• Soybean exports continue to climb, says IL Extension's Darrel Good, and USDA is forecasting nearly as many shipments as last year, which would put sales at 1.1 bil bu. Good says the rapid pace of Chinese purchases has pushed totals 39% above 2008. He says to reach USDA estimates, shipments will not have to match last year's pace. Dry weather in Argentina has reduced its crop potential, reducing US export competition.
• Corn exports, says Darrel Good are at 617 mil. bu., which is 412 mil. behind 2008 at this date. That results from declining demand from major buyers, which may be buying corn in other global markets, and feeding low quality wheat from other nations. USDA's corn export forecast is for 1.75 bil. bu., but Good doubts the goal will be reached. Read his newsletter at: http://www.farmdoc.uiuc.edu/marketing/weekly/html/012609.html .
• Same stocks, but a new price level, says Extension Specialist Jim Hilker at Michigan State. "The bottom line is that expected 2008-09 ending stocks were put at 1.790 bil. bu., up 316 mil. from the Dec estimate. The 1.790 bil. is 15% of use, in the old days an ending stocks-to-use ratio of 15% would have meant a $2.25 price. But the increase in inelastic ethanol demand, and a floor caused by the ethanol mandates, has changed the corn pricing model." Read more at: https://www.msu.edu/user/hilker/outlook.htm .
• Wheat stocks are plentiful, says Jim Hilker at Michigan St. "With the projected ending stocks-to-use ratios for both 2008-09 and 2009-10, supplies are projected to be more than sufficient the next two years. However, while the projected US 2008-09 ending stocks of 655 mil. bu. are ample, and the 2008-09 projected world ending stocks are much improved from last year, projected 2008-09 world ending stocks are still relatively tight.
• Mike Roberts' market observations from VA Tech contain grain selling strategies:
  1) Lack of technical strength is a contributing factor keeping corn under $4.00/bu. Wait and see where these prices are headed before pricing any more of the 2009 corn crop.
  2) Forecasts for better weather in Argentina and producers did not seem to be turning loose of many beans. It might be a good idea to price binned soybeans on upticks.
  3) Argentinean government was reportedly blocking exports to protect food supplies amidst an ongoing drought. It would be good to hold off pricing any more wheat.
• Planting decisions should be based on market signals, says MO Extension specialist Melvin Brees. He recalls the 2007 January corn/soybean futures price ratio near 1.9/1, which favored corn. But the 2008 signal had a January soybean corn futures price ratio of 2.5/1 that favored soybean production. Corn acres grew in '07 and soybeans in '08. Read: http://www.fapri.missouri.edu/farmers_corner/mktng_newsletter/CurrentDM.pdf .
• Brees says, On Jan 15 "March corn of $3.65 and beans $9.95 (put) the bean/corn price ratio near 2.7/1. When compared with the last two years, this appears to heavily favor soybeans. However, nearby (March '09) corn futures are discounted when compared with new crop (December '09) futures prices. This "carry in the market" suggests weak nearby demand and a market that is willing to pay more for corn next year."
• Brees says, "In contrast, the soybean market is inverted with nearby futures prices about 35 cents higher than new crop (November '09) futures prices. This signals stronger nearby demand for soybeans with less concern about next year's crop supplies. Comparing new crop corn futures price ($4.11) and soybean prices ($9.61) (Jan 15), the soybean/corn price ratio is about 2.3/1. For much of the Cornbelt, this price ratio is probably a neutral signal, unless corn production costs are especially high."
• Brees leaves some final words of wisdom. "(For either corn or soybeans), profits are likely to be harder to come by in 2009 than they were in 2008 and wishful thinking should be avoided in setting price goals. During an uncertain economic climate, capturing potential profits when they are offered may be important.
• Fertilizer prices are stabilizing, but vary widely at dealers and farm supply companies according to Purdue economist Bruce Erickson, who says the US demand is at the mercy of whatever happens in other parts of the world. He says 47 % of the N and 45% of the K needed for use in the spring of 2009 came into the US during the period of lower prices.
• Fertilizer delivery could be a problem, since less than the usual amount was applied in the fall, and more will have to be transferred into retail dealerships, which may have problems getting timely deliveries this spring. That is the thought of Purdue's Erickson, who says the delivery network will be strained with a high demand for spring fertilizer.
• Fertilizer pricing depends on the dynamics in the price of corn between now and planting time says Purdue economist Alan Miller, who adds that nitrogen prices have returned to levels that would bring natural gas prices into play again. He says natural gas prices have been relatively low, but if they increase, so does the cost of nitrogen. Read more at: http://www.agecon.purdue.edu/news/financial/Fertilizer_Market.pdf .
• Urea and UAN prices have declined slightly to become more competitive with anhydrous ammonia, causing some farmers to question the value of one over the other. Purdue agronomist Jim Camberato says urea can be applied faster than ammonia, but is typically not as good a source of N. He says Urea is often inferior to UAN when surface-applied, but equivalent or slightly better than UAN when incorporated into the soil. Read his fact sheet at: http://www.agry.purdue.edu/ext/corn/news/articles.09/Urea-0126.pdf .
• Cut your production costs with help from audio, video, and fact sheet resources provided by NE Extension at: http://cropwatch.unl.edu/survivinghighinputcosts.htm . The frequently updated website offers efficiency improvements on cropping systems, machinery management, production management, irrigation, pest control, fertility, and harvest and storage issues. The site also features production budgets for 11 crops.
• Mark your calendar. USDA's deadline is February 27 to sign up for any financial assistance from various crop disasters between 2005 and 2007. Producers with crop or pasture damage must complete an FSA-840 application at local FSA offices.
• With a 35% drop in dairy prices, dairymen are urged by OSU dairy economist Cameron Thraen to sign up for the Milk Income Loss Contract (MILC) program begun in the 2002 Farm Bill. He says the record high returns for the past two years are history, and the MILC program can provide a counter-cyclical type of payment during the grim 2009 milk economy, if you sign-up one month before you plan to enter the program. Read more at: aede.osu.edu/programs/OhioDairy/MILC_Center/MILC_Center.htm .
• If you need DDGS, go to Indiana, says Purdue economist Frank Dooley. He says the Indiana ethanol industry will reach a 1 bil. gal. capacity and those ethanol plants will produce enough distillers' dried grains to feed IN livestock three times over. Dooley says that means an annual production of 900,000 tons of DDGS, when 300,000 are needed. He says the relative high price of $100 per ton has not given indications of softening.
• Ethanol proponents have some new ammunition to use from research at Nebraska:
  1) Corn ethanol directly emits an average of 51% less greenhouse gas than gasoline.
  2) Ethanol produces 1.5 to 1.8 units of energy for every unit it takes to make ethanol.
  3) 10-19 gal. of ethanol are produced for every gal. of petroleum used to grow corn.
• Many Cornbelt farmers may be surprised to find 80% of their soybean fields infested with soybean cyst nematodes as are fields in IL. Nematologist Terry Niblack says if a field has been SCN free, it will not be for long, and said IL was completely infested by 2005, after SCN was found in only 1 county in 1962. Niblack says soil sampling is the only way to know if SCN is present, since it can cause an undetected 30% yield drop.
• SCN is easier to keep suppressed than it is to reduce the impact says Extension specialist Niblack. She adds, "If the field is planted to a confirmed SCN-resistant variety and SCN populations are increasing, that's proof that adaptation or a "race shift" has occurred. SCN-resistant varieties do not have the same levels of resistance and there are no immune soybean varieties." She says rotate crops, varieties and sources of SCN resistance.
• Given the moisture saturation of soil, MO Extension's Laura Sweets is concerned about the potential for seed decay, seedling blights, and root rot problems for both corn and beans this spring. She says that favors pythium, rhizoctonia, and fusarium fungi problems for both corn and beans, and phytophthora problems for beans. She recommends using seed with high germination rates and fungicides, if not pre-applied.
• All of that information you provided to the USDA in 2007 for the Ag Census, will be published on Feb. 4 when the results of the Ag Census are released. County-level data is the smallest unit that will be detailed, and will show the changes in agriculture from 2002 when the last Ag Census was taken until the latest one nearly two years ago.

