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May 16, 2008
Extension Update
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 2007 Farm Bill has been approved in Congress by a 318-106 vote in the House and an 81-15 vote in the Senate. It awaits the expected veto by President Bush, however, the plurality of the votes indicates the likelihood of an override of the threatened veto.
Cornbelt farmers will find familiar programs in the new legislation that renews direct payments and marketing loans. However, beginning with 2009, farmers will have the option to replace those with a safety net program that calculates state-based yield data and a two year national average price to generate a revenue type of payment.
The new Farm Bill is more of a food bill, since over half of the $280 bil. will be for food stamps, school lunches, and other public feeding programs. It also contains extensive programs for soil and water conservation, as well as a permanent disaster program. 577 farm and consumer groups jointly lobbied Congress to approve the 2007 Farm Bill.
New crop prices are expected to be higher than in the past year, based on estimates from USDA contained in last week’s May Supply and Demand report. The price range of corn rises to $5 - $6 from $4.10 - $4.40 for the old crop. New crop soybeans will range from $10.50 - $12, compared to $10 for old crop beans. New crop wheat will be $6.60 - $8.10.
But IL Extension’s Darrel Good says the market’s nervousness of production prospects has pushed prices into the upper part of the price ranges. For example, he says USDA’s 153.9 bu. national corn average is higher than trendline yields, and still only leaves 763 mil. bu. in ending stocks. He also hints that feed demand may be underestimated. His newsletter is here.
Soybean prices, says Good, are clouded by yield and acreage uncertainties. Delays in bean planting could lead to reduced yield in a year USDA is projecting a larger than normal jump of 0.9 bu. in the national average yield. He says the domestic crush is expected to reach a record amount, exports are quite strong, and he says USDA is forecasting an increase in soybean meal consumption, but less overall feed use.
USDA’s corn estimates last week caught the eye of Mich. State ag economist Jim Hilker, who said, “There was only one change to the US corn 2007-08 estimates, but it is significant. The USDA lowered the corn used for ethanol estimate by 100 million bushels, 3% of the total, but a 10% reduction in the 2007-08 projected increase. It appears that there has been a bit of a slow down in both plant completions and capacity use. This makes sense with the lower, yet still profitable, returns. They decreased the use and increased estimated ending stocks by 100 million bushels, a bit extra for next year.”
Is La Nina history? Elwynn Taylor at Iowa State says its indications are fading, but there is still a 33% risk of a Cornbelt drought. He says the La Nina sets the stage for hot and dry weather, but the risk fades as the La Nina factors fade. He adds, “The drop in soil temperature from the 60s to the low 50s last week is not desirable for the health of plants as disease often gets the advantage when soils cool early in the life of a plant.
Ohio State meteorologist Jim Noel says even with a La Nina, at least the topsoil and subsoil will be fully charged with moisture. He’s expecting “Below normal temperatures and near normal rainfall with frequent light to moderate rains can be expected the next 2 weeks. It appears a warmer and drier pattern will close out May into early June.
If your corn has been in the ground for 2 weeks, Extension’s Emerson Nafziger is not surprised it has not emerged. He says corn needs 110 to 115 growing degree days, and corn planted on May 1 may not have accumulated enough GDD’s yet. If the shoot is near the soil surface, it should progress, but unsprouted seeds should be considered dead.
Seeds in a saturated soil may not be growing very fast, since they need oxygen, and that is going to be in short supply in a saturated field. While cool temperatures are beneficial in slowing development and keeping the seed alive, Nafziger suggests that farmers be ready to replant all or parts of fields that have stayed very wet since the initial planting.
Fungicides are not an automatic bridge to higher corn yields says OSU agronomist Pierce Paul. Reasons for the wide variability escape researchers, and he’s recommending on-farm research on a couple strips through the field, rather than the whole field. He seems to think the yield benefit comes only when the corn is drought-stressed.
Think about what you are doing says Iowa State ag engineer Mark Hanna, if you are tempted to use shallow tillage to clean out a weedy, but wet field prior to planting. He says wet soils may slab into large blocks or clods and require even more tillage. And he says that also adds random wheel tracks that compact the soil, hurting root growth.
Soybeans respond to early planting, but Iowa State’s Palle Pedersen says that is moot at this point. Soybean yield is being lost day by day, but do your soybean crop a favor:
1) Mudding-in beans causes compaction and outweighs any early planting benefit.
2) With poor seed quality, stress on the seeds can result in higher than usual mortality.
3) Warmer and drier soils give faster emergence, reducing time in the soil for the seeds.
4) Apply a fungicide for Pythium, if you have to plant in cold wet soils.
5) Plant your highest productive fields first, to minimize financial loss from delays.
6) Planting into weed-free fields, and timely weed management also minimizes losses.
If you need to justify your delay in planting soybeans, get some advice from Purdue agronomists Ellsworth Christmas and Andrew Robinson. Christmas says the later planting will benefit the fragile seed coat, since it will not have to sit in the ground too long. Robinson says his recent research shows that with late planted soybeans, the yields might decrease 1% or more per day, but protein content rose with later planted beans.
Wheat trying to grow in saturated soil does a poor job with root development says IL Extension’s Nafziger. As a result, nitrogen uptake has been minimal, and that may cause the pale-colored wheat, along with minimal sunlight. He says the nitrogen may have been moved by the water to beneath the zone where the wheat roots are trying to grow.
If you are a bug, you probably don’t like raindrops. And despite the incessant rain, one of its benefits may be reducing the numbers of insects that would ordinarily be rapidly multiplying at this time of year. IL Extension entomologist Kevin Steffey says aphids and other small insects seem to be reduced in number and not liking the weather. But he says to continue scouting for armyworms and cutworms, which are grounded anyway.
White grubs in your corn could be one of four different species, and may or may not have an economic impact depending on the specie. IL Extension entomologist Mike Gray says your concern should be the cool, wet weather which slows growth of corn seedlings, and that gives grubs more time to cause damage if that’s what they do. Check the identification patterns.
Is your problem big weeds, which you know will probably escape cultivation? Healthy roots can be tough to sever, says OSU agronomist Mark Loux.
1) If using both tillage and herbicide, apply the chemical 24 hours ahead of tillage.
2) Glyphosate is the most logical choice of an herbicide treatment prior to tillage.
3) Gramoxone can be used, but is going to be less effective on larger weeds.
4) Avoid 2, 4-D or dicamba ahead of corn, since tillage will spread it into the root zone.
You can hedge a bit, and plant switchgrass now for forage or conservation, and you’ll have a good stand, just in time to deliver to an ethanol plant accepting biomass feedstock. IL Extension’s Dennis Epplin says it is a warm season grass, planted at 4-6 lbs per acre in April or May, but it will take 2 years to become fully established producing 7 T per acre.
You may not be ready to switch completely to sustainable agriculture, so Iowa State researchers are suggesting a partial step to low external input farming that reduces energy use in agriculture, but utilizes some fertilizers and pesticides. They found that a four year rotation exceeded conventional agriculture in yield, weed suppression, and profitability. Read more.
The export market wants pork, but transportation is a problem, believe Glenn Grimes and Ron Plain at MO Extension. Their sources say a shortage of ocean shipping containers is slowing down pork exports. And they say that is confirmed by the fact that cold storage stocks set a record high price at the end of Feb., and was broken in March.
