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Friday, March 19, 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.

Mark your calendar for March 31. USDA will release the quarterly stocks report and the market will watch for how much corn has been consumed. Test weights were light and livestock and ethanol refiners could have been chewing through the corn faster than would be the case if test weights were more normal, says IL marketing specialist Darrel Good in his newsletter.

The first half of the marketing year usually consumes two-thirds of the crop, and that has been edging upward. Based on projected use for livestock, exports, and ethanol, Good says the March 1 corn stocks should be near 7.5 bil. bu., slightly more than in 2009.

Soybean stocks will also be reported and Good calculates they will be near 1.217 bil., which is slightly less than this time last year. He says soybean exports for the past 3 months have been near 618 mil. bu., but he says seed, feed and residual is hard to gauge.

Planting Intentions will also be reported by USDA at the end of the month, but Good says there is more uncertainty this year because of the reduced wheat acreage that was planted and the expiring CRP acres. But he says the lack of fall field work and lack of fertilizer application is another wild card. Bean acres may be either up or down from 2009, but he says corn acres will likely increase as a result of increased ethanol demand.

If you are negotiating with a landowner to custom farm their land, economist William Edwards at IA St. offers a custom rate schedule developed from a survey of 187 farmers performing or hiring custom operations. Find his average custom rates for Iowa here. Edwards also offers a spreadsheet to help you calculate your own costs, and ensure your profitability.

Dryland areas with high yield variability may be collecting more from the FSA’s SURE program, than from crop insurance. KS St. risk management specialist Art Barnaby says USDA is providing FSA with all of its crop insurance data. Read more.

Barnaby says, “If the APH rules for SURE were applied to GRP then farmers in high risk growing regions could purchase a 70% GRP contract and receive the maximum 90% SURE revenue disaster guarantee that is loss adjusted base on farm level yields rather than aggregated county yields, and in many cases pay less than a $1 an acre in premium.” But he thinks farmers with GRP or GRIP will see adjustments in SURE benefits.

Farm liquidations and debt restructuring are on the rise in MN says economist Robert Holcomb, and he says those can trigger some significant tax liability. He says deferred income and pre-paid expenses can generate taxes, but grain and livestock sales are the most expensive. Machinery and breeding stock are taxed as depreciation recapture.

Holcomb says full or partial cancellation of a debt is considered taxable income and he says a bankruptcy proceeding does not eliminate your income tax liability. And he says if you are involved with such proceedings, ensure your tax preparer is involved.

MO farmers are being warned to prepare for significant flooding into the spring. That comes from MO climatologist Pat Guinan. He says soils are saturated, farm ponds are full, streams are at the top of banks and “All factors are in place for high flood potential.” He says precipitation has not been excessive, but there have been no drying days so far.

Guinan expects flooding in both the Missouri and Mississippi River basins because of heavy snowpack that remains in the upper Great Plains and northern Midwest. As anecdotal proof of his predictions, one of his rain gauges on a tripod tipped over because of the soft soil, and some soil temperature sensors have floated out of the ground.

Nasty weather is anticipated Saturday in the Western Cornbelt with 6-inches of snow accumulating in the central plains says NE state climatologist Allen Dutcher. He says the first onslaught will be quickly followed Tuesday and will spread storms and high winds from the Dakotas to Nebraska, which will be a threat to the spring calving season.

Cool weather will be the expectation for the Eastern Cornbelt believes Jim Noel, OSU meteorologist. He says the spring outlook is slightly colder than normal according to a weather model he follows. But he says the official outlook is equal chances for both temperatures and precipitation, but with a tendency toward the colder side of normal.

Grain bin hazard #1. If you are unloading bins of corn that is less than top quality, Purdue grain storage specialist Matt Roberts has many warnings. He says the temptation is to climb inside the bin and break up clumped grain to encourage a smooth flow. But that may not be possible. Roberts warns about walking atop crusted grain and falling through, and also breaking corn loose from the side a bin and becoming buried in an avalanche of grain. He says all of that should be done from the outside of the bin.

Grain bin hazard #2. If a bin is plugged up, Purdue ag engineer Richard Stroshine says the last thing you want to do is open a side well. He says that creates an imbalance of forces in the bin, and if you start withdrawing corn from the side well, it can actually cause the bin to buckle. He says contact equipment makers to solve those issues.

