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.

Buckle your seat belts. We have arrived at August Crop Report time. USDA on Tuesday will report numbers that will either allow the market to continue its sharp decline, stabilize it, or turn it around. The trade has a wide range of estimates:
1) Corn yield estimates of all traders range from 151 to 160 bushels per acre.
2) FC Stone predicts corn at 154.5 B/A and soybeans at 41.9 B/A
3) Informa predicts corn at 155.4 B/A and soybeans at 42 B/A.

The market slide is due primarily to improving crop conditions and expectations for higher yields says Darrel Good at Illinois. He says since 1986 there has been a high correlation between crop condition ratings and the trend-adjusted yield. Good says if current conditions persist, corn would yield 155.7 B/A and beans would be 43.7 B/A.

But Darrel Good says more modest forecasts are expected due to the lateness of the crop and its variability of maturity around the Cornbelt, since only 7% of corn is in the dough stage and only 21% of beans were setting pods, well behind the five year average for both benchmarks. He says a lot of yield uncertainty will still persist after Tuesday. Read more.

The market is waiting says Good, and given the uncertainty, he says the report has the potential to produce a sharp price response. He feels with the recent decline in both corn and bean prices, the greater risk may be smaller than expected production forecasts. Farmers with revenue crop insurance could benefit since November bean futures have dropped below the spring price guarantee and December corn futures are only 30¢ above.

The crop estimate could grow, says Iowa State market specialist Chad Hart, who says USDA has underestimated corn production 13 out of the last 20 years, and underestimated soybean production 12 of the past 20 years. He says the average difference is about 400 mil. bu. for corn and 140 mil. bu. for soybeans.

Two issues bear watching says Iowa State’s Hart. One is the export prospects for corn because Argentina has returned to the export business. Another will be the price competition for acreage next year. With 2009 corn futures over $6 per bushel and 2009 soybean futures over $13.50 per bushel, Hart says they are set for strong competition.

Iowa State Meteorologist Elwynn Taylor is betting on below trend yields because early season stress made the crop more vulnerable, but he says, “The National Weather Service outlooks slightly favor warmer than usual conditions in September and October and this gives some improvement to the chance of a delayed killing frost in the fall.”

Speaking of weather, La Nina has ended, says meteorologist Jim Noel at Ohio State, who says he’s watching to see if an El Nino develops later this year or in early 2009. He says that will impact rain patterns in the longer term. Short term, Noel says there is a trend for below normal rainfall in August, but temperatures should be near normal.

Learn about the new farm program, says Ohio State economist Carl Zulauf, “ACRE is a revenue (price times yield) program, not a price program. More importantly, ACRE does not presume what the market is going to be, it just follows the market. If prices or yields decline dramatically, ACRE provides support given the market conditions we are in at the time.” Read his analysis.

Among the details in the Farm Bill, Zulauf outlines the ACRE commodity program:
1) ACRE is an optional program beginning in 2009, but opting for it is permanent.
2) ACRE provides payments for individual crops, but it is applied to the whole farm.
3) ACRE provides payments, but Direct Payments are cut by 20%, loan rates by 30%.
4) Farmers must decide if that risk is worth the increased ACRE risk management plan.
5) ACRE is compared to a put option on revenue, calculated with state price averages.
6) To get an ACRE payment, both farm and state revenue must be under the guarantee.

Payment scenarios should be studied by producers says Zulauf before making the decision whether to opt for the ACRE program. “If prices continue to go up, then payments under the traditional programs will be greater than under ACRE, because you are giving up 20% of the direct payments and if prices keep going up, ACRE will never trigger a payment. But, if prices drop substantively, ACRE payments are likely to be larger. ACRE provides you protection in particular to short, steep declines in revenue.”

If you sprayed beans for a Japanese beetle problem, beware of a potential increase in the soybean aphid population says IL Extension entomologist Kevin Steffey. He says the aphids may have migrated into the field, or populations surged after predators may have been eliminated. Steffey says the declining value of soybeans may not allow respraying.

Soybean aphids have been on an alternating year cycle, with populations high in odd-numbered years. Paralleling that trend has been the populations of multi-colored lady beetles which prey upon the aphids when food is plentiful. Entomologist Kevin Steffey says the cycle may have been broken by relatively widespread insecticide applications.

Entomologists at Ohio State are putting their foot down about practices by some farmers adding insecticides to their spray tank when applying either fungicides or herbicides. The OSU Extension Specialists emphasize they do not recommend that practice unless there is a real need. They express great concerns about the welfare of bees with such a practice and their newsletter cites Ohio laws prohibiting the practice.
1) Wind drift is a major issue, particularly along filter strips with blooming wild flowers.
2) Time of application is also an issue, with bees most active at mid-day.

Bug Bugle Headlines: a wrap up of news from the world of crop pests.
1) Bean leaf beetles are emerging 10-14 days late; spray threshold is 20% defoliation.
2) Southwestern corn borer populations are high, jeopardizing non-Bt hybrids.
3) Two-spotted spider mites are prevalent in soybean fields in dry regions.
4) Western bean cutworm numbers are high; scout for egg masses and larvae.

Symptoms of nitrogen deficiency include light green color for upper corn leaves and firing in the lower leaves. That indicates insufficient nitrogen and the plant is breaking down its protein to re-use it says IL Extension specialist Emerson Nafziger. The result is a weaker canopy which lets sunlight reach the ground, and Nafziger says yield will drop by 1% for each 1% of light that reaches the soil and is not intercepted by a corn leaf.

Don’t try to correct the N deficiency says Nafziger because it needs moisture for root uptake and adequate rainfall is an uncertainty. The shortfall likely was from an early application that washed away, along with excessive rainfall after anhydrous ammonia was also washed into tiles. Read more.

The nitrogen contribution of a cover crop, sown into wheat stubble before 2009 corn, is questionable says Ohio State agronomist Robert Mullen. With the high cost of N, he says many farmers may look at legumes to provide some help. Following research in several plots he says the rotational benefit and the nitrogen contribution was not always reliable.

The caution sign should be up if you are considering the purchase of soil additives, wetting agents or surfactants, and soil conditioners says IL Extension Specialist Fabian Fernandez. He says a high pressure sales pitch is usually involved, but the product will likely not produce any provable results. He says most of the products on the market have been tested and reports are available.

Consumer demand for all meats was down during the first six months of the year. MO livestock economists say pork was down 2.3% from 2007. Beef was down 4.7%, broilers were down 5.5%, and turkey was down 5.1%. Exports raised live hog demand 8.2%

Pork producers concerned about bleak prospects for profitability, can seek help from a diverse group of production, management, and marketing specialists at a new website. Producers can submit questions at the “Managing Pig Production in Tough Times” website which is funded by the IL Pork Producers Association.

R.I.P. 10-Year Cattle Cycle. Iowa State economists say the predictable cycle has changed. It peaked in 1995, with numbers declining for 9 years to 2004, then began a 2 year expansion, which has begun to falter. Shane Ellis and John Lawrence say given the high cost of production, the liquidation will likely continue for several years. Read more.

What is the cost of feed? Lawrence and Ellis say, “The marketing decision of whether to sell a calf at weaning, a yearling in the spring, or finished steer in the summer depends in large part on cost of gain.” You’ll need $94 to breakeven with a yearling, and $97 to breakeven with fat cattle say the economists, who urge consideration of every cost involved.