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May 29, 2009
Cornbelt 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.
USDA’s projection of 85 mil. corn acres is in doubt because of planting delays, says Mike Woolverton at Kansas State, and that increases the chances of carryover stocks going low enough to initiate price rationing. He says a one mil. acre decline would cut the surplus to 8%, well below the 10-12% of the past 10 years. Read his latest newsletter.
Woolverton says if there is a two mil. acre decline in corn acreage, that would cut the carryover to only 5%, if delayed planting also caused a 3 bu. drop in the national yield. He says the last time that happened was in 1995, when corn futures spiked upward.
With delayed corn planting and delayed wheat planting, how many acres will shift to beans, wonders Woolverton at Kansas St.? He says the market is anticipating anywhere from 2 to 4 mil. more soybean acres than the USDA’s projection of 76 mil. Beans are still the strength of the market, attributed to the short crop in South America, US exports to China, and the prospect for ending stocks to be at critically low levels this year.
Soybean acreage is an uncertainty because of delays in planting corn, says Melvin Brees at Missouri, but delays in planting soybeans could result in lower yields and production. Currently the USDA projected soybean price range is $8.45 to $10.45, and Brees says, “If the uptrend from the early March price low continues, following the trend higher with “trailing stops” is another alternative. However, if prices falter, current new crop bids offer profitable prices within the projected price range and the potential to avoid lower prices.”
Pork producers know the score, and currently they are on the losing end with the game in late innings for some producers, says Purdue livestock economist Chris Hurt. He expects some nearly ready to forfeit the rest of the game, unable to wait for the world to return to its 2008 healthy taste for pork, when 20% of US production was exported. Read his newsletter.
Five weeks ago “swine flu” dominated the headlines until the pork industry convinced the media to label it H1N1 virus, but carcass values had lost $10 within a week and farmgate hog prices lost 17%. Hurt says the lower market prices were exacerbated by climbing costs of corn and soybean meal, with current losses around $25 per head.
Purdue’s Chris Hurt expects June to bring prices in the high $40 and low $50 range, not enough to cancel out high production costs that may cause $7 per head losses in the latter half of the year. The 2009 losses are expected to average about $12 per head. That should mean the breeding herd will continue to diminish for the rest of the year.
The US wheat crop is having serious issues. Winter wheat acreage is down 7%. Spring wheat acres were supposed to be down 6%, but two mil. acres remain unplanted in MN and ND. Drought and freeze damage have hurt the Great Plains wheat crop. In OK where drought was a problem, early harvested fields have yields less than forecast.
By the time you see wheat scab, it may be too late to do anything about it says IL Extension’s Jim Morrison. But he’s warning that current moisture and temperatures are perfect for its development. Morrison suggests wheat growers use an early warning system for managing wheat scab at www.wheatscab.psu.edu/ . In addition to seed variety resistance, management includes use of a fungicide in the triazole family.
Got weeds? They are an equal opportunity commodity, but sometimes you just don’t know what one is, and without a name, it is not easy to find an herbicide to control all of your unwanted visitors. Find the weed names with their pictures at these resources.
1) Pest bulletin
2) Spring weeds
Glyphosate guide #1. With at least 30 different formulations on the market, users need to compare alternatives by the number of pounds of acid equivalent per gallon of product. The concentration of the acid is what kills the weed, so compare before buying.
Glyphosate guide #2. Some glyphosate products have surfactants, such as Roundup PowerMax and Touchdown Total. Others do not have a built in adjuvant system, and may perform less satisfactory under extreme conditions. When a surfactant is missing, add a high quality, non-ionic surfactant at 0.25 to 1.0% v/v.
Glyphosate guide #3. Michigan St. weed specialists recommend the addition of ammonium sulfate to all glyphosate products, at the rate of 17 lbs per 100 gallons. AMS minimizes the impact of hard water on glyphosate and helps with velvetleaf control.
Glyphosate guide #4. The optimum time for glyphosate applications is when weeds are 4 inches tall in narrow row beans and 6 inches tall in soybeans planted in 30 inch rows.
You have made the decision to replant, but how do you eliminate the old corn crop?
1) IL Extension’s Aaron Hager is not facetious when he suggests tillage.
2) Glyphosate is effective at controlling corn that is susceptible to glyphosate.
3) Glyphosate resistant corn can be controlled with Poast, Poast-Plus, Fusion,
Fusilade, Select, and Assure II, but there are delays before replanting corn.
No one is certain, but if the weather is “normal” for the balance of the growing season, late planted corn could still perform well, and perform much better than in 1995 when late planting contributed to a 113 bu. average IL corn crop. That is the contention of IL Extension’s Emerson Nafziger, who says corn is now more resistant to bugs and stress.
1) Corn may have loss several hundred GDD, but sufficient temperatures should remain.
2) The longest days and most light will arrive before full canopy, so grain will be less.
3) Pollination is moved back, so rainfall will be more critical than normal.
4) Damp soils mean compaction, so corn may have fewer roots and need more rainfall.
5) Stalks will be more spindly and less able to hold larger ears.
6) Grain development will be delayed to a time when leaves may be hurt by fungus.
University of Wisconsin researchers are taking issue with the federal approval of an expanded label for Headline fungicide, and refuting some of the claims made by BASF. The WI staff says Headline was tested at its lab and, “To date, the results from our trials have not shown a consistent response for use of foliar fungicides, except when the level of disease has warranted the application of a fungicide.” Read their response to the Plant Health Label.
Headline fungicide is a multi crop fungicide, but promotional claims were questioned by 46 WI researchers who said they were concerned about the broad statements about the perceived benefits of the product. Those statements included:
1) Increased tolerance to environmental stresses.
2) Improved plant utilization of nitrogen
3) Increased tolerance to bacterial and viral infections
4) Improved straw strength of small grains
5) Improved stalk strength in corn, better hail tolerance, and more uniform seed size.
Congratulations are due, if your soybean seedlings are healthy, but you won’t really know without scouting. Pythium and phytophthora will attack the seedlings under the soil and cause rot, which are seen most frequently in fields with a hard crusty soil. IA State plant pathologist X. B. Yang says identification of those and other fungi are important steps for your 2010 seed selection and choice of fungicidal seed treatments.
Ohio has a “perfect storm” for black cutworms, and some corn fields have densities that exceed recommended thresholds for rescue treatments. Entomologists are advising corn growers to scout for potential problems, and take a break from planting to do that and save what little corn has emerged. The economic threshold is 3-5% cutting. Get a refresher.
Balance the cost of cutworm control with the value of the crop, say Iowa State entomologists. Compared to this year, 2008 corn was more valuable and the treatment thresholds were lower. They have developed a decision aid based on crop values:
Poor growing conditions have been prevalent, and they have aided grubs, wireworms, seedcorn maggots, and cutworms in doing their dirty work. Purdue entomologists have found those larvae are not being controlled by low rates of Cruiser and Poncho applied to the seed, particular when populations are high. The upshot is when the seedling is not growing vigorously, such as this year, then the systemic insecticides work poorly.
Relatively cool spring temperatures have minimized nitrogen losses in the mind of Purdue fertility specialist Jim Camberato. At least he does not believe there has been any more this year than normal. Based on fall application of anhydrous ammonia, he says the average loss would be about 30%, if a nitrification inhibitor was not applied also. Cut that number to 15% if the anhydrous ammonia was applied early this spring.
You’ve probably lost some nitrogen, but it is difficult to say how much is lost. IL fertility specialist Fabian Fernandez say the conversion of ammonium to nitrate depends on temperature, and recently it would take 1-2 weeks for nitrogen to be lost to leaching or nitrate if it was applied after May 1. Read more.
If you have switched to shorter season corn, how should your fertility program change? Fernandez says that means a reduced yield potential and less need for the N that you typically apply. “For each week that planting is delayed from the optimum for your area, it is recommended that you reduce N rate by 20 pounds per acre down to a minimum of 80 pounds per acre (for very late planting).” Plant first, apply N later.
If your fertility program needs to be more cost-conscious, the reduced rate is a good start, says Fernandez. But he says get the N to where it can be used by the corn roots.
1) Surface applications require rain or irrigation to move N into the root zone.
2) Injected N needs to be between rows to reduce root injury. Roots grow toward it.
3) Apply N to every other row, giving corn some N on at least one side.
4) Aerial application should be under 125 lbs/A and not applied when corn is wet.
Concerns about the carbon footprint of ethanol are addressed by Kurt Thelen of Michigan State, who says the effort to discredit ethanol because it will cause changes in other countries is misleading. He says the bottom line is the fact that burning gasoline emits 19.4 lbs of carbon dioxide per gal., but it takes 1.4 gal. of ethanol to do that.
By growing corn to refine into ethanol, Thelen at Michigan State says all of the crop inputs for an acre would represent 1,250 lbs of carbon dioxide per acre, or 2.9 lbs per gallon of ethanol produced. He says that is a 78% reduction from the process of refining gasoline, and it will be 94% less than gasoline when perennial grasses are used.
June Dairy Month will not be a high point of the year for many dairymen because of huge financial losses resulting from milk dropping from $18 to $12 per cwt in the past 6 months. IL dairy specialist Mike Hutjens says $16 to $18 is the current breakeven price for milk, and a 105 cow operation is losing $10,000 per month. He says much of the problem is due to the stronger dollar that has eliminated the dairy export business.
So what is a dairyman to do? Hutjens says with a new forage year underway, look for any means of improving forage quality and quantity in dairy rations. Grain by-products such as corn gluten feed, wet brewers grain, and DDGS are good ways to replace soy meal and corn when trying to cut the cost of rations, which are 60% of expenses.
Other opportunities in dairy profitability, according to IL Extension’s Hutjens:
1) Target feed costs under 9¢/lb dry matter & raise milk to feed efficiency to 1.6.
2) Silage inoculants, monensin, buffers, yeast products & trace minerals are good.
3) Ration reduction only will reduce milk yield and decrease health and immunity.
4) USDA’s MILC program will provide relief for farms with less than 150 cows.
5) CME milk futures are at $15 for fall prices, but still below production costs.
Posted by Stu Ellis at 1:48 AM | Comments (1) | Permalink
May 28, 2009
USDA Wrong? Never! (Pause) Oh, Really!
As the administrator of hundreds of different farm programs, the US Department of Agriculture is everyone’s partner, client, business associate, boss, and a myriad of other relationships that might come to mind. As everyone knows who has stepped foot into a Farm Service Agency office, or ASCS offices before that, there are strict rules that need to be followed to participate in those farm programs. And if you don’t follow the rules, you can no longer play the game. And you may even get to sit in the penalty box for those woeful infractions. But what if USDA doesn’t follow its own rules?
USDA is not going to be in a position to penalize itself, but the court certainly can, and that is exactly what happened in an eight year long case that involved wetlands. And any farm operator or land owner with a wetland, and who also participates in farm programs, knows that wetlands and sacred cows both have unprecedented protection. But should that protection extend to something that is not a wetland?
When the 1985 Farm Bill implemented the Conservation Reserve Program, it also prohibited the conversion of wetland into cropland, under terms of the Swampbuster provision of the legislation. And anyone who does, loses farm program benefits, but also can be penalized in several other areas, says Iowa State University ag law specialist Roger McEowen in a review of a case that was a nightmare for a land owner for many years. Swampbuster could not penalize anyone for something done prior to enactment of the law in December 1985, and penalties could only be levied after that date if the property met the definition of a wetland, which required hydric soils, hydrophytic plants, and periodic inundation.
USDA said those requirements were met on land owned by the B & D Land and Livestock Co., and an administrative law judge held in favor of USDA when it claimed B & D removed some woody vegetation that was protected in a wetland. B & D claimed the land had been farmed as early as 1972 and was being farmed when it bought the land in 1999. But the administrative law judge determined that as long as hydrophytic plants were present, it must be a wetland, and the owner should be heavily fined.
The B & D Land and Livestock Co. sought help from the federal court in the Northern District of Iowa in 2008 when the administrative case had finally concluded. The federal judge told USDA that its own Swampbuster rules required the presence of three elements of a wetland, not just one, and its administrative law judge disregarded expert testimony about the issues involved. The USDA decision was reversed and the court found in favor of B & D Land and Livestock Company. Instead of the USDA’s financial penalty against B & D, the federal court began to calculate what financial penalties USDA should have to pay to B & D.
B & D asked for reimbursement of about $75,000 for its attorney fees, and hiring expert witnesses over the eight years the USDA was processing the alleged violation. The federal court agreed with most of that because, the judge said, “At each stage of the proceedings, the government sought to uphold its prior “wetlands” determination, without regard to any evidence or law to the contrary, suggesting an entrenched bureaucracy’s refusal to admit error, not an interest in proper application of the law.”
In his summary of the case, Iowa State’s McEowen says, “So, in essence, USDA harassed the plaintiff with bogus wetland violation claims for many years which placed the plaintiff within the potential peril of bankruptcy and continued to maintain its bogus claims in an attempt to avoid paying the plaintiff’s attorney fees.” He says that is not new, and quotes another case, in which the court said, “…there is no worse statute than one misunderstood by those who interpret it.”
McEowen suggests that USDA should send its staff and attorneys to some wetland education classes, and if courts keep making USDA reimburse land owners for their attorney fees, then USDA may learn what the law is.
Summary:
While farm programs require land owners and operators to meet certain standards, USDA sometimes may not observe its own requirements and definitions, putting farm program participants at financial risk and in jeopardy of court proceedings. Such instances can end in favor of farmland owners and operators, but after expensive costs of litigation, which may or may not be reimbursed, depending upon a judicial decision.
