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June 30, 2008
Rev Your "N-gine" And Shift Your Corn Into Gear
Some corn has shifted up into road gear, and it looks pretty good. Other corn fields are stuck in idle as the days of summer are now getting shorter. In some years corn has reached pollination by this point, but this year much of it is less than waist high and not ready to show silks and tassels, and may still look yellow because all of the expensive nitrogen you applied last fall has disappeared. If you have more ducks and white caps in your field than corn plants, there may not be much hope; but if there is a chance to help it along, let’s see what can be done.
The 2008 corn crop throughout the Cornbelt is uneven, growth rates vary widely, and the lack of nutrients have resulted in yellowing and stunted growth, says Iowa State University agronomist John Sawyer. He has produced a pair of fact sheets on Yellow Corn, Wet Soils, and N Loss.
In the first of the series, Sawyer says the initial problems of corn resulted from wet soils, and not so much the lack of nitrogen, since N requirements are low in young corn. But he said crop rotation had a significant role in the performance of corn this year. Sawyer said corn following beans outperformed corn following corn, even when nitrogen had been applied at a 240 lb/A rate.
But what was the reason for the yellow color? Sawyer says his analysis is that nitrogen was either lost from the fall application or has moved deeper into the soil and not yet become available to the corn roots. He says there has been a more positive reaction to the spring application, but only time will tell about the impact of the heavy rains on total nitrogen available for the corn.
What can be done now? Sidedress, says Sawyer, and inject it to root depth, not put it on top of the soil hoping for rain. He says the corn needs the nitrogen more than the moisture. He adds that corn will soon be in its rapid growth phase and will need the nitrogen.
In the second fact sheet of the series, Sawyer says corn on higher ground will respond to the nitrogen quicker than corn on low ground, where wet soils suppressed the response. But after the soils drain, all of the corn will show a positive response, however the response it better to the spring applied nitrogen, even at the lower rates of application.
Sawyer’s research was directed at depth of nitrogen injection, and he found that in low areas, the corn responded better to the more shallow depth of injection and on the higher ground the corn responded better to the deeper injection.
Find Purdue’s fact sheet on estimating nitrogen loss.
Find Illinois’ fact sheet on deciding whether to apply more nitrogen.
Summary:
If you are trying to grow corn, and it does not want to cooperate this year, nitrogen may be one of the barricades to success. Fall applied nitrogen may have been lost or corn roots may not have found it yet. Spring nitrogen, applied in the root zone, may get a good response. The nitrogen issue is also complicated by whether corn followed corn or soybeans.
Posted by Stu Ellis at 12:14 AM | Comments (0) | Permalink
June 27, 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.
“No one in the grain trade believes the USDA numbers are accurate,” says Kansas State’s Mike Woolverton about the acreage and yield estimates in the June Supply Demand report. USDA’s projection is 86 mil. acres of corn and 74.8 mil. acres of beans, but those numbers will be adjusted with a flood update Monday, June 30th when USDA releases its Planted Acreage Report. You can read more from Woolverton’s newsletter.
“Yield is even more difficult to forecast this year than acreage,” says Woolverton. He adds, “Corn and most soybeans were planted late into cold, wet, compacted soils. All those factors will drag the national average yield down, but no one knows by how much.” He projects corn to be pollinating in the heat of the summer, and he says it is too early to be concerned about a national average soybean yield, but he’s concerned about frost.
Woolverton’s description of wheat is widely varying yields, reduced test weights, reduced protein content, and higher elevator prices than producers expected to see at harvest time. Kansas City cash wheat is over $9, since wheat has benefited from higher oil prices that have been pulling up corn and soybean prices with the crude oil price.
Near normal rain and heat are expected over the next month by Ohio State meteorologist Jim Noel. He says there is still a risk for heavier rainfall, but the risk for hot and dry weather is low through the month of July. Read more.
But near term heat is expected by Iowa State meteorologist Elwynn Taylor. “Well-established crops are likely to benefit, but heat can stress poorly rooted plants. Generally, temperatures slightly warmer than normal before the 4th of July are of benefit to yield and detrimental to crops thereafter. Rain prospects have declined from the multi-year peak of the past few weeks to near normal. The National Weather Service outlook for July slightly favors temperatures in the coolest 1/3 of all years; which is desirable.” He is still forecasting a 148 bu. national average corn crop and a 37 bu. soybean crop.
Bad spring weather was not limited to your neck of the woods, says NE climatologist Al Dutcher in the NE Cropwatch. He says weather models are drying out, compared to weather trends that caused problems across the Cornbelt:
1) 83 of the 99 counties in Iowa have been declared disaster areas due to flooding.
2) In NE an estimated 500-600 center pivot irrigation systems received tornado damage.
3) Iowa has lost 1.3 mil. acres of corn from flooding, and up to 3.3 mil. Cornbelt wide.
Hard to believe, but it is farm program sign-up time. In addition to signing up for direct and counter-cyclical payments, USDA will also take your name for the new 2009 ACRE program. That program reduces your direct and marketing loan benefits by 20% and 30% respectively, but provides an additional payment that averages the 2008 and 2009 marketing years and if the weather market is active, the payment could be high.
The prevented planting period has arrived for most Cornbelt locations. NE Extension’s Paul Burgener says anything planted now is uninsurable. “For those producers carrying APH, CRC, or RA contracts, prevented planting is an option if the crop cannot be planted due to excess moisture or flooding. The rules for prevented planting are complex, and a visit with your insurance professional is recommended. Those producers who are carrying GRP or GRIP insurance are not eligible for prevented planting payments.”
Late replanting can still generate income. Regardless of hybrid maturity, July 1 planting may yield around 30%. Earlier maturities resulted in drier grain at all planting dates, but they also yielded less than full season hybrids. Iowa St. research indicates an early fall frost can destroy or dramatically reduce seed yields. Read much more.
3 mil. acres of corn and beans in Iowa have been flood damaged, with 11% of corn to be replanted and 8% was flooded. Although mid-June is behind us, corn prices are causing many producers to consider replanting despite the yield loss. At this point, research show a 52% relative yield potential is possible with a population of 32,000.
Soybean survival after a flood depends on the type of soil present in the field. When flooding occurs at the V-4 stage, MN researchers report yield loss of 1.8 bu/A per day of flooding on clay soil, but only 0.8 bu/A per day of flooding on silt loam soils.
While the Cornbelt is wet, the Gulf states are dry and that means soybean rust is not spreading at this point. Ohio State’s Anne Dorrance says only one Texas kudzu patch has Asian rust, and while it was found on soybeans in the Florida panhandle, it was only one pustule in 150 soybean leaves, which was “not much to get excited about.”
The data comes from Illinois, but the entire Cornbelt may be in need of an initiative to establish grass waterways. IL Extension specialist Bob Frazee says the latest cropland survey indicates 25% of the IL acreage is now incurring major damage from concentrated water flow and ephemeral erosion, certainly exacerbated by this spring’s heavy rains.
If your wheat looks sick it could be attributed to a variety of fungal diseases resulting from the cold, wet spring. Wheat generally outgrows such maladies as pythium root rot, bacterial leaf blight, and wheat streak mosaic virus, but this year has given it a challenge. None of the pathogens can be controlled by foliar fungicides, so don’t waste the money. Next fall, ask your seed dealer for wheat varieties that are less susceptible to the fungi.
Crazy top may be prevalent in the Cornbelt, because of the saturated soils and rains that kept whorls of corn plants full of water says MO Extension’s Laura Sweets. That is the environment for a downy mildew fungus that causes the misshapen plants. It may be throughout the field, or in just a circle around a pond. Since losses are minimal, there are no control measures that are warranted, unless it is improved soil drainage in the field.
Heavy weed infestation could have resulted from heavy rains that neutralized some herbicides or hurt canopy development. Weeds that emerge after the V3 stage in corn are at a disadvantage, and their impact may be minimal unless they completely cover the soil. Iowa State’s Bob Hartzler says 3-4 in. weeds in 30 in. corn do not warrant a spray.
This may be one year when you have weedy fields at harvest time, but Hartzler says that may be something you just have to ignore for now. He says late emerging weeds will have minimal impact, but may produce a lot of seed, and create a dense weed mass next year. If you are aware of such a potential problem, create a 2009 weed management plan.
If you had no chance to apply pre-emergent weed control, short corn should be treated as soon as possible to avoid further yield loss from weed competition. Your weeds may be 5-6 in. tall, and a 5-10% yield loss on 150 bu. corn is worth $90 on $6 corn, and that cost estimate is increasing says IL Extension weed specialist Aaron Hager.
Environmental factors have caused a thin cuticle on corn leaves, and that may be the reason corn is showing crop injury from post emergent herbicides. With wet soils causing stress, crop injury becomes more common, particularly if crop oil was used.
Hager warns about potential problems with applications of post emergent herbicides to corn that may be older than the product label allows. Its height may be short, but it may be physiologically older, and he says do not apply the product if the corn is too old. Hager says if any tank-mixed products are used; follow the most restrictive product label.
If soybeans were planted into a mass of winter annuals, and summer weeds are now coming on strong, Hager suggests delaying any burndown herbicide for several days after the soybeans are planted. He says the planting activity may have disturbed the winter annuals enough for them to shut down their metabolism and halt any herbicide uptake.
Weather may have delayed your hay cutting and large stems did not dry normally, carrying moisture back to your hay storage, and now you have hot hay. While spontaneous combustion is rare, it can happen, unless you monitor the temperature, as recommended by Iowa State:
1) 125 F. is a normal temperature, but too hot to hold your arm in the hay very long.
2) 150 F. is when spoilage fungi are working and protein digestibility decreases.
3) 175 F. is the point when spreading out the hay should be considered to avoid fire.
4) 190 F. is the point when the fire department should be alerted. Very low feed value.
5) 210 F. is the point of spontaneous combustion and firefighters should be present.
Posted by Stu Ellis at 12:02 AM | Comments (0) | Permalink
June 26, 2008
A Salvage Checklist For Flooded Farmsteads
In addition to fields, floodwaters have claimed homes, farm buildings and grain bins this spring, creating permanent damage to improvements on thousands of Cornbelt farms and destroying millions of bushels of stored grain. Owners of many farmsteads are returning home to inventory the damage, but also wonder what can be salvaged. Let’s develop a checklist and action plan to address those questionable issues.
A good checklist is provided by Iowa State grain quality specialist Charles Hurburgh and colleague Dan Loy in the Animal Science Department. Their factsheet on flooding and stored grain will provide guidance to many Cornbelt farms.
• Flood damaged grain is considered contaminated because of the unknown toxins in the floodwaters. It cannot be used for anything and is destined only for disposal. Health officials may have preferences for where it goes.
