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September 30, 2009
Will Crop Production Costs Drop For You In 2010?
If you can just get past 2009, the financial picture for 2010 seems to be brighter. Those high fertilizer prices may eat your lunch, but with lower prices for N, P, & K in 2010 and steady costs for other inputs, there are more chances for profitability.
The latest forecasts for 2010 crop profits come from the economists at Purdue, who say they are still uncertain of long term price levels, “While these general price trends are obvious, the real questions are at what level will prices find equilibrium, what factors will affect them, and what is in store for certain inputs.” The Purdue crop budgets are offered in their Top Farmer Newsletter. Compared to their 2009 budgets, variable costs for soybeans are down 13%, corn costs are down 17%, and wheat by 22%.
If you have not yet priced fertilizer for 2010, you may find a pleasant surprise, compared to the nasty tricks played on you last year with anhydrous ammonia on either side of the $1,000 per ton mark. It should be in the $400 to $450 range, with DAP on either side of $400, and potash on either side of $600. Phosphate should be in the price range of anhydrous ammonia. The difference is lower commodity prices. When commodity prices were high, there was more global demand for fertilizer. For the coming year, you’ll spend $100 to $130 per acre for fertility, with the potential cost to rise slightly based on the market.
Based on the relationships between the price of corn and the price of nitrogen per pound, the Purdue forecast for 2010 indicates nitrogen will be relatively cheap. That is based on a $3.30 corn price and a 28 cent nitrogen price which is 8% of corn values. Compared to 2009, the price of nitrogen was 12% of corn values.
Seed costs continue to be strong and rising, but the Purdue economists say farmers are getting more value in their seed, with various crop protection traits included in the genetics. The “fully-equipped hybrids” will be over $300 per bag and soybeans may be over $60 per bag. Depending on planting rates, crop budgets should allow $75 to $95 per acre seed costs. The genetic companies are charging seed companies for technology fees and those are being passed on to farmers, but the rate of increase for seed costs has begun to level off.
Somewhat level for several years has been the cost of crop protectants, such as herbicides, insecticides, and fungicides. While prices for glyphosate were up for 2009, those price increases are reversing for 2010 crops.
Your fuel bill will see a 15% increase over 2009 based on predictions by the Energy Information Administration. Diesel prices were relatively low in early 2009. Propane costs have been flat due to abundant supplies, but may rise going into the winter, and level off again.
If you are buying a new tractor, the market has been soft for small tractors due to the slowdown in construction. However, sales of larger horsepower tractors have been up in recent years, with 2009 indicating a leveling off and a potential softening of prices.
Summary:
The fall of production costs for 2010 follows the softening of the grain market, but about one year late for many farmers who will be pinched to make a profit in 2009. The reduction comes primarily from lower fertilizer prices, and a stagnation in the costs for many other crop inputs, including seed, chemicals, and equipment. There may be a slight rise in energy costs for the 2010 crop, compared to 2009.
Posted by Stu Ellis at 12:58 AM | Comments (0) | Permalink
September 29, 2009
If The Hog And Pig Crop Is Diminishing, Does That Lead To Pork Profitability?
About three years ago the average pork producer saw his last profit. Since then it has been red ink because of low pork prices, low demand, and high production expenses. But there was a glimmer of hope that brightened the pork industry after Friday’s quarterly Hogs and Pigs Report from USDA. Instead of production numbers that exceeded those from a year earlier, there were some significant 3-5% drops, and some of the cutbacks were more than what the market anticipated. We’ll let you decide if it is good, but here’s the news…
Purdue economist Chris Hurt in his latest newsletter says the September 25th report indicated that producers are cutting back more than expected:
• The breeding herd was down 3.1% over the past year compared to an anticipated 2.5%.
• The number of pigs weighing less than 60 pounds was down 3.7% compared to an anticipated 1.5% reduction.
• The market herd was down 0.7% more than pre-report guesses.
While the cuts were small, Hurt believes an increased demand will compensate, helped by a general recovery in the economy which will “free up” consumer spending money. And he expects exports to strengthen as well with the help of the weaker dollar, since USDA is forecasting a 9% increase in pork exports over the next 9 months compared to year ago levels.
Chris Hurt expects prices to shift from the high $30 range into the low $40 range this winter and into the mid $40 range next spring. He thinks prices in the summer of 2010 could touch $50. While market prices are needed, profitability will be helped by lower costs for corn and soybean meal which should be in the $44-47 range during the coming 9 months. That means the current $15 loss per head should slowly reverse to a $12 profit by next summer.
The USDA forecast may come to fruition in the fourth quarter of this year when hog slaughter may decline for the first time since 2000, says Iowa State livestock economist Shane Ellis. His analysis of the Hogs and Pigs Report says, “A declining pork supply may not be the only reason to be optimistic about hog prices. Consumer confidence and spending habits have regained some strength as the brunt of the economic recession has passed. Any improvement in economic conditions both domestically and globally will lead to improved demand and prices.”
In 2008 hog prices were buoyed by global demand and the export trade kept prices as high has it could with one out of five hogs going overseas. While year to date exports are down 19%, the trend began to turn at midyear, and Shane Ellis says, “Exports volumes are back on track with what a traditional year over year increase would have been without last year’s exception.” The only challenge to the trend seen by Shane Ellis is the 2% growth in pigs per litter to 9.51.
At the University of Missouri livestock economists Glenn Grimes and Ron Plain observe that the trends reported by USDA and the pre-report estimates of the market have been engaged in an interesting dance of reconciliation of their respective and joint numbers. In their latest newsletter they say, “In recent reports the USDA has estimated numbers a little below the trade estimates but actual marketings on average have been above the trade estimates. We must remember the USDA estimates are based on a sample and the trade estimates are based on other statistics and opinions. Therefore, both estimates are subject to error. We certainly hope the USDA’s September estimates are the more correct ones.”
Grimes and Plain are not at bullish on the pork market as is Purdue’s Chris Hurt. They say there is “some chance” that both consumer demand and live hog demand going into 2010 will be positive. “This hope is based on a stronger general economy and a weaker U.S. dollar which is positive for exports. There are also some potential storm clouds. What will be the reaction of consumers and importers if we get some swine herds developing H1N1 flu this fall and winter?”
While producers have been losing money, Grimes and Plain say the retailers have been making money for the first eight months of the year, with retail prices 1.8% above 2008 levels. Their forecast for farmgate prices of pork in a declining supply is for 51-52% lean hogs to average in the low to mid-$30’s live weight and non-packer sold hogs to average in the upper $40 based on carcass weight early in 2010. They are pushing their carcass prices into the low $50 range for the first quarter of next year.
Summary:
The USDA’s recent Hogs and Pigs Report provided some hope for pork producers that production will soon decline to a point where the supply will diminish and prices may begin to climb again toward profitability. Several Cornbelt livestock economists are forecasting $50 prices early in 2010. In addition to supply adjustments downward, the economists all expect domestic and foreign demand to increase as the global recession subsides.
Posted by Stu Ellis at 12:56 AM | Comments (0) | Permalink
September 28, 2009
Will You Have A Collision With A Motor Vehicle This Harvest Season?
Look in your tool box for your tape measure, and measure the width of most of the rural roads that you will be traveling on from field to field this fall. If they were part of the rural road building programs in the middle of the last century, they are probably 16 to 18 feet wide. Now, measure the width of your combine header and calculate how much room is left when traveling down that roadway. Oh, you are wider than the road! No wonder farmers get a lot of unusual waves from motorists.
The fall harvest season brings many problems related to safety. The stress of long days in a combine cab are bad enough, but then you have to move equipment from one field to another. Sometimes that is like trying into your old military uniform or that suit you wore on your wedding day, or putting on that favorite belt with your name stamped on the back 20 years ago. Today’s farm machinery just doesn’t fit where it needs to go.
The National Agricultural Safety Database, which is a function of Extension at USDA, points to many problems that are causing increased problems.
1) There is an increased urbanization of traditional agricultural production areas. More non-farm folks live where you farm and there are more motor vehicles on the roads where you move farm equipment.
2) There is a greater tendency for you to farm over a larger area, and not have the opportunity to move equipment from field to field without encountering other traffic.
3) With current farm economics and the need to maximize efficiency, your equipment has become larger.
Of fatal crashes, nearly 54% occur in rural areas, and nearly 43% of those occur on rural roads like the one you are moving a combine on this harvest season. Most farmers realize the problem, and a group of farmers in North Carolina who reported an increase of traffic on rural roads were surveyed and said their need to drive equipment on rural roads was their number one workplace hazard.
The owner and operator of the farm equipment have responsibilities as well, “In 23% of the cases where the farm operator was issued a citation, lighting and yield violations were noted. In at least 11% of the cases where the farm operator was cited, the crash occurred in the evening and the tractor was not utilizing adequate lighting.”
The most common type of accident is the rear end collision, where a motor vehicle will collide with the back end of a piece of farm equipment, which is traveling slower than the motor vehicle. With a 15 mile per hour tractor and a 55 mile per hour car, “it only takes five seconds to close a gap the length of a football field between the car and the tractor.” The next most frequent types of accidents occur when a motor vehicle attempts to pass farm equipment that is making a left turn; followed by collisions that occur because the farm equipment is too wide for the car to pass safely, either from the same or from the opposite direction.
So how can farmers improve the safety of operating on rural roads? 92% indicated they used signal lights and 88% had slow moving vehicle placards. But the American Society of Agricultural Engineers also found several other ideas when ASAE surveyed farmers: “A majority of respondents agreed that an effective way to reduce crashes would be to ensure that: a) all farm vehicles had blinking or flashing lights; b) road officials placed diamond-shaped caution signs showing a tractor ahead on roads with heavy farm traffic; and c) roadway shoulders were wide enough to allow farmers to drive totally on the shoulder. Finally, the study found that most farmers believed that driving their tractor on rural roads was more dangerous now than it was five years before.”
While road markers and pavement extensions are not going to be made before you head to the field for the 2009 harvest, lights, reflectors, and placards can be put on farm equipment to protect yourself and your employees from the non-farm motoring public who just does not pay much attention to slower moving equipment.
Summary:
Today’s farm equipment has likely outgrown the width of rural roads, leaving little or no room to encounter non-farm traffic. Fatalities frequently occur when there is a collision between farm equipment and motor vehicles because of the differences in speed. Rear end collisions are the primary mishap, but others are related to the width of the equipment in relation to the width of the road. Farmers can protect themselves as much as possible with the required lights, reflectors, and placards.
Posted by Stu Ellis at 12:58 AM | Comments (0) | Permalink
September 25, 2009
Cornbelt Update
Cornbelt 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.
Frost premiums are bid in and out of the market daily says Mike Woolverton at KS State, since the last crop progress report showed 60% of the beans vulnerable and only 21% of the corn mature. And he says the greatest lags in development are in states most likely to experience the early freezing temperatures. The next potential frost date is about Oct. 8, and more acreage will be mature. However, he says even if a killing frost does not arrive until late Oct. some corn and soybeans will be damaged. Read his latest newsletter.
Markets have not really responded to the potential for damage, says Woolverton, because energy, currency, and other markets are dominating the commodities market. However, he says while the US will have an adequate supply of corn available to meet demand, there will not be a surplus, and the freeze cushion is not large.
Woolverton is watching the bean market because of short supplies from the old crop and large demand for the new crop. He says if old crop use is raised by USDA in Oct. that would lower ending stocks further. Any yield loss from frost hurting the new crop will cause stocks to tighten further, and he says there is no freeze cushion for beans.
The wheat market could be impacted by a freeze, but not in the US. Woolverton says weather in Argentina and Australia has been dry and planted acreage is down 40% in Argentina where “intense frost” is a threat. The same is true for Australian wheat which is threatened by a frost that could support global wheat prices if they happen.
How wide is your basis for soft red winter wheat? After trying to improve the convergence between futures and cash prices, the administrative efforts of the CBOT have not resolved the wide basis problems, at least for southern IL wheat growers, where spot bids range from $1.61 to $2.07 under the December futures contract. IL Marketing Specialist Darrel Good says this magnitude of basis has been common for a long time.
Darrel Good says the basis for hard red winter wheat is weak, but not to the extent of the SRW contracts. He says the small SRW crop and large carry would normally tell farmers to store, but there is a “fundamental disconnect between the value of SRW to end users and the value established by the futures market.” Read more of his weekly newsletter.
The SRW price issue may discourage producers from planting wheat this fall, as well as the lateness in getting corn and soybeans out of the field. Good says the CBOT continues to work on the problem by revising contract specifications, and wanting to avoid forced convergence, which would be cash settlement or forced load out of deliveries.
