Policy Recap of the Rural Tour of America
Hello and welcome to SUNUP. I'm Clinton Griffiths. Today as promised we thought we'd dig deeper into the comments made by Agriculture Secretary Tom Vilsack. He was in the state last week talking to Oklahoma producers, farmers, ranchers, state legislators, in a listening tour, listening, asking questions, talking back and forth as part of his Rural Tour of America. Joining me now to give us a little bit of perspective on what he had to say is Extension policy specialist Larry Sanders and Extension livestock specialist Derrell Peel. Gentlemen, thanks for joining me. Larry, let's start with you and talk about some of the most important legislation he's facing in his administration, and that's the cap and trade legislation. There is a lot of talk about that and we haven't seen a bill go through congress yet. Let's take a listen to what he had to say in the press conference.

One of the things we try to do at USDA was to begin the process of putting some numbers and some thought behind what this would mean for the average farmer and the average rancher. We still have work to do. But, our preliminary analysis
is even assuming farmers don't adapt and even assuming no new technology is identified, this could be a 10 to $20 billion opportunity for farmers and ranchers. There are some studies that suggest it's not but most of the studies do not look at the offset side of the equation. Some studies I've seen recently suggest livestock operators can't participate in the offset program. We don't agree with that conclusion. We think there are ways in which livestock can be raised, methane can be captured, feed additives can be changed and the feed ratios can be changed so methane is reduced that would qualify. We think there are ways in which steps that have already been taken can be recognized, with early adopter language in the bill. We think the fertilizer concerns expressed by so many, they need to understand that there's a provision in the bill that basically takes the fertilizer industry off the hook for a period of time. We are very confident in America's farmers and ranchers' ability to innovate and adapt. So, we have a positive attitude about this. And the numbers are big. If you are talking about a 10 to $20 billion additional income source for farmers and ranchers in this country, you are talking about as much as a 20 to 40% increase in overall income based on this year's numbers. Fifty four billion is the net income estimate this year. That's a huge number and I think we ought to be looking at that opportunity together with the energy opportunity together with the local markets, with our Know your Farmer, Know your Food program, together with what broadband we think can do for farmers in terms of giving them real time information as four cornerstones to a new rural economy that I think provide more positive hope than we've seen in a long time in the countryside.

So what he seems to say there is that he recognizes that this is a pretty hot button issue.

No doubt about it. We probably ought to dispense with the 800-pound gorilla in the room and anybody that comes to Oklahoma trying to sell a new program from this administration is going to have a tough time. Cap and trade has been relabelled by the opposition as cap and tax because eventually it will hit the pocketbooks of consumers and in the initial stages the developers, the proponents of the bill didn't do a very good job in including agriculture being sensitive to their concerns. The house version has finally come around to that. The senate is still debating over whether or not that's enough or too much. Environmentalists are saying those are loopholes they don't want to see because we'd be paying farmers for stuff they're already doing to some extent. The administration's going to have to do a better job of showing the benefits of these proposed changes and they're also going to have to do a better job of showing there is going to be a cost to doing nothing. Right now what everybody is hearing is the cost of doing something and it's not pleasant, but compared to the cost of doing nothing, it may not be as bad as some people think.

Right. One thing he did say is that depending on how health care goes, it may affect cap and trade legislation. I mean, is that true? What do you foresee for --

No doubt about it. The cost of health care, probably a trillion-dollar package. We'll know more over the next month or so. How intrusive government is going to be in the health marketplace and if those problems are resolved to some level of satisfaction, it will be easier than for congress to begin to turn around and tackle cap and trade. If the administration is not successful with health care, there will be a perception of a successful barrier to any discussion of further government intrusion and further cost to the consumer and/or taxpayer, whatever the program is and cap and trade falls into that.

It could have a tough road ahead, depending on what happens before it. Another thing he mentioned in that clip is this concept of Know your Farmer, Know your Food and doing some PR about promoting your local farmers within your own area. But, hand in hand with that, he is talking about looking for ways to expand that local market for farmers and producers, to be able to sell food locally. What are your thoughts on that?