• Consider tile and pit water to be contaminated with animal waste and chemicals, along with any storm sewers, which become contaminated in floods.
• In a grain bin that was partially submerged, the grain that remained several inches or more above the high water mark should be in good condition. However, it must be removed from the top, since it will be compromised by the contaminated grain through regular bin emptying methods.
• Grain that is wet will provide a haven for toxins, and with warm temperatures mold will grow fast. Clean grain that is wet will spoil within hours in the summer.
• If grain is wet only from rain water because of a leak in a bin, the grain can be dried and clean, tested for mycotoxins, and then used without delay.
• Grain that comes in contact with muddy soil should also be considered as contaminated, even if the grain was initially dry, but became scattered on the ground during subsequent salvage.
• The Food and Drug Administration’s guidelines on grain handling allows for washing and high temperature drying, as long as it did not remain in floodwaters for any length of time, and the water was clean. If the grain is reconditioned, the FDA must give written consent before it is sold. The grain can be dried and either immediately feed to livestock or ensiled for later feed use.
• Livestock can be fed wet corn, but the ration should be recalculated to account for the high moisture content. Whole, wet soybeans can also be fed as the protein portion in a livestock ration, but the ration should be recalculated to accommodate the change.
• If livestock are being fed DDGS, the addition of whole soybeans that might be wet could create problems with excess fat content in the ration. Raw soybeans can be fed to sows, but they need to be heat treated to be fed to younger pigs.
• Submerged grain bins that were full of grain may be at the end of their useful life. The soaked grain will be expanding and bin seams will split, bolt holes could enlarge, and caulked seals will be compromised. Doors may no longer shut. Other structures, such as stirring devices may no longer work properly. Bin foundations may have deteriorated. Bin design engineers may be needed to assess the damage to grain bins.
• On bins and other farm structures, electrical wiring may also have been compromised. Controllers, motors, fans, and other powered equipment may be ruined, but should not be energized when still wet.
• Wooden structures may be totally ruined, because of drywall and insulation deterioration and the introduction of molds to structural areas.
Summary:
Farm structures may have been substantially damaged during the flood, which includes electrical components and foundation damage. Grain bins that were submerged may be holding grain that is swelling and will cause bin failure. Grain that was submerged in the flood cannot be used for feed or food and should be destroyed. If grain became wet from the rain, and has not yet spoiled, it can be washed and reconditioned, then used with written consent of the FDA. And, yes, grain elevator managers face the same issues as farm operators.
Posted by Stu Ellis at 12:35 AM | Comments (0) | Permalink
June 25, 2008
What Are The Prospects For Profits In Cattle?
There is no secret that cattle bids have not covered the feed budget for quite some time, but many cowboys are holding on for better days ahead. (If only everyone else would get out of the business there might be money to be made!) Times have not been friendly for the feedlot operator or the cow/calf operator, but there may be some ideas that will either raise additional revenue or at least limit the loss.
First of all, please don’t get your hopes too high. As Ohio State Extension Specialist Stan Smith says, “There aren't enough cost saving feed alternatives anywhere in this State of Ohio which will allow us to put together a cattle finishing budget for the next year which shows a profit. At least not at the feeder cattle prices we presently see and the feed costs we can anticipate today.” Pound for pound, beef will not cover the price of corn, when you add in the cost of the animal and all of the other deductions that have to be taken off the sale price.
Smith and other Extension specialists have all heard the response that feeding retained calves somehow clears that hurdle of profitability, but he adds, “Unfortunately, that dog won't hunt.” If you are a full meal deal operator, you are either shorting yourself on the profit of selling feeder calves, or buying your calves for your feedlot that are not properly priced. If you need help with budgeting, Smith offers the 2008 OSU Enterprise Beef Budgets.
Smith says it is reasonable to expect the value of feeder calves to match the cost of feed and the projected value of fed cattle, plus a profit; but he says that is not happening at current economics because someone is willing to pay more for the calves than that formula allows. He suggests leaving feedlots empty this year and next, or finding an alternative use such as backgrounding, re-packaging cattle, or storing such things as grain, fertilizer or machinery in empty barns.
Higher feed costs are reality, says livestock economist John Lawrence at Iowa State University in his latest newsletter. He says they are not a passing fad, and livestock prices will eventually rise in response to the higher feed costs and find equilibrium. That point will also see more land producing crops, increased yields, reduced demand for feed, and commercially viable cellulosic ethanol, all of which will moderate corn prices. In the meantime, Lawrence says corn prices will be somewhere between bumper crop levels of $4 and drought levels of $8.
Until that point of equilibrium, Lawrence says livestock production will have to decline to return to profitability, including liquidation of both cattle and swine herds. Producers remaining will have to manage risk with a variety of tools, but also to learn how to manage margin, not just price.
Margins have been positive only for processors and retailers in the first five months of the year say Missouri livestock economists Glenn Grimes and Ron Plain. Their margin was up 9.5% from last year, and packers’ margin was down nearly 11% for the five months and prices for fed steers were down 2.4%. They add, “Most of the increase in prices that will result from the higher feed grain prices are still in the future.” The liquidation that Lawrence says is necessary is happening faster than the market anticipated. Grimes and Plain report, “The cattle on feed report for June 1 came in a little more positive than the trade reports. The number on feed June 1 was down 4.1%, the trade estimates average was for a 2.8% decline. Placements on feed during May were down 11%, the trade estimate were for a 9.6% decline. Fed marketings were up 2.6% and trade expected the number marketed would be up 1.7%.”
There are a number of realities in today’s cattle market that can either benefit or hurt a cowboy, says Utah State livestock economist Dillon Feuz, and you just can’t manage around them:
1) Heifers were discounted just under $9 per cwt. from steers and they found that heavier calves received a lower price per pound than lighter calves (the well known weight price slide).
2) Angus, black or red, calves received the highest price and that Charolais-Angus cross calves were about $1 per cwt. less.
3) Angus-other English breed cross calves were priced on average about $2 per cwt. less than Angus and calves with Brahma or "ear" influence were priced $5 per cwt. lower than Angus.
4) Small frame calves were priced $10 per cwt. lower than medium-large frame calves.
However, Feuz says there are some management items that can be controlled:
1) Calves with horns were discounted a little more than $1.50 per cwt. So, it would pay you to dehorn any calves with horns.
2) The greater the weight variation within a sale lot, the lower the market price. It might therefore pay you to sort cattle into more uniform sale lots.
3) However, there is also a premium for larger lots, 300 head or more receiving the highest price. Lots of less than a semi-trailer load are discounted sharply.
4) Pencil shrink varied between 0-3 percent. Calves that were offered with greater pencil shrink did bring a higher price per pound. However, that higher price did not fully offset the revenue that was lost by selling less weight. The moral of this story might be that if you want coffee shop bragging rights for topping the sale, offer more pencil shrink, but if you want more dollars in your bank account offer less pencil shrink or perhaps none.
Summary:
Today’s cattle prices are not going to be profitable, no matter how you calculate it, but profitability will return as beef prices rise to meet the value of feed. In the meantime, there are budget calculators that will help minimize the losses, as well as a variety of marketing tips. Cattlemen need to be patient, or in the alternative, vacate feedlots for a year or two and find alternative income for those facilities.
Posted by Stu Ellis at 12:40 AM | Comments (0) | Permalink
June 24, 2008
Will The Next Market Move Be Up Or Down?
If the corn market turned south tomorrow and did not look back, would your marketing plan manage your price risk? If the market begins a bearish drop, how fast and far would it go? Is this something that could not possibly happen, given the high demand and low supply? Let’s take a look at the future in the futures market.
If you think back to 1993 when flooding washed out Cornbelt cropland, the market receded along with the water. The market was satisfied that it had accurately traded the corn and bean crop, demand had been rationed, and it was time to move on. Are we just about at that point this year?
South Dakota State University economist Alan May says last Thursday’s market downtown was indicative of a market prone to heavy profit taking while at the same time having fundamental factors providing sufficient support to prevent more significant losses. And in last week’s newsletter, he says, “All this means is that it is important to watch this market closely to make sure that you don’t assume that the only direction is higher; rather, utilize those tools that can protect your price in the event of a sudden downturn.”
Is that “sudden downturn” imminent? Darrel Good at the University of Illinois acknowledges in his newsletter there is considerable uncertainty about acreage, yield, and production, but if there is favorable weather for the balance of the growing season, there could still be a respectable crop. If that is the case, Darrel Good says there may be some cracks in the foundation holding up the current record high prices.
1) Large cattle and swine numbers have been eating a lot of corn for the past year, which has been expensive, and has caused many producers to curtail production, and if so, that means corn demand will weaken. Cattle placements into feedlots are declining, the number of cattle on feed is declining, and another upward spike in corn prices would reduce the farrowing rate. If you look at livestock futures, the market is anticipating reduced numbers later this year.
2) Corn export shipments have slowed. While we have sold nearly 2 billion bushels into the export market, to get to USDA’s 2.5 billion bushel forecast would require a rate of export sales above what has been happening in recent weeks.
3) Have you noticed the recent headlines about plans being scrapped for new Midwestern ethanol plants? An ethanol slowdown extends from those cancellations to also include slower work on plants under construction and closure of plants currently operating. Those actions signal a loss of profitability in the ethanol production industry, despite a recent increase in spot ethanol prices in the past weeks.
If those planets are lining up, along with an estimate of potential supply such as USDA’s June 30th Planted Acreage Report, the market could be ripe for a correction, and it is impossible to predict how far and fast it may retreat. That is the end of a fiscal quarter and hedge fund managers like to show profits at the end of the quarter.
That does not bode well for the producer, many of whom have gaps in their fields, or maybe even no fields or farms left because of the flooding. However, the management of risk is incumbent upon everyone in agriculture today, and preparing for a market downturn is smart marketing.
Summary:
A slowdown in ethanol production, a decline in livestock feed demand, and slower exports all point to the fact that current high prices may have accomplished their goal of rationing demand. With next week’s USDA forecast of acreage, the supply can be projected, and with those elements, the market may be poised for a downward correction. Smart risk managers will have their marketing plans in place for adequate price protection.
Posted by Stu Ellis at 12:57 AM | Comments (0) | Permalink
June 23, 2008
Can Biofuels Be Blamed For Higher Food Prices?
Corn and soybean producers have taken a beating in recent months because of high commodity prices. Critics, who include consumers, livestock producers, advocates for food stamp recipients, and supports for international food aid have all expressed concern about high food prices, and many have made the link to corn and bean values whether it was legitimate or not. USDA’s new Chief Economist went to Capitol Hill earlier this month and said most of the criticism was not appropriate.