Futures prices are the carrot on a stick for cattlemen, and economists Grimes and Plain say that is causing longer stays in the feedlot. “Even with the high price for feed, the average weights of fed cattle in recent weeks are about 20 lbs. heavier than a year earlier. About the only rational reason why cattle are being fed to higher weights with the current losses is that the futures markets continue to climb. With higher prices just around the corner, feeders decide to hold cattle for another week after they are market ready.”
Posted by Stu Ellis at 12:54 AM | Comments (0) | Permalink
May 15, 2008
Are You Doing The Best Job Possible With Marketing, Or Could You Use Help?
Grain prices are higher than you ever imagined when you began farming. How can you go wrong with $5 corn and $13 soybeans? But should you wait for higher prices? Did you sell when soybeans were pushing toward $15? Was your corn unloaded in the $3 range? Are you still holding your entire old crop and wondering how to manage the price risk of the new crop? Would a marketing advisory service help you sleep better at night?
The past several years have taken us from picking the low points in the market and claiming loan deficiency payments to trying to find the highs in a fairytale marketing scenario where everyone lives happily ever after. Extension economist Bob Wisner at Iowa State University wonders aloud if you need a marketing advisory service. Being in a highly volatile price environment is a challenge for the best market watchers, but you have to be concerned about the financial health and profitability of your farming operation. All of the time demands on your management allow little chance to manage your marketing risk.
Wisner suggests your average your grain sales over the past several years, and compare that to your state average, which is available from USDA. Any shortfall on your part could mean the need for some help with marketing. Some farmers can make their own improvements if extra time was available, but others would benefit from the assistance of an advisory service.
But that is not a step made lightly. Clients of advisory services need a good marketing background and familiarity with cash and futures markets and the tools that are used. Since many of the services use buy and sell signals, a client should have some knowledge of commodity price charts. And the client must be prepared to act on a moments notice.
The advisory service can help accumulate information that provides an advantage, but will not sell your crops for you and should not be expected to hit the market highs year in and year out. Their objective is to recommend sales above the market averages and at prices that will be profitable.
What should you expect from an advisory service?
1) You will probably receive a weekly newsletter with charts and advice that might be separated for cash only farmers, conservative hedgers, and advanced hedgers and option users.
2) Newsletters may have significant information about chart patterns, technical analysis, and a wide range of tools that describe price action. Such information may also contain details on market fundamentals such as supply and demand.
3) Some services provide telephone or e-mail information and allow clients to speak with advisors on a limited schedule.
4) Some services will also hold seminars around the Cornbelt that provide more intense information and educational sessions on the use of marketing tools.
5) For a higher fee, the service may take over your marketing, and manage your sales with your local elevator and even manage a futures trading account in your name. That service comes at a much higher cost, but also requires monitoring by the client who needs to remain comfortable with such an arrangement.
The promotional material of the marketing advisory services indicates that each is the tops in the business, but you need to be able to judge one from the other. Their performance was rated for many years by the University of Illinois. The University of Illinois ratings were based on a benchmark system, and compared the net prices received by the service to the benchmark.
Each service will have recommendations that are in the top tier and in the bottom tier, as well as recommendations over time that are quite average. If it seems difficult looking at a list of equals and picking one out, the one that should be picked is the service that uses marketing tools that seem comfortable to use. Wisner says one should also remember that past performance is not always a good indicator of future results. Market volatility, upward trends, and other dynamics created unanticipated events that might throw off even the best market advisors.
Wisner offers a word of caution; saying that advisory services create their recommendations for an “average” client, and your needs may be much different than their average client, such as volume of grain marketed and risk aversion. Check with neighbors for their experience with such services and extend your inquiry to elevator managers, Extension advisors, and your lender. Search for information about ones that rise to the top of your list and ask for some sample of their newsletters to see if their style matches your style. Costs can also vary widely, but should be competitive with other services that provide the same level of service. Your decision should not be based solely on cost. Keep in mind that not every farmer needs an advisory service, and are able to create and implement a marketing plan that would surpass the recommendations of the best advisory services.
Summary:
Market advisory services may be a source of information to improve grain marketing in an atmosphere of market volatility and complexity which challenge even the best marketers. Such services will vary widely in what they provide, their style of marketing, and in their cost. A subscriber should find a service that matches his or her style of marketing as closely as possible and provides the amount of information that is desired.
Posted by Stu Ellis at 12:10 AM | Comments (0) | Permalink
May 14, 2008
Here's A Glimpse Of Your New Farm Bill, In Case You Are Asked About It.
Your Congressman and Senators are scheduled to vote—probably Wednesday, maybe Thursday—on the “Food, Conservation, and Energy Act of 2008” which will guide farm policy thru 2012. If a legislative aid called your cell phone and asked for your recommendation on how to vote, what would you say? Oh, you don’t know what is in the proposed Farm Bill? Well, you will if you read on…..
The Members of the Congress won’t be getting much of a chance to learn the details of the legislation, which is 1,500 to 2,000 pages thick. So, the authors of the legislation have provided a 423 page summary. And if that is a bit weighty, here is a quick version with the highlights of interest to most Cornbelt farmers.
Commodity programs:
• Direct payments will be made at current rates, unless participants sign up for the average crop revenue program, but the option to collect advance direct payments terminates with the start of the 2012 crop year.
• The counter cyclical payment program is continued, and rebalances target prices for wheat, grain sorghum, barley, oats, soybeans and other oilseeds effective for the 2010 crop year; and eliminates partial counter-cyclical payments beginning with the 2011 crop year.
• An optional revenue-based counter-cyclical program (ACRE) begins with the 2009 crop year for participants who forego 20% of direct payments and 30% of loan rates, but have to remain in the program for the balance of the Farm Bill.
• Participants in ACRE will be eligible for state-based coverage with a revenue guarantee equal to 90 percent of the 5-year state average yield per planted acre (excluding the years with the highest and lowest yields) times the 2-year national average price for the covered commodity.
• If the actual State revenue (yield per planted acre times the national price) is less than the revenue guarantee, and if the producers suffer a loss on their farm, then they will receive an ACRE payment equal to the difference between the State revenue guarantee and the actual revenue for the crop year up to 25 percent of the revenue guarantee. ACRE revenue payments are made on 85 percent of the acreage planted or considered planted to the covered commodity. For years 2009 to 2011, payments are limited to 83.3% of planted acreage.
Planting flexibility:
• Base acres are limited to program crops, except for specific acreage in a pilot program that will allow fruits or vegetables for processing. IL: 9,000; IN: 9,000; IA: 1,000; MI: 9,000; MN: 34,000; OH: 4,000; & WI: 9,000.
Marketing loan:
• Marketing loans are available with rules continued from the 2002 program, unless one participates in the average crop revenue program.
• 2008-2009 Loan rates are: Wheat-$2.75, corn-$1.95, soybeans-$5.00
• 2010-2012 Loan rates are: Wheat-$2.94, corn=$1.95, soybeans-$5.00
• Loan deficiency payments will be available under general terms of the current program, but the rate will be determined on the date beneficial interest was lost.
Payment limitations:
• Non farm participants may not collect farm program payments if they have an adjusted gross income exceeding $500,000 from non farm sources.
• Farm participants may not collect farm program payments if they have an adjusted gross income exceeding $750,000 from farm sources.
• Conservation payments may be collected by participants with non farm income up to $1,000,000.