The Logan Co. FSA will be conducting informational meetings on the new Farm Bill. The meetings will cover the Direct and Counter-Cyclical Program, payment eligibility, and the new ACRE program.

All meetings start at 9:30 a.m. and will be held at the Emden Community House on January 30, the Lincoln Rec Center on February 3rd, JD's Reception Hall in Minier on February 6th, and at Elkhart Zion Center on February 11th. Contact the Logan County FSA Office at 217-735-5508 with any further questions.

• Will your cropping pattern change in 2009? IL Extension's Darrel Good says many farmers are still waiting for fertilizer prices to come down, commodity prices to give stronger signals, and cost estimates and price guarantees from crop insurance. His newsletter is at: http://www.farmdoc.uiuc.edu/marketing/weekly/html/012009.html .
• Will more corn or beans be needed? Good says the answer depends on: the level of consumption next year, the magnitude of stocks at the end of the current marketing year, and US average yields in 2009, but the question won't be answered before planting time.
• For corn: Good says repeating 2008 acreage of 85.982 mil. and a trend yield of 153 bu. would produce 12.04 bil. bu. Combined with the 1.79 bil. ending stocks from 2008, such a crop would still provide a 490 mil. bu. surplus with a 12.53 bil. bu. consumption. He contends that corn acreage needs to be maintained at least at 2008 levels of 86 mil.
• For beans: Good says repeating 2008 acreage of 75.718 mil. and the trend yield of 42.3 bu. is reached, then a crop of 3.164 bil. bu. would be produced. He says with the 225 mil. bu. carryout, soybean use during the 2009-2010 marketing year would have to exceed 3.204 bil. bu., which he doubts, to warrant increased soybean acreage in 2009.
• Set sales targets, advises marketing specialist Jim Hilker at Mich. St. because there is plenty of corn, "$4.00 being a good starting target to consider for both this year and next. Of course you can average into $4.00 by staring a bit below and hoping to price some of it above. The other target you need to set is how much you want to price at each price target and time period, don't get carried away, but consider making significant sales."
• Soybean pricing depends on the Argentine drought in Hilker's mind. "The drought in Argentina both makes that a hard decision, but also may be an opportunity. Futures were only willing to pay four cents a month storage, which would only cover those with on farm storage and no production loans due. And the $9.60-70 price being offered for old crop is above what fundamentals would project at this time on known information."
• Potentially the most damaging aspect of (the Jan. 12 USDA) reports for the corn market is that the weaker demand doesn't look like it will be a one year phenomenon, says Matt Roberts at Ohio State. "Combined with higher initial inventories for next year, these reports remove much of the worry about the 2009 crop year—not only will there be a large carry-in to buffer any production shortfalls, but demand will be weak."
• Unlike corn, says Roberts, "There is no evidence of a broad-based, dramatic slowdown in soybean demand." There is softness in domestic crush, but exports are stronger. He says, "These reports provided a tremendous amount of support to soybean demand."
• Matt Roberts says, there does not appear to be much hope for higher prices in the short or intermediate term. He says corn acreage could drop 2 mil. from 2008 and corn prices would still move lower. He agrees with Darrel Good, "There is no compelling scenario in which the soybean market 'needs' additional acreage." And he says compared to the battle "for" acres of the past 3 years, weak demand will cause a battle "from" acres.
• Roberts believes undesignated acres may be destined more for wheat than for corn or soybeans. "This leads me to believe that we may have already seen the strongest of the winter rally, and prices will decline from this point to $3.80-$4.00 for the Dec '09 CBOT contract, where they will wait to gain a better handle on farmers' planting intentions."
• Strong grain prices may create problems for some farmers with the new Adjusted Gross Income rules that determine farm program payment eligibility says Steven Johnson at Iowa St., and he says there are some new financial reporting forms required by FSA.
  1) CCC-902I, which is a "Farm Operating Plan for Individuals."
  2) CCC-902E, which is a "Farm Operating Plan for Entities."
  3) CCC-926, which computes Average Adjusted Gross Income.
• As a refresher, Johnson says, "For commodity and disaster programs, the AGI limitation was reduced from the 2002 law's $2.5 mil. from all sources to a 3-year average non-farm AGI of $500,000. For 2009, those 3 years will consist of taxable years 2005, 2006 and 2007. An individual or entity that exceeds this $500,000 non-farm AGI average shall not be eligible for such programs. Also, under the new regulations, an individual or entity must have a 3-year average AGI under $750,000 per year from farm income in order to qualify for direct payments issued under the Direct and Counter-cyclical Program."
