farmgate: Extension Update
Extension Update is a weekly summary of news from Extension, government, and other attributable sources, focused on marketing, farm management, and other issues that are of interest to Midwestern farm owners and operators.
The strength of demand for corn persists says IL Extension’s Darrel Good, which started with ethanol, but has been supported recently by export demand. That scenario implies corn acreage will have to remain large to keep prices “reasonable” for users. Good says high wheat and soybean prices also imply that corn prices will remain high.
Corn exports had reached a 2.134 bil bu. high mark in 2005-06, but are projected at 2.35 bil. this year. And Good says sales are proceeding at a more rapid pace. 58% of the goal had been reached before the end of Nov. Prospects for strong exports result from the likely decline of Chinese exports and continued expansion in world feed demand. Read more of his newsletter.
Ethanol production has slowed, says Darrel Good, when margins diminished in Sept. They have since widened and ethanol prices that were $1.49 in Sept. had been $1.98 in July. The low prices resulted from large supplies and stresses on transportation and storage. He says as long as oil and unleaded gas prices are high, ethanol is profitable.
Speaking of ethanol, Iowa State’s Bob Wisner says plant expansion has not stopped despite poor returns. “Although the time needed to build an ethanol plant has increased from a couple of years ago, nearly all of the plants under construction should be operating within two to two and one-half years. The increased number of plants in the planning stage since late July also is an indication that investor interest in ethanol plants has not completely halted.” Read his analysis.
Wisner’s analysis of the ethanol industry includes his calculation that, “If all planned plants are built, the volume of corn needed just for the processing industry in the state will be 159% of the 2006 Iowa corn crop.” And he says that does not include any requirements for corn feed to livestock, exports of corn, or any other corn processing.
Wheat prices were headed down until Sept. but Mike Woolverton at Kansas State says concerns about dryness in the US and production problems in the So. Hemisphere caused a reversal that has brought prices for hard red winter wheat up 13%. He says wheat fields in SW Kansas and the OK and TX panhandles have been too dry for seedling emergence.
Woolverton’s wheat analysis covers Australia, where he says there is only half of a normal crop. He says in Argentina the flowering wheat was hit by 2 freezes and the government suspended exports until the end of the year. The extent of damage is unknown at this time. Woolverton says demand remains high and world stocks are not going to be filled by the So. Hemisphere crops. He says prices will remain strong.
Nitrogen and phosphorus prices will rise further in 2008 says NE Extension’s Gary Hergert. But he says natural gas in not the sole reason because in some parts of the world it is $1-3/MMBTU, compare to the $7 US price. He says nitrogen demand is up 14% in China, India, and So. America. Also the weak dollar makes imports more expensive.
If you have not booked your fertilizer needs, watch several websites for price trends:
1) The Fertilizer Institute price trends
2) The London fertilizer market
3) Dept of Energy natural gas prices
With a 20% increase in fertilizer prices, monitor its ratio to corn prices. NE economist Hergert says it should be 7 or 8 to 1, which is equivalent to $2.25 corn and 30¢ fertilizer.
1) Credit your residual soil nitrate-N with the help of soil samples 3 to 4 feet down.
2) Set yield goals for application of N. Use your 5-year yield average and add 5%.
3) University research-based recommendations may be lower than commercial labs.
4) Consider replicated strip trials on your farm to evaluate higher and lower rates.
Nitrogen availability cannot be determined in a preplant soil analysis say Ohio State fertility specialists. That can only be done with in-season soil estimates, or a calculation based on probability and estimates. They add, “In a high cost environment, it does not make economical sense to over-apply nitrogen hoping for a greater yield return, when field research reveals only a small chance for a response to high nitrogen rates.”
Nitrogen is one of the most expensive variables for corn, say Purdue agronomists, who quote IN prices from 40¢ to 50¢ per lb of actual N. That puts 180 lbs of N per acre at $72 to $90, and they urge a critical evaluation of material, rate & timing. Read more.
“The bottom line on N use in corn is that we’re dealing with a biological system that interacts with everything under the sun, including the sun,” says Purdue. They add:
1) You can’t predict the weather, nor the N supply throughout the year.
2) You can’t afford (financially or environmentally) to simply apply “more than enough”.
3) You can minimize risk of N loss by understanding placement and timing.
4) You can develop average N rate recommendations that will work in “average” years.
Root pruning by corn rootworms did not always mean yield loss say IL entomologists Kevin Steffey and Mike Gray. Over multiple test plots, the root injury ratings were not the best predictor of yield, but they said treated plots yielded significantly more than untreated plots. Read more.
There are significant questions raised about the way damage by corn rootworms is measured say the entomologists, and they wonder if root-rating is the best yardstick:
1) Even with equal ratings why are there large yield differences with Bt and chemicals?
2) Why would Bt outyield the same isoline with soil insecticides even with more injury?
3) Are rootworm injury rating scales relevant for rootworm Bt corn hybrids? Stay tuned.
Bt corn has made a big difference in reducing the corn borer population say Extension’s Steffey and Gray. “There is mounting evidence to indicate that the widespread planting of Bt corn has reduced the average population of European corn borers over time, and the results from our survey reflect this situation.” (Do you care if the specie is endangered?)
The strong linkage between SCN and SDS in beans means that if you have SDS, you need to check for SCN. Ohio State’s recommended management plan includes:
1) If SCN levels are 200 to 2,000 use an SCN-resistant soybean variety.
2) If SCN levels are 2,000 to 5,000, plant corn, wheat or alfalfa in those fields next.
3) If SCN levels are over 5,000, consider keeping soybeans out of that field for 2 years.
If you have a weed patch immune to Roundup, take note of the analysis of Iowa State weed specialist Bob Hartzler. He says, “The majority of species in which glyphosate resistance has evolved have a relatively high natural tolerance to glyphosate. Simply using labeled rates is unlikely to be an effective resistance management strategy since escapes with these species are likely to occur whenever the environment places them under stress or other factors limit glyphosate efficacy. Effective management of glyphosate resistance will require the use of not only appropriate rate selection, but also inclusion of alternative management strategies and limiting reliance on glyphosate.”
Just like the grain market, livestock market exports are benefiting from the low dollar. Economist Shane Ellis at Iowa State says, “Foreign markets have growing economies, increasing wealth and willingness to pay for US food products; and the foreign consumer’s opinion of beef safety is improving, which builds consumer preference. For poultry, disease has hampered other counties' ability to produce the product.”
But instead of pork exports, there has been an increase in Canadian hogs coming into the US, which theoretically should not happen. Ellis says YTD imports of feeder pigs and market hogs are up 9% and 18%, respectively. From the perspective of a Canadian producer, a weakening US dollar would reduce the cost of feeding pigs in the US, which would increase feeder pig imports. He expects more trade adjustments to occur. Read his newsletter.
Fewer cattle means better prices, say MO Extension’s Ron Plain, “We should have at least a few more months with fed cattle marketings below a year earlier. With continued growth in beef exports, the demand for live fed cattle is expected to end the year stronger than a year earlier. This combination should result in live fed cattle prices in the mid to upper $90s into mid winter.” Read more.
Beer can ears, banana ears, zipper ears, bouquet ears. They are all illustrated with reasons for why they occur on a new Ohio State poster about abnormal corn ears. You can buy a big poster, by sending an e-mail to: pubs@ag.osu.edu or download a small poster.
Posted by Stu Ellis on December 7, 2007 12:53 AM to farmgate