• Direct payments and average crop revenue payments are capped at $40,000 and counter cyclical payments at $65,000.
Conservation:
• The CRP is extended through 2012 with a 32 mil. acre cap, with CRP land subject to special conservation and wildlife initiatives determined by regional priorities.
• CRP land will be allowed to be removed from the program if ownership change involves a beginning, socially disadvantaged, limited resource farmer.
• The Conservation Security Program will remain in effect for existing contracts with a $2.3 bil. fund to promote conservation initiatives on working lands.
Credit:
• FSA farm ownership loans will be capped at $300,000, with encouragement to seek commercial credit.
• The credit and conservation titles are linked with a 75% guarantee by the USDA on loans for conservation improvements.
• The New Farmer Individual Development Accounts Program will match the savings of beginning farmers to hasten their ability to accumulate enough financial resources to buy farmland or other capital items.
Energy:
• Accelerate the commercialization of the production of advanced biofuels, which are produced from biomass products. Provide loan guarantees to refineries to upgrade their technology.
• Programs will be created and funded to promote alternative sources of energy for rural America such as livestock manure.
• Over $1 bil. for biomass energy research.
Organic agriculture:
• $220 million in funding for research for specialty crops working with state departments of agriculture.
Livestock:
• Enhance the Livestock Mandatory Reporting Act to be more readily understood by participants in the market.
• Creates new provisions for the Country of Origin Labeling Act, clarifying some nebulous regulations, and restates the 2002 law for compliance.
• Addresses numerous issues in contract production with regard to arbitration, long term financing, and litigation.
Crop Insurance:
• CAT fees will rise to $300 per crop per county.
• To create new crop insurance products, the USDA will finance the research and development cost incurred by crop insurance companies.
• Prohibits insurance coverage for the first 4 years on crops that are planted for the first time on non-cropland.
Miscellaneous:
• USDA is prohibited from closing an FSA office within 1 year of the implementation of the ACT, and the office must have at least 3 staff members.
Summary:
Farm policy for the next five years will be set within hours, and most farm organizations have signed on to the proposal, saying no one is totally happy with the plant, and that indicates significant compromises over commodity policy, conservation , energy, and many other issues.
Posted by Stu Ellis at 12:42 AM | Comments (0) | Permalink
May 13, 2008
Soybeans? Oh, I'd Forgotten All About The Soybean Market!
Earlier this year the market wanted more soybeans produced in 2008, and farmers responded with their intentions to increase soybean acres significantly. The bottom dropped out of the soybean market, farmers shifted some acres back to corn, and both crops continue their fight for acres. The May USDA Supply/Demand report indicated tight supplies when the 2008/09 marketing year comes to an end, but let’s look at the bigger picture.
Barely 10% of the 2008 soybean crop has been planted, But USDA forecasts a 3.105 bil. bu. crop with the help of a trendline yield. In the latest Oil Crops Outlook published by the Economic Research Service, the new crop will be 520 mil. bu. larger than the old crop, but demand will be strong, and the 145 million carryout expected in August of 2008 will grow only to 185 mil. bu. by August of 2009. Pushing and pulling on the number will be a slight increase in the crush and a slight decrease in soybean exports. But the tight ending stocks will be the prime support for soybean prices to range from $10.50 to $12.00 during the marketing year starting in September.
Producing 3.1 bil. bu. is predicated on soybean growers following through with their reported intentions to plant 74.8 million acres of soybeans, which is an 11 million acre increase from last year. USDA is projecting a 42.1 bu. national average yield to reach the 3.1 bil. bu. expected crop.
There will be plenty demand to consume that supply, and USDA expects competition from the Brazilian crop a year from now to compete with the new US crop. Global supplies are still expected to be tight for the coming year and that will keep exports at high levels, which are expected to again exceed 1 bil. bu. Additionally, the continued weakness in the value of the dollar will make US soybeans seem like a bargain to international buyers.
The expected 40 million bushel drop in exports will be partly offset by a 10 mil. bu. increase in the crush. USDA economists think the crush would be even larger, but high soybean prices will dampen demand for oil and meal. The contraction in the livestock herd because of high feed prices will soften demand for soybean meal. Meal consumption will be essentially flat and meal exports will be down slightly. Global soybean meal use would be down even more, but the high cost of corn makes the protein value of soybean meal attractive at current prices.
In the oil market, the high cost will also dampen demand, and the marginal increase in use is attributed to the bio-diesel production industry. Competition from other vegetable oils is expected to continue diminishing the demand for soybean oil. Strong export demand for soybean oil is attributed to the value of the dollar, and exports should slip only from 2.85 to 2.65 bil. pounds. Subsequently, soybean oil stocks will tighten from 2.8 to 2.7 bil. pounds. Prices should remain in the low 50 cent per pound range, where they have been for the past year.
Globally, soybean production is expected to reach record levels in Paraguay and Uruguay, but the large Argentine crop remains in the bin as the government and farmers disagree over how much exports are taxed. European consumption is expected to remain steady, as demand for bio-diesel has stagnated.
Summary:
Although a significant increase is expected both in acres and production, US soybeans will demand a high price this year because of continued tight carryover supplies. Farmgate prices that could average well over $10 per bushel will help dampen some of the demand for domestically produced meal and oil. However, exports of soybeans, soy meal, and soyoil are expected to remain healthy because of the exchange rate.
Posted by Stu Ellis at 12:05 AM | Comments (0) | Permalink
May 12, 2008
PSSST! Ya Wanna Know The Real Reason Behind High Food Prices?
The rise in grain and oilseed prices has been appreciatively received by owners and operators of cropland, but those rising prices mean someone has to pay more, and livestock producers know how consumers feel about it. Everyone who buys food, whether it is in the US or abroad, is paying more for food. Don’t blame corn growers and soybean producers, because there are a multitude of reasons that food prices have risen. And they go well beyond the farmgate.
US headlines have blistered US agriculture for causing food prices and fuel prices to rise, blaming farmers, ethanol, the unwritten Farm Bill and everything else that mad consumers can point toward. Prices for food commodities have risen around the world, not just in the US, but USDA economist Ronald Trostle says there are a myriad of reasons for the spike. His analysis looks at the reasons, the impact, and prospects for the future.
A 60% rise in world market prices of food has occurred in the past 2 years, which is even more significant than on the surface because since 1980 nominal food prices have generally declined. A slow rise began in 2001 and in 2006 a sharp rise began for the four principle grain commodities of corn, wheat, rice, and soybeans. For the past 38 years, periodic price spikes have occurred so the most recent is nothing new, but in the past the prices have retreated because buyers switch to alternate products. Parallel to the recent spike in prices for those four grains, food commodity prices have risen 98%, the index for all commodities has risen286%, and the index for crude oil has risen 547%. While food grain prices have not risen as much, in the big picture they form the staples for foods around the world, and such a rise has caused hardships in many poor and developing countries.
The recent rise in food prices has come amidst another series of developments that have an impact on the overall perspective:
1) Public funding of agricultural research in the US and abroad has been declining and along with that trend, the increase in average crop yields has declined.
2) A small percentage of farmland around the world is annually diverted to non-farm use.
3) Water resources have been stressed and artificial systems have become expensive.