The wheat market is in a funk according to Alan May at SD State because, “carryover supplies of wheat are expected to be the largest since 2001 when wheat prices were struggling to exceed the $3.00 per bushel mark.” He says wheat production is down, but so is demand and with a 65 mil bu. drop in exports the surplus will grow by 70 mil. bu. Read more of his newsletter.
Alan May says, “Wheat supplies have already experienced a significant buildup in 2008 and 2009 so wheat also faces the risk of further buildup of supplies if current demand projections remain constant or weaken. The length of the recovery from the recession will influence demand in the export market as well as in the domestic market.”
Nuances from the September Crop Report are being detected by MI State marketing specialist Jim Hilker, who says there were some encouraging signs of more corn use than previously expected. His newsletter is here.
1) USDA raised estimates for corn used for ethanol by 25 mil. bu., lowering carryout.
2) Feed use was raised 50 mil. bu., since cheaper feed raises livestock weights.
3) Exports were raised 100 mil. bu., along with lowering global corn production.
4) Despite 193 mil. bu. more production, carryout was only raised 14 mil. bu. from Aug.
Sept. 30 brings the Quarterly Stocks Report. Jim Hilker says the Sept. 1 corn stocks report becomes the old crop carry-out and new crop carry-in number. Subsequently, that will change the new ending stocks number for the 2009-2010 marketing year.
We’ve covered fungal rots in corn previously, but as more farmers head to the field, more of them are finding ears of corn that are moldy. IL plant pathologist Suzanne Bissonnette says most of the problems will either be fusarium or diplodia ear rot.
Diplodia ear rot will cause a bleached husk and white fluffy fungus around the kernels. However, diplodia will not produce toxins, like the fumonisin produced by fusarium, but the kernels affected by diplodia will be light in weight, shriveled, and poor in quality. Diplodia will thrive in corn stored above 18%. Bissonnette says if the corn can dry in the field, that is beneficial, but once harvested, dry it below 18% for short term storage, or 15% for long term storage. Read more.
Soybean aphids invaded soybean fields in scattered areas of the Cornbelt, but their presence was really made known when the winged individuals recently began their migration from soybeans to buckthorn. Infestations, with high populations, drew attention of the non-farm media when the public began complaining about flying pests.
Combines are like pick-up trucks, they carry a lot of things around, and in some cases things you don’t want, such as fungus from one soybean field to another. OSU plant pathologist Anne Dorrance says sclerotina fungus is being frequently transferred:
1) Harvest problem fields first, clean the combine, then move to fungus-free fields.
2) Harvest problem fields last, then clean the combine before storing for the season.
If you have white mold in soybeans, do yourself a favor and reduce its spread next year by the way you combine your beans. IA State specialist X.B. Yang suggests combining the infested areas last, so the combine does not contribute to the spread of the fungus.
Soybean rust is closing in on the Cornbelt following confirmation that it had spread to the Missouri bootheel thanks to weather perfect for Asian rust. MO plant pathologist Allen Wrather said the infections were extensive with pustules emitting spores. Wrather said most soybeans in that part of the state are in the R6 stage and will not be impacted by rust. But he said soybeans that are R5 or less should be treated with a fungicide. For the latest information about soybean rust consult the USDA website: www.sbrusa.net .
Harvest may be your priority, but add fall herbicide treatment to your list, says OSU weed specialist Mark Loux, who says schedule that around weed life cycles.
1) Before first frost treat warm season perennials including johnsongrass, pokeweed, milkweeds, hemp dogbane and horsenettle which shut down after the first frost.
2) Even after a hard freeze consider control of winter annuals and biennials, such as chickweed, deadnettle, mustards, cressleaf groundsel and others which emerge in fall.
3) Follow suggestions for cool season weed control.
If drought forced you to sell livestock and tax penalties require replacement of the herd, livestock producers in dozens of Cornbelt counties now have a longer time to do just that. IA State ag law specialist Roger McEowen says the 4 year replacement period has been lengthened to “the first tax year after the first drought-free year.” But that door is now closing for many counties on this list.
Profitable cattle feeding? IA State’s John Lawrence says it is possible for a 650# calf to be purchased and fed with $3 corn and make a profit with basis adjusted $88 per cwt April and May futures. Lawrence provides a cost-price matrix to prove his point.
Every little bit helps, say MO livestock economists Glenn Grimes and Ron Plain. They calculate that the Sept. Crop Report’s new price estimates of $3.35 for corn and $280 for soybean meal will reduce the cost of producing 100# of pork by 50¢ per live cwt. They are looking for a counter-seasonal rally. Read more.
International trade in pork has changed dramatically from 2008, say Grimes and Plain. Their weekly newsletter reports Jan-July pork exports were down 19.3% from 12 mos. earlier, and pork imports were down 3.6% from year earlier numbers. Pork exports as a share of production were nearly 18% in 2008, and that has declined to 14% for 2009. Live hog imports from Canada were down 32% from the same period of 2008.
So you want to produce biomass? Your crop year will be focused on pre-harvest crop monitoring (scouting), harvesting, transportation, storage, and analysis of the information you collect. And IL ag engineer K. C. Ting says each of those has many steps as he and colleagues try to prepare farmers to produce the next generation of ethanol. And leave it to an ag engineer to build a small unmanned helicopter to help with his crop scouting.
Posted by Stu Ellis at 1:26 AM | Comments (0) | Permalink
September 24, 2009
Corn, Soybeans, Store, Sell, Or What?
What are the markets going to do? If you ask that question, expect to hear, “They will either go up or down or stay the same.” Since that is not the answer you want to hear, instead ask the question, “What are the markets indicating, and how should that be used along with market outlook information?” That question is more appropriate and will probably get you a valid answer that is more useful. So let’s ask that question and see what the answer is.
Many marketing decisions at harvest are rooted in the need for storage, and whether the potential price later in 2010 will pay storage costs. Marketing Specialist Melvin Brees at the University of Missouri writes in his latest Decisive Marketing newsletter that USDA’s September Crop Report forecast large corn and soybean supplies, which were bigger than the August forecast and may even be larger next month. But he says the late maturing crop could be in jeopardy with frost or freeze damage. Despite the large size of the crops, Brees says there will be a large demand for the crop, and corn carryout a year from now may even be less than it was this year. Additionally, the 110 million bushel soybean carryout from the old crop may only expand to 220 million bushels with the new crop because of consumption.
Brees suggests that good marketers take a long look at whether the demand estimates will hold, because livestock producers will be unable to hold steady or expand as USDA suggests if the ethanol industry is expanding at the same time. Additionally, he wonders if there will really be an increase in corn exports while global wheat supplies are large and wheat feeding could increase. Also, he wonders if US soybean exports will be as strong as USDA suggests with the expected expansion of South American soybean production.
Price ranges projected by USDA are $3.05 to $3.65 for corn and $8.10 to $10.10 for soybeans, and Brees says supply, use, and price projections suggest they would follow a normal pattern of a lower trend into harvest following by a post harvest price recovery. Since the September USDA Crop Report December corn has had a 38 cent trading range and November beans have traded in a nearly 90 cent range fostered by threats of frost to immature crops. Such uncertainty, says Brees, creates difficulty in making store or sell marketing decisions. Consequently, he says look for clues to guide your decision.
Corn. There is a storage premium being offered by the corn market based on March futures being 13 cents higher than December futures, and May futures providing an additional 9 cents. Also cash bids suggest that seasonal basis gains could add another 10 to 20 cents per bushel if stored. Brees says the market is telling farmers to store corn, but do not store it unpriced. He says, “When the futures market offers carry it is also a weaker demand signal. Corn supplies appear to be more than adequate to meet demand. Buyers are content to not acquire corn for future needs by bidding up nearby contracts to acquire inventories. They are willing to let someone else own and store the corn. Slower than expected demand or higher production could result in increasing carryover and disappointing prices, which would limit or eliminate storage returns.”
Soybeans. There is not a storage premium being offered by the soybean market. Brees says there is only a 3 cent advantage to selling January beans instead of November beans and it will cost more than that to store them. Additionally, March soybean futures were even lower than January prices, which is certainly a sell signal, not a store signal. Currently, the harvest basis for soybeans is stronger than normal, which means it will likely not improve to provide any basis gains. Subsequently, the strong basis and lack of carry discourage storage and encourage sales. Apparently, the market sees strong supplies coming from South America next spring and does not want to bid up those prices in the wake of strong competition.
Strategy. The market is saying store corn and sell beans. Compare your cash prices with the USDA estimated price range of $3.05 to $3.65 for corn and $8.10 to $10.10 for beans. Also compare the current prices and the price range with your cost of production, and since current prices may not offer a profit, the prospects for higher prices for corn may move you out of the red and into the black. Those gains may also help with the decision to market soybeans at lower prices than you would prefer, but they may already be offering a profit.
Risks. There is a risk that weather and diseased crops could diminish the supply of corn and soybeans, which would push prices higher, and offer opportunities to lock in higher prices. Also the outside markets such as energy, currency, and the general economy could move prices up or down from current levels. Storing corn unpriced is a speculative action that could result in the loss of the premiums being offered by the futures and cash markets. Storing soybeans unpriced is also a speculative action that may diminish current profits, or could increase them if South American crops fail. Brees says speculating on higher prices can also be accomplished with futures or options positions, rather than risking your cash commodity in the bin.
Summary:
Marketing decisions are never easy, but looking at what the markets are indicating can help make the necessary decisions. The corn market currently is offering a gain from both the futures and the basis by storing. The soybean market is not offering any significant gain from futures or basis, and suggesting beans should be sold. Marketers should compare prices they are offered with USDA’s estimated price ranges to see if there are profit opportunities. Grain that is stored unpriced has a risk of losing that premium, but if the marketer is confident of higher markets, then that advantage can be captured with a futures or options position.
Posted by Stu Ellis at 12:11 AM | Comments (2) | Permalink
September 23, 2009
Harvest Should Be Well Underway, But We Remain Behind The Calendar Throughout The Cornbelt.
Crops are abundant and harvest is well underway in part of the Cornbelt, but in some spots, crops could be better, and in others harvest is a long way away. While many row crop producers tried to find profitability in a year of high input costs and low commodity prices, other challenges of delayed maturity are jeopardizing crop quality and pushing harvest well into the fall.
USDA’s Weekly Weather and Crop Bulletin indicates slow maturing crops in some areas, but brisk harvest activity in others.
ILLINOIS: Only 13% of the Illinois corn crop is mature, compared to 69% on average for this time of year. 62% of it is in good to excellent condition, but 36% is poor to fair. Usually 82% of the soybeans would be turning yellow at this point in the fall, but currently only 54% are turning yellow. 60% of the Illinois soybean crop is rated good to excellent. Winter wheat planting is barely recordable because of the delays in soybeans coming out the field.
INDIANA: Only 14% of the Indiana corn is mature, compared to the five year average of 57%. While 62% of it is rated good to excellent, 35% is rated fair to poor. Only 72% of the corn is dented at this time. 40% of the soybeans are shedding leaves compared to 66% for the five year average. 59% are rated good to excellent. A few of the earliest planted corn and soybean fields have been harvested with widely varying yields being reported. Only 1% of the wheat has been planted.
IOWA: The story is different in Iowa with 22% of the corn at maturity, but still short of the 55% for the 5 year average. 75% of it is in good to excellent condition. Half of the soybeans are shedding leaves, compared to the 64% average for this time of year. 71% of the beans are rated good to excellent. The sun filled days and average nighttime temperatures were exactly what crops needed as corn and soybeans still lag behind the five-year average for most crop progress stages. A few producers have started harvesting soybeans planted on light sandy soils. Topsoil moisture is 31% short and shifting to the dry side. The lack of adequate precipitation caused range and pasture conditions to deteriorate in several districts.
KANSAS: Harvest is underway with 8% of the corn harvested, which is still behind the 28% harvested for the 5 year average. While dry weather has helped with harvest, cool temperatures have been the rule over most of the state slowing down progress in the Kansas cotton crop. 2% of the winter wheat has emerged which is on schedule.
MICHIGAN: Corn still about 2 weeks behind normal, but advancing. Thus far, amicable temperatures helped to advance crop, but crop still needs time to mature. Some drying of crop has begun due to lack of moisture this summer. Corn for silage harvest is underway at 14% complete. Soybeans are drying down, and 65% are turning color. Southeast, general growth stages ranged from R6 to R7. Issues related to white mold, Sudden Death Syndrome, and soybean cyst nematode were present. Continued mild conditions continued advancement of crops. However, lack of significant moisture has many areas at or near drought. Wheat planting continued.
