This document printed from the University
of Illinois Extension Extension Update on Ford-Iroquois Agriculture at http://www.extension.uiuc.edu/fordiroquois/
February 25, 2008
February 25, 2008
Karen S. Moore
County Extension Director
Ford/Iroquois Unit 912 W Seminary Ave
P.O. Box 163
Onarga, IL 60955-0163
Phone: 815-268-4051
FAX: 815-268-4058 ksmoore@illinois.edu
Ford-Iroquois Extension Ag Day in Buckley – Feb. 29thSee you later this week on Friday. We have a full day of great speakers, exhibitors, a complimentary lunch, plus some surprises. The morning begins with registration at 8 a.m. with the morning sessions beginning at 9 a.m. The afternoon will conclude at 3 p.m. CCA credits will be offered.
Ford-Iroquois Ag Breakfast – March 5thMark your calendar and plan to attend the monthly Ford-Iroquois Ag Breakfast on Wednesday, March 5th beginning promptly at 7 a.m. Cost per person for breakfast is $5 (please have exact change). Colleen Callahan, farm broadcaster and former Iroquois County native, will be the featured speaker with WGFA Radio serving as this month's sponsor. Pre-registration for breakfast is requested by calling the Ford-Iroquois Extension Office at 815/268-4051 by noon on March 4th.
The acreage debate will continue, as will the debate about release of some CRP acres for crop production, suggests IL Extension's Darrel Good. He says USDA expects an extra 6 mil. acres to be planted this year, but only 1.3 mil. from former CRP land and the balance from grassland and displacing minor crops. Read his latest marketing newsletter at: http://www.farmdoc.uiuc.edu/marketing/weekly/html/021808.html .
But Darrel Good says the USDA acreage estimates for 2008 were made at a time when corn carryover stocks were much higher than they are currently, and at a time when the corn yield was thought to be 4 bu. per acre more than it turned out to be. He says those factors could be important to the market in its bid to ensure sufficient grain supplies.
High grain prices will continue, says Marketing Specialist Melvin Brees at Missouri in his latest newsletter, "It appears that the tight supply situation for grain won't be "cured" in the coming year and the outlook for favorable prices may continue. However, the balance between crops is critical to meeting demand needs and what happens to prices." More: http://www.fapri.missouri.edu/farmers_corner/mktng_newsletter/CurrentDM.pdf
Brees' outlook for wheat "Most estimates are that US acreage will increase to 61 or 62 mil. acres, which is up somewhat from last year's 60.4 mil. This increase along with slower wheat exports would allow wheat carryover to increase somewhat from current very tight levels. Wheat prices may decline from record highs, but are likely to remain at historically good price levels." He says US wheat stocks are at a 60 year low.
Regarding wheat, Marketing Specialist Jim Hilker at Michigan State says, "Projected 2007-08 world ending stocks were lowered another 1 MMT to 109 MMT, again, the lowest in modern times. The record upward price movement on top of the already record prices shows the world knows it is very short wheat and the market in making a run at rationing wheat. His balance sheet is at: http://www.msu.edu/user/hilker/outlook.htm
The bustling export business is due to the exchange rate according to Purdue economist Chris Hurt. "The European euro has increased in value relative to the US dollar by 40%. What that means is that with the same number of euros the Europeans can buy 40% more in the United States than they would have been able to buy three or four years ago."
Chris Hurt says, "As an example, $12 soybeans in the Midwest are equivalent to $9 to the world at this point. This suggests that the world will not cut back on grain usage as quickly, because as buyers purchase using their own currencies they are not experiencing as high a price as we perceive these prices to be in the United States."
Maintain your typical production practices, even though commodity prices are higher. That is the advice of Kansas State's Phil Sloderbeck who says variety selection, fertility, pest management, irrigation, timely planting and harvesting will still be the critical decisions between profit and loss. "Higher prices will lower economic thresholds, but they don't eliminate the need for scouting and applying treatments in a timely manner."
"As the stakes go up, it may be more important to make safe bets," says Extension's Sloderbeck. "Pay down the loans, purchase new equipment to improve efficiency and timeliness of practices, adjust fertilizer rates to rebuild soil that may have been mined during years of poor returns, pay more for improved higher yielding seed, update or improve equipment, and hire a crop consultant to improve pest management decisions."