An even more significant trend has been the combination of rising world population and its increasing economic power, which allows people to buy more food and higher value food. These trends have been quite prominent in China and India, with 40% of the world population. Their additional demand for energy and oil has also grown substantially.
The growth in per capita income in developing countries has allowed poorer populations to feed their hunger with higher quality food, particularly meats that were produced with protein feeds. Growth rates for meat consumption have surpassed that of consumption for grain and oilseed-based foods. With the increased demand for meat comes an increased demand for livestock feeds.
Since 2000 many smaller trends have occurred that have exacerbated the population and economic growth and their impact on food demand. Those smaller trends include:
1) China made a policy decision to reduce its stocks of food for “just in time” inventory, as a result of readily available global supplies and more liberalized commodity trade.
2) Global stocks have declined from an average of 30% in 1999 to 15% in 2007.
3) In 2000, crude oil prices began a slow, then more rapid rise along with an increased demand for energy.
4) In 2002 the US dollar began to depreciate in value, losing value in relation to the currency of importing countries, and since the US is a major food producer, food exports increased as commodity prices became cheaper to the buyer.
5) Since world commodity and oil prices are denominated in dollars, the declining value of the dollar spurred demand for both food and oil in countries where monetary values were relatively stronger.
Biofuels have had an impact, since ethanol is typically made from corn except in Brazil, and oilseeds are the feedstock for bio-diesel. The movement toward biofuels is global, and many countries are making them, not just the US. China has become a major ethanol producer, and is focusing on cassava and sweet potatoes for feed stocks. The EU is the largest bio-diesel producer and is refining rapeseed as the feed stock, but does not produce enough to meet policy goals. Brazil will be converting interior-produced soybeans into bio-diesel for domestic use, and Argentina will be producing soybean-based bio-diesel for export. In the US, about 24% of the corn crop is used for ethanol and that amount will increase as production increases. In the past five years, US ethanol production has had a more pronounced impact on the world supply/demand balance for grain, and the higher prices of US corn has spilled into world markets. Globally, an estimated 21 million acres were used worldwide to produce feed stocks for bio-fuels, however as the total world area of cropland expands, more of the increase is used for bio-fuel production than for food production.
Many recent developments, both closely and distantly related to food prices, have fueled the fire of rising food prices.
1) High fertilizer, fuel, and pesticide prices have resulted in some production cutbacks, and causing commodity prices to rise.
2) Higher commodity prices in 2006 drew the interest of market speculators, who were not interested in a commodity itself, but in a potential for increasing market values that would benefit their portfolios.
3) The 2005 Energy Policy Act caused a quick replacement of MTBE with ethanol.
4) Many global grain producers experienced adverse weather in 2006 and 2007, reducing supplies in consecutive years.
5) As corn and soybeans reached relatively high prices in 2007, importers tended to buy greater quantities, pushing up prices and reducing stocks.
6) Many countries with large reserves of foreign exchange or oil revenues were able to buy as many food commodities as they wanted.
When food prices began to rise, many nations changed domestic policies that would benefit their citizens, and in many cases caused a further rise in world food prices. Some of those policies either halted or taxed commodity exports in an effort to retain as much food within the country as possible. That reduced the available supply and prices rose. Other countries reduced taxes on imported commodities in an effort to acquire more food at a lesser price to their consumers. That increased the demand and prices rose. Other countries initiated food imports, which additionally increased demand.
The global impact on higher food prices has a greater effect on the lower income populations who 50% of their income on food, than on higher income countries which spend 10% of their income on food. USDA says a 1% rise in food prices in the US would be a 21% rise in that other country. Additionally, many nations receiving food aid donations have received less, because the food is more costly to acquire by the donating country and shipping costs have increased. Consequently, social unrest has occurred in many lesser developed countries were food is either unavailable or too expensive.
Summary:
The price of food is a function of supply and demand. Over the past two years changes in both supply and demand have combined to cause a significant upward spike in global food prices, and in some countries causing social unrest. Regarding supply, adverse weather has reduced production, public policies have reduced stocks, and the trend toward biofuels has shifted supply away from food to fuel. Regarding demand, the devaluation of the dollar has cheapened the price of commodities based on the dollar, many growing economies have larger populations with more buying power and more hunger for higher value foods, and rising petroleum prices have increased production costs or curtailed production.
Posted by Stu Ellis at 12:58 AM | Comments (4) | Permalink
May 9, 2008
Extension Update--UPDATED
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. UPDATED WITH NEW USDA MAY SUPPLY-DEMAND NUMBERS
USDA’s May supply-demand report reduced corn use for the new crop by 2% as the result of lower feed use and export demand, even though ethanol production will continue to rise. Feed use will be down 14%, but replaced in part by DDGS, and exports will be down 16% due to increased world competition. Ethanol will be up 33% from current year levels, although refinery construction has slowed. The new crop was estimated at 12.1 bil. bu., hurt by the slow spring planting rate. Carryout was estimated at 763 mil. bu. with farmgate prices from $5 to $6 /bu.
USDA estimates new crop soybean production at 3.1 bil. bu., helped by increased acreage. The crush is expected to rise 1%, and soybean oil consumption will see a shift from lower food use to higher bio-diesel use. Soybean exports are expected to fall slightly, and ending stocks for the new crop will only be at 185 mil. bu. The season average price is estimated to range from $10.50 to $12.
USDA’s supply-demand expectations for new crop wheat are for 2.4 bil. bu. production, helped by 17% more acres, and a higher yield. Usage is projected to drop 5% from lower exports, but offset slightly from higher domestic consumption. The 24% decline in exports results from larger world production. The national average price is forecast at $6.60 to $8.10 per bushel.
The market has been buying more corn acres since the Planting Intentions report, but IL Extension economist Darrel Good wonders if there will really be the demand that the market expects. He says pork producers are reducing their inventory; corn exports may decline if the dollar rebounds and wheat stocks are available; and China’s corn needs are uncertain. Read more.
Another question mark on corn demand is the ethanol market. Policy makers are debating the biofuels mandates and the tax credit received by blenders, in light of higher domestic food prices which critical consumers have erroneously blamed on ethanol. Good says, “At current prices for corn and ethanol, however, corn based ethanol production would remain profitable even with a modestly lower blender’s tax credit.”
Darrel Good says if the market needs 13 bil. bu. for the year beginning in Sept., then the 2008 crop has to reach 12.7 bil. bu., and that would require a nearly 161 bu. average yield from nearly perfect weather. He’s expecting planted acreage to exceed the March USDA estimates. Knowing the grain trade closely follows the weekly crop reports, Good says the market believes planting will speed up because farmers can plant more acres per day.
Research shows most of the time that trendline-adjusted corn crop yields are below average in La Nina years with a less chance for wheat and more likely average or above average yields on soybeans, says Jim Noel at Ohio State. “The data still supports a trend to drier than average for late May and June, but it does looks like at least average rain the next 2 weeks with small areas of above average rainfall mainly in the north.”
The western two-thirds of the Cornbelt are getting the most rainfall, says OSU weather specialist Jim Noel, “The western Cornbelt out towards Iowa, Wisconsin, So. Minnesota and NW. Illinois have been much, much wetter than Ohio and are being impacted even more. It appears the wettest areas will remain west of Ohio the next few weeks.”
How were 2007 yields? IL Extension economists report state averages were higher than trendline. Find the county details.
1) IL: 175 bu., 16 bu. above 2007 trend, with exceptional yields in nor. & cen. IL.