Joe Glauber has been at USDA for many years, but now holds the top economist job, and testified to the Senate Committee on Energy and Natural Resources. He said a couple facts were true, that corn and soybean oil make up 90% of biofuel production, corn and bean prices have risen over 50% in the past year, and global food prices have risen over 45%. But he says to blame the corn and soybean producer, or even the biofuels industry, is not correct.
Glauber said food prices are rising for a number of reasons:
1) Global economic growth is raising family incomes and bolstering demand for processed foods and meats.
2) Adverse weather has created grain shortages in many countries, and buyers are buying ahead, pushing prices higher.
3) Many countries have installed export restrictions to reduce their own domestic food price inflation.
4) Higher costs for food marketing, transportation, and processing are due to higher costs for energy.
Farmers retain an average of 20% of each dollar spent by the consumer on food, but that is less than the value of the processing. Regarding grains and meats, each has a different economic track it is following.
1) Wheat is in the 3rd consecutive year of low global production, with US stocks at record lows and prices at record highs, but global production will rise beyond the point of demand.
2) Corn has strong domestic demand from livestock operators and a 15% increase from export business due to currency relationships; however ethanol demand will rise to 4 billion bushels, further reducing US carryover stocks.
3) US rice prices are high because of tight global supplies and export bans by several producers that have pushed up prices.
4) Soybeans are priced higher because of low stocks and carryover, with strong demand from China, and the prospect for larger US crop production.
5) Fruit and vegetable prices are higher because of drought and freeze damage.
6) Livestock and poultry prices are responding to increased cow slaughter and herd contraction, increased pork production and low market prices, and stable broiler production from higher feed costs.
7) Increased dairy production from higher international demand.
The biofuel industry doubled its demand for corn and soybean oil over the past three years, but while that was responsible for part of the rise in food prices, it was not the only reason. The strength of exports from global economic growth and drought resulted in 15-18% more corn and soybeans being exported. The increased use of corn and soybean for biofuels has raised commodity prices slightly, but has had little to do with higher prices for wheat and rice. Globally, food prices have increased 45% over the past year, with the largest increases in rice and sunflower oil, but lower prices for meats. Corn contributed 5% of the 45% increase and beans contributed 12%, and assuming there was no growth in the biofuels industry, global food prices would have still risen over 40%.
Regarding domestic food price increases, USDA’s Glauber says the Consumer Price Index for all food rose 4% in 2007, pushed up by a 30% increase in egg prices, 7% for dairy, 5% for poultry and 4% for beef. And he says it is very unlikely retail prices were affected by higher corn and soybean prices, since higher feed costs impact producers and there would not have been any time for that event to translate into higher retail prices.
Glauber says the ratio of livestock prices to feed costs tells producers whether to increase or decrease production, and in April the steer-corn price ratio was the lowest since August 1996, the hog-corn ratio was the lowest since December 1998, and the milk-feed ratio was the lowest since 1995.
In the Consumer Price Index, Glauber says biofuel expansion increased food prices in 2007 by .10-.15 percentage point, and in the first four months of 2008 the increase was .20-.25 of a percentage point, while the CPI for all food rose 4.8%. He forecast that in future years, a curtailment of livestock production from higher feed costs would still only raise the food CPI by .6-.7 of a percentage point.
Summary:
Food prices have risen both domestically and international, but USDA says that cannot be attributed to the increase in the biofuels industry. It has contributed less than a quarter of a percentage point to the 4.8% higher food costs this year, and less than 5% of the 45% increase in global food costs. The real reasons are higher demand from income growth areas, increased energy costs to process and transport foods, and global grain shortages due to weather adversities.
While that might be the bottom line economics, should this issue be viewed differently?
Posted by Stu Ellis at 12:11 AM | Comments (0) | Permalink
June 20, 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.
If it seems that high water years in the Midwest are increasingly common since about 1970; they are, says IA State meteorologist Elwynn Taylor. Compared to 1993, he says the flood arrived earlier, water levels were higher in many places, and this year the rain and flooding were more widespread in the Midwest than was the case in 1993. Read more.
The climate has changed, says Taylor, because the Midwest receives 10% more annual precipitation since 1980 than prior to 1970, which doubles the stream flow. From 1930 to 1970 there were 2 “high water years”, but since 1970 there have been 12 “high water years.” He says the 200 year floods of the past can now be expected every 33 years.
Weather patterns similar to this year occurred in 1947, with many high flood reports, followed by a severe Cornbelt drought, says Elwynn Taylor at Iowa State. “The chance of changing to drought conditions appears to be about 25% and to the warm and dry side of usual (sufficient to reduce Cornbelt yields to below trend) is about 62%.”
USDA’s June 30th Planted Acreage Report will contain updated information about flooded crops after all. The National Ag Statistics Service will re-visit farms this coming week that were surveyed in early June to ascertain water damage and producers’ plans for using the flooded fields. NASS says it will also conduct a more extensive update of planted and harvested acreage in July for a more accurate August Crop Report on 8/12.
A fair amount of crop loss and demand rationing are already priced into the corn market with December 2008 futures approaching $8, says Extension’s Darrel Good at Illinois. “The worst of the crop stress may have passed and more favorable growing conditions are forecast. Corn prices may now moderate somewhat, at least until more is known about crop size.” Read more.
The global soybean situation remains clouded by the standoff in Argentina between farmers and the government, according to Mike Woolverton at Kansas State. “Lack of a suitable government response to the on and off farmer’s strike is causing a political crisis and has prevented Argentinean soybean exports for several months.” Woolverton says US beans have filled the gap, which has reduced our carryover and raised prices.
Woolverton also says the Brazilian harvest may have been less than USDA estimates, since the Minister of Agriculture says it was 59.85 mmt, not USDA’s guess of 61mmt. Woolverton also believes Brazil will not expand soybean production as much in 2008/09.
Did you sell at the Feb. highs, Melvin Brees asks? “Many producers now think they sold too early, sold too much, sold at too low of a price and some maybe even sold more than they may produce. What seemed like an easy decision to sell at almost unheard of prices in late winter now appears to have been the wrong decision. However, selling near record high prices is probably something that should be done again.” Read more.
Brees, at the Univ. of MO, says corn and beans remain in a steep uptrend signaling that prices will move higher. But he also says “downside price risk is also huge.” Brees says many bullish factors are priced into the market, and moderating weather will reduce the uncertainty of crop size, with prices moving lower. Many bearish factors include:
1) Livestock producers are liquidating to cut costs so feed demand will decline.
2) Exports will weaken from a stronger dollar and increasing transportation costs.
3) Weaker oil prices will squeeze ethanol demand, leading to refinery slow downs.
4) Limits placed on speculative trading would cause liquidation and a price collapse.
5) Opening the CRP for cropping would increase 2009 acreage and lower prices.
Cash prices for beans are catching up to futures, calculates Purdue’s Chris Hurt, “Soybeans are getting hard to find and basis levels have reflected the shortage that is developing this summer. Basis levels moved from about $.50 to $.60 under futures in late winter to about $.15 to $.25 under currently. Hurt’s latest newsletter can be read here.
Hurt says, “July futures reached $15.96 on March 3 and a return to that level is now the objective for old-crop futures. New-crop futures prices established new record contract highs on June 11 at $15.11. Movement toward $16 would be the short-term upside objective. It has been a wild ride as November futures have had a trading range of $4.50 per bushel from lows April 1 through June 11.” He says weather will dictate the trend.
Plan your soybean marketing. Hurt says add to new crop sales, but do it wisely:
1) The basis is wide, compared to the shortage of new crop beans over the coming year.
2) The demand for storage will be limited this fall because of the smaller corn crop.
3) There will not be as much pressure to sell either beans or corn at harvest.
4) The current new crop basis of 80¢ to $1 should tighten to 35¢ to 50¢ at harvest.
5) Any pricing for new beans should be on hedge-to-arrive, without setting the basis.
6) Since the basis will improve, forward contracts that set the basis should not be used.
Corn roots may be suffering, if it was planted in damp soils that became compacted then crusted with beating rains. IL Extension crop specialist Emerson Nafziger says cultivation could break up the crust and mulch the soil to retard evaporation, and give oxygen to the roots. He says corn with yellow leaves is not photosynthesizing well and is standing in water. He says its roots will not recover very fast due to slow soil drying.
If your corn is yellow, it is likely due to wet soils and depleted nitrogen, and there is little that can be done until the soils dry out says Emerson Nafziger. The quick warm up helped the leaves at the expense of the roots, and their demand for moisture and nutrients outstripped the ability of the roots to supply the needs. He says the roots need oxygen, and need to escape from carbon dioxide. Nitrogen will only enhance vegetative growth, which will not help the roots. He says the roots need to grow without your help.
The corn planting deadline depends on your north latitude. Nafziger says corn that is planted late, then gets wet, will probably not mature in time. A crop that dries out will suffer from drought stress. He says it is not impossible, but getting good yields from corn planted after 20%-25% of the seasonal Growing Degree Days have already accumulated is not a very sure thing. He says mid to northern growers need shorter season corn.
Sorghum can still be planted, and yield acceptably since it is a shorter season crop. IL crop specialist Dennis Epplin says sorghum needs only 35-40 days from mid-pollination to harvest, versus the 55-60 for corn. Narrow rows provide a quick canopy, but planters will require special seed plates. Check pre-plant herbicide labels for potential problems.
Prepare for the worst when it comes to Japanese beetles and corn rootworm beetles at pollination time. That is advice of IL Extension entomologist Mike Gray who says both insects have been delayed in their development, along with the corn, and that would put the timing for pollination and silk clipping at the hottest point of the summer in late July.
Japanese beetles in your soybeans could be a more serious peril this year with the higher values of beans. Mike Gray says traditional defoliation levels suggested as economic thresholds are 30% before bloom and 20% between bloom and pod fill. But with the higher values of beans, he says a more conservative assessment is warranted when treatment decisions are made. He says the key to success this year is careful scouting.
Soybean aphids have been found in northern IL, also getting a late start. Entomologist Kevin Steffey says, “Because there are fewer soybean fields at this time in 2008 (73% planted, 58% emerged as on June 16) than usually are available to soybean aphids during most years at this time, infestations could become relatively large in scattered fields. The temperatures this past week have been ideal for soybean aphid development.”
Flood #1. Farm wells are at risk when flooded, and need to be tested after the water recedes. Check with local health officials to obtain test kits and locate testing labs. Read more.
Flood #2. Crop insurance coverage varies by state (90% of IA covered) and agents need to be alerted about damage and to find out the rules for replanting and prevented planting. Read more.
