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.

Monday will be busy at USDA’s lock up with the Prospective Plantings Report and the Quarterly Grain Stocks Report. IL Extension’s Darrel Good analyzes them in his weekly newsletter.

The market is expecting a forecast of 87 mil. acres of corn and 70-71 mil. acres of soybeans. Darrel Good says, “That estimate compares to 2007 acreage of 93.6 mil. and 63.63 mil., respectively. Intentions for spring wheat are expected to exceed 2007. The planting intentions estimate will provide a benchmark for anticipating actual plantings.”

6 mil. acres shifted last year after the report says Good. “Recent price changes that include much lower soybean futures and an extremely weak new crop soybean basis have shifted potential profitability significantly in favor of corn over soybeans in much of the Midwest. At the same time, generally cool and very wet conditions in some areas may lead to anticipation of corn planting delays and a swing to more soybean acres.”

Purdue’s Chris Hurt agrees with Darrel Good, saying there has been a reversal in new crop futures. “During the last three weeks, market prices for corn have actually increased the incentive to raise corn as soybean prices dropped more sharply.” He believes the report will be bullish for corn with surprisingly low acres with a resulting corn rally.

It will be the opposite for beans, says Hurt, who believes there will be so many bean acres forecast by USDA that it will be a bearish report for soybeans. “The markets and the financial incentives provided by the grain prices, as well as the costs are very dynamic. Producers have some tough decisions to make this year, but they need to take a step back and make the best decisions they can.” He recommends planting more corn.

The USDA survey was taken about March 1, and Hurt says at that time new crop soybean futures were peaking at $14.66, but since then beans have collapsed more than has the corn market, and there has been a reversal in new crop futures.

Also Monday is the Grain Stocks Report, which will detail the actual feed use in the past 3 months. The December report pointed to record feed use, and Monday that trend will either be confirmed or prior estimates adjusted. Good expects corn use about 4% more than 2007 levels, helped by the large livestock herd and growing ethanol refining.

USDA wraps up this week with the Quarterly Hogs and Pigs Report, following Friday’s market close. The December report indicated the pig crop was 4% more than the prior December, pointing to a large feed demand this spring. The forecast could have a significant impact for both corn and hog prices, if hog production remains strong.

Has your elevator quit offering forward contracts? Many have backed away from routine marketing tools because of margin calls and high loan levels to service their CBOT hedges in a volatile market environment. That leaves producers to manage their own price risk with futures contracts, but that requires substantial margin money also.

It leaves a lot to be desired, but MO marketing specialist Melvin Brees says an option strike price minus the premium cost will lock in the bulk of a forward contract, then use a basis contract at the elevator to manage the balance of the price risk. He acknowledges that the expensive premiums and weak basis bids won’t come near lofty futures prices.

The combination of buying and selling options may help manage price risk at a lower cost, but Brees says you should understand that risk is not eliminated, and selling an option incurs a futures obligation that could be exercised by the buyer. Read more.

There is a 72% chance of corn yields being under the trendline this year says Iowa State meteorologist Elwynn Taylor. He says the La Nina weather pattern may have peaked, he’s not sure, but he says the crop yield risk for 2008 is still very real. Taylor says the chance for a sub trend yield is 72%, but only 60% if La Nina fades before June.

Continuous corn tillage research compared a coulter chisel plow with either deep tillage shanks or a mini-moldboard plow at the Northern IL Agronomy Research Center. The more intense tillage produced an average 207 bu. compared to the 204 for the coulter chisel plow, reports IL Extension agronomist Jim Morrison in the 2005-2007 study.

Continuous corn fertility research reported by Morrison resulted in a 208 bu. average yield with more intense fertility, which included 320 lbs. of N, 172 lbs. of P, and 270 lbs. of K. Compare that with a 203 bu. average yield from 220 lbs. N, 92 lbs. P, and 150 lbs. of K. The cost of the additional nitrogen would have been more than the value of 5 bu.

Continuous corn population research at the Northern IL Agronomy Center compared 32,000 with 40,000 plants per acre. Results indicated the higher population yielded 206 bu. compared with 205 bu. per acre for the lower population. Comparing all three trials indicates that inputs for continuous corn do not need to be different from rotational corn.

With more stacked trait corn being sold this year, more refuge acres will be planted. IA State entomologist Jon Tollefson says the 20% acreage refuge should have been planned by now. “The refuge must be grown the same way the Bt rootworm corn is; that is if the rootworm corn is corn on corn, then the refuge must also be continuous corn. If the rootworm corn is rotated corn, the refuge should also be corn grown in rotation.

Accurate records will help you avoid federal penalties or falling profits, says IL Extension’s Dennis Epplin. He says troubleshooting problems are easier with reliable records about EPA registrations of restricted pesticides used on specific fields, as well as fertility levels, yield maps, planter settings, tillage, weed maps, and herbicides used.

An IL natural resources economist has a dim view of ethanol production and policy. Madhu Khanna says federal energy policy takes corn away from the export market, and the additional corn production comes at the expense of wheat and beans, which are also needed in food exports. She says corn-based ethanol reduces carbon emissions only 15-20% per gal. relative to gasoline, (but) energy crops could reduce emissions by 80-90%."

No-till fields need to be clean says Iowa State weed specialist Bob Hartzler, and first identify the weeds. Then:
1) Winter annuals are easier to kill now in the vegetative stage, before going to seed.
2) Kill the weeds 10 days before planting to avoid damage to your crop.
3) Adding 2, 4-D to glyphosate improves the consistency of control on many annuals.

What is your weed control program for corn? MO weed specialist Kevin Bradley has evaluated 37 different trials over the past 5 years. “In 64% of the trials, the highest corn yields were obtained with a 2-pass program consisting of a pre-emergence herbicide followed by a postemergence herbicide. A 1-pass postemergence program that also contained a residual herbicide provided highest corn yields in 29% of the trials, whereas in 7% of the trials a 1-pass pre-emergence herbicide program provided highest yields.”

Planting may get blamed for compaction problems this year according to a Purdue specialist, who says the cool wet conditions leave the soil at risk of compacting with minimal fieldwork. Corey Gerber says that restricts root growth, jeopardizes moisture and nutrient uptake, and can bring on diseases and insects as seed sits in the cold soil.

Going to the field before the soil is ready can be costly in terms of having a good crop this year, say soil specialists at Iowa State. They say that saturated soils make it too wet for suitable working soil conditions. Other problems include soil compaction induced nutrient deficiency such as potassium, root development and ultimately yield reduction.

Soil compaction can occur during any field operation, even wintertime manure spreading or spring anhydrous ammonia application. Under wet conditions, the use of heavy equipment can significantly change soil structure and cause soil compaction. Operating in wet conditions and especially doing extra tillage will increase fuel use per acre as well.

Do you really understand the reason for high fertilizer prices? WI soil scientist Carrie Laboski says the main reason is that fertilizer is a world commodity and demand is up:
1) Demand for N, P, & K are up 14%, 13%, and 19 % respectively from 2001 to 2006
2) US producers have to compete with farmers from China, India & Brazil for fertilizer
3) US nitrogen demand is higher because of the 15 million acre increase in corn in ‘07
4) We import 50%+ of N, 90%+ of K, but we are the largest exporter of phosphate.
5) The weak dollar increases the cost of good imported into the US.

For several years IL agronomists have grown soybeans in an atmosphere that resembles the high carbon dioxide atmosphere 50 years from now. The purpose was to create high yielding soybeans. An offshoot of the research found that insecticides will need to be developed also. It seems the high carbon dioxide air grows more and bigger bugs.