Well, it's one of the hottest trends in agriculture today in the food sector. The lovacore movement, local people wanting local food. It's not going to take over agriculture commercially, but it's an important niche market that probably can be enhanced to some extent. There is a diverse group of people pushing this, so it makes political sense to be supportive of it. You've got folks that are pro organic and pro reducing chemical use in agriculture and the folks concerned about food safety and food nutrition. Whether or not it's true or not, it's a perception that local food is safer and more nutritious. You've got the folks thinking they'll save energy if they don't have to ship food or inputs for food long distances, and sense of community, sense of local economic development, all of those things coming together to be a relatively strong political support base for expanding the local food movement.

Right. Right. Another thing we asked him about was the ACRE program, and it's a new commodity type program, a new program for producers out there, and so I asked him what he thought about Oklahoma's participation in that, and here's the response that he gave.

I appreciate the fact that folks in Oklahoma did a good job of studying the ramifications for their operations and decided in a fairly significant way to embrace ACRE. That was not necessarily the case around the country, and I think part of it is the way in which not just farmers and ranchers responded to ACRE but also commercial bankers responded to ACRE. There were some choices and sacrifices you had to make, and I think bankers may have misunderstood that it wouldn't at the end of the day negatively impact the bottom line and so they therefore discouraged some producers from participating. I hope to see over the course of time those who participate in ACRE, successfully participating realizing they made the right choice and that will, in turn, impact the choices of others in the future. It's an experiment. We at last count had over 66,000 applications. The the number may have increased a little bit because it was just before the deadline. I think I would have liked to have seen a bit more participation but understand with a new program it takes time.

I thought it was interesting he called it an experiment.

Yes.

That's not something probably everybody wants to hear, but he wasn't completely down in the mouth, I guess, about what kind of participation they got in the ACRE program.

ACRE was intended to be an alternative to the existing direct encounter cyclical payment program, and one of the great ironies here, we have former governor of Iowa, the heart of the midwest cornbelt, and this program was developed initially to help the midwest cornbelt out and here the largest participation of any state in the union is Oklahoma. And initially when we first looked at this a year ago it didn't look like it was going to be very useful for Oklahoma producers and as it's turned out, it's been a very lucrative program for wheat producers. It's not for everybody. They all need to do individual analysis. So far those signed up the first round will benefit. They're going to reap more benefits in the first year than anything they could lose in later years, but they're probably going to make money for a couple of years on it. And so I wasn't sure I agreed with him either that bankers were the ones that might have been discouraging it initially, there was just a general disendchantment with it. But, as people got to know more about it and saw where the market was at the time of sign up, it was a sensible move for many producers.

One of the things we asked him to follow up was, do you expect more of these programs in the 2012 farm bill. He said, let's get through the 2008 farm bill and see what happens in 2012. He did talk about the SURE program and said they hope to have rules out by the end of -- here pretty soon and then have payments by the end of the year. The SURE program is something producers are still waiting on.

SURE, standing for supplemental revenue program. It's another program that tries to comprehensively deal with the revenue issues of producers and is an alternative, not a required mandate. We would have liked to have had the details of implementation out before sign-up for ACRE because there is some interaction between the two programs that producers really need to know about before they make a full decision, but at least they are going to get those out within the next month or two, and we'll see another round of decision-making by producers, and when you're talking about these programs, you're pretty much talking about a commitment for the duration, and so you want to look at them very carefully.

Right, right. Derrell, let's switch gears a little bit and another thing we talked to him about was a national animal ID program, and that's been a hot topic for several years now. Here's what he had to say.

Whatever solution we propose, I think it's important to forget about what we tried in the past. We focus on these concerns that we're expressing good faith and very passionately, and let's see if we can craft a better approach. Animal health is important to maintain and the integrity of the market is also extremely important, and what we have is a circumstance where there are serious questions about whether or not we've got a system that works so let's figure out if we've got a system that does and responds to all the concerns expressed. I believe we can do that. I've challenged our team to come up with that. We'll see what they come up with.

It sounds like he's heard people loud and clear.

This has been a huge lightning rod issue over the last several years in the U.S. Within, you know, not only between USDA and what they would like to do, but also within the industry, within the livestock industry, it's an issue that's very controversial, very cotentious and unfortunately, I think has gotten convoluted with a lot of other issues that really aren't fundamentally what this is about. There was a long-standing recognition in USDA, the concern of our need to enhance our ability to protect animal health. After BSE happened in 2003 there was an initial attempt made to launch a national animal ID program and since then we've had a series of fits and starts in terms of trying to go from voluntary to mandatory back to voluntary and where we are now is a voluntary program that isn't working. It doesn't have any support. There is a tremendous amount of opposition in some quarters to any sort of a mandatory program.