2) IN: 155 bu., 2 bu. above 2007 trend, with above average yields in eastern IN.
3) IA: 171 bu., 7 bu. above 2007 trend, eastern IA was above trend yield.
4) MN: 146 bu., 12 bu. below 2007 trend, with poor yields in central MN.
5) NE: 160 bu., 5 bu. above 2007 trend, no counties were very high or very low.
6) OH: 150 bu., 3 bu. above 2007 trend, good county yields except western OH.
Watch the growing degree days, not the calendar, says Extension’s Emerson Nafziger, who says it is too early to switch to an earlier-maturing corn hybrid, “Corn planted later also requires fewer growing degree days to reach maturity than the same hybrid planted early, which adds to the cushion. In general, then, hybrids on hand for planting should not be switched out for earlier ones unless planting goes into very late May.”
Will higher seeding rates payoff, even with hybrid corn that costs over $200 per bag. IA State agronomists analyzed current corn prices versus seed costs and populations:
1) Regardless of price, 36,000 population give maximum yield and net income.
2) The 30,000 rate gave a slightly lower return, if producers have to cut seed costs.
3) 42,000 and 48,000 rates have lower net returns for both 180 and 220 bu. yields.
4) A 24,000 rate lowers returns, but not as much as the 48,000 seeding rate.
If your soybean seeding rate exceeds 150,000 per acre, don’t expect much yield increase. IL Specialist Nafziger says 100,000 may be the population that produces the maximum yields under most conditions. He says the canopy is the key and with late planting reducing vegetative growth, narrower rows will grow a better canopy. Read Nafziger’s newsletter.
Wheat growers may not get much of a chance to plant doublecrop soybeans after taking out their wheat. The wheat crop is delayed along with everything else, so an early wheat harvest and longer growing period for soybeans has less likelihood. Nafziger says that will only happen if the temperature warms up, and he said that will hurt the wheat yield.
Which is first: planting or weed control? Mike Owen at IA State knows your concern, but says a pre-emergent weed control before planting is a priority, or at least apply it immediately after planting. He adds that winter annual weeds are a problem, and “Do not think you can eliminate the burndown herbicide treatments in pre-emergence applications unless tillage has been conducted very close to the planting and spraying operations.”
Many farmers want to wait and apply Roundup after the crop and most weeds emerge. But Owen grits his teeth at that. “There are concerns that these treatments are being marketed as a 1-pass treatment that will provide season-long weed control. This is unlikely and plan on a timely second application of something postemergence.”
Shake up your herbicide program, says Mich. State agronomist Wes Everman, “Plan to use herbicide programs that account for deficiencies in last year’s weed control program. Weed escapes the prior year can leave hundreds or thousands of weed seeds in the soil seed bank. Using the same herbicide program 2 years in a row can potentially compound the problem creating greater weed populations and weed control issues in the future.”
Armyworms are on the march out of KY into southern IN & IL and have found forage and wheatfields to their liking. It has been about 7 years since the last invasion, and IL Extension entomologists are urging producers not to depend on rescue recommendations from 2001, but get news ones. They say the cold wet weather may even enhance fungus that will control armyworms.
Many spring insect pests may be starving without fresh corn and beans. Entomologist Mike Gray says every specie is different and life cycles must be considered separately.
1) Rootworms may starve if corn planting is delayed until late May.
2) Corn borers may not be a problem, but late planting helps the second generation.
3) Cutworms can thrive on weeds in untilled fields until corn begins to emerge.
4) Annual white grub injury should be limited, but their development could be delayed.
5) Wireworms may remain in the upper (warmer) soil layer and damage seedlings.
6) Seedcorn maggot injury may be magnified by late planting in cool, wet soils.
Is soybean rust a non-issue for you? If so, IL Extension crop specialist Robert Bellm says it is a bit early for that attitude. He says all soybeans are suitable hosts along with the Cornbelt environment, but weather patterns the past 3 years have not been conducive. He says field scouting pays off, and the protective management tools are accessible. Keep up to date by monitoring the official USDA rust site.
It is the grilling season, and pork and beef producers know that because of the typical 10-20% rise in prices in late April. Shane Ellis at Iowa State says it is unfortunate that hog prices are still $10 below breakeven levels. He believes beef prices will stay below $100 because price-conscious consumers are buying cheaper pork and poultry.
And Iowa State’s Ellis says producers need to be aware of dynamics. “In general, consumers are looking for cheaper products as the cost of food and fuel escalates. This means lower demand for higher priced well finished beef and sustained strong demand for pork. For producers even the best forecasted prices of the spring and summer will still not be enough to offset the impact that feed costs have made to the bottom line.”
While watching consumer demand, don’t forget exports, which MO livestock experts say is up. “Demand for live hogs for the first 3 months of 2008 was up a whopping 8% from the same months in 2007. For these 3 months, the demand for live fed cattle was up 0.2% from a year earlier. The large increase in live hog demand was due to the sharply higher pork exports in 2008 than in 2007. The stronger cattle market and consumer demand for beef was also largely a result of larger exports and smaller imports.”
Posted by Stu Ellis at 12:12 AM | Comments (0) | Permalink
May 8, 2008
If You Are Delivering Corn To An Ethanol Plant In July, Will Your Price Premium Cover The Cost Of Grain Quality Management?
To benefit from the market carry offered by ethanol plants or other processors wanting a constant inflow of grain, farmers must accept the storage risk, which includes keeping the grain in condition. That takes management and requires energy expense, but is there a payoff, and how closely should that grain be kept within parameters? As the outside air warms up and the humidity rises, grain storage issues are going to be on your mind.
This would be a perfect world without the mold that attacks stored corn, but unfortunately we have to deal with mold that likes warm moist bins of grain. The cost of prevention requires energy and management, and in turn there should be a return to that expense. Finding the balance is what a group of Purdue economists tried to find when they analyzed the profitability in storage, versus the risks. They estimate that $270 million worth of grain was lost from the 2006 crop due to mycotoxins in stored corn. As more ethanol plants begin operation, on-farm storage will have to bear the responsibility of maintaining grain quality.
Researchers have long worked on ways to control mold growth in stored grain, including sophisticated monitoring equipment. But the question of economic returns from those efforts remains unanswered. Typically, stored grain is cooled following harvest to minimize moisture content and mold growth. Late winter or early spring delivery means the management problem is eliminated, but summertime delivery requires grain moisture management and the threat of loss from mold growth and that negates the price premium being offered for storage.
Farmers who store grain know that mold growth is minimal below 50 degrees F. and 12% moisture. Harvest time drying and aeration usually take the grain into winter with success, and then any problems developing in the core of the bin can be minimized with some grain removal.
The Purdue researchers found the optimal mold management strategy involves continuation of conditional aeration even if grain is to be sold to the local elevator in March. Continuation of conditional aeration after the end of December is even more important if high quality corn is to be delivered to a food-grade corn processor later during the summer. They developed a formula for success for maintaining quality, if the corn is to be delivered to a food grade processor paying a 55¢ premium and a 3¢ per month storage fee:
1) If in-bin temperature is less than or equal to 42 degrees F. and the number of mold damaged kernels is less than or equal to 4% at any point during the storage period, then do not aerate but keep it at least for another 15 days after which you will have to monitor and decide again.
