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The 2014 Farm Bill: Are We Near Agreement Between the House and Senate?

2013-05-17T06:28:25Z

The first of three steps have been taken toward a new Farm Bill, a 2014 version that will last through 2018 in all likelihood. The initial step occurred Tuesday and Wednesday of this week when the Agriculture Committees, first in the Senate, then the House, approved their version of farm and food legislation. The second step will be chamber approval, which could come as early as next week in the Senate. However, floor approval in the House has not been set, but could be in June. Finally, a conference committee of House and Senate members will meet, likely in July, to merge the divergent measures so Congress can pass a new Farm Bill prior to the August Congressional recess. The members do not want to return to their districts for a third consecutive year and report inaction to an angry constituency. They will already be campaigning for re-election by that time. So what have the House and Senate Agriculture committees cooked up to serve agriculture and consumers?

Multiple resources can be found at the websites of the House and Senate Agriculture Committees, which include the formal bills as well as summaries. The following is distilled from a variety of sources.

Costs of the legislation will be approximately $100 billion per year with about 80% used for food aid and nutrition programs. The Senate claims about a $2.4 billion per year cut from the 2008 Farm Bill. The House claims a $4 billion per year cut from the 2008 Farm Bill. However, the House includes more cuts in food aid programs and also claims credit for phasing out direct payments.
Commodity programs no longer include direct payments, ACRE, and SURE, which have been eliminated by both the House and Senate. The House offers a choice of two programs which include a target price program (see prices below) called a Price Loss Coverage (PLC) program that is designed to cover multiple year price declines, compared to crop insurance which is only year to year. The target prices would generate a payment to producers should commodity prices be below the target for the first five months of the marketing year.

Commodity	Senate’s Adverse Market Payment Proposal	House’s Price Loss Coverage Proposal
Corn	$2.63	$3.70
Soybeans	$6.00	$8.40
Sorghum	$2.63	$3.95
Barley	$2.63	$4.95
Wheat	$4.17	$5.50

Alternatively, the House offers producers a Revenue Loss Coverage (RLC) program also known as “shallow loss” coverage for additional crop insurance protection.A producer must have a 15% loss before it becomes effective, and is based on county-wide losses.PLC and RLC apply to planted acres up to total base acres on a farm.

The Senate’s version of a commodity safety net program also has two choices, which include the Agriculture Risk Coverage (ARC) program that is a crop insurance supplement with further choices of either farm or county-level coverage. The Senate’s target price program, Adverse Market Payment (AMP) pays on historic base acres and not on production that would run counter to global trading rules. It requires conservation compliance and the target, or reference prices as called by the Senate, are less than the House. The Senate contends the program is designed for risk management, and not as an income transfer program.

Payment limitations in the Senate Bill specify that no payments from commodity programs go to anyone with an adjusted gross income of more than $750,000, and that payments cannot exceed $50,000 per entity. The House replaces the two income limitation test (farm and nonfarm income) with a single $950,000 adjusted gross income limitation for commodity and conservation programs.

Crop Insurance is maintained at a level, which the Senate says is “strengthened” with coverage extended to fruit and vegetable crops not previously covered. The Senate bill also “addresses the declining Actual Production History (APH) yield problem by increasing the county transitional yield.” The Senate and House both create the Supplemental Coverage Option which allows producers to purchase additional coverage that would enable certain producers to receive indemnity payments for if losses were as small as 10%. The House increases the “plug” yield to 70% from the current 60% if information is missing. The Senate also increases the so-called “transitional yield.”

Both the Senate and the House bills convert the USDA policy into law that pays higher subsidy rates for crop insurance premiums for enterprise units. And both allow enterprise units coverage to be available for either irrigated or non-irrigated fields.

Conservation elements in the Farm Bill are consolidated into fewer programs with the Senate claiming a $5 billion savings over 10 years. While many typical programs are retained, the Conservation Reserve is reduced in scope. The Senate summary says, “Over the next two years, the contracts on over 10 million acres will expire. The bill lowers the acreage cap through a multi-year step-down to 25 million acres, allowing for the re-enrollment and prioritization of the most highly erodible, sensitive acres.” However, the House bill gradually reduces the size of the CRP from the current 32 million to 24.5 mil. in 2018.

The major controversy between the House and Senate’s versions was the handling of reforms in the Supplemental Nutrition Assistance Program (SNAP). The House claimed to have cut over $20 billion from SNAP over the next 10 years, while the Senate cut much less. The Senate bill eliminate lottery winners from receiving SNAP benefits, along with college students but does allow eligibility for those in basic trade and vocational programs. The Senate also eliminated liquor stores from participating and required participating stores to sell fruits and vegetables and other fresh foods. Program eligibility is determined in the Senate using both income and expenses, including utilities. The Senate does not allow automatic eligibility for those receiving utility payment assistance.

In the House bill, recipients must also pass a financial means test with automatic eligibility limited to those on Supplemental Security Income (SSI) and Temporary Assistance to Needy Families (TANF). Referral to those programs would not create eligibility, nor would utility assistance. States would no longer be paid for program administration; lottery winners would be ineligible, along with traditional college students. Funds could not be used to promote the program, illegal immigrants would be denied benefits, and states would be controlled in the implementation of restaurant type meals for the homeless and the disabled.

Summary:

The House and Senate Agriculture committees have approved their versions of a new Farm Bill. While there are many differences, there are many similarities. However, the next step for each is a vote within the respective chamber, and amendments could take the bills on divergent paths.

Planting is progressing, despite all of the serious challenges.

2013-05-14T04:10:55Z

USDA’s Crop Progress and Condition report for May 13 indicated that 28% of the corn had been planted, compared to 12% last week and 85% for last year with a 65% five year average. Only 5% is emerged, compared to 52% last year and 28% for the five year average. Soybean planting is 6% nationally, compared to the 24% five year average for May 12^th. Only 29% of the winter wheat is headed, compared to 51% for the five year average. Wheat conditions remain fairly stable with 39% in poor to very poor condition and 32% in good to excellent condition. 43% of the spring wheat has been planted, but Minnesota and North Dakota are both behind the national average, and were either finished or nearly so last year at this time. A state by state look follows…..

Illinois

Farmers in Northern and Eastern Illinois last week were able to plant corn where soils were dry enough. Little progress was made across the rest of the state as farmers were sidelined waiting for saturated soils to dry. Rains fell again late in the week stalling any drying that had occurred. Corn planting progressed to 17 percent complete across the state now compared to 94 percent last year and 64 percent for the five-year average. Concerns are growing regarding the wet soils and lateness for corn planting as well as diseases due to the wet weather in the wheat crop. Topsoil moisture levels across the state were rated as 47 percent adequate, and 53 percent surplus. The driest soils were in Northern and Eastern Illinois. Subsoil moisture was rated as 3 percent short, 62 percent adequate and 35 percent surplus.

Indiana

Thirty percent of the intended corn acreage has been planted at this time compared with 92 percent last year and 54 percent for the 5-year average. At this time farmers are ahead of both 2009 and 2011 when approximately 15 percent and 18 percent of the corn acreage had been planted respectively. Six percent of the intended soybean acreage has been planted compared with 65 percent last year and 26 percent for the 5-year average. Eighty percent of the winter wheat acreage is jointed compared with 98 percent last year and 89 percent for the 5-year average. Nineteen percent of the winter wheat acreage is headed compared with 78 percent last year and 33 percent for the 5-year average. Winter wheat condition is rated 73 percent good to excellent compared with 74 percent last year at this time. Topsoil moisture is 53% adequate and 46 % surplus. Subsoil moisture is 69% adequate and 29% surplus.

Iowa

Fifteen percent of Iowa’s corn acreage has been planted compared with 86 percent at this time last year and the five-year average of 79 percent. This is the first year since 1993 that less than 20 percent of corn acres were planted by May 12th. Soybean planting was 1 percent compete, well behind last year’s 34 percent and the five-year average of 30 percent. This is the latest start to soybean planting since 1995. Topsoil moisture levels rated 1 percent very short, 4 percent short, 68 percent adequate and 27 percent surplus. Subsoil moisture levels rated 4 percent very short, 20 percent short and 63 percent adequate and 13 percent surplus.

Kansas

Corn planting was 31 percent complete, well behind 88 percent last year and 73 percent average. Five percent of the crop was emerged, well behind 60 percent last year and over 2 weeks behind 36 percent average. Soybean planting was 1 percent complete, behind the 37 percent last year and 18 percent average. The winter wheat crop was 80 percent jointed, behind 100 percent a year ago and 96 percent average. The crop was 9 percent headed, well behind 97 percent a year ago and 3 weeks behind 52 percent average. The condition rated 21 percent very poor, 20 percent poor, 31 percent fair, 25 percent good, and 3 percent excellent. After review of the crop following unusual weather in April, just under half of the crop had no freeze damage. Topsoil moisture supplies were rated 14 percent very short, 18 percent short, 57 percent adequate, and 11 percent surplus. Subsoil moisture supplies were rated 26 percent very short, 29 percent short, 42 percent adequate, and 3 percent surplus.

Michigan

Five days were suitable for field work in Michigan during the week ending May 12 according to the USDA, NASS, Great Lakes Region. Warm, dry weather early in the week allowed for considerable planting progress to be made in southern Michigan. Corn planting went full bore until wet, cold weather stopped planters on Friday. 32% of corn is planted compared to 5% last week and 58% last year. 1% of corn is emerged. 13% of soybeans are planted, compared to 30% last year. Wheat and hay remain in very good condition. Winter wheat is rated 60% good to excellent and 29% fair. Topsoil and subsoil moisture are both about 75% adequate.