Hog slaughter is up nearly 11% since the first of the year, but MO livestock economist Glenn Grimes believes part of the reason that fewer hogs are dying from circovirus, and maturing to slaughter weight. But he says the breeding herd is only being reduced at a slow rate if at all, and the larger slaughter rate will continue through the third quarter. "If so, it will require an unheard of growth in live hog demand or death loss at a high rate from some other disease to get the kind of prices being offered by the futures market."
The dynamics will change in beef production, believe Glenn Grimes and Ron Plain at MO Extension. They think more pasture will be converted to cropland and herds will decline because of high feed costs. "The size of the cow herd is likely to be reduced more than the size of the total cattle herd as beef producers shift more beef production to pastures, ranges and forage from corn. The probabilities are high that young cattle will be raised to higher weights on forage before they are placed on a high grain diet."
Grimes and Plain rhetorically ask, "The beef cow herd in the six states of IA, IN, IL, MN, MO, and NE on January 1, 2008 was down 3% from 2007. This compares with the beef cow herd in the U.S. on January 1, 2008 being down 1%. Is this a sign that farmers are already starting to use some pasture acreage for crops rather than cows?"
Speaking of pasture, are you leasing pasture, and if so, how does your lease address the possibility of drought? NE Extension forage specialist Bruce Anderson says the landowner has the risk of having his pasture overgrazed and the value lowered. The tenant risks poor animal performance and health. He says decide ahead when to remove the cattle and adjust the rent, then put it all in writing to avoid any misunderstanding.
Save on production costs this year with some common sense. Ohio State ag engineer Randall Reeder offers a number of suggestions for cutting costs and raising profits: 1) Fuel costs for planting crops in reduced tillage is about half that of intensive tillage. 2) Using cover crops to capture N can cut commercial N purchases by 50-100 lbs/A. 3) Corn yields will be higher when rotated with soybeans because of N supplies. 4) Controlled traffic patterns save fuel, labor, crop inputs and equipment costs. 5) Better management of heating and ventilation in farm buildings saves energy cost. 6) Switching to fluorescent bulbs is expensive but saves energy and they last longer. 7) The average tractor tire is over-inflated and causes excess slippage and fuel loss. 8) Scheduled replacement of air and fuel filters saves fuel and increases power. 9) It is less efficient to keep an engine idling for warmth than it is to re-start it. 10) Don't use a sub-soiler any deeper than necessary to break up compacted soil.
What is the cost of this plan? Loux suggests, "Recent increases in the price of glyphosate products have pushed the cost of a standard glyphosate rate (0.75 lbs ae/A) upwards toward $10/A or higher. There is currently a rebate program associated with Liberty that reduces the price to about $9/A." Read more: http://corn.osu.edu/#D .
What is the first year nitrogen credit for field corn following alfalfa? If you are trying to save on N costs, IL Extension crop specialist Jim Morrison says research in IA, WI, MN, and PA found an optimum N rate of 25-42 lbs/A. He says recent IL research found corn yields did not benefit from a nitrogen rate of more than 40 lbs/A.
If you are considering organic corn, Extension in IA, WI, & OH have studied the issues after surveying recent producers. Their farm size averaged 65 A., and 91% used it for livestock feed, and 9% for food grade use. Effective weed control was their major concern, most using multiple cultivation and tillage. More. http://corn.osu.edu/#C
If biofuels are to be successful, subsidies must exist says an Iowa State study exploring their future. Ag economists calculated that to meet federal production mandates, corn will need a 22¢ to 78¢ subsidy, biodiesel will need $1.97 to $2.90, and cellulosic ethanol will need to be subsidized $1.55 to $2.11. They contend the federal mandates may create more of a food versus fuel debate, since corn will need a lower subsidy than switchgrass.
Food prices have not been forced up by ethanol say NE economists because grain prices are a function of the world market, and farmgate values for food are only 20% of the food dollar. The balance is for processing, packaging, transportation, etc. Since the value of corn used in domestic food production is only 16% of all farm production, then 16% of the 20% received by farmers is only 3.2%, hardly enough to inflate food prices. Their rationale is at: http://www.agecon.unl.edu/Cornhuskereconomics/2008/2-13-08.pdf
Consider an agri-tourism venture for people who will pay to visit your farm. It increases farm revenue; makes use of under-utilized resources, can convert a hobby into a business, and even help early retirement. Visit: http://web.extension.uiuc.edu/agritourism/ .
