Attorney General Chris Koster says the settlement provides a firm schedule under which modern technology will be installed in hog barns operated by the company, and Koster says the agreement also includes $1 million in voluntary payments by the company. PSF will pay $100,000 each to the local county school funds for the counties of Gentry, Daviess, Mercer, Sullivan and Putnam. PSF will pay a total of $500,000 to the county road funds for the following amounts: Daviess ($90,000), Gentry ($90,000), Grundy ($50,000), Mercer ($90,000), Putnam ($90,000) and Sullivan ($90,000).

Considering the penalties, the Missouri AG is confident PSF will meet the deadlines set in the settlement, $2,000 per day, per barn, for the first 30-days of noncompliance, the penalty goes to $4,000 for the next 30 days of noncompliance and then $6,000 per day for 60 days and beyond of noncompliance.

“Now, no company is going to eat those kinds of penalties when the other option is simply to apply the modern technologies to the barn as required,” said Koster.

Premium Standards Farm President Bill Homan calls the time-line aggressive, but says the company will install the $7.5 million in equipment on time. And Homan says the settlement should finally resolve the dispute which he says put 1,100 jobs in jeopardy.

“I think it is just a great bit of news for our employees and for the economy here in north Missouri,” Homan said.

In addition to the 55 primary counties in Illinois, the list also includes contiguous counties in ILLINOIS, INDIANA, IOWA, MISSOURI and WISCONSIN.

Primary counties in Illinois:

Adams, Cumberland, Iroquois, Madison, Sangamon, Bond, Edwards, Jasper, Marion, Schuyler, Brown, Effingham, Jefferson, Mason, Scott, Calhoun, Fayette, Jersey, McDonough, Stark, Carroll Fulton, Jo Daviess, Menard, Stephenson, Cass, Greene, Kankakee, Mercer, Vermilion, Christian, Grundy, Knox, Montgomery, Warren, Clark, Hamilton, Livingston, Morgan, Wayne, Clinton, Hancock, Logan, Pike, White, Cook, Henderson, Macon, Randolph, Will, Crawford, Henry, Macoupin, Rock Island, Winnebago

Illinois contiguous counties: Boone, Du Page, La Salle, Moultrie, Shelby, Bureau, Edgar, Lake, Ogle, St. Clair, Champaign, Ford, Lawrence, Peoria, Tazewell, Clay, Franklin, Marshall, Perry, Wabash, Coles, Gallatin, McHenry, Piatt, Washington, De Kalb, Jackson, McLean, Richland, Whiteside, De Witt, Kane, Monroe, Saline, Woodford, Douglas, Kendall

Indiana: Benton, Knox, Newton, Sullivan, Vigo, Gibson, Lake, Posey, Vermillion, Warren

Iowa: Clinton Dubuque Lee Muscatine Des Moines Jackson Louisa Scott

Missouri: Clark, Lincoln, Perry, Ralls, St. Louis, Lewis, Marion, Pike, St. Charles, Ste. Genevieve

Independent City: St. Louis

Wisconsin: Grant, Green, Lafayette, Rock

North and South Dakota lead the way with unemployment rates of 3.6 and 4.4 percent, respectively. Nebraska is third at 4.7, followed by New Hampshire and Vermont.  At number seven is Kansas with an unemployment rate of 6.5.  Wyoming is eighth, and Iowa is number ten at 6.8. 

For each state, Business Insider mentions the importance of agriculture to the lower than average unemployment rate.

Meanwhile, USDA’s Economic Research Service reports that the average family farm household income is expected to be up nearly six percent in 2010, to more than 81-thousand dollars.  Both farm and off-farm income are forecast to be higher.

Wednesday show hours will be from 10 a.m. to 5 p.m. and plans are that regular hours will be in place on Thursday, September 2.

Cyndi Young on delayed start

USDA projects net farm income, which declined more than 20 percent in 2009, will be up 29 percent in 2010.  And the agency has raised its forecast for ag exports to 107-point-five billion dollars, an 11 billion dollar increase over last year.

In an interview with Brownfield, Agriculture Secretary Tom Vilsack suggests the rest of the economy could take a lesson from the ag sector.

”I think this is an indication of the way you recover,” Vilsack says. “You keep an eye on debt and make sure that it’s manageable.  You invest in productivity and innovation, the way American agriculture has—and you promote, like the dickens, new opportunities both here and abroad—and that’s what American agriculture does and is doing it very well.”

Vilsack says several factors have contributed to the recovery, including the 2008 Farm Bill, the efforts of the Obama administration—such as the Recovery Act—and, in his words, “the hard work and resilience of America’s farmers and ranchers.” 

AUDIO: Tom Vilsack (3 min MP3)

Link to USDA news release

At the recent ag competition workshop in Colorado, Vilsack cited statistics showing that the spot market for hogs has declined from 62 percent in 1994 to less than four percent today.  And he says trends indicate the cash cattle market is headed that way as well.

 “In 1999, the spot market for cattle was 68 percent.  Today it’s closer to 52 percent nationally and we know, in some parts of the country, it’s less than 30 percent,” Vilsack says. “This thinning spot market is a concern because it sets the base prices in marketing contracts.” 

But James Herring of Friona Industries in Texas, one of the nation’s largest cattle feeding operations, says the cash markets are a very poor method of determining value in cattle—and that’s why they are on the decline.

 “Cattlemen are just getting smarter about determining value for the product,” says Herring, “and believe me, since all our formulas are based on the cash, if the industry ever sees the cash market becoming a poor mechanism for value transmissions, the industry participants will solve the problem—not the government.” 

