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.

Grow more. That is your assignment from the marketplace, says IL Extension Specialist Darrel Good, who says USDA’s latest projections for demand and carryover stocks point to the need for large 2008 crops. Wheat, for example, will have the smallest carryout in 33 years, but exports are at a 12 year high, says Good. Read his latest newsletter.

For soybeans, export projections are more than 1 bil. bu., and slightly under last year’s record. The projected crush will set a record, and carryout will be 5% of consumption, which is the least in 35 years. Darrel Good says the new crop needs to be 2.9 bil. bu., and with a trendline yield, that requires 69 mil. planted acres, which is 5.4 mil. more than ’07.

For corn, the export pace is at 15% more than last year, and some foreign crop estimates have declined. Good expects 13.255 bil. bu. to be consumed, which is more than USDA projects and that would reduce exports and livestock feeding. He says to reach a 13 bil. bu. new crop from trendline yield, 92.4 mil. acres are needed, just 1.2 mil. less than ’07.

For wheat, world production is expected to rebound and US exports will decline, but to keep stocks at the current low level, 63 million acres are needed with a trendline yield. That is 2.6 mil. acres more than last year, and with winter wheat seedings up about 1.6 mil. acres, Darrel Good says that implies the need for 1 mil. extra acres of spring wheat.

The acreage battle will increase in 2009 and 2010 says Iowa State Marketing Specialist Bob Wisner. He says corn supplies will remain tight, despite declining soybean acres. Commodity prices will be sensitive to US and foreign weather concerns, and Wisner says grain buyers will stop offering forward contracts for crops beyond 2008. His charts are available here.

Bob Wisner expects grain farmers to find option markets more important than in the past as a means of managing volatility. He acknowledges that options are expensive, but says out of the money strike prices can provide upward price flexibility. Wisner says the basis should strengthen later this year, but that creates a high price risk for livestock feeders.

The early ‘70’s brought a $2 increase in corn prices, and the beef cow inventory lost 8.65 mil. head. But Iowa State’s John Lawrence says that probably won’t happen this time, even though Cornbelt pastures are being planted to corn and Cornbelt states account for 57% of the decrease in beef heifers in USDA’s Jan. 1 cattle inventory. While some pastures are drought stressed, Lawrence says corn is a bigger influence. Read more.

Questions continue to be raised about USDA’s Feb. world crop analysis, and Mike Woolverton at Kansas State notes that no change was made in Brazilian soybean estimates. “Persistent rain in the North of Brazil has increased damage from Asian Rust and has delayed harvest. The South of Brazil has turned dry at a critical time in pod fill. As this uncertainty is reduced by the Brazilian soybean harvest in the next month or so, look for changes in future (USDA) reports concerning the size of Brazil’s soybean crop.”

Woolverton underscores Darrel Good’s call for a large crop, but worries about the US weather, “The drought in the Southeastern US continues and it is dry in the Southern and Western Great Plains. Most people think it is too early to talk about yield impacts. But, we will need nearly ideal weather for crop development this spring and summer for production to satisfy projected demand. Weather scares in spring and summer could cause price fluctuations even greater than we have experienced this winter.”

The wheat market at the Minneapolis Grain Exchange was in a 90¢ trading limit rule, with $1.35 the next limit, if futures contracts continue their volatility. South Dakota marketing specialist Alan May says, “It appears that SD spring wheat producers are anticipating a reduction in spring wheat acres due to better revenue from corn and a compelling argument over the challenge of managing head scab in spring wheat.”

Alan May says, “With the successful transition to more soybean and corn acres in ND, it would seem likely at this point that a growth in spring wheat acres will not occur. However, if wheat prices continue to move higher, there is the likelihood that wheat will be very competitive from a net revenue standpoint.” The MGE contract exceeded $18.

May says the market may break. “The day or days will come when hard corrections will come into this market but the foundation of very tight supplies will likely provide more than sufficient support to keep wheat prices from a free fall to pre-August levels.”

Wrong market signals may be impacting the hog industry warns Glenn Grimes at Missouri. “Unless hog slaughter is sharply lower than now indicated or we have spectacular growth in demand, live hog prices in 2008 are likely to average in the low $40's. Our concern is that the futures market indicated prices may provide signals that the herd does not need to be downsized much, if any, from the current level of production.”

Beware of porcine circovirus, which has been around for 40 years in an innocuous version, but recently has mutated, combined with other pathogens, and is raising the mortality rate 35 to 50%. A Purdue virologist believes it may have originated after combining bovine viral diarrhea virus with other swine viral diseases.

If you don’t like soybean aphids, turn off their salivary glands. That is the finding of Kansas State researchers, who discovered that genetically neutralizing the salivary glands of aphids will shorten their life 50%. They said saliva plays an important role in the damage to a crop, and billions of dollars worth of crops could be saved as a result.

A new corn nematode has been discovered in western TN, which MO nematode experts are comparing as much worse than soybean cyst nematodes. It matures much sooner than SCN, and creates 25% more cysts. It likes sandy soils best, reproduces the best in 81 degree soils, but three out of four will not survive winter soils as low as 18 degrees.

Recent heavy rains threaten the wheat crop say Purdue agronomists, “These very wet soils coupled with the alternating freezing and thawing that has occurred in recent weeks and may occur in the coming weeks, makes the possibility of heaving very likely.

When wheat breaks dormancy, Purdue recommends a topdress. “Assuming that 20-30 lbs. of nitrogen were applied at seeding time, the rate of top-dress nitrogen is directly related to yield potential. With a yield potential of 50 bu. per acre, we recommend 40 lbs. of N as a topdress, at 70 bu/ac we recommend 60 lbs. of N and at 90 bu/ac, 90 lbs. of N.”

Adjust your N application based on prices says NE soils specialist Charles Shapiro, “Nitrogen and corn prices have typically been in the 8-to-1 to 10-to-1 corn-to-nitrogen ratio. UNL nitrogen recommendations were designed to be most economical in that range. With March corn at $5.07 per bushel and nitrogen prices at about 50 cents per pound, the corn-to-nitrogen price ratio is at the recommended 10-to-1 range.”

Nitrogen and phosphorus prices continue to climb, but natural gas prices are not solely to blame says NE soils specialist Gary Hergert. It is really the value of the dollar. “With fertilizer being a worldwide commodity, the US must compete with other buyers. The weak US dollar makes fertilizer more expensive for US producers." The US imports 75% of its urea nitrogen fertilizer. But 25 US ammonia plants have closed since 1999.

“No consistent statistical yield benefits.” That was the outcome of an exhaustive WI survey about the use of foliar fungicides on corn. Without it, there was more stalk lodging but that did not mean yields were less. The agronomists say crop rotation, hybrid selection and residue management should be considered important preventative practices.

The March 15 deadline for crop insurance is quickly approaching, and Kansas State crop insurance specialist Art Barnaby has provided a multitude of historical records about market prices, to help evaluate the necessary decisions. They are located here. However, the corn price chart indicates 23 out of 35 years, prices were higher in the spring than in the fall. For soybeans, the better price was found in the spring in 20 of the 35 years studied.

In case you have forgotten, the Farm Bill remains incomplete, and a Conference Committee has not even been fully appointed to reconcile the House and Senate versions. Knowing the versions are far apart and the White House has threatened to veto both, the House leadership has proposed a 10 year compromise, $6 billion more expensive than the last version. Interestingly, the top USDA leaders say the President would agree to it.