Grain bin hazard #3. Attaching a safety harness to the top of a bin may seem like a good way to work inside the bin and remain safe, but the Purdue specialists say most bins are not designed to hold farmers from inside the bin with a harness. He says harnesses don’t really help with entrapment, and should only be used to prevent falls inside bins.

Grain bin hazard #4. Some of the safety concerns inside grain bins may be reduced with correct aeration management. Roberts says check bins every two weeks, but first turn on a fan for 5 minutes before climbing atop the bin and smelling for mold. And he says don’t warm the grain above 50 degrees, or that will encourage mold and insects. Visit Purdue’s corn storage website at: http://www.purdue.edu/cornmold .

Besides high levels of moisture, what is lurking in your fields? Would it be “winter annuals?” Yes! You win the opportunity to treat your fuzzy fields before the vegetation gets out of hand and in the way of your tillage and spring planting efforts. Here is an identification guide.

IA St. weed specialist Bob Hartzler says if there are just a few patches, a special herbicide treatment is unwarranted. But he says if you have a potpourri of flowering vegetation, ensure there is a complete control to avoid competition with the emerging crop. And he says if planting is delayed by wet soils, you’ll be thankful you sprayed weeds early.

Alfalfa weevils are lying in wait for your alfalfa to green up and supply a sumptuous meal. Watch for brown snouted beetles about a quarter inch long feeding on the terminal leaves of the alfalfa. As soon as your first cutting is finished, so is the alfalfa weevil, but potato leafhoppers arrive. Treat for the alfalfa weevil if 25-40% of leaves are damaged and 3 larvae exist per stem after you have collected about 30 stems throughout the field.

Wheat fields are few and far between, but the wheat that was planted last fall looks good so far says Purdue agronomist Herb Ohm. He looked at IN soft wheat and says it came through the winter with little to no damage. He says March cold spells can set it back and damage the flower head, but the wheat should be fine and harvest will be on time.

While wheat seedings last fall were down, that did not seem to reduce the potential for viral diseases in wheat. MO plant pathologist Laura Sweets says the green up period may show symptoms of various mosaic viruses and barley yellow dwarf virus. Cool and damp weather fosters such problems, but there are no rescue treatments for wheat virus.

If your wheat shows symptoms of virus, adopt a management program that includes: Planting good quality seed of resistant varieties; avoiding planting too early in the fall to minimize opportunity for insect vectors to transmit viruses to young plants; destroy volunteer wheat, control weed grasses, and maintain plant vigor with adequate fertility.

Most corn hybrids are resistant to Stewart’s Wilt, a bacterial disease spread by corn flea beetles. Fortunately, the insects are highly susceptible to winter temperatures, since they overwinter near the surface of the soil. OSU entomologists say their calculations show negligible threats to susceptible hybrids from either the flea beetles or the disease.

Is your planter ready for work? WI machinery systems specialist Matt Digman says block your wheels and hydraulics, and use all skin, eye, and respiratory protections.
1) Clean dirt and grease from chains, and align all chains and sprockets.
2) Check sprockets for excessive wear, and use light lubricant on them and chains.
3) Clean meter housings, chamber and seed disk with mild detergent and brush.
4) Check meter springs and pickups, and check manual for tolerances and adjustments.
5) Consider paying $10-20 per meter for dealer to check performance and wear.
6) Purge the manifold on vacuum planters, by removing each hose and blow it out.
7) Clean seed tubes of any dust that might interrupt the sensor light and check wear.
8) Disassemble, clean, and re-grease coulter and row cleaner bearings.
9) Check wear on disk openers and gauge wheels and re-adjust.
10) Check tire pressures to ensure contact with drive system for metering.
11) If using a new tractor, double check that the planter is level with good seed depth.

How do you count cornstalks? Sure, it is easy to count those 20 or so in 17.5 feet when estimating yield; but if you are count all 36,000 in an acre for exact calculations of population, stalk spacing, doubles, and even stalk girth that is a different challenge. IL ag engineers have devised a motorized, computer monitored, stalk counter for really particular farmers or seed companies which need to know how their research is going. See it here.