Posted by Stu Ellis at 12:57 AM | Comments (1) | Permalink
May 27, 2009
Ethanol: On Beyond Corn
Is there a future for farmers in the ethanol industry beyond corn? It was the agricultural community that gave birth to “gasohol” 25 years ago, and corn farmers throughout the Midwest took part in ethanol promotion activities at service stations, county fairs, and anywhere a reporter might get interested in their pitch for a new market for corn. But with the federal biofuels mandate corn-based ethanol to 15 billion gallons, is there a future economic opportunity that agriculture can harvest?
The Federal Energy Independence and Security Act implements a growing market for corn based ethanol until the 15 billion gallon limit is reached in 2012, in an effort to preserve sufficient corn quantities for other market needs. Beyond that, cellulosic ethanol is expected to grow beyond the 30 billion gallon total biofuel supply in 2022. But where do farmers fit into that overall plan?
Agricultural economist Tom Capehart of the Congressional Research Service examined Congressional policy issues involving cellulosic biofuels and says they must overcome three challenges:
1) First, cellulosic feedstocks must be available in large volumes when needed by refineries.
2) Second, the cost of converting cellulose to ethanol or other biofuels must be reduced to a level to make it competitive with gasoline and corn-starch ethanol.
3) Third, the marketing, distribution, and vehicle infrastructure must absorb the increasing volumes of renewable fuel, including cellulosic fuel mandated by the RFS.
Obviously, farmers must carve out their niche in the first challenge, if there is to be one. Capehart notes there are doubters who are “questioning whether the United States could ever produce and manage sufficient feedstocks of starches, sugars, vegetable oils, or even cellulose to permit biofuel production to meaningfully offset petroleum imports.” To many biofuel communities in the Cornbelt, “the gauntlet has been thrown down.”
Ethanol will likely be produced from a variety of cellulose sources, according to Capehart, including municipal solid waste, construction debris, and residues from the logging, lumber, and paper industries. Not much for farmers in those areas. However, other potential cellulose sources include crop residues, such as corn stalks and wheat straw, as well as perennial grasses, such as switchgrass and miscanthus. But farmers wanting to cultivate the latter will run into a challenge the CRS economist describes as, “Cellulosic feedstocks may have some environmental drawbacks. Some crops suggested for biomass are invasive species when planted in non-native environments.”
The prairie grass issue might be resolved if your ancestors could testify that they burned off switchgrass in Cornbelt states when they began the farmsteads you now operate. It was the dense, itchy stuff that pioneers fought every day as their covered wagons traveled westward. But to grow switchgrass that might be profitable, it may require several years to reach its full yield potential. Capehart quotes University of Tennessee statistics that indicate the top yield potential is two tons per acre in the first year and seven tons after the third year, which would produce up to 1,000 gallons of ethanol. An alternative is the Asian grass miscanthus, which can produce 2.5 times the amount of ethanol that corn currently produces, which is estimated at 1,100 gallons per acre. Researchers at South Dakota State and the University of Minnesota have both looked at other native prairie grass mixtures that seem promising for ethanol production, without the criticism of being “a non-native specie.”
Farmers who have baled wheat or oat straw have harvested and stored biomass for years, so there is nothing new there. Cornstalks are another issue, and Capehart suggests the need for a single machine that can harvest corn for grain and stalks for biomass in one pass through the field. And protective storage for corn stover will be a significant process and investment, which will have to borne by farmers. But imagine that an enterprising group of investors plans to build a cellulosic ethanol plant in your neighborhood and recruits you to produce the feedstock for it.
• It will produce 10-20 million gallons of ethanol per year
• It will operate 24/7 and will need 700 tons per day.
• If the plant wants corn stover, it will cost $39 to $46 per ton to transport it 30 miles.
• If the plant wants switchgrass, it will cost $57 to $63 per ton to transport it 30 miles.
CRS economist Capehart notes that harvesting corn stalks will not reduce food output, but growing grasses would displace food crops on cropland. Farmers considering such a new crop would have to calculate the multi-year commitment that would be required. The initial start-up years would have equipment investment along with a lower level of revenue for grass production. However, planting grasses will required a commitment from landowners, should such production occur on rented land, and that would mean multi-year leases.
Summary:
With US energy policy moving toward biofuels, and a limit on how much corn can be used for ethanol production, farmers will not be shut out of the market. Options are available for substantial involvement in supplying feedstocks for cellulosic ethanol producers. Those include both production of grasses, as well as harvesting of corn stalks. Farmers will have to work out marketing agreements that would compensate them for additional equipment outlays, storage and transportation costs, and early revenue losses in the case of grass production.
Posted by Stu Ellis at 1:48 AM | Comments (2) | Permalink
May 26, 2009
Replant Decision Making: Keep It Or Replant It?
Throughout much of the Midwest, most of the corn is planted, even in Illinois where nearly a week of good weather allowed many farmers to advance well beyond the state’s 10% planted mark confirmed last week. However, continued wet weather has saturated soils and allowed ponds to drown many corn seedlings. In a year when input costs may outstrip commodity sales, most farmers cannot be satisfied with a mediocre stand in the corn field. How do you rationally decide whether to replant, and not waste scarce resources?
Replant decisions are not easy. Are you tearing up field that might have a decent yield just to take a chance that a replanted crop might yield a few more bushels? IL Extension crop specialist Doug Gucker used his newsletter to point out how minimal the population had to be to justify replanting. He says, “If the corn was planted in late April to early May, then the corn stand would need to be less than 13,000 plants per acre to justify replanting.” While his seed and machinery expense are unknown, it is obvious that it would take a very poor stand to warrant the planting expense, plus the yield decline expected from corn that had a month less to grow and mature.
Gucker points to the Illinois Agronomy Handbook for a decision aid that requires you to know the current population, the potential yield for the field, input costs and market value. Such web-based decision aids can make your choice much easier, if they agree with your gut feelings. However, if your gut feeling disagrees with the calculation, then an uneasy choice has to be made.
The University of Nebraska Weekly Cropwatch features a replant guide in its May 22 edition. Crop Specialist Bob Klein and Extension Engineer Paul Jasa give credit to Iowa State University for a couple tables they provide that can assist in the decision. But the NE specialists make the point that “Getting a uniform stand at the right population is an important part of getting a good yield.” The telling part of the Iowa State table is that a planting date between May 26 and June 1 will only provide a 90% yield potential based on a final population of 28-32,000.
Seedling uniformity is a key assessment that you have to make before making any replant decision. Klein and Jasa at Nebraska say, “Research has shown that if one out of six plants is delayed by two leaf stages, yields can be reduced by 4%. If one out of six plants is delayed by four leaf stages, yields can be reduced by more than 8%.” And they remind you to contact your crop insurer, Farm Service Agency, or any others with an interest in your crop before replanting.
Agronomist Roger Elmore at Iowa State University says there are two instances when there is a need to replant. The first is non-uniform emergence, as noted by Klein, and Elmore’s worksheet for lack of uniformity helps you estimate your yield loss, but you have to determine an average for the late plants and an average for the earlier corn plants.
The second situation for replanting needs to be made when populations are significantly less than desired. Elmore’s checklist helps you determine the best course of action. But he warns that replanting may only yield marginal results in a number of situations, such as when one row has not emerged when others have, or when there is a less than two week difference in emergence. In that case he says replanting might only increase the yield by 5% and that would not pay the cost.
At Purdue, corn specialist Bob Nielsen provides much of the same information, but does quite a bit more “virtual hand-holding” to walk you through the steps in making a decision. His methods are quite helpful, and he also raises other issues, such as “patching in” versus complete replanting. He says resist that temptation if your surviving plants are at the two leaf stage or more because they will out-compete the later planted corn. He also suggests that if you replant with an earlier maturing hybrid, it may not meet all of the quality requirements for full season corn if you have contracted for a premium price. And Nielsen says there will be stresses on your late planted corn due to its effort to pollinate in the heat of the summer, and it will be perfectly timed for corn rootworm beetles to feast on its silks and tassels.
Summary:
The decision to replant corn is difficult, given the cost. However, the major issue is whether you are taking a chance to plant a lesser yielding crop than what you may have destroyed. The decision has to be made on the basis of either lack of uniformity of emergence or fewer plants per acre that are viable. Several decision aids are available, however, they are required accurate information on costs and good information on the potential yield of both the old crop and the replanted crop.
Posted by Stu Ellis at 12:39 AM | Comments (1) | Permalink
May 25, 2009
Does The Oil Market Provide Any Hint About The Future of Corn Prices?
The soybean market has been hot this spring, thanks to supply issues linked to the drought in Argentina. But while beans were climbing the charts with the help of supply fundamentals, the corn market has been locked in a sideways channel for the past six months with no clear direction for marketing plans. There is a strong argument for the interconnection between the corn and the oil markets, so will learning about the oil market provide a lesson for corn marketing?
Economists who studied the relationships between corn and ethanol, and between ethanol and the oil market, all indicate there is about a 90% correlation between them, which links the price of corn to the price of oil, because ethanol has to be priced in relation to unleaded gasoline. Consequently, knowledge of the oil market may provide a head start on corn marketing.
Members of both Houses of Congress last week gathered in the Joint Economic Committee to hear authorities analyze oil prices and the US economy. Among them was Economist James Hamilton of the University of California at San Diego, who observed that four big increases in the price of oil for the past 35 years have all been followed by global recessions. We are in number five, and Hamilton says the latest surge in oil prices was an important factor that contributed to the current recession. However that surge resulted from a combination of declining oil production, increased Chinese demand, and a heated global economy, all of which pointed to a rise in oil prices to ration the supply.
Hamilton says the $4 price for a gallon of gasoline got the attention of US consumers, and the abrupt change in spending patterns disrupted certain key economic sectors, such as a plunge in sales of light trucks and SUV automobiles, which took 125,000 jobs out of the economy. But the economist also said paying $1 more for each of the 140 billion gallons of gasoline sold in the US takes $140 billion away from consumer purchasing power. Hamilton says the biggest economic effects of an oil price increase are not seen until 3-4 fiscal quarters after the price rises.
The University of California economist suggests that speculation in the oil commodity trading pits were partially involved, and says that may have benefited from the Federal Reserve action to reduce interest rates early in 2008. He favors an emergency plan to reduce petroleum demand that can be implemented on short notice in the wake of any future oil crisis. But Hamilton notes the long term challenge is a “booming world petroleum demand in the face of stagnant world oil production.”
Retail gasoline prices have climbed 50 cents per gallon since the December low, which is $70 billion dollars taken from consumer spending power. Hamilton says there are many other dynamics now at work in the recession, which are more important than oil prices; but he says the recent price increase in gas indicates the challenges ahead. “Even if we see significant short-run gains in global oil production capabilities, if demand from China and elsewhere returns to its previous rate of growth, it will not be too long before the same calculus that produced the oil price spike of 2007-08 will be back to haunt us again.”
Based on Hamilton’s analysis, the gasoline market will be climbing, helping ethanol to return to higher levels, and that could take the corn market upward with it.
Dr. Daniel Yergin, Chairman, IHS Cambridge Energy Research Associates, also testified to the Congressional Committee and agreed that the surge in oil commodity prices was a significant contributing factor to the current recession. But Yergin says the oil industry is increasing its capacity by 2 million barrels per day at the same time demand is declining by 2 million barrels per day, putting downward pressure on oil prices. However, the cost of producing new oil fields has remained high, and despite lower oil prices, oil exploration remains costly.
With such high production costs, the new capacity may not materialize, and projects to find more oil may be postponed or cancelled. How soon that will occur, Yergin says, depends on oil demand and the recovery from the global recession, as well as the implementation of green climate change policies.
Summary:
With the corn and ethanol market closely linked to the gasoline and crude oil market, corn growers may be able to plan long term, based on the future of the oil industry. Economists have told Congress that while capacity is up slightly, demand has fallen by a like amount. However world demand should return, and with it, higher prices for gasoline. Will those become a factor in ethanol prices and corn demand? If recent history is any value, corn prices should rise along with the oil market.
Posted by Stu Ellis at 12:31 AM | Comments (1) | Permalink
May 22, 2009
Cornbelt Update
Extension Update is a weekly summary of news from Extension, government, and other attributable sources, focused on marketing, farm management, and other issues that are of interest to Midwestern farm owners and operators.
The market ought to be more worried about corn planting delays in the Eastern Cornbelt says IL Extension Specialist Darrel Good, who believes a potential 22 bu. per acre shortfall in IL, compared to 2008, could also be the case in Indiana and Ohio. Read his newsletter.
Good says the market may be ignoring planting delays because a similar situation in 2008 was erased with perfect summer weather. As a result he says the market:
1) may be primarily focusing on other supply and demand fundamentals.
2) may expect higher ethanol and export demand, along with Wall St. stability.
3) may not appreciate the yield implications of extremely late planting dates.
An IL weather and yield model developed by IL ag economists predicts:
1) A 175 bu. state average yield with average weather and only 14% planted late.
2) A 157 bu. state average yield with average weather and 75% planted late.
3) A 172 bu. state average yield with cool, wet weather and 75% planted late.
4) A 134 bu. state average yield with hot, dry weather and 75% planted late.
Planting delays will help push prices higher in a strong demand corn market believes Melvin Brees at MO Extension. His May newsletter says lower yields will lead to price strength, “One possible upside price objective is to target prices in December futures near the $4.70 high that occurred in January. Continued planting delays might provide the chance to increase price targets if prices continue to move higher.” Read his newsletter.