MINNESOTA: 38% of the corn silage crop has been cut, 20% less than the average. 85% of the soybeans are turning yellow, just 6% behind the five year average. Nearly all of the oates have been harvested. The weather has turned dry, and 35% of the topsoil is rated short of moisture. Last week’s warm, dry weather allowed small grain producers to bring this year’s harvest closer to completion. Average temperatures ranged from 4 to 15 degrees above normal throughout the state. No reporting stations recorded any measurable precipitation. As of Sunday, rainfall amounts were one-half to over 3 inches below normal over the past four weeks.
MISSOURI: Although there is no report on the Missouri corn and soybean crops, topsoil moisture is generally adequate and pastures are 70% rated good to excellent. Temperatures have been on average.
NEBRASKA: Nebraska corn is 79% good to excellent, with irrigated corn slightly better and dryland corn 74% good to excellent. 15% of it is mature, compared to the 44% average. The soybean crop is 80% good to excellent, with 89% turning color and 1% harvested compared to the 4% average. The first fields of soybeans have been harvested. Seed corn, high moisture corn, and silage were being harvested. Topsoil and subsoil moisture are generally adequate.
NORTH DAKOTA: Corn for silage is 17% chopped, compared to the 52% average for this time of year. 66% of the soybeans are turning color, compared to the 90% average for the past 5 years. Most other crops are also behind schedule for maturity, but most are in good to excellent condition. Durum wheat is 68% harvested, which is 20% behind schedule. Small grain harvest and late season crop progress made great strides last week as temperatures were well above normal and dry weather prevailed. The clear, dry weather allowed producers to stay active in the fields harvesting.
OHIO: 14% of the corn is mature, compared to the 39% average, and 74% is in good to excellent condition. 52% of the soybean leaves are dropping, compared to the 64% five year average. 8% of the soybeans are mature, compared to the 23% average and 1% has been harvested. Soil moisture is 30% short and 77% of pastures are fair to good.
SOUTH DAKOTA: Corn harvest has not yet begun, although it usually has by this time; although 38% of the silage corn has been cut. 11% of the soybeans are mature, but none has yet been harvested. 12% of the winter wheat has emerged, which is ahead of schedule. Topsoil moisture is 88% short to adequate.
WISCONSIN: 10% of the corn is mature, but unharvested. However, 34% remains undented. 12% of the silage crop has been cut. 72% of the soybeans are turning color and one-third of those are dropping leaves. Another week of sunshine and above normal temperatures accelerated maturity of corn and soybeans. The lack of rain has dried out many fields across the state, and growers were hoping for some moisture to give crops and pastures a boost as well as aid germination of winter wheat and rye. Topsoil is 51% short of moisture.
Summary:
Corn and soybean harvest is just getting underway across the Cornbelt, well behind schedule in all states, however recent weather has been warmer and dry, enhancing maturity in most states. Crop reporters indicate that a growing number of areas are becoming dry in the topsoil and subsoil.
Posted by Stu Ellis at 12:02 AM | Comments (0) | Permalink
September 22, 2009
Livestock Production: Are There Any Positives?
If it produces meat, milk or eggs, and you produce it with the intent of profitability, it will be spotlighted today. USDA’s new reports on livestock, meat prices, and the feed outlook are all the focus for livestock producers who have had a tough time lately making ends meet. Is there anything to be encouraged about?
Hog prices are forecast to average $38-39 per cwt in the third quarter of 2009, 33% below year ago levels, fade to $35-37 in the fourth quarter, which would be 14% under 2008 levels. USDA's latest Livestock Outlook says demand is lackluster, both from domestic and foreign consumers, and will not support the market at profitable levels. Returns turned negative 2 years ago, and have only been positive for two months in 2008. Sow slaughter is rising, which would reduce the breeding herd. The export market had carried many producers, but exports have been lower and imports higher than year ago levels.
Poultry production is level to slightly down, with broiler meat production about 3% lower than last year, and chick placement is down 2% from the same period in 2008. Broiler stocks are also down 7% under year ago levels, but are running counter to wholesale prices. Broiler exports are also down 13% from last year, and that has reduced wholesale prices of leg quarters. While broiler exports are down, broiler meat exports are up about 1% over last year. Additionally, turkey production is down about 10% from year ago levels, despite the fact cold storage holdings have increased, putting downward pressure on prices.
While beef imports are up 13% over year ago levels, beef exports are steady from last year, and a primary reason is the value of the dollar versus the Australian currency where most of the imported beef is originating. USDA says exports are expected to fall 8% this year and increase 7% next year. Live cattle imports currently are 16% less than last year, compared to USDA’s earlier forecast for a 12% drop in imported calves. Most have been coming from Mexico, where moisture has been insufficient to sustain pastures. For the US beef producer, grain prices are more favorable than the past two years and the weather has extended the grazing season. Cow slaughter has increased due to dairy prices, feedlot placements were up 13% over year ago levels, but fed cattle prices in the low to mid $80 range will barely cover costs for feeder calves place on feed this month.
Dairy cow slaughter has removed 145,000 head, but US milk production remains virtually unchanged from August of 2008. But low prices have not brought a decline in production that would balance supply and demand, in part because of lower feed prices that have kept up the interest of dairymen in continuing to produce milk.
Lower feed prices have encouraged many livestock producers to stay in business, and large US new crop yields are expected to support that trend. USDA’s Feed Outlook says, “With larger feed grain production, all 2009/10 feed grain prices are projected lower.” Total feed grain use will reach a record this month, in part because of a higher number of grain consuming animal units compared to last month, but down 1.7 million from year ago levels. For the livestock feeder, the best news is a record corn yield forecast and corn prices half of what they peaked at in early 2008. Additionally, sorghum production will be more than previously forecast, but still down from last year.
Global feed production is down, despite the larger US production. There is a reduction in Chinese and Canadian corn production due to growing conditions, and a reduction in Brazilian corn production because of stronger soybean prices. Argentine corn production is also down because of prices and government policies. Globally, increased use of feed grains will trim projected ending stocks. USDA says, “The combination of increased world corn trade and reduced ompetition boost prospects for U.S. October-September 2009/10 corn exports 3.0 million tons this month to 56.0 million. As of September 3, 2009, outstanding export sales of corn reached 12.1 million tons, up from 11.9 a year earlier.”
Summary:
US livestock production will continue at high levels for the foreseeable future. While dairy cow slaughter is up, milk production is steady due to higher production per cow. There is a start on the increased slaughter rate for sows, but production of pork remains high. Beef production is also steady, but imports are up while exports are down due to currency values. Domestic feed supplies will be abundant with a large corn crop, giving producers less incentive to cut back on production.
Posted by Stu Ellis at 12:28 AM | Comments (0) | Permalink
September 21, 2009
Making The ACRE Decision: NOT ANOTHER ONE?!
You fussed and fidgeted at your computer. You tossed and turned in your bed. Finally you threw your hands up in the air and drove to the FSA office and signed up for ACRE. And on August 14 you thought the pressure of making decisions were over. After all this was a four year commitment and crop insurance is only one year. But alas, your angst may rise again, if you are one of those farmers who are eligible to make another ACRE decision. OH, NO! NOT AGAIN!
USDA has not yet announced how many farm operators and landowners signed up for the ACRE Program, but the final count may only be 25% of those who had been participating in the Direct and Counter-cyclical Programs. So there will be fewer farmers who have to make the next ACRE decision, which deals with priority of crops receiving ACRE payments. Initially, if you are only raising one crop, such as 100% corn or 100% wheat, you do not have to worry about making a crop priority decision. Secondly, the eligibility question focuses on how much you have planted, compared to your base acres. If you have planted 20% more than your base acres, then you have a decision to make about crop priority. If you have not planted more than 120% of your base acres, then you have escaped the decision-making.
Since that decision needs to be made by September 30, if you are eligible to assign a payment priority to your crop, you will need to brush up on the decision-making process. That is outlined by University of Illinois economist Gary Schnitkey in his recent newsletter. And Schnitkey says you can make the decision to not decide, leaving “no priority” as your choice, which he says is appropriate. If that is your choice, ACRE payments will be received in proportion to planted acres.
However, if you are eligible, and want to maximize your revenue, compare your operation to the examples provided by Schnitkey and decide which fits best. He says the amount of ACRE payments will vary widely by crop, and will vary from farm to farm, depending on the ratio of farm historic yields to state average yields. And he adds, “Crop priority can be changed each year. Hence, choices made in 2009 can be changed in later years if expected payments look different in future years.”
If your decision is to make corn your first priority, ACRE payments will be received on the maximum number of corn acres. That would be beneficial if your state’s ACRE payment rate for corn is more than it is for soybeans. However, if your state has a lower ACRE payment rate for soybeans than corn, and you have soybeans as your top priority, your payment will be smaller.
The bottom line is that ACRE payments are made on acres and if you are eligible to establish a crop priority, you will probably want to select the crop that is getting the highest payment per acre.
Summary:
Although sign-up for the ACRE program is past for the 2009 crop, those farm operators and landowners who did enroll may have the choice of making a decision of whether to list corn, soybeans, or wheat as their top priority for receiving payments. ACRE payments are based on acres, and if the objective is to maximize revenue, the decision would be to give the priority to the crop that has the highest payment rate per acre. Not all farms will be eligible; only those with planted acreage more than 20% larger than their base acres.
Posted by Stu Ellis at 12:02 AM | Comments (0) | Permalink
September 18, 2009
Cornbelt Update
Cornbelt 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.
2009 is a mirror image of 2008 says IA State marketing specialist Chad Hart with growing season parallels. Read more.
1) Delayed planting concerns gave way to mild growing season weather.
2) Crop conditions are holding, production is up and prices are working downward.
3) Demand for livestock feed is declining, but the decline should halt this year.
4) Demand for ethanol stocks is slow, but the biofuels industry continues to grow.
5) Export demand for 2008 beans set a record, and that will continue for 2009 beans.
6) Lower corn and bean prices imply increased demand helping livestock & biofuels.
7) Markets are concentrating on the supply, but seasonal pricing is returning.
9) Current weather and crop patterns are supporting seasonal pricing trends.
10) For those with storage, higher prices can be found a few months after harvest.
11) Recovery of the economy will point to more demand and possible higher prices.
Mike Woolverton at KS State agrees with Hart. He says, “Absent a faster than expected global economic recovery or an unexpected shock to the system, commodity prices are likely to follow the pattern for big crops. Low harvest-time prices will stimulate demand. Supplies will be reduced as the marketing year progresses, to put upward pressure on prices.” He says soybean supplies will be tight until spring.
The big crop gets bigger adage is true this year, says MO economist Melvin Brees, “However, demand is expected to be at record levels as well. The longer term downside price risks may lie in these use numbers. Continued improvement in the economy and especially improved conditions for livestock producers are likely needed to meet corn use expectations. The risk for soybean prices may be in increased 2010 South American production and stronger competition for exports next spring and summer.”
Operators and landowners are both beginning to think about leases for the 2010 crop year. While most discussions deal with calculation of a fair cash rent, ag law specialists at OH State say there are many other issues that need some serious consideration:
1) What is the resolution process to settle any leasing term disagreements?
2) Does a written or verbal agreement imply a partnership?
3) Does the agreement increase the liability for the action of the other party?
4) Who has access to production records and how does that impact FSA programs?
Wheat growers in the Cornbelt and Great Plains will need to make crop insurance selections soon and those choices are aided by a Crop Insurance Decision Tool, provided by IL ag economists. It calculates premiums, evaluates insurance payments, and provides historical data useful when making crop insurance decisions for wheat harvested in 2010. Find it here.
ACRE decisions were made in August, but Sept. 30 is the deadline for prioritizing a crop. For example, if corn is picked as the first priority and soybeans the second priority, ACRE payments will be received on the maximum number of planted corn acres and the remainder of eligible acres will be allocated to soybeans. That only matters if you have more than one crop and 83.3% of your total acres exceeds your base acres. Read more here.
If your farm is eligible for an ACRE priority, what crop would you select? IL ag economists say their analysis “appears that choosing corn as the first priority, wheat as the second (if wheat is grown), and soybeans as the third will maximize ACRE payments from a farm.” But they also say factors could change that ranking. They recommend checking historical yields in relation to state yields since ACRE payments could change.
