Extension Update on Ford-Iroquois Agriculture

A weekly publication of University of Illinois Extension, January 19, 2009

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

• Choosing a Financial Professional will be the topic of a workshop to be held on January 28, 2009 at 1:00 p.m. at the Ford-Iroquois Extension office. Kathy Sweedler, Extension Educator, will help attendees learn what questions to ask and what all those credentials mean. Cost is $5.00. Registration is requested by calling 815-268-4051 or e-mailing alchandl@illinois.edu.
• Just a reminder that the Ford-Iroquois Extension office will be closed on Monday, January 19, 2009 in observance of Martin Luther King's birthday. The office will reopen at 8:00 a.m. on Tuesday.
• USDA's crop production, stocks, and supply-demand reports were especially negative for corn prices and will likely end the month old rally in prices even with some worries about the Argentine crop, says IL Extension's Darrel Good, who says corn prices could decline to the level of early December. "The larger projection of year ending stocks and the slower consumption suggest that corn acres may not have to increase much in 2009."
• Darrel Good says the reports were less negative for soybean price prospects, but the larger inventory of US soybeans will offset some of the concerns about the Argentine crop. Darrel says, "An increase in US acreage is not needed in 2009." Read his latest newsletter at: http://www.farmdoc.uiuc.edu/marketing/weekly/html/011209.html . A recap is at: http://www.farmgate.uiuc.edu/archive/2009/01/mondays_basketf.html .
• The bearish USDA report was a surprise to many, says Mike Woolverton at Kansas State, It"caught most people in the grain trade leaning the wrong way. Because of the late soybean harvest and thousands of acres of unharvested corn caught by early winter snow storms, most grain traders expected the USDA to lower its final estimates of corn and soybean production." But he says in commodity markets heavily influenced by outside factors and populated by pessimistic traders, the report was enough to take both markets limit down the next trading day. And the wheat market fell down the daily limit also.
• USDA's wheat seedings report last Monday also surprised the market with a 9% drop in acreage, but Woolverton says, "An even bigger surprise was the 26% drop in soft red winter wheat." He blamed "The terrible basis farmers faced in summer and fall, up to $2 per bushel or more in some local markets; the convergence problems with the CBOT wheat contract; and the late, wet corn harvest. Farmers simply could not get into their fields in time to plant wheat, although it is likely some producers intentionally held back from planting soft red to give them more flexibility for spring-planted row crops."
• Woolverton says corn exports will eventually increase. "US wheat price is still being suppressed by low quality, low priced Black Sea wheat. As much as 80% of the Ukrainian wheat crop graded no higher than feed wheat and has been selling for as little as $2.50 per bu., hurting both global wheat and corn prices. US exports of wheat and corn have been disappointing the past several months." He says feed wheat will soon be gone.
• The recent low corn price, pushed down by competition from feed wheat, slack export demand, and lower than expected ethanol corn grind, may be giving corn growers a misleading market signal to cut back on acres planted this spring, believes Woolverton. A soybean to corn price ratio that discouraged corn planting and still sky-high fertilizer prices had early surveys showing farmers intending to shift more acres into soybeans.
• Woolverton's preliminary calculations show a need for more corn production next year rather than less, assuming a reduction in feed wheat availability, corn export demand recovery, and increased ethanol production to meet the upwardly revised mandate for 2009. He says the market will have to bid more acres into corn with a higher corn price relative to soybeans. Better profit margins for ethanol producers would help and lower fertilizer prices would pull some of those unplanted soft red wheat acres into corn.
• Learn about ACRE before sign-up arrives this spring, say IL Extension economists. Payments are crop specific and the whole farm must be enrolled in ACRE, not just your corn base without enrolling your soybean base. It is expected that the ACRE election will be made by Farm Services Agency (FSA) farm number, so an operator could have some farms enrolled in ACRE and some under the traditional counter-cyclical program.
• Ohio had the worst soybean crop last year since 2002 when the average yield was 32 bu. per acre. The 2008 yield was 36 bu., some 7 bushels below the 2007 crop. OSU soybean specialist Jim Beuerlein blamed the weather, which destroyed more seed test plots than in his 40 years of research, "Of the six locations that were evaluated, yields were down anywhere from 20 to 40 bushels an acre due to the flooding and the drought. I had one field that had about 1,000 plots in it and we probably threw away 600 of them."
• Fungicides have the best chance to increase yield when fungal diseases are, or have a high risk of, infecting a crop, says Purdue specialist Kiersten Wise, and that requires scouting. She says as the price of corn goes down, it will take more bushels to pay off, "If the application cost $28 per acre, an extra 7 bu. of $4 corn would be needed."
• Pork weights are falling say Glenn Grimes and Ron Plain at MO Extension. Iowa-Minnesota live weights were 269.4 lbs. last week, which they said was 2.2 pounds less that year ago levels. "Weights will likely start declining in the next few weeks and hit a low in late summer, probably in August," say Grimes and Plain. "The low week in 2008 ended August 9 at 257.4 lbs per head for barrows and gilts in Iowa-Minnesota."
• Productivity is up in the US cattle industry. In fact Grimes and Plain at MO Extension say it is up 51% over the past 42 years. "This productivity growth resulted from growth in cattle feeding, feeding more of the cattle, feeding to heavier weights, the decline in the dairy herd relative to the beef cow herd and imports of more live feeder cattle."
• Grimes and Plain say the dynamics include increased beef and veal production by pulling marketings forward. "In other words we are increasing slaughter some each year by moving cattle through the growth and feeding cycle faster and slaughtering cattle at a younger age. How much more growth we have is not very predictable. There are limits to how heavy we can feed cattle and percentage of calf crop fed to heavy slaughter weights." They believe there will be some productivity growth for several more years.