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.

USDA’s latest supply/demand report raised feed use and cut carryout for the 2006 corn crop. Chris Hurt at Purdue says that spells market volatility. “This means that the 2.1 bil. ending stocks this year will fade to just 1.1 bil. in a year. This means the corn surplus will be ending and result in higher cash prices, as well as more volatile prices.”

Regarding price, Extension’s Hurt says, “USDA has pegged the average farm price for the 2006 crop to be from $2.25 to $2.65 per bushel. Given crop conditions and weather forecast right now, this is probably too low, with 10¢ to 20¢ higher prices more likely.”

If you have old crop corn, what do you do? Purdue’s Chris Hurt has several ideas:
1) The basis will widen, so consider selling corn now, and on related weather rallies.
2) Store old corn for delivery next winter or in the spring of 2007, as pricing improves.
3) Holding old corn for a 55¢ gain, minus 15¢ storage, is a 40¢ return to storage.
4) If you build new storage at $1.25 per bu., year #1 has a 32% return on investment.

If you have new crop corn, how do you develop a marketing plan? Chris Hurt says the timing is similar, with better prices anticipated next spring. “Given current futures prices, one might expect prices in the spring of 2007 to be about 45¢ higher than at harvest. With 11¢ of interest costs, this means a return to the grain bin of about 34¢ per bushel.

The latest on soybeans, is lower 2006 acreage, and lower ending stocks both this year and next. Extension Specialist Chris Hurt says that helps longer term pricing prospects. But he says returns to storage for beans are not as strong as for corn. “On old crop beans, anticipated returns to storage are about 60¢ per bushel from now until next June. However, interest cost is 38¢, for an expected return of just 22¢ for the grain bin.”

For new crop beans, Hurt says, “In a similar fashion, current anticipated returns for storing new crop beans this fall are about 40¢ per bushel, but subtracting 28¢ of interest costs leaves only a 12¢ return for storage space.” Corn is your storage priority.

What is your soybean marketing plan? Extension’s Darrel Good says the market is trading a 37 bu. crop with the current $6.25 farmgate price. USDA says trendline yield is 40.7 bu. and a 41+ bu. crop would drop average farm prices into the $5.30 range.

Adjust your price targets, since higher energy costs inflate production costs. U of IL ag economists say corn production costs rose nearly $50 per acre between 2003 and 2005. Read their report.
1) N. IL: 44% of the $50 increase is energy sensitive. Fert: $16. Fuel/oil: $6.
2) C. IL: 47% of the $42 increase is energy sensitive. Fert: $15. Fuel/oil: $5.
3) S. IL: 34% of the $69 increase is energy sensitive. Fert: $19. Fuel/oil: $6.

The “aridity index” details heat and rain, and is the best yield guide, says Iowa St. meteorologist Elwynn Taylor, who compared the AI with last year. “Iowa with the exception of north central is as good as or better than on July 4, 2005. MN is as good or better. ND, SD, NE, KS are not as good. Northeast MO is better, but otherwise MO is not as good. IL and IN are better everywhere. WS is better in the southwest and south central but otherwise about the same as in the past year. Over all about 1/3 of the Corn belt has a favorable outlook and the bulk can still swing either way.”

Spotty showers, high heat, and insect challenges mark corn pollination. But Ohio State agronomists say don’t blame your corn for poor pollination. “The amount of pollen is rarely a cause of poor kernel set. Each tassel contains from 2-5 mil. pollen grains, which is 2,000 to 5,000 pollen grains produced for each silk of the ear shoot. Shortages of pollen are usually only a problem under conditions of extreme heat and drought. Poor kernel set is more often associated with poor timing of pollen shed with silk emergence.”

Tired of the beetle battle? “The published economic threshold is 3 or more Japanese beetles per ear before pollination is complete. After pollination is complete, the threat to corn disappears. For flowering soybeans, the economic threshold is 20% defoliation, declining from the 30% defoliation threshold for vegetative-stage soybeans.” Controls include cold winters and windshields. Read more.

