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Friday, January 08, 2010

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.

With 650 mil. bu. of corn still in the field, IA St. marketing specialist Chad Hart says that is 5% of the 12.92 bil. bu. crop. He believes, “Some of the recent market strength in corn is due to the potential loss of some of these bushels and some quality issues with the harvested crop.” ND has 32% of the crop in the field, SD & WI have 12%, IL has 5%. Hart is awaiting USDA’s final report on the 2009 crop on January 12. Read more.

The corn futures market is more bullish than USDA, says Hart, based on USDA’s price range midpoint of $3.55. He says corn futures have been pointing to a season average of $3.70 to $3.80, helped by harvest delays, strength in crude oil prices, a weaker dollar, and re-emergence of non-commercial buying at the end of the year, primarily from funds.

The bean futures market is more bullish than USDA says Hart, based on USDA’s price range midpoint of $9.50. He says harvest delays moved futures to the $9.50 level. Since then exports, crude oil, a weaker dollar and non-commercial buying have supported it.

Profitability has returned to the ethanol market says Chad Hart at IA St., helped by higher oil prices. But he says the corn market is currently supported by exports with the pace of sales picking up over a year ago, helped by a weaker dollar. While traditional buyers have backed away, non-traditional buyers have picked up the slack. Hart says bean exports continue at a record pace. China has bought more than grown in IA & SD.

If you have grain to sell, Hart says prices over the next few months should remain firm, although the basis has widened with the large corn and bean crops. He says it should narrow as the marketing year progresses, and he says the ‘10 outlook is brighter than ‘09.

The pork industry lost $5 billion over the past two years, but unlike other industries it did not get bailed out. Purdue economist Chris Hurt says hog producers lost $20 per head in 2008 and 2009, and those remaining may see profitability in 2010. Read his newsletter for predictions.

Chris Hurt says the fact the breeding herd is down 6% over 2 years is deceiving, because production has increased due to the 4% increase in pigs per litter and heavier market weights. Oddly enough, consumer pork supplies per capita will be down because pork exports will grow by 10% and the US population will increase by 1%.

Hurt’s estimated 6% decline in per capita supply of pork will translate into more demand and higher retail prices. His forecast is for 1Q live prices averaging in the higher $40 range with 2Q and 3Q prices averaging in the low $50 range, before 4Q prices fall back to the $40 range. He says that will average $50, or on a carcass basis at $67.

Pork production costs will remain just below market prices, calculates Hurt, who says current corn and soybean meal prices will keep production costs in the $50 to $51 range for the year. That includes labor and depreciation of buildings and equipment and, “The bottom line is that hog producers are not expected to go backwards financially in 2010.”

Circle December 2009 on the calendar says economist John Lawrence at IA St. because December had the least financial loss for pork producers in a year that was the worst year ever for pork profitability. He says losses bottomed at $43 per head for farrow to finish producers in August, and peaked at a loss of only $13.97 per head in December. Read more.

Will pork productivity improve, asks livestock economist Lawrence? He believes:
1) Fewer retained gilts points to an older sow herd that may improve productivity near term, but hurt production when the herd is has more old and young females than normal.
2) There may be disease breaks that hurt production as diseases mutate or as producers try to economize by cutting back on vaccinations after controlling circovirus.
3) Poorer quality corn with light test weights and molds producing mycotoxins can impact palatability and performance, with lower carcass weights and pigs per litter.

Diesel fuel prices are 42% more than they were in Jan. of 2009 says KS St. economist Kevin Dhuyvetter. With higher crude oil prices, diesel is expected to climb to a point about 74% higher than 2009 in March, before a gradual tightening in the separation. Fuel prices won’t be dropping, but 2010 prices will be closer to those 12 months earlier. Check out his chart.

Did you have a crop failure in 2008? And was your county declared a disaster area? Those are the requirements for applying for a payment from the SURE program. The Supplemental Revenue program is part of the 2008 Farm Bill and is the permanent disaster program. If you think you may be eligible for a payment, read these:
1) Explanation of the SURE program.
2) Calculator for SURE payment

Now you see it, now you don’t. That may describe both the federal inheritance tax as well as any inheritance you might have from a family death this year. Despite action in the US House to repeal the expiration of the federal inheritance tax, the Senate did not act and currently there is no tax. However, senators plan to impose a tax for 2010, which may cause confusion, lawsuits, and some headaches for farm families with 2010 deaths. Read more.

If miscanthus is a host for corn rootworms, is that a plus or a minus? Miscanthus is being promoted as a good ethanol feedstock, and researchers have found corn rootworm will survive almost as good on miscanthus roots as they will on corn although there were 70% fewer adults, but researchers say the total implications are not yet known.

Miscanthus researchers studying the revelation about corn rootworms say there is a good and bad side to the discovery that the giant grass crop is an alternate host with corn.
1) Good: miscanthus could serve as a non-biotech refuge and when mating with others that survive in a Bt cornfield, the genetic combination may help the total control effort.
2) Bad: miscanthus fields could serve as a vast perennial reservoir of rootworm beetles.

Sweet corn growers would be interested in a census of commercial sweet corn grown in IL, WI, & MN, focused on 20 environmental variables, 30 agronomic variables and 56 weed species. Those weeds must propagate in the 80 day sweet corn window, and were mostly fall panicum, giant foxtail, wild proso millet, lambsquarters, and velvetleaf.

The sweet corn census identified the highest yielding fields were those that used interrow cultivation, planted sweet corn hybrids that matured in less than 84 days, and grown north of the IL-WI border. High yield fields were also further north and had lower weed interference and produced fewer weed seeds. Researchers found that weed interference was an indicator of yield loss which occurred in over half of the fields.

The survey of commercial sweet corn fields found that fields receiving the highest herbicide rates and most expensive weed control programs had higher weed diversity, more weed interference, and produced the most weed seeds. USDA researcher Marty Williams who lead the research effort believes this may be the result of farmers applying more herbicides and at higher rates to the weediest fields, but with limited success.

When picking 2010 corn hybrids, check information from Extension, grower associations, seed companies and on-farm strip trials says MN agronomist Jeff Coulter:
1) Identify an acceptable maturity range based on GDD needed to reach black layer.
2) Plant multiple hybrids of varying maturities to spread risk and widen harvest period.
3) There is more variability in yield within a maturity group than between groups.
4) Consider standability, disease tolerance, emergence and need for transgenic hybrids.

New herbicides are available in many states, but not always the same ones.
1) Iowa
2) Missouri
3) Nebraska

Blame your ancestors for your problem with soybean aphids, since they planted buckthorn in their gardens and around their homes. Without that shrub from Asia, soybean aphids would not have a winter host, and those Asian lady beetles would not be in your home, after gorging themselves on aphid juice all summer. That is the contention of OSU researchers who are analyzing the buckthorn impact in OH, MI, MN, & IA.

Buckthorn Watch is a citizen-scientist program being started in OH to get people started on eradication, says researcher Andy Michel, using $494,000 from USDA. "The reason why the system with buckthorn, the soybean aphid and the multi-colored Asian ladybeetle works so well is because of evolutionary history – all three invasives are from Asia. It's like we've taken that entire system and transplanted it here in the United States."

Posted by Stu Ellis on 01/08 at 01:14 AM | Permalink

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