• Cattle feeders are being hurt by ethanol plants that are shutting down and diminishing the volume of wet and dry distillers' grains that are available. Nebraska livestock economist Darrell Mark says, "Feeders can't simply remove it from rations once cattle have been fed this highly palatable feed. Given strong local demand and reduced supply, the cost of distillers' grains has increased dramatically relative to corn (despite absolute prices dropping)." More: http://www.lmic.info/memberspublic/InTheCattleMarket.html
• Pork producers are intrigued with the 2008 broiler production, which was down 0.7% for the year and 5.8% for the 4^th quarter. MO livestock economists Grimes and Plain say the cutback is big in absolute terms and historically. They say the pork-poultry cross demand relationship is high and "Therefore, this reduction in poultry supplies and higher prices should be positive to pork demand." http://agebb.missouri.edu/mkt/bull1c.htm .
• Returns to cattle feeders in 2008 were a minus $130 per head according to the Livestock Marketing Information Center, and the worst going back into the 1970's. That is based on feeding out a 750 lb. steer in a commercial feedlot. Grimes and Plain say, "Due to the weakening feeder-calf prices and high costs, some cow-calf producers did not cover cash costs of production in late 2008." Returns are in the 20^th month of red ink.
• Livestock production will be down in 2008. The Grimes and Plain Outlook says:
  1) Beef producers will continue to reduce the cattle herd in 2009 and into 2010.
  2) Pork production will decline 2-3% in the first quarter of 2009, and 3% for the year.
  3) Chicken and turkey production will decline 3%, an unusual two year decline.
• Should corn silage get extra N? That was the question to be answered in a 4 year IL study involving continuous corn, corn-soybean rotations, and varying rates of N.
  1) Silage yield and crude protein were higher in Sb-C than in C-C rotations.
  2) Silage yield and crude protein rose in both rotations up to 180 lbs. of N.
  3) Neutral detergent fiber decreased in both rotations with increasing N rates.
  4) Results were minimal or inconsistent for other silage quality parameters.
• Delayed weed control means lost corn yield to weed specialist Bob Hartzler at Iowa St. Early season weed competition reduced the biomass of the ear shoot up to 85%. He says allowing weeds to compete for an additional week when corn was growing from V4 to V5 resulted in a 63% increase in lost yield because ear shoots begin at the V5 stage. Read his analysis at: http://www.weeds.iastate.edu/mgmt/2009/toolong.pdf .
• If non-GMO soybean premiums have caught your attention, please, please remember that Roundup is not an option for weed control. Some farmers will need a refresher on weed control for non-GMO beans. You can do it from home with the help of Ohio State's weed management fact sheets. Find them at: http://agcrops.osu.edu/weeds/ .
• For maximizing grain yield and profitability, soybean variety selection is the single most important factor. In a free webcast presentation titled Soybean Variety Selection, WI Soybean Extension Specialist Shawn Conley discusses variety selection criteria and other related yield-maximizing factors. This recording, which can be viewed through mid-February, is provided by the non-profit Plant Management Network: http://www.plantmanagementnetwork.org/edcenter/seminars/SampleWebcast/
• Your grain bins may be out of sight, but should not be out of mind. MO Extension's Charles Ellis says cooler air along the sides settles, and is warmed at the bottom, where it carries moisture to the top and releases it for the benefit of insects and mold. The top surface moisture condensation will lead to rapid spoilage as the outside air warms. He suggests aeration. http://ppp.missouri.edu/newsletters/ipcm/archives/fullissue/v19n1.pdf
• The Clean Water Act has broadened, thanks to a federal court ruling on FIFRA-regulated pesticides that might find their way into water. Although EPA may have found the chemicals were not environmentally harmful, the court ruled that pesticides are not exempt when they leak into water. Iowa St. specialist Roger McEowen says the court may have been confused. Read more at: http://www.calt.iastate.edu/cleanwater.html .
• Mark your calendar if you are buying, selling, or renting Cornbelt farmland. The Chicago Farmers Farmland Investment Fair is set for Feb. 7 at Joliet (IL) Junior College. Speakers will focus on farm management, ownership issues, production alternatives, and the Farm Bill. Registration and trade show information is at: www.chicagofarmers.org .

