~ " Michigan Farm News 1-=1 January 31, 1994 Vol. 71, No.2 At Press Time... Policy/Trade Issues" Loom Big in 1994 for Michigan Ag Michigan Farm Bureau Long David Schwelkhardt, Dept. of Trade policy issues will again be high on the Congressional agenda in 1994. Range Planning Speak-Up Agricultural Economics, MSU Implementation of the North American Free Trade Agreement (NAFT A) began on Meetings Scheduled .... Jan. 1, and Congress is also expected to vote on the agreement reached last year Michigan Farm Bureau members Nearly every Michigan farmer will ex- under the General Agreement on Tariffs and Trade (GA TT). have an opportunity for direct input perience some impact in 1994, as a result of various farm program provisions, the into the future direction of their implementation of the North American organization during a series of Long Free Trade Agreement (NAFT A), and .. Range Planning Speak-Up meetings. Congressional action on the recently com- Dates and locations are: pleted General Agreement on Tariffs and Feb. 21, Flint Trade (GATf). Holiday Inn, 7 - 9:15 p.m. 1994 Farm Program Provisions Feb. 22, Marshall Some provisions for the 1994 commodity programs have been announced by USDA. Schuler's Restaurant, 7 - 9:15 p.m. Target prices will remain at the levels es- .• Feb. 23, Lansing tablished by the 1990 Farm Bill, and the Acreage Reduction Program (ARP) will be Holiday Inn West, 1:30 - 4 p.m. zero for both corn and wheat. Feb. 24, Grand Rapids All "flex" provisions will remain in effect Amway Grand Plaza, 7 - 9: 15 p.m. for 1994, with 15 percent of all Crop Feb. 28, Grayling Acreage Bases serving as Normal Flex Acreage and 10 percent of each base being ". Holiday Inn, 7 - 9:15 p.m. eligible as Optional Flex Acreage. Loan March 1, Escanaba rates are expected to be somewhat higher than in 1993. House of Ludington, 12 - 2:15 p.m. CST 1994 Trade Outlook In This Issue U.S. agricultural exports are expected to remain at $42.5 billion in 1994 (Figure 1 Asia will remain the fastest growing Trade Policy Outlook MSU Ag. Econ. Outlook on page 15). This would be identical to the market for U.S. agricultural exports. Total The removal of tariffs under NAFT A will level of exports in 1993, but some changes exports to Asia are projected to increase by be completed over a 15-year period (Table Policy & Trade page 1 in the composition of exports are expected. $600 million in 1994, with most of this 1 on page 15). Prior to 1994,29 percent of growth occurring in Japan, Taiwan, and U.S. agricultural imports from Mexico Ag Credit in 1994 page 5 entered the U.S. on a duty-free basis, while Exports of grains and soybeans are ex- South Korea. Exports to the European Wheat & Feedgrains page 6 pected to decline by $800 million in 1994. Community are expected to remain steady, only 15 percent of U.S. exports entered Exports of livestock, poultry and dairy while exports to Eastern Europe and the Mexico duty-free. Hogs & Cattle page 6 products are expected to increase by $400 Former Soviet Union may decline. million in 1994, breaking the record of $8.5 Under the provisions of NAFT A, tariffs on Michigan Fruit Outlook page 7 billion set by these products in 1993. Japan remains the largest customer for U.S. an additional 35 percent of U.S. imports agricultural exports, purchasing a from Mexico and 37 percent of U.S. ex- Production Inputs page 8 U.S. exports of horticultural products are projected $8.9 billion from the U.S. in ports to Mexico were eliminated on Jan. 1. expected to reach $7.6 billion in 1994, 1994. Canada will continue as the second Most other tariffs will be phased out over Poultry Projections page 8 five or 10 years. NAFTA is expected to $300 million greater than 1993. largest customer at $5.2 bill ion, and Michigan Land Values page 9 Mexico will continue as the U.S.'s third have its most immediate impact on U.S. Total U.S. exports will be boosted by largest export market. exports of corn, dry beans, apples and some Economic Outlook page 11 Japan's decision to import rice following a meat products. poor harvest in 1993. U.S. agricultural im- Mexico's imports from the U.S. are ex- • Sugar Prospects page 11 ports are expected to reach $24.5 billion in pected to increase by $300 million, reach- Continued page 15 ...see 1994, $100 million greater than in 1993. ing $3.9 billion in 1994. Trade Issues Big in 94 Dairy Management - '94 page 12 Farm Management Tips * Special thanks to MSU's Depart- page 16 Soybean Referendum Feb. 9 - Don't Forget to Vote! Michigan soybean growers should be ment of Ag Economics staff and sure to cast their vote on the Soybean " project coordinator, Dr. Jim Hilker. Referendum at county Extension offices on Feb. 9. Innovative, environmentally-friendly SoyDiesel fuel is just one of the many results of research sponsored by the national soybean checkoff program. At right, the Dodge Ram Pickup, powered by SoyDiesel, is sponsored by Michigan Soybean Checkoff dollars as part of a national effort to increase awareness. The market potential of Soy- Diesel in mass transit systems would require • 125 million bushels of soybeans and could add as much as 50 cents per bushel in value, while also providing environmental benefits. "In this era of declining government re- search spending, it's going to be more impor- tant than ever that farmers take a good look at the value of self-help, producer-funded research, " said Jack Laurie, president of the Michigan Farm Bureau. ''And with the recent- ly-completed GATT and NAFTA agree- ments, promotion and market development efforts by producers will also be critical to our future profitability. " To verify your voting eligibility, contact your local county Extension office . • Michigan Farm News Classifieds - Page 14 Michigan Farm News 11= January 31, 1994 Observations In Brief ... A Volatile Year in Store for Grain Prices from the 75th Tight supplies have brought recent rallies to grain prices, which saw com soar above $3 a Annual Meeting bushel and pushed soybeans past the $7 a bushel mark recently. Experts say the robust markets could prompt farmers to plant around 80 million acres of corn in 1994, which could of the American translate into a bumper crop of more than 9 billion bushels. Farm Bureau In the meantime, however, the higher prices for grain and soybeans will be key factors for livestock producers, who will want to pay close attention to procurement prices and watch their production costs. The sharp rise in corn prices at the end of 1993 has already caused Federation some hog producers to scale back expansion plans, says the Wall StreetJournal in a review • The voting delegates to the annual approved a wide range of policies to guide our national of commodity markets for the past year. organization for the coming year. One of the highlights was the following AFBF soybean policy: "We support the current soybean checkoff (SPARe) and encourage our membership Crop Insurance Payment Rate Raised for Wheat to become more informed and participate in the 1994 soybean referendum. " Increased levels at which farmers will be allowed to insure their 1994 wheat crop will help Michigan Farm Bureau has presented a great deal of information on the activities of the make more credit available for wheat producers, since banks only lend money for wheat United Soybean Board in this (see front page) and other recent issues of the Michigan Farm production up to the amount of crop insurance the farmer has. News. It is critical that all Michigan soybean farmers participate in the soybean referendum on Feb. 9. You can vote at your county Extension office or by absentee ballot. Critics said the $2.80 per bushel price election set by the Federal Crop Insurance Commis- sion in September was totally inadequate and asked FCIC Manager Ken Ackerman to raise • Another important AFBF policy calls for the consideration of new concepts in the 1995 farm it to $3.25 per bushel. The higher maximum coverage was approved just before the end of bill, including the combination of present farm programs, federal crop insurance and disaster the year, which could allow farmers using insurance coverage as collateral for operating programs. The new concepts, said the delegates, should allow the market to send accurate loans to be eligible for more credit, said Rep. Earl Pomeroy (D-N.Dak.). economic signals to producers. Russia Catches Up on Back Export Credit Payments A continued shift of USDA programs toward a market orientation will be good news for those of us who farm in Michigan. Because of our proximity to major urban markets, our farm As the curtain came down on 1993, Russia made its final installment of $147.4 million on producers may be more in tune