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Friday, March 12, 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.

Only hours remain (depending on when you read this) before the March 15 deadline to select your crop insurance program for 2010. Spring guarantees are $3.99 & $9.23.
1) GRIP
2) IL FAQs
3) Premium & payment calculators
4) IA St. FAQ’s

With the wet fields in 2009, one of the early issues was delayed and prevented planting provisions of crop insurance policies. IA St. economist William Edwards provides a fact sheet on those issues. Act, in case Mother Nature makes a return visit this year with more rain than needed.

True or false: Corn export demand is driven by the value of the US dollar. That is conventional wisdom, but IL Marketing Specialist Darrel Good says it is quite hard to prove by using current data. Many other dynamics in the market cloud the picture. Read his newsletter.

Darrel Good says, “There may be some recent economic relationship between the value of the US dollar and crude oil which impacts the value of ethanol and therefore corn.” The correlation is only .4, but he says, “It is unlikely that the corn market will completely ignore currency values in the price discovery process, even if the relationship is weak.”

Corn acreage will grow by 2.5 mil. acres over 2009 according to USDA because of fewer wheat acres planted last fall and expiring CRP contracts. If the trend yield of 160.9 bu. is hit, production will again be a record. Chad Hart at IA St. says the total supply for the 2010 marketing year will be nearly 15 bil. bu. Read more in his newsletter.

A 15 bil. bu. corn supply will cover a 13.24 bil. bu corn demand, says Chad Hart leaving 1.65 bil. bu. in carryover at the end of the marketing year for the 2010 crop. He says that is a result of declining feed demand, growing ethanol demand, and slow export growth.

Soybean acreage will decline to 77 mil. and Hart says a trend yield of 42.9 bu. will give 3.26 bil. in production with a total supply slightly under 3.5 bil. He says that will leave ending stocks at 330 mil. bu. pushing the stocks to use ratio back above 10%.

USDA’s next market moving reports are due out on March 31. Those will include the prospective plantings report and the Grain Stocks report at the mid-year point.

Your marketing plan needs to be reconciled with USDA’s last report says Dan O’Brien at KS St. He says, “An important message to take from the USDA World Agricultural Supply and Demand Estimates released on March 10, 2010 is that world supplies and ending stocks of coarse grains, wheat and oilseeds are all projected to increase by more than had been expected in earlier USDA WASDE reports.” Read his newsletter.

O’Brien expects US commodity prices to remain under pressure until at least the spring and summer months when weather markets may create some rallies. Until then, he said it should be expected that corn and bean price prospects will remain neutral to negative and wheat prices will continue to erode; as a result of accumulating global grain stocks.

If you are making a farm risk management plan, read some of the thoughts of MI St. marketing specialist Jim Hilker.
1) Were you eligible for SURE benefits from the 2008 or 2009 crops, and are you eligible for SURE for futures crops that might qualify for the permanent disaster program?
2) Do you have crop revenue insurance, have the ACRE program, or any alternative risk management plan? What insurance plans should be part of your risk management plan?
3) Do you have target prices in place which impact your net worth? Consider options-based marketing plans if they fit your goals, or an alternative risk management plan.

If you bypassed ACRE in 2009, but are interested in the 2010 sign-up, you have until June 1 to make your decision. ACRE uses a two year national price average, and that means 2008 and 2009 prices will be used for ACRE payments on the 2010 crops. The difference will be the fact the higher 2007 prices are replaced by the lower 2009 price. But OSU economist Chris Bruynis says the yield portion of the formula should not change since the high yields in 2009 will not be used in the “Olympic averaging.”

Chris Bruynis says, “The gamble is do you take a set payment amount in the DCP program (since there is a low probability that any counter cyclical or loan deficiency payments will be made) or take a lower payment to protect potential revenue shortfalls in the event of low yields and/or prices. Remember, even if you decide to sign up for ACRE, it is not a substitute for crop insurance since it depends on low state revenue to trigger.” Read more.

Soybean production will enlarge in the Brazilian state of Mato Grosso. Its economists say production will increase 50% within 10 years, acreage would increase 28% and yields would rise 16%. That means 52 bushels per acre by 2020, up from 44.5 bu. today. The Mato Grosso economists also predict corn production would nearly double by 2020 with yield increases climbing to 81 bushels per acre, up from the 72 bushels today.

The Argentine government is funded by taxes on exports, such as corn and soybeans, and farmers in that country are angry. They have organized to hold onto their soybean crop and “send the government a message.” The head of the agrarian movement says it’s “Unacceptable that 4 percent of the (country’s) soybean farmers hold 60 percent of total production of the oilseed, and with respect to wheat production, 7 percent of wheat farmers manage 57 percent of the total.” Bean exports are taxed and wheat is not.

The South American information comes from www.CropSpotters.com where Brazilian farmers are answering the question of what is the biggest threat to agriculture. Most indicated disenchantment with soybean prices and others expressed weather concerns.

Is your stored corn stabilized or deteriorating? Warmer temperatures will bring molds back to life, regardless whether your wet corn is stored in the bin, pile, or in the field. NE plant pathologist Tamra Jackson says some ear rot diseases were visible last year, and some were not, and both can continue to grow in sub-optimal storage conditions. She says standing corn should be considered more perishable and be marketed quickly. Read more.

