Featured Agriculture News

07/17/2018 - Cash Market Moves

The 2015 implementation of the system known as positive train control was extended by Congress to have the systems in place in December of this year. It also left open the possibility of an additional extension to 2020.

07/17/2018 - Back In the Fold

A Mississippi farm family's experience demonstrates why succession planning can be so difficult -- and traumatic -- for many farm families.

07/17/2018 - USDA Crop Progress

Good-to-excellent condition ratings for both corn and soybeans declined nationwide last week, according to the USDA National Ag Statistics Service's latest Crop Progress report.

07/16/2018 - Stamp Farms Co-Defendant Pleads Guilty

A plea agreement could land an alleged co-conspirator in prison for five years in a criminal case connected to a Michigan farm's bankruptcy filing.

07/16/2018 - Family Business Matters

Develop strategies to deal with big-ticket challenges and daily interactions.

07/16/2018 - Todd's Take

USDA is predicting the lowest ending corn stocks relative to use in over 20 years, but corn prices are in the dumps. What gives?

07/13/2018 - The Market's Fine Print

A deeper look at what both the U.S. and China may be thinking as the trade war progresses.

07/13/2018 - EPA Docs Show Oil's Influence on RFS

The latest EPA documents released on proposed Renewable Fuel Standard volumes show the agency planned to reallocate biofuel gallons lost to waivers following a meeting between former EPA Administrator Scott Pruitt and U.S. Secretary of Agriculture Sonny Perdue.

07/10/2018 - KS, MO Farmers Dealing with Drought

A lack of rain in east-central Kansas and north-central Missouri, has led to crops withering in the field, leaving livestock with little to eat or drink.
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07/17/2018 Cash Market Moves

By Mary Kennedy
DTN Cash Grains Analyst

In late 2015, Congress extended the deadline for positive train control implementation by at least three years to Dec. 31, 2018, with a possible extension to Dec. 31, 2020, if a railroad completed certain statutory requirements necessary to obtain an extension, according to the Federal Railroad Administration (FRA). The legislation, the Positive Train Control Enforcement and Implementation Act of 2015, required all railroads to submit a revised PTC Implementation Plan (PTCIP) by Jan. 27, 2016, outlining when and how the railroad would have a system fully installed and activated.

The U.S. Department of Transportation (DOT) released a letter on Jan. 2, 2018, from Secretary of Transportation Elaine L. Chao to all the nation's Class I railroads, intercity passenger railroads and state and local transit authorities, stressing the urgency and importance of safely implementing positive train control (PTC) systems in the upcoming year to meet the Dec. 31, 2018, deadline, as mandated by Congress.

"Advancing the implementation of PTC is among the most important rail safety initiatives on the Department's agenda," Secretary Chao said in the letter. "FRA leadership has been directed to work with your organization's leadership to help create an increased level of urgency to underscore the imperative of meeting existing expectations for rolling out this critical rail-safety technology."

U.S. Sen. John Thune, R-S.D., chairman of the Senate Committee on Commerce, Science and Transportation, convened a hearing titled, "Implementation of Positive Train Control" on March 1, 2018. "Railroad passengers expect railroads to follow safety laws and implement the necessary technology to do so, including PTC," said Thune. "After troubling reports that some commuter railroads are falling behind on implementation, this hearing will examine what needs to get done and what railroads need to do to meet their obligations."

Here is a link to the testimonies at the hearing:

https://www.commerce.senate.gov/…

BNSF Railway Company (BNSF) announced in December 2017 that it had fully installed PTC and was operating under PTC on all mandated subdivisions well ahead of the year-end deadline. However, in mid-June, they submitted a request to the DOT for a two-year extension of the PTC deadline, due to the FRA current interpretation of the law that full implementation status cannot be achieved until all non-BNSF trains and/or equipment operating on its PTC-equipped lines are also PTC compliant, according to a BNSF press release.

"BNSF has succeeded in the adoption of this key safety technology. Even with this request for a deadline extension, BNSF's PTC network is installed and we are currently running, and will continue to run, more than a thousand trains daily with PTC as we continue to refine the system and resolve technological challenges," said Chris Matthews, BNSF assistant vice president, Network Control Systems.

However, to be considered fully implemented requires that all other railroads operating across any of BNSF's PTC-equipped lines must be capable of operating with BNSF's PTC system, noted the press release. "This interoperability of PTC systems between Class I, commuter and short-line rail carriers remains a challenge," said BNSF. "While the BNSF has successfully demonstrated interoperability with several railroads that operate on its network, including commuter railroads and Amtrak, not all railroads that operate on BNSF will have completed their PTC installation by the end of 2018."

Union Pacific (UP) has stated on their website that, at the end of 2018, PTC will be 100% installed on UP's required rail lines, and implemented on 75% of the required lines.

"When we filed our revised implementation plan in 2016, the goal was full PTC implementation on all required lines by the end of 2018. However, as we implemented this complex suite of technologies across our network, the largest one in the U.S., unanticipated operational issues developed," UP stated on their website.

"As permitted by Federal statute, UP intends to file with the FRA an alternative schedule for implementing PTC on the remaining segments as soon as practicable, but no later than the end of 2020. We will meet all criteria necessary for an alternative schedule, including full network installation and implementation on the majority of required lines, by the end of 2018.

"UP remains committed to PTC. The alternative schedule provides flexibility to problem solve issues that arise, so that this critical safety system is implemented correctly. PTC will be installed and implemented for all passenger use on UP's required lines by the end of 2018."

The Association of American Railroads (AAR) stated on their website that Class I railroads that meet the 2018 installation deadline can obtain an additional 24 months to test and ensure the system is fully interoperable.

"It is not enough to get PTC to operate across a single railroad's footprint; it must be interoperable. Interoperability means that the system works with any PTC-equipped locomotive running on any of the railroad tracks through the United States where PTC is required," noted AAR. "While some railroads will be fully implemented by the end of 2018, others will continue to test and will be fully interoperable no later than the 2020 deadline."

Here is a link to the background on Positive Train Control Enforcement and Implementation Act of 2015:

https://www.transportation.gov/…

Here is a link to an article posted by Association of American Railroads on Complexities and Challenges of PTC

https://www.aar.org/…

Here is a link to all U.S railroads quarterly reports on PTC implementation progress:

https://www.fra.dot.gov/…

Mary Kennedy can be reached at mary.kennedy@dtn.com

Follow her on Twitter @MaryCKenn

(BE/BAS/AG)

07/17/2018 Back In the Fold

By Des Keller
Progressive Farmer Contributing Editor

ACTIONABLE INSIGHTS:

-- Family returning to the farm need to have defined roles and goals.
-- New management must work toward building loyalty from employees.
-- Embrace technology, such as apps, to track fieldwork and maintenance.

