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Friday, July 31, 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.

14 days until the ACRE sign-up deadline and barely 1% of eligible farms have enrolled according to FSA. August 14 is the deadline for operators and owners to sign CCC-509 ACRE (Power of Attorney is accepted.) Production data will not be needed until July 15, 2010, and third party evidence will only have to be provided at that time if spot checked.

Farm operators and owners needing more information about the ACRE program can visit the farm gate website. Land Grant University economists and specialists detail the program and give their recommendations. Remember that any payment will not be made until Oct. 2010, if 2009 crops are eligible.

August 12 is the date for the August Crop Report, and IL marketing specialist Darrel Good says corn prices are still reflecting a large crop. He says the consensus of the market seems to be for a modest reduction of the acreage reported by the USDA in June. His newsletter is here.

The August Crop Report will be closely watched for its estimates of state average yields as many farmers make last minute decisions on enrolling their farms in ACRE. The report will also update the national average cash price, which is expected to increase the prospects to trigger state payments, despite the yield potential, because of the higher price levels of the past two years. Low yields in some states will also trigger a payment.

A large crop with a low price may also trigger crop revenue insurance payments, and especially for producers with low yields, says Good. He notes that sales of 2009 corn are not currently appealing, since prices are below crop revenue insurance guarantees.

Darrel Good says the July Cattle on Feed report indicated feedlot inventory was 5.3% smaller than last year, with liquidation in beef and dairy cows, and a 1.4% decline in the calf crop, which all point to a weak demand for feed corn. However, exports were larger than expected, and the USDA forecast of 1.8 bil. bu. is reachable by the end of August.

A weather or demand shock is what OH St. marketing specialist Matt Roberts is looking for to push corn prices higher, but he says don’t get greedy, “The big rallies that we’ve seen the past few years have been driven by competition for acres and input prices. Neither appears to be that significant going forward.” Read his latest newsletter here.

Matt Roberts says the wheat market still has not adjusted to the new CBOT delivery points designed to promote futures and cash convergence beginning in July. But he says that just did not happen, “I did not expect basis to return to historical levels, but I did expect that basis would tighten noticeably as we moved toward the July delivery.” And he says, “I’m not going to prognosticate what happens from here.”

Farm estates in the Cornbelt will have a 6.50% interest rate for special use valuation elections made on federal estate tax returns for decedents dying in the current calendar year. IA State ag law specialist Roger McEowen says the IRS interest rate assignments ranged from 7.63% to 6.17% across the US divided along Farm Credit District lines.

Cool summers are on a four year cycle on the charts of OH St. meteorologist Jim Noel, who says this summer is even far cooler than 2004, 2000, 1996 and 1992. (But stop there because 1988 was hot and dry.) He adds, “This cool year is more a function of the weather pattern combined with such features as coming out of a La Nina, decent soil moisture, longest sunspot minimum in nearly a century per NASA, and a persistent low (pressure area) just north of the Great Lakes in the upper atmosphere.”

Iowa and Nebraska are leading in crop development, but IA St. meteorologist Elwynn Taylor says July brought Iowa half or less of expected rainfall. He says crops have not been hurt because of cooler temperatures. Taylor says even with the coolness, there is no increased risk of early frost. He says there is no great temperature difference with the Yukon and when that has occurred previously frost even comes later than normal.

Are cool temperatures adverse for corn? “Probably not,” says OH St. agronomist Peter Thomison, who says corn yields best with moderate temperatures and adequate moisture. And he defines moderate as 80 to 86ºF, but higher if moisture is available, and night temperatures in the mid-60’s. He quotes IL research that cool night temperatures result in slower GDD accumulation which lengthens grain fill and increases dry matter.

The downside to cool temperatures is a longer time for corn to mature, and Thomison says consider that in estimating fuel costs for grain drying. He warns cool temperatures are also associated with some diseases, limited to specific genetics in some hybrids.

The cold winter and fewer GDD’s this summer have delayed feeding of bean leaf beetles in soybeans to the time that beans are beginning to bloom. IA St. entomologist Erin Hodgson says if they feed on beans during pod-fill, significant damage can result. Scout beans with a drop cloth or net, count the beetles per foot of row and repeat throughout the field. It only takes 6 beetles per row-foot to protect $8 beans at a cost of $12 per acre. Read more.

Japanese beetles have not been the widespread problem they have been in prior years, but producers with corn and soybean fields being damaged, can use a rescue treatment. Rescue treatments are justified if the Japanese beetles reach the economic injury thresholds for:
1) Corn: 3+ beetles per ear, silks clipped to less than1/2 inch, pollination less than 50%.
2) Beans: 30% defoliation prior to blooming, or 20% defoliation prior to pod-fill.

How were most farmers so lucky to escape the perennial onslaught of Japanese beetles? Purdue entomologists say the population is lower than most seasons and they suggest you thank the weather, since winter temperatures and spring rains diminished their numbers.

Soybean aphids have sought employment in Canada this year, with entomologists counting the largest work forces in Quebec and Ontario, but with some itinerants below the US border. WI entomologists suggest continued scouting to detect any rise in the aphid population densities. They urge farmers not to be tempted to tank mix an insecticide with either a soybean fungicide or with a second application of glyphosate.