Flood #3. Ponding and wet soils deplete oxygen to the corn plant, making it susceptible to various root rot pathogens. As waters recede, examine plant tissues for their health. Read more.
Flood #4. Electrical systems in farm buildings may have been compromised, so power should be disconnected professionally, before you thoroughly dry out circuit boxes.
Posted by Stu Ellis at 12:43 AM | Comments (0) | Permalink
June 19, 2008
You've Had All The Excess Rain You Can Stand, But What About Your Grandson's Farm?
Weather seems to have been on your mind lately. In fact it has been on the minds of most every Cornbelt farmer who delayed planting because of cold, wet soils, and now is fighting ponds and levee breaks. The spring weather has been relatively fearsome with frequent storms, tornadoes, and torrential downpours. Are we looking at the weather of tomorrow?
No one knows more than a farmer that the vagaries of the weather generate risk and can bring a successful farming operator to his knees. Climate change may well be upon us, since weather seems to have become more variable, and exhibited extremes more than it has in the past century. Global Climate Models that are created from a variety of inputs such as conservation of mass and water, momentum, energy, and ocean dynamics can point to potential weather and climate expectations, says Gerald North of Texas A & M in the Spring 2008 issue of Choices.
North says many other dynamics are considered in developing climate models, which can predict future weather patterns. Those include changes in the content of greenhouse gases, volcanic dust in the atmosphere, and the changing brightness of the sun. Meteorologists will change the variables and that changes others, such as increasing and decreasing the water vapor content of the atmosphere. That is manifest in ice and snow cover, as well as cloud densities. He says the weather prediction models all agree that if carbon dioxide levels double, global temperatures would increase by more than 5 degrees F. At current levels, that would occur in 140 years, but when other greenhouse gases are doubled, the temperature increase would occur in 70 years.
North says there are a number of predictions from the international global climate models:
1) There is more warming toward the poles than in the tropical areas.
2) Precipitation would increase with more water vapor in the atmosphere, but less than expected.
3) Most of the increases in precipitation are in the middle latitudes, such as the northern tier of the US, with more precipitation north of the Gulf of Mexico and less to the west of it.
4) Mountain snow packs will shrink and reduce river flows, and snows will melt earlier on high plains ranges.
For the Cornbelt 50 years from now, temperatures would be 4-6 degrees warmer in the winter, 2-8 degrees warmer in the spring, 3-7 degrees warmer in the summer, and 3-8 degrees warmer in the fall. 50 years into the future, the Cornbelt can also expect winter precipitation that varies 10% either way from the present, spring precipitation that ranges from 5% less to 15% more, summer precipitation that ranges from 20% less to 10% more than the present, and fall precipitation that ranges from 30% less to 5% more.
North also says the various weather models predict:
1) There are likely to be more heat waves with more mid-latitude drying in summer and an increased risk of prolonged droughts (and their consequences, fires, etc.).
2) Precipitation in the United States will be mixed, with more rain in the east and much drier in the southwest.
3) Most models suggest that the multi-year swings of wet and dry periods will be more pronounced than those of today’s climate.
4) Sea level will rise a foot or two under the conservative assumptions that melting of the big ice sheets on Greenland and Antarctica does not accelerate catastrophically.
Summary:
More violent weather, more rain, and warmer temperatures will be the forecast for the Cornbelt in 50 years, if global climate models are correct in their predictions. Numerous dynamics are fed into global climate models which indicate increasing amounts of greenhouse gases in the atmosphere will move warmer temperatures north, but provide quantities of precipitation across most of the Cornbelt.
A question for you: What should seed companies be doing today to prepare for expected changes in the weather? Or do you place any stock in the predictions?
Posted by Stu Ellis at 12:04 AM | Comments (3) | Permalink
June 18, 2008
The New Farm Program: No Pain, No Gain
Compared to understanding the new Farm Bill, mastering the markets and the weather will seem as easy as eating a piece of pie. Grandpa and Dad went to the ASCS office to sign up and just flagged off their setaside acres. For the 2002 Farm Bill, you had to make some calculations and some decisions whether to participate. For the 2007 Farm Bill, you might want to volunteer to do all of your neighbors’ taxes if they will take care of your program sign up obligations. When you get to the ACRE and SURE programs, you will be thinking they SURE are ACHERS!
All joking aside, the Farm Bill will be in effect through the 2012 crop, and although commodity prices are well above support levels, most farmers will find that it would be smart to pencil out the alternatives. To get you started toward a rough understanding, University of Nebraska ag economist and farm policy specialist Brad Lubben offers his insight in the latest Cornhusker Economics newsletter.
On the surface the new farm program is similar to the last farm program:
1) A loan deficiency payment can be obtained if the Posted County Price is below the county loan rate.
2) You will get a direct payment, which is a set rate that varies by crop.
3) Counter cyclical payments may be made, depending upon the results of calculations with the target price, direct payment, loan rate and market price.
Direct and counter cyclical payments are made on 85% of the yield in 2008, and 83.3% for 2009-2011. Lubben says the marketing loan benefits and the counter cyclical payments would be safety net provisions in case of a collapse in commodity prices, but direct payments will provide cash annually.
But the complexity begins in 2009, with the implementation of the Average Crop Revenue Election (ACRE) program. Entry into that program is irreversible, but you may find it to be quite beneficial, depending upon your farm. It is designed to provide financial support more closely to prices in your own state compared to a national price and yield.
1) Benchmark state yields are based on Olympic averages.
2) Benchmark prices are two year national averages.
3) State guarantees are 90% of a calculation, but cannot change 10% year to year.
4) Benchmark farm yield is based on Olympic averages.
5) Benchmark farm revenue includes crop insurance and crop revenue
6) Actual state revenue tallies statewide statistics
7) Actual farm revenue uses benchmark prices and annual production.
8) ACRE payment rates utilize all of the above, but is made on 83.3% of crops.
Since ACRE payments are limited to 25% of the guarantee, it may not cover the entire decline in crop prices. And ACRE payments are based on state statistics, not farm statistics. Farmers electing the ACRE program will only be eligible for 80% of their direct payments and 70% of market loan benefits.
Delays in approving the new Farm Bill were due in part to the development of a permanent disaster program, which is called Supplemental Revenue Assistance Program (SURE). Beginning with the current crop year, it covers crop and livestock losses, along with feed losses. Participation requires crop insurance, being in a county with a declared disaster, and having a loss greater than 50%. Calculations are more complex than in the ACRE program, but payments come after crop insurance indemnities are paid, and payments are limited to 90% of the expected revenue.
Lubben readily admits the programs are much more complex than typical farm programs. He says with the need to manage risk with crop insurance and marketing tools, the addition of the safety net programs increased the complexity of decisions that need to be made, but may be critical to the survival of the farm.
Summary:
21st Century agriculture requires a strong discipline in risk management, and the 2007 Farm Bill provides assistance, despite its complexity. Participants can remain with the elements retained from the 2002 legislation, but also offers an alternative that calculates financial assistance based on state level statistics instead of national statistics. A permanent disaster program would also provide assistance, but only to farmers with crop insurance. The complexity of the calculations and program requirements should not divert farmers from a strong look at the program details.
Posted by Stu Ellis at 12:25 AM | Comments (0) | Permalink
June 17, 2008
The Corn Market: Prices Will Ration Short Supplies
Corn futures are pushing toward the $8 mark. The good news is you don’t have to sell 4 bushels to get $8. The bad news is some farmers may only have four bushels to sell. Nightmares have come true for many farm operators across the Cornbelt, as they watch crops drown and their topsoil wash down rivers that used to be miles away. Little to nothing can be done except the aftermath paperwork. But for the corn market, the headaches have only begun.
Purdue economist Chris Hurt says we only have to follow the 1993 row marker when the last 500 year flood arrived. In his June 11 newsletter Hurt says yields were ultimately reduced by 18% from planting expectations and that would mean a 127 bu. national average this year when the trend yield was 30 bushels higher. Also, 6.3 million acres were abandoned to the flood. Hurt says a 142 bushel average applied against 76 million harvested acres only produces 10.8 billion bushels compared to the 13 billion bushel crop last year and the expected ethanol consumption of an additional 1 billion bushels.
If we are short 3-4 billion bushels of corn, University of Illinois economist Darrel Good says that means rationing. In his June 16 newsletter Good says the 1993 crop saw exports decline 20% and feed use declines an average of 11% in short crop years of recent vintage. He says USDA is projecting a consistent decline in use as a result of the expected short crop this year. Feed use will be down 16%, exports will be down 21%, but domestic consumption is expected to increase 33% with the help of ethanol taking 1 billion bushels more than in 2007.
Hurt says the ethanol estimate really depends upon oil prices and corn prices. He calculates a $1 loss per bushel currently and some plants are already in a slow down or shut down phase. One help may be a 32% increase in consumption of DDGS, which Darrel Good expects because of high corn prices.
As we move toward the June 30 Planted Acreage Report, Good says the data has already been collected, and there may still be some corn replanted or beans planted that the report does not reflect. He also says harvested acreage will also be tough to calculate because of the flooding and ponding. He believes “A fair amount of crop loss and demand rationing are already priced into the corn market with December 2008 futures approaching $8. The worst of the crop stress may have passed and more favorable growing conditions are forecast. Corn prices may now moderate somewhat, at least until more is known about crop size.”
However, Hurt says we are in an explosive price environment, with the potential for July futures to reach $8.50. However, he says a drying pattern is forecast by the National Weather Service, leading to a near term peak in prices this week. If prices are at a breaking point with downside potential, you’ll be interested in the thoughts of South Dakota State University economist Alan May, who says you know your expenses, and they should be written into your marketing plan. In his June 10 newsletter he says, “If current offerings of new crop bids on corn mean profit for you, there is nothing wrong with making sales now. Remember that with every sale of new crop corn you make, you give up something (the chance for a higher price) to get something else in return (protection against lower prices).” May says the wheat market reached its $20 peak in February, and then prices fell $4-$5 per bushel.
Summary:
Rationing is either upon us or around the corner for the corn market. With the loss of several million acres of corn, and crop quality declining in the face of adverse weather, US production this year may be closer to 10 billion bushels than the 14 billion that is needed to meet full demand. Cornbelt marketing specialists believe ethanol producers will get the corn they want as long as oil prices remain high. That means livestock producers will get shortchanged along with importers, unless the US dollar weakens further. But for corn growers, cash prices are quite attractive and will yield a profit for producers who have a marketing plan.
Posted by Stu Ellis at 12:17 AM | Comments (0) | Permalink
June 16, 2008
Changes in Agricultural Policy Could Impact Your Long Term Cropping And Marketing Plans.