**

Karen Makamson Edwards remembers clearly the fall day in 2013 when she turned down the drive to her parents' farm and knew her life was going to change forever.

A Mississippi girl turned hair stylist living in Pueblo, Colorado, Karen had never intended to return to the farm after college and styling school. She and husband, Stephen, an attorney, loved where they lived and had started a family.

But, for Karen, there were strong pangs of homesickness when she returned to Morgan City for a visit with 2-year-old McKenzie. Edwards wanted her daughter to get a sense of the farm at harvest, to generate for her the kind of wonderful memories she treasured. And, honestly, she missed those times herself.

"When we turned down the dirt road to home, I knew this time was different," Karen said. "There was a calling for me there. Things were changing, and I knew God wanted me to be a part of the change. The rest is history."

So began the latest phase of a family-farm transition that continues to this day. The Makamsons' experience demonstrates why succession planning can be so difficult -- and traumatic -- for many farm families. Even under the best circumstances, unforeseen events can quickly transform a carefully laid plan into chaos and uncertainty.

UNDER NEW MANAGEMENT

Karen's parents can attest to the fact the family business most people envision doesn't resemble the successful one emerging at Garry Makamson Farms.

"I didn't see Karen having a lot of interest in the farm," said Karen's father, Garry, 63. "I was reserved about her being interested because you don't just walk into this business and run it."

"We did not expect her to come back," said Connie Makamson, Karen's mother. "That was a shocker. But, when she said she wanted to, we were excited."

Certainly, it didn't immediately occur to Karen to move back to the farm. For more than two years, she had helped from Colorado. She built the farm's website and did public relations.

In 2011, the Makamson operation became part of FamilyFarms Group, a national financial and management consulting organization of nearly 90 farms. Karen attended the group's annual conferences with her father.

"I was blown away by the women involved in farming I met there -- in other than just a bookkeeping role," Karen said. "In the back of my mind, I thought, 'We'll see where this goes.' "

Then her brother, Steven Makamson, decided to leave the farm in 2013 to pursue his first love -- coaching basketball and teaching. He had been working on the farm since he was 8 years old but rented and farmed his first 150 acres while in college. At the same time, he worked setting up and maintaining the irrigation systems for his father.

Steven then worked on the farm for 2 1/2 years after college, took a break to continue his education and worked for another six years for his father, the last three years performing human resources (HR) duties on the farm. Karen's "calling" found her returning to take on management duties as the farm's director of human resources.

By December 2014, the Edwards family had moved back to Mississippi, but not to Morgan City. Instead, they settled in Jackson, the state's largest city, where Stephen -- son-in-law and attorney -- got a job.

EARN THE JOB

No matter how a succession plan unfolds, it's crucial for everyone to communicate, said Megan Roberts, Extension educator, agricultural business management at the University of Minnesota.

"When it comes to estate and family business succession planning, we immediately think about all the legal and tax aspects," she said. "Ultimately, however, it is the communication that leads to goal setting that is the foundation for any transition."

The communication has to involve determining the role of the newcomer in running the operation. Nobody should receive an owner-manager salary without doing the work, according to Galen Dody, of Dody Legacy Group, a Missouri-based business planning and accounting group.

"You want an adult child coming back to the farm to take on a management role in some area and watch their growth," he said. His firm isn't working with the Makamsons and isn't familiar with their particular situation.

"For children to come back to the farm, we want them to understand that it may require them taking some courses and showing a desire to grow the operation, and create more success for the future," Dody explained. "If that's not the desire, they are just a hired hand."

MAKING IT WORK

Karen has moved well beyond any hired-hand stage. Her new routine has her traveling 1 1/2 hours to Morgan City at least twice a week to work on the farm's human resources and the operation's paperwork, and to plot the future of the business.

"The hardest part about working from Jackson is balancing work life and home life," Karen said. "When I'm home, my full-time mommy job doesn't stop. Fortunately, most of what I do can be done via phone, email or scan. The Edwardses have two young children with a third due in August.

DIVISION OF LABOR

As for the official delegation of farm duties, Garry is the CEO and owner. On any given day, he could be doing anything from driving the combine to accounting to buying supplies to crop marketing.

"Dad makes the big decisions," Karen said. "He consults Mom and me to weigh out different opinions and options."

Garry's nephew, Curt Jolly, is the operations manager. He coordinates the daily activities of nine employees, and they answer to him about their immediate work.

"Dad and Curt have been working together for more than 25 years," Karen said. "He knows as much about the operation side as Dad does."

A LOT TO LEARN

Karen conducts employee performance reviews and keeps employee records up-to-date. She addresses any complaints from or about employees, and created and enforces the farm's employee handbook. She is also the "face" of the farm and works with the Natural Resources Conservation Service, the Farm Service Agency and FamilyFarms Group.

"I learned a lot about HR skills and how to work with people by working with the public in fashion design and as a hairdresser," Karen said. "I also leaned on FamilyFarms Group [for the] technical part of creating an employee handbook, policies, disciplinary actions, etc."

As for the federal agencies, Karen said she's been fortunate to have had local employees "hold my hand and help me learn."

From day to day, how well is it working?

"Karen has helped me change the way we conduct business," Garry said. "We've implemented things that, in the long run, make us better." For example, she formalized how they work on the farm. Employee hours are closely assigned and tracked, so it's clear who is working on what and when.

Karen has also spent more time on the farm's human capital. She lunches -- on the farm's dime -- regularly with workers. Last fall, the Makamsons took employees to a Mississippi State University football game. The entire farm had a month off last winter.

"I give her a ton of credit for doing some things different on the farm," said David Walker, whose Memphis, Tennessee-based Local Seed Co. works with the farm. "Garry has asked me, 'Do you think we're headed in the right direction? Can Karen handle this?' My response has always been, 'Yes.' She's building loyalty from employees."

SUCCESSION AND BEYOND

Walker said he's been impressed with the newsletter Karen produces. "Karen keeps the farm operation in the eye of their landlords, bankers and other professionals," he said. "And, if another landowner visits their accountant or banker in the area, and wants to find a good farm to rent their ground to, this newsletter, in this area, makes them stand out."

