equipment dealers, along with names newer to the U.S., such as Krone and Kubota.

But at the Woodbury County Fair, which opened Wednesday at the fairgrounds in Moville, just two brand names dominate the large farm machinery on display: John Deere and Case IH.

Farmers looking over the equipment Wednesday morning had all kinds of reasons for favoring one brand over another. Most said they either "bled red" for Case IH or were "all green" fans of John Deere.

It may be a sad state of affairs for farmers who remember when there was more variety in the brands of tractors they could buy than in the brands of beer at their local grocery. For them, the fair offers 110 antique tractors.

For the others, well, there's mostly Case IH and John Deere to argue over.

A few farmers said it wasn't the brand, per se, that fuels their loyalty but the ease of getting service and parts when they need them. Unlike country crooner Kenny Chesney, not a single one of them mentioned that it matters whether their girlfriend thinks their tractor's sexy ... just as long as it's green. Or red.

Here is a sampling of opinions from the fair:

John Deere

Bryce Sohn, Danbury, Iowa -- "I'm definitely green. I just think you get the parts quicker. There are a lot of dealerships, good service."

Tom Handke, Mapleton, Iowa -- "The resale is the best. It costs more, but you get more out of it and fewer problems. It's whatever a person thinks; you're either Deere or Case."

Eldon Cuthrell, Early, Iowa -- "I have two balers, a John Deere and a Vermeer. The John Deere was giving us trouble; I bought a Vermeer `cause it's supposed to be better for bailing corn stalks." He said the Vermeer can be run in reverse to unclog a jam, but a jam in a Deere must be dug out. "You go with whatever works. I don't wear John Deere shorts or Vermeer shorts. But some guys do."

Case IH

Dennis Uhl, Sloan, Iowa -- "I had it beat into me," Uhl said of his father's own loyalty to Farmall, and then to Case IH. "I was brainwashed."

Paul Nelson, 12, Moville, Iowa -- "I drive an International Harvester 1026 Farmall. I like red tractors. When the green ones break down, it's kind of hard to fix `em up. You have to take the GPS off and stuff."

Marlin Groth, Moville, Iowa -- Groth is president of the Tri-State Antique Club; 10 of the 110 antique tractors on display at the fair belong to him, all are International Harvester or another forerunner of Case IH, including one bought new on July 11, 1935 by his great-grandfather. It was last owned by a neighbor of Groth, who told him years ago that he'd have to wait until he died to buy it. Sure enough, the man left a note about the tractor in his will. The neighbor's heirs recently came to Groth and offered him the right of first refusal to buy the tractor. They worked out a deal and Groth bought the tractor from the estate. "I rescued it about a month ago," he said.

Brand doesn't matter

Leo Groth, Moville, Iowa -- "If you get a good dealer, if you're satisfied with the dealer, stick by it."

Ray and Kathy Haafke, Bronson, Iowa -- "We kind of gravitate to orphans and oddballs," Kathy said of the couple's diverse collection of antique tractors. Now retired from farming, they brought six tractors to the fair, including a Minneapolis-Moline and a 1938 Graham-Bradley. They used both International Harvester and John Deere tractors on their farm, Ray said.

Thursday, July 22, 2010

In California, Bankruptcy of Giant Farming Co-op Holds a Lesson

Modesto Bee

The bankruptcy of Tri Valley Growers, a huge grower- owned cooperative, cast a pall over tomato and peach growers just as the 2000 canning season got rolling.

Ten years after its demise, the outlook is brighter in the sun-soaked fields near Westley where former Tri Valley member Bill Cox still grows tomatoes.

He sells his crop to two other food processors now, though the 2010 price might not be as high as the past three years. He sees continuing demand from fans of ketchup, pasta sauce and salsa.

But the collapse of Tri Valley, which cost the 500-plus grower- members about $145 million in equity, still is felt. Cox said his share of that was "a couple hundred thousand dollars," money that could have helped him diversify.

"We lost a bunch of money," he said. "We could have developed a couple hundred acres of orchards, or at least 100."

The bankruptcy of the 11,000-employee company, with plants up and down the valley, also contributed to the decline in the region's cannery work force. While primarily seasonal work, the mostly unionized jobs pay fairly good hourly wages compared with other valley occupations.