What have high commodity prices done? First and foremost, they have provided American crop farmers with revenue that has been appreciated and long overdue. But there have been numerous consequences for domestic and foreign consumers who have had to pay higher prices. There have also been impacts for the grain marketing industry. And they have also spurred increased global production. Members of Congress asked for an analysis of the issues, and you’ll find out what they were told.
The Congressional Research Service reviewed the impact of high commodity prices and reported to Congress in early May. Since 2007 and through 2008 so far, prices for the world’s two major food crops, wheat and rice have risen substantially. Wheat prices rose 81% in 2007, and have risen 44% so far this year. Rice prices climbed 21% in 2007 and 144% since late last year. In March the Director of the United Nations World Food Program asked for $500 million in donations to supply food to low income households around the world. Pleas for money, pleas for understanding, and warnings for a worsening crisis followed quickly. Domestically, the higher prices contributed to food price inflation and raised costs for livestock feeders and food processors, and created hedging problems for grain merchandisers.
But the issues that have affected one commodity have not impacted others, says Randy Schnepf of the Congressional Research Service (CRS),
• For wheat, a combination of international weather-related crop failures over the past two years that has resulted in historically low U.S. and global stock levels is the primary impetus behind high prices. Government policies by several key foreign producers to limit exports in favor of domestic markets also have contributed to higher prices.
• For coarse grains and oilseeds, a combination of growing demand bolstered by rapid income growth in developing markets and government biofuels mandates are the key drivers.
• For rice, the combination of population-driven demand growth outpacing crop yields over several years, and recent government policies by several major rice exporting countries to limit exports, are the primary catalysts.
Carryover stocks are expected to be at or near historical lows when the new crop is ready for harvest:
• Stocks for coarse grains and wheat are projected to drop by mid-2008 to the lowest levels since 1977, while ending stocks of total grains fall to the lowest level since 1981. More importantly, their respective stocks-to-use ratios are all projected to reach record lows.
• The stocks-to-use ratios for global corn and vegetable oils are projected to be the tightest since the early 1970s.
• Global rice stocks, as well as the stocks-to-use ratio, are projected up slightly from the previous year at 77.2 million tons and 18.2% in 2007/2008. However, the previous year’s stocks-to-use ratio of 18.1% was the lowest since 1976.
• U.S. wheat ending stocks for 2007/2008 are projected to fall to their lowest level (242 million bushels or 6.6 million tons) since 1947 — well below their pipeline range.
• U.S. soybean stocks of 4.4 million tons are projected at the lower end of their pipeline range.
• U.S. corn ending stocks, although projected at what would appear to be an ample level, are low in historical global supply-to-use terms.
The term “perfect storm” has been used to describe the simultaneous factors that have resulted in high food prices:
1) Global grain production declined in 2005 & 2006, and then an Australian drought cut wheat production for a second year.
2) Increasing population and robust economic growth in China and India raised the demand for food in households with strong purchasing power.
3) A weak US dollar made food exporters cheaper, and buyers bought more products and increased the frequency of their purchases. The shift in the exchange rate has equaled the rise in commodity prices in some cases.
4) Concerns over rising oil prices created governmental policies to promote biofuels, many of which are made from agricultural products typically sold as foods.
5) Several foreign governments took the initiative to restrict export of their food products, complicating the supply-demand relationship in global trade.
6) Higher energy costs have impacted processing and transportation, causing food prices to rise in retail markets.
High commodity prices have many implications for the US agricultural economy.
1) Farm income has recorded significant gains, and is expected to rise to $96.6 billion, up 10% from 2007.
2) Direct payments will be $13.4 billion in 2008, down from the four year average of $17.4 billion.
3) Crop insurance premiums will rise because higher commodity prices mean farmers will have to pay more to insure their crop.
4) Feed cost for livestock operators will be $45 billion, up 18% over 2007.
5) Volatility in the grain markets is diminishing the effectiveness of the futures markets, and lack of convergence between the cash and futures market is increasing the risk in forward contracts offered by elevators.
Will high prices bring about lower prices?
1) For wheat and rice, the price increases are likely to be short term because it was weather related shortfalls that contributed to the price increases, and consuming countries are trying to catch up on their own production. With expansion comes lower prices, but volatility could remain.
2) Biofuel feedstock demand has bid up the prices of corn, soybeans, and other crops that compete for acres. Acreage will increase to meet part of the demand, however low stocks are expected to persist as global production will have difficulty keeping up with the demand.
3) Continued increases in global population and income will sustain the demand for livestock products and good growing conditions will have to be present.
The US government has been asked by many individuals and groups to take a variety of actions they believe would alleviate problems, such as reducing or eliminating ethanol mandates, more food aid shipments, more investment in agricultural infrastructure, opening up the CRP to production, and a variety of other policy changes.
Summary:
High commodity prices have raised US farm income, but at a price. Domestic farm and biofuel policies have been targeted by critics for change, low income consumers here and abroad have seen their food prices rise, and competing countries are planning on expansion of their grain production. Wheat and rice, whose prices rose from weather related issues, will see near term declines in price. Feed grains and oilseeds used for biofuel production will continue to be in high demand.
Posted by Stu Ellis at 12:07 AM | Comments (0) | Permalink
June 13, 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.
Many reasons for a market downturn can be counted says IL Extension economist Darrel Good. Among them: CRP grazing allowed, declining crude oil prices, efforts by the US to strengthen the dollar, wheat prices becoming competitive with corn for livestock feed, and CFTC’s announcement about speculative trading being investigated.
None of those reasons could overcome the bullish strength of heavy Midwest rains and a sudden rise in crude oil prices, and Darrel Good says those altered the fundamentals for corn and soybeans. Particularly, the weather delays in finishing planting and the need for replanting reduces the potential size of both the 2008 corn and soybean crops he says. Read his newsletter.
The market will be watching the potential crop size over the next few weeks, but the strength of demand will determine price and the need for rationing. While Good doubts any US market intervention like other nations, he says beware of two possibilities:
1) Initiatives to use the CRP for more forage for livestock or expand 2009 crop acreage.
2) Change the Renewable Fuels Standard to reduce corn demand by ethanol refineries.
USDA’s Supply-Demand Report this week cut the corn yield projection by 5 bu. per acre to 148.9, but did not change the planted acreage estimates, despite extensive flooding. The Planted Acreage Report at the end of the month will provide USDA’s perspective on the impact heavy rains. Corn prices were estimated at $5.30 to $6.30.
USDA retained its yield and acreage projections for soybeans, despite the planting delays, but the June 30 acreage report will refine the numbers. Mike Woolverton at Kansas State says old crop bean stocks are projected at a 15 day supply, but that will rise only to a 21 day supply for the new crop, still based on earlier production estimates. The tight supplies are the reason USDA raised the farmgate price range to $11.00 to $12.50.
Wheat yield projections were raised to 43.2 bu. per acre based on improved prospects for winter wheat says Woolverton, but ending stocks are still relatively low because of the demand for feed wheat and export demand. Farm prices will be $6.75 to $8.25. Read his newsletter.
Continued adverse weather will offer 3 choices to farmers with crop insurance, says Purdue economist George Patrick, who says agents need to be consulted about them:
1) Replant the original crop, even though the yield will likely be reduced.
2) Plant an alternative crop after the final planting date and late planting period.
3) Abandon the acreage and take a prevented planting payment.
Shorter maturity hybrids are becoming more popular because they would require fewer growing degree days, but when you are cut 300 GDD off your hybrid the trade off is a decrease in the higher yield typical for later planted corn says IL Extension Specialist Emerson Nafziger. He advises short season hybrids untested in your area may suffer disease and drought stress. Read more.
Nafziger is concerned about the biochemical needs of soybeans which trigger flowering. The length of darkness is key, but will be counter to what soybeans need when planted late. The biochemical process also has to occur at the V-3 stage in beans, which is the earliest that flowering can occur, and those two events may be mismatched this year.
If soybeans flower early, the flowering period is much shorter and their height is shorter. A wet July or August can extend the growth and flowering period. Read more in Emerson Nafziger’s newsletter.
Cut corn and bean yield projections in half if planting is not accomplished by late June, says Nafziger. "Even with high costs, the yield needed to cover costs is relatively low when corn is more than $6 a bushel. We're looking at some real disappointment at having so much income potential not realized this year due to weather-related crop problems."
Seed beans are available for replanting say Iowa State agronomists. Plenty of group 2 is available, but lesser amounts of groups 1 & 3. Additional seed can be conditioned by seed companies to meet demand, but germination will still vary in the 80% to 90% range.
Seed corn is also available, and companies are moving shorter maturity corn into areas where replanting will be necessary. Yields will only be 50% to 70% of normal, despite the maturity length of the hybrid. Crop insurance policies may expect replanting to be attempted to meet the “good farming practice” requirement, along with pesticides.
Has your nitrogen washed away? Fertility specialist John Sawyer at Iowa State says the late spring moisture and warm soils increased the chance for loss. He uses the IL research of: 4-5% loss of nitrate-N by denitrification per day of saturated soil. He says more N is lost by tile flow, and would total about twice the typical annual loss. Read more.
If you are replacing failed corn with soybeans, Purdue agronomist Bob Nielsen says, “That while the choice to replant damaged cornfields back to soybeans is the prerogative of the grower, the risk of damage to the soybean crop from previously applied corn herbicides is borne solely by the grower because most soil-applied corn herbicides have more than a few months' crop rotation restriction on their labels.” And he says soybean seed may be either in short supply or you may not get your first choice of seed beans. Read more.
Evaluate your possible damage from ponding by assessing debris, silt, and residue from other fields that enters the whorl of the corn plant suggests Ohio State’s Peter Thomison. Even if water is not standing, saturated and soupy soils can injure the plant, along with:
1) Stage of development, duration of ponding, plus soil and air temperature.
2) If it does not kill the plant, ponding will retard root growth, and cause nitrogen loss.
3) If ponding in corn lasts less than 48 hours, crop injury should be limited.
4) Ponding will contribute to disease risks of pythium, corn smut, and crazy top.
Keep your fingers crossed about reduced insect pressure on crops this spring:
1) Armyworms in wheat are concerns in OH & IN, with some in southern IL.
2) Only a few cases of significant bean leaf beetles in the earliest planted fields.
3) Replanted corn will probably be more susceptible to black cutworm feeding.
4) Corn borers are laying eggs in the tallest corn, but larvae won’t survive in short corn.
5) Japanese beetles are emerging but can’t find pollinating corn or flowering beans.
6) Soybean aphids have been found in uncommonly small colonies in MI, IN, OH, & IL.