Still, Karen is a young woman manager in a business still dominated by men. And, she's doing it at a distance. As is, she's paid a salary and gas for her travel. Karen and her parents have been looking into providing health care as part of employment but "haven't found the right fit yet."

Farm employee Kevin Mueller believes her input to the business has been valuable. "She sees things here with fresh eyes," said Mueller, 28, who has worked on the farm for four years. "She's taking us to another level in terms of using technology. To me, it doesn't matter who the boss is as long as I can get the work done.

"Karen has started us using Trello [a project-planning application] that allows us to use our phones to make notes on something we see in a field -- and this information can be accessed by everyone else," he added. "I can also use it to go back and check when I've changed the oil on a particular tractor, for instance. This app is a real benefit as opposed to having everyone write everything down on paper and share in a group meeting that may be tough to arrange."

She has also used training exercises for HR purposes that can be accessed on employees' phones to watch, for example, a video on the use of a new forklift. "Otherwise, it would be tough to stop everyone on the farm to have a meeting," Mueller adds.

Planning for succession of the business is just getting started. Garry, admittedly, is glad he has Karen handling human resources. That part of the business was not one of his strengths. "If you can conquer HR, that's one of the hardest things on the farm."

The family has been meeting with bankers, lawyers and estate/succession planners on how to make the best transition of the business. Karen and her brother, Steven, who maintains a financial interest in the operation, will eventually split assets (land and equipment) fairly. Whether that will occur through gifting, buyouts, inheritance or a combination of those methods is as yet undetermined.

"My brother and I have always been in agreement that we want the farm to continue, but our ultimate goal is to stay close as a family," she said.

Upon their retirement, Karen will rent land from her parents. "I've been working to build relationships with current landowners that Dad rents from, so I can hopefully continue those leases in the future," she said.

Long term, the plan is for Karen to take over as CEO. "I will make the big decisions with a team under me to help with the day-in, day-out work."

PLAN YOUR ROAD MAP

A successful farm transition and succession plan transfer the human, business and financial capital to the next generation. Ideally, the plan would play out during the course of a decade.

"We use a decade as a benchmark," said Megan Roberts, Extension educator, agricultural business management, for the University of Minnesota. "The important thing is that the plans that take place over a reasonable period of time can be more successful."

The players in the process not only include the family members involved but possibly others outside the family. The transition planning should also comprise accountants, lawyers, consultants, extension educators and others.

Following are the main elements involved:

-- Retirement Plan. The needs of the generation retiring -- in terms of income -- often have to be met by the farm business. That income can't, however, endanger the future success of the farm business.

"Retirement income needs are not totally dependent on the farm business operating entity," Roberts said. Farmers may receive income from land rents separate from the operating entity as well as social security, prior savings or money from the sale of assets to the succeeding generation. Retirement planning should also include health-care planning as well as retirees' contribution of labor and where to live, Roberts explains.

-- Transition Plan. What strategies should you use to transfer ownership, management and control of the farm business? Transferring management is an often overlooked or inadequately considered aspect of the plan that leads to the failure of many transitions.

"A buy-sell agreement is needed to eliminate the biggest risks a company and its shareholders face: the unexpected loss of a managing shareholder," said Wes Hentges, of AgriLegacy, a business consulting and accounting firm based in Missouri. Such an agreement provides clear terms for transferring share upon triggering events such as the death, disability, retirement or other voluntary and involuntary departure of a shareholder, he added.

-- Estate Plan. This plan must specify how farm assets will be distributed among the heirs upon the death of the owners. The plan should treat heirs fairly while maximizing the opportunity for the farm business to succeed in the future. Fair treatment doesn't necessarily mean equal treatment. This plan should also minimize any tax burden on heirs.

-- Business Plan. What are the business goals of the farm and the strategies to achieve them? Owners and managers need to critically and honestly evaluate the farm business to determine what direction is best for the future. Many farmers don't take this opportunity to make substantive and needed changes to the farm business. The plan should involve the ability to dissolve components of the business if needed, explained Galen Dody, of Dody Legacy Group.

"Don't put your children in business together unless you give them a way to get out," Dody said. "You need good buy-sell agreements that set the terms of a sale between or by family members."

-- Land-Use Plan. Owners should evaluate current and potential future uses of their farmland. The plan might include a decision on whether to keep the land in agriculture or sell it for development.

(AG)

07/17/2018 USDA Crop Progress

By Anthony Greder
DTN Managing Editor

OMAHA (DTN) -- Good-to-excellent condition ratings for both corn and soybeans declined nationwide last week, according to the USDA National Ag Statistics Service's weekly Crop Progress report released Monday.

NASS estimated that 72% of the nation's corn was in good-to-excellent condition as of Sunday, July 15, down 3 percentage points from 75% the previous week.

"Hot and dry weather increased poor-to-very-poor ratings from Missouri to Texas," said DTN Analyst Todd Hultman. "Michigan is also experiencing dry weather with 20% of their corn crop rated poor or very poor."

Corn development continued to run well ahead of the average pace with NASS estimating that 63% of the crop was silking as of Sunday, 26 percentage points ahead of 37% for both last year and the five-year average.

Soybean condition also declined last week. The crop was rated 69% good to excellent on Sunday, down 2 percentage points from 71% the previous week. Poor-to-very-poor ratings increased in Missouri, Kansas and Michigan.

"Good-to-excellent ratings for both corn and soybeans are not as good as those seen in 2016, but are still significantly higher than a year ago," Hultman said.

Like corn, soybean development was also running well ahead of normal, with NASS estimating 65% of the crop blooming as of Sunday, 20 percentage points ahead of the five-year average of 45%. Twenty-six percent of soybeans were estimated to be setting pods, 15 percentage points ahead of the five-year average pace of 11%.

Meanwhile, NASS estimated that 74% of winter wheat was harvested as of Sunday, equal to last year's pace of 74%, but slightly ahead of the five-year average of 71%.

Spring wheat was 93% headed as of Sunday, ahead of the last year's 89% and also ahead of the five-year average of 85%. The condition of the crop held steady from the previous week at 80% good to excellent. That's still the highest good-to-excellent rating for spring wheat for this time of year since 2010, Hultman noted.

Sorghum was 31% headed, equal to last year and near the five-year average of 32%. Sorghum coloring was 19%, near 20% for both last year and the five-year average. Sorghum condition slipped again from 51% good to excellent the previous week to 47% last week.