We asked him about a mandatory program, and he said, well, let's just wait and see what the legislation says, so he hasn't committed one way or the other yet.

You know, I think it's a case where from a regulatory standpoint in terms of the core animal health issues there is a pretty strong recognition it's going to have to be mandatory to do what it needs to do. At the same time since there is so much vocal opposition and issues wrapped up in it, concerns about producer confidentiality, producer liability, a lot of it just stems from a concern about big government and big brother as one more intrusion on private industry. And so there is a lot of issues out here, and so it's going to take a tremendous amount of work to bring the industry together and to bring the industry and the government together to find a solution to this problem. Once again, the issue here is one of sort of preventing something that could happen and recognizing the consequences of not doing something. Part of the reason it's easy to be a little bit opposition to this is because we're a bit of victims of our own success.

Right.

We've had good success and not had major problems. I think in some cases there is a fairly large misunderstanding of what could happen as the world continues to evolve in terms of the potential threats of animal diseases and what they can do to our livestock industry in this country.

All right. Thanks, gentlemen. Thanks for being here. There is a lot of big issues on the table these days, and sure appreciate you giving us a little perspective on it.

Farmhand Olympics
The ancient greeks didn't start it. And you won't see it on network television. But that doesn't mean there isn't some tough competition. SUNUP's Dave Deken puts us in the middle of this year's Noble county fair farmhand olympics.

From the big cities of Perry, Morrison, and Lucene to the small towns of Red Rock, Marland, Billings and Lela, the citizens of Noble county unite to follow the best of the best farmhands in the land. One humid night in September, the youth of the county put down their sickles and park their planters, to show their friends and families what they are made of.

We've done this the past three years. We started it several years ago and we've tried to evolve it every year changing up the events and keeping it interesting for the students. Our program is all about promoting agriculture so we want the students to know there is more than just showing animals at the fair so this gives them another opportunity to get involved and have a great time.

So there are events that you would do on the farm, like pumping water, roping hay bale cattle. But that's the easy stuff. The real athletes have to do a marathon of sorts, actually a relay race. You start by putting on your cowbell and rolling a watermelon with your head, of course. Then you change clothes and hop for a while. Then you become a wheel barrel, and pick up an apple. And, finally, you have to find the hard-boiled egg, the old-fashioned way. Congratulations to the overall winners. [applause]

For the third year in a row, Perry claims the title.

Since they are all seniors there will be a new champion next September.

We got films to watch.

And that means less than a year to train to be the best farmhands in all of the land, or at least Noble county.

Cow-Calf Corner
Growing replacement heifers is an important part of any cow-calf operation. As we go into the fall and winter months, there will be heifers weaned and then given some supplemental feed in order to grow to be big enough to go into the breeding season next spring. If you're putting together a growing program for replacement heifers, especially a grain mix that's going to be mixed by the local mill, I would encourage you to include one of the feeding ingredients called ionofors. They are basically sold under the trade names or rumensin, which has the active ingredient monensin in it or Bovatech, which has the active ingredient lasalacid. Either one of those will do a great job of helping those replacement heifers go through this growing process. They are beneficial from about three different ways. They improve feed efficiency, so the heifers grow a little bit better on a little less feed. We have found with research that was done in Texas and Wyoming back through the years that these particular feed ingredients will encourage the onset of puberty, just a little bit earlier in these replacement heifers. What that means is you will have a higher percentage of the heifers cycling earlier in the breeding season next spring. Last, but not least is the fact that these particular feed ingredients are really helpful at preventing cocidiosis,which is important in young cattle going through the winter months. If you're going to put horses with those replacement heifers, do not use the ionofors because they can be potentially toxic to horses and if the cattle are intended for all natural programs, most of them will not allow that inclusion of an ionophore. For the rest of us, if we're going to have a grain mix, put together for replacement heifers, I strongly encourage you to include one of the ionophores this year. We'll visit with you next week on SUNUP's Cow-Calf Corner.

Market Monitor
Oklahoma wheat producers are planning a 2010 crop and prices are just wollering around. Here to take about that and other issues is Kim Anderson. Kim, thanks for being here. Let's talk about planning that 2010 crop. What kind of market will producers face?