June 1 begins the ACRE sign-up, and some farms will either be helped or hurt by ACRE. OSU economist Carl Zulauf says put some in and keep some out.
1) For corn-soybean-wheat farms, the reduction in direct payment per planted acre usually will be smaller, the greater the share of base acres that are soybeans.
2) Compared to the counter-cyclical program, ACRE better matches current production risk because its payment is based on planted acres (up to the farm’s total base acres).
3) The higher a farm’s 5-year Olympic moving average yield, relative to the state’s 5-year Olympic average yield for a crop, the higher the farm’s ACRE revenue payment.
4) The more yield has increased the higher will be a FSA farm’s Olympic average yield. For example, recently tiled fields may have greater yield increases.
5) The closer changes in yield on a FSA farm and state move together, the more similar is changes in farm and state revenue, implying better risk protection from ACRE.
Flipping the switch. If you think that it is too late for corn and you are going to plant soybeans instead, work through a checklist from Vince Davis of IL Extension.
1) Review the economic decisions.
2) Variety selection will be a key, so look for university trial reports in your state.
3) Choose a variety with SCN resistance different that what was planted last year.
4) Warmer soils mean more fungal problems, so find varieties with disease resistance.
5) You will not benefit from any nitrogen application, so check that off as lost.
6) Check the label for issues with any corn pre-emergent herbicide that was applied.
7) With the intense fieldwork in narrow windows, keep rested, alert, and safe.
What little corn that has been planted in some states has been flooded out, and replant decisions are the top priority. IL Extension’s Emerson Nafziger knows you are wondering about using a shorter season hybrid. He says, “Early-maturing corn planted late is likely to be hurt even more by weather-related problems than mid-maturity hybrids would be, and both will be damaged by early frost. This suggests that going to earlier hybrids, especially if they are not adapted, may provide little or no benefit when planting is late.” Read more.
There is a similar philosophy from the OSU agronomists, who say, “In Ohio and Indiana, we've observed decreases in required heat units from planting to kernel black layer which average about 6.8 growing degree days (GDDs) per day of delayed planting. Therefore a hybrid rated at 2800 GDDs with normal planting dates (i.e. late April or early May) may require slightly less than 2600 GDDs when planted in late May or early June, i.e. a 30 day delay in planting may result in a hybrid maturing in 204 fewer GDDs (30 days multiplied by 6.8 GDDs per day).” Read more.
Some replant scenarios may have a farmer tearing up a marginal field that would have outyielded a newly planted late maturing field. Nafziger believes, “It is important to make the replant decision based on estimated effects on net income, not on an emotional basis or a need to "make the field look better." At the same time, listening to one's gut isn't always a bad thing,” especially if the numbers make it look like a wash.
The main problem with planting soybeans on drowned out corn is the issue of what pre-emergent herbicide was used. Purdue agronomists report, “The only herbicides labeled for use in corn which would allow replanting soybean immediately are Prowl and Python. All other soil-applied corn herbicides have a several month rotational interval which must elapse before beans can be planted. Most of the post-emergence herbicides have shorter rotational intervals, but would still require a couple of weeks before planting.”
Early planting requires higher planting rates, only because of the cooler soils earlier in the season. Later planting has the benefit of warmer soil temperature and germination improves, which may allow seeding rates to be lowered by 3-5% to reach the desired harvest population, since a higher percentage of seed will germinate.
Even though your planting date is delayed, that is no reason to change your plant population, say OH State agronomists. Regardless of the date, final stands of 30-36,000 population were required for optimal yields. However, they found that the lack of response to higher population was related to increased stalk lodging.
If moving from planting to spraying, IA St. ag engineers have several ideas to cut spray drift. They say a 100 micron drop will blow 96 ft. from a 3 ft. boom height, in a 20 mph wind.
1) Increase droplet size to prevent small droplets from entering air currents.
2) Use larger spray tips and operate them at lower pressures.
3) Keep booms at the lowest height that still allows nozzle overlap.
4) Drive slower near field borders if using spray controller that lowers pressure.
The wet spring may have placed weeds lower on your priority list, but IA State weed specialist Bob Hartzler says act conservatively to minimize the risk of yield loss by letting weeds get out of control. He says if weeds are more concentrated than 10 per square foot, they need to be controlled before reaching 2 inches in height. They will not only take moisture away from an emerging crop, but will steal any applied nitrogen.
Volunteer corn should also be on your priority list to control. Hartzler says one volunteer corn plant per 10 foot row of soybeans will cut yield by 1.3%. If your volunteer corn is glyphosate resistant, he says use paraquat or SelectMax, but if using the latter, there is a 6 day interval between spraying and planting to avoid residue issues.
Weed control #1. In no-till fields which have yet to be planted, failure to control glyphosate resistant weeds before planting could lead to significant challenges in bean fields where few alternatives exist for post emergent weed control. IL Extension’s Aaron Hager says glyphosate tank mix partners will be needed before and after planting.
Weed control #2. While growth regulators can be effective, there must be a time lapse between application and planting. If you do not have that time, eliminate the growth regulator from the burndown or increase the rate of the non-selective herbicide.
Weed control #3. Since larger weeds require a higher rate of herbicide application, delaying a burndown application until after planting may require high rates of application. For glyphosate burndowns, Hager recommends adding the full recommended rate of AMS, and be cautious of products without sufficient AMS.
As weeds escape a particular set of POST herbicides and become increasingly hard to control, PRE herbicides, selected for those weeds, will minimize the selection pressure of the herbicide resistant or tolerant weeds in that field, say Purdue agronomists. “Even if some of the weeds are not totally killed by the PRE treatment, weed growth is reduced allowing the POST application to be made to smaller weeds, ensuring better coverage and increased control. While herbicide resistant crops have allowed for a wider window of application over the past decade, as weeds become more resistant to these herbicides, it is important to change to different modes of action or add an herbicide with a different mode of action to the herbicide program to keep weeds in check and yields high.” Read more.
The loss of nitrogen will be minimal if you applied anhydrous ammonia, say OSU fertility specialists. They report it is “fairly resistant to microbial oxidation and eliminates the bacteria responsible for nitrification. Thus, that material can be in the field for a week or two prior to conversion to nitrate. Additionally, the speed of microbial oxidation is a function of soil temperature.” They say GGD are less than normal.
However, UAN dry or liquid may be more at risk of degradation, particularly if the field was waterlogged for more than a day. And liquid UAN, more so, than dry UAN. Again, temperatures are key to the speed of the nitrification, and coolness slows it down.
“Refuge in a bag,” also known as Pioneer’s AcreMax, has not yet been totally adopted by a government advisory panel. The concept is to reduce the Bt refuge from 20% of acreage to only 5%, but the group said the blended seed did not prove to be either toxic or a repellant. The result is more study, and EPA is expected to soon weigh into the debate.
Have corn rootworms drowned in the Eastern Cornbelt? Their mortality is high in saturated soils and standing water, but IL Extension entomologist Mike Gray asks if they have even hatched yet. Based on degree-days, Gray says we are at the midpoint of the hatch, and some are still in the egg stage and immune to the ponded fields.
Consider the rootworm environment. Cool water and soil will preserve rootworm eggs. Warmer temperatures will decrease the survival rate. Larvae have survival problems, until they can find corn roots, then survival in standing water is improved. Planting delays will jeopardize their survival, since about half will die within 24 hours if they cannot find corn root tissue to enter. 95% will starve in 3 days without corn roots.
Was wheat hurt by the recent cold nights? That is a possibility, but it depends on the variety, the growth stage, how cold it was, and the length of exposure to the cold. Spikes can be trapped, leaves discolored, flowers sterilized, and lower stems damaged. But, OSU agronomists say wheat is a winter crop and can tolerate cold temperatures.
Cattle feeders are still seeing red ink says livestock economist Dillon Feuz, who says “Nebraska feedlots have averaged a $120 per head loss since January 2008.” But he adds, “Cattle prices have strengthen this month to the point of a positive return for some producers. However, it would appear that feeder cattle that were purchased near the average market price and that have average feedlot performance will not break-even this summer. For those cattle to break-even, feeding costs would need to remain at present levels and the fed cattle market would need to regain that $2-3 per cwt that has been lost in the last two weeks.” He thinks $85 would be breakeven for some fed cattle.
Essentially, a catch-22 is what IA State ag law specialist Roger McEowen describes with the current federal policy on ethanol. He says the Obama administration wants the average fuel economy to increase to 35.5 mpg by 2016, but the move to increase the ethanol blend from 10 to 15% would cause a further reduction in fuel economy. Read his rather critical observation.
Posted by Stu Ellis at 1:37 AM | Comments (0) | Permalink
May 21, 2009
ACRE: Are You Moving Closer To A Decision To Sign Up?
Most Cornbelt farmers have had a lot of tractor seat time this spring, during which the question of ACRE may have been mentally debated. Sign-up for the Average Crop Revenue Election program will begin June 1, and many farmers are either still trying to decide or have given up and plan to wait until the next rainy day when they can study a bit more about it. If you are among either group, we have some insight from the experts to share with you.
While most farmers are well along with planting, there are tens of thousands in Illinois, Indiana, and other parts of the Eastern Cornbelt who have yet to get into the field, and many others who have not even gotten a good start on planting. That will cause those to wonder if the ACRE program participation will be a plus or a minus if some acres don’t get planted or if their own prevented planting crop insurance claim will have an impact. Good question, says Kansas State ag economist Art Barnaby. His latest advice indicates that acreage which was considered planted but failed, will count against the state ACRE payment, which is the first threshold that must be crossed. Barnaby says the crop may be reduced because of failed acreage, but it would be less than 2% and that would not be sufficient to have much of an impact, unless they were all in one state.
Barnaby says FSA considers prevented planted acreage a farm level statistic, and not a state level statistic. If corn acreages shift to soybeans, bean acres will increase nationally as the result of prevented planting for corn, but he thinks acres that were never planted into anything will have a small impact.
The Kansas State economist says the FSA definition for failed acres will impact ACRE payments and in many cases may be the difference between a large ACRE payment and none in some states. However, failed acreage does not include prevented planting. He says late planting will cut corn yields and that would increase ACRE payments, which will also be determined by the average price for the Marketing Year.
On a related issue, Iowa State University ag economist Bruce Babcock writes in a recent newsletter that ACRE payments will be based on historical prices but crop insurance is based on market conditions at sign up time. He says today’s ACRE safety net uses a moving average of prices over the past two years, but not the current year. He estimates ACRE prices at $4.20 for corn, $9.88 for soybeans, and $6.67 for wheat; and if prices fall 10% below those levels ACRE payments will begin, provided state yields are close to their five year average.
What is that chance? Iowa State’s Babcock says there is a 50% chance that corn payments will exceed $7 per acre, a 50% chance that soybean payments will exceed $9 per acre, and a 50% chance that wheat payments will exceed $12 per acre. Since direct payments, which are reduced 20% upon ACRE sign-up, are much lower than those amounts, Babcock says, “The chance is much better than 50-50 that average ACRE payments will exceed the average loss in direct payments. This suggests that many corn, soybean, and wheat farmers will find it advantageous to enroll in ACRE.”
Babcock says ACRE’s backward look for prices and its 10% limit on year to year change, there is a chance that 2010 ACRE guarantees will be much greater than what producers can get for their crop when sold into the marketplace. If that is the case, the ACRE program will be dictating cropping patterns in 2010 and not the marketplace.
Could that have been avoided? Babcock says it could have, if the writers of the ACRE program would have used futures prices, rather than historic prices.
Summary:
The ACRE program will offer the opportunity for payments higher than what would be lost from the direct payment program, under expected scenarios. The ACRE program, which holds its sign-up from June 1 through August 14, will be impacted by the delays in corn planting this year. That will reduce the yield, which would benefit those who would sign up. Additionally, the potential for acres that are failed, will make ACRE payments more likely, due to the lower yield. Acres that are prevented planting, will count against the farm yield, but only have a small impact.
Posted by Stu Ellis at 12:37 AM | Comments (0) | Permalink
May 20, 2009
The Pork Market: Thumbs Up Or Thumbs Down?
Prepare yourself for USDA’s latest message to the pork industry: “Hog prices are expected to recover in June.” When you are finished with the euphoric celebratory dancing and the high fives with your spouse, let’s pull ourselves together, restore the decorum at home, and ask, “Recover from what?”
The latest Livestock Outlook from USDA’s Economics Research Service teases producers a bit with the headline, and begins by saying, “USDA revised second-quarter hog prices downward, to reflect price weakness in April and negative effects of H1N1 flu virus in May. June prices are expected to recover from May lows.” Recovery is a good thing, but USDA is not projecting a return to the profitability of recent memory.
The weaker demand for pork, resulting from the H1N1 flu virus took about $5 per cwt from the lean hog market. US consumers and foreign demand withered from the flu outbreak. Domestic buyers were cautious and foreign governments backed away from imports on the disease concerns. USDA believes foreign and domestic consumer confidence will increase as reports of the disease decrease. ERS economists think prices of US pork and hogs will adjust upward as demand returns to normal and seasonal product flows are restored.
For the first three months of the year demand was healthy, weighing in at 1.03 billion pounds, 72 million under 2008, but 30% ahead of 2007. The shortfall this year resulted from a fading demand from China, since it has moved beyond a domestic shortfall and will increase its own production. Economists believe China will increase its pork industry by 6% this year, with a 17% drop in pork imports. For the second quarter of the year USDA believes exports will remain steady with the first quarter at 950 million pounds. Ironically, the export projection remains steady, despite great volatility in purchases among importing nations.