Minnesota

Minnesota farmers were finally able to make significant planting progress during the week ending May 12^th. Corn is 18 percent planted, well behind both last year’s 86 percent and the average of 68 percent. 2% of soybeans are planted, compared to 40% at this time last year. Spring wheat is 19 percent planted, compared with 100 percent last year and the average of 65 percent. Topsoil moisture supplies were rated 1 percent very short, 15 percent short, 70 percent adequate, and 14 percent surplus. Subsoil moisture supplies were rated 9 percent very short, 30 percent short, 56 percent adequate and 5 percent surplus.

Missouri

Corn planting was 28 percent complete, 32 days behind last year and 22 days behind normal. The northwest district increased 21 points and the east-central district increased 13 points last week. Corn emerged was 14 percent complete, 25 days behind last year and 15 days behind normal. Soybean planting was 1 percent complete. Winter wheat headed increased 24 points to 37 percent complete, 32 days behind last year and 8 days behind normal. Winter wheat condition was rated 1 percent very poor, 3 percent poor, 33 percent fair, 55 percent good, and 8 percent excellent. Topsoil moisture supply was 65 percent adequate and 35 percent surplus. Subsoil moisture supply was 1 percent very short, 8 percent short, 79 percent adequate and 12 percent surplus. Spring tillage was 47 percent, compared to 91 percent last year, and the 5 year average (normal) of 68 percent.

Nebraska

Corn planting was most advanced in south central counties and least in northeastern areas where precipitation has been 25-50 percent above normal since April 1. Average temperatures were again below normal, with lows dipping below freezing in some areas. Soil temperatures as of Sunday were 55 degrees or higher throughout the state. Corn planted was 43 percent, well behind last year’s 89 and 10 days behind 77 average. Emerged was 2 percent, well behind last year’s 52 and 25 average. Soybeans planted was 7 percent, behind last year’s 56 and 33 average. Wheat conditions rated 14 percent very poor, 34 poor, 40 fair, 12 good, and 0 excellent. Wheat jointed was 34 percent, well behind last year’s 94 and 2 weeks behind 67 average. Statewide, topsoil moisture supplies rated 14 percent very short, 25 short, 59 adequate, and 2 surplus. Subsoil moisture supplies rated 40 percent very short, 42 short, 18 adequate, and 0 surplus.

North Dakota

According to reports, the warmer, drier weather allowed almost all producers across the state to either start preparing their fields for planting or make good progress in getting their crops in the ground. Statewide, on average, there were 5.5 days suitable for fieldwork. High winds have caused newly planted fields to dry quickly. Corn planting rated 18 percent complete, behind 79 percent last year and 43 percent average. Soybean planting rated 3 percent complete, behind last year at 45 percent and 14 percent average. Spring wheat seeding rated 26 percent complete, still behind last year at 92 percent and 53 percent average, but advanced 19 percentage points from last week. Emergence rated 1 percent, behind last year at 65 percent and 25 percent average. Topsoil moisture supplies rated 6 percent very short, 21 percent short, 65 percent adequate, and 8 percent surplus. Subsoil moisture supplies were 7 percent very short, 30 percent short, 57 percent adequate, and 6 percent surplus.

Ohio

The warmer temperatures and low precipitation made it a great week for field work. Producers worked steadily through the week to make considerable progress on corn and oat planting. Rain showers late in the week put a halt to field work in some areas, although many producers worked between showers to continue their momentum. Soybean planting also saw an increase this week, but is slightly behind average as farmers have been focused on corn planting. Corn planting is 46% complete, compared to 7% last week and 83% a year ago. 2% is emerged, compared to 53% last year. 16% of soybeans have been planted compared to 44% last year and 5% of the winter wheat is headed. 72% of the winter wheat is in good to excellent condition. 78% of the topsoil has adequate moisture and 19% is surplus. 91% of the subsoil has adequate to surplus moisture.

South Dakota

Seeding of small grains was above 70 percent and corn planting was over one-third complete. Corn planting also advanced 30 percentage points with 37 percent rated complete, behind last year at 76 percent and 46 percent average. One percent of corn has emerged, behind last year at 35 percent and 10 percent average. Soybean planting rated 6 percent complete, behind last year at 25 percent and 10 percent average. Spring wheat seeding advanced 30 percentage points with 76 percent rated complete, behind last year’s 100 percent and 88 percent average. Spring wheat emerged rated 20 percent complete, also behind last year at 95 percent and 56 percent average. Topsoil moisture supplies rated 12 percent very short, 25 percent short, 59 percent adequate, and 4 percent surplus. Subsoil moisture supplies rated 29 percent very short, 43 percent short, 27 percent adequate, and 1 percent surplus.

Wisconsin

Corn was 14 percent planted, 32 percentage points behind the five-year average. Soybeans were 1 percent planted this week, compared to 14 percent last year and a 13 percent five-year average. Corn, soybeans, oats and vegetables were being planted where conditions permitted. Reporters commented that the high percentage of tillage completed last fall will help fieldwork go faster in this unusually late spring season. Corn was 14 percent planted, 32 percentage points behind the five-year average. Soybeans were 1 percent planted this week, compared to 14 percent last year and a 13 percent five-year average. Corn, soybeans, oats and vegetables were being planted where conditions permitted. Reporters commented that the high percentage of tillage completed last fall will help fieldwork go faster in this unusually late spring season. Topsoil moisture is 73% adequate and 26% surplus. Subsoil moisture is 79% adequate and 10% surplus.

Summary:

USDa corn planting at 28% slowest planting pace for this date since the flood year of 1993 when only 27% of the crop was planted. Emergence is at 5% vs. 52% last year and 28% on average. Soybean planting is at 6% complete vs. 43% last year and 24% on average. 32% of winter wheat is Good to Excellent, which matches previous week; 39% Poor to Very Poor; matches the previous week, but 1% shift to very poor.

Which comes first, the corn planting or nitrogen application?

2013-05-13T05:06:38Z

While some parts of the Cornbelt made planting progress in the past week, not everyone did. And many farmers who are concerned about planting corn after the optimum planting dates may also wonder about changing their routine of field work. For example, should corn planting or nitrogen application be first? The answer is easy, and we have some tips to make it easier.

Although many farmers may be surprised about how far behind others are, keep in mind that soils have been wet in some parts of the Cornbelt since late February, and there has not been any fieldwork, including nitrogen application and pre-plant herbicide application. So the legitimate question becomes, what are the priorities for field work, since you are still at square one? Iowa State University agronomist John Sawyer says the easy answer is getting your corn planted first. But he quickly says if you were debating which to do first, create a plan to get it all done. And that may require some creativity with labor and equipment.

Put on fertilizer, only if it does not delay planting, says Sawyer. And he suggests doubling up on the field work, if you don’t already do that. Such as broadcasting urea or UAN solution and incorporating it will normal tillage before planting. He warns against allowing them to remain on the top of the soil very long and be lost to volatility. Since rains have been frequent, he suggests using a rain to a positive advantage: A rain (at least 0.25 to 0.50 inch within approximately two days after application) will eliminate volatile loss concern.

Anhydrous ammonia may have been your first choice for nitrogen, but it has not been applied. What would happen if a window opens and a corn planter follows the anhydrous knives? Sawyer says there is not a waiting period, but seedlings will not grow in the ammonia channel because of injury. He says a deep application will avoid that problem, as well as the use of GPS which would allow corn to be planted between the ammonia knife tracks.

A post-plant sidedress application may be the wisest choice, but that will require the proper equipment. Sawyer ranks the choices as follows:

injected anhydrous ammonia, UAN or urea,
broadcast dry ammonium nitrate, ammonium sulfate or urease treated urea,
surface dribbling UAN solution between rows,
broadcast UAN, and
broadcast urea.

He says sidedressing can begin as soon as the corn rows are visible, and since roots will reach the row middle at an early stage, applying the nitrogen every other row should be an option. If you are planting corn within the row from a prior crop of soybeans, he says there should be adequate nitrogen from the soybeans to get the corn plant started. But use starter fertilizer if planting after corn.

Broadcast urea or ammonium sulfate will burn a corn plant if the granules fall within the corn whorl. Broadcast UAN has less volatile loss than dry urea, but a urease inhibitor will help prevent that. However the best cure is for rain to move the nitrogen into the root zone. But broadcasting UAN will also cause leaf burn and impede early growth. He says research has shown cosmetic plant damage if the corn is at the V3 growth sage and the application exceeds 60 pounds of N per acre. However, higher rates will begin to depress yields if the growth stage exceeds V3.

Sawyer suggests using the late spring soil nitrate test if nitrogen is going to be sidedressed. That collects soil from the top 12 inches of soil when the corn is 6-12 inches tall and the rates of nitrogen application can be adjusted.

But what if the corn becomes too tall for sidedressing, based on continued wet conditions? High clearance equipment can be used, says Sawyer if normal sidedress knives cannot be used. But that will change your nitrogen choice away from anhydrous ammonia. You would be using UAN solution either dribbled between the rows or shallow injection with a coulter. He says, “Research in Iowa has shown corn can respond to mid- to late-vegetative growth stage N application when there is deficient N supply, but there can be loss in yield potential. Reduced yield occurs more frequently when soils are dry at and after application (applied N not getting into the root zone) and with severe N stress. Best responses occur with sufficient rainfall shortly after application to move N into the active root zone.”

Summary:

Corn should be planted first, and then nitrogen applied, if it has not already been applied. If it does not delay planting, fertilize first. Sidedressing nitrogen can occur after corn is visible, but choices should be carefully selected and broadcast forms of nitrogen could end up burning the corn to the point of yield loss. Before planning to sidedress, ensure the appropriate equipment is available, along with the necessary nitrogen products.

Prices for corn and soybeans, five years from now.

