• USDA has revised its October Crop Report reducing corn acreage by 1.2%, soybean acreage by 1.4%, and dropping acreage also for canola, sunflowers, and edible beans, with an increase in sorghum acres of 2.5%. USDA said the adjustment was necessitated by failure of the FSA and NASS computer software to reconcile acreage information.
• Revised corn data projects 78.177 mil. harvested acres, 153.9 bu. average yield and 12.033 bil. bu. production. Planted and harvested acreage dropped 1 mil., and yield declined 0.1 bu. USDA did not adjust any projected use, but reduced ending stocks from 1.154 bil. to 1.088 bil. bu. and added 5¢ to the average farm price, now $4.25 to $5.25. Find details at: http://www.usda.gov/oce/commodity/wasde/latest-revision.txt .
• Revised soybean data projects 74.374 mil. harvested acres, 39.5 bu. average yield and 2.938 bil. bu. production. Planted acreage and harvested acreage both dropped 1.1 mil., but yield estimates were left unchanged. A 30 mil. bu. drop in exports was the only adjustment to use, with ending stocks lowered from 220 to 205 mil. bu. USDA added 10¢ to the season average price estimate which now ranges $9.70 to $11.20 per bu.
• While futures prices have fallen, the basis has narrowed says IL Extension's Darrel Good. He points to an anecdotal cash price that was 40¢ under Dec futures, which was 20¢ higher than recent fall delivery prices, but still 20¢ under year ago levels. His cash bean example is up 60¢ from recent bids, and 15¢ stronger than cash bean prices in late 2007. Read more at: http://www.farmdoc.uiuc.edu/marketing/weekly/html/102708.html
• Darrel Good also says spreads in the bean market have also narrowed to create a carry in the market. The result of the carry and the narrow basis is a return to storage, if farmers can store beans. Good says the return is minimal, and calculated a 50¢ return for 8 months of storage, if summer 2009 basis levels narrowed to 10¢ under. That works out to be a 17¢ return to storage, because 6% interest on $8.30 soybeans would cost 33¢.
• Returns to storage for corn are a slightly better calculates Darrel Good. The Dec to July futures spread is 37¢ putting cash prices at 77¢ under July. If the basis returns to typical levels, he says that puts a return to storage at 62¢ for corn stored 8 months. With 13¢ interest, the true return to storage would be 49¢, even covering commercial rates.
• Update your marketing plan based on the stronger basis, suggests Good. If prices recover as expected over the next six months, then storage would pay off. He says holding corn may be preferable, but at current scenarios, the soybean market may only reward those with a basis contract or a hedge, which are cheaper than storing beans.
• Was the revised USDA report a turning point in the market meltdown? Kansas State marketing specialist Mike Woolverton thinks, "During the summer and early fall, commodity prices have been beaten down by outside influences such as the precipitous oil price drop, a tremendous hedge and index fund sell-off, the credit market freeze, overseas buyers waiting out the down price trends, and the global economic downturn. Now, maybe buyers and sellers can concentrate on supply and demand fundamentals."
• Woolverton says market fundamentals are stronger than prices reflect. He says the world will soon turn to US corn and wheat, and demand will strengthen. He says ending stocks are low by historic standards, the battle for acres will heat up, input costs have to fall more or fertilizer sales will weaken, exports have held up despite credit conditions.
• Look at South America, says Woolverton, who says crops have struggled due to bad weather, wheat in both Argentina and Australia is droughty, financial problems in Brazil have restricted soybean planting, and Argentine farmers are mad at their export taxes.
• Will credit markets and ethanol expansion determine 2009 corn and soybean acreage? Ohio St. marketing specialist Matt Roberts believes ethanol expansion will slow, but he is uncertain how much. Estimating weaker exports and more ethanol demand, Roberts says there may be a need for 2-3 mil. more acres of corn than in 2008. Roberts says soybean acreage in 2009 could be reduced by 1.5 mil. without much difficulty in the market.
• Will there be more profit in planting corn or soybeans in 2009? Declining commodity prices and rising input costs have underscored the need for precise calculations, but as grain prices potentially recover and some input costs soften, periodic calculations may be required as you implement your marketing plan. Consult the crop enterprise budgets offered by Ohio State at: http://aede.osu.edu/Programs/FarmManagement/Budgets .
