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.

Corn market volatility continues says Extension’s Jim Hilker at Michigan State. “December 2008 corn futures made new highs of $5.90 before going back as low as $5.43. And we haven't even gotten to the growing season. Get used to it, if you want to do some pricing you will need to be ready.” Read more.

Hilker says the Prospective Plantings Report will keep the soybean market on its toes. That report will be released on March 31. With US carryover stocks only at 140 mil. bu., Hilker expects USDA to forecast 71 mil. soybean acres in 2008. He says with expected soybean use that will only leave 149 mil. bu. for the 2008/09 marketing year carryout.

Soybean oil prices have plummeted, and IL Extension Marketing Specialist Darrel Good is not surprised, believing they have been overvalued, even in the wake of strong demand and declining stocks. He says soy oil prices will be heavily influenced by 2008 world soybean crop, and the soy oil market will watch forecasts for US soybean acres.

Darrel Good says the high price of soybean oil has impacted biodiesel production. He said soybean oil use in biodiesel production was 469.4 mil. lbs. in August 2007, but only 318.8 mil. lbs. in January. And USDA expects 2008 conversion of soybean oil into biodiesel will not grow from 2007 levels. However, global consumption of soy oil is up, and Good says China will use 14% more soy oil this year than last, 29% more than 2006.

La Nina will likely remain moderate through May and weaken in July, says Iowa State meteorologist Elwynn Taylor, “Possibly influencing North American weather until December. This outlook includes a slightly greater than usual chance of below normal precipitation in July.” He says odds favor a below trend corn yield this year.

Cycles can give a good insight to the weather if you watch what Elwynn Taylor does:
1) The 30 year wet/dry cycle will give us drier times for the next 20 years or so.
2) The peak of the 89 year warm period should be reached in 2025, then cooler years.
3) The 20 year harsh winter period has just begun, compared to milder since the 1980’s.
4) This year was a peak (of a sawtooth pattern) for cold air intrusions into the Midwest.
5) Changes in the short cycle events (7-42 days) have bigger seasonal impacts.

Analyzing your 2007 production costs, you probably found an 8% to 12% jump in corn production costs, and a 7% to 17% rise in soybean production costs. Those were ranges for IL farms from the top to the bottom of the state, with “The non-land interest cost per acre being one of the items that increased the most due to higher grain inventory values and more capital investment into machinery,” says IL ag economist Dale Lattz.

$542 per acre was the total cost to produce corn, averaged across IL. Economist Lattz says, “Variable costs increased $22 per acre, or 10%, other non-land costs increased $21 per acre and land costs increased $11 per acre. In 2007, cash costs accounted for 44% of the corn production cost, other non-land costs were 30%, and land costs were 26%.

$418 per acre was the total cost to produce soybeans, averaged across IL. Lattz says, “Variable costs accounted for 32% of the total cost of production for soybeans, other non-land costs 34% and land costs 34%.” His newsletter gives details for 1,559 farms.

2008 crop budgets prepared by MO Extension economists show substantial returns.
1) 155 bu. dryland corn has $534.42 total cost, and $773.65 gross revenue at $4.90.
2) 200 bu. irrigated corn has $690.03 total cost, and $994.15 gross revenue at $4.90.
3) 50 bu. soybeans has $343.79 total cost, and $545.15 gross revenue at $10.80
4) 60 bu. wheat has $352.43 total cost, and $554.15 gross revenue at $9.00

Other than cash rent, your biggest per acre investment will be fertilizer; so what is your thinking about cutting back to save on expenses, or pouring it on to maximize yield and revenue? NE fertility specialists say one place not to cut back is on soil sampling. Because of increased fertilizer costs, the relative cost of an accurate fertility measurement is only 52¢ per $100 of fertilizer expense this year, compared to 88¢ per $100 in 2006.

