Extension Update on Ford-Iroquois Agriculture

A weekly publication of University of Illinois Extension, February 23, 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

• The Ford-Iroquois Ag Breakfast will be held on Wednesday, March 4 beginning at 7:00 a.m. Bill Morris will be speaking on "Your National Weather Service – Products & Services." Big R will be the breakfast sponsor. Cost is $5.00. Please call to reserve your spot by noon on March 3 by calling 815-268-4051 or e-mailing heins@illinois.edu.
• Don't forget to join us for the Ford-Iroquois Extension Ag Day on Friday, February 27 in Buckley at Christ Lutheran High School. We have a great lineup of speakers for that day. Registration will begin at 8:00 a.m. with the program beginning at 9:00 a.m. Lunch is provided thanks to our Agribusiness/Extension Partners.
• Corn and soybean prices will be driven by acreage this spring believes IL Extension's Darrel Good, but he says acreage uncertainty stems from questions about profitability, cost of production, and declines in winter wheat and cotton acreage. Read his newsletter at: http://www.farmdoc.uiuc.edu/marketing/weekly/html/021609.html .
• Darrel Good says biofuels will play a role in determining the need for corn acreage, but sorghum is replacing corn as a feedstock in some ethanol plants in the Southern and Central Plains states. He says the federal biofuel mandate calls for 10.5 bil. gal. in 2009 and 12.0 bil. gal. in 2010, but marketing years don't line up and the use of sorghum puts a new twist into the analysis of how much corn acreage is required for ethanol refining.
• Overall, ethanol's thirst for corn will be large, with at least 3.6 bil. bu. this year, 4.0 bil. bu. next year and up to 5 bil. bu. by the 2015 marketing year. Good thinks 2009 planted corn acreage needs to parallel 2008, but bean acres may not need to expand. However, he expects the Mar. 31 Prospective Plantings to predict more soybeans.
• Despite periodic positive news, the grain markets have regularly been rewarded with losses every day says South Dakota Extension marketing specialist Alan May. "What is at play here is the heavy pressure of outside markets; particularly crude oil, the dollar index market and the stock market. As these markets continue to either weaken or simply remain stagnant, grain commodities ignored the positive news of stronger corn export sales and expectations of greater export volume of soybeans."
• Brace yourself for a weekly storm, advises OSU meteorologist Jim Noel, because we are in a weather pattern that is typical for this time of year. He says weak La Nina conditions are getting weaker and should be gone by spring. But he says all of the ice on the Great Lakes makes for a cooler and wetter spring in the Eastern Cornbelt.
• Farm program eligibility depends on your Adjusted Gross Income (AGI) and Adjusted Gross Farm Income (AGFI), so compute it carefully says Iowa St. ag law specialist Roger McEowen who provides a factsheet at: http://www.calt.iastate.edu/agi.html .
  1) A non-farm AGI cannot exceed $500,000 to receive farm program payments.
  2) An AGFI cannot exceed $750,000 to receive direct and counter cyclical payments.
  3) An AGI cannot exceed $1 mil. to get conservation payments unless 2/3 is farming.
  4) The average for the AGI for 2009 is the average for tax years 2005, 2006, & 2007.
  5) AGFI is net farm income, plus sale of capital goods, rentals, and royalties.
  6) AGI and AGFI are reported to FSA on Form CCC-926 and page 3 gives guidance.
  7) AGFI is a "net income" concept, not a producer's gross farm revenue.
• Caution is being advised by TN Extension economist Daryll Ray if farmers are considering the USDA's ACRE program. He's not convinced of its benefits, and says:
  1) The 2009 price guarantee is the average of 2007 & 2008 prices, but 2008 is unknown.
  2) Are farm and state-level yields used in revenue estimates really attainable?
  3) Signing up for ACRE requires proof of income, so farmers will surrender their 1040.
  4) Converting to ACRE irrevocably through 2012 is another headache.
  5) Obtain the paperwork and study it well before the June 1 deadline for signing up.
  6) Get legal help in defining "active involvement" is your farm is a partnership.
  7) Assemble your records in one place to document yields and acreages.
  8) Calculate worst-case and other scenarios for your farm using your own data.
  9) Your calculations should include the low end of USDA's estimated price range.
  10) Base your decisions on your own farm, not on the estimates of other farms.
  11) Obtain opinions from your CPA and banker about their perception of risks.