2) If temperature is greater than 69 degrees F. and mold damaged kernels is less than 5% then do not sell yet but aerate the grain conditionally (i.e., when the outside temperature is less than the in-bin temperature by at least 5 degrees).
3) If the in-bin temperature is above 51 degrees F. and mold damaged kernels reaches 6.14% any time before the first half of March, then aerate the grain conditionally and keep it until early in March to sell it to the local elevator. If it is any time past March, then sell it to the local elevator right away.
4) For the period before December, if mold damaged kernels reaches 5%, sell to the food processor because, no storage fee is paid until December and hence the risk of losing money from possible mold development is higher than the storage fees earned for the periods after December.
5) In the summer months, if the in-bin temperature is between 60 degrees F. and 96 degrees F, and the number of mold damaged kernels reaches 5.29%, then sell it immediately to the food processor. This is because, in these periods, the periodic damage from molds exceeds the storage fee paid per period.
Summary:
Delayed delivery premiums for contracted grain production can be lucrative, but will require management of the risk of the grain going out of condition, and that management should see a return. Whether the objective is to optimize a return, or minimize a loss of the price premium by overspending on energy expense, a farmer must achieve profitability by preventing mold growth. Creating a plan of benchmarks for maximum mold levels and grain temperatures can facilitate the decision-making process for delayed delivery of grain.
Posted by Stu Ellis at 12:51 AM | Comments (0) | Permalink
May 7, 2008
What Is Stealing Your Nitrogen And Starving Your Corn?
Your decisions for use of Roundup Ready or Liberty Link corn have already been made. It is either in your field, or in your machine shed awaiting a brief ride in a planter box. But your decisions for a post emergent weed control system in corn may have brought some unexpected consequences. You don’t like surprises, so let’s take a look at what to expect this year in those corn fields.
The formula is simple. Plant a seed corn that has the genetics to resist glyphosate or glufosinate. Apply your side dress nitrogen. Spray the field with the proper herbicide for the corn. Pat your self on the back for your management decisions. Pocket a bit less money next fall.
Everything is in your plan except the last step and that is one that is becoming an issue for many farmers using a Roundup or Liberty Link weed control system. Not that the seed and chemical are more expensive, but the issue with the nitrogen is growing larger. Several Cornbelt agronomists are pointing out the problem, and Mark Loux at Ohio State is the latest in the C.O.R.N. newsletter reiterates the challenge of annual grasses in corn soaking up the nitrogen before the crop gets a chance to utilize it.
Loux and Purdue colleagues all expect expansion of Roundup and Liberty Link systems, which means most farmers are moving away from soil applied herbicides such as atrazine to eliminate the grass before it begins interfering with the corn crop. The pre-plant herbicides left the fields clean for an early start for the corn, and when the anhydrous ammonia applicator worked through the fields a couple weeks later, the rows were still fairly clean. That will not be the case where the glyphosate and glufosinate systems are implemented. Fields will have a broad spectrum of weeds using the same nutrients that corn will need, including the expensive nitrogen that will be applied. Researchers are uncertain just how much nitrogen will be siphoned off by a health crop of weeds and grasses, and work is being done to quantify the exact loss and determine the impact on corn yield.
The research that Loux and colleagues describes focuses just on the impact of grass, since the researchers eliminated the broadleaf weeds and allowed the grass to grow through the time that side-dress nitrogen was applied. The results indicated the grass accumulated a substantial amount of nitrogen. When the grass was 12 inches tall, it had consumed 50 to 63 lbs of nitrogen per acre in a 1999 study and 16 to 32 lbs in a 2000 study. The researchers found that when the grass was removed at a 9 inch height or more, the corn yield was reduced and the corn had accumulated less nitrogen compared to corn in fields free of any grass or weed competition.
The researchers had several recommendations for farmers who will be using a Roundup or Liberty Link weed control system:
1) When grass emerges with corn, and if the density reaches 30 plants per square foot, the grass should be controlled before it reaches the 6 inch height.
2) The best opportunity for utilizing side-dress nitrogen to recover yield due to early-season weed interference probably involves injection of the N into the soil after postemergence herbicides are applied.
3) To minimize the influence of grass weeds on N accumulation and corn yield, use residual herbicides either by themselves or in a tank mix with glyphosate or glufosinate.
4) Expect a potential 6% corn yield reduction if weeds and grasses are not controlled before reaching a 6 inch height.
5) Consider a late season nitrogen application to replace the nitrogen consumed by any weeds that were not controlled early.
Summary:
Just because nitrogen is applied to boost your corn yield does not mean that other weeds and grasses present in the field are not allowed to use it. If it is there, the non-corn plants will use it and that reduces the amount of nitrogen available to the corn. The problems created by the shift from a soil applied herbicide to a post emergent herbicide in the Roundup and Liberty Link programs will mean weeds and grasses will be present when side-dress nitrogen is applied in several weeks. Yield loss in corn may be significant unless the grasses are controlled in a timely manner.
Posted by Stu Ellis at 12:27 AM | Comments (0) | Permalink
May 6, 2008
The New Farm Bill: What Do We Really Know About It?
The new Farm Bill has not exactly been written in a vacuum, but very little has escaped the Congressional Committee room doors. Even Monday, when the leadership said the document is complete for all practical purposes, they only offered crumbs from the huge cake that has been in the mixing, baking, and decorating process for the last three years. With little else to go on, we’ll look at the crumbs, which do indicate the flavor of the cake.
Senator Tom Harkin, Chair of the Senate Agriculture Committee, said he hopes the proposed legislation will pass muster at the White House and be signed into law. His Committee statement Monday provided few details about the Farm Bill.
Commodities: Some of the features of the 2002 Farm Bill, such as direct payments have been retained, but funding levels were cut. Two years into the plan, producers will be given the option to sign up for a new type of safety net, entitled the Average Crop Revenue program. Senator Harkin indicated it was similar to the Durbin-Brown plan which offered revenue support calculated from state yields and prices.
Conservation: The interest in conservation of Senator Harkin can be seen in the substantial expansion of Farm Bill conservation programs. His new Conservation Stewardship Program is funded with $12 billion over 10 years to enroll 115 million acres into the program. It is a working land program, compared to the Conservation Reserve Program which retires land.
Energy: The primary focus is on biofuels production, and is designed to promote cellulosic ethanol from agricultural biomass. Loan and grant programs would assist new refinery construction and new research on renewable fuels.
Livestock: A new element in the Farm Bill, it addresses some elements of contract production and provides more producer protections dealing with arbitration clauses, and location of court filings. It also modifies the Country of Origin Labeling provisions.
Nutrition: This section received the largest funding increase (reportedly $10.4 billion) and creates a variety of programs to assist children and families improve their access to food.
Research: $78 million in funding is set aside to help producers promote organic food products, and $230 million is appropriated for research on specialty crops.
Rural Development: Funding is appropriated for rural water and wastewater programs, for producers to process their own products and increase the value, and loans for beginning entrepreneurs.
Fresh Fruits and Vegetables: More funding is provided for organic foods, funding for promoting local markets, and $400 million for a 10 year program to improve pest and disease detection.
Summary:
While details are absent and full program descriptions are unavailable, the summary of Farm Bill elements released Monday by the Senate Agriculture Committee gives a hint of changes that have occurred from the 2002 Farm Bill. The contentious and private negotiations primarily involved funding more than policy, and spending has been the reason for veto threats from the White House. Although many producers have already finalized 2008 production plans without knowing how any farm program details will impact the marketing of the crop, most producers probably will sail through 2008 without thinking much about the need for a revenue safety net.