Barley was 90% headed as of Sunday, ahead of 87% last year and also ahead of the average pace of 88%. Oats were 96% headed, equal to last year and near the average pace of 95%. Sixteen percent of oats were harvested as of Sunday, ahead of 13% last year and also ahead of the five-year average of 14%.

Rice was 32% headed as of Sunday, near 31% last year and slightly ahead of the average of 29%. Cotton was 72% squaring, ahead of the average of 70%. Thirty-one percent of cotton was setting bolls, also ahead of the average pace of 24%. Cotton condition held steady last week while rice's good-to-excellent rating dropped 3 percentage points.

To view weekly crop progress reports issued by National Ag Statistics Service offices in individual states, visit http://www.nass.usda.gov. Look for the U.S. map in the "Find Data and Reports by" section and choose the state you wish to view in the drop-down menu. Then look for that state's "Crop Progress & Condition" report.

National Crop Progress Summary
This Last Last 5-Year
Week Week Year Avg.
Corn Silking 63 37 37 37
Soybeans Blooming 65 47 49 45
Soybeans Setting Pods 26 11 15 11
Cotton Squaring 72 59 69 70
Cotton Setting Bolls 31 21 25 24
Sorghum Headed 31 25 31 32
Sorghum Coloring 19 17 20 20
Spring Wheat Headed 93 81 89 85
Winter Wheat Harvested 74 63 74 71
Rice Headed 32 21 31 29
Barley Headed 90 78 87 88
Oats Headed 96 91 96 95
Oats Harvested 16 10 13 14

**

National Crop Condition Summary
(VP=Very Poor; P=Poor; F=Fair; G=Good; E=Excellent)
This Week Last Week Last Year
VP P F G E VP P F G E VP P F G E
Corn 3 6 19 51 21 2 5 18 54 21 3 8 25 51 13
Soybeans 2 6 23 53 16 2 5 22 55 16 3 8 28 51 10
Spring Wheat 1 3 16 67 13 1 3 16 66 14 21 20 25 28 6
Sorghum 5 12 36 43 4 4 11 34 46 5 2 6 29 56 7
Cotton 10 18 31 34 7 8 19 32 34 7 1 9 30 46 14
Rice 1 5 25 56 13 1 5 22 59 13 1 4 25 46 24
Oats 4 3 22 58 13 3 3 21 60 13 9 13 27 42 9
Barley 1 2 12 70 15 1 2 12 68 17 8 10 29 43 10

Please send comments to talk@dtn.com

(AG)

07/16/2018 Stamp Farms Co-Defendant Pleads Guilty

By Todd Neeley
DTN Staff Reporter

OMAHA (DTN) -- One of three men indicted on 14 counts of conspiracy to commit bank fraud and making false statements to attain loans and crop insurance for Decatur, Michigan-based Stamp Farms LLC, has reached a plea agreement, according to court documents filed in the U.S. District Court for the District of Western Michigan.

James Leonard Becraft Jr. agreed to plead guilty to conspiracy to make false statements to the Federal Crop Insurance Corp. A change of plea hearing is set for Aug. 3 in Grand Rapids, Michigan. Jury selection and the trial is set to begin on Jan. 23, 2019.

On Dec. 13, 2017, a grand jury handed down an indictment of Becraft, Michael Stamp and Douglas Edward Diekman in connection with the Stamp Farms Chapter 11 bankruptcy filed in November 2012. The bank found Stamp Farms in noncompliance on loan agreements, including working capital and other ratios. Michael Stamp is the former owner of the farm.

Stamp and Becraft originally pled not guilty in January, according to court records, after being arrested by Internal Revenue Service agents on Jan. 18. According to the indictment, the losses alleged in the fraud total about $60.5 million.

According to the plea agreement, Becraft could face five years in prison, three years of supervised release, and pay about $2.7 million in restitution as well as a $250,000 fine.

In addition, the agreement said Becraft agreed to cooperate with federal authorities on the investigation into Stamp Farms.

"The defendant's cooperation will consist of all steps needed to uncover and prosecute such crimes, including but not limited to, providing investigators with a full, complete and truthful statements concerning the defendant's knowledge of any and all criminal activity of which he is aware," the agreement said.

In return, the U.S. Attorney's office agrees not to oppose Becraft's request for a reduction in the charges. Also, Becraft will not be charged with bank fraud and conspiracy to commit bank fraud.

STAMP FARMS BANKRUPTCY

According to court documents in Stamp's individual bankruptcy case, Wells Fargo claimed it had made a $68 million loan in December 2011 based on representations that Stamp Farms and its affiliates farmed 46,000 acres. Audits later could uncover only about 27,000 acres, the bank claimed.

Stamp Farms' assets eventually were auctioned off to Dennis Boersen, the owner of Zeeland, Michigan-based Boersen Farms. Boersen Farms has also faced financial difficulties.

The indictment said Stamp rapidly increased the number of acres the company farmed by acquiring agricultural land leases from landowners in southwest Michigan, "often by paying above-market rates."

Over the years, Stamp relied on "large" operating loans and credit agreements. In addition, the indictment said Stamp used crop insurance payments to pay for some of his operation, including covering lease payments.

Starting in 2011, Stamp needed money to keep his farm going and to pay off an outstanding loan. Between March and December, Stamp provided false information to obtain about $68 million in credit from Wells Fargo by misrepresenting the amount of land he farmed and the value of his farming assets, the grand jury said.

According to the indictment, when the bank extended his credit, Stamp continued to provide false information about his operation. In addition, Stamp submitted false claims to the Federal Crop Insurance Corporation in order to get crop insurance payments.

Stamp conspired with Becraft and Diekman, in particular, to "defraud the Federal Crop Insurance Corporation and its reinsurers," the indictment said.

STAMP'S WIFE JAILED

In June 2015, Stamp's wife, Melissa Stamp, was sentenced to 20 months in jail and 20 months of supervised release, and was also required to pay $184,500 in restitution and had to forfeit $151,915 as part of a plea agreement with federal authorities for her role in bankruptcy fraud.

According to a news release from the U.S. Department of Justice, at the time of her guilty plea, Melissa Stamp admitted to giving $75,000 to her brother and about $90,000 to her father to conceal the money from a bankruptcy case that was filed one month later by her husband. She also admitted to concealing $50,000 in a safe in her home, according to DOJ, but none of the money was disclosed to the bankruptcy court.

The farm and its related businesses at the time of the bankruptcy claimed assets valued at $131 million and a net worth of $39 million. An audit found those assets dwindled to about $93 million in a matter of months.