A significant dynamic in the US pork industry is the fading involvement of Canada. Compared to last year:
• Live swine imports from Canada are down 40%
• Slaughter swine imports are down 67%
• Finishing animal imports are down 28%.
This drop is attributed to the contraction of the Canadian hog industry due to lower profitability, and the marketing uncertainties due to the Country of Origin Labeling program.
In addition to the live hogs southbound from Canada, pork cuts are not flowing into the US as rapidly as last year by a 5.5% margin. Low quality pork from Mexico is not being demanded by immigrants in US cities, and high quality pork from Denmark is not being sought because of the recessionary economy.
Meats that compete with pork present a rather mixed bag:
1) Broiler meat will rise 1.6% in 2010 compared to the current year as expansion is restricted because of high feed costs. Weights will remain steady, but the number of birds slaughtered will increase.
2) Turkey production will be up 2% in 2010, after falling in 2009. Higher prices will be an incentive for increased production. However, most of the increased production will be exported, and much of it to Mexico.
3) Retail beef prices have increased in 2009 over 2008 by 4%, indicating that grocery demand is steadier than restaurant demand. Cattle feeders have recently seen margins that are closer to breakeven than any time since 2007. That is a result in lower prices for both feeder calves and feed, but USDA does not expect positive margins to last beyond the summer. The impact of H1N1 virus was difficult to analyze on the cattle industry, since two opposite marketing forces may have offset each other.
Summary:
Pork demand suffered from the H1N1 flu virus, wrongly named the swine flu. As a result both domestic and foreign consumers reduced their consumption of US pork, and $5 per cwt was lost on market hogs. As reports of the flu decline, demand is expected to rise for US pork. The export market for the second quarter is expected to parallel the first quarter. In other meats, both poultry and turkey production are expected to show marginal growth into 2010, and the beef market will see some brief profitability for cattle feeders as the result of lower input costs.
Posted by Stu Ellis at 12:17 AM | Comments (1) | Permalink
May 19, 2009
The Latest Challenge To Biofuels Would Seem To Be Easily Overcome, But It May Not Be!
Every farmer has fought for years to develop new markets and create an additional demand for his crops. Ethanol’s long history finally shifted into road gear in 2006 with the help of federal mandates. Soydiesel does not have quite the history, but has consumed sufficient quantities if soybean oil to help push the market higher. However, both are facing one of the biggest challenges of their life, and the share of biofuels in the farm economy has raised some serious questions.
Suddenly, the ethanol and soydiesel industries have found themselves having to answer charges they are villains in the global warming debate. The US EPA raised the issue with a proposed rule adverse to biofuels. Most folks would stop in their tracks at such an allegation because they thought biofuels were supposed to replace petroleum fuels that were contributing to global warming. How can ethanol and soydiesel be worse than petroleum in that debate?
The issue involves, what is called, “indirect land use.” Those concerned about the issue allege that production of ethanol and soy diesel are forcing more land to be converted to crops both here and abroad and clearing land for row crop production is a contributor to global warming. That is their argument in a nutshell. Coming to the defense of biofuels during a Congressional hearing was Chief USDA economist Joe Glauber. Glauber says biofuel production may increase land under cultivation, but estimates of the magnitude vary. Part of the immediate negative impact on ethanol will be seen by the policies adopted in California which take indirect land use into account as contributing to greenhouse gas emissions, a move that would potentially exclude Cornbelt ethanol from the California market.
Glauber says corn based ethanol will stabilize at the 15 billion gallon level in the near future, then added requirements will come from biomass sources. He says last year 3.7 billion bushels of corn went into ethanol refineries, and by the 2015/16 marketing year, that volume will top out at 4.8 billion bushels. At that time corn planting will require 86 to 90- million acres and the average yield is expected to be 169 bushels per acre. His point is that increased yields, as well as a slight increase in acreage will achieve ethanol’s requirement for corn.
Also, Glauber says cropland has varied widely in the US over the past 30 years, ranging from 297 million in 1981 to less than 245 million in early 1990. Planted acreage for the eight major row crops was 253 million last year, and is estimated to be 246 million this year. So, Glauber is saying acreage for row crop production in the US has been 50 million acres higher than it is now.
Globally, the estimate of biofuel production is more difficult to estimate says the USDA Chief Economist. He says one recently study estimated more than 26 million acres would be used for ethanol production world wide, which was 1.8 million acres per billion gallons of ethanol. On the other side was a study that said a 1% increase in ethanol used would result in a 0.009 percent increase in world crop area. Even the California policy makers did not agree with the initial estimate, saying each one billion gallons of ethanol would require only 726,000 acres.
Glauber says one of the uncertainties in everyone’s calculations is the projected corn yield, particularly on land that is brought into cultivation just to meet the ethanol demand. Lower yields would require more land, and good yields would require less land. Glauber says the latter can be seen in Brazil where new lands opened for soybean production were double the national average. Alternately, switching from one crop to a biofuel crop can be easily done if both are typically cultivated on that farm, but more difficult if forestland is being reclaimed for row crops.
Another uncertainty is the growth of yields over time, since many studies do not take into consideration USDA’s estimate that corn yields increase by 2 bushels per year per acre, and if that is applied to the rest of the world, then corn yields would be 10% higher in 2015 than the California study estimates. And Glauber says higher crop prices will likely result in increased crop yields.
One product that may be misunderstood by critics is DDGS, which can replace as much as 1.271 pounds of corn for animal feed per 1 pound of DDGS. The California policy is based on a one to one ratio for DDGS replacement of corn.
Glauber says there is no question that increased demand for biofuels will have an impact on crop acreage, but the big question is magnitude, and higher crop yields that are expected mean there will be less acreage needed than many critics are projecting.
Summary:
While federal policies current favor biofuel production and use, proposals by the US EPA would curtail some of the impact by saying US biofuel production is causing more land to be cultivated in the US and around the world, and that would contribute to more global warming. Critics may not be looking at the fact that US corn production for ethanol is near the maximum, and that yields here and abroad will climb to the point that increased acreage will not be needed.
Posted by Stu Ellis at 12:31 AM | Comments (1) | Permalink
May 18, 2009
Is The Federal Estate Tax An Issue For You?
Farmers visiting with their Congressional representatives have usually found the opportunity to call for elimination of the Estate Tax, or “Death Tax” in the current vernacular. With farm estates including millions of dollars worth of farmland and machinery, there is a fear that Uncle Sam will take so much of the value that the next generation will have insufficient assets to carry on the family farm. Although the exemption has been rising and tax rate declining, it will all change next year with a repeal of the Estate Tax, and a renewal of the tax in 2011 with a low exemption and a high rate. Is the federal Estate Tax an issue for your farming operation?
As the Estate Tax exemption climbed from $675,000 in 2001 to $3,500,000 this year, fewer farm estates were impacted by the tax. USDA economist Ron Durst, writing in the electronic newsletter Amber Waves, says “...their potential effect on farmers and other small business owners has been a major concern among policymakers. These groups are more likely than the general public to owe estate taxes,...” Durst says Congress over the years has tried to make the Estate Tax less onerous by allowing farmland to be taxed at its farm use value, rather than fair market value, in addition to an installment provision, and a deduction for family owned businesses. Other provisions will become effective next year, with the repeal of the tax. However, at the end of 2010, the situation is set to be comparable to Cinderella at midnight when her coach turned back into a pumpkin. The Estate Tax rate will jump from 45% to 55% and the exemption will revert to $1,000,000.
Economist Durst says the IRS does little Estate Tax business, but knows farmers quite well, “About 9,600 estates (0.4 percent of all estates) are expected to owe Federal estate tax in 2009. The estates of small business owners are about twice as likely as the typical estate to owe tax, and farm estates are even more likely to owe tax, primarily because of their land holdings.” He says the current year will see 2.9% of farm estate owing the tax, expected to average about $1.1 million. A commercial farm is 10 times more likely to owe Federal Estate Taxes than other farms, and 10% of farms with annual sales over $250,000 will likely owe the tax. While commercial farm estates account for only 6% of all farm estates, they pay nearly 40% of Estate Taxes.
The scheduled repeal of the tax next year and the re-establishment of the tax in 2011 create uncertainty, says Durst, “but it also raises concerns regarding the disparate treatment of similar estates depending upon the date of death. The family of a person who dies on January 1, 2011, could owe considerably more than the heirs of a person dying a few days earlier.” Durst says at the same time the tax rate and exemptions are going against a farm estate, the estate itself has gotten much larger with higher land values, and greater equity. As a result, an estimate one out of every 10 farm estates would owe the tax in 2011, which are estimated at more than two and a half billion dollars.
The meteoric rise in farmland values in the past several years will be one of the more troubling issues for heirs in farm estates under the law that takes effect in 2011. Previously, the valuation process eliminated the increased value of the land that was typically held for long periods of time. However, beginning in 2011, the amount of value appreciation to be exempted will be limited. Additionally, the change will require the determination of asset values at the time they were acquired many years before. That will be a particularly challenging compliance issue for many families of farms that may have been acquired several generations earlier.
The USDA economist says the proposed federal budget for 2010 would retain the $3.5 million exemption, along with the 45% tax rate, and retain the stepped up basis treatment for inherited assets, which would mean status quo for farm families that experience estate transfers in 2011 and beyond. While it is not the total repeal of the Estate Tax that many farm families advocate, it would reduce some of the uncertainty.
Summary:
The federal Estate Tax hits hard at many commercial farms, which are more likely to pay the tax than other farms and most other estates. The tax is scheduled for complete repeal in 2010, but re-establishment in 2011 at higher tax rates and lesser exemptions, which would capture many farm estates that have higher values from land prices and greater equity. A proposal for the next federal fiscal year would keep the current tax rate, exemptions, and most rules in place, instead of the more onerous provisions being restored in 2011.
Posted by Stu Ellis at 12:26 AM | Comments (0) | Permalink
May 15, 2009
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.
USDA nibbled away at the corn surplus, cutting it to 1.6 bil. bu. by transferring 50 bil. bu. each to export and ethanol estimates. IL Extension’s Darrel Good says the 12.09 bil. bu. production estimate parallels 2008, while the expected yield rose 1.5 bu. and harvested acreage fell by 800 thousand. Good says the projected 155.4 bu. average yield is a function of the trend line, adjusted for a slight decline due to planting delays.
Corn consumption will climb over 400 mil. bu. going into next year, which USDA estimates will be 12.56 bil. 350 mil. additional bu. will be used for ethanol and 150 mil. for exports, while 100 mil. fewer bu. will be fed, leaving only 1.145 bil. in ending stocks. Read more.
Darrel Good expects a modest shift from corn to beans in the Eastern Cornbelt due to planting delays, which can also reduce yield. That is one reason for USDA’s 1.5 bu. cut in the expected 2009 corn yield. He says without favorable weather like 2008, the slow planting will contribute to additional advances in corn prices.
Weather and planting progress will remain the major driver for crop prices over the short term, says IA Extension’s Chad Hart. “Longer term, the markets will continue to watch the development of biofuel regulations. The recent releases by the California Air Resources Board and the federal Environmental Protection Agency, incorporating indirect land use change and greenhouse gas emissions, were seen as negatives to the biofuel industry. But these policies are being phased in over a few years and are subject to additional review, so biofuel policy uncertainty remains,” according to Hart.
The soybean carryout for the current marketing year already was low, and USDA cut it further to 130 mil. bu. by increasing the crush and exports. Darrel Good says harvested acreage will climb 400 thousand and if the trend line yield of 42.6 bu. is reached, production will be 3.195 bil. bu. 2010 consumption is estimated at 3.107 bil. bu.
USDA may have overestimated grain supplies in the May report says KS Extension’s Mike Woolverton.
1) The 41.4 bu. wheat yield may be too high, given adverse weather and late planting.
2) Unplanted wheat acres will shift to soybeans or other alternative crops.
3) Global crop estimates were cut 4%, but major producers have production problems.
4) Don’t count on good weather to rescue US crops a second year from late planting.
5) An inverse in the bean market indicates price rationing is already occurring.
6) Global bean stocks can’t increase with the poor South American yields.
With oil prices pushing towards $60, gas prices have caught up with ethanol prices, says Jim Hilker at Michigan State. “If oil prices continue up, I would expect gas prices to over take ethanol prices. Up to this point the higher gas prices haven't affected the ethanol price a lot, just like the ethanol prices quit dropping, due to the mandates and blender credits, at prices not way below where they are now. If oil prices continue up, it will help corn prices, if they stay where they are at, it will put a better support under corn prices.”
Soybeans have been in an up trend since the end of February, and recently they have caught up with corn. Or in Hilker’s words, “returns per acre are a tossup for the average farm.” He suspects soybean prices will now move more consistently with corn, if corn plantings are on target, if not, relative corn prices may pull back ahead. Hilker says, “Strongly consider pricing remaining old crop soybeans on this rally.”
Dec corn futures have a price risk premium, says IA Extension’s Steven Johnson, due to the fact much of the Cornbelt is not planted, and that provides a pricing opportunity. He says based on the past 18 years, there is a 79% chance the May corn price will be higher than the October price for Dec corn futures. His newsletter details that logic.
Consider new crop pricing, says Johnson if you have revenue crop insurance that guarantees a $4.04 corn price, the current price exceeds that level by 45¢. He says don’t commit too many pre-harvest bushels, and use forward contracts or hedge-to-arrive. He says hedges or options can complement your cash contracts to manage your futures risk.
Even with a US wheat crop that is 366 mil. bu. less than last year, USDA projects average prices to decline from the $6.85 this year to a range of $4.70 to $5.70 for the new crop. Darrel Good at Illinois says one of the reasons is the larger foreign wheat stocks.