• Matt Roberts at Ohio State says those budgets show variable costs of $450-$500 per acre to plant corn, and a breakeven price of $4.50 that includes returns to labor and land. For soybeans, the variable cost is $240-$270 with a breakeven inclusive market price of $9-$10. Roberts says unless something changes, he cannot see increased corn acreage. Read more: http://aede.osu.edu/people/roberts.628/extension/newsletter/08v.pdf .
• Be a church mouse and listen to Purdue economist Allan Gray's advice to agribusiness:
  1) If you have a high-priced fertilizer inventory, your tendency is to cover your costs. But farmers know prices have declined, and they will look to a lower priced competitor.
  2) If you have pre-sold nitrogen at high prices, you'll face pressure to give farmers relief.
  3) Elevators earlier this year had to pay out high margin calls, and lower prices are bringing that cash back home. Keep the cash if possible for your financial reserves.
  4) Ag lenders are tightening their credit, and farmers who do not get needed operating credit will be asking ag retailers to help finance the crop inputs needed next spring.
  5) Elevators considering use of their additional working capital to enter the credit business should be diligent in understanding credit worthiness and one's ability to repay.
  6) Agribusiness should not lose focus of serving their best customers at the highest level.
• Wet and cold sums up 2008 weather say Iowa St. specialists, with the statewide accumulation of growing degree days 130 behind the average, and rainfall 7 in. more than average. Interestingly, 85% of that surplus 7 inches fell prior to June 12.
• "Run wide open and don't lift," says grain quality specialist Charles Hurburgh at Iowa State, addressing the need to get all grain out of the field as quickly as possible and deal with moisture issues in storage. Hurburgh says soybeans will not dry any further, and will only rise in moisture now and temperature variations will cause pods to split open.
• If you have wet corn, and lack of drying capacity, Hurburgh has several suggestions:
  1) Dry it to 17-18%, store it with airflow and cool it off, and moisture will drop to 15%.
  2) Dry it to 20%, cool it with aeration, hold it at 17-18%, dry it in the spring or sell it.
  3) Dry it to 20%, store it with aeration, return the batch to the dryer for more heat later.
• If grain drying is your priority, consider these money-savers for this year and next:
  1) Calibrate your grain moisture meter. Meter errors cause under- or over-drying.
  2) Clean grain to remove fines before drying. There's no need to dry unneeded materials.
  3) Full heat drying cuts energy use by 15%. In-bin (dryeration) cuts energy use by 25%.
  4) Add a stirring device to bin dryers to save 20-30% in drying costs.
  5) If you have perforated floors and aeration, combination drying will save 40-50%, if you dry to 20% moisture with high temperature drying and finish with ambient air.
• Soybean rust was found in McLean and Marshall Counties in Central IL, and Jackson and Union Counties in Southern IL, but so far those 4 are the only counties north of the Ohio River with confirmed cases of rust. http://sbr.ipmpipe.org/cgi-bin/sbr/public.cgi .
• If your 2009 bean fields are rife with purple deadnettle over the winter, you are also likely hosting soybean cyst nematode. SCN egg populations can increase 3-5 fold over the winter on purple deadnettle, a winter annual. Ohio State specialists recommend that it be controlled within four weeks of emergence, since SCN eggs will hatch in 4-5 weeks.
• Pork producers continue to send sows and gilts to market, reducing the breeding herd at a modest rate says MO livestock economist Glenn Grimes. He hopes by December the breeding herd will be 5% below last December. Without any demand loss, Grimes says the average cost producer should break even in 2009. He is predicting financial losses on market hogs in the first and fourth quarters and profits in the second and third quarters.
• Breakeven costs for cattle feeders are dropping according to the calculations of Kansas State livestock economist Jim Mintert. His newsletter says even though fed cattle prices are only $90, the recent decline in feeder calves and the 30% decrease in feed costs have pushed breakeven prices down sharply. He says low cost operators may see a profit.
• Cattlemen should be concerned about the risk of prussic acid forming in forage that has been damaged by frost, and the potential for poisoned livestock. The problem remains until sorghum, sudangrass, or sorghum-sudan forages wilt and dry. Prussic acid is fatal to cattle, and IL Extension crop specialist Robert Bellm says there is no immunity.