2013-05-10T04:36:02Z

Although challenges to planting the 2013 crop may provide some degree of support to corn and soybean prices, they have quickly faded from the 2012 highs and are threatening to diminish further from the highs that began in 2007. When corn prices were pumped up from ethanol demand and soybean prices had to bid for acres, a new era of commodity prices was declared by economists. Since we are six years into that era and prices are settling down as predicted, how far down will they settle, anyway?

Iowa State University economists Dermot Hayes and Lisha Li leave little doubt they believe commodity prices are high now, but offer some long term projections which may be valuable for farmers to engage in some long term financial planning. After all, if commodity prices fade further, it may be hard to make the cash rent payment. The economists offer a formula for projecting corn and soybean prices out for five years, using the same type of calculations used by USDA’s Risk Management Agency for establishing revenue guarantees for crop insurance.

Their contention is that economic models designed to predict prices are not as good as the use of commodity futures prices, since traders are using information that helps establish prices. However, the more distant the contract the less the liquidity behind it and the less valuable it becomes as a predictor of prices into the future. Subsequently, the Iowa State economists have projected a six year price trend, based on the futures market, plus an implied volatility factor. But they are quick to qualify the accuracy of their projection, “Of course, any projected price level is subject to enormous uncertainty, and this uncertainty expands as one looks further and further into the future.”

Based on graphs that depict the price trend from their formula, they say corn futures will fall to a level just under $5 by December 2017. And soybean prices are expected to fall to about $11 per bushel by the same time frame. They say, “These prices suggest that futures traders expecting continued demand growth will hold prices at what can be considered historically high levels. However, the projected prices are substantially below current levels, indicating that traders expect world supply to expand to eliminate the current scarcity of corn and soybeans.”

While those would be considered average prices for corn and soybeans five years out from now, there is also the change those might not be achieved, and Hayes and Li offer a “worst case scenario” made up of the bottom 10% of potential prices. Any farmer who is creating a valid marketing plan should be aware of the potential for the worst-case-scenario.

Year	Corn	Soybeans
2013	$4.27	$9.69
2014	$3.85	$8.89
2015	$3.41	$7.85
2016	$3.12	$7.09
2017	$2.89	$6.55

The Iowa State economists say, “These extremely low prices levels are unlikely, but they do give one pause.”

Summary:

Based on futures prices and their implied volatility, which are used for setting crop insurance revenue guarantees, it is also possible to project corn and soybean prices several years out. This will help farmers with cash flow projections.

The price of eggs in China, and other important facts for agriculture.

2013-05-09T04:38:29Z

What is your connection to China? Grandma used to ask, “What does that have to do with the price of eggs in China?” And while a 5^th grader can find it on a map, most people likely feel no connection. On the other hand agriculture has a close connection. In addition to a myriad of foreign trade exchanges annually, educational exchanges, and a majority of Wal-Mart merchandise, China’s food consumption is rooted in US exports. And it would not hurt most farmers to know how eggs are priced in China.

Agricultural economists Bret Stuart and Richard Fritz of Global AgriTrends, a Denver-based market research firm, write in the current online issue of Choices Magazine that from “a meat, poultry, and livestock standpoint, China is a world superpower.” But instead of exporting, China has an extraordinary domestic production volume, and still needs to import.

USDA’s Foreign Agriculture Service estimates that 60% of the world’s hogs are raised in China, compared to 8% in the US. For cattle, 23% of the world’s beef herd is in China, compared to 15% in the US. Despite that level of production, China only claims 3% of global meat exports, compared to 28% for the US. And while self-sufficiency is the national goal, there has been an increased level of importation of beef, pork, and poultry.

Because of the large livestock production, China has become a global producer and importer of feed. 71% of China’s growth in corn production is the result of more acres, and 29% due to higher yield. And the economists say acreage growth has a limit.

Chinese consumers are paying a higher price for their animal protein purchases. Stuart and Fritz report, “Meat price inflation in China has outpaced overall food price inflation in recent years. The calendar year 2011 saw a basket of retail meat prices rise by 24%; beef leg prices at retail averaged 35% annual inflation in November 2012 according to National Bureau of Statistics China….Chinese citizens’ ability to pay for food is outpacing the United States. A growing price disparity between domestic and imported foods leads to more imported meat, poultry, and dairy products. Any market with domestic prices well above U.S. prices or global prices will import products if access is granted. However, this stands in stark conflict to China’s self-reliance aims.”

China has the demand, the US has some of the supply, so what happens? The economists say China was the largest market for US farm products in 2012 at $25.9 billion, a 38% increase over 2011. Interestingly, 5% of the purchases were for raw hides for processing and re-export.

Of the red meat imported by China, 39% was pork, but not hams, chops and loins, “Variety meat items such as ears, stomachs, and intestines bring a much higher value in China than here in the United States. Whole muscle cuts of pork have been imported for further processing into sausage and other processed products.” In the poultry trade, 85% of US chicken paws are exported to China, but an attempt to export leg quarters resulted in trade sanction for alleged dumping. In beef trade, China closed its doors to US beef following the 2003 discovery of a dairy cow with BSE, and the market has not been reopened.

China’s political policies and food needs are not on the same track say Fritz and Stuart. China has a policy of self-sufficiency, low prices, and compliance with global trade rules are in conflict with each other. In the midst of that, they feel the current agricultural trade relationship with the US will grow, but with a strengthening of trust between the two. They also say the USDA’s food Safety and Inspection Service along with the Food and Drug Administration should be allowed to do their scientific work without Chinese political influence trumping it. And thirdly China should embrace international standards.

Summary:

China has 1.3 billion people to feed and in a country with a policy of food self sufficiency, that can create some shortage issues. The citizenry has economic power to purchase meat proteins and China is a global leader in pork and beef production, but also must import meats as well as import feeds for its livestock herd. While the self sufficiency is not being met, China is also trying to produce a low cost food, but at the same time violating global trade rules which it recently accepted. For US producers, China is expected to be a regular customer of feed grains, soybeans for livestock feed, and meats.

Your recipe for insect and weed control could be hazardous to your corn

2013-05-02T11:51:21Z

You are trying to manage your various risks in crop production, double checking weed and insect management plans. Then suddenly the crop protection chemical industry throws a wide sweeping curve ball that sails past you for a called strike. You didn’t see that one coming and neither did many other farmers who are also planning to use organophosphate soil insecticides for additional rootworm control, along with some of the more popular herbicides. But it turns out that your plan is fraught with peril. Oooops!

You may be like many farmers surveyed by University of Illinois entomologist Mike Gray who reports that over 90% of farmers will be using a Bt hybrid to help control corn rootworms. But just to ensure success, Gray says about half of farmers will also be applying a soil insecticide as “cheap insurance.” “From my perspective, the escalation of soil insecticide use along with corn rootworm Bt hybrids has been fueled primarily by concerns about Bt resistance and high commodity prices," he said.

Gray found the use of a soil insecticide, along with a Bt hybrid for rootworm control to be somewhat ironic. He said, "I think it is worth mentioning that one of the key benefits touted concerning the use of Bt hybrids for corn rootworm management was the reduction of soil insecticide use. It is a bit surprising that, 10 years after the first Bt hybrids entered the marketplace for corn rootworms in 2003, a heightened interest in the use of soil insecticides has surfaced in such a significant fashion."

Are you one of those 50% of Bt corn growers who will be using a soil insecticide? If so, what is your weed control plan? That is a key question being asked by Aaron Hager, an Illinois weed specialist. He says the use of organophosphate soil insecticides at planting could restrict the option to use some corn herbicides, specifically those that are ALS or HPPD-inhibiting. Both insecticides and herbicides are foreign to a corn plant, which has to metabolize and break down those compounds. But Hager says the ALS and HPPD herbicides are processed by corn in the same way as organophosphates, the plant can be overwhelmed and injury can occur.

If your insecticide is Counter, Thimet, Lorsban, Aztec or Fortress, they will have varying interactions with a wide variety of popular herbicides. Some can be applied jointly without any interaction. However, others will result in unacceptable, temporary, or severe crop injury. Some herbicides can be applied within 45 or 60 days of the insecticide, and some not at all if you want to keep the corn crop.

Hager provides a handy chart that indicates the potential adverse interactions between the organophosphates and the particular herbicides. He strongly suggests consulting the herbicide label and researching current product information before making your final decision.

Killing insects and weeds are one thing, but killing your crop is another.

Summary:

The increasing reliance of soil-applied insecticides as insurance for Bt control of rootworm may increase the potential for crop damage, depending on the class of insecticides used and the corn herbicides also used on the crop. Certain organophosphate insecticides will create potential damage to corn, if ALS or HPPD-inhibiting herbicides are used.

Political Dealing with Farm Programs

2013-05-01T03:58:22Z

Monty Hall would love it. And farmers who gamble on the markets and big stakes revenue crops would be in hog heaven. And for those who were fans of the daytime television show Let’s Make a Deal will appreciate the choices they might be afforded if the Congress approves a new Farm Bill with a trio of optional programs.

Agricultural economists Carl Zulauf of Ohio State University and Gary Schnitkey of the University of Illinois suggest farmers may have three choices of programs for a farm safety net based on what the House and Senate Agricultural Committees may develop. The Committees are slated to begin marking up their versions of a new Farm Bill in the next few days, reworking their proposals for the 2012 Farm Bill that did not get considered in the House.

Door #1 Revenue Program

While they did not get much attention per se, the Senate’s Agriculture Risk Coverage (ARC) and the House’s Revenue Loss Coverage (RLC) were designed to provide year to year financial support for agriculture, since crop insurance guarantees only provide support for a single crop, and crop values can change significantly from year to year (e.g. 2012 to 2013). The ARC and RLC programs contained complex formulas involving price averages over multiple years, then multiplied by a coverage level, which was 89% in the Senate and 85% in the House. When revenue fell below threshold levels, payments were made on a per acre basis taking gross revenue into account along with crop insurance indemnity payments.