Failed wheat may earn a SURE disaster payment, but the temptation to plant an alternative crop may be a financial disaster. OK Extension’s Rodney Jones says any replacement crop that jeopardizes a SURE payment, must not only make a profit itself, but cover the loss of the SURE payment, and that is not guaranteed. Read more.
Benchmark Farm Yield is the term FSA will be using to determine whether your farm will be eligible for an ACRE payment, should you decide to enroll. OH Extension’s Mike Gastier says BFY may be the only effective way to prove yields in the Farm Bill. He adds, “It's in a producer's best interest to establish a strong Benchmark Farm Yield because the higher the Benchmark Farm Yield the more likely it is that the farm trigger is met and the higher the payment per acre will be should both triggers be met.”
How do you establish a Benchmark Farm Yield? Gastier says it is computed from your 2004-2008 yields, with the high and low years eliminated. Acceptable yield proof will include actual settlements or weight tickets through a commercial grain facility or crop insurance data including NAP or the APH database, but yield monitors will not be acceptable. If the data is not available, the default is 95% of the county average yield.
Corn lesson #1. IL Extension’s Emerson Nafziger says wet soils restrict the availability of oxygen to the corn seedlings that have germinated. He says the warmer the soil, the more oxygen that is needed because the growth rate is higher than with cooler soils.
Corn lesson #2. Mid-May brings the threshold for yield loss of 1.5 bu. per day that corn is not planted. While some may want to “mud it in” the resulting soil compaction from working soil that is too wet can have a detrimental impact later in the summer if the weather turns hot and dry. Compacted soil will restrict moisture availability to the corn.
Corn lesson #3. Nafziger says poor emergence could be the result of crusted soils:
1) A healthy, but thickened coleoptile means a crust or clod physically interfered.
2) A discolored and mushy seed indicates disease has set in and it will die.
3) Insect larvae may have eaten parts of the seed or seedling, which stopped its growth.
4) Reduced oxygen supply will allow roots to grow, but not the leaf shoot.
5) A seedling that is growing slowly is subject to invasion by soil-borne diseases.
Replanting is a decision some farmers will have to make, based on poor stands from the initial planting. IA State agronomists offer a guide to making that decision easier, comparing the potential yield from the first stand, versus the potential yield from any replanting, but they say actual losses could be greater or less. Find the chart.
Northern Cornbelt farmers who need to plant or replant, face critical decisions on dates, says MN Extension’s Jeff Coulter. He says MN corn planted after mid-May faces a 9% yield loss at a minimum. And he says stick with original hybrid choices until the last week in May before switching to an earlier maturing hybrid. Review his charts and calculations.
Your corn is emerging in a weed field. Now what? IL Extension’s Aaron Hager says:
1) If you planted in wet soil and the seed furrow did not close, the corn seedlings can be exposed to a soil residual herbicide applied after planting, with severe injury resulting.
2) If your corn is within a day or two of emerging, don’t consider applying a pre-emergent herbicide that is not supposed to be applied to post emergent corn.
3) Many, but not all, soil residual herbicide can be applied after corn emergence. However not all of them will control weeds that have emerged along with the corn.
4) Consult his newsletter.
Corn pests #1. Corn planted into pasture or CRP may attract wireworms which can remain in the larval stage for 6 years before becoming an adult beetle. They prefer cool soils, so earlier corn will be at a higher risk. With no rescue treatment for wireworms, the only preventative measure is the use of seed treatments, but they are becoming so commonly used, NE researchers detect that insect resistance is a possibility.
Corn pests #2. White grubs prefer to feed on grasses, which includes corn. Annual grubs will not be a problem, but heavy damage can occur from three-year grubs in the last two years of their larval stage. Damage to corn will not show up until after they are done feeding. There is no rescue treatment, but some fields will require replanting.
Corn pests #3. Cutworms will be at work within 7 days after emergence of corn, and may not be affected by any seed treatments or Bt traits. Cutworms will be heaviest in fields that had a high weed infestation prior to corn planting. Use a rescue treatment if 5% or more of the corn has been cut and worms are one inch or under. If soil is dry or crusted, rotary hoeing immediately before or after Lorsban (chlorpyrifos) application may enhance control. Any insecticides that are Pyrethroids should not be incorporated.
Think ahead about weed control in soybeans with an insecticide strategy. NE Extension’s Stevan Knezevic reports that weeds are more successful in soybeans that have suffered some insect defoliation because the canopy is reduced. He says, “Soybeans with 30%-60% insect damage have a shorter weed control window and potentially fewer weed control options. Early season bean leaf beetle feeding and defoliation can reduce yield two ways: directly, through soybean plant damage, and indirectly, by moving the critical period of weed control forward -- from 20 days after emergence to 10 days.”
As you plant soybeans, think about soybean rust, since it has been found on kudzu in FL, GA, AL & LA. So far it has not been found on soybeans, but this is the earliest it has been found in some locations. The problem this year is the delayed planting of beans will keep them at risk of rust for a longer period of the growing season. Rust has been showing up throughout the Cornbelt, but usually too late to do any serious damage. Keep track of soybean rust.
Most farmers who investigated organic production were concerned about their income in the required transition period. USDA will provide up to $20,000 per farm to ease the conversion process. Program sign-up is underway at local NRCS offices through 5/29. Producers may also qualify under the EQIP program, which has larger funding limits.
Another cropping alternative is switchgrass production for biofuel, grazing, or wildlife/conservation. But how do you grow it? Drill or broadcast the seed, but do not cut or graze it during the establishment year, so its roots can develop. Weed management is an issue, and WI Extension has a factsheet on switchgrass cultivation along with a weed control guide.
The price went down and the weight went up on hogs while the “swine” flu was underway. MO Extension’s Glenn Grimes says producers held hogs back from the market and they gained 3.4 pounds in late April and 5.9 pounds in early May, compared to prior years. He says the ailment cut about a half billion dollars out of the hog market.
Expect more regulations on farming and food processing as the result of increasing globalization of agriculture. That is the forecast of IL Extension economist Bob Spitze who says our food supply now can originate from any field or processor on the planet, and carelessness at a peanut processor affected the whole world almost immediately. The Emeritus professor says those interconnections focus attention on quality and safety.
Farmers who were unpaid after delivering corn to VeraSun Energy, can file a proof of claim, says IA State ag law specialist Roger McEowen. He says the deadline is May 25, or 30 days after a contract has been rejected. Follow his instructions, download the forms, and get the address.
Posted by Stu Ellis at 1:42 AM | Comments (0) | Permalink
May 14, 2009
The Crystal Ball: What Does It Hold For Cornbelt Farmers?
What are your feelings about the grain markets? Are they poised to climb higher, or have the spring rallies taken them as high as they are going? Has the recession dampened demand for ethanol-blended gasoline and softened the corn market? Has the recession curtailed demand for meat and reduced the need for more feed grains? Is there any bright spot in the in the crop outlook at all?
If the market has you down and out, you have come to the right place. Iowa State economists agree with you that there are uncertainties, but they think the outlook for Cornbelt corn and soybean producers is a bright one. If you are surprised at that, they point to your counterparts overseas:
· World supplies of grain have not grown as rapidly as expected because prices are down the world around, and foreign producers have not expanded production.
· There have been less than ideal growing conditions around the world, particularly the drought that cut 60% out of the Argentine grain crop.
· Credit constraints have seriously hampered many foreign farmers from getting money to buy inputs.
The bright outlook comes from the Spring issue of the Iowa Ag Review. Economists Bruce Babcock and Lihong McPhail look back to 2006, just before the commodity price run up, and say new crop corn is 35% higher and new crop soybeans are 56% higher. That is a 68% increase in revenue potential for a 50-50 corn-soybean rotation. But they are quick to acknowledge higher production costs:
· 14% annual increase in seed bean costs
· 20% annual increase in seed corn costs
While many farmers applied $900 per ton anhydrous ammonia, the cost of fertilizer and seed doubled production costs, and that should have eliminated any benefit of a 68% increase in grain revenue. But the Iowa State economists say returns to land, management and machinery have gone up 43% per acre over 2006 levels, if one is farming his own land. Rented land will not have that level of a return, and may be less well off than in 2006.
The economists calculate that if fertilizer prices next fall reflect current world prices, then returns on 2010 crops will be $70 more per acre, if Monsanto and Pioneer keep seed prices steady. That is also dependent upon stability in the grain market.
In 2006 ethanol consumed 2.1 billion bushels of corn, but will need 4.3 billion bushels for production in 2010, and that equates to 10 million acres of corn, once the distillers’ grain supply replaces feed corn. They believe that if the world financial crisis is resolved in another year or two, then world demand for meat and livestock will resume as population and income return to growth rates. They predict the US will need to devote more acres to grain production to meet world demand, and that will require higher commodity prices to achieve acreage expansion.
Their acknowledged rosy philosophy relies on a continuation of the US biofuels policy, but forecasts would have to be recalculated, if the public wants changes in federal biofuels or climate control policies. In those cases, corn demand would suffer.
Based on current USDA projections for future corn and soybean demand:
1) The average price of 2009 corn at $4.38 would drop to $3.48 if renewable fuel policies were eliminated.
2) The average price of 2009 beans at $9.52 would drop to $9.46 if renewable fuel policies were eliminated.
The Iowa State economists emphasize that strong crop prices depend on a continuation of biofuel policies as they are now, or there would be a 20% drop in corn prices and a growth in corn carryover of 800 million bushels. Their overall grain price outlook depends on a strong biofuels industry.
Summary:
Compared to farm revenue prior to the run up in commodity prices, prospects for 2009 and 2010 are much more favorable than in 2006. While grain prices are higher, so are production costs, particularly for seed and fertilizer, yet return to land, management and machinery will provide profitability, unless high cash rents are paid. The prospects for strong grain prices depend on an end to the economic crisis and a continuation of US biofuels policies. The latter helps maintain strong demand for corn and soybean prices.
Posted by Stu Ellis at 12:55 AM | Comments (0) | Permalink
May 13, 2009
What Is That Fungus Growing In Your Wheat?
If you are growing wheat, one of the recent phone calls you may have made was to an Extension specialist to ask what was wrong with your wheat. Small grains specialists are reporting frequent inquiries about diseases and what can be done about them. Scout your wheat, make notes, and let’s visit about what you’ve found and what you can do about it.
You have undoubtedly noticed that the cool, wet spring has been the “perfect storm” for fungus to thrive in wheat. And depending on the stage of growth, you may have different fungal problems.
In her May 5 newsletter, Laura Sweets at the University of Missouri reports increasing problems with Septoria leaf blotch and barley yellow dwarf virus, both of which have been helped with light rains, high humidity, and overcast skies. She is urging wheat growers to scout their fields to determine what fungal problems exist and the severity of them. It will also be helpful to be familiar with Feekes growth stages because many fungicides have limitations on when they can be applied in relation to the stage of growth of the crop. Label restrictions may prohibit application within 30 days of harvest, which would dictate the use of certain fungicides in the southern parts of the Midwest.
Sweets uses her April 28 newsletter to describe Fusarium head blight or scab, which is a premature bleaching of a portion of the head, with pink or orange mold growth at the base of the head. Sweets says the scab is not going to be prevented, but fungicides may be able to control the extent of the damage. One of the concerns is the fact Fusarium produces mycotoxins, which means the wheat cannot be fed to non-ruminant animals.
For a thorough discussion of numerous wheat fungal problems, and fungicides that will help control problems, Sweets provides that in her April 21 newsletter.
The agronomists at Ohio State have been watching the progression of wheat diseases northward as the crop develops, which is between jointing at stage 6 and flag leaf emergence at stage 8 in their part of the Midwest. Their recommendation for fungicide application is to first be aware of whether your wheat varieties are susceptible to fungal problems. Then check your field for diseases and determine the yield potential for the field.
In their latest newsletter the OSU agronomists say when the level of disease is high on the top two leaves, a fungicide application would be beneficial. In their part of the Midwest, they point to stagonospora leaf and glume blotch, powdery mildew, and leaf rust as the fungi that will have the greatest impact on yield. But they say rust is usually not detected until after flowering and that is too late to impact yield. Their observation is “The growth stage of the wheat crop when disease develops influences the impact on yield and timing of fungicide application. The earlier the growth stage, the greater the potential to impact yield.”
The OSU recommendation is for Tilt or PropiMax on powdery mildew, and if your have stagonospora leaf blotch or rust, good control is provided by Tilt, PropiMax, Quadris, Quilt, Stratego, and Headline. Use 20 gal water/A with ground equipment and 5 gal water/A if applying by airplane. Using less water will lower effectiveness. Check labels for application timing restrictions.
Illinois agronomist Carl Bradley reports in his newsletter there is a medium to high risk for fusarium in Southern Illinois, Southern Indiana, Southern Missouri, and throughout much of Kentucky. He says, “Only triazole-type fungicides (Folicur, Prosaro, Caramba, and others) should be applied for control of scab. It is important to follow manufacturer's instructions regarding rates, timing, and spray volume. Products that contain a strobilurin-type fungicide (Headline, Quadris, Quilt, Stratego, Twinline, and others) should never be applied for control of scab. Strobilurin fungicides applied at heading or flowering can actually increase the deoxynivalenol (DON) contamination in grain.” Bradley also provides results of the effectiveness of several fungicides.
Summary:
Fungal problems may be or become rampant in many Midwestern wheat fields because of the damp, cool weather conditions. Wheat growers should scout fields, determine the type and extent of fungal problems they have, and use effective fungicides for control. However, the stage of growth of the wheat may limit the kinds that are used, and agronomists say it is important to identify what fungi are present before any application is made due to the potential for adverse reactions.