Ducks in cornfields probably indicate reduced populations of corn rootworm. The hatch is two weeks behind last year, with ponds and saturated soils contributing to their demise. IL entomologist Mike Gray doubts any high densities because of starvation from lack of corn roots, which may help you make insecticide decisions for fields needed replanting.
However! Research over the past few years has indicated that standing water does not spell an end to corn rootworm. They can survive a pond lasting only a few days and grow up to inflict severe damage. A 1991 study at Urbana, IL, indicated enough corn rootworms survived a severely flooded research plot “to inflict impressive damage.”
On the other hand, corn nematodes which like sandy soils, are surviving quite well, thank you. If you have stunted oval patches of corn, it may warrant you to take soil samples and have them tested by a nematode lab, which is the only way to diagnose that problem. Read more.
In the physics of rain, drops range from 1 to 7 millimeters and hit the ground as fast as 20 miles per hour. When millions hit bare ground, soil particles are dislodged and may land 3 to 5 feet away. A heavy rainstorm may splash 90 tons of soil per acre, but most of it remains in the field and fills up pores in the soil preventing moisture absorption. More is available.
Missouri’s 30+ inches of rain from December to May turns out to be the wettest such period ever. MO climatologist Pat Guinan said the average is under 19 inches. Also, 60 tornadoes have hit, which is twice the yearly average. Guinan said the culprit is the above normal temperatures in the southern US and below normal temperatures in the northern US, and the large contrast in air masses results in more unstable weather.
The La Nina has been weakening says Guinan, who blames the phenomenon for causing the jet stream to shift its path and set up the violent weather. With the fading La Nina, Guinan says that may indicate there are calmer, sunnier days ahead this summer.
Posted by Stu Ellis at 12:46 AM | Comments (0) | Permalink
June 12, 2008
The Cornbelt: Land Of 1,000,000 Lakes
In just 80 days the new marketing year starts, and we’re fortunate to have a modest amount of carryover, because the new corn and soybean crop is not yet ready for prime time. Barely a majority of the new crop can see the light of day, because the rest of it is either underwater, in the ground, or still in the bag. This may soon be a reality check time for farmers who have forward priced a significant portion of their expected crop, but forgot to sign up for crop insurance. We’ll tour the flood-stricken Cornbelt and check up on crops and ponds.
Our tour guides are the hundreds of volunteer crop reporters throughout the Cornbelt who provide the data that is assembled on Monday by the National Agricultural Statistics Service. The complete report is available on Tuesdays during the crop production season.
ILLINOIS: Surplus moisture covers 61% of the state, and only 1% is in the short category. 88% of the corn has emerged, probably meaning 12% has yet to be planted. 82% is fair to good. Only 45% of the soybeans have emerged, probably meaning the other 55% are still in the bag, and 86% of the crop that is up is listed fair to good. Heavy rains have impeded planting progress, but warmer temperatures have helped the crop that is growing.
INDIANA: 99% of the soil moisture is evenly split between adequate and surplus, With severe flooding in central and southern parts of the state with half of the counties rated as flood disaster areas. 94% of the corn has been planted, and 83% has emerged with 77% in fair to good condition. 73% of the soybeans have been planted, and 80% of the emerged crop is rated fair to good.
IOWA: Three-quarters of Iowa has surplus moisture with the balance listed as adequate. 89% of the corn has emerged with only 2% left to plant, however 81% is rated only fair to good. 86% of the beans are in the ground, with 63% emerged and 83% of those are only fair to good condition. USDA reports severe weather has flooded cropland, pasture, and hay, delaying hay harvest and causing a shortage of feed for cattle. Fences have also been washed out, creating problems using pastures.
KANSAS: 90% of the state has adequate to surplus moisture, but is not as wet as states to the east. Subsoil moisture is listed 66% adequate. Wheat is ripening on par with 2007 with 81% reported free of insects and 50% free of disease. Forage, sorghum, and other crops are generally in good condition with farmers reporting plenty of pasture and water.
MICHIGAN: Farming weather prevailed over Michigan with 5 days suitable for fieldwork, and two-thirds of the state reporting adequate moisture in both the topsoil and subsoil. 85% of the barley and 83% of the oats are in fair to good condition. USDA reports, “Warm temperatures and rain this week advanced crop development as well as boosted farmer’s spirits.” Corn and soybean planted is all but complete, crops have emerged, and corn is being side-dressed.
MINNESOTA: Soil moisture is 68% adequate and 31% surplus, but “Crop conditions were rated mostly good to excellent in spite of heavy rains and strong storms that occurred during the week.” Corn and soybean crops were described as continuing to emerge rapidly with the help of average temperatures. Wheat, oat, and barley crops were progressing, but substantially behind recent years in their stage of development.
MISSOURI: Soil moisture is 96% adequate to surplus and about evenly split. That caused crop reporters to say fieldwork was at a near standstill for another week, due to flooded areas and continued heavy rains. Spring tillage remains 22% incomplete, and the rains have delayed corn, soybean, and sorghum planting.
NEBRASKA: 60% to 70% of the topsoil and subsoil has adequate moisture, and most of the rest is rated as surplus, indicating few days suitable for fieldwork in the past week. 95% of the corn crop has emerged and 83% is in fair to good condition. 59% of the beans have emerged and 88% are in fair to good condition. Ratings for planting, emergence, and quality are all behind recent years. 79% of the wheat and 86% of the oats are in fair to good condition. USDA reports, “Strong winds damaged farmsteads and over turned pivots, combined with hail and heavy rains across parts of Nebraska. The storms caused flooding and damage to crops as well as roads.”
NORTH DAKOTA: While 72% of the soil has adequate moisture, 20% is actually short, and nearly 60% of the subsoil is short of moisture. Spring wheat development was about on par with last year, and durum wheat was ahead of recent years. Barley, oat, canola, and sunflower crops were also generally keeping pace with 2007 and the 5 year average. And USDA reports showers in the southeastern part of the state last week were “welcomed.”
OHIO: 57% of the state has surplus moisture with the balance reporting adequate supplies. 92% of the corn and 58% of the beans have emerged, with 75% of the corn and 81% of the beans listed as fair to good condition. 69% of the oats and 76% of the winter wheat were rated in good to excellent condition. Southern Ohio received 3-6 inches of rain, leaving flooded fields that will require replanting.
SOUTH DAKOTA: Heavy precipitation halted fieldwork, leaving one-third of the state with surplus soil moisture and the rest with adequate amounts, but also with reports of flooding and hail damage. Subsoil moisture is in good shape. However crops are significantly delayed in their development compared to last year and the five year average. That includes winter wheat, barley, oats, and spring wheat. Corn planting is 95% complete, and the emerged corn is about half the size of the five year average at this time. While the recent rains delayed fieldwork, the rain was needed for soil recharge.
Summary:
With the extensive rainfall, both in volume and coverage area throughout the Cornbelt, many farmers have been unable to finish planting and many flooded fields have been damaged the point the replanting is necessary, if at all possible. Warmer temperatures in the past couple weeks have assisted struggling corn and bean plants in growth, but throughout the Cornbelt, row crops and small grains are significantly behind normal development schedules and could be in jeopardy when fall months bring frost. There is no wonder that the grain market has been concerned about the new crop.
Posted by Stu Ellis at 12:27 AM | Comments (0) | Permalink
June 11, 2008
How Do You Make That Business Decision About Replanting?
Monday, the agronomic issues of replanting were recapped, and today the business issues of replanting will be in the spotlight. And these will be quite important, particularly if you have crop insurance. Replanting a crop covered by insurance is like a dog with bad breath. You don’t want to go there, if you don’t have to, but sometimes it is necessary. And this year it is necessary for you and most of your neighbors.
There will be quite a few familiar faces lined up at your crop insurance agent’s office this year, because this spring has been a nightmare, and it is not over yet. Your agent and the adjusters will be burning the midnight oil, but to help you understand the replanting issues, University of Illinois farm management specialist Gary Schnitkey has assembled a series of factsheets addressing the replanting issue.
1) Crop Insurance: Final Planting Dates, Late Planting Period, and Prevented Planting.
Your final planting date depends on your state and latitude, and it would be impossible to list all of them here. There is a good chance your final planting date for corn is either past, upon you now, or will soon occur. The final planting date for soybeans may be 10-15 days later. After the final planting date, USDA provides a 25 day long “final planting period” in which your guaranteed yield slowly declines at a rate of 1% per day, and then holds steady at 60% of the guarantee.
You should know:
• You can receive a prevented planting payment, if your problems are common in the vicinity.
• Your payment is 60% of the final guarantee, unless you signed up for 65% or 70%.
• You cannot plant an alternate insured crop in the late planting period, but can, after it expires, but that crop only has a 35% guarantee.
If your corn crop is less than satisfactory and you want to replant, consult your crop insurance agent before you take another breath.
• You can do nothing, but that might not meet the smell test of “good farming practice.”
• You can replant corn with the help of an indemnity check, but you will not get one if you do not contact your agent.
• You can work with your agent to declare the crop a failure, which may not be easy, and will probably require a test strip left in the field to determine final yield, and that will be deducted from your final indemnity check.
• If the field is destroyed, and an alternate is planted, your first crop may be eligible for a 100% payment, but the second crop will not be insured. If you want to insure the second crop, it would be eligible for a 65% yield guarantee, if you took the 35% guarantee on the first crop.
• The only instance of getting a 100% payment on two crops is for double crop soybeans, but that needs to be demonstrated as common practice on your farm.
Just for discussion, assume that the final planting date has passed, the final planting period is underway, and you have yet to plant any of your crop. You have the choice of either planting the crop with a reduced guarantee or taking a prevented planting payment.
• If the crop is planted, your full guarantee will be reduced by a small percentage which declines 1% per day, up to 25% for 25 days after the final planting date.
• By taking the payment, which is 60% of the guarantee, other farmers must be experiencing similar problems; you are allowed to plant an alternative crop. By not planting the second crop, you are eligible for 100% of the prevented planting payment.
• Another choice is to plant a second crop, which can be insured at 65% of the guaranteed rate, but any indemnity payment on the failed crop is limited to 35%.
So the question is: What is your decision (of course, made jointly with your crop insurance agent)?
Gary Schnitkey has provided a decision aid to assist in the process of deciding and evaluating your alternatives.
Summary:
The issue of replanting a crop comes up infrequently, and most farmers rarely have to address the alternatives. However, before any crop is replanted, your insurance agent should be consulted, if the crop is insured and if you want to receive an indemnity check for the weather damage. There are a wide range of benefits, including payments for failed crops, payments for alternative crops, and payments for prevented planting of any crop. However, rules must be followed and insurance agents can guide you through the process.