"Besides the pedigree information and EPDs and Accuracies found in the hard copy, which will be out next week, the web version includes pertinent information like Adjusted Birth, Weaning and Yearling Weights, Illinois Heifer Development Program-eligible bulls; and the six-trait Power Score which determines sale order," he said. "In addition, the website contains the registration numbers where producers can link to the breed associations and secure a copy of the performance pedigrees."

The Feb. 19 IPT Bull Sale is the leadoff event for the Illinois Beef Expo held on the Illinois State Fairgrounds.

"There are 117 performance bulls cataloged, including 83 Angus, 33 Simmental, and one Polled Hereford," said Seibert, who is the sale's manager. Additional information can be obtained by contacting Seibert at (309) 694-7501, dseibert@illinois.edu .

Urbana - This year, the sponsors of the Certified Livestock Manager Training (CLMT) workshops are going the extra mile to assist producers in their efforts to comply with the Illinois Livestock Management Facilities Act and other environmental regulations.

"The first person to register from a facility will pay $30," said Randy Fonner, U of I Extension specialist and coordinator of the workshops. "Additional registrants from the same facility will only be charged $20."

Although Fonner emphasized that each facility is only required to have one person certified, "there is value in larger facilities having multiple people certified," he noted. "If one person leaves for a week, and a second employee is certified, you've got yourself covered."

Fonner also believes there is educational value in having employees hear the message and participate in the workshops. "This is an opportunity to provide additional training for your employees, and that's always a good thing," he said. "Everything we talk about, whether it's safety, odor, land application, regulations, it's all important information for anyone who works at the facility."

Since the Livestock Management Facilities Act was passed in Illinois in May of 1996, certification in livestock manure management is required for producers with more than 300 animal units, and must be renewed every three years.

Some of the topics that will be addressed at this year's workshops include concrete construction and the value of manure as fertilizer.

"We want to help producers with quality construction that also meets state regulations," said Fonner. "You need to make sure the work gets done right so the approval process with the Department of Agriculture goes smoothly."

Fonner also said the value of manure as fertilizer is a hot topic these days.

"With the increase in the cost of commercial fertilizer, manure is a little more valuable in people's eyes," he said.

But Fonner said it is important to know how to apply manure efficiently, with an eye to environmental risk. "You need to know what's in the manure," he said, "and you need a good soil test to show you where you should apply it, and where you shouldn't. If you variably apply nutrients, you're putting them where you need them and getting the most 'bang for your buck.' You're also reducing the risk of unused nutrients going into surface or ground water."

Other topics will include approved carcass disposal methods and management practices, using manure on forage crops, practical odor control strategies, the latest odor-management research, and innovative manure storage and process technologies.

To register for a workshop or purchase a manual or CD, call (800) 345-6087. Prices are listed below and you may pay by credit card. If you have a manual, 2003 or newer, you will not need to purchase a new manual.

CLM Workshop Registration: $30 per person; same farm registrations will be charged $30 for the first registration and $20 for each additional if registered at the same time.

CLM Manual only: $55.00 + $7.00 shipping = $62.00

CLM CD only $25.00 + $7.00 shipping = $32.00

CLM Manual & CD: $80.00 + $7.00 shipping = $87.00

Workshop walk-ins: $92.00 per person (includes CLM manual)

A workshop brochure is available at www.livestocktraining.com. If you have questions, contact Fonner at (217) 333-2611 or e-mail him at clmt@illinois.edu.

January 29, 2009 -- Newton – Focus on SWINE

Location: Sunrise Community Center, 1401 Clayton Ave., Newton, Ill. For directions, call the Jasper Co. Extension Office at (618) 783-2521. Registration: 8:15 a.m. Workshop starts: 8:50 a.m. Participants arriving after 9:20 a.m. cannot be certified for attending the workshop. IDOA written exam: 1:30 p.m. This workshop will primarily be aimed at SWINE producers, but is open to all producers.