Posted by Stu Ellis at 12:23 AM | Comments (0) | Permalink
May 12, 2009
Soybeans: A Flash In The Pan, Or Here For The Long Haul?
Your grandfather may remember the time before soybeans were planted on your farm. They are a relatively new crop, compared to corn and small grains. As agriculture changes, will your son and grandson also be planting soybeans, or will that be a crop that is replaced by something else?
You are more concerned about getting a crop planted this year, and are probably not even thinking about next year, but economists at the National Soybean Research Laboratory at the University of Illinois are looking at the long term viability of soybeans, all the way out to the year 2030. Economists Tadayoshi Masuda and Peter Goldsmith remind us that soybeans are consumed as human food, but primarily crushed into oil and meal, both of which are used for a wide range of human foods, livestock feeds, and industrial feedstocks, including biodiesel. Their focus was projecting long term demand in the domestic and international markets to determine if there was a need for US farmers to grow soybeans.
World consumption of soybeans in 2003 was nearly 184 million tons, which was 7.4 times the amount consumed just four decades earlier. The US consumes more than 26% of the supply and the top five consuming countries consume nearly 75%.
1) The US produced 73.4 million tons of soybeans, consumed 48.3 million tons, and exported the balance. Domestic use included 44 million tons crushed into meal and oil, both of which recorded some exports. About 11% of the oil was consumed for biofuels and industrial purposes.
2) China produced 15.8 million tons of soybeans, imported 17.5 million additional tons, and consumed the total. 71% of them were processed into food, and the balance crushed into meal and oil. 27% of the oil produced was exported.
3) Brazil produced 43.8 million tons of soybeans, exported one third of the production and consumed the other two-thirds. Of the soybeans that were crushed in Brazil, 61% of the meal and 40% of the oil were exported.
The economists believe that international organizations may be underestimating feed demand in coming years, and say, “Linked with the expansion of meat consumption and biofuel usage, it is expected that the world demand for soybean and soy products will increase steadily.” They calculate world demand growing at a 2.8% annual rate currently, then 2% in the next five years, and gradually slowing to a 1.1% growth rate annually in 2030. However, that rate of growth will require more than 307 million tons of soybeans, compared to the 183 million tons in 2003.
1) The US demand for 49 million tons today will rise to nearly 56 million tons in 2030, and the US will only be requiring 18% of the supply, compared to the current 26%.
2) China’s current demand of 33 million tons of soybeans will grow to 109 million tons in 2030, which is over 35% of the world demand.
3) Brazilian demand, which is 14.7% of the world at present will fall to 12.8%.
4) India now consumes 3.3% of the world demand for soybeans, and that will increase only to 4.4% by 2030.
Regarding soybean meal, the US currently uses 29 million tons annually and that will rise only to 33 million tons in the next two decades. Brazil now uses less than 8 million tons of meal, but that will rise to more than 11 million tons by 2030. China now uses 18.7 million tons of meal, and that will rise to nearly 88 million tons in 2030.
Regarding soybean oil, US and Brazilian consumption will grow slightly, but nothing compared to Chinese consumption, which is nearly 5 million tons today, and should reach 27.4 million tons in 2030.
Summary:
The versatility of soybeans, which are a popular crop today, will keep that commodity in international demand over the next two decades. World demand will increase by two-thirds by the year 2030, much of the increase in demand coming from China, which will more than triple its demand for soybeans, and more than quintuple its demand for both soybean meal and soybean oil.
Posted by Stu Ellis at 12:08 AM | Comments (1) | Permalink
May 11, 2009
Why Is My Corn Not Emerging Like I Think It Should?
Adverse weather has kept many corn planters in the shed in the central and eastern parts of the Cornbelt, and drawing many parallels to the spring of 2008, there are concerns about the development of the new corn crop as it tries to climb out of wet, and sometimes cool soils. But there are a variety of other challenges, some preventable, facing corn seedlings, and if they fail, it will show up when you cross the elevator scales at harvest.
Your seed salesman has sold you on the vigor that his seedlings have, the stuff that helps them get up and out of the ground. That may be, but there are hazards that await young corn plants, and some of those can be prevented with a change in farming practices. Purdue corn king Bob Nielsen knows that you and your pocketknife have been working hard in the field to check on germination, seedling vigor, emergence, and root development. And if you are finding problems, he knows why.
Germination begins with the seed absorbing water equal to 30% of its weight and that triggers enzymes causing cells to divide and grow. Having sufficient moisture is key to the success, but if the seed is faced with alternating wet and dry periods, its energy required to germinate may be spent before the mission is accomplished. The first spike is the radicle root coming from the tip of the kernel within 2-3 days in warm, moist soil. Cooler and drier soils may delay that by a week or two. The second spike is the coleoptile, which comes from the embryo side of the kernel soon after. At optimum conditions those will happen on the same day, but Nielsen says days or weeks may pass between the emergence of the two from the kernel because of adversity, “When excessively cold and/or wet soils delay germination and/or emergence, the kernel and young seedling are subjected to lengthier exposure to damaging factors such as soil-borne seed diseases, insect feeding and injury from pre-plant or pre-emergent herbicides and carryover herbicides from a previous crop.”
Emergence of the corn plant depends on the coleoptile reaching the surface of the soil, then its internal leaves breaking out of the protective tissue. Emergence requires 100 to 120 Growing Degree Days, which may require 5 to 7 calendar days under optimum conditions. But if the soil is cold, it may take several weeks for emergence. Since exposure to light filtering through the surface of the soil is key to successful emergence and leaf development, there are some controllable issues:
1) Cloddy seedbeds, dry seedbeds, and open slots in no-till planting can expose the seed to light at levels lower than desirable, causing the coleoptile to leaf out under ground.
2) Herbicide injury provides a stressful environment, and that is indicated by a corkscrew coleoptile, or leaves emerging where they should not.
3) A crusty surface, planter furrow compaction, and dense soil can physically restrict the coleoptile penetration of the surface. That causes it to rupture, form a corkscrew shape, or push the leaves out the side.
4) If the coleoptile is subjected to soil temperatures under 50F or wide swings in temperatures, the coleoptile can also form a cornscrew shape or rupture to push leaves out of its side.
Root development includes both the fibrous roots for moisture uptake and the nodal roots for strength and nutrients. Nodal roots can become stunted from soils that is too dry, too wet, or too cold, as well as from insect or herbicide damage, or from soil compaction from either the planter or tillage issues. The seminal roots that first appear can be damaged by cold temperatures, or salt injury from starter fertilizer that is too close to the kernel. Stress to the first few nodal roots can severely stunt the development of the corn plant, and if kernel reserves are nearing depletion, seedling death is not uncommon. Those stresses include salt injury from fertilizer, seedling diseases, herbicide injury, insect damage, compaction from the planter or tillage, and soils that are either too wet or too dry.
Summary:
Although seed corn is generally vigorous and wants to germinate, emerge from the soil, and create a new corn plant, there are numerous hazards that potentially challenge that process. Environmental challenges include soils that are too cold, too dry, or too wet. Physical challenges that include crusty soil, cloddy soil that allows too much light to reach the seedling too early, or soil that is compacted from either planter or tillage issues. Chemical challenges include herbicide carryover from a prior crop and salts from starter fertilizer too close to the seed. Many of the challenges can be eliminated or controlled to provide a better environment for the seedling.
Posted by Stu Ellis at 12:48 AM | Comments (0) | Permalink
May 8, 2009
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.
Soybean prices have climbed about $3.50 in the cash market reaching fall 2008 levels, while Chinese purchases of US soybeans outpace those of last year. China has bought more than 600 mil. bu. of US beans, which IL Extension’s Darrel Good says surpasses 2008 purchases by 189 mil. bu. Currently, China has purchased 60% of US bean exports. Read more.
Soybean exports are outpacing the domestic use says Good. USDA had projected 1.21 bil. bu. in soybean exports this year, and the current total is near 1.05 bil. bu. Good says the pace of the crush remains slow, but with the brisk export business, soybean ending stocks could drop below the current estimate of 165 mil. bu. He says that is helping push old crop bean prices above $11 and new crop bean prices toward $10.
On the other hand, the corn market is “anemic” in comparison to beans, says Good. Corn exports have been healthy, and only minimal amounts need to be sold for the balance of the year to reach USDA’s 1.7 bil bu. projection. However, the slower use of corn for livestock feed and ethanol production may keep ending stocks near 1.7 bil. bu. Good says planting delays have not had a substantial impact on corn prices.
If you are pricing grain, Good says use the spring revenue insurance guarantees as your base, which means new crop soybean prices have a $1 premium and new crop corn prices are offering a 25¢ premium over the crop insurance spring guarantees.
Volatility in grain markets is expected by marketing specialist Chad Hart at Iowa State. He says weather conditions, biofuels policies, and the H1N1 flu outbreak will contribute to continued market volatility. Regarding biofuels, he says watch ethanol news:
1) CA’s new fuel standard is unfriendly to ethanol due to criticism of corn production.
2) US EPA has proposed a new fuel standard with specific greenhouse gas limits.
3) EPA has accepted input on the proposal to increase ethanol from 10% to 15% blend.
When the lean hog contract caught the H1N1 flu, May contracts fell from over $70 on April 24 to $58 on May 1, and down to $55 when a human infected some Canadian hogs. IA Extension’s Shane Ellis says the basis tightened from $6 to $1 in that time. He expects markets to recover, but the summer rally will be delayed for a few weeks.
If you sign up for ACRE, FSA offices will require historical farm yield information. At this time, USDA has not released the rules on what documents are required, and what happens if you don’t have them, says IL Extension economist Nick Paulson. Those rules may come soon, since the announced sign-up period for ACRE begins on June 1.
Planting delays may shift your preference to soybeans says IL Extension’s Emerson Nafziger. Using a $4 corn price and $11 soybean price, he says, “By May 10, gross income from corn is being lost at the rate of $4.93/A for each day of delay, while beans are losing only $1.80 (northern IL) and 16¢/A (southern IL) per day of delay. By May 30, corn is losing about $9.15 per day of planting delay while soybeans lose $4.78 and $3.92 in northern and southern IL, respectively. As expected, the loss in gross income as soybean planting is delayed stays well behind that of corn throughout May, and this difference widens in June.” Read more.
Nafziger says, “While planting delays mean faster loss of yield and gross income from corn compared to soybean, the date at which planting soybeans will be more profitable than planting corn depends on expected net incomes for the two crops.”
If looking for shorter season seed corn, OH Extension agronomists urge you to move slowly on that concept. “Don't worry about switching hybrid maturities unless planting is delayed to late May. If planting is possible before May 20, plant full season hybrids first to allow them to exploit the growing season more fully. Research in Ohio and other Cornbelt states generally indicates that earlier maturity hybrids lose less yield potential with late plantings than the later maturing, full season hybrids.”
If higher soybean seed costs have caused you to consider reducing your seeding rate, keep in mid that soybean plants compensate well to low stands by adjusting pod and seed number per plant and expanding their growth to make a canopy that suppresses weeds, says IL Extension’s Vince Davis. Read more.
Seed beans with many biotech traits will cost between 15¢ and 45¢ per 1,000 seeds for most farmers, says Davis. “Economically optimum seeding rates fluctuated by 26,000 seeds per acre in that seed price range. From this research trial, optimum rates in the range of 25¢ to 45¢ per 1,000 seeds would have been between 100,000 and 129,000 seeds per acre. This is much lower than current recommendations for 30-inch rows in Illinois, and a little lower than I would be comfortable recommending.”
If planting soybeans late, consider your equipment, says OSU agronomist Jim Beuerline. He says the later planting is accomplished, the greater the response to narrow rows and increased seeding rates. And he adds, “If you are tempted to use the corn planter to punch in a lot of acres fast, keep in mind that thirty-inch row beans planted May 10 will produce less yield than drilled beans planted two weeks later. The goal is to attain rapid canopy closure and maximize sunlight collection.”
With corn coming up (in some states), the accumulation of heat units, and the collection of black cutworm moths being recorded, Purdue entomologists are predicting black cutworm larvae will begin cutting seedlings on May 10, if corn is present where they hatch. They say cutworms can be managed effectively with scouting and insecticides.
Young corn looks tasty to black cutworm larvae, so scouting should include looking for pinholes in corn seedlings. IL Extension’s Jim Morrison says, “Cut, missing, or wilted corn plants are typical symptoms of black cutworm larvae damage. Feeding mainly at night, larvae will move up the row as they feed. On average, one larva may cut 3-4 plants in its lifetime.” He says treat when 3-5% of the plants are cut and larvae are present.
Iowa may have escaped a bean leaf beetle problem this year because of winter weather conditions, says entomologist Erin Hodgson. The predicted mortality is due to “an exceptionally harsh winter” and models indicated 99% of the bean leaf beetles bit the dust across the northern third of Iowa and 75% across the southern third of Iowa.
Both bad and good bugs may be in your wheat, and it is your assignment to know the predators from the bad bugs. A good balance could prevent the cost of an insecticide treatment, which would kill both the friends and the foes. Check the economic thresholds before spraying. Read more.
The bugs are not winning, but two noted Extension entomologists have departed from their university research positions to take similar positions in the corporate world. Marlin Edwards at Iowa State University shifted his focus earlier this year to Pioneer and now Kevin Steffey at the University of Illinois will be headed to Dow AgroSciences.
