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IOWA FARMING Pros and cons of deferred pricing for grain DES MOUSES SUNDAY REGISTER By ARLO JACOBSON Deferred pricing of 1975 grain is one of the options Iowa farmers may wish to examine as they near the harvest season, according to some state officials. The deferred pricing contract may be available in different forms with the seller's price determined on the buyer's posted cash bid for a given day, or by using Chicago futures market prices and a set basis figure. The NEW Co-operative Inc., serving Vincent, Badger and Duncombe in north central Iowa, offers two options, developed by Bob Wallentine, manager. In one as an example, the farmer sells on a fixed basis of 50 cents under the July futures option. The only cost to the farmer is for the interest he loses. But the farmer is at the mercy of the basis changes, with the basis usually narrowing from harvest time to summer. With this in mind, Wallentine developed a second option in which the current cash price is taken off the board, but the farmer is charged two cents per bushel per month with a minimum charge of 10 cents per bushel. Deferred pricing is relatively new in Iowa although farmers in the South and other areas have been using it for some time. The NEW Co- operative reported handling on a deferred pricing basis about 8 per cent of the corn it bought last year and 3 per cent of the soybeans. Pitfalls Those entering into deferred pricing should be aware of the pitfalls, experts advise. For one thing the farmer gives up possession of his grain upon delivery, and receives only a piece of paper in return. Since the contract is not a warehouse receipt, the seller would lose a preferred position if the elevator should go broke. An Ohio Department of Agriculture official noted that farmers settled for 30 cents on the dollar the last time an elevator went broke in that state. An advantage to the producer could be in the transportation picture, according to Phil Baumel and Bob Wisner, agricultural economists at Iowa State University. Couldn't Movt It They use as an example the transportation crisis of 1973 when farmers were unable to sell because local elevators were full although futures prices were at attractive levels. Elevators in many cases had no way to move the grain on hand and were completely WATERLOO, IOWA OOCMVfKINMN I. J. THOMAS SHOW THE HONNII MIliAF SHOW k. Mk BARNES RCA RODEO ROY ROGERS THE CHARLEY PRIDE *' AND 0*LE EVANS SHOW ANDIPRICE SAL, SEPT. 20 • 2:30 & 7:00 p.m. Doc Severmsen and His Now Generation Brass Featuring Today's Children S5 and S4 SUN., SEPT. 21-2:30 47:00 p.m. Roy Rogers and Dale Evans and The Sons of the Pioneeis •• SSandSI WON., SEPT. 22 -2:30 & 7:00 p.m. Roy Rogers and Dale Evans and The Sons of the Pioneers .. S5andS4 TUES.. SEPT. 23-2:30 4 7:00 p.m. The Charley Pride Show S6 and S5 WED., SEPT. 24 • 7:00 p.m. Barnes RCA Rodeo S4 and S3 THURS., SEPT. 25-2:30 4 7:00 p.m. Barne? -iCA Rodeo S4 and S3 FRI., SEPT. 26 -7:00 p.m. Barnes RCA Rodeo S4 and S3 SAT., SEPT. 27-2:30 4 7:00 p.m. The Anne Murray Show with Special Guesl Star B. J. Thomas S5 and S4 SUN., SEPT. 28-1:00 4 4:00 p.m. The Ronnie Milsap Show S5 and S4 Mail and make check payable to:' .NATIONAL DAIRY CATTLE CONGRESS Box298. Waterloo. Iowa 50704, .tickets (,'rt S each tor (Date) (Time). Send tickets C«> S cadi for (Date) (Time)Enclosed is a self-addressed, stamped envelope and check/money order lor S : . NAME : , ADDRESS PHONE TOWN STATE ZIP Box Office opens Tuesday. Sept. 2. Mail order tickets will be honored first. All tickets mailed after Sept. 1. If tickets in price range you order are sold out, you will be sent best available tickets with refund. General Admission tickets lor Rodeo S2; Charley Pride Show S4; and all other shows S3. On sale at Auditorium Box Office day of show only. No Advance Sale On Genera! Admission. Exchange or refund given only if performance is cancelled. Fairgrounds Admission- Adults St 50. Children (6 thru 11) 75c. under 6 FREE. Auto Parking. 