Posted by Stu Ellis at 12:04 AM | Comments (2) | Permalink
June 10, 2008
What If You Woke Up Tomorrow And US Ethanol Policies Had Evaporated?
Farmers and other ethanol supporters are being besieged by critics in the debate over whether food should be converted to fuel, and if farmers should benefit from government farm payments while commodity prices are at record highs. Much of the focus is on the level of goals set by Congress for ethanol production, the tax credit provided to companies that blend ethanol with gasoline, and the tariff that is applied to foreign ethanol. While those elements are part of the ethanol fabric of America, they do come with an economic impact that critics can cite, chapter and verse. Here’s what you should know…
Congress has established a Renewable Fuels Standard that calls for 9 billion gallons of ethanol to be produced by 2008, rising to 10.5 billion in 2009. U.S. trade policy on ethanol includes an ad valorem tariff of 2.5 % as well as an import duty of $0.54 per gallon. Additionally, there is a $0.51 per gallon tax credit given to blenders of domestic ethanol, which will be reduced to $0.45 on Jan. 1, 2009. These three lightning rod issues are frequently focused on agriculture and its supporters by a wide variety of opponents, some of which are related to food marketing, others in petroleum industries, and others which support Brazilian sugar interests. US farmers, trying to make a buck, have promoted ethanol for nearly 30 years, know those economic supports may be on shaky ground.
What would happen if one or more would be lost? That’s what Iowa State University economists Lihong Lu McPhail and Bruce A. Babcock calculated in their recent analysis of federal ethanol policies. Looking at the marketing year for the new crop, the researchers assessed corn acreage, yield, oil prices, domestic and export demand, and the capacity of the ethanol industry.
Some of the assumptions made by the economists included:
• Planted corn acreage of 86 million, with 763 million bu. in ending stocks.
• Continued strong exports because of a weak dollar.
• At least a 9 bil. gal. ethanol production capacity at 2.75 gal. per bu. of corn.
• 800 mil. gal. of Brazilian ethanol would be imported at equal price levels.
• Shipping problems will increase with higher volumes of ethanol produced.
• Ethanol has 67.8% of the energy content of gasoline, and consumers will not pay more than that price relationship with gasoline.
• Wholesale prices are $2.62 for gasoline and $2.36 for ethanol in the current marketing year.
• Crude oil was priced at $130 per barrel based on NYMEX futures prices.
• Corn prices will average $5.86 for the new crop.
1) Elimination of either the Renewable Fuels Mandate or the blenders’ tax credit would reduce the price of corn by 3.9% to $5.63 per bu. Elimination of the mandate would reduce ethanol production by 3%, ethanol prices would drop 3% and gasoline prices would rise 0.3%. Corn growers would lose $2.37 bil. in income and gasoline producers would gain $1.88 bil. in income.
2) Elimination of the blenders’ tax credit would generate $5.1 bil. more tax income, corn prices would drop 3.5%, ethanol prices would drop 10.2%, and ethanol production would drop 2.8%. Gasoline producers would gain $2.75 bil. from less competition from ethanol. Corn growers and ethanol producers would each lose about $2.4 bil.
3) Elimination of the tariff on imported ethanol would triple ethanol imports, reducing domestic ethanol production by 1.9% and corn prices by 2.5%. Ethanol prices would drop 2.5% and fuel prices by 1.2%. Motorists would save $5.08 bil. in fuel costs, with corn growers losing $1.58 bil.
4) If all programs were eliminated, corn prices would drop 14.5% or $9.4 bil. Ethanol prices would drop 18.6%, but gasoline prices would rise 0.2% providing a $5 bil. revenue increase to the oil industry. Government revenue would increase by $4.9 bil.
Summary:
Elimination of the federal ethanol support policies would keep most ethanol plants operating, as long as revenue covers operating costs. Eliminating one of the policies would cut corn prices by no more than 4%, but elimination of all would reduce corn prices by 14.5%. Motorists would benefit $5 bil. worth if tariffs were removed, dropping both gasoline and ethanol prices. While the three policies are in place to foster growth in the bio-fuels industry, they have wide-ranging impacts.
And a question for you: Should they be kept in place?
Posted by Stu Ellis at 5:00 AM | Comments (3) | Permalink
June 9, 2008
How Do You Make That Agronomic Decision About Replanting?
If your crops are underwater, there is little you can do. You are probably looking for all of the information you can get, in an effort to make plans, in case re-re-re-planting is in your future. Some of the information here has been previously provided, but nevertheless, let’s do a re-run on replanting.
Purdue agronomist Bob Nielsen provides a summary of the impacts of floodwaters on young corn plants. He covers issue, such as time underwater, temperatures, impact on soil, post flood vigor, and potential diseases after flooding.
The June 2 issue of Iowa State’s Integrated Crop Management News is primarily focused on flooding issues. Addressed are replant options and getting rid of the damaged crop, saturated soils, impact of flooding on soybeans, and soybean replant decisions.
Missouri agronomist Laura Sweets addresses seed decay and seedling blight in the May 30 issue of the Integrated Pest and Crop Management newsletter.
Ohio State University agronomist Peter Thomison provides an overview of ponding impacts in a newsletter for the Crop Observation and Recommendation Network.
Purdue’s Neilsen offers an updated factsheet on the Effects of Flooding or Ponding on Young Corn. It provides similar suggestions previously cited, along with several related references.
Peter Thomison at Ohio State University, writing in the current C.O.R. N. newsletter, offers several thoughts about patching in corn, where the stand is less than satisfactory. He covers timing relative to the first planting, replanting where emergence is uneven, and cultivation challenges.
University of Illinois fertility specialist Fabian Fernandez, writing about nitrogen application challenges, suggests that questions should be answered whether nitrogen is really going to help a crop with a mediocre yield potential. He also addresses the impact of nitrogen in flooded soils.
Replanting decisions are accompanied by a need to decide on what to do about insecticides. University of Illinois entomologist Kevin Steffey addresses maximum rates and the possibility of switching insecticides, in his May 23rd newsletter.
While replanting decisions in June are similar to decisions of late planted corn, University of Illinois agronomist Emerson Nafziger addresses issues of delayed planting in a May 23rd issue of his newsletter.
Storms that covered Nebraska several years ago caused a flurry of articles in the Crop Watch newsletter about assessing crop stands, switching corn hybrids, and replanting decisions with herbicides in mind.
Summary:
Flooded fields throughout the Cornbelt have caused many considerations about replanting and all of the fertility, herbicides, and insecticide issues that accompany replant decisions. Numerous research-based factsheets and newsletters are available for consultation that will provide answers to most questions.
The question I have is: How much of your crop are you having to replant?
Posted by Stu Ellis at 12:13 AM | Comments (1) | Permalink
June 6, 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.
Grain consumption is generally predictable, but there will be a big question mark this year because of USDA’s approval to open up the CRP for livestock feed use says IL Extension economist Darrel Good. He rhetorically asks, “How much will this additional forage production substitute for grain feeding in the last half of the 2008 calendar year?
One calculation of the impact is to estimate the level of participation, amount of forage, and its nutrient content. Good says that statistic can be converted into grain replacement, which would work backward into grain stocks disappearance. Read his weekly newsletter.
A second calculation for potential grain use depends on the capacity to feed additional forage. While there are 95.5 million grain consuming animal units, only 4% are cattle. USDA estimates that 6.6 bil. bu. will be fed this year, and 5.7 bil. bu. next year, and 4% of that amount of grain is 250 mil. bu. with 125 mil. used in a 6 month feeding cycle.
Darrel Good says clues about the potential for CRP forage to displace grain will come from the number of acres enrolled into the program, then the September and December grain stocks reports will indicate the impact of the decision to open the CRP for grazing. His expectation is for the CRP grazing program to have little implication for grain prices.
Can you predict the price of corn this fall? Most say no, but options users know the probability that the market will reach a specific price when the option expires. IL economists Bruce Sherrick and Darrel Good say prices are predictable based on the implied price levels of options. There is a 10% probability the December option will expire below $4.11, and a nearly 28% chance it will expire above $7. Read more.
The cold and wet weather appears to be coming to an end for Iowa State’s Elwynn Taylor. He says the end is not clearly in sight, but is approaching. The air pressure is below La Nina levels and the odds of a severe drought have begun to diminish. “As of today the most likely national corn yield for 2008 is 148 BPA (up from 142 BPA). The rain pattern that has soaked the Cornbelt shows continued migration northward and will be positioned in northern Minnesota by June 21st if the trend is maintained.”
Begin a savings plan to pay for your diesel fuel over the coming year, if the calculations are correct by Kansas State economist Kevin Dhuyvetter. NYMEX futures tell him fall diesel prices will be 45-60% higher than last year. Spring 2009 diesel prices will be 8-25% higher than spring of 2008. Review his chart.
You may typically be applying nitrogen at this time, but since this has not been a typical spring, Extension crop specialist Emerson Nafziger suggests letting the crop maturity and soil condition determine the timing of the N, rather than the calendar. Read his latest nitrogen thoughts.
Your typical nitrogen application may be much more than the corn can use, says Nafziger, because crop conditions this spring have reduced the yield potential, and may continue to reduce yield potential. In that case, Nafziger says no amount of nitrogen will make up the shortfall, and it is only a waste of money to apply an excess of nitrogen.
Flooded fields are prevalent around the Cornbelt, some planted, and some are not. Iowa State agronomists say corn that is germinating can withstand 4 days of saturated or flooded soils. Seedlings with less than 6 leaves can withstand 4 days underwater if the temperature is less than the high 70’s. Higher temperatures shorten the survival period.
As floodwaters recede decisions about replanting need to be made, but the feasible dates for replanting are quickly vanishing. In the next few days, replanted corn may have a 90% yield potential, but if replanting is delayed beyond June 10, the yield potential is 70% or less. Consult this advice.
Soybeans are jeopardized by wet fields says Palle Pedersen at Iowa State since there is significant yield loss after 6 days in the water, and greater yield loss with temperatures over 80 degrees. Saturated soils restrict oxygen to the soybean roots, and flooded soils allow a build up of toxins and carbon dioxide 50 times greater than in dry soils. Silt can also collect on leaves and restrict photosynthetic activity, unless rain washes it off.
If your soybeans are emerging, what is their state of health? Iowa State specialists say poor stand establishment suggest disease pressure is quite high despite use of fungicides. Cool wet soils increased seedling diseases and contributed to the poor emergence rate.
If your soybeans need replanting, seed treatments with fungicides are highly recommended by specialists, who say, “If Phyophthora causes seedling damping off, more severe damping off would happen in the replanted soybeans unless the seed is treated with the right fungicides or the weather turns dry after replanting.” And the recommendation is for the use of even higher doses of fungicides on the replanted beans.