The sign-up deadline is Sept. 30 for the Conservation Security Program, and that date will determine payment eligibility. The CSP program is new in the 2008 Farm Bill and IA State economist Mike Duffy says it pays operators based on additional conservation measures they adopt for at least 5 years. Payments will be between $12 and $22 per acre and practices include: injecting or incorporating manure, dust control on unpaved roads, extending existing filter strips, recycling farm lubricants, and going to no-till, and many others. Read more.
Is your corn safe from frost? Maturity is the point at which kernels have maximum dry weight and the plant is safe from yield loss, and that is indicated by the formation of the black layer which is visible on the inward tip of the kernel.
1) Kernels at the butt end of the ear will develop the black layer first.
2) At maturity, weight no longer increases, and a gradual loss of moisture begins.
3) The black layer will form when the grain moisture is around 30 to 35%.
4) Frost about 10 days to 2 weeks prior to black layer will reduce yield 4-5%.
5) Frost about 3 weeks before black layer will reduce yield 10-20%.
6) Frost one month prior to maturity will result in potentially unmarketable grain.
Crop maturity may be a serious concern for you in the wake of frost threats in the offing and crops that are far from maturity. OSU agronomists assembled their observations:
1) When silking occurred by late July, kernel black layer formation occurred Sept. 21.
2) When silking occurred in early Aug., kernel black layer occurred by Oct. 11.
3) When silking occurred in mid-Aug., kernel black layer was formed by Oct. 27.
4) Corn planted as late as mid-June could mature even when GDD was below average.
Crop maturity for soybeans is also a concern for many, even if soybeans planted three weeks late only suffer a one week delay in maturity, says Purdue’s Shaun Casteel. The majority of beans are between R5 and R6 and will reach full maturity in 33 and 18 days respectively. But cool temperatures could prolong that timetable. Casteel says harvest should be well underway in October, and that timetable will challenge wheat planting.
Stressed corn during the growing season may result in stalk rots about harvest time according to MO plant pathologist Laura Sweets, who says scout and be prepared:
1) Fusarium and Gibberella cause a pink discoloration of diseased stalk tissue.
2) Anthracnose will appear as shiny black lesions at the corn stalk nodes.
3) Diplodia causes spongy stalks with mats of white fungal growth.
4) Charcoal rot begins in the roots and plants will break at the crown.
Stalk rots may cause yield losses of 10% to 20% on susceptible hybrids. If more than 10-15% of stalks are rotted, Sweets says the field should be harvested as soon as possible. In preparation for the 2010 crop, management of stalk rots include: 1) select hybrids with good stalk strength and lodging characteristics, 2) plant at recommended populations for that hybrid, 3) follow proper fertility practices, 4) harvest in a timely manner.
Scouting for stalk rots should include the push test, where plants are pushed 45 degrees from vertical at ear level. MN agronomists say plants that break following the push test are at risk for stalk lodging. Stalk strength can also be evaluated by pinching the lower stalk at the first internode above the brace roots. Hollow stalks will collapse from that.
How much field loss will your combine emit? Your goal should be one bushel per acre or less, which is 2 corn kernels or 4 soybeans on the ground per square foot. Without adjusting your combine since last year’s harvest, you may have the same amount of volunteer corn that you saw in your fields this past spring. Here are IA State resources:
1) Combine settings for corn
2) Combine settings for beans
3) Profitable corn harvesting
4) Profitable bean harvesting
5) Harvest safety
“Luck, art, and skill” are the keys to harvesting soybeans says NE ag engineer Tom Dorn, but if you can harvest them at 13% moisture instead of 10%, the additional profit is more than $11 per acre. The benefit is from heavier beans and reduced harvest loses. Read more.
Manage your soybean harvest to cut drying costs and prevent shatter loss, says Dorn:
1) When harvesting tough stems, make combine adjustments and use slower speeds.
2) Begin harvesting at 14% moisture, and even when some leaves remain on the stem.
3) Spread out maturity and harvest by adjusting planting dates and variety selection.
4) Overnight dew and afternoon winds can both change bean moistures.
5) Avoid harvest when beans are driest to maintain moisture and cut shatter losses.
6) If storing beans in a drying bin, begin harvest at 16% moisture and dry to 13%.
Trochanter mealybug. That is a new soybean pest in the Midwest that you will have to learn about, but experts are learning right along with you. Ohio entomologists say they may reduce soybean yields, but there is no data that indicates economic impact. The trochanter mealybug is a root feeder, much like the soybean cyst nematode, and exhibits sap-sucking traits, like the soybean aphid. Symptoms of its presence appear to be a potassium deficiency in soybeans, but OSU specialists say they do not know if there is a relationship with those symptoms and the mealybugs, “Things right now are a bit up in the air in terms of their distribution and if it’s something we need to be concerned about.”
Blank ear tips may cause concern, and certainly cut yield. OSU agronomist Peter Thomison says those kernels are the last to be pollinated and the plant may have run out of pollen, or silks could have suffered from drought stress. Pollen feeding and silk clipping by insects may also contribute to the problem with poorly filled ear tips. He also says those kernels cannot compete as well for nutrients and may have been aborted.
Cellulosic ethanol production may depend, in part, on the availability of corn stover. But IA State researchers are concerned that stover removal has unintended consequences:
1) Soil productivity requires organic matter, and corn stover replaces lost carbon.
2) Crops depend on recycled nutrients, and stover removal impacts decomposition.
3) Stover removal changes greenhouse gas interactions at ground level.
FSA has made grain bin loans, and now it will also help finance construction of barns for storing hay or other types of biomass. The terms of the loan include 85% of the cost of new facilities for up to two years worth of production, and it can be financed at the fixed FSA interest rate for either 7, 10, or 12 years depending on the loan amount. Read more.
Drip irrigation, coming from a network of pipes underground, reduced crop needs for water by 25% and still produced a 200 bu. per acre corn yield in western KS. KS researchers say the reduction in irrigation water compares to sprinkler irrigation at 85% efficiency, and furrow irrigation, which is only 65% efficient.
The swine breeding herd is shrinking says MO economists Glenn Grimes and Ron Plain, due to increased sow slaughter, which was a little below 2008, but “When adjusted for the shrinkage in the sow herd it was 2.5% above a year earlier. This is the third consecutive week with sow slaughter above a year earlier. Gilt and sow slaughter for the last few weeks suggest producers may have sped up the reduction in herd size.”
Despite 5 weight classes and two genders, the price of cattle in NE is driven by the price of 4-500 lb. steers say NE economists. That contrasts to a similar TX study which found the TX beef market to be driven by 6-700 lb. heifers. The industries are quite different it seems. The TX climate is milder, breeding and feedlot operations are year-round and the heifer can go either to a feedlot or be bred. In NE the primary buyer looks for lightweight steers for feedlots, and his longer time there determines profitability. Read more.
Cattle feeders using DDGS are frequently frustrated with different nutritional values, which change from one ethanol plant to another and from one process to another. A Purdue researcher has developed a process to predict the nutritional value based on the process, and says if a large cattle feeder wants a particular nutrient profile, it is possible.
Happy birthday, today to FAPRI, the Food and Agricultural Policy Research Institute at the University of Missouri, which celebrates its 25th anniversary. Its economists have provided commodity price projections and policy analysis to Congress, farm groups, and international trade negotiators. Founder Abner Womack said the strength of FAPRI is to give unbiased facts based on numbers to policy makers, and to not recommend policy.
Posted by Stu Ellis at 2:38 AM | Comments (0) | Permalink
September 17, 2009
Remembering Norman Borlaug
If Norman Borlaug was the only agriculturalist to win the Nobel Prize, that would be a fitting tribute to such an individual as he was. The farm gate pauses today to pay tribute to Borlaug who passed away Saturday, and was one of those individuals who left the world better than he found it.
Many will remember their first awareness of him in connection with the “Green Revolution” which brought hybrid seeds to the Asian subcontinent to feed the millions who were starving. His efforts were applauded by the Nobel Institute who awarded him its 1970 Peace Prize. Norman Borlaug was a wheat breeder and research director for CIMMYT, (Centro Internacional de Mejoramiento de Maíz y Trigo) more commonly known as the International Maize and Wheat Improvement Center. CIMMYT’s tribute to Borlaug salutes his “exemplary life dedicated to fighting hunger in developing countries.”
His high yielding wheat varieties and improved farming practices first helped Mexican farmers in the 1950’s then South Asian farmers in the following decade. Currently, his varieties are produced on 200 million acres around the world. That was made possible by the establishment of 15 international research stations which applied his technology and helped teach local farmers about production improvements.
Borlaug was most recently in the news when he received the Presidential Medal of Freedom, and earlier had received the Congressional Gold Medal, the highest US recognition for a civilian. But he helped establish the World Food Prize in 1986, which has become the Nobel Prize for agriculture. To date, 25 eminent researchers have received the award for their contributions to increasing the quantity, quality, and availability of world food supplies.
Borlaug was the consummate Extension agent, not only researching but teaching. He taught agronomic technology to the impoverished to better feed their families and their neighbors, and he taught elite researchers about the need for their efforts to be applied at ground level. Since his work was in more than 100 nations around the world, he is well known in many of those countries as a hunger fighter. In his Nobel acceptance speech, Norman Borlaug said, “It is true that the tide of the battle against hunger has changed for the better…but ebb tide could soon set in, if we become complacent…”
Borlaug lit a spark in millions of people around the world, not just in helping indigenous farmers feed those nearby villagers in India or Africa, but ignited the desires of many others to carry on his work in places we will never visit, nor ever hear of. Many of their comments are moving tributes to an individual they once met, but that was all it took to launch their careers toward helping feed a hungry world.
At the Norman Borlaug Institute for International Agriculture at Texas A & M University, Borlaug recently noted, "We all eat at least three times a day in privileged nations, and yet we take food for granted. There has been great progress, and food is more equitably distributed. But hunger is commonplace, and famine appears all too often."
Borlaug was an Iowa farm boy who attended the University of Minnesota and received graduate degrees in plant pathology. After World War II he became a researcher for the Cooperative Wheat Research and Production Program, which assisted Mexican farmers with better agricultural practices. That project later evolved into CIMMYT and he began training interns to work in agricultural research, who migrated around the world to carry his spark and message. As a result, Pakistan and India, despite their large populations, are self-sufficient in food.
Summary:
The passing of Norman Borlaug will leave big shoes to fill, but many of his protégés are working around the world, not only to conduct research into better grain production but also to train indigenous farmers about how to use the technology. The highly decorated, but reserved Borlaug will be remembered as the Father of the Green Revolution.
Posted by Stu Ellis at 12:25 AM | Comments (0) | Permalink
September 16, 2009
Global Demand And The Impact On US Crops
USDA’s September Crop Report raised the forecast for corn exports to 2.2 billion from 2.1 billion bushels which was the largest increase of any use sector for new crop corn. That level is substantially larger than the 1.850 billion bushel export record for old crop corn. It helped push total use above the 13 billion bushel mark for the first time. The same report also pushed soybean exports slightly higher to 1.280 billion compared to the August report, but that matched the old crop export demand. If global demand for US corn and soybeans is so healthy, what is happening in other grain production areas that is causing that?
If the global market is going to be strong for US grain, are other parts of the world having production problems? USDA’s World Agricultural Supply and Demand Estimates (WASDE) report projects an additional 100 million bushels being exported, pushing to the total to 2.2 billion bushels. The September WASDE report says, (corn) “Exports are raised 100 million bushels with higher projected imports for Canada and lower production in South America.”
Coarse grain supplies, which includes corn, sorghum, barley, and oats, remain steady for the 2009-2010 marketing year, except for an additional supply here in the US that offsets declines in stocks of other countries. USDA reduced its estimates of corn production in China, Brazil, Argentina, Canada, Kenya, and EU-27. Chinese corn production is lowered 2.5 million tons as yield prospects were reduced by extended summer dryness. USDA also lowered its estimates for corn production by 2 million tons in Brazil and by one million tons in Argentina. Those nations are providing more incentives to farmers to grow soybeans instead of corn, therefore planted acreage is expected to decline. Elsewhere around the world, corn production will decline this coming year in Canada, Kenya, and the EU-27.
With reduced production in many areas, coarse grain trade will increase substantially for the coming year, mostly corn. Canada and Kenya will be buying more, but Brazil and Argentina will be selling less, as will the European Union. Coarse grain feeding, compared to wheat feeding, is expected to climb 3 million tons with larger volumes here in the US and more barley feeding in the EU. Global corn ending stocks are projected to decline by 2.4 million tons in 2009-2010.
