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 World Supply and Demand Report held few surprises this week, and IL Extension’s Darrel Good says the market will be watching other reports. “The markets will continue to monitor the rate of US exports and export sales and anticipate the Jan 12 reports on grain stocks, winter wheat acres, and final 2006 US production estimates. He says, “Following the sharp increase in prices since mid-September, some consolidation would not be surprising over the next 4 weeks. The major issue will continue to be US producer planting intentions for 2007.” That report will be released the end of March.

For March corn futures, Michigan State outlook specialist Jim Hilker says there is a 10% chance that the price will be higher than $4.31 and a 10% chance that the price will be less than or equal to $3.14. That leaves an 80% chance of it being between those two, with a 50% chance it will be on either side of the $3.68 midpoint of that range.

For March bean futures, Hilker says there is a 10% chance that the price will be higher than $7.77 and a 10% chance that the price will be less than or equal to $5.94. That gives an 80% chance it will between, with a 50% chance it will be above or below $6.79. For March wheat futures, Hilker says there is a 10% chance that the price will be higher than $5.61 and a 10% chance that the price will be less than or equal to $4.23. So there is an 80% probability it will be in between, and a 50% chance of being above or below $4.87.

“Learn to live without the LDP for as long as the biofuels market inflates corn and soybean prices,” says Purdue ag economist Corinne Alexander. She says sharpen your marketing skills to maximize profits in volatile grain markets. With large storage returns, storage hedges or forward contracts and early pricing had been a winning strategy as grain prices began to climb. "Now we're seeing prices increase substantially for future deliveries, so waiting to price seems to be a better strategy," says Alexander.

Farmers who missed a price peak can still use other marketing strategies. Purdue University’s Alexander says "Should there be another energy price spike that increases demand for corn again, they can use a sell-and-defend strategy, where you price your grain with a forward contract and then buy an out-of-the-money call."

Should you let your wheat grow or tear it up and plant corn? Nebraska Extension economists created a spreadsheet to help answer that question. They say it appears that tearing out the wheat and planting corn is a good choice on irrigated land, while leaving the planted wheat is the best choice for dryland conditions, (based on Nebraska yields.) They emphasize the need for accuracy of input.

Changing crop rotations requires careful calculations and Iowa State offers an Internet-based calculator to help compare expected yields and returns. Find the calculator. Use of the decision-aid will require your computer to have a recent version of Excel software.

When using the Iowa State calculator, economist Mike Duffy says be sure to use the right soybean yields. “Since 2000, on average, corn yields have been 3.6 times the soybean yields. From 1995, there has been 3.37 bushels of corn per bushel of soybeans, on average.” Read more.

If you sell grain after Jan. 2, evaluate your true savings says Iowa State economist Bill Edwards. 20,000 bu. of corn at $3 is $60,000. A Dec sale taxed at 41% (25% fed, 5% state, & SE tax) is a $24,600 tax liability. A Jan sale means you have that money for another year, and if your operating loan rate is 8%, multiply 8% by $24,600 to calculate a savings of $1,968. However, that must be weighed against additional storage charges.

On the other hand, Edwards says you can’t defer opportunities for deductions and credits. “Be sure to report enough taxable income to take advantage of all available deductions, exemptions and credits. Reporting a very low taxable income in one year may waste these. Meet with your tax preparer and complete a tax estimate before the end of the year, then plan marketing and prepayment of input expenses accordingly.”

Giant ragweed is becoming harder to control, and too much glyphosate may be the reason. Extension agronomists say where a preplant burndown (glyphosate plus 2,4-D ester) was followed with two POST glyphosate applications at 0.75 lb ae/A, the glyphosate-sensitive giant ragweed were 100% controlled, but glyphosate-resistant ragweed were only 88% controlled. They say these giant ragweed populations may not be adequately controlled by herbicide programs consisting of only Roundup.

How do you control glyphosate-resistant ragweed in Roundup Ready beans?
1) Do not plant into the patch, but destroy it with tillage or a pre-plant burndown.
2) Apply PRE herbicides to reduce early-season density and rate of growth.
3) Apply POST treatments when they are 6-10” tall, but consider ALS resistance.
4) Make a second POST application of glyphosate no more than 3-4 weeks after the first.

Congratulations and condolences go to Missouri, the first and only state where three glyphosate-resistant weeds have been identified: tall waterhemp, common ragweed and horseweed. Weed scientist Kevin Bradley said Missouri holds this dubious honor because of the large acreage planted to continuous soybeans, 90% of which are Roundup Ready.

Incoming House Ag Committee Chair Collin Peterson says he wants half of US motor fuel produced by US agriculture, moving toward cellulosic ethanol. He says cellulosic feed stocks such as grass and corn stalks will get a lot of attention in the 2007 Farm Bill, particularly in research funding. He wants a CRP-type program producing the biomass.

Attach a silage cutter into the rear of a combine and you have what Iowa State ag engineers say will not only combine your corn, but chop and harvest your corn stover. Instead of separately harvesting corn and stalks (for biomass ethanol), the one-pass operation only requires a silage wagon pulled behind the combine. They say the more stover you want to collect, the more you have to slow down your combine speed.

Beef producers should see two small positives from higher corn prices, according to Utah State livestock economist Dillon Feuz. He says expensive corn means cattle will not be overfed, and will be marketed early with lighter weights. Secondly, he says corn prices will also impact swine and poultry producers and meat competition will decline.

High corn prices used to cause more pork producers to exit the business than low hog prices, but Nebraska Extension’s Al Prosch says that trend is diminishing. He says, “For the most part, most producers are just beginning to see the higher price of corn as a factor. There are not likely to be any losses of great magnitude though the end of 2006. Next year may be a different story. Hog prices will need to remain in the same range in 2007 as they were in 2005 and 2006 to leave producers with any profit.”

Regardless the livestock specie, any effort to save on feed costs, should be weighed against performance. Kansas St. economists say, “Consider income over feed costs (IOFC) or total cost/cwt of milk (as opposed to feed cost/cwt). As producers consider alternative feed ingredients (such as DDGS) it is possible to reduce feed cost per cwt, but if production decreases, IOFC might also decrease, leading to reduced financial returns.” Read more.

If your tillage program requires more horsepower, IL Extension economist Gary Schnitkey suggests sharing a bigger tractor with your neighbors. “(If) you are pulling the anhydrous ammonia tank with some extra sweeps or cultivation during that tillage, it will be a fairly big tractor needed to do that operation. If several farmers get together and share that tractor, it could reduce costs on those farms that are doing strip till.”

Diversity in hybrid selection is important to your bottom line according to a new Iowa State University website on corn production. Iowa State agronomists say, “If three high-yielding hybrids perform the same across several university test plots, plant only one of them. Yet, if there are differences in genetic traits, maturity, or disease susceptibility, then planting all three of them is a good idea because it spreads your risk and increases the potential for having high yields.” Consult the handbook.

Mark your calendar for USDA’s annual Outlook Forum, scheduled for Mar. 1-2 in Arlington, VA. A major focus will be on bioenergy and its implications for agriculture. Register. Over 100 speakers, including farmers and industry officials will cover dozens of topics, and attendees are never disappointed.

Farm wives, farm kids, and senior farmers are all targeted in a series of farm safety resources and factsheets contained in a new Extension website, focused on farm safety. Farmers who think their family should know the information, should themselves review other factsheets on electricity, mowing, tractor rollovers and many safety rules they frequently violate.