The president of the Iowa Farmers Union, pork producer Chris Petersen of Clear Lake, Iowa, believes the contraction of the cash market has opened the door to market manipulation by the packers. 

“A hundred-thousand hog a day on the spot market—half of those spot transactions are packer-to-packer.  Isn’t that amazing?” says Petersen. “I’ve really been convinced for a long time that something’s going on here.” 

Analysts say as the use of formula pricing and grid pricing contracts has increased, cash hog markets have declined in importance.  However, they remain an important formula in determining the base price for those contracts.

At the recent ag competition workshop in Colorado, Marquette, Kansas cattle feeder Allan Sents said he doesn’t buy that argument.

“One of the biggest disagreements we have is with the critics of this rule change saying that it’s all about procuring quality cattle,” Sents said. “That has nothing to do with it. The largest supply agreements have had everything to do with supply and controlling that inventory, and nothing to do with quality cattle—and that’s been show by numerous studies and examples.”

AUDIO: Allan Sents (3:30 MP3)

But the man in charge of the fourth largest cattle feeding operation in the U.S., James Herring of Friona Industries in Amarillo, Texas, says alternative marketing arrangements allow producers to get paid for the value they add.

“As sorted as our cattle are, it’s nothing for us to see $400 a head difference in a single pen,” says Herring. “So with that diversity in the herd, calling those animals the same in value is almost laughable.  That’s like saying that all cars out in this parking lot are the same because they’ve got four wheels.  It’s just silly.”

AUDIO: James Herring (9 min MP3)

The National Cattlemen’s Beef Association says new liabilities associated with the proposed GIPSA rule will likely cause cattle buyers to withdraw marketing arrangements rather than run the risk of litigation.

Pork industry economist Steve Meyer of Paragon Economics says limiting the use of alternative marketing agreements would hurt pork producers. Speaking at an NCBA-NPPC forum prior to the workshop, Meyer said the proposed rules would make marketing contracts more expensive to use, which would mean fewer marketing contracts.

“Unlike the people that are proponents of this, I don’t think that means a lot of hogs are going to go back to being traded in spot markets or at the local auction barn,” Meyer says, “and certainly not at the terminal markets, because there aren’t any anymore—and the reason there aren’t any is that they’re costly.”

And Meyer says that will create what he calls “a tremendous incentive for vertical integration—and by the way, I don’t think that the people that wrote this rule are silly enough that they don’t know  that that is what’s going to happen.  Maybe I’m looking a little too sinister at that, but I think they realize that.”

Some supporters of the GIPSA rules would like to see those marketing agreements banned, while others simply want them made public.

AUDIO: Steve Meyer (6:30 MP3)

“USDA, ISDA, Nature Conservancy and the Department of Natural Resources, this is the way we move forward during tough times,” said the Lt. Governor. “You know State government has continued to squeeze and squeeze all we can out of the administration of our services, we don’t want to harm essential services, I consider soil and water conservation to be an essential service, if we want the agricultural industry to remain strong and to protect wetlands as well, we must move forward with these practices.”

AUDIO: Indiana Lt. Governor Skillman (3:05 MP3)

The expansion announced on Friday takes the CREP program in Indiana from 3 watersheds to 11 and from 7,000 acres to 26,250 acres, touching 65 counties.

Julia Wickard, FSA State Executive Director says that with the signing of the agreement, signup is already underway. So what does the CREP expansion mean to Hoosier farmers?

“It’s going to work for some, it won’t work for everyone,” said Wickard. “I think every farmer has to look at it, evaluate it, and decide how they can make it work in their operation.”

AUDIO: Julia Wickard, Indiana FSA State Exec. Director (3:05 MP3)

The first step in the process begins at the local Farm Service Agency (FSA) where landowners can determine whether or not they are eligible for the program, once that is done, the next step will be the Natural Resources Conservation Service (NRCS) who will provide landowners with the technical assistance.

“We have the expertise of the soil, we have the expertise of our standards and specifications for conservation practices, we have that connection with the land,” said Indiana State Conservationist Jane Hardisty. “As a partner of USDA, our role is to provide all the technical assistance that goes directly to the farmer.”

AUDIO: Jane Hardisty, Indiana State Conservationist, NRCS (4:05 MP3)

In his opening remarks, Agriculture Secretary Tom Vilsack discussed what he called “disturbing trends” in agriculture.  He says those trends must not be allowed to continue.

“Because if we do, we’re going to end up with a handful of farmers, a handful of packers, a handful of processors and a handful of grocery stores,” says Vilsack, “and at that point, I think consumers will suffer as well.”

AUDIO: Tom Vilsack (6 min MP3)

U.S. Attorney General Eric Holder says Justice is serious about addressing concentration issues.  He pointed to DOJ’s lawsuit that caused JBS to abandon its efforts to acquire of National Beef.

“This was an important step, but we realize that it was only a small step,” Holder says. “We would like to hear any lingering concerns.  We would like to know what more we can do.”

AUDIO: Eric Holder (6 min MP3)

For her part, the head of the DOJ’s antitrust division, Christine Varney, says the system is broken. “America’s farmers put food on the table for all of us—and there’s something wrong in the system when the farmers can’t make a living—when they cannot pass that farm down to their children,” she says.

AUDIO: Christine Varney (1 min MP3)

The fifth and final ag competition workshop will be hold in Washington, D.C. in December.