51.50. INQUIRE ABOUT ACCOMMODATIONS _.. Please send information on hotels and motels in Waterloo. Please send information on tiailer and camping facilities. out of the market for days at a time. "If you anticipate transportation problems, the basis sale tends to work to your advantage," Wisner said. In some cases, the seller may obtain advance_paymenL even though he has not sold his grain. Up to 80 per cent of the current value of the grain is paid upon delivery, with the balance collected upon the sale. As in any transaction, deferred pricing offers advantages and disadvantages to both parties. A big advantage to the elevator is that it allows scheduling of shipments. The manager need no longer wait until the farmer decides to sell stored grain. Thus, he can arrange for an even flow of grain and shipping cars. Another advantage of deferred pricing is that it gives elevators access to capital without having to pay interest. Nidging and Contracting With a steady movement of corn and soybeans, the elevator also can take care of more customers, and the deferred pricing alternative. might just bring in customers from a wider area. With immediate selling of unpriced grain, the elevator picks up additional risks of the market working against it, but an astute manager who knows the futures markets can hedge against extra risks. Unhappy customers could be a potential disadvantage to the elevator if the market moves in his favor and against the customer. Wisner suggests that farmers look at the whole range of marketing alternatives available. "Look at hedges and contracting," Wisner said. "If the market is declining, it favors hedging or cash sales, and you shouldn't be locked in on deferred pricing just because it sounds like a good technique." Use lagoon watte in low-cost irrigation project By VERYL SANDERSON ANKENY, IA. - Researchers here at the Ankeny Dairy Research Farm have put a waste holding pond into dual use by using the water for irrigating a hay field. Dr. Richard J. Smith of the agricultural engineering department of Iowa State University designed the system to demonstrate that water from lagoons can be used for irrigation without going to the expense of digging a well. (The Register reported recently on an irrigation well large enough to water 250 acres. The well alone cost $20,000.) "The biggest hangup preventing irrigation systems from being installed is economics," Smith says. "Most farmers just do not want to put out the capital investment it takes to establish a system. « "This concept of using an existing holding pond is one way of cutting the costs/' he says. (Cost estimates on irrigation systems are available from agricultural engineering and economics departments at ISU.) The system* here is a solid- set sprinkler system covering some four acres of ground. The sprinklers are never moved, and are tied into lines of plastic, pipe buried two feet underground. "The sprinklers take up about 12 square inches of space where they extend above ground," Smith says. "They do not pose any great hazard in the field, and they are clearly marked. Automatic "There's a gravel drain at the end of each line through the field so the system can be drained at the end of the season, around mid-October. The plastic piping was found to be the easiest to manipulate and doesn't allow for crysti- zation of materials within the pipe," he says. "This system is set up on a time clock so the operator does not have to continually check the operation. It is KXEL FARM DIRECTOR BRIAN ROBERTS • 25 YEARS FARM LIFE • VIET NAM VETERAN • PRESIDENT, IOWA ASSOCIATED PRESS BROADCASTERS ASSOCIATION • INTERNATIONAL FLYING FARMERS KXEL FARM BROADCAST SCHIDULE: 5:30 AM—COUNTRY FARM FEATURE 6:30 AM — HEADLINE MARKET REPORT 10:30 AM—OPENING GRAIN AND STOCK MARKETS 12:30 PM — HEADLINE MARKET REPORT/FARM, NEWS 3:30 PM CLOSING GRAIN AND STOCK MARKETS PLUS NUMEROUS AGRICULTURAL NEWS FEATURES THROUGHOUT THE DAY The volet of Agriculture XEL Brian Robert*,, Farm Director Hal Hanna, Farm Editor 1540 CLEAR CHANNEL 50,000 WATTS WATERLOO, IOWA "The way to get to Iowa Agriculture" more expensive to install, but it saves labor. "Without the solid-set sprinklers, the operator would have to go back to the field periodically to move the pipeline. "For fields over 10 acres a spray gun is more efficient. For acreages more than, say 50 acres, the operator would likely have to go to a bigger system, such as a center pivot," Smith says. The 8,000-cubic-yard lagoon is fed from the dairy unit where some 300 head of Hoi- steins are held, of which 125 head are milked. The dairy operation has been managed by Bob McCabe for the past 20 years. Water volume from the milking center, including condenser water, ranges from 2,500 gallons a day in the winter to 4,500 gallons daily in the summer. The runoff is carried by gravity flow through cement troughs; yards are cleaned once a month. McCabe says