The reason a farmer would not want to pick Door #1 is because price trends, as the result of large crops, will decline and financial support will decline in lockstep. Crop revenue insurance makes payments on a price guarantee or yield insurance makes payments on bushels produced. As a result, multiple years could provide minimal insurance indemnity payments and the multiple year season average prices may work their way lower as well. Rapid declines would be protected, but slow declines would not and farming operations would have to learn to live with less USDA farm supports.

Both ARC and RLC are connected with crop insurance, and provide financial support where farmers may lower their cost by having a higher deductible. If a 65% or 75% crop insurance coverage is selected the ARC and RLC programs provide a payment that begins where the crop insurance ends, but does not guarantee 100% of expected revenue, only a “shallow loss.”

Door #2 Target Prices

An old program that was phased out with Freedom to Farm was resurrected for southern farmers who wanted to retain the concept of target prices for peanuts and rice, which have enjoyed high price support programs. And the political weight of the south on the Agriculture Committees nearly assures that any new farm program will include target prices. The concept of target prices created havoc for the USDA when the World Trade Organization upheld a complaint by Brazil over high support prices for US cotton. A payment was made to Brazil, but a subsequent payment was negated by the recent sequester action.

Target prices were included in the 2008 Farm Bill, but were so low, Cornbelt farmers may not have known they were there, with $2.63 for corn, $6.00 for soybeans, and $4.17 for wheat. While the target prices were low, the government did not have any outlays for deficiency payments. However, they would not have provided any substantial economic support if market prices had faded that deep.

Since target prices are set by a Farm Bill, they will remain steady throughout the life of the legislation, but any financial support they offer could be pared by year to year appropriations. If target prices are high, payments could be made that would draw taxpayer protest, such as the current system of direct payments. And such financial support, since target prices are based on production, will draw WTO protests because target prices encourage US production at the financial risk of farmers in developing countries.

Door #3 Supplemental Insurance Program

While cotton producers only were eligible for the STAX program proposed in the failed 2012 Farm Bill, the Supplemental Coverage Option (SCO) was included in both the House and Senate proposals. It was designed to enhance the use of crop insurance by offering the opportunity for farmers to cover their shallow losses, their deductible, with a subsidized mini crop insurance program. It was generally designed to take farmers up to the 90% coverage level, and was based on either county yield or revenue in the spirit of GRP or GRIP policies.

The SCO plan was a year to year plan with different levels of financial protection from year to year and could fall substantially as 2012 prices fell compared to the 2013 new crop prices. Another downside is the potential for sporadic coverage, if an insufficient number of farmers wanted SCO to create a risk pool in their county.

Summary:

Contrary to the TV program, farmers may know what is behind each of the doors, but it is now up to the Congressional Ag Committee members to play Let’s Make a Deal. All three of the programs, Revenue Program, Target Price Program, and Supplemental Insurance Program potentially have a substantial price attached to them and that may spell their demise. However, Congress will have ways of cutting costs, by reducing subsidies for crop insurance, by reducing target prices, and by reducing the payment levels from the 80% range down to levels that are considerably less. The Congress is a long way from approving any of these plans for implementation for the 2014 crop; however they form the basis for programs that have been given considerable support within the committees and are familiar to others in Congress.

Corn Planting Date: Implications of planting in May

2013-04-26T04:42:44Z

In the prior posting on Farmgateblog you learned from two eminent corn production specialists that not having your corn planted does not make you naughty and destined for a time out in the corner of your machine shed. In fact, corn that has been planted in a few Cornbelt fields is struggling to survive in the cold, wet soil. And once you get planting, some farmers may not stop, come darkness or even breakfast the next morning. Which makes one wonder about the impact of planting late.

Since 2013 planting is not getting underway until about the first of May in most parts of the Cornbelt, that means several weeks of April, in which corn is typically planted, will be shifted to May. While that justifies the bigger planter to your lender and your spouse, it also indicates more corn will be planted later than usual. That is the premise of University of Illinois economists Darrel Good and Scott Irwin .

Is “later than usual” an indicator of future problems this year? While Purdue's Bob Nielsen and Emerson Nafziger of the University of Illinois tend to say no in the April 25^th posting, Good and Irwin agree to some extend and say good yields can still be obtained based on prior years. However, everyone agrees that yields do decline at an accelerating rate in the later part of May. And Good and Irwin rhetorically ask, “What is late, anyway?” Their answer is: “We have quantified late planting as the percentage of the U.S. crop planted after May 30 in years prior to 1986 and after May 20 since 1986. That quantification balances the results of agronomic research and regional considerations and is used here.” Looking at USDA data, they calculate that in the 42 years since 1971, about 15% of the corn crop was planted late, but varied widely depending on the season. With only 4% of corn acreage planted by April 21, Good and Irwin say 81% of the crop needs to be planted before May 20 “when late planting begins.” Your ability to attend that party depends on the weather, and weather windows have been getting narrower, as indicated by the Good and Irwin research. But after all that is why you have a bigger planter. Good and Irwin say their research shows that for Illinois (you will have to calculate your own state) about 50% of the days in the last 10 days of April and the first 20 days of May are suitable for field work. At this point we are getting down to about a dozen days suitable for fieldwork before the arbitrary “late” flag is thrown.

Can your equipment cover the required territory? Do you have extra hours of labor you can call on? Do you have the capacity to go all night long? Some larger operations may already have a 24-hour schedule to cover tens of thousands of acres across many counties. Good and Irwin say you are planting 15-20% more acres in a day than in the 1970’s. With their calculation that a suitable planting day will allow nearly 5% of the acreage to be planted, they figure by May 20 about 75% of the corn acreage will be planted. With a quarter of the crop unplanted by May 20, that would equate to 2009, when yields hit a record high of nearly 165 bushels per acre. At a higher rate of planting per day, Good and Irwin calculate that only 9% of the crop would be unplanted by May 20 and considered “late.”

So what are the implications of a late planted crop?

They say to reach the average of 15% of the crop unplanted by May 20, a higher rate of acres planted per day than the 10 year average will have to be achieved. While some weather is expected to be good, there is also rain in the forecast and that may keep the planting rate behind average.
The corn market has been softening for some weeks in reaction to recent USDA reports of large acreage, and new crop futures are as low as they were last June, prior to the onset of the drought. Good and Irwin suggest the market is not concerned because of the prospect for large acreage and plenty of corn with a trend yield. The economists say that near perfect corn production weather followed the late planting season in 2009.

Summary:

Recent planting trends indicate that an average of 15% of the corn crop is planted after May 20. Based on the amount of corn planted to date, over 80% must be planted in the last 10 days of April and the first 20 days of May to take best advantage of higher yield opportunities. Also based on the typical amount of suitable field work days, that amount is cut to about 15, making the planting window smaller. While increased acreage can be covered in a day with larger equipment, between 5% and 6% of the expected corn acreage must be planted per day between now and May 20, when yields taper off at a higher rate.

Corn Planting Date: When is the best time?

2013-04-25T05:46:35Z

Your seed corn is piled on pallets in the machine shed; your soil is cold and wet, and it is April 25. But the weather forecast gives little chance of getting into the field for another week. Your herbicide applicator has yet to show up and you have to wait for him. You are faunching at the bit because it is getting late and Dad always said to start planting in April. Your spouse is tired of your griping, and your blood pressure and stress are just about to get you admitted as a cardiac patient. We have a tip for you: erase your concerns about the calendar and planting date. There is nothing magic about planting corn in April.

Bob Nielsen calls planting date a “conundrum,” sort of like a riddle, a puzzle, an enigma, or a mystery. Nielsen is a corn production specialist at Purdue University and suggests you take conventional wisdom with a grain of salt. In his analysis of planting dates, Nielsen says very little corn was planted anywhere by April 21, but that is of little concern because only a relatively small percentage of acreage is planted by that date. Rhetorically, he asks, “What are the consequences of a delayed start to planting? How important a predictor of statewide corn yield is planting date anyway? Does late planting in and of itself guarantee lower than normal yields? Good questions, but the effect of planting date on statewide average corn yield is not clear cut.” “Really,” you say!

Nielsen says over the past 20 years there has not been a strong relationship between the planting date and the statewide yield in Indiana. And you can extrapolate that analysis to your state as well. He says planting date is only one of many “yield influencing factors” and it represents only 22% to 24% of the yield variability. Nielsen acknowledges that the potential for yield declines after May 1 by 0.3% per day in early May and by 1% per day in late May. But he quickly adds, “Yield potential goes down with delayed planting because of a number of factors, including a shorter growing season, greater insect & disease pressure, and higher risk of hot, dry conditions during pollination.”

What Nielsen would like you to do to ease your concern about the necessity of planting in April is take the other yield influencing factors and group them together in a way they would create the maximum possible yield for the year on the optimum planting date. He says that might be 220 bushels per acre; or it could be 150 bushels per acre. A 10 day delay beyond the first of May would have an impact of 10 multiplied by 0.3% per day decrease in yield. Applied to the 220 bushel yield would be 213 bushels per acre. Applied to the 150 bushel yield would be 146 bushels per acre.