January 30, 2009 -- Nashville – Focus on SWINE

Location: St. Paul's United Church of Christ, 330 North Buhrman St., Nashville, Ill. For directions, call the Washington Co. Extension Office at (618) 327-8881. Registration: 8:15 a.m. Workshop starts: 8:50 a.m. Participants arriving after 9:20 a.m. cannot be certified for attending the workshop. IDOA written exam: 1:30 p.m. This workshop will primarily be aimed at SWINE producers, but is open to all producers.

(Please notice time change for BEEF/DAIRY workshops.)

February 17, 2009 -- Breese – Focus on BEEF/DAIRY

Location: Clinton County Extension Office, 1163 North 4^th St., Breese, Ill. For directions call the Clinton Co. Extension Office at (618) 526-4551. Registration: 9:30 a.m. Workshop starts: 10:00 a.m. Participants arriving after 10:20 a.m. cannot be certified for attending the workshop. IDOA written exam: 2:00 p.m. This workshop will primarily be aimed at BEEF/DAIRY producers, but is open to all producers.

February 18, 2009 -- Effingham – Focus on BEEF/DAIRY

Location: Effingham County Extension Office, 1209 Wenthe Dr., Effingham, Ill. For directions call the Effingham Co. Extension Office at (217) 347-5126. Registration: 9:30 a.m. Workshop starts: 10:00 a.m. Participants arriving after 10:20 a.m. cannot be certified for attending the workshop. IDOA written exam: 2:00 p.m. This workshop will primarily be aimed at BEEF/DAIRY producers, but is open to all producers.

February 25, 2009 -- Freeport – Focus on BEEF/DAIRY

Location: Stephenson County Farm Bureau Building, 210 W. Spring St., Freeport, Ill. For directions call the Stephenson Co. Extension Office at (815) 235-4125. Registration: 9:30 a.m. Workshop starts: 10:00 a.m. Participants arriving after 10:20 a.m. cannot be certified for attending the workshop. IDOA written exam: 2:00 p.m. This workshop will primarily be aimed at BEEF/DAIRY producers, but is open to all producers.

February 26, 2009 -- Mt. Carroll – Focus on SWINE

Location: Carroll County Farm Bureau, Naaman Diehl Auditorium, Rt. 64 & 78, Mt. Carroll, Ill. For directions call the Carroll County Extension Office at (815) 244-9444. Registration: 8:15 a.m. Workshop starts: 8:50 a.m. Participants arriving after 9:20 a.m. cannot be certified for attending the workshop. IDOA written exam: 1:30 p.m. This workshop will primarily be aimed at SWINE producers, but is open to all producers.

March 3, 2009 -- Sycamore

Location: DeKalb County Farm Bureau Building, 1350 W. Prairie Dr., Sycamore, Ill. For directions call the DeKalb Co. Extension Office at (815) 758-8194. Registration: 8:15 a.m. Workshop starts: 8:50 a.m. Participants arriving after 9:20 a.m. cannot be certified for attending the workshop. IDOA written exam: 1:30 p.m.

March 9, 2009 -- Springfield

Location: Sangamon/Menard County Extension Office, Illinois State Fairgrounds, South Gate, Bldg. 30, Springfield, Ill. For directions call the Sangamon/Menard Co. Extension Office at (217) 782-4617. Registration: 8:15 a.m. Workshop starts: 8:50 a.m. Participants arriving after 9:20 a.m. cannot be certified for attending the workshop. IDOA written exam: 1:30 p.m.

The end of the calendar year brings a flury of "settling up" on some custom work done for neighbors, friends, or on a business agreement. Below is the link to the latest edition (May, 08) of Costs of Operation figures for Illinois:

http://www.farmdoc.uiuc.edu/manage/machinery/machinery_summary.html

These figures are based on actual costs to perform an operation including power, machinery, fuel, and labor. There is no management fee included.

For some of the less traditional rates not included on the Illinois site, try the Iowa State University site. They actually survey operators to garner their figures:

http://www.extension.iastate.edu/publications/FM1698.pdf

• The link to crude oil has broken says economist Chad Hart at Iowa State and grain prices are stronger. Hart says the strength in corn and bean prices has come from weather concerns in South America, weakness in the dollar, and bidding for 2009 acreage. More: www.econ.iastate.edu/outreach/agriculture/periodicals/ifo/IFO_2009/ifo010109.pdf#page=3 .
• Corn exports are significantly behind the pace of last year, despite weather problems in Brazil and Argentina that threaten the size of their corn crops. But soybean exports are stronger, running well ahead of early 2008 levels. Chinese purchases have been the key. With the stronger dollar hurting exports, Brazil's trade could certainly benefit, says Hart.
• The 2009 calendar year may be the first that ethanol production could be less than the federal mandates for production. Chad Hart at Iowa State says the ethanol industry has suffered financial stress as seen by the Verasun bankruptcy. He says that means there will be less DDGS produced and a greater demand for corn by the livestock industry.
• Chad Hart is not expecting 2009 total acreage to expand has it has been for several years because of the higher production costs and lower profitability. He says some forecasts have been for record acreage of soybeans as farmers shift away from high priced fertilizers for corn. Hart says prices in the early part of 2009 and weather going into the planting season will ultimately decide the allocation of corn and bean acres.
• The federal ethanol production mandates makes marketing specialist Jim Hilker at Michigan State think corn acreage will expand by 2.3 mil. over last year. He said 2 mil. more acres will be needed and the ethanol industry will bid up prices to buy some insurance acres. He says, "If you look at corn prices relative to soybean prices, corn yield relative to soybean yields, and you look at the huge drop in wholesale fertilizer prices, corn will deliver a higher return per acre. Thus more corn acres to be planted."
• Hilker says soybean acreage will drop by 1 mil. acres from last year because of better returns for corn. He says if they drop very little, soybean prices may struggle next year and he's suggesting prices be locked in for fall delivery. His reasoning includes:
  1) Ending stocks for the 2009/2010 crop will be 250 mil. bu. with trend yields.
  2) Export growth & increased domestic demand will support prices for the new crop.
  3) Increased acreage will result in 2010, and ending stocks will continue to build.
• Mark your calendar for Jan. 12, when USDA will close out the 2008 production year estimates. The final projection will be made in crop size, along with a new supply-demand estimate, and the Quarterly Stocks Report. Winter wheat seedings will also be reported. Watch the farm gate website for a summary of the USDA crop reports.
• Production cost: Fuel. Diesel fuel prices are down 28% from the highs and 25% in the last month, but only down 1% from year ago levels. Mike Duffy at Iowa State says tune engines, keep tires properly inflated, and consider energy efficient replacements.
• Production cost: Seed. Duffy says 30% price variations on comparable products are not uncommon, as seed industry competition is reduced and prices rise. He says make sure you can benefit from a special genetic trait before buying seed with that trait.
• Production cost: Fertilizer. Fertilizer and lime costs are up 64% from 5 years ago, and estimating costs is difficult with different payment regimes. Duffy predicts steady prices for N & P, but uncertainty for K, as higher priced products are sold before lower priced.
• Production cost: Pesticides. Pest management costs have increased considerably says Duffy, who says one popular herbicide will likely double in price for 2009. Pesticide costs per acre were flat the last several years, but he says that trend will end in 2009.
• Production cost: Rent. Average increases will be up by 8% says Duffy, which will follow land values. He says lower grain prices and higher input costs will lead to lower returns and that should lead to lower rent, which is up 30% over the past 3 years.
• Continuous corn will cost $4.88 for 165 bu. and $5.10 for 145 bu. for non-land cost of production. Corn after beans will cost $4.21 for 180 bu. and $4.32 for 160 bu. for non-land costs. Soybeans will cost $9.64 for 55 bu. and $9.81 for 50 bu. for non-land costs.
• Mike Duffy at Iowa State says prepare for volatile grain and input prices, and risk management is going to take on a new meaning and urgency in the years ahead. He thinks wild gyrations will settle down, but prices and costs will be at a higher level. He says the energy-related boom for agriculture has faded and the 2009 outlook is not bright.
• One final note, says Duffy, "Remember that over the past 40 years there has only been one year when the top third farms in the Iowa Farm Business Association didn't make money. Somebody is always making money in Iowa agriculture."
• To follow up on diesel prices, Kansas State economist Kevin Dhuyvetter tracks the NYMEX crude oil market which determines diesel prices. He says March prices should be 48% less than last year, and April through July, diesel prices should be more than 50% less than what you paid in 2008. Harvest prices should be 30-45% less than last fall.
• No lower fertilizer prices yet, says Jim Hilker at Michigan St., but stocks of high priced fertilizer must be sold first. "Consider waiting to price fertilizer until you can price it at the lower prices. Urea in the mid $300's, wholesale NH3 in the $500 range, may find retail NH3 for $600, wholesale DAP around $600, and wholesale potash around $900, which is the smallest drop." More: https://www.msu.edu/user/hilker/outlook.htm .
• Crop insurance indemnity payments will likely be taxable as 2008 income, since most of the revenue policies paid price declines, not yield losses. A yield loss payment can be deferred if it follows your normal marketing pattern, but any portion of the indemnity related to revenue cannot. An indemnity from a GRIP payment will not be paid until later this spring and will be considered 2009 income, says Iowa State farm management specialist Steve Johnson. He says any payment deferred must be all or none and cannot be split. Iowa State's Johnson urges farmers to seek advice from a certified tax preparer.
• Modest profits are in the future for the hog industry says Purdue economist Chris Hurt in his latest newsletter. http://www.farmdoc.uiuc.edu/marketing/weekly/html/010509.html . However, that is dependent upon moderating feed prices and somewhat higher hog prices as production is anticipated to decline 1-2% during 2009. But Hurt says the 21% of production that was exported in 2008 to help out, may not be as robust this year.
• With a 60¢ reduction in corn and a $25 drop per ton in bean meal, Hurt says cost of production should drop $3-4/cwt for live hogs. He says that may turn the $15 loss per head in 2008 to a gain of $3 per head in 2009, reversing 6 straight quarters of losses.
• The 2009 beef market will be marked with the start of a consumer trend of less beef being purchased and purchasing less expensive cuts of meat, says Nevil Speer at Western Kentucky. He says the corn market will also interfere with profitability and the end result is continued turbulence, requiring careful decision making and risk management.
• The sufficiency approach for P, K and S management allows for significant savings in short-term fertilizer costs, says NE fertility specialist Richard Ferguson. "With this approach, nutrient application is not recommended when the soil test level exceeds the critical level as the probability of yield response is low. With the crop nutrient removal approach, an additional $118.56 of nutrients per acre would be applied for situations of adequate nutrient availability and 200 bu/acre corn yield." http://cropwatch.unl.edu/ .
• Clay soils that are poorly drained have a long compaction memory say Ohio State soil scientists. On a no-till field, the compaction caused by one trip of a grain cart resulted in a 40% yield loss, with effects of the compaction continuing for 8 years. They determined that it is better to prevent the compaction initially, than struggle to eliminate it.
• Preventing compaction can be accomplished, say Ohio State researchers:
  1) Practicing minimal tillage techniques, such as chisel plowing or subsoiling.
  2) Rely on earthworms for help, but compaction reduces their population by 70%.
  3) Utilize alfalfa or other cover crops that have deep taproots to open compacted soil.
  4) Crop residue left in the field acts as a buffer to dissipate any wheeled traffic.
  5) Use dual axle equipment with wider tires to distribute weight over a wider area.
  6) Practice controlled traffic to confine equipment traffic to specific paths each year.
• The difficulty of defining sustainable agriculture has appeared again in a national effort to create standards for sustainable agricultural production, processing, and product handling, says IL ag law specialist Bryan Endres. In an effort to select an organization without preconceived ideas to write the plan, the input of a large segment of agriculture was ignored. Work is resuming on the standards with wider farmer representation. More: http://www.farmdoc.uiuc.edu/announcements/agrinews/Dec_2008/agrinews_Dec_2008.html .