The case left southwestern Michigan landowners and creditors jolted by what legal experts believe was, at the time, the largest grain farm bankruptcy in U.S. history. Top Producer magazine had featured the farm and Michael Stamp on the November 2012 cover as one of the publication's top producers of the year -- the same month Stamp filed for bankruptcy.

Stamp owned a number of related businesses that were part of the farm bankruptcy case. They include a custom farming operation, a trucking business, an excavating operation and a grain elevator, Northstar Grain LLC, which has a reported 4.2 million bushels of grain capacity.

While southwest Michigan was hit hard by drought in 2012, it is unclear what actually led to Stamp Farms' downfall in what was an era of booming commodity prices.

According to USDA, corn yields slipped statewide in 2012, falling from an average yield of 153 bushels an acre (bpa) in 2011 to about 118 bpa last year. Ironically, one of Stamp's affiliated farms placed third in the Michigan Corn Growers Association yield contest with a dryland yield of 259.9 bushels.

Todd Neeley can be reached at todd.neeley@dtn.com

Follow him on Twitter @toddneeleyDTN

(BAS/AG)

07/16/2018 Family Business Matters

By Lance Woodbury
DTN Farm Business Adviser

Many of these columns have focused on big, strategic moves family businesses should make to enhance their success with estate plans, management succession, family employment, compensation, governance and conflict management. A degree of certainty on these important issues helps family members make better decisions and maintain relationships.

Challenging as the big issues may be, many family businesses are derailed by the little things. Seemingly minor events, an unintentional sleight, unequal time spent with different family members or an offhand remark becomes the spark that ignites a forest fire in the family firm. Consider whether some of the following concerns place your family business at risk for a blowup.

WORKING TIME

When working together in business, our human inclination is to notice how coworkers use their time. Even though family members have different responsibilities or roles, our tendency is to want to see everyone working the same number of hours. But, this often isn't the best strategy for a successful business. Some work inside and some outside, some are with people, some with equipment and some with technology. Some put in long hours at certain times, while some are steadier year-round. Some family members are more efficient with their time.

The overall result of these differences is some family members often feel they are working harder than others, which may be the case. Feelings of resentment can arise about perceptions of time spent working. These problems often start small but, over time, develop into a real relationship problem in the business.

EXPENSE EQUITY

When the comparison shifts to money and the expenses paid by the business, conflict can heat up in a hurry. What if one family member eats lunch out most days and pays with a company credit card, while another brings his or her lunch to work? Or, what if one occasionally fills up his or her personal vehicle's gas tank at the farm? What about paying for a spouse's expenses on a business trip?

One meal or tank of gas by a family member may not be a firing offense. However, over months and years, frustration and resentment about what the business covers and whether people are taking advantage of the business and each other can create a serious wedge between family members.

ATTENTION

If a grandparent takes one grandchild on trips more frequently than others, it doesn't mean the other grandkids are loved any less. But, it probably doesn't feel like that to the others. How people are included in business discussions, whether they go on trips together, even the number of meals eaten together can create friction when compared with other family members. Again, it isn't one meal or one trip, but, instead, the accumulation of time spent that increases friction.

A REMEDY

It is ideal, but naive, to expect people not to compare how they spend their time, the money of the business or the attention they receive from others. Consider two strategies to address these issues. First, commit to checking in with other family members. More often than not, the offending family member isn't aware of, or being held accountable for, their work habits, use of company funds or time spent with others. Simple awareness can go a long way. Second, when it comes to time and expenses, consider crafting a policy that spells out what hours are expected and what expenses are covered. Good policies can prevent problems and are often routine in non-family enterprises.

There are always challenges in working with family members. A commitment to communication and a few key policies can help clarify expectations and prevent these small issues from becoming large headaches for your family business.

**

Editor's Note: Write Lance Woodbury at Family Business Matters, 2204 Lakeshore Dr., Suite 415, Birmingham, AL 35209, or email lance@agprogress.com.

(AG)

07/16/2018 Todd's Take

By Todd Hultman
DTN Analyst

If we look at Thursday's World Agricultural Supply and Demand Estimates (WASDE) report from USDA, especially the world estimates for corn, it is easy to get a bullish feeling for corn prices. USDA lowered its estimate of world ending corn stocks to 151.96 million metric tons (mmt) (5.98 billion bushels) for 2018-19, a 21% drop the previous season's 191.73 mmt (7.55 bb). Not only are world corn stocks expected to be lower in 2018-19 relative to use, corn is expected to have the lowest stocks-to-use ratio since 1995-96, one of the more bullish years in corn price history.

When we look at corn prices themselves, however, we see a chart in a deep slump. December corn is trading at $3.56 early Friday, down a painful 17% from the high it reached just seven weeks ago. Moving to a long-term chart of December corn prices, current levels are not too far from last year's harvest low of $3.35 1/2, or the eight-year low at $3.18.

So what gives? Why are corn prices in the dumps when USDA's world estimates look so bullish? That's a fair question and I have a few thoughts to help try to understand corn's dilemma.

First, if we never saw USDA's world estimates, there wouldn't be much argument about December corn trading as low as it currently is. Back in early May, when December corn prices were pushing near what would eventually become their seasonal highs, noncommercials put on their largest net-long position since 2011.

Dry weather for Brazil's second corn crop -- coming after Argentina's drought -- surely inspired some of the bullishness, but the exuberant noncommercial response was revealed to be unsustainable when early planting went well in the U.S., and early crop conditions looked good.

Lots of bullish noncommercial positions have been losing money as USDA has repeatedly reported high crop ratings each Monday, which was a certain recipe for even lower prices. And that's what happened to corn. Add to the mix generally bearish concerns in grains over the lack of a NAFTA agreement and a trade war with China, and a bullish argument for corn prices becomes difficult to make.

It is in this heavily bearish environment that we are asking traders to have faith in USDA's more bullish projections for 2018-19. Keep in mind that the first field-based corn yield estimate in the U.S. will not be released until USDA's next WASDE report on Aug. 10 and last year's corn yield hit a record high 176.6 bushels an acre (bpa) on much less than ideal conditions. Can anyone yet say that a 15.0-bb crop with an average yield of roughly 183 bushels is out of the question?

Here in the U.S., USDA expects the current season to end on Aug. 31 with 2.03 bb of surplus corn. However, the 5.3 bb of corn stocks USDA reported for June 1 shows that demand is running 77 mb less than a year ago, but USDA is predicting 261 mb of increased corn demand in 2017-18. The final ending stocks for corn this season could easily be 2.2 bb.