Posted by Stu Ellis at 12:34 AM | Comments (0) | Permalink
May 5, 2008
Checking In On The Recent Dynamics In The Wheat Market
As the US wheat crop comes to life, and makes the final turn toward maturity, domestic and global supplies will soon be expanding and concluding a multi-year chapter of short crops and tight supplies. The US wheat producer fed the world, allowing domestic supplies to run critically short in an effort to meet global needs. As the new crop in the Northern Hemisphere takes shape, what factors will dominate the market?
USDA’s latest Wheat Outlook has kept supplies at 2.613 billion bushels from the 2007 and prior crops and utilization at 2.371 billion bushels. That makes ending stocks at 242 million bushels, the least since the late 1940’s. The relative short US crop last year was just over 2 billion bushels because of freeze and harvest problems. Combined with the short crop was a 322 million bushel increase in use, primarily from export demand.
Old crop exports continue to rise and the 1.275 billion bushels estimated for the year will be 366 million above the prior year. Short crops around the world, increased economic buying power in developing countries, and the exchange rate all made the US the world storehouse for wheat.
Domestic flour consumption continues it slow climb back from the recent dietary trend that diminished carbohydrate consumption. Per capital use in the last fiscal year was 8.8 lbs. under the recent high watermark set in 2000. The diet trend toward high fiber, grain-based food will spur wheat flour consumption. Last year’s consumption of 137.5 lbs compares to the all time high of 225 lbs. in 1879 and 110 lbs. in 1972.
New crop production is based on an estimated 63.8 million acres, up 6% from last year. Winter wheat acreage is estimated at 46.8 million, and spring wheat is forecast at 14.3 million. The winter wheat crop is currently 45% good to excellent condition, compared to 64% at this time last year. 21% of the crop is rated poor to very poor, primarily in the Texas and Oklahoma wheat country, but conditions are improving.
Globally, wheat production is increasing with better crops and crop conditions, along with increased acreage due to higher world wheat prices. Production for 2007/08 is estimated at 606.7 million tons and use for the same period is forecast at 619.1 million tons. The continued high demand and corresponding prices are shifting wheat from livestock feed to human food. Ending stocks are estimated at 112 million tons, up slightly from higher production and lower use.
US export trade for the current marketing year continues to climb because of reduced competition and an increase in overall world trade. March shipments, for example, were 20% higher than March of 2007. While the continued pace of exports for the balance of the current marketing year will slow from tight US supplies, USDA is expecting June shipments of new crop wheat to be strong. The Australian wheat exports are being restricted to ensure supplies are sufficient for domestic demand, and Argentine wheat export estimates have been cut because of the uncertainty in domestic export regulations. However the high world price for wheat has resulted in increased exports from China and Brazil.
US average wheat prices, which had nudged the $4 mark for 2006 production, pushed well toward $12 for the 2007 crop.
Summary:
Domestic supplies of wheat are at 60 year lows. World supplies of wheat are at 30 year lows. But prices have responded, encouraging more production. Wheat prices are half of what they had been, but are still well above typical prices, driven both by short supplies, and by increasing world wealth and corresponding buying power. Major suppliers in the global wheat trade have both curtailed exports for domestic reasons and others have expanded exports to take advantage of the high priced demand.
Posted by Stu Ellis at 12:43 AM | Comments (0) | Permalink
May 2, 2008
Extension Update
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.
By 1-2% the soybean crush keeps increasing monthly according to IL Extension’s Darrel Good, who says it has grown from 1.53 bil. bu. in 2004 to an estimated 1.84 bil. bu. for the current marketing year. But he says the pace is slowing because of slower meal consumption, which was 3% less in March of 2008 compared to March 2007.
But the pace of exports is strong for soybeans, says Good, which are projected at 96% of the record exports of 2007. He says US soybean producers are benefiting from the halt in Argentine soybean exports, caused by a farmer strike that is protesting higher export taxes. If so, the increased US exports would offset the slowdown in the domestic crush.
For the past month the bean basis has tightened about 40¢, but remains weak. Fall delivery bids have also strengthened about 20¢, but are 60¢ weaker than a year ago. The lack of convergence of cash and futures has persisted since last July, but Good says the convergence for the May soybean contract appears to be occurring as would be expected. Read more.
Cornbelt temperatures are expected to average normal to cooler than usual through mid-May and precipitation may exceed the norm, says Iowa State’s Elwynn Taylor. “However the general weather pattern appears to be progressing toward seasonable conditions that are expected to dominate the month of May. The storm track appears to be shifting to the North and likely result in diminished rain in the central Cornbelt.”
La Nina remains, says Taylor. “The January-April weather has been typical of a La Nina in most of the US. La Nina carries the risk of a late spring change from cold and moist to hot and dry. The La Nina event appears to have passed its peak and recent warming of waters near the equator off the western equatorial coast of South America and diminished winds in the area are likely to hasten the return to neutral conditions.”
Meteorologist Jim Noel at OSU agrees with the La Nina forecast, predicting, “The good news is we do not see any significant threat for flooding and heavy rainfall, but we will need to watch an upper level high pressure building over the eastern US. This may cause
rainfall to diminish further in May/June.” Noel offered a four month weather outlook:
1) May: Average temps and below average rainfall
2) June: Above average temps and below average rainfall
3) July: Above average temps and average to below average rainfall
4) August: Average to above average temps and average rainfall
As planting continues to be delayed, implement your emergency plan to get the crop in the ground as the weather windows open up, says MO agronomist Bill Casady.
1) Have 2 people running the planter and a third person in a support role.
2) Account for every field and every bag of seed, since re-calculations take time.
3) Ensure there are no surprises with trash in the middle or on the edge of fields.
4) Use extra help to monitor planter performance, so the operator does not waste time.
5) Shortcuts or hurried actions can result in injury that will further delay planting.
Stick with full season hybrids through the end of May says MO agronomist Bill Wiebold, acknowledging some yield fade after May 10. He says a switch to an early season hybrid assures yield loss, and that is not worth the reduced drying time at harvest. But any switch from 110 to 100 day hybrids requires 4,000 more seeds per acre.
Once planted, corn requires an average of 100 growing degree days to emerge. But that can range from 90 to 150, and is dependent upon both soil and air temperature, as well as adequate soil moisture. Ohio State agronomist Peter Thomison says emergence is also influenced by residue cover, tillage, soil organic matter and moisture content.
When soils become dry enough to enter the field, the priority should be planting, not fertilizing, says IL fertility specialist Fabian Fernandez. The reduction of yield potential due to delayed planting is more important than the benefit of applying N before planting.
1) Caution should be exercised not to apply N when the soil is still too wet.
2) Some N can escape from the soil because of poor closure of the knife track.
3) Planting without applying N will likely not negatively impact corn yield potential.
4) There is no loss of yield if N is applied before the 5th-leaf stage.
5) Sidedress applications can be reduced if loss of yield potential has occurred.
6) Roots will grow into the in-between-row position by the 4th-leaf stage.
No herbicide and corn not planted. So what are your options for weed control?
1) If using 2,4-D, check the interval between application and planting, since it will vary.