Unplanted fields that are “wooly” with weeds will need pre-plant attention before seeding, and depending on your weed crop, different tactics may be necessary. IL Extension’s Aaron Hager says tillage may not be sufficient to clear the field, if weeds ball up in a cultivator, or some weeds escape being cut off and re-grow. Consider:
1) Glyphosate and other translocation herbicides need time to work before tillage.
2) Don’t till soon after spraying growth regulators or it will impact your seedlings.
3) Contact herbicides may begin impacting weeds quicker than translocators.
4) Burndown herbicides can be mixed with soil-residual herbicides, but any subsequent tillage may not provide the most desirable distribution of the chemical in the soil.
If you do tank mix a burndown and residual herbicide, OH Extension’s Mark Loux says, “Where weeds are large, the inclusion of residual herbicides (or application in 28%) can reduce the activity of glyphosate and the weed control. This can be compensated for somewhat by increasing the glyphosate rate.” Read more.
Planting corn without an herbicide application is possible according to Ohio State agronomists. Instead of delaying the required time after applying the herbicide, Mark Loux says forge ahead and plant. “Reconsider applying pre-emergence herbicides where it’s unlikely to rain before the weeds emerge (you can check by digging down to see what the weeds are doing), and consider switching to an early post-emergence approach. The good news here is that most pre-emergence corn herbicides can be applied to emerged corn, and some of them have enough foliar activity to control small, emerged weeds without the need to include post-emergence herbicides.” Read more.
Weeds of every specie are coming up in many Cornbelt fields where soils have been perfect for weeds, but unwelcoming for tillage, sprayers, and certainly planters. Purdue weed specialists suggest a two-fold approach to clearing fields that are quite weedy.
1) Use glyphosate + 2,4-D or 2,4-D + paraquat + Sencor (beans) or atrazine (corn) if you desire more rapid desiccation of weed biomass. In the glyphosate-based program, use the 1.5 lb ae/A rate with 1 pt/A of 2,4-D. Most labels require you to wait 7 days before planting corn or soybean with this rate of 2,4-D.
2) In the paraquat-based program, use the upper end of the rate range for more effective control of large weeds. But be prepared for re-growth if weather remains wet and cool.
Control thistles in the first of their 2-year life cycle, which can be achieved with a herbicide application. Once the thistles sends up a spike in its second year, it will produce viable seeds, surviving your weed-killing spray. IL Extension’s Robert Bellm says a combination of low ground mowing followed by an herbicide works best.
If you applied nitrogen last fall, is it still there? IL Extension’s Fabian Fernandez says it depends on the time of application, soil temperature, and whether the soil has been saturated, which would reduce bacterial activity. So there is no quick answer. But check his calculations to estimate your loss. Read more.
If you need to apply more nitrogen, Fernandez says, “If the field is already planted, the best way to apply the additional N would be, 1) injected anhydrous ammonia or UAN solutions, 2) broadcast ammoniated products (ammonium nitrate or ammonium sulfate), 3) broadcast urea, 4) UAN solution dribbled between rows, and 5) broadcast UAN solution. If you have not planted your field yet, plant now and apply additional N later.
But what about P & K? Crop requirements for P and K can often be met with starter applications placed in bands two inches to the side and two inches below the seed, say OH agronomists. “Application of P and K is only necessary with the starter if they are deficient in the soil, and the greatest probability of yield response from P and K starter is in a no-till situation.” They say the longer planting is delayed the less benefit received from a P & K starter, because at later planting dates soil temperatures are higher (this is not necessarily true for no-till soils and that is why they are more likely to be responsive).
Diesel prices will continue to be under 2008 prices through November 2009. KS State economist Kevin Dhuyvetter calculates that diesel prices will be about 54% less than they were last year for much of the summer, then the price difference narrows, because of falling prices late in 2008, not because of price increases he expects in 2009.
Four stomachs and at least 22,000 genes. That is what makes a cow a cow, and now researchers have mapped the bovine genome. “"Having the genome sequence is now the window to understanding how (a cow works), how ruminants ended up with four stomachs instead of one, how the cow's immune system operates and how it is able to secrete large amounts of protein in its milk," says IL researcher Harris Lewin.
It is not your 120’ Deere planter, and it is not your great-grandfather’s wooden single seed corn planter he pushed in the ground with his foot. But a new invention by Univ. of IL ag engineering students will allow farmers in Africa and other developing countries to plant corn with a device that jabs into the ground and deposits a seed where farming equipment is completely absent. The hand held corn planters have been tested and will be manufactured and distributed with funds from the Howard Buffet Foundation.
Posted by Stu Ellis at 1:18 AM | Comments (2) | Permalink
May 7, 2009
Today's Test Question: Do Ethanol Plants Provide Nearby Farmers With A Corn Price Advantage?
Spurred on by federal policy support of ethanol, thousands of Cornbelt farmers began coffeeshop meetings, then community meetings, and ramped up to form cooperatives and build ethanol refineries. Their vision was an investment that would pay premium prices for corn sold to the ethanol plant. How did that work out for them?
There is no secret to the success of ethanol as a (relatively) new use for corn that was designed to consume surpluses and keep a steady forward pressure on the corn throttle. Just a few years ago, consumption was measured in a few million bushels that would be turned into a few million gallons of ethanol. This year we’ll convert 3.7 billion bushels of corn into 10.5 billion gallons of ethanol. Corn demand pushed prices higher in 2007 and 2008, but the trend has partially reversed.
As new ethanol plants began operating and competing for corn from the surrounding area, the question is asked that if the payoff met the expectations of farmers who sold corn to these new local markets. Did they get a premium price?
Agricultural economist Ani Katchova at the University of Kentucky delved into the issue and quickly found that a biorefinery built in a new location would have to compete with previously established marketing channels to secure corn as an input to the ethanol process. Many prior studies found that there were positive responses for corn prices around ethanol plants, but Katchova wanted to discover if there were significantly higher prices for farmers located close to ethanol plants. Prices that were offered near the plants and farther away at the same time were compared.
Using information from the Renewable Fuels Association and comparing zip codes with corn prices reported by the USDA, Katchova analyzed statistics from IL, IN, IA, KS, MN, MO, NE, and WI. Price comparisons used 2007, which was the latest complete set available from USDA and 2005, as a base period. Katchova found the average corn contract price for the two years was $3.12. But how valid are the statistics?
· 22% of counties with corn price information had ethanol plants.
· 5% of the zip code areas had ethanol plants.
· 10% of the corn contracts had an ethanol plant in the county
· 2% of the corn contracts had an ethanol plant in the same zip code.
· 7% of the corn contracts had a new ethanol plant built in the county in the last two years.
· 0.6% of the contracts had a new ethanol plant built in the same zip code.
The economist analyzed 2,851 corn delivery contracts in 632 different counties. Between 2005 and 2007, corn prices rose by 76¢ to 79¢. While Katchova reported corn contracts were nearly 11¢ per bushel lower for farmers in the same zip code as the ethanol plant, the economist says that did not indicate a negative impact, but only differences from areas around the Midwest. The economist looked at changes in prices from one period to the next that may be common for both groups regardless of whether an ethanol plant is located nearby, and determined, “These results provide an indication that while prices in real terms have risen over the last few years across the U.S., farmers located close to ethanol plants have not been able to secure even higher prices due to their proximity to ethanol plants.”
Other correlations that were found:
· Larger farms are able to obtain higher prices because of higher volumes delivered.
· There are some indications that operator age has a positive effect.
· There are some indications that operator education has a negative effect.
Katchova’s findings contrast to those recorded in 2001 and 2002, but there were fewer ethanol plants at that earlier time and “since then ethanol production and biorefinery construction have intensified.”
The economist says future profitability of ethanol plants depending on corn prices, and the findings imply that “As corn production nears its capacity to provide for local production of ethanol, the competition may drive local corn prices higher and make ethanol production less profitable. Therefore, it is important to consider future plant construction sites as to not reach the capacity point in a local area and thus bid up local prices.”
Summary:
Conventional wisdom is that corn prices are higher around ethanol plants because of the intense competition, but that may not always be the case. The proliferation of ethanol plants around the Cornbelt has apparently smoothed out the price differences and while corn prices have risen the past several years, farmers near an ethanol plant do not enjoy any price advantage. As ethanol continues to consume larger amounts of corn, a given area may reach a corn supply capacity, and that may result in competition that will be detrimental to ethanol plants that are price sensitive.
Posted by Stu Ellis at 12:50 AM | Comments (0) | Permalink
May 6, 2009
Why Did Hog Markets Crash So Hard Because An Influenza Strain Was Blamed On Swine?
At $25 per head, the pork industry has suffered the worst from the fall out of the H1N1 influenza problem. At the outset it was mislabeled Swine Flu, and both the media and governmental health authorities convinced the public that hogs had something to do with the health issue. Consumers quit buying pork, foreign countries began banning US pork exports, and the bottom dropped out of the cash and futures markets for hogs. Although a hog was never found to have the virus until some caught it from a Canadian farm worker, the damage was already done. But how did the news translate into falling market prices.
Over the years there have been many scares that public health would be jeopardized by animal health maladies. Subsequently, the livestock futures traders manage their risk by selling contracts and the price plummets. It is not quite as simple as that say agricultural economists Amy Hagerman and Yanhong Jin who coincidentally published a research paper on the market impact of foot and mouth disease at the same time livestock futures were impacted by the H1N1 virus. Their research examines the market volatility and the rationality of traders to the uncertainty about the spread of an animal disease.
The economists use the rumor of foot and mouth disease that originated in a Kansas Sale Barn in early 2002, which turned out to be false, but took $50 million out of the cattle industry overnight. The parallels with the alleged swine flu can be closely compared. Hagerman and Jin report that uncertainty plays an important role in futures prices and trading volumes and those increase the implied volatility of the stock. While the reactions may not be irrational they suggest, it can lead to over or under reaction by traders. At that point herd mentality sets in, traders think other traders have very accurate information and will follow their lead. Hagerman and Jin say that leads to price distortions, in part from foreign investors moving in and out of US markets.
The economists say that once the information uncertainty has cleared up, such as dispelling a rumor, then the herding disappears and prices adjust. But if prices continue to fall, then the market has shifted into a new mentality of momentum trading. Hagerman and Jin label the traders as “newswatchers” who trade with current or past information and “momentum traders” who rely on prior trades to set their forecasts. They believe the momentum in the market results from traders looking at the overall market direction instead of fundamentals based on supply and demand information.
Looking at the timing of how the foot and mouth rumor got from the Kansas Sale Barn to the Chicago trading floor, authorities are uncertain, but believe an Iowa radio station had reported the potential outbreak of foot and mouth disease and when that got to the traders, the market nose dived. It could also have been conveyed by a cattle buyer to a floor broker. While some market manipulation has been speculated, there was no confirmation following governmental investigations.
The economists say lean hog futures were the most volatile, followed by pork bellies and live cattle, with feeder calves the least. All moved together during the rumor period, and although feeder cattle and lean hogs continued to fall after the rumor was dispelled, they soon recovered. They say the pattern indicates herd mentality, and while momentum trading does not imply herding, it may aggravate the effects of herding. Their analysis indicates “The incident may well have been a trigger for the downward price cycle earlier in the year than expected. However, the incident was not found to have a significant impact on prices of pork bellies contracts.” And they go on to say, “analysis would seem to reveal herding behavior in feeder cattle, live cattle and lean hog livestock futures and momentum trading for live cattle and lean hog livestock futures. A more formal econometric analysis of herding behavior leads to evidence of herding behavior in live cattle and lean hogs.”
The economists say, “It could be argued that the rumor of FMD gave traders a reason to sell; however, even if the market was primed for a seasonal downturn the rumor appears to have caused the downturn to be steeper than expected or reasonable under ordinary circumstances.”
Summary:
The current drop in hog futures and cash markets is the result of the influenza strain erroneously blamed on hogs. Nevertheless, the marketplace loss tens of millions of dollars in value, which can be explained by research based on a 2002 rumor of foot and mouth disease in US cattle. Some traders sold the market short based on what they saw other traders doing that they thought was the right thing to do. Once the market momentum headed down, other traders also sold, because that is where the market was moving. Some contracts prove to be more resilient than others, but market volatility will spread to many related contracts.
Posted by Stu Ellis at 12:06 AM | Comments (2) | Permalink
May 5, 2009
Olympic Style Training For The ACRE Games
Whether you are figure skating for a gold medal or raising corn, soybeans and wheat under the ACRE farm program, an Olympic average will determine your future. With the high and low discarded, the remaining numbers are averaged to determine the trend in state yields and farm yields for payment eligibility purposes. With the ACRE program, is there really that much at stake in how payments are calculated?
Gary Schnitkey thinks there is a lot at stake. He is a Farm Management Specialist at the University of Illinois, and in his latest newsletter Schnitkey says Olympic averages for yields, primarily go up, but will sometimes take a downturn. “On a state basis, farm Olympic average yields will decline in about one-third of the years, given that history provides a reasonable guide for the future.”
Since signing up for the ACRE program is a calculated risk that it will provide better protection than the conventional direct and counter-cyclical payments, Schnitkey’s reference to a “guide to the future” is a valuable one. He says there are two places in the extensive ACRE calculation that the Olympic average yield for your farm will come into play. The first is determining eligibility, since your farm revenue must be below a farm guarantee and state revenue must be below a state guarantee. Both use the Olympic average, and if both meet the test, an ACRE payment is triggered.
Schnitkey makes some observations that may help you make a decision on sign-up for the ACRE program:
· Farms with higher Olympic average yields will receive higher payments than those with lower Olympic average yields.