Regarding oilseeds, the US will have higher production, a higher crush, and more exports of soybean meal and soybeans. Exports are expected to increase because the soybean crop in India is down, along with exportable supplies. US exports are projected at 1.28 billion bushels as a result of declines in foreign production, which is down 1.2 million tons to 326.9 million. However global production is expected reach a record level of 243.9 million tons due to large crops in the US and a large crop expected in Brazil. Those are partly offset by reductions in the soybean crops in China, India, and Canada. Brazilian production is projected at 62 million tons, Chinese production at 15 million and India at 9 million tons. USDA says, “A late start to planting resulted in lower-than-expected area sown. Lower yields are projected due to a period of dryness in late July and early August.”
Global oilseed trade will climb slightly during the coming year to reflect increased imports by China. Global stocks are expected to climb due to higher stocks in China and the US, which are only partly offset by lower stocks in Argentina and India. China’s imports are expected to reach a record 39.8 million tons.
Summary:
Although the Federal Reserve has declared the recession to be history, there are still some demand weaknesses in the US corn and soybean crop. Corn exports are expected to be slightly higher helped by a short crop in Canada, which will be a customer, and reduced production in Brazil and Argentina which will reduce competition. China will continue to be a strong customer of US soybeans, and the short crop in India will reduce completion from that part of the world.
Posted by Stu Ellis at 12:58 AM | Comments (0) | Permalink
September 15, 2009
When Will Your Fertilizer Be Applied This Fall?
With your crop still several weeks from being ready to harvest, and the onset of frost and cold weather coming in less time than that, your priority is on getting your barely mature crop out of the field and into the bin. The last thing you are thinking about is fall fertilizer application.
Your farming plate is full enough as it is without adding fertility issues right now. However, this is the time of year when crop nutrient issues are addressed, and there is always the possibility that a very late fall will allow a timely harvest as well as fall fertilizer application and tillage. With that potential, it would not be inappropriate to make some plans about building fertility for your 2010 crop. Iowa State fertility specialists John Sawyer and Antonio Mallarino use their recent newsletter to provide some issues for consideration.
Soil sampling. Your need for P and K is generally guided by the result of a soil sample, as well as determining how much, if any, lime is needed based on soil pH. However, with crops growing in a field it is difficult to collect soil samples. It also takes time to get them analyzed, get the fertilizer delivered and spread while the soil is still tillable. Certainly, those issues can be schedule for the spring, but based on the past several years you may not have the chance to get any fertilizer spread. And the agronomists say it is a good practice to collect soil samples in the same season that potash needs are addressed.
Soil samples should represent no more than 10 acres each unless there is very little soil type variation in the field. Many Cornbelt fields are rife with different soil types. The agronomists say composite grid samples should represent areas smaller than 3 to 4 acres and having multiple test results per field helps determine uniform application rates and aids the effort to have site-specific application rates for fertilizer, lime and manure. Fertility recommendations are based on samples taken in the top six inches of the soil and cores should be taken at a consistent depth. They recommend 10-12 cores per sample with uniform blending before the sample is sent to the lab for testing.
P & K application. Among the reasons to apply P & K in the fall is typically the availability of time, unlike the potential issues which farmers will face this year. The soil would probably be dry and the fertilizer could be applied before tillage. The nutrients would not be locked into the soil before their use in the spring, and even a two year application could be made. With rainfall usually less in the fall, there is little worry about loss of nutrients to leaching or erosion. And rain will help P incorporation into the soil. The only downside is the amount of nitrogen applied when P is applied in the form of DAP or MAP, and the ammonium form of the nitrogen will allow higher amounts of nitrates to be formed and lost to the environment.
N application. While nitrogen can be applied successfully in the fall, it has several requirements that are key to that success. Soil temperatures have to be under 50º to prevent the conversion of the ammonium to nitrate. If soils are warmer, then a nitrification inhibitor is required to slow that conversion rate. Many farmers will apply anhydrous ammonia in the fall under those conditions and have nearly all of it available to boost corn growth the following spring. Other N fertilizers, such as urea and UAN will nitrify too quickly and should not be fall applied. Coated urea can be used if managed properly.
Manure application. Manure is a good nutrient source but because of variable N, P, and K content, handling and rate of application can be challenges that reduce its success rate. While the maximum rate of application for one nutrient will limit the application of the other two, those others will have to be bolstered by a commercial fertilizer. The agronomists say that giving priority to the amount of N in the manure means that manure will best be applied in the fall after soils cool, and that will not affect P and K availability. With the potential for N loss, the manure N should be injected or immediately incorporated to reduce loss with surface application. Additionally, the manure form of P should also be managed to prevent runoff, and also prevent excessive application that results in a high P index rating.
Summary:
With the lateness of the 2009 crop, fall fertilizer application may not get made by many farmers, although fall may be the best time to do so because of drier soils, chance for good incorporation, and usually the spring fieldwork is already rushed. Assessing fertility your fertility requirement begins with a soil sample, and sufficient numbers need to be taken to adequately analyze the need for P and K and lime. P & K can be applied every two years because of their stability in the soil, unlike nitrogen. With less rainfall in the fall, fall-applied P has less of a chance to leach out or run off and will be incorporated. However, with the use of DAP or MAP, there may be nitrogen that is also applied, and if the soil is too warm, it converts to nitrates and is lost to the following crop. N application can be successful in the fall if soils are cool or a nitrification inhibitor is used. Manure is also a good nutrient source, but phosphorous may reach its maximum before other nutrients reach adequate levels.
Posted by Stu Ellis at 1:06 AM | Comments (0) | Permalink
September 14, 2009
Crop Forecasts Can Be Computed With Weather Statistics And Crop Conditions
The old adage holds that “big crops get bigger;” and we must have a big crop because the production forecasts from USDA continue to grow. While many Cornbelt farmers may contest that projection, there is some corroborating evidence that USDA’s estimates may be on track. The NASS statisticians complete their objective field surveys with actual measurements of crops. At the same time, economists at the University of Illinois, joined by a meteorologist, have developed a model that makes crop size prediction in a completely different manner. What have they found?
Throughout the course of the summer, University of Illinois ag economists Scott Irwin and Darrel Good, along with meteorologist Mike Tannura have been refining their 2009 crop size estimates based on several factors. Their Final Yield Forecast makes use of a crop weather model that estimates the impact of technology (trend), state average monthly weather variables, and portion of the crop planted late on state average yield. Their latest update includes August precipitation and temperatures to project yields in Illinois, Iowa, and Indiana.
The forecasters repeat the fact that July was the coldest month in their long term sample and August was at the low end of their historical records, two factors that may reduce the ability of their model to accurately predict the impact of temperatures on yield. So far the track record has credibility. It predicted 97% of the variation in corn yields and 92% of the bean yields over 1986 to 2008. The Illinois forecasters used the USDA September crop report’s acreage update for 80.007 million acres of corn and 76.767 million acres of soybeans.
The economists report their forecasts based on the crop weather model are “substantially higher” than last month, based on the assumption of average August weather and “marginally lower” than the forecast based on the assumption of good August weather. They attribute that development to the positive impact of August precipitation and temperature on yield prospects.
Based on the September 6th report that 69% of the corn crop was in good to excellent condition, the US corn yield forecasts range from 158.8 to 170.2 bushels per acre. That puts total production between 12.705 billion bushels and 13.621 billion bushels. The average is a 164.5 bushel per acre average yield that provides a 13.163 billion bushel crop. Friday’s USDA forecast projected a 161.9 bushel crop and a 12.955 billion bushel production. Based on the September 6th report that 68% of the soybean crop was in good to excellent condition, the US soybean yield forecasts range from 44.6 to 45.2 bushels per acre with production ranging from 3.422 billion acres to 3.466 billion bushels. The average is a 44.9 bushel yield that produces a 3.444 billion bushel crop. USDA forecasts a 42.3 bushel per acre yield average with production estimated at 3.245 billion bushels.
For Illinois, the crop model projects a 178 bushel yield on corn and 48.9 bushel yield for soybeans. For Indiana the crop model projects a 170.6 bushel yield on corn and 47.4 bushel yield for soybeans. For Iowa the crop model projects a 201 bushel yield on corn and 50 bushel yield for soybeans.
Summary:
Actual field examinations by USDA statisticians have forecast a larger corn and soybean crop than was expected in August, and a crop weather model developed at the University of Illinois has corroborated that estimate. Illinois is expected to have a 178 corn yield and 44.9 bushel soybean yield. Iowa is expected to have a 201 bushel corn yield and 50 bushel soybean yield and Indiana is expected to have a 170.6 corn yield and 47.4 soybean yield. Nationally, the Illinois crop weather model projects a 164.5 bushel corn yield with production at 13.163 billion bushels. For soybeans the crop weather model projects a 44.9 bushel yield with a 3.245 billion bushel crop.
Posted by Stu Ellis at 12:10 AM | Comments (1) | Permalink
September 11, 2009
Cornbelt Update--UPDATED With September Crop Report
Cornbelt 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 raised the ante by projecting a 12.955 bil. bu. corn crop in its September Crop Report, helped by boosting the average yield from 159.5 bu. in the August report to 161.9 bu. per acre. That would be a record yield and 8 bu. above the 2008 crop. The larger crop prospects came from the western half of the Cornbelt, since a dry August held steady the yields in the eastern part of the Cornbelt.
The Supply-Demand report for corn projects 13.025 bil. in usage, nearly a billion more than last year, helped by higher feed use and higher export demand. Ending stocks were raised slightly and the season average price was tightened to a range of $3.05 to $3.65.
Estimated corn yields in Cornbelt states were: IL 179; IN 163; IA 187; KS 144; MI 146; MN 167; MO 151; NE 169; ND 120; OH 165; SD 147; WI 137.
Soybean production was pushed up to a record of 3.25 bil. bu., a 10% increase from 2008. The average yield was estimated at 42.3 bu. raised slightly with the help of higher yields in all states except IN. The 76.8 mil. acreage estimate was raised slightly from the June estimate.
The Supply-Demand report for soybeans forecasts a record 1.28 bil. bu. in exports because of strong shipments in late August. Increased biodiesel production and meal exports will also be positive, leaving the new crop carryout at 220 mil. bu. The season average price slid 30¢ to a range of $8.10 to $10.10.
Estimated soybean yields in Cornbelt states were: IL 44; IN 43; IA 52; KS 40; MI 38; MN 40; MO 42; NE 51; ND 30; OH 47; SD 39; WI 39.
Ahead of the USDA September Crop Report, the market was looking for:
1) The August estimate for corn was 12.761 bil. bu. from a 159.5 bu. yield.
2) Trade estimates range from 12.697 to 13.127 bil. bu., averaging 12.932 bil. bu.
3) The August estimate for beans was 3.199 bil. bu. from a 41.7 bu. yield.
4) Trade estimates range from 3.186 to 3.309 bil. bu. averaging 3.256 bil. bu.
5) The August estimate for corn carryout was 1.720 bil. bu. for the old crop.
6) Trade estimates range from 1.690 to 1.720 bil bu., averaging 1.712 bil. bu.
7) The August estimate for bean carryout was 110 mil. bu. for the old crop.
8) Trade estimates range from 80 to 110 mil bu., averaging 102 mil. bu.
9) The August estimate for corn carryout was 1.621 bil. bu. in August 2010.
10) Trade estimates range from 1.557 to 1.989 bil. bu. averaging 1.768 bil. bu.
11) The August estimate for bean carryout was 210 mil. bu. in August 2010.
12) Trade estimates range from 178 to 304 mil. bu., averaging 226 mil. bu.
Purdue marketing specialist Chris Hurt says it was “bold” for the USDA to project a 159.5 bu. national yield estimate in the August Crop Report, but he now thinks the national average yield may end up closer to 161.5 bu. per acre. Hurt says not everyone may agree, but he says moderate weather conditions may repeat the 2004 mammoth crop.
If the crop is that large, Hurt says there may be new contract low prices on corn, and that means vulnerability on the downside of prices. Hurt says the market is probably not thinking about a number quite that high at this point; but the economist expects the crop to continue to look good and even improve a little unless there is a frost. “We're likely to see good returns for corn storage -- depressed prices at harvest time and above normal price appreciation going into next spring and summer," he said.
Hurt is also bullish on soybean yields and with the crop rating at its highest in recent years, he thinks the prior record of 43 bu. per acre can be surpassed. “This means there is going to be a lot of soybeans, and prices are going to decrease to get end users to come in and buy more of this crop,” says Hurt. He says South American could add more beans to the supply and $9 beans out of the field this fall will drop under $9 next spring. “However, he said a lot will depend on world demand, the value of the dollar and the ultimate size of the US and South American crops.”