2) Give burndown herbicides time to work, since tillage can injure and avert weed kill.
3) Adjust the herbicide rate to be effective as the field currently is infested with weeds.
No herbicide applied, and corn is planted. Closing the seed furrow is a priority.
1) Many pre-emergent herbicides can injure seedlings severely with chemical contact.
2) Do not use nitrogen fertilizer as a herbicide carrier on emerging corn.
Herbicide applied, and corn not planted. Control any weeds prior to planting.
1) Planting can injure some weeds, and they will have to recover before spray is lethal.
2) Controlling weeds after planting is a gamble that the weather will cooperate.
Herbicide applied, and corn is planted. Remain vigilant for weed emergence.
1) Heavy rains may have moved herbicides too deep into the soil profile to be effective.
2) The less than ideal growing conditions may make corn susceptible to chemical injury.
Can you identify the weeds in your fields, or will your burndown just burn up money? It is not cheating to look at pictures for comparison, to ensure you are spraying what you think you are spraying. IL Extension specialist John Church suggests these websites:
1) Pest Management Bulletin.
2) Early spring weeds.
2, 4-D with a glyphosate burndown will better control dandelion, horseweeds, and many winter annuals, and will provide better consistent control in cool conditions. But with time being a critical factor, the use of 2, 4-D will require a 7 day interval between application and planting to protect emerging corn and soybeans. Injury risk is determined by how much of the herbicide reaches the seedling, which is a function of planting depth, application rate, soil type, and the timing and quantity of any subsequent rainfall.
Cool, wet springs enhance development of virus-based diseases in wheat, and MO plant pathologist Laura Sweets says that is happening. She says there are no rescue treatments, but scouting is still important. Management of the problem includes planting resistant varieties, avoid planting too early in the fall, and destroy any volunteer wheat.
Your seed beans are still in the bag, but Asian rust is on the loose. It is infesting kudzu in one Texas county and six Florida counties, but other southern states do not have any confirmation yet on suspected sites. It has been found on coral beans for the first time on that ornamental crop. Weekly updates can be monitored.
Your corn may still be in the bag, but black cutworms are about as anxious as you to see corn seedlings emerge. Look for pinholes in the leaves first. IL Extension crop specialist Jim Morrison says, “If tillage or herbicides eliminate weeds one to two weeks before planting, black cutworms that had been present probably starve to death.”
Beware of insects especially white grubs and wireworms. Wet, cool soils usually make corn seedlings more susceptible to injury caused by below-ground insect pests because the insects can munch away while the corn is growing slowly, says Kevin Steffey at IL.
Your 2008 seed may likely have been coated with an insecticidal treatment, but how will it perform? OSU entomologists say that depends on the product and the insect.
1) Protection from seedcorn maggot seems to be good for both corn and soybeans.
2) Corn seed treatments are not acceptable to protect against black cutworm.
3) Seed treatments should offer good control against corn flea beetles.
4) Treatments for corn rootworms are acceptable, but not at high rootworm pressure.
5) Effectiveness against wireworms and grubs is still questionable.
6) Soybean treatments for bean leaf beetles and aphids are limited into mid-summer.
Grass is cheaper than corn says Utah State livestock economist Dillon Feuz. “Just two years ago, total feedlot cost of gain was in the $45-50 per hundred pounds of gain range. Today total feedlot cost of gain is closer to $90 per hundred pounds of gain. In addition to the obvious consequences of this being a loss of profitability in the cattle feeding sector and downward price pressure on feeder cattle prices, another consequence has been a renewed interest in stocker programs that include grazing cattle on grass.”
Posted by Stu Ellis at 4:29 AM | Comments (0) | Permalink
May 1, 2008
Is There Any Redeeming Value In Using The Farm Program Payment Information USDA Had To Release?
Probably nothing in agriculture has angered farmers more than the release of details about farm program payments they have received. When the USDA was forced to reveal who received how much in commodity and conservation payments, those names of farmers began to appear in the media with expected retaliation from tax payers. However, the information from the once-private files is being used to identify information about absentee landlords that will be used to develop future commodity policies. And we have an example.
About half of US farmland is operated by someone other than the owner, and when commodity payment information is associated with operators and landowners, USDA economists can determine how farm program payments relate to the actual farm operation. USDA ag economists Michael Brady and Vince Breneman analyzed the information released by USDA for the 2004 crop year. They wanted to determine where payments were being sent in relation to the farm, the use of cash rent versus crop share leases, and whether the ethanol tax credit benefited farm operators or farm owners. You will not find any individual names in this summary of that research.
The 20th Century saw a great transition from farms being owner operated to farms being operated by someone other than the owner. Division of estates further separates owners from their land, by more than just distance. The economists believe this also impacts the health of the rural economy, since money flows out of rural areas into urban areas. The USDA goal is more focused on rural areas, and the economists say the FSA payment information details the location where USDA money is going.
USDA’s 1999 survey of land ownership found that non-operator landlords owned 221 of the 434 million acres of US cropland, most lived within 50 miles of their farm, and most were retired farmers. Since their average age was 63, a lot of ownership would be changing in the near future. Owners over 70 years of age numbered more than the next younger age categories, and the older group increased its holdings by 40 million acres in the decade preceding the 1998 survey. Both the older age group, and their children in the next younger aged groups are likely candidates for cash rental agreements, instead of crop share.
The USDA ownership information covers 2.3 million entities or individuals and includes addresses where checks were sent, the amount, and the reason for the payment. For their study, the economists used 1,381,949 accounts with payments exceeding $15 billion. Since farm program payments are not supposed to be sent to cash rent landlords, the economists estimate the checks were going to crop share landowners. All of the payment recipients were divided into four groups, rural addresses in the same or a different county, and urban addresses in the same or a different county. What they found out:
1) Slightly more than half of all payments4 are sent to the farm or a rural area in the county of the farm.
2) The next largest category is urban, but another county at 17.39%.
3) 27% of the payments went to urban addresses, either the same or another county.
4) It does not appear that there are a significant portion of absentee landowners living in rural areas that are at a significant distance from the farm, which is expected given data from other surveys.
The USDA economists looked at the trends in several Cornbelt states.
1) Looking at the state of Illinois, which has a high percentage of non-operating landlords, approximately half of all checks were not sent to a rural address in the same county as the farm. More than 30% went to urban areas either in or out of the county.
2) If Illinois trends in absentee landlords are similar for cash-rent contracts then a slightly conservative estimate would put the urban, but another county category at a little less than 15%.
3) In Nebraska, 20% of payments are sent to out of county urban landowners. By payment volume the total is only around 5%.
4) The urban, but another county category for Ohio is even smaller at 9% of all payments and less than 3% by volume. When adjacent counties are included in the IU category it constitutes over 90% of the total value of all payments.
5) Values for Indiana and Iowa are more similar to Ohio than Illinois.
Summary:
USDA statistics for distribution of farm payments among farm operators and absentee landowners indicate 28% are sent to urban areas and not farm addresses. Comparing results across states in the Cornbelt show significant variation with Illinois appearing to have more absentee landowners than Ohio, Iowa, or Nebraska. An important question related to the use of the data, and research on absentee land ownership in general, is how land ownership will change in the next decade given the significant amount of farmland owned by people in their 70’s and 80’s.
Posted by Stu Ellis at 12:36 AM | Comments (0) | Permalink