Extension Update on Ford-Iroquois Agriculture

A weekly publication of University of Illinois Extension, October 6, 2008

Prepared in part by Stu Ellis, former Extension specialist & Aimee Chandler, Ag Program Coord., Ford-Iroquois Unit

Our address is University of Illinois Extension, 912 W. Seminary, Onarga, IL 60955. 815-268-4051

Our Internet homepage is at www.extension.uiuc.edu/ford

• Mark your calendars for the upcoming Ford-Iroquois Ag Breakfasts. On November 5 Ford and Iroquois County FSA offices will speak on the 2008 Farm Bill. The sponsor is First Trust & Savings Bank of Watseka. The December 3 breakfast will feature Jean Payne of Illinois Fertilizer & Chemical Association speaking on Rising Input Costs of Farming. Ford-Iroquois Farm Bureau will be the sponsor. Breakfasts will begin at 7:00 a.m.
• How healthy is the farm economy? Many economists have been rhetorically asking that question in the wake of failures in the financial markets here and abroad. Credit has been drying up in non-agricultural markets, but the farm lending season is just around the corner, and will be coming at a time when commodity price strength is being questioned.
• In the past 90 days Dec corn has dropped over $3 and Nov beans have dropped over $6.50 per bu. and marketing specialist Mike Woolverton at Kansas State says supply and demand fundamentals had almost nothing to do with it. He says it was all a function of the financial markets, because of the housing bubble and the subprime mortgage issues.
• The financial companies which assumed the risk in those troubled areas also ran hedge funds and index funds, and Woolverton says when they were unable to liquidate mortgage assets, they had to get cash by offsetting futures and options contracts at large losses. That took billions of dollars out of the commodity market, reducing grain prices.
• At the same time, USDA's stocks report found 83 mil. bu. more corn and 60 mil. bu. more soybeans than what the trade expected. Woolverton says that normally would not generate much concern, but at the time when money is being pulled out of commodities, the increased levels of grain stocks indicates the world economy is slowing down.
• The quarterly grain stocks report estimated corn stocks at 1.62 bil. bu., up 25% from year earlier levels, representing the old crop carryout. On-farm stocks totaled 500 mil. and off-farm stocks totaled 1.12 bil. bu., which was 33% more than 2007 levels.
• The quarterly grain stocks report estimated soybean stocks at 205 mil. bu., down 64% from year earlier levels, with 47 mil bu. on-farm and 158 mil. off-farm. USDA adjusted the 2007 soybean crop estimates by increasing production to 2.68 bil. bu., increasing planted acres to 64.7 mil., and raising the average yield by .5 bu. to 41.7 bu. per acre.
• Corn demand in the coming year will be increased by the Renewable Fuels Standard which continues to ratchet upward. Economist Chad Hart at Iowa State says 10.5 bil. gal. of biofuels are required in 2009, which will consume 3.6 bil. bu. from the 2008 crop and 4.1 bil. bu. from the 2009 crop to meet the demand for 12 bil. gal. of biofuels in 2010.
• Market dynamics include growth in biofuel production, livestock producers adjusting to higher crop prices, higher energy prices supporting biofuels, slow economy domestically and worldwide. Iowa State's Hart says that will keep volatility in the market. He's expecting 2009 corn and soybean prices to parallel 2008 prices of $5.50 and $12.25.
• Global demand for US pork is taking 18% of domestic production, up from 10% a year ago. And Purdue Extension economist Chris Hurt says that is the only reason hog prices were able to recover so sharply this year given the fact domestic production is 7% higher than 2007. More: http://www.farmdoc.uiuc.edu/marketing/weekly/html/092908.html
• But brace yourself says Hurt because that foundation is cracking. China had taken 46% of the growth, but that began to drop even before the Olympics. Russia had taken 13% of the growth, but diplomatic conflicts could jeopardize that business. And Hurt says Russia is attempting to stimulate is own pork industry with government financial help.
• Chris Hurt says the Hogs & Pigs Report indicated higher weaning rates which will not mean a decline in production, despite a smaller breeding herd. With high feed costs, he expects more financial losses for pork producers in 2008. With projected prices in 2009, Hurt says producers could pay about $5.25 for corn and still break even.
• The quarterly Hogs and Pigs Report estimated the herd at 68.7 million, up 2%, but with the breeding herd down 2.6%, and farrowing intentions down 5.6%. Iowa State economists say production will remain above last year through the end of 2008, and 2009 production will decline throughout the year. Market prices are expected to stabilize. http://www.econ.iastate.edu/outreach/agriculture/periodicals/ifo/IFO_2008/ifo100108.pdf