with the needs and wants of our consumers than are farmers its overdue payments under the USDA export credit program. The settlement of the $450 in many other parts of the country. We'll benefit from a flexible farm bill that does a better million bill, due under a debt rescheduling arranged during 1993, was necessary before the job taking the reality of fast-moving markets into account. USDA could consider Russia for any new export credit advances. • The MFB Young Farmer program can be very proud of the fine job done by Jim Van Damme The department is still considering whether to extend any more credit to the Russians, who in finishing as a runner-up in the National Discussion Meet and Jeff Horning in participating say they would prefer to use cash to buy additional u.s. grain or other commodities, in the Young Farmers and Ranchers Achievement Program. It makes you feel optimistic according to Knight-Ridder Financial News. By law, USDA can only make loans to about the future of our industry when you witness the caliber of the young people involved countries it considers credit worthy and able to repay the loans. Russia faces another $1.7 in events like this. billion in payments on past loans that come due in 1994. • I was also very proud to accept an achievement plaque for Michigan Farm Bureau at the Southwest Michigan Young Farmers Host Seminar awards and recognition program. Our six gold stars are solid proof that Farm Bureau members in our state support and participate in many outstanding programs of work. on Financing and Environment, Feb. 16 Michigan won gold stars for excellence in Membership, Young Farmers, State and Local Affairs, Information, Policy Development and Rural Health. Our state was eligible for this Young Farmer committees from Berrien, Cass, Kalamazoo, Van Buren and St. Joe counties have joined together to sponsor an evening issues seminar on Feb. 16 at the Van Buren recognition because we again achieved membership quota in 1993. That's just one more good reason to keep membership growth on your county's front burner this month! County Farm Bureau office located in Paw Paw. The seminar starts at 6:30 p.m. and ends by 9 p.n:J.Citing the environment and financing as the two main issues facing young farmers, program coordinators plan on utilizing speakers and a question and answer session to • Finally, there's nothing like an AFBF annual to make you appreciate the incredible diversity provide participants information they can take home and use in their own operations. of agriculture across this country. I talked to farmers who grow everything from alligators to zucchini. Farm Bureau is the only organization that brings these varied agricultural interests Michigan Department of Agriculture Right-to-Farm Specialist Kurt Thelen, and MFB together to discuss and debate issues of concern to all of us. Legislative Counsel Vicki Pontz will open the program. They will address environmental issues including Right-to-Farm and amendments to the Coastal Zone Management Act and American farmers may grow a hundred different commodities, but under the banner of Farm its potential impact on agriculture. Bureau, we can present a united front on critical issues like wetlands, private property rights and health care reform. Lawmakers and regulators respect and respond to our policies Ryan Peacock of Farm Credit Services will also do a presentation on young farmer startup because they know the policies accurately reflect the real needs of farmers. Let's build on loan options. John Collins with Michigan National Bank will conclude the program with a that foundation as we tackle the challenges of 1994. presentation entitled, "What Bankers Look for in a Balance Sheet." For more information, call MFB Southwest Regional Representative Scott Newton at (616) 637-4490. ~aJ-Laf~n, Michigan Farm Bureau Michigan Dry Bean Day Feb. 22 in Saginaw The future of Michigan's dry edible bean industry will be a focus of discussion by experts Feb. 22 at the Saginaw Civic Center in Saginaw. The Michigan Dry Bean Day education Michigan Young Farmer Talks His Way to program and tradeshow will run from 8:30 a.m. through 3 p.m. National Honors in AFf3F Competition Industry representatives will discuss the need to improve dry bean quality standards from field management and elevator handling through consumer production. A highlight of the discussion will be comments by Marvin Leher, U.S. Embassy agricultural trade officer in Mexico City, on the outlook for dry edible bean sales in Mexico under the North American Free Trade Agreement. Research agronomists will also focus on controlling nightshade, ragweed, anthracnose and scierotia in dry edible beans. More information about the program can be obtained by writing to Steve Poindexter, Michigan State University Extension, 705 Adams St., Saginaw, MI 48602-2192 or by calling him at (517) 799-2233. Tracks Already in Place for Reduced Subsidies An easy way already exists to cut government payments to farmers. It is called the triple base of "flexible acreage" in the 1990 farm bill, according to John Lee, Jr., former administrator of USDA's Economic Research Service. Lee said the Clinton administration can be expected to push for increases in "flex" acres in the 1995 farm bill. He also said there may be some form of means testing used to skew benefit reductions toward larger farms and protect smaller operators from the cuts. The MICHIGAN FARM NEWS (ISSN:0743-9962) is published semi-monthly except in the months of November, December, June, and July when only one issue is printed, as a service to regular members, by Michigan Farm Bureau, 7373 West Saginaw Highway, Lansing, M148917. Member subscription price of $1.50 included in annual Jim Van Damme, of Rock, (in the Upper Peninsula) talked his way to runner-up status in dues of Michigan Farm Bureau regular members. Additional subscription fees required for mailing Michigan Farm the American Farm Bureau Federation National Discussion Meet held in conjunction with News to non-members and outside the continental U.S.A. Second-Class Postage paid at Lansing, MI and the AFBF annual meeting. Van Damme and three other contestants in the Discussion Meet additional mailing offices. Letters to the editor and statewide news articles should be sent to: Editor, Michigan final round talked about the topic "new uses for agricultural commodities and by-products." Farm News, P.O. Box 30960, Lansing, MI 48909-8460. POSTMASTER: Send address changes to: Michigan Farm News, P.O. Box 30960, Lansing, MI 48909-8460. Pictured above Van Damme (left) and his wife, Lori, accept congratualtions from AFBF Young Farmer Committee Chairman from New Hampshire, Scott Mason. Editorial: Dennis Rudat, Editor and Business Manager. Staff Contributors: Mike Rogers; Connie Lawson; Donna Wilber; Henry Huisjen. Young farmers from 37 states participated in this year's Discussion Meet event. As national Officers: President, Jack Laurie, Cass City; Vice President, Tom Guthrie, Delton; Administrative Director Chuck runner-up, Van Damme receives a cellular phone, courtesy of AT&T, and a $1,000 U.S. Burkett; Treasurer and Chief Financial Officer, Tom Parker; Secretary, William S. Wilkinson. Directors: District 1, Jim Miller, Coloma; District 2, Blaine VanSickle, Marshall; District 3, Douglas Darling, Maybee; District 4, Tom Savings Bond, courtesy of the AFBF Young Farmers and Ranchers Committee. Guthrie, Delton; District 5, Mark Smuts, Charlotte; District 6, Wayne Wood, Marlette; District 7, Larry Snider, Hart; District 8, Richard Leach, Saginaw; District 9, Joshua Wunsch, Traverse City; District 10, Margaret Kartes, West Jeffery and Lynda Homing, of Manchester, also represented Michigan in the Young Farmer Branch; District 11, Robert Wahmhoff, Baraga. At-Large: Jack Laurie, Cass City; Faye Adam, Snover; Jan Achievement contest. As Michigan's winner of the 1993 Distinguished Young Farmer Vosburg, Climax; Judy Emmons, Sheridan. Promotion and Education, Paul Swartzendruber, Pigeon; Young contest, the Homings competed with other state winners for national honors. Farmers, Andy Hagenow, Rockford. Michigan Farm News January 31, 1994 Property Tax Reform Measures Ne'ed to Clarify Homestead Definition With the passage and signature of the According to Nelson, the homestead Act, Act No. 440 of the Public Acts of 1976, to the farm. Both plans raise questions for governor on over 20 bills, the school definitions are as follows: being sections 554.801 to 554.844 of the land held in trust, corporate ownership or reform/property tax reduction and shift has HoBo 5111 - Now Public Act 331 of 1993, Michigan Compiled Laws. Homestead also life-lease. been accomplished