Using the example of a 140A center pivot irrigated cornfield, the NE fertility specialists said using 30 lbs too much N would waste $2,100 on the 140 A field. Using 50 lb. too little N below the recommended rate would cut yield by 15-20 bu. per acre and reduce income on the field as much as $14,000. They stressed using the on-line nitrogen calculators which make recommendations based on crop prices and nitrogen costs. Find a calculator here.

That 20% non-Bt refuge applies whether you are planting YieldGard, Herculex, or Agrisure. However, the rules vary for refuge placement depending on the insect.
1) For corn borers, the refuge can be inside, adjacent, or within one-half mile of the Bt.
2) For rootworm, the refuge has to be in the same field or adjacent to the Bt field.
3) For stacked hybrids, Ohio State recommends a common refuge in or next to the Bt.

Your planting options for the non-Bt refuge are numerous. Adjacent fields can be separated by a ditch or a road. Internal refuges can be a block, a strip alongside the field, or split rows with your corn planter. The stewardship of biotechnology is a priority for researchers and NCGA. But don’t forget that you are urged to use traditional insecticide tools in the refuge.

Asian soybean rust is alive and well in the sunny southland and preparing for its return to the Midwest with the rest of the snowbirds. The national Asian Rust website is here. Among the latest findings about ASR:
1) Rust overwinters on kudzu, but populations are reduced each year and must rebuild.
2) Kudzu can suffer from drought, so rust population depends on local moisture.
3) Asian rust survives further north than was previously predicted.
4) Rust has survived on kudzu further west in LA and TX than in prior years.
5) More efforts have been made to track rust in Mexico than in prior years.

Beef exports are growing, and NE livestock economist Darrell Mark says thank the low value of the dollar, which is curtailing beef imports as well. January tonnage was 35% over January 2007. January beef exports to Canada were up 89% and up 15% to Mexico. Exports to Japan and Korea, the largest customers prior to 2003, continue to lag.

Lock in those futures prices, say MO livestock economists Glenn Grimes and Ron Plain, “With pork production in 2008 likely to be up between 5-6%, we expect live hog prices negotiated in Iowa to average between $41-44 per cwt. The lean hog futures price in mid-week was offering a live price in the mid $50 per cwt for June 2008 through April of 2009. The odds are very high that the demand for live hogs will not grow enough or slaughter declines enough to get close to the prices currently being offered for hogs by the futures market in the coming year.” Read more.

Dairymen should not skimp on feed, then suffer a revenue loss, says IL Extension Dairy Specialist Mike Hutjens, “By reducing feed intake by one pound of dry matter, for instance, you may save 10 cents but lose 36 to 40 cents a day in milk income."
1) Fuzzy cottonseed may be expensive, but it has functional fiber and slowly releases fat.
2) Replacing forage with straw reduces total dry matter intake, and cuts milk yield.
3) Cutting back on hay reduces rumen digestion and microbial growth.
4) 3-5 lbs of hay yields 5 lbs of milk, so if milk is 18¢/lb, hay is worth 11-18¢/lb.

Spring wheat may have been the major crop in your area in the 1800’s and early 1900’s but it has risks in the Cornbelt today compared to other crops. Concerns to address are adaptation, variety, type of soil, fertility, rotation, planting rates, etc. Iowa State has a new guide for spring wheat here.

Does this describe you? “University agronomists and county ag professionals, along with many crop consultants and professionals, have all noted that many producers are spending less time choosing varieties and hybrids, less time scouting and walking fields, not testing the soil as often as needed, failing to rotate crops, not paying attention to crop disease control, not harvesting in a timely manner, and overlooking other basics that are sure profit generators.” Ohio State’s crop checklist is here.

Build your library to more quickly identify crop problems and find solutions. The following manuals and reference guides can be ordered.
1) 2008 Illinois Agricultural Pest Management Handbook, a comprehensive guide.
2) Field Crop Scouting Manual, covers pests, injuries, nutrient deficiencies, etc.
3) Pocket Guide to Soybean Diseases in the Midwestern U.S., covers 24 diseases.
4) Field Guide to Corn Diseases, covers 50 different diseases and abnormalities.