• Because of the delayed harvest, timing will be critical in the fall application of anhydrous ammonia. If the 4 inch soil temperature is below 60 degrees, application can begin, but only with the help of a nitrification inhibitor. If you are not using an inhibitor, do not apply anhydrous ammonia if the 4 inch soil temperature is above 50 degrees. Do not apply any to soils that have a high tendency toward leaching or excessive drainage.
• If you plan to apply manure, poultry litter, or other organic fertilizers because of the high cost of commercial fertilizer, remember their nitrogen source is uric acid and forms of ammonium that will volatilize and be lost into the atmosphere. IL Extension Specialist Fabian Fernandez urges incorporation of them into the soil to avoid volatilization. Read his newsletter on nitrogen at: http://www.ipm.uiuc.edu/bulletin/article.php?id=1041 .
• The nitrogen rate calculator should be one of the tools on your computer desktop. Using your location, plus current prices for nitrogen and current prices for corn, it will guide your decision on the rate of nitrogen to apply that will give you the best financial return. Find it at: http://extension.agron.iastate.edu/soilfertility/nrate.aspx .
• Between soybean harvest and wheat planting, squeeze in a fertilizer application on your wheat ground to help the crop get established and tiller before winter. Extension fertility specialist Fabian Fernandez says the 30 lb. per acre minimal amount is enough because more would create surplus vegetation and result in disease or lodging in the spring. He also says phosphorus will help. http://www.ipm.uiuc.edu/bulletin/article.php?id=1042 .
• Cost savings occurs with lesser tillage, say Iowa State specialists, who calculate 3-4 gal. of fuel per acre with conventional tillage plus planting and spraying. That compares to 1 gal. per acre for no-till operation. They express concern about tillage in wetter soils, resulting in compaction. Compaction in the top 3-6 inches is due to surface pressure and compaction below that level is primarily associated with axle weight.
• Preliminary results are being published from Univ. of IL test plots for corn rootworm control. Initial findings are at: http://www.ipm.uiuc.edu/bulletin/article.php?id=1038 .
  1) Wet soils at time of rootworm hatch may have caused a wide variation in the results.
  2) Aztec provided most consistent results, with injury ratings lower or equal to Bt seeds.
  3) Bt seeds provided varying results and "are not silver bullets against corn rootworms."
  4) A combination of Bt hybrids and soil insecticides resulted in less root injury.
  5) Researchers are not recommending that a combination always be used.
• Until this year, a low number of soybean aphids found in the fall meant a low number would be feasting on soybean fields the following summer. 2008 should have been a year with few soybean aphids, but it wasn't. Researchers say the fall survey can be helpful in predicting an outbreak, but only if the data is combined with a similar survey of the population of Asian multi-colored lady beetles, which are a major aphid predator.
• Challenge your friends. In some cases, the test weight of corn is inversely proportional to moisture content. IL Extension's Emerson Nafziger says it makes sense that wetter kernels are "a little puffy" which lowers test weight. He says keep that in mind if you are docked on test weight if delivering high moisture corn. Dry grain has better test weight.
• Nafziger is concerned about drydown, with days in the 60's and nights in the 40's. He says corn should be harvested in that case when moisture reaches the mid to lower 20% range. He says corn dries at a slower rate the dryer it gets, and it will slow even further as temperatures drop in October. http://www.ipm.uiuc.edu/bulletin/article.php?id=1043 .
• Soybean seed quality, which was compromised last year, could also be challenged this year with fungal problems. Plant pathologist X. B. Yang at Iowa State reports the presence of cercospora leaf spot, which appears like SDS or pod and stem blight. It causes a purple discoloration in soybeans, along with poor seed vigor and germination.
• NASS will come calling this winter to find out how much is being paid to cash rent farm land. This new report will quantify levels of cash rent and determine accurate rent values for land in the Conservation Reserve Program. The results of the USDA study will not be released until April, which will be too late to impact cash rent levels in 2009 leases, unless owners and operators have agreed on that variable to adjust rent up or down.
• Settling upon a cash rent is a function of communication between the owner and the operator according to Purdue economist Craig Dobbins. He says, "It's a matter of being able to put yourself in the other's shoes and understanding the kinds of costs and risks that are being taken by all parties involved. As long as people keep communicating with each other, they will eventually find a number that is agreeable and equitable."