When we take a closer look at USDA's world estimates, we see that world corn production is expected to be up 20.6 mmt (809 mb) in the new season, while world demand is expected to be up 24.4 mmt (961 mb). As mentioned earlier, the U.S. crop is still young, and new crops in Brazil and Argentina have yet to be planted. We are also talking about demand estimates that extend to Aug. 31, 2019.

Looking at world corn demand, it is difficult to tell in the WASDE report where the surge is coming from, but we do see that 7% of the 24.4 mmt increase is coming from China. Keep in mind that China reportedly has plenty of old-crop corn on hand and is only expected to import 1 mmt more than it did a year ago. So we have to note a significant part of the demand surge USDA is recording will not translate as increased exports for the U.S.

It has been said that all politics is local and that may also be a good bit of wisdom when trying to understand this year's corn prices. On the practical side, ending U.S. corn stocks in excess of 2 bb, a slower demand pace in the current season, uncertainty over the future of NAFTA, and relationships with other trading partners, are all bearish factors close to home. So is the corn growing in U.S. fields, most of which is off to a good start in 2018.

At this point, USDA's world estimates are still more theoretical than practical, and plenty of changes are still possible as we journey on. It takes more than just estimates to move markets -- it takes real people actually buying corn and that's what we're not seeing yet. Stay tuned to DTN for what promises to be an interesting season for corn.

Todd Hultman can be reached at Todd.Hultman@dtn.com

Follow him on Twitter @ToddHultman

(BAS/BE)

07/13/2018 The Market's Fine Print

By John Harrington
DTN Livestock Analyst

When President Donald Trump first tweeted in early March that "trade wars are good and easily won," I think he may have been onto something. That is, if you allow me to read behind the typos.

Whatever you think about his philosophy of leadership through tweets, the president has developed quite a reputation for colorful and often mystifying typos. Remember the early morning post when he invented the word "covfefe?"

And then there was the time he tweeted about his trip to Israel and the possibility of a lasting "peach." Once, the chief executive lambasted China for stealing a U.S. Navy research drone in international waters, tweeting the affront as an "unpresidented" act.

But who really cares? I mean even world-renown heart surgeons misplace a sponge or scalpel now and then. Furthermore, none voted for Donald Trump because of the way his fingers danced over the tiny keyboard of a smartphone (please, no small hands jokes, not on my watch).

What's important is that despite the occasional typo, misspelling, or missing verb/conjunction, we can usually take a decent, educated guess at what the president's tweet actually means. Specifically, Trump's high level of business success prior to moving into the White House tells me he's no dummy when it comes to the importance of market timing.

Accordingly, I feel confident in speculating that the oft-quoted trade war tweet was just a minor operator error meant to read: "Trade wars are good IF they are easy to win."

Think of the Trump administration as competent and responsible bridge inspectors. They know, at least at their non-political best, critical measurements such as traffic counts, weight limits, the wear of girders and the age of piers. They know when deferred maintenance is affordable and when it is not.

While many of his critics have expressed serious doubt about President Trump's grasp on macroeconomics and global trade, there's little doubt in my mind that he fully understands that the only "good" trade war is one "easy" (read with utmost speed) to resolve.

I'm guessing (hoping? praying?) that despite the president's ubiquitous display of confidence and self-assurance, he hears the alarm clock ticking away, one set for five minutes before the hour when fearless protectionism becomes economically and politically untenable.

If you agree with Trump's assessment of the China problem, it's certainly not difficult to understand his willingness to throw the first punch. With China exporting goods to the U.S. worth more than a half-trillion dollars last year, $375 million more than the U.S. shipped to China, the Chinese economy seems far more vulnerable to a trade war than the American market.

In a nutshell, Trump's trade war tactics to-date are based on the simple assumption that "They have more to lose than we do."

Furthermore, at the risk of sounding too agriculturally defensive, I think the presidential strategy since late spring has been emboldened by China's counter-tariffs against the likes of U.S. beans and pork -- painful jabs thought to be relatively feckless by far too many within Washington's circle of power.

Anyone in the White House who bothers to look at a commodity screen knows differently. Grain and meat futures have been imploding faster than Scott Pruitt's career at the EPA. Additionally, hard trade data for May clearly reflected Chinese buyers moving away from U.S. product and toward other sources unsaddled with punitive tariffs.

For example, U.S. pork exports to the China/Hong Kong region were well below the late spring of 2017 due in part to the additional 25% tariff imposed by China on April 2. Specifically, U.S. exports to China/Hong Kong in May totaled no more than 34,191 metric tons, down 31% from a year ago, while export value dropped 25% to $79.9 million.

The next monthly set of pork trade numbers will likely look even worse, and the same goes for the July summary as Chinese tariffs continue to ramp up through midsummer.

As far as beef exports are concerned, we have not yet documented any discouraging news -- but we will. Effective July 6, China's duty rate on U.S. beef is scheduled to increase from 12% to 37%.

Such a significant surge in the tariff will make it extremely difficult for Chinese end-users to profitably utilize U.S. beef, especially with U.S. beef already priced at a premium compared to imports from other suppliers, and with Australian product subject to a duty of just 7.2% through the China-Australia Free Trade Agreement.

There's really no nice way to put it. U.S. farmers and ranchers have been the first troops casually dispatched to the front lines -- cannon fodder in a trade war that has managed heretofore to bomb under the radar of most American consumers.

But such sweet oblivion enjoyed by the urban mass may soon evaporate thanks to the latest offensive being readied by the Trump high command.

On Tuesday, the White House announced plans to impose a 10% tariff on $200 billion of Chinese goods after a public comment period. That means the tariffs could take effect sometime after Aug. 30, a month before U.S. retailers start the all-important fourth quarter leading up to the holiday shopping season.

Unlike the earlier tariffs by the U.S. and China (which primarily hit soybean farmers, pork producers and manufacturers), the latest effort takes direct aim at plenty of food products and finished consumer goods.

I suppose some consumers could continue to enjoy a honeymoon period with higher tariffs representing nothing more than internet headlines. But, eventually, all manufacturers and retailers will have no choice but to pass the raised tariff charges on to everyday shoppers.

And the new list of Chinese goods to be taxed are anything but the frivolous eye-candy of the rich and famous. For example, the list includes: seafood, dog leashes, handbags, luggage, vinyl floor tile, perfume, golf bags, baseball mitts, furniture, carpets, window and wall air-conditioning units, refrigerators and freezers, buttons and toilet paper.