The 2008-2009 Agriculture and Natural Resources Newsletter for Logan County is online at http://web.extension.uiuc.edu/logan/agnews/ Of course, this is a work in progress, as details are just coming out on some of the winter meetings.

Of note are the Private Pesticide Applicator Training, with the only Logan County date set for December 2 at the Lincoln Rec Center, and the Cost of Operation rates from earlier this year.

• Is the market dominated by bad news? Not really, says MO Extension marketing specialist Melvin Brees, who outlines several positive developments in his newsletter: http://www.fapri.missouri.edu/farmers_corner/mktng_newsletter/CurrentDM.pdf
  1) Current prices discourage increased plantings in South America.
  2) Lower prices reduce feed costs and support continued strong feed use.
  3) World population and incomes suggest that food demand is solid.
  4) Lower prices and freight costs offset the negative impacts of a stronger dollar.
  5) While corn and soybean carryout is increasing, it remains below average.
  6) The 2008-09 corn stocks/use ratio is the lowest in more than 10 years.
  7) Lower fuel costs and fertilizer price weakness might offer some input cost relief.
  8) Higher crop prices may be needed to encourage 2009 crop production.
• "Market action this year has clearly demonstrated the importance of capturing profitable prices when they are offered," says MO Extension's Brees. He says for unpriced grain, "Market carry and basis gain potential suggest storage returns, but be aware that volatile price action can erase these returns in a single futures trading session." Brees says your assignment is to work on 2009 cash flow and a marketing plan.
• Corn storage is also the plan of Jim Hilker at Mich. State Extension. He says that is indicated by the basis and the spread between futures. "What it doesn't tell us, is whether to store it under a hedge, or store unpriced, ie, is the price going up down or up? As soon as I figure out what the oil price will do, I'll let you know what the corn price will do."
• Hilker feels sorry if you have unpriced wheat. "Futures have dropped as the world has learned it will have enough wheat, and with the drop in corn prices meaning the bid for land will not have to be as high. (Also) the basis is about a $1.00 weaker, $1.50 to $2.50."
• Regarding soybeans, Hilker says, "The problem here is that I would generally recommend a basis contract here if you wanted to stay in the market, when the market says it won't pay for storage, but here the basis may strengthen a bunch."
• The "new market territory" we entered two years ago is now in full force across the rest of the markets says So. Dakota State marketing specialist Alan May, who expects added uncertainty in coming months. He says, "All of these concerns about the economy still mean that your success boils down to applying sound risk management strategy to your business. Stay in front of the cost versus return aspect of your enterprises, evaluate constantly where your breakeven lies, and stay in close touch with your lender to make sure you are both on the same page in terms of credit availability and cost of that credit."
• Revenue Assurance is shaping up to make significant indemnity payments, but if the corn market goes up, the payment would decline, suggesting the necessity to buy a call option for "insurance insurance." K-State Extension's Art Barnaby says please consider:
  1) If the market continues to slide, your RA indemnity check would get larger.
  2) December calls are about to expire, so March calls are the best alternative.
  3) Sell back a March call by mid-November to minimize the loss of the time value.
  4) Don't even consider any of this, unless you are very familiar with options.
• If you farm for multiple landowners and make decisions for them on crop insurance, Kansas State risk management specialist Art Barnaby says land owners may be better off with APH policies than with a group policy that farm operators choose. A larger farming unit may benefit from GRP or GRIP, but does not protect the owners' small tracts. More: http://www.agmanager.info/crops/insurance/risk_mgt/rm_html08/AB_ra_pay.asp.
• If corn drydown seems to be slow, you are correct. Purdue agronomist Bob Nielsen says planting was late, cool temperatures slowed development, and maturity was delayed. http://www.agry.purdue.edu/ext/corn/news/articles.08/GrainDrydown-1022.html .
  1) The later grain matures, the smaller the daily rate of drydown due to temperature.
  2) Harvest moistures are parallel to 2002, but drier than 2003, so not too unusual.
  3) Estimated drydown rates for 10 of the past 21 days have been .4 points or less per day.
  4) For corn that did not mature until late Sept., drydown time has been insufficient.