for the moment. Discus- states: "Homestead" means a dwelling or includes property owned by a cooperative sion is increasing on the need for a number unit in a multiple-unit dwelling subject to ad housing corporation and occupied as a "Farm Bureau has been working with the of technical correction bills to deal with the valorem property taxes that is owned and principal residence by tenant stockholders. Legislature and bills are being drafted to flurry of activity in the Dec. 23 and 24 occupied as a principal residence by the For purposes of this subsection, owner in- provide a single definition of farmland at a twenty-six hour marathon session. owner of the dwelling or unit. cludes but is not limited to a land contract single millage rate to deal with this very grantee. complex, and confusing situation," Nelson As the technical experts read through the Homestead includes all unoccupied said. "MFB policy calls for farmland to be package of new law, there are varying property classified as agricultural adjacent HoBo 4297 - Now Public Act 312 of 1993 levied at the same millage rate as homes- opinions as to the implications of the law. and contiguous to the home of the owner states: "Homestead property" means a teads. The bill that is being drafted would Frequently there is disagreement as to both that is not leased or rented by the owner to dwelling or unit in a multiple-unit dwelling carry out Farm Bureau policy." the intent, and in fact, the interpretation of another person if the gross receipts of the subject to ad valorem property taxes that is the new body of law, according to MFB agricultural or horticultural operations, if owned and occupied as a principal Nelson is urging MFB members to contact Legislative Counsel Ron Nelson. any, exceed the household income of the residence by the owner of the dwelling or their state representative and senator and owner. unit. advise them of the confusing, conflicting, "Farm Bureau has continued to express and unequitable situation which these two concern regarding the homestead definition If the gross receipts of the agricultural or If the principal residence is located on definitions create. Urge them to be aware of which incorporates farmland definition," horticultural operations do not exceed the property classified as agricultural or is ad- the bill which is being drafted and to be Nelson explained. "There are not one, but household income of the owner, the jacent to property classified as agricultural introduced as soon as legislative session is two definitions of homestead and farm land homestead includes only 5 acres adjacent owned by the owner of the principal under way. found within the new law. H.B. 5111, which and contiguous to the home of the owner. residence, homestead property includes all provides the criteria for the statutory plan, unoccupied property classified as agricul- During the December session, there were a and H.B. 4279, which is the basis for the Homestead includes a life care facility tural owned by the owner of the principal number of legislators supportive of Farm ballot plan, have different definitions." registered under the LivingCare Disclosure residence that is not leased or rented by the Bureau's position for a single definition of owner to another person. For purposes of agriculture with all farmland being treated this subsection, owner includes, but is not alike and at the same millage levy. Soil Conservation Service Named limited to, a land contract grantee. However, because of the complexity of the Lead Agency for Wetland Delineation "The language is similar. in that leased or rented land which accounts for one-third of package and the many details, the amend- ments did not receive enough votes and thus Officials have announced that the Soil would be for five-year periods and appeals the total agriculture land in the state, or the problem continues, Nelson said. , Conservation Service will be the lead federal would be handled by the SCS appeals system. one-half of the crop land would be at the agency in charge of wetlands delineation for According to these officials, the basic "It's expected there will be a number of bills farmers and a~riculturalland. President Clin- 24 mill rate," Nelson said. "There are sig- idea of the memorandum of agreement is to nificant differences between the two introduced known as "technical correc- ton had origmally proposed the plan last concentrate decision making on wetland August, and It finally met the approval of the definitions' with the ballot language deal- tions" because of ambiguous language or delineation as much as possible. SCS, how- USDA, the Department of Interior, the Army ing only with adjacent land, whereas the problems that have been identified during ever, would make wetland delineations on Corps of Engmeers and the Environmental non-agricultural land at the request of a statutory plan deals with both contiguous the marathon session," Nelson advised. Protection Agency. producer who is participating in USDA and adjacent land." "Farm Bureau will continue to analyze and Under the new agreement, farmers whose evaluate the package with further informa- programs . • ' land is considered questionable will need to SCS officials pointed out that the agency The ballot plan is ambiguous regarding tion as details become available." rely solely on the SCS and USDA for resolu- does not have the staff and the resources to person's residence located in relationshi tion. Previously, the input of a second federal work on delineations of all non-agricultural agency, often the EP A, was necessary to land. Several questions were raised about the resolve wetlands disputes. problems arising from situations where The key provisions of the new memoran- farmers and ranchers own forest and range dum of agreement call for the Soil Conserva- land and are not participating in USDA tion (SCS) to be the agency of decision in programs. regard to wetland delineation on "agricultural The memorandum of agreement will go land" which is defined to include convention- into effect when published and was the result al farming land but does not include forest of 1993 legislation supported by Farm Bureau lands, range lands, wood lots, tree farms, etc. to consolidate wetland delineations into a The Environmental Protection Agency "one-stop shopping" mode, thus avoiding and the Corps of Engineers will continue to conflicting rules being applied to individual have primary jurisdiction over these "non- landowners. agricultural lands." Delineation made by SCS Pesticide Reform Facing Gridlock Gridlock may have eased in some plan because of its total reliance on health- quarters in Washmgton, but the barriers based standards. He said House members blocking enactment of a modernized pesticide support the Lehman-Bliley-Rowland Bill, bill remains in place. That was the message which allows regulators to consider the del ivered by two policy-makers at an benefits pesticides provide. American Farm Bureau Federation conven- Given the difficulties of getting agree- '. tion conference. ment on a bill that has been bouncing around "Unless there is a realistic compromise Congress for more than 20 years, O'Connor (reached) ...we'll probably never get legisla- said that the administration should consider Scott Maxwell is a partner in Maxwell Seed Farms. Hope, MI. The 2,800-acre farm grows, processes and markets edible tion," said Bill O'Connor, policy director for another tack. He said the administration was beans and also produces sugar beets, soybeans, com, wheat and hay. Republican members on the House Agricul- on a "legislation or nothing" course, and that ture Committee. because of the problems posed by the Delaney WHY SCOTT MAXWELL WORKS WITH A TAX O'Connor said there has been no progress court decision, the EPA should consider ad- '. on major pesticides legislation since 1986, despite widespread recognition that an up- ministrative remedies. Goldman agreed that the Delaney SPECIALIST THAT KNOWS AGRICULTURE. dated law is needed. decision forced the agency to follow an ar- "We used to have our taxes prepared when they looked over our tax records Ly nn Goldman, the Environmental chaic standard, but said the administration by a large accounting firm. It seemed like from the big accounting firm, they imme- Protection Agency official in charge of pes- cannot act without legislation because of we were constantly having to train their diately spotted some things that the CPA TAX ticide regulation, was more optimistic about another lawsuit moving through the courts. the prospects for new legislation but acknow- That case, she said, could result in more tax preparers on our business had