The September production estimate will change believes Mich. State’s Jim Hilker and he adds the market is liable to remain very volatile given remaining production concerns about the corn crop. He says the US corn yield could be anywhere from 8 bu. per acre higher than the August estimate to 159.5 bu. to 6 bu. per acre lower than that. Read more of Hilker’s August newsletter.
Hilker provides some advice on evaluating a decision on storing your corn. He says Dec. futures are 32¢ under July futures, meaning the market is offering 4.6¢ per month to store, which would cover on-farm costs plus interest, but not cover commercial storage.
Hilker says the basis also helps makes the storage decision. He says the expected improvement of the December to July basis would be 20¢, on top of the 32¢ futures carry in the market. That is a total of 52¢ which would more than cover storage costs for on-farm storage, but the market is questioning the 45¢ value of commercial storage.
To achieve that return to storage, Hilker says the grain must be sold either with a forward contract which locks in the price or use a hedge to arrive contract or a futures hedge. He says if you think the market will rise or you have to use commercial storage, use a basis contract. If you think the market will drop, use a hedge to arrive or forward contract for farm-stored corn, or sell any corn that would have to be sent to the elevator.
Production risks remain with the soybean crop also, says Hilker, but a storage decision is not as clear cut. He says there is only an 8¢ spread from November to July futures and storage costs more than 8¢. Hilker adds that the basis may tighten about 20¢ between harvest and June, so the return to storage would total 28¢. Since storage costs and interest are more, Hilker says the market will not pay for storing soybeans. For marketing he says use a basis contract if you think the market will rise, or sell at harvest if you think the market will fall. Regardless, there is no return to storage for beans.
Crop insurance indemnity payments are great, but will require tax planning say MN farm business specialists. For a physical crop loss, the payment can be deferred for taxes until next year, if you are a cash basis taxpayer and typically market your crop the following year from production. However, indemnity payments received because revenue declined must be reported in the year the payment was received. Read more.
Farmland values across the Chicago Federal Reserve District are down 3% compared to year ago levels, caused by drops of 5% in IA & MI, and drops of 2% in IL & WI. IN values were slightly stronger than year ago levels. Fed economist David Oppedahl says corn and bean prices have become a drag on land values, and he adds that plentiful supplies and softer demand will keep downward pressure on farmland values.
The Chicago Fed reports credit conditions “worsened” April through June, with a drop in repayment rates on non-real estate loans. The rate would have been flat were it not for the dairy impact of Wisconsin, where 55% of lenders reported lower repayment rates.
The financial outlook reported by economist Oppedahl was stark: “The tone of comments by (lenders) communicated deep concerns for agricultural producers, especially if livestock and dairy prices do not increase soon and losses continue to mount.” Read more.
The late August hailstorm which shredded crops in a swath 10 miles wide and 200 miles long across northern Iowa is being blamed for a deterioration of crop quality and potential toxic molds in corn. But Iowa State grain quality specialist Charles Hurburgh believes recent weather enhancing crop drydown will minimize the problems. But still:
1) Kernels bruised by hail will shrivel, be moldy, and pass out of the combine.
2) Undeveloped corn will have free sugars, and have test weights as low as 40 lbs.
3) Aflatoxin risk may have been averted, but feed corn should first be tested.
4) Stalk strength will be weak, and corn should be dried in small batches.
5) Expect discounts for moisture, damage, test weight, and foreign material.
How should damaged corn be handled? Hurburgh says carefully dry and store it.
1) Do not mix any leftover 2008 corn with the less moisture stable 2009 crop.
2) Grain must be cooled when stored, then cyclically lower temperature to 30º’s.
3) Remove bin center cores to eliminate trash, possibly twice in larger bins.
4) Move light corn to the market as soon as possible, and store heavier test weights.
“Train” your yield monitor by calibrating it against a weigh wagon or commercial scale so it will provide a reliable record of your yield, particularly if it is connected to a GPS unit. Purdue agronomist Bob Nielsen says the process reconciles the grain flow rate and the flow sensor signal strength to electronically estimate low, medium, and high yields. He says the owner’s manual may only suggest one load, but more may be needed to fine tune the accuracy. That additional effort is the reason many monitors are not calibrated. Read more.
Visitors at the Farm Progress Show saw one combine in a field demonstration leaving about 100 kernels of corn per square foot, but another combine leaving no grain on the ground. Proper setting of your combine will have a major impact on your revenue for the year. Iowa State ag engineer Mark Hanna has numerous recommendations about that.
1) Scout your field to look for new erosion gullies and determine stalk strength.
2) Fields with wetter corn will have a delayed harvest, but weak stalks may change that.
3) A 1 bu. per acre loss equals 2-4 kernels per square ft. or 1 ear per 1/100th acre.
4) Start with a low cylinder speed and raise it only to minimize threshing losses.
5) Start with wide concave clearance and reduce it to minimize threshing losses.
Wheat planting is approaching and OH agronomists say 2009 seed is larger and more pounds of seed will have to be used per acre to get enough plants for a good stand. That is 1.2 to 1.6 million seeds per acre in 7.5 in. rows immediately following the fly-free date. If planting more than 2 weeks after the fly free date use 1.6 to 2.0 million seeds per acre.
When wheat is planted on time, the seeding rate has little effect on yield, but if planting more than 30 seeds per foot of row, there is a tendency to increase lodging, and you are spending more money on seed than necessary. Plant at the drill’s calibrated speed.
Unexplained damage to ears of corn may be the result of flocks of birds says Purdue agronomist Bob Nielsen, who says ears will have missing or damaged kernels and husks may be shredded, which can give rise to ear molds and rots, and potential mycotoxins. He says they are attracted to a field because of either the hybrid or the stage of maturity.
Does purple or reddish corn have your curiosity aroused? Those are pigments associated with stresses in the plants that limit their ability to use the products of photosynthesis created during the day. The tendency toward the purple color varies with hybrids which may not have any genes or many genes that trigger the production of the pigment that will turn the plant reddish or purple. Purdue agronomist Bob Nielsen says the color is not a problem, but is an indication of problems with ear size or kernel set.
Cattle slaughter is down says Iowa St. economist Shane Ellis because of lower supplies and weaker demand. He says fewer cattle are being fed and the supply of cull cows is down. While beef cattle slaughter has been down, dairy cow slaughter has been up with little impact on the retail meat market because consumers are opting for hamburger.
The reduced slaughter is due to more timely rain through cattle country say MO economists Ron Plain and Glenn Grimes. They say lower domestic and foreign demand contributed to the weak demand, and they add, “We are likely to see stronger fed cattle prices seasonally but stay below a year earlier. However, prices higher than a year earlier for fed cattle are expected this winter due to smaller production.”
If you sell cull cows, doing so immediately after weaning may not be the best time, says MO livestock specialist David Hoffman. He says cull cow prices are the lowest in the early fall and winter and highest in the late winter and early spring. He recommends adding some weight to them if you have high quality fall forage. He says carcass grade can improve on younger cows and that may mean a $5-8 premium per hundredweight.
Hog slaughter has been consistent says Shane Ellis at Iowa State, who adds that is not good news for producers who need a break in hog prices. He says most price forecasters suggest the low prices will continue into the fourth quarter of the year with steady volume going to market. He says instead of cutting the breeding herd, the industry will need more demand or lower feed costs to return to profitability. Read more.
The average loss per hog from Oct. 2007 through July 2009 is $16.98 for independent pork producers, say MO economists Glenn Grimes and Ron Plain, who say that means a $3.6 billion loss for the pork industry, compared to $4.4 billion in 1998 and 1999. But they say the record will be set, because losses will continue for another 10-11 months.
But Grimes and Plain say not every producer has lost that much. They say the average loss was $6.10 per head for the 9% of hogs sold using the packer marketing formula that is based on the futures market. And they say total losses have been reduced for the 13% of hogs sold with purchase agreement contracts tied to feed prices.
While milk cow numbers are dropping, milk production per cow is increasing according to economist Robert Tigner of Nebraska. The dairy herd was 115,000 less in July of 2009 than in July of 2008, and 34,000 less than in June of 2009. However, milk production was up 0.1% or 34 mil. pounds, which shifted from low to high production.
Posted by Stu Ellis at 4:34 AM | Comments (0) | Permalink
September 10, 2009
Your Farm Records For 2009 May Show A Loss On Corn And Soybean Production.
Are you farming at a loss in 2009? Even with highly productive soil and good yields, 2009 could generate an income statement with red ink at the bottom. That was not in your plan for the year, but may be a reality.
Central Illinois farmland, not unlike good productive land throughout the rest of the Cornbelt, could return a loss this year on both corn and soybeans, believe ag economists Gary Schnitkey and Nick Paulson at the University of Illinois. Their latest farm management newsletter suggests an $8 loss per acre on corn and a $15 loss per acre on soybeans for the 2009 crop. And they say that has not happened in the past two decades. The reason, of course is high production costs and low market prices.
Breaking down their calculations, Schnitkey and Paulson say non-land costs for corn are projected at $517 per acre, $89 higher than 2008, while corn prices of $3.25 per bushel were the 2009 average compared to $4.05 for the 2008 crop. They used a 200 bushel yield estimate for corn and 51 for soybeans, which came from USDA’s National Ag Statistics Service. While not yet received, the revenue estimates included a $25 ACRE payment for corn. They indicate that the final crop revenue estimates could vary, and the only factor that could make any substantial change would be commodity market prices.
The increased production expenses for 2009 are attributed to higher cost for fertilizer than in 2008 and slightly higher seed costs for corn. After deducting total non-land costs of $517 for corn, $202 remains for a return to land and operator, which means cash rent must be paid from that amount. Schnitkey and Paulson used $210 for cash rent, leaving an $8 loss. For beans non-land costs of $312 are deducted from $507 gross revenue, leaving a return to land and operator of $195. With $210 cash rent, there is a $15 loss. Again, higher costs for seed and fertilizers pushed costs higher in 2009.
The economists report that cash rent operations will have more outlay than share rent farms, and cropshare leases will have lower land costs, and therefore operator returns will likely be higher than those for cash rent farms. With the increased financial stress for cash rent farms in 2009, operators will have to draw upon equity that may have accumulated from their returns in 2007 and 2008. The economists say, “Hence, financial difficulties likely will not be widespread across grain farms in the Cornbelt.”
For 2010, operator returns will be back in the black, with a $94 net for corn and $84 for soybeans, due in part to lower land costs from lower cash rents. Additionally, non land costs are projected $77 less for corn at $440 per acre, which is attributed to lower fertilizer costs for 2010 crops. The crop budgets for 2010 prepared by Schnitkey and Paulson are based on $3.75 corn and $10 soybeans.
Looking at the trend in returns, the economists contend, “The 2009 and 2010 projection suggests that high returns of 2007 and 2008 will not occur over the next couple of years. It is likely that the high returns period experienced during 2007 and 2008 is over and crop farming now faces agricultural returns closer to historical averages.”
Summary:
Profitability in 2008 is giving way to red ink in 2009 before a slight recovery to positive net returns on corn and soybeans in 2010. Higher fertilizer and seed costs raised 2009 production costs, and with lower commodity prices, the estimated returns for corn and soybeans will be negative on productive farmland. In 2010, lower cash rents, plus a return to more traditional prices for fertilizer will restore a small degree of profitability.
Posted by Stu Ellis at 1:42 AM | Comments (1) | Permalink
September 9, 2009
Will It Pay To Store 2009 Corn And Beans?
When the December 2009 corn contract was initiated by the Chicago Board of Trade, it reached a low of $3, and bounced back up above $7 last June before a long fade. Mr. Life of Contract Low is knocking on the door again, saying “I’m baaaaaack.” So what do you do with your corn, if it ever matures enough to harvest?
A minimal amount of corn is ready for harvest, and farmers with corn ready to combine are probably taking advantage of the opportunity for it to field dry as much as possible, since the Cornbelt will be consuming great volumes of propane this year to dry grain. With the added cost of drying to already high production costs, the net revenue from crops this fall will be minimal at best. So the challenge will be marketing, and the first question needing an answer is whether the crop will be stored and for how long.
Extension Marketing Specialist Darrel Good at the University of Illinois uses his current newsletter to explore the storage decision, which he says is a speculative decision in anticipation of higher prices. While futures prices are less than stable, the basis is more predictable and Good says, “A look at current new crop basis levels, then, can give some insight into the potential return to storage from basis appreciation.”