• Is there an advantage to leasing farm equipment? NE Extension's Tim Lemmons says among the advantages: lower up-front, down payment costs compared to purchasing; payments often are less than traditional loan payments; less liability on the balance sheet; equipment available for short-term needs; access to and use of latest technology; and lease payments are considered production expenses for tax purposes.
• Is there an advantage to buying farm equipment? Nebraska's Tim Lemmons suggests: owned equipment may be easily replaced or sold at the owner's discretion while replacing leased equipment may be more difficult; owned equipment has asset value & may be used as collateral against other loans; purchases do not require security deposits, although down payments to secure financing may be higher; purchased equipment has no use limitations while some leases specify the number of hours a machine may be used before a penalty is imposed; and increased asset value on the balance sheet.
• Increases of soybean seed price of 25%-100%+ may push some farmers to plant bin-run seed, but WI soybean specialist Shawn Conley says 90% of soybeans are glyphosate tolerant and federal patent laws prohibit that. He expects an increase of field monitoring this year to "catch" growers who recycle their soybeans into the planter box.
• Soybeans that are not herbicide tolerant fall under the Plant Variety Protection Act says Conley, & while that allows seed to be saved for planting, it restricts the amount of seed that someone can save to an amount that would serve the needs of his own farm.More: http://ipcm.wisc.edu/LinkClick.aspx?fileticket=PfWKCfvYUf4%3d&tabid=114&mid=669
• But planting bin-run seed can create agronomic issues, and if the seed was not harvested with the intent of being seed the following year, there will likely be quality issues related to harvest timing, storage conditions, and handling says Conley. He says if you are planting bin-run seed, have it custom cleaned or conditioned, including the application of seed treatments and inoculants, if the law allows for that seed variety.
• Adverse winter weather can have an adverse impact on young livestock says Extension veterinarian Russ Daly, particularly problems that may not show up for some time after cold spells and blizzards. He warns of frostbite, pneumonia, and several viruses that can incubate for several days then be aggravated by other stressors such as weaning and transporting. He suggests consultation with local veterinarians to diagnose problems.
• The sagging global demand for beef may be out of the hands of the beef industry to control according to a study by Kansas St. and Michigan St. livestock economists.
  1) While price is important, small price adjustments have minimal impact on consumers.
  2) Recent food safety recalls adversely affect domestic and foreign demand by 2.6%.
  3) Consumer influence by health articles linking fat and heart disease cut demand by 9%.
  4) The media frenzy about low carbohydrate diets boosted beef demand by 2%.
  5) Convenience of preparation benefits poultry and pork, but hurts beef demand.
• So, what should the beef industry do to bolster demand? Researchers decided:
  1) Conduct research that identifies positive impacts from consumption of beef.
  2) Present those findings to health professionals, nutritionists, and consumers.
  3) Develop production or processing techniques to enhance beef nutritional qualities.
• Is the US beef herd overestimated? That is possible say MO livestock economists Glenn Grimes and Ron Plain, who say if that is correct, there is no further need to reduce the cow herd further. They say those who doubt USDA numbers believe the cut in the cow herd has been covered up by the speedup in marketings of steers and heifers by putting them on the market earlier, even though they had reached market weight. But Grimes and Plain side with USDA's statistics and the benchmark 2007 Ag Census.
• It is too early now, but it may be time to order legume seed for bolstering pasture vitality with the help of frost seeding. The seed depends on freezing and thawing for soil incorporation along with later winter moisture. IL crop specialist Jim Morrison says medium red clover provides the best success but requires inoculation and proper pH.
• Taking a soil test will allow you to make educated decisions on your farm rather than adding fertilizer that is not needed, particularly on pastures, says KY forage specialist Ray Smith. In pastures approximately 80% of the nutrients consumed in the forage are returned to the pasture in the manure and urine. Therefore, fertilizer requirements on pasture are lower than for hayfields, but this is only true in well-managed rotationally grazed pastures where manure and urine are equally distributed throughout the pasture.
• Has your poly tank failed and created a catastrophe? They are versatile and tough, but failure is a potential, so inspection and maintenance need to be part of your routine in using them. Get poly advice at: http://www.btny.purdue.edu/Pubs/PPP/PPP-77.pdf .
• Have you lost a poly tank while traveling down the roadway? Securing a poly tank is not hard, but must be done correctly because lost cargo is not easy to reload on a truck or trailer. There are governmental requirements for securing loads, including poly tanks. Get the proper techniques at: http://www.btny.purdue.edu/Pubs/PPP/PPP-75.pdf .