missed. ledged the difficulties of satisfying all the sweeping restrictions on pesticide use. and on changes in government FARM CREDIT "Our Farm Credit Tax Specialist interested parties. She said the Clinton Another conference speaker, Ronald programs. And yet we were still really seems to understand our administration's forthcoming pesticides Knutson, of Texas A&M University, said getting charged their top rates. farming goals and tax strategies. reform bill would break the logjam. farmers face substantially reduced yields if a "Then we met an employee of A lot of times I can call her and Both Goldman and O'Connor agreed that new law seeks to reduce chemical use by 50 Farm Credit at a meeting and we are able to take care of most a new law is essential, in part, because of the or 100 percent. Knutson, the principal author were surprised to learn about SERVICE things over the phone. need to. overturn a 1992 court decision that of two studie~ on the effects of reduced pes- the broad range of products and "One thing about Farm Credit requires EPA to apply the zero-risk Delaney ticide use, said such policies would mean services available from Farm Credit. Tax Services-if it has to do with Clause. "big-time regional differences" for crop When we let our tax preparation out for agriculture, they've probably run into it. The Clinton plan would solve the Delaney yields. bids, we included Farm Credit. What They understand farming and they problem, encourage integrated pest manage- For example, if a 50 percent chemical impressed us about Farm Credit was, definitely have an expertise in taxes." ment, help minor crop producers who are reduction policy was in effect, Washington losing chemicals, afford special protection for State apple growers would experience a 30 vulnerable groups, and lead to overall reduc- tion in pesticide use, Goldman said. percent loss in production. Michigan apple growers, however, would lose all their crop, ELECTRONIC TAX FILING O'Connor disagreed with Goldman's he noted. The net effect of wide-scale reduc- characterization. The administrafion's tion of chemical use, Knutson said, would be FOR FAST RETURNS AVAILABLE proposal, he contended, is unacceptable to large yield reductions, reduced exports, in- FINANCIAL MANAGEMENT SERVICES OFFICES many members of the agriculture committees, creased imports, higher food prices, and the who, he said, disagree with "80 percent" of the risk of shortages of some crops. AID.n. ~ Caro ~ Thr •• Rivera Tr.vera. CIty Ann Gerk. Judith Judd Unda Janka Gary lenneman K.ny Tobin BiB HaRln (5171354-4343 (5171 686-5550 15171873-8557 15171224-1184 18181279-5178 (6161948-5710 1-S()()'968-1414 1-S()()'968-1412 1-S00-968-8800 1-800-968-1364 1-800-968-1413 Michigan Farm Bureau (517) 323-7000 Michigan Farm News • January 31, 1994 30-Day Forecast - Continued Colder Than Normal With Normal Precipe Winter continued in full force over the entire state through mid- Just when it seemed that the current extreme conditions would January, bringing heavy lake-effect snows and record or near continue for some time (and bring back memories of winters during record cold temperatures. Mean temperatures for the past 30 days the late 1970s), it now appears major changes in the jet stream were generally 4-8 degrees below normal, although without a configuration are underway, leading to a dramatic change in week of above normal temperatures at the beginning of this period, weather patterns across Michigan. the departures would have been much greater. With this change, the jet stream flow is expected to be much more Precipitation totals for the period were highly dependent on the west to east (instead of north to south), resulting in much milder proximity to the lakes, with totals ranging from less than 50 percent temperatures for the central and eastern U.S. This change may also of normal across the southeastern one-third of the Lower Peninsula lead to a more active storm track through the Midwest and greater- to more than 200 percent of normal across western Lower precipitation totals. Michigan and much of the Upper Peninsula. Snowfall in the lake-effect areas was extremely heavy, with snow depths by mid- The biggest question now is how long this change will last, as the January generally ranging from 2-3 feet or even greater. A series latest National Weather Service 30-day outlook through mid- of fast-moving weather disturbances finally brought appreciable February calls for a return to the conditions of early January, with snowcover to the remainder of lower Michigan, offering protec- temperatures expected to be below normal. Precipitation is forecast tion from extreme cold to overwintering field and forage crops. to be near normal for the period. Michigan Weather Summary Michigan Weather Summary 12/16/93 Temperature Precipitation Temperature Precipitation to 1/15194 Observed Dev. From Actual Normal Observed Dev. From Actual Normal Mean Normal llnch.\ linch) Mean Normal (inch.) linch) Alpena 15.6 - 5.7 0.95 1.74 Lanslr,g 18.9 -4.7 0.89 1.74 Bad Axe 18.2 -6.0 0.67 -1~59 Marguette 9.5 -3.6 1.90 1.96 Detroit 21.9 - 2.5 1.26 1.87 Muskegon 21.3 -4.4 1.69 2.21 Escanaba 15.0 - 4.4 1.09 1.83 Pellston 13.9 - 5.1 3.56 1.89 Flint 18.6 -5.5 0.49 1.87 Saginaw 18.9 - 5.1 0.78 1.59 Grand Rapids 19.4 - 3.5 1.37 2.41 Sault Ste. Marie 8.6 -7.5 2.93 1.83 Houghton 11.6 - 5.7 3.67 1.96 South Bend 21.7 - 3.7 1.n 2.41 Houghton Lake 17.2 - 3.5 1.03 1.74 Traverse City 19.0 - 4.8 4.40 1.89 Jackson 19.5 -5.8 0.93 1.74 Vestaburg 17.5 -6.6 1.16 1.73 Normals are based on district averages. Jeff Andresen, Ag Meteorologist, MSU Michigan and Major Commodity Area Extended Weather Outlook T - Temp. P - Preclp. 1/31 T 2115 P 1/31 T .3/31 f 1993 Weather Markets Spillov~r into 1994 Michigan B N N N The weather effects that dominated the "Smart investors see land as a low-risk, Purcell said beef has lost market shares W. Corn Belt N N N B grain and livestock markets in 1993 will E. Corn Belt N N NIB B high-return alternative to the stock market in recent years, which have basically been Wlnt. Wheat Belt A B B N undoubtedly carry over into 1994, accord- and other investments," Gill said. taken over by poultry, with pork produc- Spr. Wheat Belt N N A N ing to economists at an agricultural com- Dr. Bill Uhrig, grain marketing tion remaining pretty stable through im- Pac. NW Wheat A N A N modity marketing seminar held during the specialist at Purdue University, said proved technology and some reduction in Delta N B B N Amencan Farm Bureau's annual meeting. farmers should take advantage of good the number of producers. Southeast B N B N Jim Gill, Illinois Farm Bureau director San Joaquin N N A N of commodities, said many acres in the pricing opportunities in the near term and Purcell said fed cattle prices probably Midwest that were damaged by last prepare for lower prices and higher crop will not reach the break-even level for most A-Above Average, B-Below Average, N-Nor- summer's floods will remain fallow in output next year. He said previous disaster producers this year. He recommends mal, MA-Much Above, MB-Much Below, NP- years have been followed by higher producers take advantage of opportunities No Preclp. Source: National Weather Office 1994. He said lower interest rates and higher profit opportunities translate into production the next year and 1994 will be in the high $70 per hundredweight range. good news for landowners looking to sell. like years following a drought -- yields will Hog numbers, which have dropped be higher. about 2 percent, will not likely increase in In the livestock sector, nothing could 1994 with the higher feed costs prevailing Serving Michigan have done more good than to have a long hedge established prior to the October now. Producers should take pricing oppor- tunities in the high $50 range this summer Farm Families is grain situation report, which showed dramatic reduction in stocks, according to and not wait for $60 hogs. Above all, Pur- cell recommended that producers take Our Only Business Wayne Purcell, agricultural economist and livestock marketing specialist from Vir- protection against the risk of dramatically higher feed costs that would occur if there Since its beginning in 1971, Michigan Farm Radio Network's only objective ginia Tech. is another weather catastrophe in 1994. has been to serve Michigan's farm families. This dedication to serve agricul- ture is shared by 29 local radio stations in Michigan. Through these sta- tions, Michigan Farm Radio Network provides the latest in market analysis, weather and news to Farm Bureau members daily on the following stations: Station City Frequen~y Morning Farm NoonFsrm Morton Buildings is Raving a V8IY Speci~1 WABJ Adrian 1490 5:45 am 11:50 am WATZ Alpena 1450 5:30 am 11:30 am WTKA Ann Arbor 1050 6:05 am 12:05 pm WLEW Bad Axe 1340 6:30 am 12:50 pm WHFB Benton Harbor 12:30 pm WKYO Care 1360 6:15 am 12:15 pm WTVB Coldwater 1590 5:45 am *** WDOW Dowagiac 1440 6:05 am 12:15 pm WGHN Grand Haven 1370/92.1 5:45 am 12:15 pm WPLB Greenville 1380 6:15 am 11:45am WBCH Hastings 1220 6:15 am 12:30 pm WCSR Hillsdale 1340 6:45 am 12:45 pm WHTC Holland 1450 12:15 pm WKZO Kalamazoo 590 ** 11:30 am WJIM Lansing 1240 5:05 am 11:50 am WWGZ Lapeer 1530 * 12:15 pm WOAP WHAK Owosso Rogers City 1080 960 6:15 am 12:30 pm 12:15 pm We're0pedL.y Our Boars IIrigId 8 Early ... '1m ':111 .. 