With new crops, come new pests, and IL researchers developing miscanthus and switchgrass as biomass crops for biofuels report there are several species of nematodes that are causing a potential risk to the crops. 85 different test plots were planted in IL, GA, IA, KY, SD, and TN, and each of the plots had at least two nematode species that were feasting on the roots of the plants. The research leader said, “The high levels of nematodes found in our survey and the damage symptoms observed in infected roots suggest parasitism may contribute to the decline of biomass production.”

Buy or sell cattle futures? NE livestock economist Darrell Mark says non-commercial traders (large speculators, not cowboys or processors) have the largest net long position in the market in the past 11 years. While commercials follow fundamentals, the non-commercials follow price trends, and they are long when the market is trending up. With commercials having a record number of short positions, is the up market shifting? Read more.

It is not true that all livestock feed is laced with antibiotics, despite what the public criticism may be, says Purdue animal scientist Paul Ebner. He says while antibiotics can both treat a disease and be used to prevent disease, the best thing for producers is to work with veterinarians so they can use such products in the most efficient ways possible.

Purdue’s Ebner says much of the controversy with livestock antibiotic use comes from the idea of antibiotic-resistant bacteria, or the so-called superbugs that affect humans. But he says antibiotic resistance in humans is much more closely related to human antibiotic use than on-farm use. "When we look at antibiotic-use patterns in humans and human antibiotic resistance patterns, they mirror each other," he said.

What is the real value of the $1 biodiesel tax incentive? Significant, says FAPRI economist Pat Westhoff, "Because of the mandates, we think the short-run impact of the tax incentive is pretty small, but when you look at the 10-year average, it's closer to a 25-cent per bushel impact on soybeans." It has passed the Senate, but stalled in the House. The incentive renewal expired Dec. 31, and a renewal is only good until next Dec. 31.

Mark your calendar: the ACRE farm program and 2008 Farm Bill expire in about 30 months, and House Ag Committee Chairman Collin Petersen has indicated he wants to begin consideration of the next Farm Bill this April. He either wants plenty of lead time, or he is anticipating a significant battle with Congressional colleagues for dollars.

Posted by Stu Ellis on 03/19 at 01:57 AM | Permalink

Comments

Need a Little Acreage War? Our soybean crushers have been exporting a lot of soybean meal. The small South American crop last year (Argentina exports a larger percentage of their soybean as processed products than Brazil) probably is the reason for the increase. An estimate based on Department of Commerce’s export data indicates, to date, we are within 30 million bushels on a bushel basis of last year's soybean meal exports. Should we use soybeans for crush at the minimum for domestic use and minimum historic soybean meal export use from now to end of marketing year, we will crush 81 million more bushel than current USDA’s estimates. These estimates are on a trend line basis. Dr. Wisner’s data (Ag Marketing Resource Center) was used to estimates around 32 million less bushels of soybeans will be consumed as soybean meal with the increase in distiller’s grain substitutions. This is comparing the 2008-09 with the current marketing year 2009-10. That would have USDA 49 million bushels short. (The trend line approach should indicate part of the change. The result is a 2009-10 ending stocks between 49-81 million bushels less than currently projected by USDA.) Dr. Good, as outline in this blog issue, is projecting March soybean stock to be down 85 million bushels from last year. This may indicate our year end decline is too small. If our soybean meal is substituting for Argentina’s production, we might expect exports of soybean meal to continue longer than soybean exports. Argentina’s harvest starts later than Brazil’s and some time would be expected to process the beans. Current concerns of a dock workers strike in Argentina may also keep soybean meal buyers coming to the US. USDA, in their February Forum, projected 2010-11 ending stocks could be 120 million bushels over beginning stock when 77 million acres of soybeans are planted. A beginning stocks of 190 million bushels left little need for excitement. Dropping that number may be a different story. A major war for soybean acres occurred in 2004-05 when 2003-04 ending stocks were 112 million bushels. (Time is running out for an acreage switch.) The analyses of the March stock numbers will be as important as the projected planting acres. USDA will provide another outlook for 2010-11 use in the May production report. That could be the next report that provides some excitement if the March report is a dud.

Posted by: Freeport, IL at March 19, 2010 2:02PM

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