they discovered some problems with the system when it first opened. "We found that the fall of the troughs was not enough for the heavy manure generated from the unit. We also miscalculated the amount of rainfall and had to enlarge the lagoon," he says. Expected mean rainfall at Ankeny is 31 inches a year. Estimating that 0.6 of precipitation becomes runoff, this adds 18.8 inches a year to the lagoon, Smith says. 264,000 Cubie Flit "Also, we found that the aerator has to run continually to dispell odors," he says. Dr. Richard Smith designed the lagoon irrigation system in use at Ankeny Research Farm. "But, these factors have all been corrected." The aerator, located in a silo to catch the wastes after they enter the lagoon, is a three-horsepower unit. "We've really been happy with this," Smith says. "The aerator doesn't freeze up in the winter. If it did, the ice would put the unit out of balance and it would overturn." The milking center contributes some 171,000 cubic feet of water to the lagoon annually and Smith estimates that some 264,000 cubic feet of liquid (including rainfall) must be pumped from the lagoon per year. On the four acre-field, Smith says that the annual amount of lot runoff applied is 18 inches. Another plus factor, he adds, is the nitrogen recovered from the wastes. ."I would recommend segregating human wastes (from the milking center toilets) and use a septic tank and leach field if possible. This would allow omission of the aeration basin. "Also, I'd increase the irrigation area to six acres. This would amount to three acres per 100 cows in the total herd," he says. "Those four acres have really meant a savings for us this year. We harvested hay from the field," McCabe .says. "The first cutting was normal because of the rainfall we received early in the season. But when that dry spell hit us, the other unirrigated fields didn't yield very well. "This field had a stand of hay a foot to a foot and a half high. Around the edges where it wasn't irrigated, the stand was only 6 inches high," McCabe says. "With hay costing (1.75 a bale right now, that's a pretty valuable four-acre yield." See no "organized"opposition to soybean check-off; officials urge aye vote By DON MUHM KeejMlf term •dittr Iowa soybean officials reported last week "no known organized opposition" to a continuance of the statewide soybean check-off, which raises about $900,000 yearly to promote this key farm product. Soybean growers go to the polls Sept. 9 (8 a.m. to 5 p.m.) at county extension offices across the state to vote whether the four-year-old soybean check-off program should be continued. Merlyn Groot of Manson, president of the Iowa Soybean Association, said last week that "a favorable vote (for the check-off program) is crucial." Groot's view relates to expected carry-over supplies of soybeans this fall and in the fall of 1976, with the latter reserves expected to be at a record level, and the need for what he termed "long-range planning in our vital overseas marketing programs." Any soybean grower who marketed a minimum of 250 bushels of soybeans during the past marketing year (from Sept. 1, 1974, through Aug. 31, 1975) is eligible to vote, according to Thatcher Johnson, deputy secretary of agriculture for Iowa. Johnson ^said that growers can cast ballots at any county Time For \ Your $, Y INSURANCE CHECK-UP See us once a year for a review of all your policies. We can tell if your coverage has fallen 'behind due to inflation. Or if you have 'unnecessary, overlapping protection. We can save you a lot of grief. We put things together again insurance FROM FARM MUUJAIS UNITED IN CRINNELL MUTUAL REINSURANCE CO. "GRINNELL, IOWA -^ extension office in the crop reporting district in which they are residents. "If soybean producers are not certain as to what crop reporting district they live in, they can either check with us here at the (Agriculture) department or at any county extension office," Johnson added. Rasults Results of the voting will be compiled by the office of Iowa Secretary of Agriculture Robert Lounsberry, with unofficial results to be announced the evening of Sept. 9. A protest of voting procedures followed the initial soybean check-off referendum four years ago after no pol-~ ling place was established at one southern Iowa county extension office. Johnson said last week that there would be polling places open in all counties this time. A long-time Iowa legislator, State Senator C. Joseph Coleman