It is quite possible that the 146 bushel yield could occur when corn was planted in a given year on May 10, and the 214 bushel per acre yield could occur when the corn was planted the following year, on May 15. In this case, a larger yield was generated at a later planting date. Nielsen says, “A delayed planting of corn in an otherwise high yielding year may still be higher yielding than a crop planted on the optimum planting date in an otherwise lower yielding year. Farmers know this to be true because some have had June-planted crops in recent years that ultimately yielded better than any crop they have ever had.............. because the remainder of the growing season following the delayed planting was exceptional.” He says look at 2009 and 2012. 2012 corn was planted early and yielded much less than the 2009 corn which was planted late, all because of the yield influencing factors other than the planting date.

Update:

In full agreement with Nielsen is University of Illinois crop production specialist Emerson Nafziger, who says planting at mid-May or later is not the end of the world, "Planting before the end of April generally means that we’ve removed late planting – and the shortened season and greater chance of stress that follow late planting – as a potential barrier to high yields, thus maximizing yield potential. At the same time, we need to recognize that it’s not “game over” if we are forced by weather and soil conditions to plant into May, even past mid-May."

And Nafziger says the caution to planting is to not do anything that will impede the yield, which includes planting in soil that is not environmentally friendly to the seed, "The fact that early planting does not necessarily lead to high yields does tell us that what happens after planting and through the rest of the season is more important than when we get the crop planted. This in turn reminds us that it’s important not to do anything that might compromise the plant’s ability to take advantage of conditions later in the season that will determine actual yield. That certainly includes taking care not to plant into wet, compacted soils in our rush to plant early."

Summary:

Since planting date is only one of several yield-influencing factors, the date for planting corn has a much more minor impact than believed by many corn growers. Planting corn after May 1 may lead to lower corn yields; however that is only 23% of the determinant. It is quite possible for later planted corn to out-yield earlier planted corn.

Calendar Pages Move, But Planters Don’t

2013-04-23T03:33:32Z

USDA’s weekly crop progress and condition report was almost a re-run of the prior week, with corn planting progress increasing only from 2% last week to 4% for the latest report. Among the three-I states, Indiana made the most progress, moving up to 1% complete. Illinois remained at 1%, and Iowa farmers have yet to open the machine shed door. Nationally, the 18 major corn growing states typically would be at 16% complete, and were at 26% complete at this time a year ago. Regarding wheat, only 8% is headed versus 42% in 2012, and crop conditions eroded by a percent, with good-to excellent dropping from 36% last week to 35% this week. The acreage in poor to very poor grew from 31% last week to 33% for the latest period. And with heavy rains in the mid to latter part of last week, soil moistures have moved into the surplus category.

Illinois

The heavy rains along with the below average temperatures resulted in only 0.3 days suitable for fieldwork last week and very little progress in spring fieldwork. Topsoil moisture increased dramatically this week and was rated at 35 percent adequate and 65 percent surplus. Subsoil moisture was rated at 5 percent short, 68 percent adequate, and 27 percent surplus. Cold soil temperatures also continue to be another factor delaying corn planting. Corn planting stayed at 1 percent planted compared to the five-year average of 24 percent. Winter wheat conditions were rated at 3 percent poor, 21 percent fair, 63 percent good, and 13 percent excellent.

Indiana

Farmers in south western and south central counties were able to make very limited progress planting corn. However, their efforts did push planted acreage to one percent complete which is approximately two weeks behind the 5-year average pace. One percent of the intended corn acreage has been planted at this time compared with 43 percent last year and 16 percent for the 5-year average. Only a few scattered fields of soybeans have been planted thus far this spring. Thirty-six percent of the winter wheat acreage is jointed compared with 67 percent last year and 40 percent for the 5-year average. Winter wheat condition is rated 68 percent good to excellent compared with 76 percent last year at this time. Topsoil moisture is 60% surplus and 40% adequate.

Iowa

Wet conditions in Iowa during the week ending April 21, 2013 continued to limit fieldwork according to the USDA, National Agricultural Statistics Service. Snow was received in northern Iowa, while precipitation was mostly rain in southern Iowa. The additional moisture did help to improve both top and subsoil moisture levels. Statewide there was an average of 0.3 days suitable for fieldwork during the week. Topsoil moisture levels rated 3 percent very short, 6 percent short, 60 percent adequate and 31 percent surplus. Subsoil moisture levels rated 14 percent very short, 32 percent short and 48 percent adequate and 6 percent surplus. No report on corn planting

Kansas

For the week ending April 21, 2013, the cold spell continued across Kansas, with average temperatures at least ten degrees below normal for most of the State, and lows dropping below freezing in many areas. Topsoil moisture supplies were rated 15 percent very short, 23 percent short, 53 percent adequate, and 9 percent surplus. Subsoil moisture supplies were rated 33 percent very short, 35 percent short, 31 percent adequate, and 1 percent surplus. The winter wheat crop was 43 percent jointed, behind 96 percent a year ago and 63 percent average. The condition of the crop was rated as 16 percent very poor, 21 percent poor, 33 percent fair, 27 percent good, and 3 percent excellent. Farmers in the western third of State are still evaluating the impact of freezing temperatures on their crop,

Michigan

One day was suitable for field work in Michigan during the week ending April 21 according to the USDA, NASS, Great Lakes Region. Rain, snow, and cold weather were prevalent last week. Rain fall totals are well above normal. Some areas saw more than 4 inches of rain. This participation coupled with snow melt and the rain received previously had streams and rivers running high. Flooding occurred, especially in southern Michigan. Low areas of fields were under water. Winter wheat in southern Michigan greened nicely. Wheat in northern Michigan remained dormant. Wheat in low areas of fields has been under water for a few days and there may be some loss. Corn planting has yet to begin, compared to last year when 10% of the crop had been planted by this date.

Minnesota

Snow cover and precipitation during the week ending April 21st continued to limit field work in Minnesota. The topsoil and subsoil moisture levels are slowly recharging between frosts. Temperatures remained below normal throughout much of the state. Snow covered areas and frozen ditches were still common in the northern parts of the state, yet water began flowing in thawed fields elsewhere. There were no days rated suitable for fieldwork statewide, compared with last year’s 3.2, and the average of 2.9. Topsoil moisture supplies were rated 3 percent very short, 14 percent short, 59 percent adequate, and 24 percent surplus.

Missouri

Heavy rains minimized planting and tillage progress across most of the State with 1.6 days suitable for fieldwork. Most of planting and tillage progress was in the southern third of the state which had 3.8 days or more suitable for fieldwork. The heavy rains caused minor flooding of rivers and creeks. Topsoil moisture supply was 2 percent short, 60 percent adequate, and 38 percent surplus. Corn planting was 13 percent complete, 17 days behind last year and 9 days behind normal. The southeast district increased 24 points to 68 percent complete. Corn emerged was 5 percent complete, 10 days behind last year and 1 day behind normal.

Nebraska

For the week ending April 21, 2013, cold temperatures combined with precipitation in the form of snow and rain to halt spring fieldwork, according to USDA’s National Agricultural Statistics Service, Nebraska Field Office. Soil moisture supplies in the east showed improvement; however, western counties received 0.5 inch or less of moisture during the week, doing little to build soil profiles. The cold conditions lowered soil temperatures which declined into the low 40’s and upper 30’s statewide. Planting activities were at a standstill with only 1.6 days considered suitable for fieldwork. Statewide, topsoil moisture supplies rated 10 percent very short, 31 short, 56 adequate, and 3 surplus. Subsoil moisture supplies rated 49 percent very short, 41 short, 10 adequate, and 0 surplus. Wheat conditions rated 13 percent very poor, 30 poor, 46 fair, 11 good, and 0 excellent. Wheat jointed was 5 percent, behind last year’s 56 and 18 average.

North Dakota

The cooler temperatures and wet soils have delayed even further the start of fieldwork, with reports indicating that, on average, producers intend to begin fieldwork by May 5. Temperatures across North Dakota last week were at least 9 degrees below normal, with the exception being the southwest part of the state where temperatures were 6 to 9 degrees below normal. With the continued snow cover, averaging 5.9 inches across the state, there was only 0.1 day suitable for fieldwork. Although moisture supplies continue to improve, the 2013 planting progress remains well behind last year’s early progress and also behind the 5 year average. Topsoil moisture supplies rated 2 percent very short, 9 percent short, 74 percent adequate, and 15 percent surplus. Subsoil moisture supplies were 5 percent very short, 35 percent short, 56 percent adequate, and 4 percent surplus.

Ohio

Two days were suitable for field work in Ohio during the week ending April 21. Rain throughout the State kept farmers from working in their fields for most of the week, particularly in the northern and western parts of the State where heavy rains and flooding occurred. The rain has been beneficial to winter wheat, which is in a rapid growth phase. Overall the crop is looking good. Although some field prep activities are ongoing, many producers are waiting for warmer and drier weather to start planting corn. One percent of the corn has been planted, the same as last week, which compares to 12% for the 5-year average and 31% at this point in 2012. The winter wheat crop is rated 12% excellent, 60% good, 23% fair and 5% poor to very poor.

South Dakota

(Did not issue a report for the week of April 21)

Wisconsin

Yet another soggy, frigid week delayed the start of fieldwork and planting statewide. Some areas of northern Wisconsin received significant snowfall, while cold rain left water standing in fields across the south. Temperatures were well below average and growing degree days lagged behind normal. Hay and winter wheat reportedly remained dormant across much of the state. Statewide, spring tillage was 1 percent complete, compared to 42 percent last year and a five year average of 25 percent. This represents the latest start to spring tillage in the past 30 years of Crop Progress data. Topsoil moisture is rated 39% surplus, 56% adequate, with the subsoil moisture at 15% surplus and 62% adequate.

Wet Soil or Dry: Will ACRE Provide Any Benefits in 2013?