"There are nowhere near the employees there were back when they were going strong," said Wayne Zipser, who grew peaches for Tri Valley and now is

executive manager of the Stanislaus County Farm Bureau.

As for the growers, he said, "it hurt them. They were counting on those investments to grow the company. And it hurt the local economy."

A giant before the fall

Tri Valley, founded in 1932, grew to be the biggest player in the state's canning industry. At its peak in the 1980s, it ran 1.3 million tons of produce a year through 10 plants in California and one in New Jersey, selling under labels such as S&W and Libby.

Modesto was at the heart of it all, with one plant for tomatoes and two for peaches, apricots and other fruit.

The cooperative made a profit every year from 1988 to 1997, then lost $165 million over the next two years. It was bleeding yet more cash when it filed for bankruptcy July 10, 2000.

"It was a momentous event and a horrific event because growers lost millions and millions of dollars in equity," said Richard Sexton, an agricultural economist at the University of California at Davis.

He co-wrote a 2004 paper that cited several reasons for the collapse. They include overpayment for the raw crops, inefficient plants, a heavy debt load, poor financial oversight and weak brands in the tomato market.

Tri Valley stumbled through the 2000 harvest, then vanished as its assets were sold off to pay creditors. The Modesto presence has been reduced to one fruit plant, a Finch Road operation now owned by Seneca Foods Corp.

Processing has survived

The bankruptcy came as demand for canned fruit was slipping, another factor in the shrinkage of the industry.

Yet food processing has survived. At the peak of production last year, about 9,000 people worked at nine fruit and tomato plants in Stanislaus, Merced and San Joaquin counties.

"It puts money in people's pockets, whether to pay a bill or pay the mortgage," said Michael Tapia, who used to drove a forklift at a ConAgra Foods tomato warehouse in south Modesto.

He was seeking similar work this summer at the Del Monte Foods fruit cannery on Yosemite Boulevard. The job pays $16.94 to $18.37 an hour, not bad in a county where the jobless rate was 17.3 percent in May and many working people have taken pay cuts.

"It's tough out there right now for anybody," Tapia said. "People are losing homes. People are losing the things they have worked hard for in life."

Times were not so bad for the overall economy when Tri Valley faltered, so the impact was softened. The dairy, wine and nut industries were expanding, though not without some rough patches, and they employed mostly year-round workers.

Despite the troubles for tomato and peach growers, total gross income to Stanislaus County farmers nearly doubled from 2000 to 2009, to an estimated $2.31 billion.

On top of that, a housing boom brought plenty of work in construction and related fields, though it would come crashing down in the second half of the decade.

In 2000, it was tomatoes rather than the more lucrative fruit that dragged Tri Valley down. Today, the situation is reversed for the canning industry, with tomato demand stronger and fruit lagging.

One reason for that is the steady demand for paste, sauce and other tomato products. Industry representatives say consumers find them convenient, tasty and nutritious.

"The canning tomato market doesn't compete much with the fresh tomato market," Sexton said. "They go to different uses."

The Central Valley remains an ideal place to farm tomatoes thanks to its long stretches of sunny days. Mechanical harvesting has greatly reduced the need for field workers. Irrigation supplies are a long-term concern, especially on the West Side, but the easing of the drought this year has helped.

"I think it should be stable," Cox said of the processing tomato market. "I don't know about any international competition that's going to be accelerating."

Tough market for fruit

Not so for growers of peaches and other canning fruits. They contend with cheap imports and with the high cost of hand labor during the harvest.

Then there's the consumer, who can get fresh fruit from somewhere in the world all year.

The canned fruit industry has gone on the offensive, arguing that its process seals in flavor and nutrition. It also has offered new packaging, such as 4-ounce plastic cups, and new ingredient mixes, such as fruit packed in juice.

"It suffers from this notion of being not in fashion, but it's still a good product," said peach grower Paul Van Konynenburg of Modesto. "You put it in front of any 4-year-old and they will tell you how great it is. It's not your grandfather's heavy- syrup peaches."

Van Konynenburg was a Tri Valley member and served on its board of directors. He said the cooperative was done in by a number of factors that added up, including the conflicting needs of tomato growers, who have an annual crop, and fruit growers, who have long-lived trees.

