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 January corn crop numbers are now history, but what were the changes besides cutting production and carryout? IL Extension’s Darrel Good offers his weekly analysis.
1) The Nov to Jan cut in the US yield estimate was the 2nd largest in the past 32 years.
2) The corn export forecast of 2.250 bil. bu. is a 17 year high, based on good sales so far.
3) The feed use estimate of 5.975 bil. bu. is a 3 year low, caused by higher corn prices.
4) Prices will have to average $3.50 through Aug. to reach USDA’s price projection.

Iowa State’s outlook specialist Bob Wisner says corn demand keeps surpassing supply. “Revised production data still show the second-highest US corn yield on record in 2006, with a US average yield of 149.1 bu. per acre. Even so, the crop was 1.3 to 1.4 bil. bu. below potential market demand. This is the 2nd consecutive season that production has fallen short of market demand. The ‘05 US crop was about 200 mil. bu. below total use.”

Most of the production-use gap this year can be filled by drawing down the large beginning carryover stocks to minimum levels needed for normal operations from August 31 until new-crop supplies are available, says Bob Wisner. “However, the market will also need to ration away about 200 to 300 mil. bu. of demand through higher prices.” Read his newsletter.

The corn demand results from ethanol, and Kansas State’s Mike Woolverton asks how many more acres are needed. “Each new ethanol plant will add about 37 mil. bu. to corn demand per year; and an average of one new plant is coming on line each week. To meet all needs will require production of about 11.9 bil. bu. of corn in 2007. In order to do that, assuming trend line yield, US producers need to plant about 10 mil. additional acres of corn this spring. Read more.

For wheat producers, Woolverton says, “The wheat market faces a dilemma. If wheat price remains high, export demand will be choked off, but if wheat price does not remain high, wheat acreage will shift into corn or soybean production.” He says the USDA did confirm market expectations of a 9% increase in winter wheat acres.

If 10 mil. more acres of corn are needed, where will it come from? Iowa State’s Wisner says other crops will have to make way, such as oats, hay, and pasture, as well as beans and wheat, which saw a sharp rise in fall 2006 planting. Wisner says half of the Cornbelt CRP acres may be converted to corn and bean production in the next few years.

The January bean crop numbers are also history, and Darrel Good offers his analysis:
1) Though lower than the Nov estimate, the 3.188 bil. bu. crop is a record for the US
2) The export forecast was cut from Nov. but the 1.12 bil. bu will set a record.
3) Prices will have to average $6.50 through Aug. to reach USDA’s projection of $6.10.
4) 2007 bean acres could crop by 10 mil. and still maintain carryout stocks over 250 mil.
5) If Mar 2008 bean futures remain near $7.70, Brazil will significantly increase acres.

The strength in the bean market has come from meal in the past week, says Bob Wisner. But he says, “It is questionable how much further strength is likely in soybean meal, with competition from DDGS and tighter profit margins in poultry and hogs.

Soybean rust may be more of a 2007 threat, than in prior years, says USDA plant pathologist Glenn Hartman at the U of IL. “The situation has changed enough that soybean growers will need to be on heightened alert during the early part of the growing season." Hartman says rust has stayed in FL, AL, & GA the last two winters, but it is now spending the winter in LA, where weather will bring it up the Mississippi River.

A hard freeze or a dry spring could keep the rust in check temporarily, but it currently is residing on kudzu in areas of LA more north and west than in prior winters. Glenn Hartman says rust building up early in the spring in LA, AL, & MS will mean that chances will go up considerably that the Midwest may be reached by the disease.

Soybean producers should check websites: www.sbrusa.com and www.soybeanrust.org regularly for information about the spread of Asian Rust. “When the map begins to light up in northern KY and AR and southern MO. When that happens, they can begin to take appropriate action based on their own risk tolerance." He says there will be time to react.

The difference between 80 bu. and 183 bu. was use of a Bt rootworm hybrid at the IL research facility at Monmouth, says Extension’s Emerson Nafziger. He says the soil was dry, the soil insecticides didn’t seem up to the task of protecting yields in dry fields of corn after corn. More normal weather at the Urbana test site allowed only a 15 to 25 bu. difference. Nafziger says in dry soils stress of corn after corn is magnified. Results from the crop yield trials.

Manure management will be easier after attending one of two Midwestern conferences focused on facility construction, manure application, EQIP funding, odor control and system safety. Sessions will be 3/13 in Effingham, IL (I-57 & I70) and 3/15 in Princeton, IL (I-80). Get conference information.

Many producers will be surveyed between late Jan. and early Mar. for USDA’s annual Agriculture Resource Management Survey. Nearly every federal policy is based on the ARMS survey, which asks about operating expenses, production costs, and households.