If your soybeans are planted and up, they are susceptible to damage from bean leaf beetles, because they are starving and looking for food. Large numbers can accumulate in the few fields which have growing soybeans. Bean leaf beetles have to be numerous (16 to 39 beetles per foot of row at stage V2+) to cause economic damage. But they say with soybeans struggling to grow, and considering the value, lower thresholds may work.
Cutworm scouting should be continued for at least two more weeks or until the 4 leaf stage, say the bug specialists. “Black cutworm larvae also have a tendency to bore into the bases of larger corn plants, and such injury can kill the growing point. This injury often referred to as "dead heart," results in corn plants with wilted center leaves.”
Indiana wins the corn rootworm derby. The first rootworm larvae of the season have been found in Indiana, but the hatch is about two weeks later than in 2007. The question becomes how the rootworms were affected by the torrential rains of the week, which have left many fields under water. If they cannot find corn roots they will die or drown.
Brown stink bugs are present in high numbers this year says Wayne Bailey, who has been counting them in Missouri, and he says they have the potential to substantially damage seedling corn. Field edges are damaged first, and Bailey says most farmers usually don’t see the damage until it is too late. He recommends scouting and spraying.
Regardless of your Cornbelt location, entomologists say insects have been quiet this spring. This week’s conference call on bugs reported IL, IA, KS, MI, ND, and OH "not much is happening." Among the insect and mite issues mentioned were cutworms (black, dingy, sandhill, variegated, and winter in MI and ND, the appearance of bean leaf beetles, and scattered reports of armyworm, cereal leaf beetle, and wheat curl mite in wheat. Since then, IL entomologists have continued to receive reports about cutworm injury.
Recent rains and warmer temperatures will make the weeds grow as fast as the crop, and shorten your time for applying a post emergent herbicide if your pre-emergent herbicide has failed or was never applied. IL Extension weed specialist Aaron Hager says you have several choices.
1) Remove the weeds during the current critical period for corn and yield will be saved.
2) If the corn is beyond the labeled recommendations, the crop can be injured.
3) Corn under stress from water or other issues can be injured by herbicides.
4) Check labels since some herbicides now have restrictions against certain insecticides.
Breaking down livestock waste into various components, and treating them as cities treat sewage, can successfully address the odor issues facing rural livestock production farms. Livestock researcher Paul Walker at Illinois State says the systems approach produces a soil amendment product and a low odor, low phosphorus, high nitrogen product usable in irrigation systems. Read more.
Yes, feed costs are high, says Iowa State livestock economist John Lawrence, but he adds, “Eventually livestock prices will increase in response to the higher feed costs and reach a level that yields enough margin to sustain the industry.” Lawrence says the transition will not be smooth or timely, but producers should prepare for the long run.
Livestock producers should focus on business management to survive says Lawrence, in his June newsletter:
1) Corn prices will not return to $2, and even a bumper crop may only drop them to $4.
2) If corn cheapens, do you have borrowing capacity and storage for that opportunity?
3) Livestock production will have to decline to return profitability with high feed costs.
4) Market volatility will continue and the focus should be on margins, not just prices.
5) Futures contracts will provide an acceptable margin to lock in for a part of production.
Posted by Stu Ellis at 12:25 AM | Comments (0) | Permalink
June 5, 2008
Corn, Weeds, And Your Post-Emergent Herbicide Needs.
Plenty of moisture and warmer temperatures not only speed up crop development but also weed development. Look at them grow! Short of pulling them out by hand, develop a plan to aggressively eradicate your weeds before they become too much competition for your crop to overcome. Let’s create an early post emergence weed control program for corn.
In most years, May would have been the litmus test for residual herbicides, but the cool weather this year held back both crop and weed development. But a change in the weather the past few days will be an even stronger test to see how much residual weed control you really have, and what you need to do to respond with flexibility. Mark Loux of Ohio State University writes in the June 2nd issue of the Crop Observation and Recommendation Network newsletter that many summer annual weeds have reached the 2 to 4 inch stage where pre-emergent herbicides were not used.
1) If you have relied upon a total post-emergent weed control program, those herbicides should be applied while weeds are in the 2-3 inch level to prevent crop competition. If your weeds are already at the 6 inch level, crop yields might have already declined by as much as 6%, and it increases with taller weeds. Loux says many grasses and summer annual weeds grow at the same rate as the crop.
2) If you had applied a broad spectrum pre-emergent herbicide that had been activated with sufficient rain, then weed development will probably be retarded substantially and your post emergent program is not as critically needed at this time. That will be to your advantage with controlling later germinating weeds, and instead of applying a post emergent herbicide by the V3-V4 corn stage, it can be delayed, but should be applied before corn reaches 18-20 inches in height. That is the point that corn will out-compete weeds that are just emerging.
3) If your pre-emergent herbicide program ran into trouble from lack of rain, the timing of a post-emergent program is more difficult to estimate. There may be a dense carpet of weeds that are in the 3-4 inch stage, and your post emergent weed control needs to be applied to avert yield loss. If the pre-emergent herbicide worked a little bit, then the post emergent application can be delayed.
4) Since timing of a herbicide application should be based on weed size, not necessarily yield loss, your mindset needs to be on the weeds and not the end result this fall. But one of the challenges you have is that grasses are more difficult to control than broadleaves with a typical post-emergent herbicide when they are more than 4 inches tall. Loux recommends a post emergent herbicide that is better suited for grasses that are taller. But he says the challenge is “for those growers evaluating options where pre-emergent herbicides have not been completely effective, the real question may be whether to apply when grasses are less than 2 inches tall in order to reduce costs, or apply when grasses are about 4 inches tall to try to improve control of late-emerging weeds.”
5) In a year with marginal response of a pre-emergent herbicide makes it seem like an easy decision to have planted a Liberty Link or Roundup Ready corn. While the post-emergent application timing has less flexibility, the use of Liberty does allow better control of larger giant foxtail, but glyphosate controls grasses over 6 inches. But both glyphosate and Liberty should still be applied when weeds are 4 inches tall to prevent yield loss, whether you are using a total post emergent program or your pre-emergent herbicide failed.
6) Loux says your corn plant will be going through a critical phase 25-40 days after planting, and that weeds should not be competing with the corn during that time to avoid yield loss. So a post emergent herbicide application at 20-25 days after planting should minimize the competition, but should also have a residual impact to cover 2-4 more weeks.
7) Fields with a problem with giant ragweed will have a new flush of growth in mid-June, which is at the end of the critical growth period for corn, and needs to be covered by your residual herbicide. Loux suggests adding a residual herbicide to a broad spectrum herbicide to cover as long of a period as possible.
8) Loux also shares your concern about the rising price of glyphosate, and says it becomes possible to apply alternatives for the same price that avoid the problems with glyphosate resistance and also provide a longer residual control. But he says that may also require the addition of atrazine and that means application before the corn is 12 inches tall, but grass is less than 2 inches tall.
Summary:
Weed control may well be a challenge this year because the cool temperatures retarded both crop and weed development and pre-emergent herbicide applications may have been compromised by either insufficient or too much moisture. Timing of post emergent applications is critical because it needs to be before weeds get too tall, it needs to be before corn enters its 25-40 day growth period, and the post emergent product needs to contain enough residual control for late developing weeds.
Posted by Stu Ellis at 12:32 AM | Comments (0) | Permalink
June 4, 2008
Capture The Wind And Capture More Profitability.
As crude oil costs rise, so will the cost of many other forms of energy, particularly electricity, much of which is generated by burning fossil fuels. Electric rates will impact many rural homes, and particularly irrigators if pumps are wired into the farm grid. You may have wanted to tell the local utility company to “come get its stuff,” seeking independence from electric bills. Now, you may be able to reasonably plan for that day to arrive.
Windfarms are being developed across wide areas of the Cornbelt and Great Plains, in addition to other parts of the US. But along with the commercial installations of 300-500 towers, many individual farms are investigating the opportunity of installing a turbine to generate private electricity and cut energy costs. Economists Brian Frosch and Joe Outlaw at Texas A & M University have created a guide detailing what farmers should consider if plans are being developed to erect a wind turbine. The Texas economists say average residential electric prices increased 58% from 2002 to 2006. Depending upon state utility regulators, electric prices could be much lower or much higher, but the Texas rate of 12.7 cents per kilowatt hour is a place to start.
Unless a wind energy company has approached you about erecting a turbine on your property, you’ll probably want to consider a small wind application, which is up to 100 kilowatts of capacity. That consists of a tower and turbine, and costs $3- $5,000per kilowatt of generation capacity. But the economists advise that before you write the check, a thorough review of all applicable laws should be conducted. Such a system would be connected to the larger electric grid and that requires the approval of the local utility, since it will be purchasing excess power back from your turbine. The checklist also includes zoning restrictions, the interconnection with the utility, and particularly the availability of wind. The smaller applications require an annual average wind speed of 11 miles per hour, and that will have to be determined by the proper instrumentation.
Prior to tower construction, zoning issues will come into play, including height restrictions if airports are nearby. Turbine size is another consideration, since it has to be large enough to provide the electricity required, but your electric bill should be a good resource for that information. The economists say the turbine should be mounted at least 30 feet higher than existing structures and trees if it is within 300 feet of anything that might modify airflow. Connected to the turbine wiring will be an inverter, which links your system to the commercial grid, and which comes with an agreement from the utility to purchase your excess electricity at the going rate.
If you are part of the footprint for a large windfarm, you’ll probably consult with an attorney about the leasing of land for the developer to erect a turbine tower. That will ensure your lease terms are fair and may include some of the other leasing arrangements the company has agreed to with your neighbors. The Texas economists say most wind energy leases have a 20 year term, and provide electricity royalties from 2% to 6%; and that is approximately $2,000 per year. A lengthy list of resources is also provided by the Texas A & M economists.
Summary:
Whether your goal is ecological or saving money, one of ways to achieve both is a wind turbine for your farm. Smaller applications are available compared to the large commercial installations. Farmers wanting to explore the possibility have numerous resources available at the Texas A & M website, which detail leasing arrangements for commercial operations, as well as zoning issues, and help with determining the size of turbine appropriate for your farm.
Posted by Stu Ellis at 12:32 AM | Comments (0) | Permalink
June 3, 2008
The World Wants Your Commodities, And It Has Money To Buy.
Cornbelt farmers are still “king of the hill” when it comes to world export trade. The latest statistics from USDA indicates farm exports will be well beyond the $100 billion benchmark, providing more support to grain and livestock market prices. World food importers are lining up at the US farmgate.
USDA’s May