Van Konynenburg now sells his peaches to Seneca, which he said has a good system for keeping the inventory moving.

Gary Darpinian, an Escalon-area grower who chairs the California Canning Peach Association, also praised Seneca.

"They've been a good addition to the peach industry," said Darpinian, who sells to Del Monte and was not a Tri Valley member. "The growers I know have been very pleased with their operation."

A spokesman at Seneca headquarters in Marion, N.Y., did not respond to a request for comment on how the old Tri Valley plant is faring.

Rethinking co-ops

Tri Valley's troubles got industry people thinking about the value of farming cooperatives. Growers have formed them to get fair prices for their crops, but they have to be wary of producing surpluses or pricing out the buyers of the finished products.

Darpinian said cooperatives need to have communication among the growers, board members and executives.

"Having good, accurate information about the financial condition of the company is very important," he said.

Sexton, in his 2004 post-mortem on Tri Valley, said the cooperative structure contributed to crop overpayments and "cumbersome" decision making, but the company also faced larger trends in the fruit and tomato markets.

Ten years after the Tri Valley debacle, the canning tomato industry is growing, although prices waver as processors try to match supply with demand.

The fruit industry is clearly struggling, but if it can stabilize, Modesto could be the hub of what remains. Seneca has started up the old Tri Valley plant for yet another season, and Del Monte has invested heavily in its own Modesto operation.

"It's a smaller total piece of the pie than it was in, say, 1964, but it's still a big piece," Van Konynenburg said.

He noted another advantage of supplying canned food to the world:

"Because those are outside dollars coming into our community, that is how our economy builds its wealth."

Wednesday, July 14, 2010

How Financial Overhaul can Hurt Farmers

The Wall Street Journal

GILTNER, Neb.—Farmer Jim Kreutz uses derivatives to soften the blow should the price of feed corn drop before harvest. His brother-in-law, feedlot owner Jon Reeson, turns to them to hedge the price of his steer. The local farmers' co-op uses derivatives to finance fixed-price diesel for truckers who carry cattle to slaughter. And the packing plant employs derivatives to stabilize costs from natural gas to foreign currencies.

Far from Wall Street, President Barack Obama's financial regulatory overhaul, which may pass Congress as early as Thursday, will leave tracks across the wide-open landscape of American industry.

Designed to fix problems that helped cause the financial crisis, the bill will touch storefront check cashiers, city governments, small manufacturers, home buyers and credit bureaus, attesting to the sweeping nature of the legislation, the broadest revamp of finance rules since the 1930s.

Here in Nebraska farm country, those in the business of bringing beef from hoof to mouth are anxious, specifically about the bill's provisions that tighten rules governing derivatives. Some worry the coming curbs will make it riskier and pricier to do business. Others hope the changes bring competition that will redound to their benefit.

"Out here we like to cuss the large banking institutions because of the mortgage mess, but we also know that without them some of these markets don't work," says Mike Hoelscher, energy program manager for AgWest Commodities LLC, a Holdrege, Neb., brokerage that provides derivatives services to the farming industry.

Derivatives are financial instruments whose value "derives" from something else, such as interest rates or heating-oil prices. The first derivatives were crop futures, which appeared in the U.S. at the end of the Civil War and became a standard facet of business for companies across America.

During the financial crisis, they became notorious as American International Group Inc. and others were gutted by bad bets on derivatives linked to bad mortgages.

President Obama and other proponents say the financial overhaul will prevent the kind of reckless lending and borrowing that sank the financial system and left taxpayers with the check. They say non-financial companies are worrying unduly about the derivatives portion of the legislation. The Senate is expected to approve the financial regulatory overhaul on Thursday, sending it to the president.

The full impact won't be known for years, but in Nebraska nerves are already on edge.

Executives at Five Points Bank in Hastings think the new rules on mortgage lending will make the home-loan business less profitable. "When they create a new regulator, it really scares us," says Nate Gengenbach, vice president of commercial and agricultural lending.

Advance America Cash Advance Centers Inc. thinks the new Bureau of Consumer Financial Protection will take aim at the payday-loan business, though it's not clear what steps the agency will take. Advance America's storefront at the Skagway Mall in Grand Island charges an effective 460.08% annualized interest rate on a two-week $425 loan.