10"111 WSJ St. Johns 1580 6:15 am 12:15 pm February 11, 12, & 13, 1994 WMLM St. Louis 1540 6:05 am 12:20 pm Watch for special price ads in your area or WSGW Saginaw 790 5:55 am 12:20 pm contact your local sales office for a free WMIC Sandusky 660 6:15 am 12:45 pm .infOfTTlO1!ve flyer with pricing examples. Special WCSY South Haven 940 12:15 pm pnces available during this sale, All buildings will WKJC Tawas City 104.7 12:45 pm reflect speaa' Isale pnang. .. WLKM Three Rivers 1510/95.9 6:15 am 12:15 pm WTCM Traverse City 580 5:55 am 11:20 am Sale ends February 13, 1994. Call Now! * Station signs on at different times during the year. Morning farm times change (::sf)'DW IocsI omce btIyl with the sign-on times. Adrian, MI (517) 263-0541 Btown City, MI (313) 346-2702 800-447-7436 ** Station airs various farm reports between 5:30 and 6:00 am. *** Station airs various farm reports between 12:00 and 1:00 p.m. Kalkaska, MJ (616) 258-2580 Rockford, MI (616)874-6400 ~~MORTON U. BUILDINGS Some stations carry additional market reports throughout the market day. ThIee Rivers, MI (616) 279-5Zl1 Michigan Farm News 1r~~~s~l!pt~!~!!!!,!ral Credit Outlook - Be Ready to Lock in Rates •• January 31, 1994 m Economics, MSU Figure 1 However, the steepness of the yield curve Lst year, we stated that short-term inter- implies that investors expect short-term est rates were at their lowest levels since Interest Rates on U.S. Treasury Securities rates to be higher in the future because they the early 1960s and they continued to of Various Maturities are not willing to lend for long periods decline about a half of 1 percent during the except at much higher rates. MId-Year Rate year. Longer-term rates have declined about 1 percent to mid-October and then u.s. Treasury 1993 1992 1990 1988 Therefore, borrowers need to carefully increased slightly as the economy showed Security Percent weigh the advantages oftoday's low, short- signs of improvement. Rates paid by term rates with strong indications that they 3 Month T -Bill 3.05 3.66 7.73 6.26 could increase against the potential of lock- farmers on operating and term loans have 1 Year T -Bond 3.47 4.17 8.10 7.40 held steady. Long-term rates have ing in longer-term rates at a level which is 5 Year T -Bond 5.09 5.60 8.43 8.58 low by recent standards. declined. 10 Year T-Bond 5.81 7.26 8.48 9.09 30 Year T -Bond 6.63 7.84 8.46 9.23 During 1994, we expect both short-term The spread between short-term .and long- term rates is usually. reported as the dif- Spread and long-term interest rates to increase ference between the 3D-year U.S. Treasury 30 Year-3 Month 3.48 4.18 0.73 2.97 slightly. Short-term rates may increase Bond and the 3-month U.S. T-Bill. As can about 1 percent. be seen in the bottom of Figure 1, this difference is unusually high. Short-term Commercial banks and the four Farm rates can be "managed" to a degree by the be a result of an increase in short-term rates below 6 percent, rates have increased al- Credit Service centers in Michigan have Federal Reserve and their position during rather than a major decrease in long-term most half a percentage point. plenty of money to lend. Commercial banks the past 2-1/2 years has been to reduce rates. are evaluating loans very carefully. Since The yield curve, which is a plot of interest credit quality is a major concern of their rates to attempt to encourage borrowing However, during 1993 both continued to rates at various maturities from three regulating agencies, they are reluctant to and stimulate economic expansion. decline and the spread decreased because months to 30 years, shows a very low rate add any marginal loans to their portfolio. Long-term rates, however, are more of an the long-term rate declined more than the for short-term maturities increasing rapid- expression of market forces between bor- short-term. We do not expect that to con- ly for longer-term obligations. This offers This means borrowers must do a good job rowers and investors. This would indicate tinue in 1994. Since mid-September for a strong incentive for borrowers to finance of selling themselves and their potential to instance, when the 3D-year T-Bill rate fell with short-term variable rate loans. the lender. that as the ~pread narrows, it wiltprimarily Michigan Produced Soybeans Find a Niche in Human Consumption Markets More and more Michigan-produced soybeans are finding their way into products Currently, producer-funded research is un- varieties needed for the market. "What ~orhuman cfnsumption such as fv!iso, a fermented soybean product manufactured derway at MSU too develop new varieties we're interested in doing is getting more In Japan. It s a concentrate that IS used as a food base for soups and gravies to of soybeans that contain the higher protein productive varieties available so that provide nutrition and 8-12 primarily to vegetarians. Producer-funded research at level preferred for human consumption, producers who want to grow ~eans for MSU could improve the yield potential of varieties used for human consumption. while producing a yield that is competitive human consumption in these markets do with oth~r varieties of soybeans. not have to sustain as much of a yield cost," concluded Diers. According to researcher Brian Diers, an assistant professor in the Department of That could mean the best of both worlds Crop and Soil Sciences, the Vinton and both from a price and yield aspect. With Beeson lines of edible soybeans are less continued producer-funded research, even productive than other varieties. Therefore, more Michigan produced soybeans will be producers have to take a bit of a hit when it finding their way to the higher priced comes to productivity, in order to .grow human consumption market. • By Michelle Strautz Redman said there are many soy products As overall world demand for soy foods on the market, including items such as tofu, increases, Michigan-produced edible soy pudding, soy flour, soy sauce, soybean soybeans are gaining notoriety among oil and vegetable burgers. Brand names buyers, increasing the demand for certain commonly associated with these products varieties of unprocessed Michigan are Eden Soy, West Soy, Mori-Nu, Wor- soybeans, according to Keith Reinholt, ex- thington and Kikkoman, to name a few. ecutive director of the Michigan Soybean Promotion Committee. "We have seen a very large increase in demand for the soy foods in general," said Reinholt said Michigan-produced Redman. "There's been a significant in- soybeans, for some unexplained reason, crease in demand since we started out in contain a slightly higher level of protein 1986, and there has been, just in the past than beans grown in other states. Sources couple of years especially, a large increase indicate that in addition to its nutritional in demand for organically grown food value, protein also serves as a bonding agent in food items produced from soybeans. processing grade soybeans from overseas." Why are Michigan grown In addition, Reinholt believes that, as a According to Redman, international buyers of Eden Soy are very specific about organic certification, quality and price when buying soybeans in demand result of the state's dry bean industry, Michigan beans are handled with more care, resulting in less damage to the beans, thus soy foods. There are also different labelling laws in various countries that have to be for food products? producing full soybeans, which is what followed when shipping the products inter- many buyers are looking for. nationally. Michigan produced varieties of Vinton and Gordon Weuthrich, co-owner of Farm~, Because there's more to soybeans Beeson soybeans have been contracted for Inc., in Lenawee county, is currently work- more than 15 years for the edible soybean market, which is now expanding interna- ing with buyers in Europe, Sri Lanka and the Pacific Rim who are interested in buying than the oil! tionally, with producers being paid Michigan-produced soybeans for process- premiums depending on production costs ing. Factors influencing their purchasing and any loss of yield relative to what normal decisions include the size, protein levels and flavor of the beans. • The appearance of a larger bean is preferred by many customers. soybeans would yield. • When sampling raw soybeans, buyers prefer the tastier beans. American Soy Products in Saline, Mich., Weuthrich said these international buyers uses 100 percent Organic Crop Improve- are concerned with size because larger • Research has shown that higher protein levels in diets are preferred. ment Association (OCIA) certified organi- beans are more attractive when they're cally grown soybeans in manufacturing marketed to retail stores. "However, we their Eden Soy product, a soy milk that is don't have the kind of volumes they're Soybean CheckotT...lt's working. low in fat, sodium, cholesterol, and is lac- looking for, but we could develop it long tose free, according to Tim Redman, vice term," he said." Michigan Soybean Promotion Committee, P.O. Box 287, Frankenmuth, MI 48734 president of sales and marketing. Michigan Farm News '" January 31,1994 1994 Market Outlook ...Crops & Livestock ......