Let's just say it's ugly. The wheat prices are low and indications are they will stay low. You look at what's happened with wheat. You go back two years ago, we had less than 300 million bushels of wheat stocks in storage. This year we're looking at 750 million. You look at the world is around 4 billion, over 6, 6.9 billion bushels in stocks. The average for the world, 5.5. We've got massive supplies of wheat around the world and prices react, prices well below average.

It seems like there is a lot more competition for wheat from around the world. Are they better at growing wheat now? What seems to be the issue there?

There is a lot of wheat because of farmer, irrespective of where they're located, if prices are high, they will increase acres and the input. Last year we had near-record yields. This year we had near-record yeilds so the weather cooperated two years in a row, relatively high prices two years in a row so the producers planted it, the weather cooperated, we grew, it now we've got excess wheat. Some places don't have the storage and they're going to put it on the market and there is your competition.

What's the market offering for this 2010 crop?

The July contract is a little over $5. A basis between $.80 and a $1.10, so it's offering somewhere around $4.20 a bushel.

Real quick, what's the market offering for corn and beans?

Corn and beans, corn is building a bottom, you know, finally getting to the bottom of that. I think we'll have problems with storage and that will drive prices down a little more. The cash market, futures market probably pretty level. Some low side risk in beans but it's probably pretty much where it is in unless yields are much higher than we expect and I don't think that's likely.

Thanks for being here, Kim. Kim Anderson, our grain marketing specialist.

Shop Stop
Hi. Welcome to Shop Stop. This week we'll talk about chisels.

We'll talk about reconditioning and showing you some things that can go wrong if you don't recondition chisels. We'll show two different types, a wood chisel and coal chisels.

I think the thing to think about with coal chisels is we focus on the end that's doing the work. Make sure it has a good edge on it. One thing we need to focus on, especially if we are using our chisels a lot, is the other end of it that we're going to be hammering on.

And you can see this one's been bevelled and that's proper. This one's been mushroomed and if I turn this over, you can see what will happen with the mushroom end on it. It will break off. If you're not wearing the eye protection, that can enter your eye as well.

So think about your chisels, how to use them. Take care of the thing as best you can, but we'll demonstrate a little bit now about how to put the proper edge on a coal chisel and how to approach that with a bench grinder.

Go over to your grinder and make sure you put your safety, personal protection on, and you want a degree of 60 degrees on the outer end, and what I like to do is lay that up there and hold my hand where I can slide that thing back and forth across and take it and dip it, and that way I can leave my hand at the same location, dip it in the water because you don't want this tip to get so hot that it turns blue. It's important that you keep that cooled. And then go back across it until you get that edge done, and you flip it over and then do the same thing and maintain that -- try to main that 60 degrees.

I think the thing that you think about with the coal chisels is you are putting the same bevel on both sides on it whereas with the wood chisel it's a little bit different situation.

The wood chisel we'll do a hollow grind and we'll be just grinding one side of this chisel, and you want this distance between the tip of the chisel to the back of the grind about 2 to 2-1/2 times the thickness of the chisel, so the same thing applies. I like to lay that on there, and then I put my hand there and then drag it back and forth across keeping that cool by dipping it in water and back to the grinder and taking my time until I get that edge on there, and it will put a wire edge on the back side, and you can take that off with a wet stone when you do your final sharpening.

I think the thing to think about with your chisel, the better shape they're, in the easier they'll work and the less likely you'll be of having any kind of accident with them.

Keep your chisels in good condition. Keep them safe. And keep them sharp.

That's it this week for Shop Stop. We'll see you next time.

AGWEATHER
Hi. This is Cindy Morgan with this week's Mesonet AGWEATHER report. Just like we saw earlier this week, strong cold fronts often return this time of year and with the reappearance of cold fronts, we usually see increased rainfall. So far this month most of the state has above-normal rainfall with areas in eastern Oklahoma receiving twice their normal amounts. Other areas have not faired as well, though, especially in northwestern and north central Oklahoma where some locations have received less than half their normal amount of rainfall. With the exception of the dry areas in northwestern and north central Oklahoma, the recent rainfall has pretty much replenished soil moisture down to 10 inches below the surface. This time of year brings a decline in soil temperature and our temperature map shows the average under 2 inches of bear dirt is in the low 70s across the state. In this coming week, the air temperature is expected to be above normal for the panhandle but below normal for the eastern third of the state while precipitation is expected to be above normal for the entire state. That's all we have for this week's Mesonet AGWEATHER report. We look forward to seeing you again next week.