Assuming this new round of tariffs stays on track, there won't be a single customer that rolls out of Walmart after Labor Day who doesn't have an opinion about tariffs. If this tit-for-tat trade war just keeps sparking, keep in mind that China currently makes roughly 36% of American shoes and clothes and about 20% of our furniture and household items.

So, returning to my original question, can the current trade war be simultaneously "good" (i.e., defined by the president as resulting in smaller trade deficits with China and greater safeguards for intellectual property rights) and "easy" (i.e., won in an acceptable span of time, a period of economic and political hardship that does not overshadow the "good")?

As I previously noted, President Trump's basic strategy is to fully exploit the reality that the U.S. market is more important to China than the China market is to the U.S. Accordingly, the best way to nail the mutually dependent goals of "good" and "easy" is to fire the tariff gun early, aggressively and often.

Furthermore, USDA Secretary Sonny Perdue may be reassuring his boss that China could easily run out of trade war patience if it tries to maintain both its boycott of U.S. beans and the size of its hog herd. While the Brazilian source of beans has proven handy in the short run, it's simply not big enough to satisfy the Chinese pork appetite in the long run.

On the other hand, China's unchallenged one-party one-leader government means Beijing can quickly marshal its vast resources almost at will, much as it did earlier this week when the People's Bank essentially freed up tens of billions of dollars in credit to help smaller businesses and support growth in the face of trade war fallout.

Needless to say, the U.S. president does not enjoy such sway at the Federal Reserve or within the halls of Congress.

Another factor helping China make the trade war difficult for the U.S. rather than easy is the relatively large number of American businesses operating and selling in China. In 2015, U.S. goods and services produced and sold in China totaled $223 billion, compared with a minuscule $10 billion of Chinese products made and sold in the United States, according to Nicholas Lardy, a China expert at the Peterson Institute for International Economics.

China's bureaucracy has hundreds of ways it can slow and expensively inconvenience foreign entrepreneurs. Such activity could represent a damaging new front in the trade war that the U.S. could not counter.

Finally, Chinese consumers may be willing to hunker down longer than their U.S. counterparts. Not only are they victims of an oppressive propaganda machine that would rouse nationalism and villainize the U.S., the vast population of China as a whole remains closer to serious periods of privation than U.S. citizens.

So who will blink first? What's the maximum level of economic pain that will still justify a trade war as "good?" And how many months before the 2020 election does "easy" become too difficult?

All I know is the longer the great locomotive of trade remains stopped in the middle of a critical bridge, the greater the chance of a catastrophe.

John Harrington can be reached at harringtonsfotm@gmail.com

Follow him on Twitter @feelofthemarket

(BE/AG)

07/13/2018 EPA Docs Show Oil's Influence on RFS

By Todd Neeley
DTN Staff Reporter

OMAHA (DTN) -- The EPA was set to reallocate gallons lost in the Renewable Fuel Standard to small-refinery waivers, but that proposal was pulled within days after a series of meetings and phone calls that then EPA Administrator Scott Pruitt had with lawmakers from oil states and RFS stakeholders.

As part of the rulemaking process on the latest proposed RFS volumes, which are slated for a public hearing on July 18, the agency on Wednesday posted a number of documents to regulations.gov showing the interagency process that took place prior to the proposal's release. That interagency review includes USDA, EPA and the Office of Management and Budget.

In addition, after Pruitt resigned earlier this week, the EPA posted an updated Pruitt calendar (https://www.epa.gov/…) that includes his schedule in the days ahead of the release of the proposed volumes on June 26.

EPA estimates it waived about 2.25 billion gallons of biofuels for 2016 and 2017. The ethanol and agriculture industries have pressed the agency to reallocate those lost gallons to other refiners. In the weeks leading up to the release of the RFS volumes proposal, Pruitt told two different groups of agriculture and ethanol organizations two different stories when asked about the agency's ability to reallocate RFS gallons.

During a visit to East Kansas Agri-Energy's ethanol plant in Garnett, Kansas, on June 12, Pruitt said the agency could reallocate gallons. The next day in South Dakota, Pruitt told an ag group, "Counsel worries reallocating lost RINs (renewable identification numbers) retroactively isn't legal."

REALLOCATION PROPOSED

According to a June 19 interagency review document, the EPA proposed raising the total overall percentage of renewable fuels in the gasoline pool from 10.88% to 11.76% -- just days after Pruitt's visits to Midwest states that also included a stop in Nebraska. That bump in renewable fuel percentages was expected to make up at least some gallons lost to waivers. The proposed bump in percentages came one day after a morning meeting Pruitt had with U.S. Secretary of Agriculture Sonny Perdue in Washington, D.C.

In a June 20 interagency review document, EPA personnel appeared to indicate it was legal to reallocate gallons to larger refiners.

"EPA's proposed approach implements CAA section 211(o)(3)(B)(i), which states that EPA 'shall determine and publish...the renewable fuel obligation that ensures that the requirements of [the RFS program in CAA section 211(o)(2)] are met.' Projecting the total exempted volume based on the most recent exemption data is an appropriate way to address this effect and facilitate the satisfaction of the RFS program requirements in CAA section 211(o)(2).

"...This approach is consistent with the text of our regulations, which accounts for the 'amount of gasoline' and 'amount of diesel projected to be produced by exempt small refineries' in 2019," the document stated.

Geoff Cooper, executive vice president of the Renewable Fuels Association, said the document seems to contradict Pruitt's concerns about the legality of reallocation.

"EPA was saying that it believes the law compels them to account for small-refiner exemptions prospectively," Cooper said. "In other words, EPA was saying the best way to observe the spirit and intent of the law is to account for expected exemptions and reallocate those volumes to larger refiners."

PRUITT CALLS

Also on June 20, Pruitt's calendar shows he had phone calls with RFS opponents Sen. Ted Cruz, R-Texas, and Sen. Pat Toomey, R-Pa. Both have called for RFS reform, claiming the RIN system was hurting small refiners. Cruz advocated for a cap on RIN prices. Along with Sens. Charles Grassley, R-Iowa, and Joni Ernst, R-Iowa, Cruz and Toomey met a handful of times at the White House to discuss the RFS in the past year.

On the evening of June 21 and the morning of June 22, Pruitt's calendar shows he had phone calls with RFS stakeholders.

Then, according to a June 22 draft of the RFS proposal, documents posted to regulations.gov show the percentage of renewable fuels dropped back to 10.88% from 11.76% -- within two days of the calls with Cruz and Toomey and RFS stakeholders.