•. ..... .... ..~ •••••••• ••••••• r• •••••~.'I ', , .~ Dr. Jim Hilker,Dept. of Agricultural Economics, MSU E~RM••••••• •••• .r••••• ,j •• • ' J...-;:::.. ••• ~ ••••••• . Corn Soybeans The Jan. ] 2, USDA final ] 993 Crop ahead of earlier expectations and continue As shown in Table 3, the story for soybeans BUSINESS { to look strong. is not much different than the story for Production Report not only confirmed that the U.S. com crop harvested last fall was small due to the flooding, but showed it was As seen below in Table 1, this all adds up to com. The ] 993 crop was short, demand is fairly good, projected ending stocks are OUTLOOK ] 59 million bushels, 2.5 percent, smaller a very tight expected ending stocks es- tight and prices are good. And, as we dis- than the previous estimate. timate. Tight ending stocks equate to strong cussed, when projected ending stocks are com prices like we're seeing right now and tight and production capacity is large, the The report estimated that 6.344 billion will continue to see until the 1994 crop is market has a lot more potential to go both bushels of com were harvested in the U.S. made. That doesn't mean the market will up and down. in 1993, 33 percent less than last year and stand still - just the opposite. When you 20 percent less than a 5-year average. have tight stocks, but the capacity in anyone The January USDA report showed 1993 year to way out produce your needs, you soybean production to be 1.809 billion The U.S. yield was estimated to be ]00 have the possibility for huge price swings. bushels, 25 million lower than the Novem- bushels per acre versus the ]31 bushels per And that is the spot we are at right now! ber estimate. This was 17 percent below the acre the previous year and an expected ] 992 production figure. Look for soybean prices to react to every trend yield of ]22 bushels per acre. Projection: With a trend yield in 1994, piece of news out of South America this Michigan's 1993 yield was estimated to be prices will likely drop back to the $2.20- There were 3 million acres of soybean winter and early spring, and then the u.s. 1] 0 bushels per acre, a bit below trend. 2.40 range. If we have above trend yields acres planted that were not harvested, 2 planting season starts. Continue to price ~ next fall, prices could drop back to the $2.00 million more than typical. The U.S. yield your 1993 soybeans on market upswings The Quarterly Stocks Report released in range. On the other hand, if we have a poor was estimated at 32 bushels an acre. This and be ready to start pricing some of your January showed strong feed use last fall, not com yield, prices could go a lot higher. compares to last year's yield of over 37 1994 crop as well. as high as the] 993 record use, but running bushels per acre and an expected trend close to it. While higher prices for the Speculation on what production will be next yield of about 35 bushels per acre. Fall 1994 prices could run from under $6.00 remainder of the year will cut back feed use, year will change continuously from now to considerably above $7.00 using the same it will still be a positive price force. until harvest as new information becomes Michigan's soybean yield was estimated at three scenarios we used for com, trend Exports, while running behind last year, are available. Take advantage of upswings to price portions of your corn. If you run out of 38 bushels per acre, this ties the record which has been met two other times. yield, above average, and below average yields. 'J' running at a rate to meet USDA projections. corn to price and the market keeps going up, Food, seed and industrial uses are running you always have new crop to price. Cattle Wheat Cattle prices in 1994 are projected to high corn prices will bring weights down average considerably less than 1993, espe- which should help prices. January report time also brought some ex- to be up from last year, while food use is cially in 'the first half of the year. First citement to the wheat market. The USDA expected to be about the same as last year. quarter prices will be in the $70-74 range Feeder prices will also average below 1993 reported 50.6 million acres of winter wheat Exports continue to run above expectations for fed steers as we brought a large supply levels in 1994. In the long-run, feeder prices had been planted in the fall. This is down and are the strongest force in the good into the new year. react strongly to fed prices and feed from 51.7 million acres planted the pre- prices we have been seeing. prices. The problem is they often react to the vious fall. As we become more current and feedlot fed prices and feed prices at the time rather Projection: At this point, my analysis of numbers fall off into spring, prices are than to what they may be at sale time. While In Michigan, 600,000 acres of winter wheat the wheat supply/demand factors would projected to make it back into the $73-77 feeder prices will be down, they do have were planted. While this is about 3 percent suggest that prices are near the top and may range in the second quarter. During the one thing in their favor, supplies are small. more than planted the previous fall when it be above what fundamentals would sug- second half of the year, prices are likely to was miserable, it is still 8 percent below gest. fall back into the lower $70's. On the demand side, things look fairly what was planted for the 1992 crop. good. The demand shift away from beef we It is probably time to be wrapping up old It wasn't too many years ago that these saw over the 1980s has slowed to a crawl The USDA also released an updated Supp- crop sales and to be looking at forward prices would have looked pretty good. But and maybe even stopped. It appears real Iy/Demand Balance Sheet for wheat shown pricing portions of your new crop wheat on the cattle in the feedlots now were bought income growth will be positive in 1994 and in Table 2. Unlike com and soybeans, rallies. While there is the potential for at prices that would need fed prices in the that is a good sign for the beef sector. On projected ending stocks are not considered prices to continue to increase, the odds are upper $70s to break-even and then the feed the trade side, imports are expected to be tight. But considering the prices, demand by harvesting time prices will be lower than prices began to sky rocket. At this point, lower than last year and exports are ex- has been pretty good. Feed use is projected today's opportunities. keep as current as possible. Eventually, the pected to grow. Table 1 Table 2 Table 3 1 Supply/Demand Supply/Demand Supply/Demand Balance Sheet For Balance Sheet For Balance Sheet For CORN WHEAT SOYBEANS USDA USDA USDA Hilker USDA Hilker Proj. Proj. Proj. Proj. Proj. Proj. 1991-92 92-93 93-94 1991-92 92-93 93-94 1991-92 92-93 93-94 Corn Acreage (MillionAcres) Wheat Acreage (MillionAcres) Soybean Acreage (MillionAcres) Acres Set-Aside and Acres Set-Aside and Diverted Acres Planted Acres Harvested 4.7 76.0 68.8 3.5 79.3 72.2 7.0 73.3 63.0 Diverted Acres Planted Acres Harvested 10.0 69.9 57.7 3.5 72.3 62.4 0.5 72.1 62.5 Acres Planted Acres Harvested Bu./Harvested Acre 34.2 59.2 58.0 59.1 58.2 37.6 59.4 56.4 32.0 ~ Bu./A. Harvested 108.6 131.4 100.7 Bu./A. Harvested 34.3 39.4 38.4 Stocks (MillionBushels) Beg. Stocks 329 278 292 Stocks (MillionBushels) Stocks (MillionBushels) Production 1987 2188 1809 Beg. Stocks 1521 1100 2113 Beg. Stocks 866 472 529 Imports 3 2 5 Production 7475 9482 6344 Production 1981 2459 2402 Total Supply 2319 2468 2106 Use: Imports Total Supply 20 7 9016 10,589 8,477 20 Use: Imports Total Supply 41 2888 3001 70 90 3021 Use: Crushlngs 1254 1279 1230 • Exports 684 770 615 Feed 4878 5301 4800 Food 789 829 825 Seed, Feed and Food/Seed 1454 1511 1575 Seed 94 98 98 Residuals 103 127 111 Total Domestic 6332 6813 6375 Feed 253 191 275 Total Use 2041 2176 1956 Exports 1584 1663 1300 Total Domestic 1136 1118 1198 Ending Stocks 278 292 165 Total Use 7916 8476 7675 Exports 1280 1354 1225 Ending Stocks, ~ Ending Stocks 1100 2113 802 Total Use 2416 2472 2423 Percent of Use 13.6% 13.4% 7.7% Ending Stocks Ending Stocks 472 529 598 Percent of Use 13.9% 24.9.