2013-04-17T10:34:54Z

Most Cornbelt farmers not have received an ACRE payment, since the inception of the program in the 2008 Farm Bill. While that primarily results from very low participation in the program, most of those producers who did opt for the ACRE program have not financially qualified for payments due to the calculation formulas. However, the ACRE program may be worthy of consideration in 2013 depending on crop production prospects in your particular state. Could ACRE benefit a farmer with very low soil moisture or a farmer whose spring planting has been delayed because of wet soils?

The Average Crop Revenue Election (ACRE) program was established in the 2008 Farm Bill as part of the farm safety net. However, the complexity of the program and the requirement for landowner participation resulted in very low participation. The highest rates of participation were in Nebraska and Illinois, possibly because of active program promotion by Extension-based agricultural policy economists such as Brad Lubben in Nebraska and Gary Schnitkey in Illinois. With the availability of ACRE in the 2013 production year, farmers will have until June 3 to decide whether to sign up for the program. And not unexpected, both Lubben and Schnitkey have offered extensive assistance to farmers to help make their decisions. But their assistance benefits everyone, because Nebraska is beginning the season as the epicenter of the drought and Illinois farmers have been kept out of the fields due to incessant wet weather issues. That dichotomy offers a span that would include nearly all Cornbelt farmers who want to use the information provided by Lubben and Schnitkey in making a decision for their farming operation.

Refresher

Lubben provides several points that provide a refresher about the ACRE program, which provides financial protection based on average revenue levels instead of commodity price levels set in legislation:

Average revenue-based safety net tied to benchmark based on average yields and average prices.
Protection from revenue losses when state and farm revenue both fall below respective benchmarks.
Protection tied to planted acres of program commodities on a farm, up to the farm’s total base acreage.
Direct payments available on base acres and program yields at 80 percent of the full DP rate for ACRE participants.
Marketing loans available on actual production at 70 percent of the full ML rate for ACRE participants.

There are two calculations for ACRE, and both must be used to qualify a farm for an ACRE payment should crop prices fall:

The state ACRE guarantee is calculated as 90 percent of the 5-year Olympic average yield, multiplied by the 2-year simple-average price of the two prior marketing years for the current year guarantee.
The farm-level guarantee is equal to the average yield, multiplied by the average price, plus the farmer-paid crop insurance premium.

Lubben says, “The ACRE guarantees move every year based on updated yield and prices, so they reflect current revenue expectations and provide protection from revenue losses much better than does the DCP program.” But any gain has a 10% cap from the prior year, reducing effective protection. At Illinois, Schnitkey says, “ACRE will provide protection against low prices given average or above yields.”

In his analysis for the prospects for an ACRE payment for the 2013 crop, Lubben says early in the year, crop prices would have negated any ACRE payment and producers would have been better off remaining with the direct payment program. But with the lack of soil moisture in Nebraska to diminish yields and the decline in commodity prices, the potential for an ACRE payment has increased. And he says revenue losses would not need to be so severe to trigger an ACRE payment. Lubben says, “Coupled with uncertainty about 2013 yields and prices, the ACRE guarantees, although still far below revenue projections, could be very valuable to producers and well worth the 20 percent of DPs given up to sign up for ACRE.”

Decision Aid

Schnitkey has developed a web-based decision aid for any state, built on a large database of yields and prices. He says, “The ACRE Payment Estimator then provides a table of state ACRE payments times .85 for different state yields and marketing year average prices. Farms with higher yields than the state average will receive higher payments and vice versa.” Currently, he says there is only a 27% chance of an ACRE payment in 2013 (in Illinois), but if one were received, it would be about $13 per acre.

Based on Schnitkey’s decision aid, he says, “The 2013 ACRE Payment Estimator will provide an evaluation of the likelihood and size of ACRE payments. In most Midwest cases, expected ACRE payments are near what is given up in terms of direct payments. If protection is desired for low revenues, which may be caused by low prices, ACRE will be a suitable alternative.”

Summary:

Cornbelt farmers have the opportunity to sign up for ACRE in 2013 as part of the safety net offered in the extension of the 2008 Farm Bill. A payment is not guaranteed, but given the wide variety of soil moisture situations and production expectations, ACRE provides an option for financial risk management. A decision aid can assist in making the choice to forego a portion of direct payment for the ACRE program.

Significant Challenges Exist to Winter Wheat and Timely Spring Planting

2013-04-16T04:14:59Z

Cold soil temperatures, widespread rains, and as much as 15-18 inches of snow cover are not conducive to planting in the Cornbelt. Subsequently, only 2% of the US corn crop has been planted, as of April 15. That compares to 16% at this time in 2012, but last spring was a polar opposite of 2013. While Texas corn growers have more than half of their crop planted, North Carolina is 28% planted. Tennessee is the only other state in double digits with 11%. When it comes to the 12 primary Cornbelt states, tally that region at 1% planted. A year ago over 12% of the Cornbelt was planted with corn. The USDA released its first weekly Crop Progress report on April 15, and details follow.

In addition to the initial report on corn planting, the USDA provided an overview of the US winter wheat crop. Nationally, an average of 4% of the wheat is headed at this time, compared to 28% last year, and 12% for the five year average. Currently, 31% of the crop is rated poor to very poor, with 34% fair and 36% good to excellent, with only 5% in the latter category. In 2012, only 11% was poor to very poor and 64% was good to excellent. In severe condition is the South Dakota crop at 73% poor to very poor. In serious condition are the crops in Nebraska and Texas where 50% of the crop is poor to very poor condition. Also reporting a substantial amount of wheat in poor to very poor condition are Colorado at 42%, Oklahoma and Ohio at 37% and Kansas with 33% of the crop in that condition. Spring wheat planting is negligible at this point, which is usually 13% based on the five year average. None has been planted in Minnesota or North Dakota and only 6% in South Dakota. At this time last year, half to three-quarters of the spring wheat had been planted in those states.

Illinois

Cool, wet weather was the main story throughout much of the state last week. With only 1.5 days suitable for fieldwork last week, not much fieldwork was completed. A few operations were able to start planting corn but most were forced out of the fields by rain early in the week. Topsoil moisture was rated at 1 percent very short, 4 percent short, 70 percent adequate, and 25 percent surplus. Subsoil moisture was rated at 4 percent very short, 17 percent short, 75 percent adequate, and 4 percent surplus. Cold soil temperatures are another factor delaying a strong start to corn planting.

Indiana

Heavy rain showers arrived mid week which left soils too muddy for field work across most of the state. Less than one percent of the intended corn acreage has been planted at this time compared with 21 percent last year and 6 percent for the 5-year average. A few scattered fields of soybeans have been reported to be planted. 81% of the winter wheat is fair to good, with only 4% jointed. Topsoil moisture is 62% adequate and 34% surplus. Subsoil moisture is 72% adequate and 15% surplus.

Kansas

For the week ending April 14, 2013, central and eastern areas of Kansas saw precipitation in the form of rain, ice, snow and isolated hail. Topsoil moisture conditions improved in areas that received the moisture; however, more is needed to have an impact on subsoil moisture supplies. Temperatures for the week were below normal with lows falling below freezing in the western half of the State. Producers were concerned about the impact of the low temperatures on their wheat crop but it is too early to determine the amount of damage. Topsoil moisture supplies were rated 15 percent very short, 25 percent short, 55 percent adequate, and 5 percent surplus. Subsoil moisture supplies were rated 36 percent very short, 37 percent short, 26 percent adequate, and 1 percent surplus.

Michigan

One day was suitable for field work in Michigan during the week ending April 14 according to the USDA, NASS, Great Lakes Region. Heavy precipitation in the form of rain or snow fell everyday last week. Snowfall accumulation totals in the northern reaches of the state ranged from 6 to 12 inches. Very little field work occurred. Water ponded in low areas of fields. Soil temperatures remained cold. Wheat in the southern part of the State has broken dormancy and began to green. Wheat in the northern part of the State remains dormant. Topsoil moisture is 29% adequate and 71% surplus. Subsoil moisture is 45% adequate and 45% surplus.

Minnesota

A noteworthy storm brought widespread heavy snow, rain and ice late in the week. High winds caused tree damage and power outages in southwest Minnesota. The snow covered fields in the northern parts are not showing signs of significant melting. This continues to worry farmers about the potential of flooding from rapid snow melt. The consistent rain and snow provided much needed topsoil moisture relief where the soil would allow for absorption. For the week ending April 14, 2013, only 0.1 days were rated suitable for fieldwork statewide, compared with last year’s 5.0. Topsoil moisture supplies were rated 5 percent very short, 17 percent short, 61 percent adequate, and 17 percent surplus. Subsoil moisture supplies were rated 23 percent very short, 43 percent short, 31 percent adequate, and 3 percent surplus.

Missouri

Wet weather across the State limited tillage and planting progress. There were 1.8 days suitable for fieldwork. The northern 3 districts and the west-central district had less than 1 day suitable for fieldwork. Topsoil moisture supply was 3 percent short, 70 percent adequate, and 27 percent surplus. The northeast and west-central districts were rated 45 percent or more surplus. Subsoil moisture supply was 9 percent very short, 24 percent short, 62 percent adequate and 5 percent surplus. Spring tillage was 33 percent, compared to 69 percent last year, and the 5 year average (normal) of 39 percent. Corn planting was 8 percent complete, 13 days behind last year and 6 days behind normal. The southeast district was 44 percent planted. Corn emerged was 1 percent. Winter wheat condition was rated 1 percent poor, 24 percent fair, 62 percent good, and 13 percent excellent. Winter wheat heading was reported in the southeast district.