But it's the derivatives portion—the part of the bill aimed directly at Wall Street—that might end up touching most lives in rural America.

The new law requires most derivatives transactions be standardized, traded on exchanges, just like corporate stocks, and funneled through clearinghouses to protect against default.

Faced with intense lobbying, Congress partially exempted businesses that use derivatives for commercial purposes. So, farmers and co-ops probably won't face new collateral requirements, for instance—although there remains a dispute over that section of the bill. Those that trade derivatives on regulated exchanges, such as the Chicago Board of Trade, are less likely to see immediate impacts than those conducting private over-the-counter deals, which will face federal regulation for the first time. The goal is to make such deals transparent.

The question for these farmers is whether such rules will make hedging more expensive. Some say new requirements on big players will create higher costs for small players, including the cash dealers will have to put aside to enter into private derivatives transactions. Some brokers think restrictions on big-money banks and investors will drain the amount of money available to the everyday deals farmers favor.

Others predict the opposite effect, pushing money from the private market to the exchanges and creating more competition that will benefit farmers.

Uncertainty reigns in Giltner, a town of 400 residents 80 miles west of Lincoln. At first glimpse, Giltner's landscape seems featureless, a fading horizon of corn and soybeans. But its details are more subtle, including wildflowers and shaded creeks. Everywhere galvanized-steel sprinkler systems crawl across farm fields like giant stick insects.

Mr. Kreutz, an outgoing 36-year-old with a sandy crewcut and sunburned neck, gave up a career in finance and took over the 2,800-acre family farm after his father's death. As he works his fields, he checks the crop futures prices on his smart phone.

Here's how Mr. Kreutz does it: Say in early summer he sees that the price for a Chicago Board of Trade futures contract on corn for delivery later in the year is $3.56 a bushel. If he likes the price, and wants to lock it in, he calls AgWest and sells a futures contract for 5,000 bushels. The futures contract is a derivative in which the price for corn is set now for exchange in the future, though no kernels will change hands. Instead, when the contract nears expiration, Mr. Kreutz and the buyer of his contract will settle—in effect—by check.

By fall, when Mr. Kreutz is ready to deliver his crop to the local co-op, the market price might have fallen by 50 cents. He'll sell his actual corn for that lower amount. But he'll make up the difference through his financial hedge. (Mr. Kreutz buys a new futures contract at the lower price to make good on his earlier promise, making up the 50 cents.) In all, he'll have hit the price target he locked in earlier in the year, minus brokerage fees.

If the price rises during the summer, as it did during the food crisis two years ago, Mr. Kreutz has to pony up extra cash for his broker—a margin call—to maintain his positions. He recoups that by selling his actual corn at a higher price, but has to take a loss to meet the futures contract he signed earlier in the year, missing out on a windfall but ultimately meeting his target price.

Mr. Kreutz does this type of operation dozens of times a year, hedging about 70% of his 345,000-bushel corn harvest.

Such deals ripple through the local economy. When Mr. Kreutz gets a margin call from his broker, he turns to his banker, Mr. Gengenbach, for a loan to cover it. Mr. Gengenbach estimates that one quarter of his farm clients use derivatives.

"Somebody like Jim has a lot of money in his crop out here," says the 37-year-old Mr. Gengenbach. "If he can't protect that, it's not good for us."

Mr. Kreutz's brokerage, AgWest, thinks the new finance law will hurt both firm and farm. If big investors and dealers have to keep more cash on hand, there will be less liquidity in the market and therefore the cost of derivatives will increase, Mr. Hoelscher, the broker said.

A few minutes from the Kreutz family farm are the corrals of Jon Reeson's feedlot. Mr. Reeson, 43, is married to Mr. Kreutz's sister Jane. His feedlot holds as many as 1,500 steer, mostly Black Angus, which grow from 600-lb. calves into 1,300 pounders ready for slaughter.

Mr. Reeson uses derivatives to hedge both the price he pays for feed and the price he gets for selling his steer.

The fattening takes about 7,000 pounds of food for each animal. Mr. Reeson can't count on a favorable price from his brother-in-law's farm, in which he has a stake, so when he sees a feed price he likes, he seals it with a futures contract.