August and September will show any damage you may have from Western Bean cutworms, but now is the time to scout for masses of purple eggs on corn leaves to determine if you need to prevent the larvae from entering developing corn ears. Read more.

If you are looking for good news, rejoice in the latest corn root ratings, which indicate root worm pressure seemed to be down this year. That is the initial report from several research stations in IL, and combined with low numbers of adults being caught in traps, IL entomologist Mike Gray says that suggests low corn rootworm pressure in 2010. But he says without your own data, plan on using Bt hybrids, insecticides, or both next year.

The low population of corn rootworms in IL was attributed to the larvae hatching in saturated soils, as well as higher use of Bt stacked hybrids. Gray also provides a theory about insecticide resistance.
1) Granules applied in 7 in. bands create an inter-row refuge preventing annual exposure.
2) Broadcast application allowed some rootworms to acquire resistance to insecticides.

If you have corn rootworm beetles, how many does it take to cause damage the following year? That is the question NE entomologists set out to answer, and they have created a guideline based on plant population versus the number of beetles. However, their research indicated different thresholds depending on whether you have continuous corn or rotate corn after beans. Read more.

Drought conditions have moved into MN & WI, and MN entomologists are urging farmers to beware of spider mite infestations in both soybeans and corn. They are seeing activity along field edges, and suggesting that a rescue treatment may be warranted. Read more.

What is the outlook for bean yields if the canopy is not fully closed, flowering is underway, July was the coolest on record, but there is adequate moisture? IL agronomist Vince Davis says it is too early to tell, but history indicates trend yields or better could still be attained. While planting date is a good indicator of yield expectation, “Let's keep hoping for a little more heat through August to maximize crop development.”

Davis at IL quotes KY researcher Chad Lee who says fungicides and fertilizers will not cause soybeans to grow taller, if that is your concern. He says beans were planted late, they are flowering late, and despite what your own “internal clock” says, soybeans do not have to be larger than they are, “Tall plants do not automatically equal high bean yields.” Lee says take the money you plan to spend on fertilizer and take a trip someplace warm.

To avoid your dilemma next year, Lee at KY says the best management practice would have been to plant in 7.5-inch rows. The narrow rows would have improved the chances of getting complete canopy closure by flowering. Foliar fertilizers and fungicides will not make up the difference in temperatures, planting date or row spacing.”

Have corn yields been hurt by the difficulties experienced this year in applying nitrogen? IL agronomist Emerson Nafziger says the uneven stands and yellow leaves may be the result of different factors, not necessarily inadequate nitrogen. He says when water limits yields fewer plants are really needed. At that point high rates of N increase leaf area increasing photosynthesis and transpiration and accelerate the onset of drought. Subsequently, when water is short, more plants and more N both contribute to yield loss. Read more of his newsletter.

The weather was good for wheat in Ohio, where agronomist Jim Beuerlein of OH St. said some varieties reached 120 bu./A helped by a cool, moist spring. He suggests giving 2010 wheat a good start on record yields with improved management techniques:
1) Plant after the Hessian fly-safe date to avoid risk from barley yellow dwarf virus.
2) Apply 20-30 lbs of nitrogen per acre before planting.
3) Ensure the phosphorous level is above 25 ppm and soil pH is above 6.5.
4) Plant 18-25 seeds per row-foot for both 7.5 and 15 in. row spacings.
5) Plant at a seeding depth of 1.0 to 1.5 inches deep.
6) Select disease resistant varieties, since disease is the biggest yield drag on wheat.

If it is legal to plant your own wheat seed, Beuerlein says do a quality check on it:
1) Have it tested for its ability to germinate under stressful environment conditions.
2) Clean the grain to remove weed seed, diseased kernels, and foreign matter.
3) Treat the seed with appropriate fungicides to protect against seed & soil borne disease.

The Smithfield liquidation of 27,000 sows in TX and the Tyson liquidation of 20,000 sows in MO & AR will help, but will not be enough to solve the over production problem in the pork industry according to MO economists Glenn Grimes and Ron Plain. They say that is only 0.78% of the breeding herd, and it needs to drop 7-10% from June levels.

The H1N1 virus continues to plague the pork industry, keeping US pork exports well below the period prior to the outbreak of the ill-named “swine flu.” MO economist Glenn Grimes says May exports were down 36% from May 2008, and for the first 5 months of the year, exports were 17% below 2008 levels, but 34% above 2007 levels.

Cowboys are being squeezed more by feed prices than by cattle prices say Grimes and Plain, who look at large crop prospects, and say, “Even though corn and meal prices this next year are likely to be substantially below a year earlier, the odds do not favor going back to $2.00 corn and $180-200 soybean meal. Therefore, we have to reduce the cow herd more than we have so far to get production and cost back in line with cattle prices.”

Beef exports on the other hand were 2.6% higher than year ago levels for the first 5 months of the year. However, beef imports, as a percent of production, were 5% compared to 3.76% in the same months of 2008, according to Glenn Grimes.

Posted by Stu Ellis on 07/31 at 01:00 AM | Permalink

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