Nebraska

For the week ending of April 14, 2013, precipitation in the form of rain, snow and hail crossed the state with many locations receiving 1 to 3 inches of moisture. This boosted topsoil moisture supplies, but shut down spring fieldwork activities. Topsoil temperatures declined and were in the low 40’s in many eastern and southern counties. Topsoil moisture supplies rated 20 percent very short, 33 short, 45 adequate, and 2 surplus. Subsoil moisture supplies rated 55 percent very short, 38 short, 7 adequate, and 0 surplus. Wheat conditions rated 17 percent very poor, 33 poor, 38 fair, 12 good, and 0 excellent. Wheat jointed was 3 percent, behind last year’s 34 and 10 average.

North Dakota

For the week ending April 14, 2013, a weekend blizzard dumped from 4 to 20 inches of heavy, wet snow across much of the state. This new snow will delay even further the start of fieldwork and may cause a higher likelihood of spring flooding. Spring planting is being delayed further by the continued winter like weather. Although moisture supplies improved, the 2013 planting progress continues to be well behind last year’s early progress and also behind the 5 year average. Topsoil moisture supplies rated 4 percent very short, 10 percent short, 69 percent adequate, and 17 percent surplus. Subsoil moisture supplies rated 6 percent very short, 28 percent short, 60 percent adequate, and 6 percent surplus.

Ohio

Three days were suitable for field work in Ohio during the week ending April 14 according to the USDA, NASS, Great Lakes Region. With warmer than usual temperatures, some farmers were able to make progress on field work early in the week. Heavy precipitation from Wednesday on, especially in the northern parts of the State, helped increase soil moisture but halted field activities late in the week. The warmer weather, coupled with precipitation, improved wheat condition. Topsoil moisture is 50% adequate and 48% surplus. Subsoil moisture is 63% adequate and 22% surplus. Winter wheat condition is 87% fair to good. One percent of the corn was planted in the past week, compared to 9% last year and 3% for the five year average.

South Dakota

For the week ending April 14, 2013, snow and freezing rain brought badly needed moisture to parts of the state and kept temperatures colder than normal. Average snow depth across the state was reported at 6.6 inches. Producers anticipate a late planting season for most crops. Topsoil moisture supplies rated 17 percent very short, 27 percent short, 52 percent adequate, and 4 percent surplus. Subsoil moisture supplies rated 39 percent very short, 44 percent short, 16 percent adequate, and 1 percent surplus. Winter wheat condition rated 30 percent very poor, 43 percent poor, 22 percent fair, 5 percent good, and 0 percent excellent. Six percent of spring wheat has been seeded, compared to 79 percent last year and 26 percent average.

Wisconsin

Wet and chilly weather kept farmers out of fields this week. A series of storms brought heavy rain across southern Wisconsin and snow, sleet and freezing rain to the north. Water was reportedly standing in fields where soils are highly saturated or still frozen. Rivers and streams were reportedly at or near flood stage in some areas. Topsoil moisture was 32 percent surplus statewide. Temperatures remained below average and growing degree days were well below normal at all reporting stations. There were 0.0 days suitable for fieldwork this week. Statewide, spring tillage had not yet begun. Winter wheat was also greening up in some areas, though low temperatures and snowfall kept growth minimal. “Winter does not want to go away”

Summary:

As the crop reporter in Wisconsin put it, “winter does not want to go away.” That is true throughout much of the Cornbelt, where cold soil temperatures and fields that were either ponded or snow-covered prevented much field activity. The market is beginning to take notice of the field conditions and the potential for another 10-days to two weeks before soils will be ready for cultivation and planting. At this point corn planting is well behind the pace of 2012, and somewhat behind the five-year average pace. Wheat crops in the Plains states are in sad shape with an abundance of acreage reported poor to very poor.

Livestock Feed Outlook for the Near Term

2013-04-15T10:32:46Z

While Cornbelt crop producers look back at USDA’s March 28 reports and wonder “what happened here,” livestock feeders are doing “high-fives” with themselves. Although the acreage projection was not unexpected it forecast the potential for increased production and subsequently lower prices for feed grains and soybean meal in the next marketing year. However, the quarterly grain stocks report contained surprises to the market that pushed prices down for the old crop and immediately lowered the cost of feed for livestock producers. Not a bad way to begin the spring if you have a lot of mouths to feed.

USDA’s Feed Outlook is chock full of good news for livestock feeders, based on the increased availability of feed and lower prices. However, some spot shortages have raised cash prices and what has dropped on the futures market has been negated by an increased basis. Nevertheless, livestock producers foresee opportunities for profitability that were dimmed before the USDA’s two reports on March 28. Livestock economists are now pointing to black in the near future.

The improved opportunities for the livestock producer can be traced directly to the grain stocks report that indicated nearly 400 million more bushels of corn existed—and should be available—for the market. Evenly split between on-farm and commercial storage, unpriced US corn stocks dropped $1 in value. However, finding deliverable supplies may be a challenge since the 2.7 billion bushels of corn held on farms was only 49% of the total supply, and at this point in the marketing year, farmers typically hold closer to 60% of the crop.

In feed terms, USDA says the projected supply of feed grains is 319 million metric tons (mmt). While that is 11% below the 358 mmt of 2012, higher sorghum and barley imports have added to the supply. And feed use has been declining for 3 consecutive years which has not occurred for 35 years.

Competitors

In competition with livestock feeders for short corn supplies is the ethanol industry, which is projected to increase its use of corn by 50 million bushels, in large part to lower costs of corn. Exporters will not be taking advantage of the lower corn prices, since increased production in Brazil will help supply global demand. US corn prices remain above the price in Brazil and some other countries, which will tend to keep more of it for domestic use.

Due to the lower numbers of grain consuming animal units the feed use of corn is expected to shrink in the second half of the current corn marketing year. It is expected to be about 800 million bushels less than the 10-year average and the fourth lowest use of corn in a given second half of the marketing year since 1975.

Because of the higher stocks corn prices expected to be paid for feed were reduced by 30-cents per bushel on the low end of the USDA price range and by a dime on the top end with the mid-point for the marketing year reset to $6.90. However, at the end of the corn marketing year in August, available supplies of the old crop are expected to be down to 757 million bushels, and available supplies of the new crop will be minimal. In 2012, early planting resulted in abundant supplies of corn in August, but the weather delays for planting the 2013 crop will push harvest back. And some farmers may be opting for soybean planting instead of corn if the planting season continues to be challenged.

Accessing Supplies

Livestock feeders may see a wider variation of supplies, depending on their location. States that were hurt by the 2012 drought had been seeing progressively higher acreages of continuous corn being planted. But those were the hardest hit by the drought and most of those farmers have indicated intentions to reduce corn acreage and plant a more weather-resistant crop rotation. Illinois farmers are planning a 5% reduction in corn acres, and across the Cornbelt states from Iowa to Ohio a more than 900 thousand acre drop is expected. However, the Great Lakes states, along with the Southern Plains, the Delta, and the Southeast are increasing corn acres by more than is being lost in the Cornbelt. The result may be earlier planting of more acres in Gulf Coast States could have the potential to supply early corn, if it can be accessed.

Sorghum

Reduced corn supplies from the 2012 crop pushed many livestock feeders toward sorghum, where stocks are lower as a result, but not as low as possible because of increased sorghum imports. Disappearance has increased due to feeding and stocks in both on-farm and commercial storage is down. Feeders are well aware of high sorghum prices, since the midpoint of USDA’s price range is $6.85 and is the highest on record.

Barley

Domestic use is higher due to lower corn supplies, and imports have bolstered stocks. The stocks are higher than in 2012, due to a better production year. Barley production enjoyed the better weather that fostered increased corn production in Minnesota and the Dakotas were record corn yields occurred in 2012.

Summary:

Livestock feeders who have been challenged in finding supplies and paying for them, have benefitted from increased stocks of corn and lower prices due to USDA’s reports at the end of March. While those supplies will be tight through August, and Cornbelt weather has delayed planting, early planting has occurred in the Gulf States which may supply needed corn in early August. Due to high prices of old corn, exports have been reduced, but the $1 drop in corn prices since the end of March has also meant increased competition for corn from the ethanol industry. 2013 acreage will increase, but not in the Cornbelt, where many farmers will return to traditional crop rotations.

Are your 2013 crops in jeopardy of herbicide carryover?

2013-04-12T04:29:20Z

The 2013 planting season is 2-4 weeks behind the early start of 2012, depending on your location in the Cornbelt. While many farmers have been yearning to sink the planter in the ground, cold soil temperatures and recent heavy rains have waylaid the 2013 planting season another week or two. For many farmers delays only mean reduced yield, but for others delays may avert reduced yields. How is that so?

The drought of 2012 created more challenges than just reduced yields. Its agronomic impact not only reduced nitrogen use and left more of that nutrient in the soil for use this year, but it also left more herbicides in the soil for use this year. If you don’t rotate crops you might not notice the added benefit of increased herbicide concentration. But if you do rotate crops, you may notice the impact of your 2012 herbicide doing its best to attack that strange new crop in the field. Suddenly, the crop you planted may have some serious challenges.

Herbicide carryover will be one of the legacies of the 2012 drought that will be as hard to quantify as how much nitrogen may still be available from last year. University of Illinois weed specialist Aaron Hager says, “Dry soil conditions, similar to what most of Illinois experienced during the 2012 growing season, often slow the rate of herbicide degradation and increase the potential for damage to rotational crops from herbicide carryover.” He reminded farmers of the impact of the 1988 drought on 1989 crops when herbicide carryover was a significant problem for the first time. The reason was the lack of herbicide degradation in the soil due to low soil moisture, which inhibited the work of microorganisms in breaking down the complex herbicide molecules.

Hager said there are many unanswered questions whether herbicides remain from the inactivity of the microorganisms or whether late fall rains were able to bolster their populations so they could finish their job. And he said there are many factors that interact to determine how long an herbicide will remain active in the soil.