You’ve planted rootworm Bt corn, it is being devoured by rootworm adults unphased by its toxicity, and you want to know why! For the long answer, you can read this newsletter. Until then, here’s the short answer:
1) Corn rootworms must eat 75 ppm of the Yieldgard toxic protein for a 50% death rate.
2) Young leaf tissue has 81 ppm, grain has 70 ppm, roots have 39 ppm, pollen has 62 ppm, and silks have 10 ppm. So the silks provide a tasty, but non-lethal feast for them.
3) The average amount of the protein in root tissue decreases from 69.8 ppm to 44 ppm as the corn plan matures from growth stage V4 to growth stage V9.
4) Herculex RW varieties have shown a wide testing range of protein presence.

Western bean cutworm moths are showing up in traps, which is the best way to decide on the potential need for any rescue treatment. But, the moths look like other moths.
1) For more information.
2) For trap data near you.
3) For a moth picture.

It may be the old chicken or egg question, but do you solve a pest problem by reading the label first, then selecting a product, or buying the product first, then reading the label? If you search labels before buying, there are several on-line services that can help. But they all provide different degrees of information, and no one seems to be the best. Learn their pros and cons.

Agronomy Day at the U of IL celebrates its 50th birthday 8/17. Tours start at 7 a.m.
1) Asian rust, wheat diseases, corn rotations, corn nitrogen issues, and plants for shade.
2) The insect tour addresses nematodes, SCN resistance, rootworms and soybean aphids.
3) The weed tour addresses problem weeds, safeners, aquatic weeds, and energy biomass.
4) The equipment tour covers future machinery, roadway hazards, nozzles, and revenue.

Without increased production, Purdue’s Chris Hurt says pork profits should be steady. “Third quarter prices are expected to average in the $46 to $48 range. A transition from high prices in the high $50s in early-July to the mid-$40s by the end of September is expected. For the fall and winter quarters, prices are expected to average about $44. Some improvement is anticipated into the spring of 2007, perhaps pushing prices to an average near $46.”

On the horizon for pork producers, Extension Specialist Chris Hurt says market prices could be affected by the reopening of the Asian beef market, and production costs could be affected by higher corn prices. “It may be time to fill every inch of space with corn as the last of the relatively cheap corn may be available late this summer and fall. With ending stocks of over 2.0 billion bushels, basis levels should be weak and futures premiums for next spring and summer are large. This means that ownership of cash corn from now through harvest will likely pay handsome dividends for hog producers.”

If manure is a feasible alternative to commercial fertilizer on your farm, plan to attend a multi-state seminar on putting manure in the root zone for efficiency. IL Specialists Pete Fandel and Jay Solomon are featured speakers for their work on GPS accuracy and record keeping. The seminar is at St. John’s, MI, July 27. Other topics: manure economics, nutrient management, conservation, and odor control.

USDA relaxed CRP rules to allow grazing where drought has reduced forage in KS, NE, SD, ND, and 6 other western states. Details are at USDA. Farmers in a drought area with alfalfa that had stopped growing are advised by KS specialists to cut it if more than 4 inches tall, but leave anything shorter.

Transition time, a market, and patience are needed, but a Purdue economist studied an organic grain operation and declared it profitable. Corn revenues per acre were $540 to $978. Soybean revenues were $350 to $516 per acre.

IL farmers who renew their pesticide license next winter will pay a $30 fee if they want to participate in the 2 hour review seminar offered by Extension Specialists ahead of the test. The fee, which pays for the trainer, facility, and travel cost, is separate from the license fee paid to the state. Amortize the $30 over 3 years for low cost test insurance.

After complaining to the WTO about US farm subsidies, Brazil is distributing over $400 million to its soybean farmers to bolster sagging prices. Total price supports this year are at $1 bil. in a program parallel to what Brazil and the WTO shamed the US for doing.

You produce it, but before food gets to the consumer, USDA inspects it, and food inspection observed its Centennial recently, with the 100th Anniversary of the Federal Meat Inspection Act, fostered by a literary expose on the meat packing industry. Trace the progress.