In April, he called AgWest and locked in a price with a futures contract for $95 per hundredweight of cattle. Since then the market price has dropped to $90. If the price stays there until October, he'll have made the right call, earning a higher price than if he'd relied on the market alone. If the price spikes higher, though, he'll miss out on potential gains.

Mr. Reeson is willing to live with that possibility in exchange for locking in a profit or a narrowed loss. Derivatives hedging helped him survive the recession of 2008-2009, when cash-strapped diners avoided steak and the price of beef plunged.

He's watching the new legislation warily and can't yet tell if it will hurt or help.

When his cattle have reached full weight, Mr. Reeson puts them on Roger and Barb Wilson's trucks for the trip to the slaughterhouse. The Wilsons have seven semi tractors and 16 trailers, and one of their biggest costs is diesel fuel to keep the fleet on the road.

In 2004, Cooperative Producers Inc., his local co-op, offered Mr. Wilson a price-protection plan for 10,000 gallons of diesel at about $2.50 a gallon, with 90 days to use it.

CPI had a choice. It could take its chances and hope the price of fuel would drop before Mr. Wilson took delivery on his full order, a windfall for the co-op. If diesel prices jumped, though, the coop would take a bath. "That falls under speculation," says Gary Brandt, CPI's vice president of energy. "But that's not what cooperatives do. That's what Goldman Sachs does."

Instead, CPI hedged on the New York Mercantile Exchange, buying a futures contract on heating oil, a close market substitute for diesel fuel. The co-op goes a step further and hedges also the difference between the prices of fuel traded in New York and delivered in Nebraska.

For the 57-year-old Mr. Wilson, the pricing plan proved a mixed blessing. The first year, the pump price shot up by another 20 to 25 cents, meaning he was getting a good deal. The following year the pump price dropped about a quarter a gallon, but Mr. Wilson was obliged to pay the higher price. "It hurt to have to pay for that fuel," he recalls sourly. He quit the program after that.

The finance law's imminence has prompted CPI's Mr. Brandt to warn his sales team and customers that the co-op may have to end its maximum-price fuel contracts. He's worried too that CPI might have to cut its fuel supplies if it can't hedge against price drops.

"We have to start making a game plan if they take away the ability for us to hedge that inventory," Mr. Brandt says.

The Wilsons deliver Mr. Reeson's steer to a low, cement-gray complex on the edge of Grand Island, Neb., where trucks arrive loaded with cattle, and others leave loaded with meat. Over the past year, Mr. Reeson has sold 1,125 steer to the packing plant, which is owned by JBS USA, a Greeley, Colo., unit of Brazilian-owned JBS SA.

JBS buys livestock two ways. Sometimes it pays cash for the following week's kill. Sometimes it buys further forward, agreeing in July, for instance, to a fixed price for steer delivered in December. JBS hedges on the derivatives market to make sure live cattle prices don't drop before it takes delivery.

The company also sells beef cuts forward to restaurant chains, promising delivery at set prices months ahead of time. JBS expects to have enough meat to fulfill the agreements. But if it runs short, it doesn't want to risk having to pay higher prices to buy meat to supply those restaurants.

So, it uses the derivatives market to play it safe. To do so, the company has to find a way to hedge different cuts of beef: Tenderloins might represent 1.5% of the total value of a steer. Strip loins might make up 3%. In a sense, JBS protects itself by reconstructing the steer through a derivatives trade on the Chicago Mercantile Exchange. "We try to put the carcass back together financially," says company spokesman Chandler Keys.

The company hedges electricity for its refrigerators and natural gas for its boilers. It hedges currencies to stabilize its income from overseas. It hedges fuel for its fleet of thousands of trucks.

Even executives at a big firm such as JBS haven't been able to nail down the precise impact of the legislation on their business, introducing an unaccustomed level of uncertainty into their operations. They aren't changing the way they use derivatives, yet, hoping instead that exemptions for commercial users will insulate them.

"To get food, particularly highly perishable food like meat and poultry, through to the consumer, you have to manage your risk," says Mr. Keys.

Indiana Couple Use 10-Acre Farm to Grow Local Produce

Chicago Tribune

GOSHEN, Ind. — What began as Karen Wellington's personal quest for honest information about where food comes from has evolved into a local family farm that is reaping more than just healthier food -- it's producing a crop of friends.