· The December USDA crop report made headlines for cutting projections for corn used for ethanol from 4 bil. to 3.7 bil. bu. But Extension's Jim Hilker at Mich. State says 2009 will still require 700 mil. more bu. of corn used for ethanol than the 2007-2008 marketing year. He says subsidies and mandates remain, but just the rate of growth is slowing.

· Hilker says E-85 prices used to be less than the price of gasoline, but that is no longer true. "This is due to wholesale gas prices dropping to around $1.10, while ethanol has dropped to about $1.50 per gallon. At the peak of the oil and corn prices ethanol reached $2.90, about 80% of gas prices at the time. The relatively higher ethanol content in E-85 is one reason the USDA has lowered their forecasted use of corn for ethanol."

· With trend yields in corn and the nearly 1.5 bil. bu. carryover next August, Hilker says 2.25 mil. fewer corn acres will be needed in 2009, but he expects a 3 mil. acre expansion. Hilker's latest newsletter can be found at: https://www.msu.edu/user/hilker/outlook.htm .

· If you have corn to sell, Hilker says, "The futures market spreads continue to say it will pay five cents a month to store corn, under a hedge if prices drop, and under both a hedge and storing cash if prices rise. However, the nearby basis has tightened to the point where it may no longer help with paying for storage. This tells me that on-farm storage is still a reasonable alternative, and paying commercial storage plus lost interest is not."

· If you have beans to sell, Hilker says, "The futures are telling everybody it will not pay to store soybeans. Of course, with 35 cents-plus nearby basis it is hard to know what that means. My best shot is if you want to stay in the soybean market, use a basis contract, sell cash/forward contract and buy futures, or sell cash/forward contract and buy calls."

· When your bookwork is finished, 2008 will show substantial red ink for hog producers says IL ag economist Dale Lattz. Reviewing records from 5,500 farms, Lattz says hog prices are expected to average about $49.50/cwt in 2008. The sharp increase in corn and soybean prices early in 2008 will resulted in significantly higher feed costs. Feed costs are expected to average about $38.75/cwt and non-feed costs at $19.70. Total production costs would be $58.45/cwt, or significantly above the average price received.