Using East Central Illinois elevators, he says the current basis is 25¢ under December futures. That is stronger than the basis of the past two years when futures prices were higher, but about the same as prices prior to the run up in 2007. He concludes that with a strong basis already, there may not be much room for improvement, particularly to cover the cost of storage. But when the carry in the market is added on, the outlook for a return to storage is brighter. Good says July futures are about 31¢ above December futures and a harvest bid was 57¢ under a July futures price, and he expects some significant strengthening of the July basis by next spring. A 15¢ basis improvement by early June, which would be parallel to this past spring, means the market is offering nearly 42¢ to store corn from harvest to next June. Will 42¢ pay the freight?
The time span from harvest to June would consume about 11¢ per bushel in interest cost, leaving 30¢ to cover the cost of storage, which would be sufficient for on-farm storage costs, if quality can be maintained, and if the crop is forward priced at this time. A delay in pricing the crop means a risk of lower futures prices and the loss of the return to storage that is now offered for corn.
Beans are a different story says Good, with harvest bids only 13¢ under November futures. That should be considered a strong basis, but the soybean market also has a lack of carry, seen by the fact that January futures are only 5¢ higher than November futures and July futures are only 8¢ higher than November futures. Good says the $9.09 cash bid is only 21¢ under July futures meaning that basis appreciation would not cover the cost of storage and interest would be more than what could be earned by storing.
Farmers believing that soybean prices will rise could own futures for less cost that owning and storing the physical commodity, since Good says selling beans at $9.09 and purchasing July futures at $9.30 would be cheaper than paying interest and storage. However, a declining futures price would result in margin calls and may present tax issues.
An alternative Good suggests is a basis contract that would allow beans to be sold for the current basis plus a portion of the futures price. Later, when the owner of the beans is satisfied with the futures price, settlement is made.
Summary:
The cost of storing the crop will include both interest and storage, but there are opportunities to increase income with a stronger basis and a stronger carry in the market. While basis improvement may not earn much, the market carry plus basis improvement may be enough to more than cover the cost of storage.
Posted by Stu Ellis at 12:26 AM | Comments (0) | Permalink
September 8, 2009
What Would Proposition Two Do To Your Operation?
Proposition Two—as it was known to California voters—is alive and well and moving through the states of Ohio and Nebraska, potentially forcing a change in the way livestock is produced. A phase out of commercial egg production in California is one change attributed to the referendum initiative, and Nebraska is examining its potential impact.
Economist and agricultural law specialist David Aiken at the University of Nebraska seems to think his state would undergo similar changes that have occurred in California as a result of the ballot-driven “Animal Welfare Initiative.” His report in the Cornhusker Economics newsletter says the concept would end the use of veal calf crates, swine gestation crates, and poultry cages, known as battery or laying cages. He says the main supporter of Proposition Two in California was the Humane Society of the United States, aided by consumer and environmental groups and opposed by agricultural and food processing groups. During the November 2008 election, it passed nearly two to one, and imposed a fine and jail time for violators.
The new California law, which takes effect in 2015 and is being proposed in Ohio and Nebraska, would require that confined sows, veal calves and laying hens be able to stand up, lie down, and extend their limbs without touching another animal or a side of the enclosure and to turn around freely within the enclosure. The battery cage ban applies to chicken, turkey, duck, geese or guinea fowl kept for egg production. Exceptions to the law include sows within seven days of farrowing, transportation, veterinary treatment, 4-H and similar exhibitions and humane slaughter.
Aiken says swine gestation crates also have been banned in Florida, Arizona, Oregon, Colorado, and Maine. Veal crates have been banned in Florida, Arizona, Colorado, California, and Maine. However, California becomes the first state to ban the use of cages for laying hens. He says the potential impact on Nebraska agriculture remains to be seen, but Nebraska is one of three states allowing such ballot initiatives which are among the top egg producing states. The others are California, where it is now law, and Ohio, where advocates are trying to add it to the 2010 general election ballot. Aiken says a favorable vote there would likely lead to a similar effort in Nebraska in 2012.
The trend seems to be gaining momentum, which began in 1999 with a European Union law that banned laying hen cages. US-based laws began with a gestation crate ban in Florida in 2002 and an Arizona ban on both gestation crates and veal crates in 2006, followed by similar initiatives in Oregon in 2007, and Colorado in 2008. On a parallel path, several members of the food processing industry adopted policies that reduced their purchases of livestock which may have been raised in confinement facilities.
Among the commercial entities were Cargill’s 2004 decision to phase out gestation crates, followed by Smithfield in 2007. The Smithfield decision established a ten year timeline. Fast food vendors also became involved with a Burger King policy to buy 5% of its eggs from non-caged hens, Wendy’s setting a similar goal for 2%, and McDonalds agreeing to study the use of cages for laying hens. Ice cream makers Ben and Jerry went cage free for their egg purchases in 2006.
Summary:
Nebraska livestock producers are being that ballot initiatives, which were successful in California is underway in Ohio and may be in gaining acceptance in Nebraska. The proposal would ban the use of gestation crates for sows, crates for veal calves, and cages for laying hens.
Posted by Stu Ellis at 1:46 AM | Comments (0) | Permalink
September 7, 2009
How Much Cash Rent Can You Afford In 2010?
With high production costs in 2009 and low commodity prices, many cash rent farmers may be thinking about that call to the landowner to set a date for discussing leasing arrangements in 2010. “Will the landowner want more rent? How can I afford to pay any more? Are there any alternatives?” Oh, the questions that we ask ourselves!
Cash rents for farmland began climbing in 2007 and exploded higher for the 2008 crop year in many areas of the Cornbelt, thanks to higher commodity prices. Iowa State University ag economist William Edwards reports the average cash rent in Iowa jumped from $150 per acre in 2007 to $177 in 2008, but the upward trend slowed going into 2009 when the average was estimated at $185 per acre. Edwards wonders, “Has the bubble burst for 2010?”
To arrive at a fair cash rent for 2010, Edwards suggests a methodical look at price prospects, input costs, and safety nets.
1) Futures market prices for the 2010 crop may give both operators and landowners some indication of profit potential. If landowners are looking at Chicago Board of Trade prices, they need to realize that cash markets are going to be lower than futures contracts and harvest prices will be 30¢ to 40¢ lower than futures. Edwards says that late 2008 futures prices were offering $6 for corn and $14 for soybeans and farm operators were bidding for land. In the past year the ethanol demand has declined, ethanol profitability has been low, livestock numbers are down, and grain prices have dropped accordingly.
Edward says subtracting a 40¢ basis from July futures leaves $3.40 for corn and $8.30 for soybeans next year, which means gross profits will be down even with good prospects for production. He says a 170 bushel corn yield, 50 bushel soybean yield, and $20 for direct payments, will result in a $598 gross for corn, $435 for soybeans.
2) Pricey crop inputs can exacerbate cash rent that is already high. However, Edwards says all indications point to lower costs for some inputs in the 2010 planting season, particularly those that are energy related. Fertilizer is the key one, and anhydrous ammonia prices are back down to more traditional levels. Edwards says the cost of fuel is lower than year ago levels, as is the cost of propane for those who will have large bills for drying corn this fall. Seed and pesticide prices continue to creep upward.
When the totals are in yours may vary from what Edwards calculates, but he is expecting a $57 decline in corn production costs and a $16 drop in planting soybeans in 2010. But he says those drops will not offset the lower prices for grain. When he subtracts the non-land costs from estimated gross revenue, Edwards says that leaves $174 for corn and $164 for soybeans that can be used for rent and profit.
3) Beyond the government farm program, one of the primary revenue safety nets used by many farmers is revenue-based crop insurance. 2008 provided checks to many farmers because fall grain prices were lower than they were early in the year when the price guarantees were established. For 2009, farmers with revenue crop insurance have a $4.04 corn guarantee and an $8.80 soybean guarantee. Using 75% coverage levels, that guarantees $3.03 and $6.60 at harvest, minus the basis.
The ACRE program could provide funds for farmers who enrolled by the mid-August deadline, however, any payment earned will not be made until the fall of 2010. Edwards says the Iowa state guarantees of $635 for corn and $457 for beans would give farmers in his state a guarantee of $3.65 for corn and $9.12 for beans. If you are signing the lease for 2010, remember that ACRE payments cannot change more than 10%, so any decline would be limited to $3.28 and $8.21. Compare those to the futures price minus the basis for fall 2010 delivery.
Edwards tell farm operators and land owners to consider those issues as they enter negotiations on the 2010 cash rent lease. One of the ways to make the lease more responsive to changes in the agricultural economy is the convert the cash rent to a flexible lease that contains adjustment factors based on prices, yields, or other variables.
Summary:
Entering into a new cash rent lease for the 2010 production season should not be an emotional process but a methodical one that can result in a fair treatment for both the operator and the land owner. Potential grain sales revenue should be estimated, along with costs of inputs and any farm program payments. Once income and outgo is known, that leaves the amount that farmers can either bank as return to labor and management or to pay out in cash rent.
Posted by Stu Ellis at 12:13 AM | Comments (0) | Permalink
September 4, 2009
Cornbelt Update
Cornbelt 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.
Export business will be a key indicator of new crop corn demand says IL marketing specialist Darrel Good. USDA is predicting 2.1 bil. bu. export trade, 337 mil. less than the 2007 crop, but 250 mil. more than the 2008 crop. So far 284 mil. bu. have been booked for export from new crop stocks, compared to 334 mil. at this time last year. Good says the difference is the lack of sales to Japan, which he says will be made up.
Export business will also be a key indicator of the soybean market says Darrel Good. USDA’s forecast is for1.265 bil. bu., and currently 477 mil. bu. have been booked for export, well above the 271 mil. sold at this time in the record setting pace last year. Read more.
Good believes the consumption of US corn and beans will reach a record level for the current marketing year, but he says prices will depend on how much users are willing to pay in the wake of global economic challenges. He says if a recovery does occur a modest increase in prices would be expected following the harvest of large crops.
Feed demand for corn is 5.3 bil. bu., but Iowa St. specialist Chad Hart says that includes a residual which captures crop loss beyond the field, and with the larger and later crop, he says USDA expects higher corn losses beyond the field. He says the true feed demand is still under pressure given current livestock economics, in which numbers are declining.
Large corn and soybean crops are forecast, but marketing specialist Chad Hart at Iowa St. says there are still significant weather concerns. He says only 18% of the corn is in the dent stage versus the five year average of 43% and pod setting for soybeans is behind as well, with delays in both crops increasing the concern for potential frost damage.
The grain market is pointing to an average $3.10 corn price and $9.60 for soybeans, says Hart, who adds that tight bean stocks have caused an inversion in the market with Sept. having a $1 premium over Nov. He says concerns about the weather, advance export strength, and Argentine farm strikes are helping support prices. Read more.
The corn price is languishing says Mike Woolverton at Kansas St., because of the crop size potential. He says last year’s long fall was beneficial to the crop, and this year’s has a greater yield potential of 12.8 bil. bu. if the first freeze holds off long enough.
Soybeans have the potential to kick-start the commodity complex says Woolverton, because global buyers bought up the supply. He says domestic crushers offered larger premiums over the summer and still complained about the tight supply. Woolverton says, “Every bean in every pod is needed this year. Anything that knocks the top off of the yield projection will cause soybean price to move up; perhaps sharply.”
Early grain sales have paid off for MN marketing specialist Ed Usset who was selling spring wheat for $8.71 or $3.50 higher than Sept. futures at harvest. His philosophy:
1) I do NOT make early sales because my “outlook” calls for lower prices by harvest.
2) I do NOT make early sales because of the value of the dollar, the size of the Canadian wheat crop or my general expectations concerning the economy, etc.
3) I do NOT make early sales because of advice from a market advisor or broker.
4) I make sales because I understand my own operation and my own cost of production, and these are sale prices that work for me.
Conflicting reports of land value trends confuse buyers say IL economists Bruce Sherrick and Paul Ellinger, who list some buffers that keep prices from falling. Read more.
1) Farmers with cash and recent high incomes are supporting local farmland markets.
2) It is not as costly to secure financing because of low interest rates.
3) Returns are less attractive on alternative investments.
4) Land markets seem to move slowly.
5) Long term institutional investors have increased interest in land holdings.
6) There are low debt levels on land, unlike the situation in the 1980’s.
Will cool temperatures impact grain fill in corn? That’s a good question says Purdue’s Bob Nielsen, “Unfortunately, the effects of such an unusually cool grain filling period on corn maturity dates and yield in the central Cornbelt are not well known, partly because the historical occurrence of such unusually cool grain filling periods is so infrequent.” But he says the plant slowly shuts down in cool temperatures, even without frost.