· Based on average yields from 2003 to 2008 to determine a 2009 ACRE payment, Schnitkey says some of the difference in Olympic averages is regional, and all farms should make their own evaluation, since there can be wide variations within a region.
· In calculating an Olympic yield, one year falls away from the calendar movement, and if it was a low yielding year, then the next calculation will undoubtedly rise because the lower yield was eliminated from the calculation.
· With poorer corn yields in 2005, it may be one of the two discarded in the Olympic average, suggesting a potential for the 2011 average to increase if shortfalls do not occur this year and next.
· Over time, Olympic averages will vary. In most years, Olympic averages will increase as productivity gains cause higher yields. However, Olympic averages will not always increase and some years will decrease.
· In Illinois, for example, from 1977 to 2008 Olympic averages declined in 11 years for corn, anywhere from 1.1 bu. per acre to 7.4 bu.
· Using the same Illinois example, since 1977, there have been 13 out of 31 years in which farm Olympic average soybean yields have declined.
There is no cut and dried, black and white answer as to whether you should sign up or not for the ACRE program, which requires a sacrifice of 20% of Direct Payments and 30% of market loan benefits. And Schnitkey concludes that while Olympic averages yields vary across farms in any state, there will also be variation within a geographic area. As you well know, you and your neighbor can have widely varying yields in a given year, a result of one or more of many factors.
Schnitkey believes that farms with higher farm Olympic average yields will have higher ACRE payments than farms with lower Olympic averages. And he adds those lower averaging farms will also have lower Direct Payments, meaning there is less to sacrifice by switching to ACRE. But he also says as yield trend lines rise, Olympic averages will also rise.
Summary:
Whether or not the answer to the ACRE sign-up dilemma is how Olympic average yields are calculated for your farm and your state, those calculations will play a significant role in determining your eligibility for an ACRE payment and how much it will total. Olympic averages for a farm have the potential to vary widely within a locale, not just across a state. Over time, Olympic averages have registered declines about one-third of the time, but progressive yield increases should keep them generally increasing.
Posted by Stu Ellis at 12:08 AM | Comments (0) | Permalink
May 4, 2009
Soybeans: Plant 'Em If You Got 'Em.
While the farm gate readily acknowledges that you are probably not finished planting corn, and some of you have not been able to get near a cornfield, some farmers in drier parts of the Cornbelt may be wondering if it is too early to plant soybeans. Whether you have finished with corn, never planned on planting any, or have begun the switch from corn to beans, there are some legitimate questions on timing for optimum soybean yields. As the kids in the rear car seat continually ask, “Are we there yet?”
For many Cornbelt farmers, 2009 has become a carbon copy of 2008. Some folks have retrieved last year’s reports to land owners, and used the copy and paste functions on the computer. Soggy fields and incessant storm fronts have prevented much headway on planting, but for those soybean growers who are ready to put seed beans in the ground, Extension agronomists Vince Davis and Emerson Nafziger at the University of Illinois says we are not past the date when yields begin to significantly decline, but we are in that part of the calendar that is not too early to plant soybeans. Their newsletter focuses on when soybeans should be planted to maximize yield, and that date certainly progresses from south to north in the Cornbelt.
Davis and Nafziger report some of their colleagues have reached some noteworthy conclusions:
1) A survey of 24 sites around the Midwest found that yields were relatively stable over planting dates during May, but after May 30, yields declined about one-half bushel per day if the field had high-yielding tendencies.
2) Iowa State agronomists tallied 62 bu. averages from late April, 60 bu. averages from early May, 56.7 bu. averages from late May, and 46.7 bu. averages from early June. That calculates to be a 0.15 bu. daily penalty from late April to early May, a 0.28 bu. daily penalty from early May to late May, and a 0.86 bu. daily penalty from late May to early June. At today’s prices, delaying from late April to early June would be a $160 loss per acre. They recommend that southern Iowa farmers begin planting April 25, and northern Iowa farmers begin on May 1.
3) Purdue researchers reported similar results in Indiana, but said, “The highest and most stable yields were from planting in the first to second week of May, and yields decreased at a rate of 0.5 bushels per day for planting after May 10.”
4) Research conducted by agronomists on high yielding fields in northern Illinois was parallel to the Indiana recommendations. It would also be similar to the recommendations for northern Iowa farmers. Illinois researchers working in southern Illinois, comparing favorably with southern Indiana and central Missouri, found an increasingly larger rate of yield decline as the date advanced toward June. Yields dropped 0.10 bu. per day from May 10 to 20, 0.26 bu. per day from May 20 to 30, 0.42 bu. per day from June 1-10, and 0.59 bu. per day from June 10 to 20.
Davis and Nafziger at Illinois recommend that you begin planting soybeans as soon as soil conditions allow it, and your yields will increase “by large amounts” compared to waiting until June to plant. They also note, “The earlier soybeans are planted, the more yield will also be influenced by proper seed selection and management. Choose varieties with good SDS and SCN resistance, and soybean seed treatments will also be of greater value.”
Addressing the subject of a plateau in soybean yields being reached over the past five years, the agronomists say weather has played a significant role in planting delays from 2004 to 2008, and only 50% of beans were planted by mid-May and only 80% by late May, indicating that yields may have been larger if the crop had been planted sooner. Davis and Nafziger say, “To improve yields in Illinois, we must plant soybeans in a more timely way (early to mid-May). To accomplish that, we need a change in the weather.” But their thoughts will probably apply to most of the Cornbelt.
Summary:
Cornbelt researchers have determined soybean yields gradually decline after a late April planting date, but the rate of yield loss grows at an increasing rate per day from late April until early June. Their recommendations for planting begin in late April for the southern and central parts of the Cornbelt, and about May 1 for the northern part of the Cornbelt, given that soil conditions allow it, which has not generally been the case in the past several years. They also recommend using disease resistant seeds and seed treatments for early planted seed.
Posted by Stu Ellis at 12:23 AM | Comments (0) | Permalink
May 1, 2009
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.
Like pork, grain markets have caught swine flu, says IL Extension’s Darrel Good, who blames sharp declines in corn, bean, and wheat markets on false perceptions. He says, “The extent of reported cases of swine flu will be important in determining the depth of demand worries.” Read more.
In his weekly newsletter, Good cites other fundamentals influencing crop prices:
1) The domestic soybean crush is 10% less than last year, right at USDA forecasts.
2) Robust Chinese soybean purchases may push exports beyond USDA forecasts.
3) Corn exports have surpassed 1 bil. bu., and USDA projections may be reachable.
4) California fuel policies are changing, which would restrict ethanol consumption.
5) Despite slow planting and more forecasts for rain, there is little market concern.
Your marketing plan should accommodate another year of price volatility says Darrel Good. He says pricing the new crop “can still be anchored to the spring price guarantees of crop revenue insurance.” And spikes above that level may trigger small sales.
The market is anticipating a switch from corn to soybeans, says Mike Woolverton at Kansas St. He says low ending stocks, poor South American yields, and Chinese demand has pushed old crop futures above $10, but the new crops remains a dollar less. He says recent higher prices for corn and wheat has encouraged those to be planted if possible.
If switching crops is in your plans IL Extension’s Emerson Nafziger says the decision is complicated because of recent price moves of both corn and beans. He suggests reading his April 10 newsletter, and basing any decision to switch from corn to beans on costs and expected yields for a given date. If considering staying with corn, but switching to an earlier hybrid, Nafziger discourages that because most hybrids have a Growing Degree Day cushion and can be planted later.
If you tend to mope about planting delayed by the weather, crop specialist Emerson Nafziger says just hope 2009 turns out like 2008. He says IL ag economists say April rains, even slightly above average, have a positive impact on yield. He says it is not the case for dry Aprils to have good yields and wet Aprils to have poor yields from delays. But Nafziger says, “A wet April that turns into a wet May could well be another story.”
Nafziger offers some quick guidance to consider if your planting is delayed by weather:
1) Planting should take priority over operations like N application.
2) Apply N, only if planting is not delayed, and soils are not compacted while doing that.
3) Planting into warm soils means that crops emerge faster and more uniformly.
4) Growing Degree Days are only average, so early planted crops have emerged slowly.
Watch Monday’s crop condition report from USDA for any improvement on the 2009 wheat crop. KS Extension’s Mike Woolverton says 73% of TX wheat is poor to very poor, and only 11% good to excellent. In OK, 64% of the wheat is poor to very poor, 9% was good and 0% excellent. Central KS wheat has been hurt by freezing temperatures.
No-till fields are pretty, but the last thing you want is a flower garden. Effective control depends on identification of the weeds you are cultivating, and these pictures can help.
1) Pest Management Bulletin
2) Early Spring Weeds
Weeds #1. Wet soils in the Cornbelt have hampered planting, but benefited weed growth. While priorities are on planting, IL Extension’s Aaron Hager says, “Existing weed vegetation should be controlled before planting by utilizing tillage, herbicides, or a combination of tactics so the corn can become established under weed-free conditions.”
Weeds #2. Some winter annual weed species are beginning to flower, but others are setting seed. While applying herbicides to species already making seed may not appreciably reduce seed production, species in the early stages of flowering should be controlled soon to prevent seed production and addition to the soil seed bank.
Weeds #3. If using 2,4-D for a burndown application, several ester formulations allow pre-plant applications without a specified interval, but others require 7 days. Some also indicate that tillage should not be performed for at least 7 days after application. Beware.
Weeds #4. Cool temperatures can slow the activity of many herbicides, both contact and translocation varieties. Contact herbicides may not be affected as much by coolness. When the forecast calls for several nights of cool air, symptoms of herbicide activity on weeds may develop sooner with a contact herbicide than with a translocated herbicide.
Rewind back to 2008 to address black cutworm issues. 2009 is a carbon copy with late planting, a heavy infestation, and timing that is perfect for the cutworms. IL Extension’s Kevin Steffey says seed treatments such as Cruiser and Poncho and transgenic traits to control caterpillars will prevent black cutworm injury, but not if infestations are heavy. For late planting advice on insects, read this.
Black cutworm moths arrive at your farm by chance. Purdue entomologists say the moths use their minute energy to fly straight up. “Once in the jetstream, they are often caught up in wind currents in southern regions of the United States and carried to the Midwest. They are then deposited back to ground level by spring storms. Predicting the location and intensity of a spring thunderstorm is difficult,” (and infestations, as well.)
The Purdue bug gurus say, “In predicting insect infestations, timing is everything. There are other variables to consider, but timing of when and how all these factors (migration, food availability, development temps) “collide” ultimately determines the infestation.” They say Mother Nature usually wins out over preventative treatments.
When should cutworm treatment be applied? Iowa State’s Jon Tollefson says, “The economic threshold for black cutworms is: 1) When larvae average less than ¾ inch in length, an insecticide should be considered if 2-3% of the plants are wilted or cut; 2) If cutworms are longer, treatment should be applied if 5% of the plants are cut, and 3) If the field has a poor plant population, (20,000 or less) these thresholds should be lowered.”
Do you apply insecticide for cutworms, while applying herbicide? IA Extension’s Jon Tollefson says no, “If you are planting 1,000 acres of corn and, based on past experience, it is probable that you will have 10% infested with cutworms. If you purchase insecticide at $4 per acre and treat all of the fields, the cost would be $4000. If you scouted the fields and treated the 10% infested, assuming there is a treatment cost for the insecticide and its application of $12 per acre, the cost to you would be only $1200.”
Should seed beans be inoculated? IA Agronomist Palle Pederson says not unless:
1) The field has not been seeded with beans in the last 3-5 years, the soil pH is below 6.0, there is low organic matter in the soil, or the field has been flooded for more than a week.
2) The field was flooded for an extended period in 2008 and soybeans were injured or died. A field with such anaerobic conditions last year may have reduced soil bacteria.
Avoid continuous soybeans, but IA Extension’s Palle Pederson says it is OK to plant them in 2 successive years, if just returning to a normal crop rotation. But ask yourself:
1) What would a soil test say about the K level, since beans remove more than corn?
2) Were there any soybean diseases in 2008 that would require resistant seed in 2009?
Corkscrew corn seedlings indicate an emergence problem. While it usually ends in death of the seedling, Purdue’s Bob Nielsen says it is a rare occurrence, but can be attributed to dense soil, and even from compaction during planting. Read more.
Crusted soils after a heavy rain can be an impediment to corn and bean seedlings trying to emerge. Iowa State soil specialists recommend judicious use of a rotary hoe:
1) Soil surface moisture should allow the soil to crumple in your hand with moisture left.
2) Hoe at speeds 8 to 10 miles per hour unless safety is a concern.
3) Ensure both cotyledons of the soybean seedling are not being broken off by the hoe.
4) A 1-2% stand loss in corn is acceptable, since a crusted soil would have been worse.
5) If the loss rises to 3-5%, then slow the tractor speed to become less aggressive.
Although the public wants protection from hogs they believe created swine flu, pork producers should take precautions to protect their stock from flu spread by the public. MO Extension veterinarian Beth Young provided suggestions for on-farm protection:
1) Use NPPC standards to reduce transmission of virus between pigs and people.
2) Ensure ventilation systems in hog barns are in good working order or upgrade them.
3) Seal facilities to prevent any type of birds from entering which can introduce a virus.
4) Store feed in closed containers to prevent contamination from any bird feces.
5) Vaccinate pigs for swine influenza to reduce animal and human exposure.
6) Vaccinate swine farm workers and their families to protect them and your herd.
7) Provide workers with clothing and boots worn only while working around animals.
Posted by Stu Ellis at 12:45 AM | Comments (1) | Permalink