% 10.4% Regular Loan Rate $5.02 $5.02 5.02 Ending Stocks Regular Loan Rate $1.62 $1.72 $1.72, Percent of Use 19.5% 21.4% 24.7% Regular Loan Rate $2.04 $2.21 $2.45 U.S. Season Average U.S. Season Average Farm Price.S/Bu. S5.58 S5.5O S6.60 Farm Price.S/Bu. S2.37 S2.07 S2.65 U.S. Season Average Source: USDA & Hilker Source: USDA & Hilker Farm Price. S/Bu. $3.00 $3.24 $3.18 III Source: USDA & Hilker I Michigan Farm News -. January 31, 1994 •• Michigan Fruit Outlook For The Mid-1990's ...... ••••••••r. ••••••• ••••••• ••••• •••• 'l•••~:.. ~.rl 1• Donald Ricks, Dept. of Agricultural Economics, MSU Apples and tart cherries are Michigan's two largest fruit crops in acreage, produc- ~~ i p t E~RM•••••••• •••• .r •••••• ,j ••• .'~ J1~::. •••• •••••••• . tion and fann value. These two crops together comprise 82 percent of the state's tree fruit acreage and 89 percent of the tree BUSINESS fruit production. Apple production during the next few years OUTLOOK is expected to average somewhat larger than during the last five years (although the age with 40 percent in that peak production production in any particular year can vary age category. substantially depending upon weather con- ditions). Bearing apple acreage in Because of the high percentage that are Michigan has remained relatively steady near peak bearing ages, and with nearly with a gradual increase during the last five steady bearing acreage, tart cherry produc- years. tion capabilities can be expected to remain relatively high during the next few years. Apples The state's continuing substantial produc- Looking ahead, bearing apple acreage is tive capacity for tart cherries was ... likely to remain nearly steady to down somewhat. There will be significant new acreage coming into bearing age that will demonstrated the last two years with large crops in both 1992 and 1993 (although not all of the production was harvested). add to the state's production capacity. This acreage may be, at most, a stable bearing recent large crop in 1992 of 25.7 million young acreage will-come into bearing at acreage to perhaps some decline in bushels. Plums: younger ages than in 'previous periods be- Michigan's bearing apple acreage. Michigan's plum acreage decreased by 33 cause of the predominant modem planting Tart Cherries percent since 1986, according to the latest systems which involve fewer non-bearing Although the bearing acreage can be ex- For tart cherries, Michigan's total acreage orchard survey. This downward trend in years. pected to remain steady or decline some- of all ages has decreased somewhat in acreage and production capacity can be what, average yields per acre will likely recent years. The latest orchard survey expected to continue in future years. There Along with the young acreage coming into continue on their upward trend in future from the Michigan Agricultural Statistics have been very few new plantings of plums bearing, growers will likely remove con- years. This will occur, in part, because of Service, which was published in 1993, in Michigan during recent years. siderable older bearing acreage as well. the industry's greater emphasis on shows that tart cherry acreage declined by Growers have, in recent years, been remov- younger, high-yielding orchards and 5,800 acres (13 percent) from the 44,000 Peaches: ing older bearing acreage at a faster rate modem planting systems. acres in 1986 to the most recent figure of Peach acreage in Michigan has been rela- than during the early to mid-1980s. This 38,200 acres. tively steady according to the recent or- has been part of an overall orchard culling The higher yields per acre will likely mean chard survey. Sweet cherry acreage and renewal process by many growers in that Michigan's apple production will in- Bearing acres have, on the other hand, declined somewhat, while Michigan pear order to become more efficient and to help crease somewhat with the next few years. remained relatively constant since 1986. acreage remains at a low level with a improve the quality of the fruit raised. This will be especially noteworthy in large- This is because of an unusually large per- moderate declining trend. Blueberry These steps are needed in response to crop years of favorable weather. In those centage of the state's tart orchards which acreage and production have been trending market requirements for higher quality fruit years, Michigan's apple production may are in their bearing ages. This is especially upward substantially with a record-large and to other economic pressures. reach several million bushels more than the so for tart acreages that are 11-15 years of crop produced in 1993. In the future, grower removals of apple \). orchards may occur even more rapidly. This adjustment may be forced by downward pressure on net returns, con- tinued higher quality requirements and higher costs along with the substantial risks to growers from a series of new government regulations on pesticides and hired labor. The net result for the next few years of both removals and the new young bearing 1994 Market Outlook ...Livestock Continued from page 6 Hogs As the slow liquidation indicated in the last Hogs and Pigs Report takes effect, hog prices will improve. Prices are expected to move into the mid $40s this spring and on up to $50 as we move into the summer. Next fall, prices will show a seasonal decrease, but should not fall out of the mid- $40s. While the first few dollars of these higher prices will be needed to pay for the higher corn prkes, the hog sector should be profitable the last three quarters of the year. Again, like beef, the demand shift away from pork has basically stopped. Along with this, income growth and a stronger economy will help. Keep current and keep a close eye on the forward pricing oppor- tunities. It would not take much of a rally from this point to present some profitable forward pricing opportunities. A big story for the hog sector in 1994 will continue to be the shift in where hogs are raised. Even though the sector as a whole is liquidating, the states in which the huge farrowing units are being built continue to expand. The question is, will the hog sector go like the poultry sector or will the Com Belt get back into the ballgame? Midwest producers can compete with these large uni.ts, b~t there will have to be some changes III their practices. Michigan Farm News January 31, 1994 1994 Outlook for Production Inputs Positive Michigan fertilizer and chemical prices are expected steady, with slight increases for seed. much effect on supply, demand or price Chris Peterson, Dept. of Agricultural here in Michigan. Economics, MSU Chemicals Fertilizer Chemical demand and prices will be af- National and Michigan sources indicate fected by many of the same factors affect- ing fertilizer. Supplies will be adequate. that fertilizer supplies will be more than adequate in 1994. Demand will be strong. Demand should be strong although con- . USDA predicts that planted acreage will tinued pressures from environmental increase in 1994 (especially corn) since a regulations may dampen demand some- zero ARP for 1994 wheat was set last July what as more lower-use cultivation prac- and a zero percent ARP for 1994 corn was tices continue to increase. Locally, prices set last November. Fertilizer prices should are expected to be unchanged from last be stable to slightly higher. In particular, year. phosphate prices are expected to be up. Nationally, USDA predicts price increases. Strong farm incomes in Michigan will also Pesticide manufacturers' costs are increas- add to increased input demand as planting ing due to increased R&D costs and in- rises. Generally, there is a very positive creased reregistration costs for older a~titude among farmers and agribusinesses products. Many manufacturers continue about 1994. The 1993 crop year is being expensive biotechnology research. viewed as a good year after the difficult Dealers' costs have also risen, especially 1992 crop year. This positive attitude for liability insurance. should translate into improved demand conditions