You may or may not be interested in buying land in Nebraska, but the price trends for different types of land paint an interesting scenario. After a year of no change in prices, the price of cropland has begun to rise. Cropland without irrigation is up 6.4%, slightly more than land with irrigation. Simultaneously, the price of non-tillable grazing land fell by 5.6% for the year, with greater decreases where range areas are the most dominant. Read the report.

Before you spray, calibrate. Application rate, nozzle flow rate, ground speed, and fan width have to be computed, and even with sophisticated electronics, it has to be calibrated. Bob Wolf of KS St. and IL Extension’s Scott Bretthauer have a fact sheet to help you do that.

Glufosinate is not glyphosate and IL weed specialist Aaron Hager says don’t mix them up or your crop will suffer immeasurably. While he admits the names are similar, the chemistry is not. Glufosinate inhibits a plant enzyme early in the nitrogen assimilation process, which means glufosinate can control weeds that are resistant to glyphosate. He says glufosinate does better in warmth and sunshine, and if applied to weeds under 6 in.

Burndown for no-till can be applied with early pre-plant or separate, according to Purdue weed scientists. They offer several tips as you consider weed management:
1) Glyphosate or paraquat can be applied anytime before spring planting.
2) If using only glyphosate, allow 7 to 10 days for weed control before planting.
3) For glyphosate resistant marestail, mix at least 1 pt/A 2,4-D ester with your burndown.
4) When using 2,4-D at 0.5 pt ai/A or less, wait 7 days before planting soybeans.
5) If you use more than 0.5 pt ai/A, most labels specify a 30 day preplant interval.
6) Extreme, Canopy DF, or Canopy EX can only be used before soybean.
7) Simazine can only be used before corn.
8) Atrazine, Sencor, Scepter, and FirstRate will have some burndown, if COC is added.

Manganese and glyphosate: the debate continues. Researchers at various universities have tried to verify the rumor that glyphosate tolerant soybean yields can be helped with an application of manganese. So far, there is no confirmation. But read these reports:
1) OSU study on foliar application of manganese.
2) IA St. report on Round up and manganese.

Refuge confusion? If you are planting Smartstax with 3 different genes for rootworm control, then your refuge needs only to be 5% of your corn field acres and must be placed inside or adjacent to your Bt acres. For non-Smartstax acres your refuge requirement remains at 20% of your Bt field acres. There is no “refuge-in-a-bag” strategy for 2010.

Don’t rush to apply N to wheat, since it does not need it until stem elongation and earlier application may result in loss of some of the N. That is the recommendation of OSU agronomists who say that ammonium sulfate has the least loss, but also the least N in the analysis and it may be the most expensive. Evaluate price and availability.

A handy tip for wheat fertilization is: “If you need P in your crop rotation system, applying DAP will allow the wheat the use the N and provide P for the wheat and future crops. So consider your field P needs and the price of DAP or MAP at application time.”

Is it too late to plant spring forage? No, says IA St. agronomist Stephen Barnhart, but he knows it is too wet now, and waiting too long will threaten the integrity of the stand should hot, dry weather cause the stand to wither. He says keep the companion crop planting rate at 50% and mow the new seedlings frequently to let the forage have light.

Or should it be delayed? Forage crops planted in late summer are limited by the first freeze, but will still need good soil moisture during the germination and establishment period. Barnhart says risks are high and fall rain is erratic. If you don’t plant now and carry over your seed until fall or next year, store it carefully and test for germination.

Beef profitability of $50-100/head is likely says IA St. economist Shane Ellis whose prediction is based on futures prices that show March through June marketings may be some of the most profitable in the past three years. He says not every month will show profit, 2010 should be a breakeven year and triple digit losses may be history. View his chart.

Pork profitability up to $25 /head is also likely says Ellis, because cheaper corn will lead to the first black ink in 18 months. He says producers may be encouraged, but it is too premature to begin increasing production. He says supplies will be down in 2010 and so will consumption. But he says export demand could consume 20% of production.

Manure can be an asset or a liability, but to retain the value in that commodity, you’ll want to visit a new website created to address manure issues, called “Manure Central.” Visitors will find information on certifications, regulations, manure exchange, and how small farm operators can handle manure, as well as those addressing volumes of manure. All of the information can be obtained here.

Farm families are at increasing health risks caused by a pathogen prevalent on livestock farms. OSU researchers took multiple samples at 52 rural households, half with dairy, sheep or beef herds and tested for listeriosis, a quarter of which cases are fatal. Farms with livestock were twice as likely to have contamination on shoes, food, gloves, sinks, and washing machines. Genetic testing pointed directly at the livestock on the farm.

The OSU researchers conducting the listeria study said farmers working with livestock and particularly dairy cows need to take precautions not to bring pathogens into their homes. Keep clothing and boots outside, since school backpacks dropped on a floor frequently make their way to the kitchen counter when it is time to do homework. They even suggested a separate laundry area that is used only for work clothes used in barns. Install a washer and dryer in your livestock facility and give your spouse a break.

Posted by Stu Ellis on 03/12 at 01:35 AM | Permalink

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