• The past several years have allowed natural field drydown for corn, but because of the late maturing crop, nearly every load will have to be artificially dried. There will not only be an energy cost to remove water, but there will also be a weight loss or shrinkage. If your elevator calculates a "pencil shrink," a good explanation of the process to improve your understanding is at: http://www.extension.iastate.edu/Publications/NCH61.pdf .
• If the economy does not permit consumers to demand beef, supply fundamentals will have no impact on the beef market says Purdue economist Chris Hurt. He says cattle prices dropped 10% in the past month, impacting small feeding operations with unpriced feeder calves. More: http://www.farmdoc.uiuc.edu/marketing/weekly/html/102008.html .
• Hurt says the price decline was moderated by the 25% slide in corn prices and 20% fall in soybean meal prices in the past 3 weeks, easing the cost of production for livestock operators. Hurt tells cattle feeders to expect a recession and not a depression so don't panic. He says if you lock in bargain feed prices, also lock in your live cattle futures. He expects a $5-7 recovery in feeder calves and finished cattle moving into the low $90's.
• Cattle economist Dillon Feuz at Utah State says tight credit may be a problem for cattlemen with excess red ink. "Cattle feeders have generally lost money the last 2 years and based on current prices many cow-calf producers are likely to lose money this year. You will all likely need more operating money to work with, and if this financial crisis doesn't get solved, you may have a difficult time finding banks to loan you money."
• Cash rents are rising, and pasture rental agreements should be in writing just like cropland. "Cattlemen seem willing to pay more for the land, renting by the year, month or day; by the head and/or pair; or by the acre," says MO Extension's Wayne Prewitt. A sample lease is at: http://extension.missouri.edu/explorepdf/regpubs/ncr149.pdf .
• Exports are still contributing to the value of pork. MO livestock economist Glenn Grimes says in August, exports were responsible for $47.90 per head, compared to $27.27 for August of 2007. While exports continue to rise, the rate of growth has slowed. He's expecting additional weakness in hog prices in coming weeks.
• Country of origin labeling (COOL) is now law, but Ohio State economist Ian Sheldon questions the economic logic and says it will drive up already high food prices. "If it's about safety, then perhaps we should be spending money on food safety." He says the across the board implementation means higher prices, whether consumers want it or not.
• Regardless of market prices, you cannot afford to lose a bin full of grain. NE ag engineer Tom Dorn says, "Mold growth is reduced below 50°F and nearly stops at 40°F. Mold activity is greatly reduced below 16% moisture content at all temperatures. The university therefore recommends bringing corn down to 15% moisture and cooling it to between 30°F and 40°F if the grain will be held into the winter months. If held into the summer months, corn should be dried to 14% by May. Soybean moisture content should be two points lower than corn, 13% for winter delivery and 12% for spring delivery."
• If you are planting wheat, agronomists at Ohio State say we are at the end of the period when there will be adequate tiller development before winter dormancy. Even if soybean harvest is late, late planted wheat is at a greater risk for poor stand establishment, winter kill, and spring heaving. They say if freezing is delayed, wheat may still do fairly well.
• For late planted wheat, increase your seeding rate up from the 1.2-1.6 mil. per acre to 1.6-2.0 mil. per acre. The latter would be 30 seeds per foot of 7.5 in. rows. Wheat at 13,000 seeds per lb. would require 123 lbs. to get 1.6 mil. and 154 lbs. for 2.0 mil.
• If a fire reaches your chemical storage, and firefighters pour on the water to douse the flames, will your insurance pay for the environmental clean-up? Purdue pesticide specialist Fred Whitford says most insurance policies have "environmental exclusions" which makes farmers liable for cleaning up chemical spills. Read his factsheet at: http://www.btny.purdue.edu/Pubs/PPP/PPP-49.pdf , then ask an insurance agent:
  1) What is the extent of coverage for environmental cleanup?
  2) How much environmental cleanup coverage do you have?
  3) Are you covered for spills from off-the-farm transportation accidents?
  4) What is required of me if there is a chemical spill?
  5) Are there any actions you might take that might void the policy?
  6) Are you covered for chemical spills resulting from temporary storage accidents?

Everyone knows the cost of nitrogen, well at least the fact it is priced similarly to gold (tons to ounces at least!) Here is the latest information concerning application recommendations based on price of commodity and price per pound of nitrogen:

http://www.ipm.uiuc.edu/bulletin/article.php?id=1041

• 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."