Corn fields with loss of leaf color, firing and premature loss of photosynthesis should not be a reason to change nitrogen management next year says IL crop specialist Emerson Nafziger. While there have been two successive years of those problems, those losses are unusual, and he says do not make large changes in rate, form, or timing. He says it should not happen next year, but consider ways to manage N to reduce loss potential.
Weeds may be maturing in many fields, ready to spread seed back into the soil at harvest time. IL weed specialist Aaron Hager says there are several herbicides that have a relative short time restriction between application and harvest and could be applied. Read more. However, he says given the current development stage of weeds, preharvest herbicides may not do much to limit weed seeds.
Fungal ear rots have enjoyed the weather, and may be prevalent in your field, but you need to identify which you have to determine how it should be handled at harvest time. Fusarium will produce fumonisin, aspergillus will produce aflatoxin, but diplodia should not be considered a serious problem unless it contributes to stalk rot and standability.
Ear rot fungi will develop while moisture is above 18%, whether in storage or in the field. Long term storage requires moisture below 14% if aspergillus is developing. Diplodia is not a big worry for storage says IL specialist Suzanne Bissonnette, in her newsletter.
If ear rots are present, it is important to harvest the field in a timely manner and to store the grain under the best possible conditions says Laura Sweets at Univ. of MO. Adjust harvest equipment for minimum kernel damage and maximum cleaning. Grain should be thoroughly cleaned to remove lightweight, damaged or broken and moldy kernels.
You probably have time to clean out bins and prepare them for new crop storage, and that will reduce the potential for problems with insects in grain. That includes cleaning the inside and outside of the bin along with all grain handling equipment and filling any holes or cracks. Treat the walls and floors with a residual insecticide. Read more.
A late harvest creates problems for fall fertilizer applications, and IL fertility specialist Fabian Fernandez suggests the possibility of a biennial P & K application before a corn crop, but he says either fall or spring applications can be made. He says a fall application may allow a loss of the nitrogen accompanying P in MAP and DAP. Read his newsletter.
One in five pounds of pork was exported in 2008, helping support pork prices, says livestock economist Shane Ellis at Iowa St., but this year pork exports have been down nearly 40% during the summer. He says that is part of the reason price forecasts suggest that the painfully low hog prices will continue into the fourth quarter of 2009. He says the solution is not to cut a half million sows, but more demand and lower feed costs.
“Our problem in the hog industry is not demand relative to the past but high costs of production because of ethanol,” say MO livestock economists Glenn Grimes and Ron Plain. “However, the only way to solve the problem is to reduce production because feed costs are going to stay high relative to history.” They say consumer demand is up 4%.
Farmer-lender mediation cases in Minnesota have tripled in the past year from 133 in 2008 to 433 in 2009. MN specialist Rob Holcomb says the steady increase in the number of farm loans in trouble is expected to increase because of low livestock prices and ripple effects of the general economy. The number of cases began to increase in January.
Production costs will be lower in 2010 believes Purdue economist Bruce Erickson. He says fall ammonia will be $400-$500 per ton, but K is still averaging over $600. He does not believe seed prices will rise in 2010 so budget $100 per acre for corn. And Erickson says lower prices are likely for herbicides, including glyphosate.
As we enter the hurricane season, IN climatologist Dev Niyogi says if any sweep into the Cornbelt, note the soil moisture ahead of the storm. He says, “If the ground is wet, the storm is likely to sustain, while dry conditions should calm the storm.”
Posted by Stu Ellis at 2:29 AM | Comments (0) | Permalink
September 3, 2009
Red Ink Or Black Ink For 2009 Crops?
As combines try to squeeze the last kernel of corn and last soybean out of the field, those may be needed to keep profitability in farming. Last week’s forecast by USDA of a 38% decline in farm income was a rude wake up call for many farmers. In essence crop production costs will be down in 2009, but not nearly as much as income. That spells a drop in profitability.
The cost-price squeeze will create a profitability issue that Iowa State economist Don Hofstrand says farmers have not faced in recent years. His article in the September Ag Decision Maker says the situation is especially acute for corn since nitrogen prices pushed up the cost, which is up 25% over 2008 and up 50% over 2007. His calculation for cost per bushel allows a comparison to the price of corn, and while farmers owning their land or both owning and cash renting are still making a profit, Hofstrand’s computation indicates the pure cash rent farmer currently has a cost above the price of corn.
Hofstrand says profit margins were tight before and during the 2005 production season, but after that point, corn prices moved higher at a quicker pace than did production costs. For the past 12-14 months, corn prices have drifted lower and now intersect with that line on the graph that shows rising production costs. That is an indication of red ink on a per bushel budget basis. Hofstrand estimates cash rent at $1.25 per bushel, machinery and fuel at 65¢, labor at 15¢, seed at 50¢, fertilizer at $1.10, crop protection at 20¢, and interest & insurance at 30¢ per bushel, which totals slightly more than $4 per bushel for the new crop.
Soybeans are better he says, thanks to not having to apply nitrogen. He says the 2006 crop brought a quick run up in price that peaked at mid-summer of last year. And he says soybeans seem to remain at profitable levels for the new crop. His current estimates for production costs are pushing above the $10 per bushel mark for soybeans, with cash rent about $4 per bushel. Machinery cost and fuel are about $1, with labor at 25¢ and seed costs about $1. Fertilizers are about $2.75, crop protectants are 50¢, and interest and insurance are about 75¢ per bushel. Based on that cost of production, Hofstrand’s calculation show farmers owning their land or farmers owning part and renting part to still be in a profitable situation with $10 beans. However, the declining soybean price is close to intersecting with the rising production cost of cash rent farmers.
Hofstrand says changes in “cost per bushel” from year to year may not correspond to changes in cost per acre, because the cost per bushel considers yield changes from year to year. He says higher costs per acre may be offset by spreading those costs over more bushels from a higher yield, resulting in a lower cost per bushel.
Summary:
Profitability will be a challenge for corn and soybean producers this year, with higher production costs and lower commodity receipts. The past three crops have provided more profitability because market prices were rising faster than production costs. While production costs are down for the 2009 crop, they are not down as much as market prices. The outcome is potential red ink for high cost operators, such as those who cash rent all of their land, but a likely year of profitability for farmers who either own their land or who own and rent land.
Posted by Stu Ellis at 12:30 AM | Comments (0) | Permalink
September 2, 2009
A "Frost Scare" In The Soybean Market? How Do You Take Advantage Of That?
Your soybeans may be a long way from maturity. And since you have flipped the calendar to September you wonder if they will mature enough to avoid a yield loss should an early frost take its toll. You may or may not have crop insurance protection. But you have a marketing opportunity, if you want to sell the frost scare.
The market wants #2 yellow soybeans, both in quality and quantity, but an early frost makes that a near impossibility, particularly if the crop is late in maturing. Iowa State economist Stephen Johnson says most soybeans will be in the R5 stage by mid-September, when beans begin to form in the upper pods, but they are not safe against a hard freeze until the R6 stage. That is when there are full sized green beans in the pods at the top of the plant. Even then some yield loss will be recorded.
Throughout the Cornbelt the average date of the first killing freeze ranges from early October in the north to late October in the south. However Johnson says the cool temperatures of this summer have little predictive value for estimating the date of the first frost. He says the hottest summer of the last 38 was in 1983 and the first killing frost that year was six days earlier than usual. The coolest year was 1992 and the first frost was 1 day early. While the cool weather of this year may cause one to think the frost would be early, Johnson says that has kept a premium on soybean futures.
Johnson says Nebraska farmer and soybean marketing specialist Roy Smith has identified a frost scare that typically occurs in late August or early September in the bean market. Of the last 30 years of the bean market, “Smith found that the single day for “selling a frost scare in soybeans” was 9-7, or the 7th trading day of September. This date typically falls just ahead of the USDA September Crop Production Report. In 2009, the September Report will be released on Friday morning, September 11th. Thus, the 10th could be a key date for implementing a pre-harvest sales strategy for soybeans.”
How do you sell the frost scare? Johnson says if you have adequate storage, selling November futures would be one tool. Another is to buy a November put option and if the US has a good crop and the South American crop gets off to a good start, then you have a floor in the market. Johnson says forward contracts with an elevator or processor will allow cash beans to be sold, but with a wide harvest basis, use a hedge to arrive contract that allows the basis to be set at a later date. He says the use of a January or March delivery date will allow the basis to return to normal, which may provide a better return to storage.
Farmers with Crop Revenue Coverage or Revenue Assurance with the harvest price option types of crop insurance will have a floor of $8.80 for soybeans. While those covered bushels can be sold with comfort, avoid selling uncovered bushels. Johnson says the use of other futures hedges or options strategies should be used for bushels that you do not want to commit for delivery.
Summary:
The lateness of the soybean crop in maturing may cause frost to be a consideration in the marketing of the crop. The market has a tendency to rise because of a frost scare in the early part of September, and usually before the September crop report, which this year is September 11. The use of either futures, options, or cash marketing contracts can be used, depending upon whether a marketer wants to commit delivery. If revenue crop insurance is applicable, those covered bushels can also be sold.
Posted by Stu Ellis at 12:41 AM | Comments (3) | Permalink
September 1, 2009
Are Foreign Consumers Still Hungry For US Foods?
When the value of the dollar declined, foreign consumers scooped up US grains, meats, and other farm products, pushing prices higher in late 2007 and early 2008. Exports pushed to record highs, and were attributed as part of the sizzling agricultural economy. Even pork was quite profitable because export demand composed a significant percentage of its value. But that was then and this is now, and many farmers wonder if exports will resume center stage.
USDA’s Outlook for Agricultural Trade in the fiscal year beginning in October is nearly a mirror image to the 2009 fiscal year which is nearly concluded. The Fiscal 2010 projection is a $97 billion total, compared to $97.5 billion for the current fiscal year, and down from the $115 billion year of 2008, which was double the export value in a recently as 2005.
While total values are similar, there are some shifts among commodities, which is a function of various world crop conditions and how fast the consumer demand is drawing down global stocks. Another significant factor is the global economy, and since the Mexican economy shrank 6% and the Canadian economy shrank 2.5%, it is no surprise that US exports declined since our two major trading partners were not buying as much. USDA says China, which is the only economy that is growing, will be joined by India and Korea in leading the global recovery. Forecasters say oil and housing have risen from their bottom, US and Canadian GDP will grow 2% in 2010, but the dollar will appreciate against the Canadian dollar and the Brazilian real and depreciate against the Yen, the Peso, the Pound and the Euro. Those dynamics have great influence over which countries will be buyers of US products or sellers to US consumers.
In agriculture, grain and feed exports are forecast at $25.5 billion, down $900 million from 2009, because of lower values for grain. However, larger wheat crops in several areas of the world will limit global demand. Corn exports will be higher by 12% because of larger US stocks that soften prices, but there is also reduced wheat feeding and less competition from Ukraine and Russian corn.
Oilseed exports are forecast at $20.1 billion, down $800 million from 2009 due to lower values for US soybeans and higher export values for South American soybean products. However, there will be some limits to the South American exports of soybean oil because of greater biodiesel production. Soybeans exports in 2009 have been bolstered in the later part of the year by continued purchases from China.
Livestock producers will enjoy a small increase in foreign business with a $900 million increase to $19.7 billion. Pork exports will reach $4 billion on larger volume and beef exports are expected to reach $2.6 billion both on higher values and higher volume.
On the other side of the ledger are food products produced by foreign nations and imported into the US, and the poor US economy depressed the value and volume of imported foods in 2009. The total to date is $3 billion or 5% less than it was in 2008, pushing agricultural imports down to $76 billion for the current year. For 2010, agricultural imports are expected to increase 7.8% to $82 billion, the result of increased values and increased volumes of sugar, bananas, cocoa, coffee, and tropical oils. Going down are imports of livestock, which is largely inbound cattle and hogs from Canada. Those numbers are declining because of weaker pork demand and the impact of the Country of Origin Labeling requirement.
Traditionally, US farmers have sold more products abroad than US consumers have bought from foreign sources of food. In 2008, when the value of the dollar enhanced exports and impeded imports, the balance of trade was a positive $36 billion. It had recently been as tight as $4.6 billion in 2006. For 2009, the balance of trade will be slightly over $21 billion, but decline to $15 billion in 2010.
Summary:
The poor global economy, improved crop production in other parts of the world, and the shifting relationships between the dollar and other international currencies have all combined to keep US agricultural exports in 2010 about level with 2009. Both are well below the record set in 2008 when foreign consumers could not get enough of US grain and meat products. The result is a tightening of the balance of trade, which remains positive for agriculture.
Posted by Stu Ellis at 12:58 AM | Comments (2) | Permalink