Offers for free eggs from Karen and Jim Wellington's 10-acre farm, located within Goshen's city limits on Waverly Avenue, between the canal and the river, have appeared on Facebook. Karen drops off 10 to 12 dozen eggs a week at her husband Jim's downtown Goshen eye care office for community members to pick up. There's never any charge, she said.

Wellington was inspired to begin farming after reading books such as "Fast Food Nation" and "The Omnivore's Dilemma" and watching documentaries along the lines of "Food, Inc." which investigate genetically modified, corporate mass-production food systems and the complex politics and health concerns wrapped around the average American diet. Wellington reached a point in her research where she could no longer feed her family with meat from grocery store shelves.

"A neighbor raised a cow for us that we butchered and when the cow was gone I said, 'that's it.' We didn't eat any meat after that for two years," she said.

In mid-July, Karen is offering local people a chance to raise their own White Mountain chickens, from day-old chicks through to slaughter. The chickens are pesticide and antibiotic-free and are raised in a free-range pasture. Participants will divide the cost of the chicks and locally-milled feed, and will share a rotational schedule of caring for the chicks. They will participate in the slaughter together. All needed equipment will be free of charge.

For Janet Gulec, who follows her friend's farming adventures and who wants to eat more locally produced food, it's an opportunity for her kids to learn an appreciation for where food comes from. Janet is hoping to raise 15 pasture-raised hens. She loves the taste of Wellington's chicken and has time to invest in the experience. Gulec is buying a freezer and also plans to buy a quarter share of a cow from Wellington.

"Karen's a great person to be offering her resources to help people in the community to try this. Goshen, for a small city, is very special in so many ways, and this is just one more great thing that adds to the flavor of our community," Gulec said.

For an amateur almost-city farmer, there have been sad times and difficulties, as Karen learns "by trial and error," she said.

"Last summer a gentleman came to me and asked if he could do work for me in exchange for putting his horses up at my pasture. Since I wanted to raise my own beef, we spent some money beefing up my fence and he did the labor. I paid for all the materials, starting with 16 calves."

Wellington learned -- a little too late -- that calves need several weeks of mother's milk before feeding on grass alone, she said.

"I think it stunted their growth a little bit. They're probably not as big as they should be."

Last summer she lost two calves. One became sickly and died shortly after transport. Another succumbed to pneumonia.

And then there was Buttercup.

"We bought a dairy cow and milked her for two or three months but she got mastitis and she didn't get better. We butchered Buttercup into hamburger because she was an older cow. She really was an outreach to the community because we'd invite people to come out and milk her, and take the milk home for free, because you're not allowed to sell raw milk in Indiana," she said.

Overall, it's been an easier go with the chickens. "Chickens can eat anything -- corn, grain, grass, bugs. What I've learned is that chickens and cows have a very interesting, symbiotic relationship. A cow poops and it's infested with flies and maggots, and chickens love that. The chickens sanitize the pasture and the manure keeps the grass growing to feed the cows. When chickens are separated from cows on a farm, the benefits of this natural relationship are lost, she said.

"If you look at nature, I'm convinced those things are all meant to work together," she said.

Karen enlisted help to build some 8-foot by 8-foot "chicken tractors" which hold about 20 chickens per tractor. The tractors transport the hens around the pasture, ensuring they move to new grass daily to fertilize the land and to eat insects.

"Broilers are pretty lazy. They sit around waiting for you to bring them food."

The Wellingtons' hens produce far more eggs than Karen, Jim and their three children can eat. They love to give the rest away.

"It's fun. Yesterday I passed a woman who was collecting grass clippings after mowing. I needed the clippings for my vegetable garden, so I traded eggs for them and the woman was thrilled."

Karen plans to give the woman a dozen eggs every weekend from now on, she said.

"You try to find ways to brighten someone's day. We get three or four blue eggs a day. That's pretty cool. It still gives me a tiny thrill when I collect the eggs and I try to put a blue one in almost every dozen."

Karen's co-op of new chicken farmers will buy all the one-day old chicks on July 13th and will raise them up for eight to ten weeks before taking part in a butchering day together.

"For me, I have the land, I have the means, and in my circle of friends there are so many who, if they had the land, would do this, because they care about what they put into their bodies. Why wouldn't I want to share? Part of it is selfish, because I don't want to do all the work myself," she said.