in all input markets. Seeds Seed supplies should mostly be adequate Nationally, one major source of uncertain- with some shortages in specific varieties of Energy Given the positive farming conditions ex- ty in all input markets is the impact of the edible beans, soybeans and corn. For Nationally and locally, fuel supplies reasons already cited, demand should be pected, local demand should be strong. One 1993 Mississippi River flooding. How- should be good this year. Prices are ex- strong. Prices are expected to rise. cause of uncertainty in this area is the EPA ever, this does not appear to be having pected to remain stable or decline slightly. requirements for farmers using diesel fuel to use low-sulphur fuel. The supplies of low-sulphur diesel may be tight and the impact of its use on equipment efficiency is still an issue of concern. Equipment Interest rates remain quite low, farm asset values are good and debt/equity ratios are strong. This combination of factors should make this an ideal time for farm capital expenditures. In Michigan, the poor 1992 crop year still appears to be a drag on equipment demand even though other input markets are expected to be strong in 1994. Equipment supplies will clearly be ade- quate'while prices are likely to remain little changed. Nationally, equipment demand has been much stronger and prices have been rising. FAMILY HEAI:rH INS\}RANCE In the longer term, one of the more interest- PROPOSAL ing trends to watch will be the impact of FARM OWNERS/OPERATORS changing tillage practices along with demands for reduced environmental im- pact from chemicals and fertilizers on the mix of equipment purchased by farmers. "Smart" application equipment and site- Assoc WCM~llEll f.J CM~I SilO specific practices will make significant changes in the nature and cost of equipment demanded by producers. Profits for Broilers, Turkeys and Eggs Hinge on Feed Costs • I CtJrrcn\ Health In,;ur:.lI1n: Henry Larzelere, Dept. of Agricultural Economics, MSU Broilers Broilers placed during 1993 averaged about 4 percent above 1992. However, prices in 1993 averaged about 55 cents a pound, 3 cents above 1992. Broilers placed for slaughter early in 1994 were nearly 6 percent above a year earlier. With chick placement in 1994 likely to average 5 percent above 1993, to In these tough economic times all business owners are looking.forways improve their bottom line.. ' the 12-city average will probably be 55 cents a pound in 1994, nearly the same as in 1993. NoW Fa~m.~ure~ucan help with a new m9ney ~aving.group ~ealt~ Plan from Blue Cross Blue"~ni~ld~OfMichiga~.'~~ Higher feed ingredient costs in 1994 will .. "~, '.' . " ., .. limit the expansion of chick placements. Any These new pians are guaranteed issq~ntrmatter what your health history, locally ~erviceg by our 69 countyoffices"and 400 ageiits.s~at~wide,". reduction of feed costs will not likely occur ,and competitively priced to saVe'farm Qwners and operators.hundreds,or even thousands otoollars off th~ir,he~lth insl)rance bilL until after harvest and then only if weather So, if you're a sale'pr~prietor or if you hav~one or more employees, you should call ~arm Sureau today for benefit and rate"information: conditions are nearer to normal than in 1993. •. - ~ • ., •. ".••• "". , ~ k Turkeys . ,-.~-;;fII'i,'L'1,E~V "',: Wholesale prices for frozen whole turkeys during the major marketing season of 1993 were above the previous year. These higher FOR A FREE, NO OBUGATION RATE QUOTE - Fill OUT THE COUPON BELOW OR CAll DIRECT 1-800-292-2680, EXT. 3239 OR 3240. prices were in spite of a slightly larger supply in 1993 than the year before. Increases in Please mail to: Michigan Farm Bureau further processing and in exports probably Membership Services accounted for the greater rate of use in 1993. P.O. Box 30960 lansing, MI 48909 Storage stocks on Jan. 1, 1994, were es- timated to be about 3 percent less than a year Please Print ea.rlier. It is expected that production in 1994 Name Current Health Insurance will be up 2 percent from 1993. This would probably mean that prices in the major Address Number of Full Time Employees o Sole proprietor marketing season would be a little above 11 person groupl 1993. Phone o 2-4 0 5-9 County o 10-24 0 25 and over Continued on page 9 ...see Type of Farm/Business 1994 Poultry Profits MFN • A Health and Wellness Publication of Michigan Farm Bureau • Cold Facts about .. o H'POTHER * * * * * * * * * * * • Protect yoursel' 'rom steps to treal: It. Health experts persons and those medicated by hypothermle this winter by estimate that approximately 25,000 cardiovascular drugs, tranquilizers, leernln. to rec•• nl.e the people die of hypothermia each year. antidepressants and sedatives. symptoms CIftd tGIdng the right Be especially watchful of infants, older (Cot ........ next 11_) -. Cold Facts About Patients should share A vveighty solution to health history with DIABETES dentists Your chances of developing adult onset diabetes You might not know that you Hypothermia isasignificantdrop in increase two-fold for every 200/0 of excess weight you carry. Diet should share your medical history with the body's internal temperature and exercise to lose weight can treat 330/0 to 550/0 of non-insulin- your dentist before you receive dental characterized by these symptoms: dependent diabetes. treatment. But because your overall health history can make a big differ- Muscle stiffness and possibly Check with your doctor about the properweightforyou based on ence in your dentist's decisions about trembling in an arm or leg. your height, body type and age. Here's a rule of thumb that can treating you, it's important that he or Intense shivering. Somepeople help you determine your ideal weight: Men five feet tall should she has all the facts first. don't shiver,porticular1yolder odul ts, weigh about 106/bs. -add six pounds for each additional inch of First and foremost, your dentist but could sti II be at risk. height. Women five feet tall should weigh about 100 pounds- should know the name of your regular Confused thinking or dis- add five pounds for each additional inch of height. physician in case he or she needs orientation. to contact that doctor for more infor- Marked changes in mood or af- mation. fect, suchas apathy (indifference), Also, you should always tell your extreme drowsiness, hostility dentist what medications you're taking or aggression. so that he or she can avoid any possible Changes in the face and skin. interactions between the medications Look for puffiness, swelling or you're already taking and any additional medications he or she plans to pre- paleness. Skin is cool or cold to the scribe. For example, there's some touch. evidence that some antibiotics can decrease the effectiveness of birth If you suspect someone is suffering control pills, especially when the from hypothermia, call for medical antibiotics are combined with some assistance immediately and take other common medications. And if the following steps until help J '\ \ 'q you:r,e allergic to ar.\Y,medications, arrives: your dentist should know that, too. Get the person out of the cold. Didyou knowthatyou might need Replace wet clothing with warm, to take antibiotics before a dental dry clothing. Cover the person with appointment if you've had an artificial blankets, or other warm material, hip replacement? Also, people who suchas jackets, towels, or newspa- thers t be have certain medical conditions as cardiovascular or immune such system pers.lfpossiblegettheperson into areness is sOberinJ. ile many adults kn ..w disorders should tell their dentists about a sleeping bag with someone ing the first trim~ste of pregnancy, a ~ati those conditions. These patients might else to provide body warmth. need to take antibiotics or other medi- sugg pregnant womellbh rid also abstain fro,Hna Make every effort to keep the the se esters. cations before dental treatment to -. ;1J person awake and alert. e later stages 0lprefnancy can cause1fr avoid compl ications. the bab c, the country' larist volunteer orgajliz Some of the medical conditions to impro entally retardei pe pie, which cond~ct thatare most importantforyourdentist Drin~ing nng pregnancy can lea to Fe~al AlcohoU S to knowaboutcould surpriseyou. That's ~:~~; ~:~:~:1:xeventable mental retaldat .n. which affectr why you shouldn't try to guess which conditions your dentist needs to know. In addition to the heartache Fetalllco~~ofS~n-' ro ,_. :gs bout, it costs about. Instead, tell him or her every- $1 .4 ~illion in ~ealth car~ o.ver the lifeti;le ~ust one affect c~l~d report~ the thing. Like your other doctors, your Amencan Medical ASSOCiation. For all FJtal Aleoho/:fu(a