• 2008 will prove to be less profitable for beef producers than 2007, says Dale Lattz at IL Farm Business Farm Management. Returns to cattle producers were supported by slightly higher finished cattle prices and lower prices paid for replacement cattle. Offsetting the higher finished cattle prices will be significantly higher feed costs. Feed costs rose in 2008 due to higher corn and forage prices. Even with higher finished cattle prices, those higher feed costs will most likely result in 2008 returns below 2007 returns.
• Deductions, exemptions, and depreciation are at the top of your mind, and all farmers should beware of many changes approved by Congress late in the year to boost the economy that have implications for farm taxes. For changes in the law and needed tax tables, MN Extension tax specialists have provided extensive information at: http://www.cffm.umn.edu/Publications/pubs/FarmMgtTopics/AgTaxUpdate.pdf .
• Full time farm employees who received a year end bonus were rewarded with an average of $1,000, but within a range of $50 to $9,000 according to an Iowa State survey. 55% of employees received the bonus, which were based either on volume of commodity produced, commodity quality and performance, longevity, or farm profitability.
• Year end bonuses were tallied by Iowa State ag economist William Edwards who notes a bonus does not have to be paid in cash. Appliances, gift certificates, paid vacation or travel. A commodity can also be used, such as a volume of grain or livestock, or grain from acreage to sell. Edwards says current tax laws do not subject payments to employees in the form of commodities to Social Security tax. For ideas about bonus payments, visit: http://www.extension.iastate.edu/agdm/wholefarm/html/c1-61.html .
• Cash rent increases from 2008 to 2009 may be flat says Purdue economist Craig Dobbins, due to the erosion in grain prices and economic meltdown. "So the decision that might have been made in September to pay cash rents in 2009 of $180 to $200 an acre and still have something left over, well, today there's nothing left over and a farmer is in the hole." He says costs and profits should be carefully calculated when negotiating rent.
• Purdue's Craig Dobbins says when meeting with a land owner to discuss cash rental rates, "It's worthwhile to share some information about your costs, how you see your return situation shaping up and letting the landowner know what the margin is potentially going to be for the next year." He says owners should be aware of market price drops. Get negotiating help at: http://www.agecon.purdue.edu/news/financial/leases_final.pdf .
• Production costs are going to be cut where possible says Dobbins. He says this is not the time for a fertility building program. No-till systems will help cut down trips across fields. Money can be saved by ensuring seeding rates are at the proper level.
• Are your yield goals reasonable? Profitability can be increased $7.50 per acre by decreasing a yield goal that was 10 bu./A too high, or increased $42.50 per acre by increasing a yield goal that was 10 bu./A too low. NE agronomist Charles Shapiro says the savings comes from a more correct nitrogen application adjusted for reasonable yield. Read his fact sheet: http://www.ianrpubs.unl.edu/epublic/live/g481/build/g481.pdf
• Profitability is dependent upon the efficient and wise use of fertilizer says KY soil specialist Lloyd Murdock. He offers a checklist for fertilizer profitability:
  1) A soil test will indicate if reserves of P and K in the soil are sufficient for profits.
  2) If P exceeds 45 lbs/A and K exceeds 250 lbs/A, why add more and raise your cost?
  3) If P & K are insufficient, apply them in the row at a half to a third of broadcast rates.
  4) When the pH is between 6.2 and 7.0, crops use fertilizers much more efficiently.
  5) Manure is cheaper, but good distribution and nutrient testing are the keys to its value.
  6) K should be applied each year if vegetation is harvested such as silage, hay, or straw.
  7) Sidedressing N on poorly drained soils will improve efficiency and allow lower rates.
• Evaluating hybrids can become easier with two principles offered by Purdue's Bob Nielsen at: http://www.agry.purdue.edu/ext/corn/news/timeless/HybridSeln.html .
  1) Consistent yields 5% above the average yield of trials in which they are entered.
  2) Consistently yield at least 90% of the maximum yielding hybrid in a trial.
• Purdue's Bob Nielsen also says look for trials that evaluate hybrids over multiple locations. Multiple testing locations in a single year represent possible weather patterns your farm may encounter in the future. Weather influences hybrid performance more than any other variable, because weather interacts with most of the other yield limiting factors.
• Selecting corn hybrids for silage requires different standards than hybrids for grain. MN agronomist Jeff Coulter says check performance data from university seed trials.
  1) Silage hybrids should be 5-10 days longer in maturity than hybrids for grain.
  2) Consider hybrids with a range in maturity to avoid crop loss from heat or drought.
  3) Avoid hybrids with long stay-green ratings because whole plant moisture is too high.
  4) Dairy producers should evaluate hybrids by milk per acre and milk per ton at: www.wisc.edu/dysci/uwex/nutritn/spreadsheets/milk2006cornsilagev1.xls .
• December weather has been LaNina weather says Elwynn Taylor at Iowa State. He says it is extraordinary for it to develop this early, which is 3 months earlier than usual. A LaNina peaked last March, contributed to spring flooding, and diminished by mid-May and began to peak again in November, causing all of the snow and cold temperatures.
• Will the LaNina remain with us? Taylor says, "The "early peak" of the current LaNina may indicate that the adverse impacts with the large-scale event will dissipate early in the growing season. If so, the above average moisture in the soils of the Cornbelt would be considered as advantageous to potential crop yields." In the meantime, Taylor there has been near record flooding of some Midwest rivers, instead of January for LaNina years.
• Warmer temperatures are on the way says MO climatologist Pat Quinan, who says precipitation predictions are a toss-up for January according to the National Climate Predication Center. Guinan says 10 of the past 15 winters have been warmer than normal with 3 in the top 5 warmest since 1895. Eleven of the past 15 have been wetter than normal. Guinan says 2008 was one of the wettest years which means livestock ponds are full, ground water is in good shape for spring planting, and soil moisture is sufficient.
• Corn milling technology can be improved with a new gene inserted in corn that will cause it to stand out under special lighting. The genes can be inserted into the embryo, the starch, or the pericarp coating on the seed and the selected element can be identified under the testing light after the corn has been milled. Iowa State researchers say the individual kernel parts can be identified and segregated easier with the advancement.