Interagency review documents also show that a recommendation to restore a 500-million-gallon RFS shortfall in the latest volume proposal was not adopted by the agency. In a 2016 ruling in favor of biofuels interests, the U.S. Circuit Court of Appeals for the District of Columbia Circuit had ordered EPA to restore that shortfall.

On Thursday, the EPA indicated in a letter to Grassley that it intends to continue in the same direction with the small-refinery waiver program.

"We appreciate that the SREs granted over the past several months have been the focus of many stakeholders' attention," new EPA Assistant Administrator William L. Wehrum said in the letter, "but we are required by statute to implement these provisions and we will continue to manage the program consistent with the law."

Wehrum told Grassley the agency granted 19 or 20 petitions received in 2016, 29 of 33 in 2017 and "have not yet received any petitions for the 2018 compliance year."

Frank Maisano, senior principal at Washington, D.C.-based communications firm Bracewell, LLP, and a representative for refining interests, said the documents show USDA has limited involvement in the interagency review.

"The real story is that USDA, engaging in no critical analysis of their own, simply adopts the position of ethanol special interests despite potential impacts on consumers, small businesses, and others," Maisano said. "Still, no evidence of demand destruction and no legal authority for making retroactive reallocations. Simply because ethanol shills at USDA place comments in interagency comments on a program over which they have no jurisdiction does not compel the expert agency to follow them down the rabbit hole."

Read the EPA documents here: https://www.regulations.gov/…

Todd Neeley can be reached at todd.neeley@dtn.com

Follow me on Twitter @toddneeleyDTN

(AG)

07/10/2018 KS, MO Farmers Dealing with Drought

By Russ Quinn
DTN Staff Reporter

OMAHA (DTN) -- In a growing season where some regions of the Western Corn Belt have seen too much moisture, other areas have seen very little of it. From east-central Kansas into north-central Missouri, scant amounts of precipitation have led to crops withering in the field, leaving livestock with little to eat or drink.

Some areas are worse than others, but farmers in Kansas and Missouri said the drought area will grow in size the longer it doesn't rain. Moisture may still help soybeans, but it's too late for most of the corn.

DROUGHT MOVING NORTHEAST

The Southern Plains were dry this spring and these conditions have spread north and east. A large area from central Kansas east through north-central Missouri has received limited moisture.

Northern Missouri, for instance, has generally had only 4 to 8 inches of precipitation since mid-April, said DTN Senior Ag Meteorologist Bryce Anderson. This would be anywhere from 50% to 75% below average, he said.

Calculated soil moisture shows a deficit of 4 inches or greater in these areas. The dry conditions extend from the Southern Plains into northern Missouri and into southeastern Iowa and western Illinois.

However, Missouri has had the worst of those three states by far, he said.

"This is the first time since mid-July 2012 that northern Missouri is in Level 3 (extreme) drought," Anderson said.

Adam Casner, a row-crop farmer from Carrollton, Missouri, said he had moisture during planting this spring, but the weather has been dry since. Rains have been spotty, but he estimates he has only had 3 inches since Easter, and the last rain over an inch was back in the middle of March.

Casner said his region of north-central Missouri had "a tremendous yield potential" as they were able to fertilize, plant and spray crops in a timely fashion this spring. Dry weather during and after corn pollination, however, has led to many pollination issues and quite a bit of tip-back on ears, he said.

EARLY SILAGE

Further west into east-central Kansas, Jacquelyne Leffler was busy cutting silage on her farm near Americus, Kansas, the second week of July. Her home area of Lyon County has only seen about 1.75 inches of rain since Memorial Day, she said.

Leffler and her family run stocker and feeder cattle on grass in the Flint Hills region, and they will feed out some cattle along with growing crop. With the limited moisture, they decided to salvage their corn crop.

"This might be the earliest we ever have cut silage," Leffler told DTN. "Typically we cut around the first part of August."

Leffler said the corn was so damaged from drought conditions, the crop didn't even form ears.

She estimates the feed without ears could be anywhere between 50% and 70% of the normal nutritional value of silage. Their plan is to mix it with hay and grain from last year until they run out, she said.

Leffler said the grass on their pastures is quickly drying out, just as pasture ponds are. The grass is struggling, and they will be lucky to have another two weeks of grazing even with lower stocking rates.

"The grass is critical right now," she said.

While Casner does not raise cattle, he said cattle producers in his area are really struggling as well. Many of his neighbors who have cattle are already feeding hay as the grass and ponds have dried out. Cattle producers are also pumping water out of wells or tapping into rural water to get water to their livestock.

There is a lot of talk of chopping quite a bit of silage and maybe even baling beans if it comes down to it, Casner said.

On the positive side, the drought conditions have not yet seemed to have damaged soybeans.

"The dry weather hasn't seemed to bother the early beans, they are branching and blooming nicely," Casner said. "Late beans have struggled with emergence as soil moisture has to be 3 to 4 inches below ground at planting."

BETTER IN NW MISSOURI

Conditions in northwestern Missouri are not as dire as they are in more central locations of the Show-Me state.

Bob Birdsell, who raises cattle and crops near Stanberry, Missouri, said his part of the state has been dry in recent weeks, but they were able to catch rains earlier. He estimated they had 5 inches in May and 2 inches in June.

The corn looks pretty good other than some reports of gray leafspot and some pressure from beetles and armyworms, he said. Soybeans also look fairly decent, although on some fields, signs of stress are evident.

With limited rains over the last few weeks, the grass is really not growing much. He recently baled a 55-acre fescue field and only got 95 round bales compared to the 163 bales he got last year.

"I think the hay was shorter this year more due to the cold conditions we had back in April when it was supposed to be growing and it wasn't, than the dry conditions we have seen in recent weeks," Birdsell said.

The coming weeks will be important for the crop of northwest Missouri, Birdsell said.

If rains were to fall (and there is a good chance this weekend) crops could still yield fairly well. However, if it stays dry, then all bets are off.

Birdsell said if it stays dry, many farmers in his area with livestock might resort to cutting silage, a practice not seen very often there. There are some custom choppers in the area and they might see an increase in business, he said.

"I think most anyone with livestock would be willing to cut silage with hay prices where they are," he said. "I have seen anywhere from $80 to $120 for a large bale for mixed-grass hay."

Russ Quinn can be reached at russ.quinn@dtn.com

Follow him on Twitter @RussQuinnDTN

(BAS/SK)