Some herbicides will have very little soil activity over a short period of time and others may persist for a long period. That is even the case for chemicals in the same family, subsequently, chemical makers have to provide guidance on each product of what crop can follow its application and by how long of a waiting period. But he says, “Variations in certain soil physical and chemical properties can influence the persistence of a particular herbicide apart from its chemical composition.”
Soil properties that impact the rate of degradation can either be microbial, chemical, or physical. Hager says one of the more important factors is soil pH. In a high pH soil the chemical may have only a weak attachment to clay particles and is more available for plant uptake. The opposite is the case for a low pH soil.
The soil pH will also determine how rapidly the herbicide molecule is degraded in the presence of water. That occurs more rapidly in a high pH or acidic soil, and less rapidly in a lower pH soil.
The physical make up of the soil will also vary the degradation of the herbicide. Hager says soils with higher amounts of clay and organic matter will increase the carryover potential. When they are bound to soil particles, they are not available for plant uptake, don’t move down in the soil profile, or are degraded by microbes.
The rate of degradation by microbes is also a function of the environment and soil conditions. Any factor that affects the microorganisms such as high temperature and low moisture will impact the rate of degradation. Currently, the cool soil temperatures are a hindrance to degradation because they are slowing microbial activity and reproduction. Hager says, “Herbicide degradation by soil microorganisms usually occurs most rapidly when adequate soil moisture is present. Under extremely dry conditions the rate of herbicide degradation by soil microorganisms can slow enough to allow the herbicide to persist into the next growing season.”

So what do you do?

Herbicide degradation takes time and moisture.
Although moisture is abundant in some regions, cool temperatures are inhibiting microbial activity.
Shallow tillage can spread the herbicide residue throughout the field, where degradation will be enhanced.
Early planting a rotated crop with sensitivity to the carryover herbicide may increase the likelihood of injury.
The susceptibility of the crop really determines whether it will be injured.
Retaining the 2012 crop in the same field will eliminate the potential for injury in 2013.
If crop rotation is necessary, delayed planting would allow further degradation.

Summary:

Dry soil in 2012 restricted the degradation of crop herbicides due to reduced microbial activity. Many fields planted in 2013 to a rotational crop may see herbicide injury, unless planting is delayed to allow as much degradation as possible.

USDA’s 2014 Proposed Budget: A summary for the curious farmer

2013-04-11T02:21:27Z

Have you peeked yet at the USDA’s proposed $146 billion spending plan for the fiscal year beginning in October? Probably not. Just the preface of the 132 page document can cure the worst case of insomnia. Nevertheless, the budget proposal is what Congress has been given, and will be met with, “Oh, it’s a starting point, at least.” With the budget on the table for discussion, let’s see where the discussion starts….

USDA authorized spending has climbed from $116 billion in 2009 to the $156 billion authorized for the current fiscal year before the fiscal cliff, and sequester, and other cuts were made. The Fiscal Year 2014 budget proposes $146 billion in total spending, which includes $123 billion for mandatory programs that include: crop insurance, nutrition assistance programs, farm commodity and trade programs and a number of conservation programs. The remaining programs provide some discretion to Congress and the White House and include WIC; food safety; rural development loans and grants; research and education; soil and water conservation technical assistance; animal and plant health; management of national forests, wildland fire, and other Forest Service activities; and domestic and international marketing assistance.

Overview

Of all funds proposed for administration under USDA, 72% are for nutrition assistance, 15% for farm and commodity programs, 6% are for conservation and forestry, and all other spending makes up 6% of the budget. With the Federal government budgeting over a 10 year horizon, the USDA budget proposes a $38 billion savings over the next 10 years, had budget trends been allowed to continue.

USDA budget writers say the FY 2014 budget reduces the deficit by that $38 billion, while earmarking $1.3 billion for beginning farmers, bioenergy, specialty crops, and organic agriculture. The President’s Budget also proposes to extend selected livestock disaster assistance programs for 2014 through 2018. $9.5 billion would be spend on crop insurance, $5.5 billion for loans for financially stressed farmers, $4 billion for clean and renewable energy projects, plus other funds for increased enforcement of the Packers and Stockyards Act, feral swine eradication, and a $383 million funding for increased investment for food research at universities.

Farm Service Agency

2,100 FSA offices remain in operation after 125 were closed in 2012. Operational expenses will decline from $1.666 bil. to $1.59 bil. Loan programs will drop from $3.857 bil. to $3.650 bil. Grant programs will rise from $1.722 bil. to $1.905 bil. Funds are to assist with farm ownership for approximately 8,000 operators.

Direct Payments, which totaled $4.955 bil. in 2013, will decline to $4.936 bil. in 2014. The $370 MILC payment will drop to zero, and the $170 mil. bio-based fuel production program will also go to zero funding. Total commodity programs drop from $7.290 to $6.541 bil. The CRP program generally holds steady at $2.165 bil. with a $6 mil. increase. Commodity Credit Corporation funding drops from$10.137 bil. to $9.538 bil. to cover those and a wide variety of other FSA programs. Within the cuts to the Direct Payment program, feed grains drop from $2.325 to $2.294 bil., wheat drops from $1.254 to $1.086 bil., and soybeans from $571 mil. to $556 mil. FSA disaster programs have a zero budget for 2014, down from $911 mil. in 2013.

Risk Management Agency

While it is hard to budget for a disaster, the RMA is planning a substantial reduction in indemnity payments for 2014. The budget proposal calls for $11 bil., down from $17 bil. in 2013. Regarding the drought and other natural crop disasters, RMA says, “As of March 25, 2013, based on actual indemnities for crop year 2012 the loss ratio is about 1.44. At this time, the pace of loss claims for the 2012 crop year is beginning to slow; accordingly, current estimates are that the crop year 2012 loss ratio will reach about 1.5.” The agency says the actual total government cost for the crop insurance program was about $7.6 bil. $4.5 bil. was provided to producers to cover crop loss, and $3.1 bil. went to insurance companies to cover administrative expense. (That means the crop insurance companies covered the nearly $10 bil. balance of indemnity payments issued for crop loss.)

Rural Development

The budget proposals says, “Since 2009, USDA has helped more than 627,000 rural families buy, refinance, or repair a home, and provided over 15,000 grants and loans to help over 60,000 small rural businesses create and save over 320,000 jobs.” Rural Development contains a number of small programs with funding of $1 to $55 million. However, the guaranteed loans to business and industry program is proposed for funding at $741 mil., down from $776 mil. in 2013. Total funding for Rural Business Service programming is $953 mil. a cut from $1.028 bil. in 2013.

Rural Utilities

Although the loan program for rural electric utilities drops from $7.024 bil. to $4.0 billion in 2014, the loan program for telecommunications and broadband expansion holds steady at $690 mil. Funding for broadband distance learning is held to $63 mil. in loans at $10 mil. in grants. One of the big program expansions raises funding for loans for water and wastewater from $873 mil in 2013 to $1.2 bil. in 2014. Overall spending on rural utilities drops from $9.259 bil in 2013 to $6.327 bil. in 2014.

Supplemental Nutrition Assistance Program (SNAP)

This program, which draws extensive controversy, contains 72% of USDA funding and draws the attention of metropolitan members of Congress to the USDA. The SNAP program remains at $78 billion, but at $300 mil. less than in 2013. For the Food and Nutrition Service, overall funding is cut from $112.3 bil to $109.3 bil. Within the agency, there is a slight increase for the child nutrition program and other programs. An overall $6.3 bil. cut in SNAP funds approved by a supplemental funding earlier this year, allows the overall program to reduce its funding request. USDA says, “For 2014, the Budget anticipates participation falling to an average level of 44.7 million participants per month from 47.1 million in 2013. While the program increased sharply in the economic downturn, the rate at which participation has increased has been declining since around January 2010.”

Natural Resources and Environment

The conservation budget calls for $6.2 bil. in 2014, 36% of that for CRP, 22% of EQIP, and 16% for the CSP program. Acres enrolled in conservation programs has increased from under 135 mil in 2004 to more than 378 mil. in 2014.

Agriculture Research Service

ARS funding increases $200 mil. to $1.303 bil., primarily due to $155 mil. for replacement of the Southeast Poultry Disease Research Laboratory in Athens, GA and $30 mil additional in environmental stewardship.

National Institute of Food and Agriculture

NIFA distributes funding for university research and Extension activities. Discretionary program funding rises from $1.214 bil. to $1.293 bil, and mandatory funding rises from $1.231 bil. to $1.346 bil. Most of the funds are for research in food and agriculture projects proposed by researchers who compete for the funds. Some of the funds are distributed by a formula. Food and agriculture research funding is getting a 43% increase in funding for the competitive grants.

Other USDA programs:

Food Safety holds relatively steady at $1.019 bil. down $2 mil.
Forest Service drops from $5.265 bil. to $4.858 bil.
APHIS drops from $1.092 to $1.071 bil.
Agricultural Marketing Service increases from $1.090 to $1.191 bil. for additional funding for commodity program expenses.
GIPSA funding rises $3 mil. to $41 mil to cover additional salaries
National Ag Statistics Service funding drops $1 mil. to $159 mil. by cutting estimate costs.
Economics Research Service funding rises $1 mil to $79 mil.

Summary:

USDA funding, like other agencies of the federal government, will have less money to spend due to efforts to control the budget deficit. The annual budget is designed to implement policy, which is set by the Farm Bill, and that proposed budget will be set by Congress when a new Farm Bill is approved. The annual appropriation for USDA attempts to reflect the will of Congress, cross pollinated with the needs of the public as determined by USDA administrators. Most of the programming is maintained from year to year, but 8% of the 2013 budget was cut to establish the funding guideline for the 2014 budget.