of Clare, backs a favorable vote in the referendum: "Some of us started work- Ing to get a (soybean) check- off program going in Iowa back in 1963," Coleman related. "Then we finally got the job done in 1971. Look at what has happened since (soybean) exports have increased to where half or slightly more of our soybean production is marketed overseas now. -- livistmtnt "This has done wonders for the -(U.S.) balance of payments, and it has meant additional income for farmers as well. "An investment of 15 to 25 cents per acre (figuring a yield of 30 bushels or more of soybeans) is a better investment for the farmer than what he's spending for fertilizer or herbicides." Coleman's latter statement relates to the fact that the program has been operated at the maximum of a half- cent per bushel checked off for market development and promotion. "Why," he added, "I've put $12 per acre in (soybean) herbicides alone just to have a crop, so why not spend a quarter or less to help sell that same crop?" Groot told a farm audience last week why he favors a vote to continue the Iowa check-off: "Look at what has hap- pened to the U.S. soybean Industry in just the past 15 years," Groot said. ' 1960Prict "We're exporting today just about as many soybeans as were grown in the U.S. back in 1960 or the early 1960's. And what's more we're getting paid anywhere from two to 2.5 times as much per bushel as well." Groot related that in 1960 the average price of soybeans was $2.13 a bushel, and 555 million bushels were produced in the U.S. "Now, we're looking at more than a billion bushels of soybeans with 50 to 55 per cent of this sold overseas," he added. Groot said that soybean growers along with the U.S. Foreign Agricultural Service and co-operating foreign countries have marketing programs in about 17 countries. The American Soybean Association has field offices in Japan, West Germany, Taiwan, Mexico, Belgium and Austria. "And we're thinking about opening up an office In the Middle East oil countries because there is interest in building a bigger poultry industry there, and that means a bigger market for soybean oil meal," the Manson soybean grower added. Soybtan Mial "I understand that the soybean meal market there may grow from 80,000 tons per year up to a half-million tons by 1980, if the oil nations are sincere in wanting to Increase poultry production and upgrade the diets of their people.". Such overseas market development work is "a long- range" proposition which Groot says requires a lot of planning and a continuance of funding. "Iowa has been a leader," he added. "It was the first Corn Belt state to pass a statewide check-off program. Since then Illinois, Minnesota and Nebraska have instigated a check-off program. All told, there are 15 states now where soybean growers are helping to sell their crop through a check-off program that helps finance overseas market development efforts." There is yet another factor, Groot mentioned: "We've got the inflation "problem overseas. It is taking more money these days to invest in market development. That's another reason why we feel this will be a crucial vote Sept. 9 by soybean producers." .What's coming up? ATLANTIC, IA. - Sept. 3. Dedication ceremonies Wayne Feed plant, which is a division of Allied Mills. Tours of plant begin at 10 a.m. STUART, IA. - Sept. 4. Soybean field day at the Eugine Kading farm at 6:30 p.m. Sponsored by the Iowa Soybean Promotion Board and Iowa State University. DES MOINES, IA. - Sept. 4. Beef-swine nutrition seminar at Eddie Webster Motel 8:30 a.m. Sponsored by Thompson-Hayward Co. DES MOINES, IA. - Sept. 7-9. Conference of Soil Conservation District Commissioners at Hotel Savery. AUSTIN, MINN. - Sept. 10. National Barrow Show at the Mower County Fairgrounds. DUBUQUE, IA. - Sept. 1011. Tri-State Ag Days spon- soqpd by the Co-operative Extension Service. Topics are dairying, forage production and cow-calf management. DES MOINES, IA. - Sept. 11. Iowa Grain and Feed Association diamond jubilee convention and industry show at Hotel Savery. Contact the Assocation in Des Moines. AMES, IA. - Sept. 12. Egg Industry Fall Festival sponsored by the Iowa Poultry As- sociaiton at the Ramada Inn. KEOSAUQUA, IA. - Sept. 13. Sheep Empire Day, 9:30 a.m. MOULTON, IA. - Sept. 1113. Moulton Jamboree Days. Contact Robert Harris, Moulton. DES MOINES, IA. - Sept. 18-19. Salute to American Agriculture, sponsored by FS Services, Inc., at Veterans Memorial Auditorium. r.