A weekly publication of University of Illinois Extension, Sept. 22, 2006, Vol. 8 No. 22

Start your day at: www.Farmgate.uiuc.edu , a blog for farm decision-makers.

• Following harvest pressure, cash prices will begin a gradual climb into the spring, says Bob Wisner at Iowa State. "Returns for un-priced storage of both crops appear likely to be greater than normal. A better indication of potential returns will be available after the October and November crop reports have been released. Unless the corn crop is considerably larger than currently forecast, there is a good chance that western Corn Belt cash prices for corn will be 25 to 30 cents above harvest lows next spring." He expects some cash prices below local loan rates.
• After deciding to store your crop, Univ. of MO Extension's Melvin Brees suggests, "An effective storage strategy would be to "lock-in" the carry with futures hedges, hedge-to-arrive contracts, etc., and then lift hedges and sell or deliver on the hedge-to-arrive contracts when basis strengthens. This strategy reduces risk and captures the storage profits the market is offering. The Melvin Brees monthly newsletter can be found at: http://www.fapri.missouri.edu/farmers_corner/mktng_newsletter/CurrentDM.pdf .
• Since we have our second largest soybean crop, Brees says, "While the market loan or LDP provides downside price protection at current price levels, the primary marketing objective for storing soybeans appears to be choosing strategies that capture market carry and basis gains rather than the expectation of significantly higher prices."
• On the issue of wheat, Brees is telling producers that $4 wheat is more profitable than $3 corn, and a soybean doublecrop is a potential. But he says hedge your wheat now because $4 prices don't last long. "Soft red wheat supplies are large and wheat futures prices are have been above $4.00 only about 20% of the time during the past 20 years. The decision to plant wheat also should consider including forward pricing with cash contracts or hedges to protect the potential profits the wheat market is currently offering."
• The 47.1 million harvested acres of wheat in 2006 compares to the 1982 high of 80.6 million. Wheat prices averaged $3.40 for the past 3 years, but will be near $4.20 for the current marketing year. IL Extension Specialist Darrel Good says the high level of 2007 wheat futures may motivate producers to increase acreage this year, but they are also looking at weak basis and low cash bids. Good says 2007 wheat acreage has important implications in an environment where a significant increase in corn acreage is needed.
• 10.7 million acres of more corn will be needed in 2007 according to Iowa State's Bob Wisner. He's been totaling up all of the ethanol plants that are under construction and set to come on line in the coming year. He says with a 150 bu. national average yield, and the diminishing carryover stocks, the US will need that much more corn to meet the growth in ethanol production. That includes reductions in exports and livestock feeding. http://www.econ.iastate.edu/outreach/agriculture/periodicals/ifo/IFO_2006/ifo091506.pdf
• As you harvest, take a census of your weeds. Ohio State researchers suspect a number of giant ragweed populations may be developing a low level of resistance to glyphosate. "We conducted field research this year on several such giant ragweed populations, which demonstrated the importance of 2,4-D and residual herbicides for management of giant ragweed in soybeans, along with proper glyphosate rate and application timing."
• Hopefully you don't have, but if you have lodged corn, there are many actions you can take to harvest as much as possible. Generally, lodged fields should be harvested when they are first ready to avoid further deterioration. Keep aware of ears left on the ground behind the combine. 1 ear in a 100^th of an acre plot is one bushel per acre. That is 8 rows about 22 feet long. Before you make major combine adjustments, check an unharvested area, which would indicate how much is on the ground before you ventured through. For more considerations, visit: http://www.ipm.iastate.edu/ipm/icm/2006/9-18/lodged.html .
• Normally only corn and beans go through your combine, but law enforcement officers are warning farmers to beware of equipment left in fields by marijuana growers, such as buckets and other containers for watering the marijuana plants. Four locations have been found in east central IL, and sheriff's deputies are advising farmers to be extra alert.
• Costs of field operations rose 11 to 44% this year say IL Extension Economists Gary Schnitkey and Dale Lattz. Contributors included a 67% increase in fuel prices, higher steel costs if new equipment was purchased, and a slight increase in interest rates.
  1) Chisel plowing rose 25% per acre from $10.70 to $13.40 per acre.
  2) Corn combining rose 11% from $31.10 per acre to $34.50 per acre. (6 row head)
  3) Soybean combining rose 11% from $26.30 to $29.20 per acre (20 ft. platform)
  4) Field cultivating rose 44% per acre from $6.20 to $8.90 per acre.
  5) Planting costs rose 14% per acre from $8.30 to $9.50 per acre.
  6) Tandem disking rose 20% per acre from $8.20 to $9.80 per acre.
  7) More: http://www.farmdoc.uiuc.edu/manage/newsletters/fefo06_16/fefo06_16.html
• 15,000 US farmers told NE Extension's Brad Lubben, their top ranking 2006 goal was "Agriculture's role in reducing the nation's dependence on non-renewable energy. With the recent explosive growth in the bioenergy production sector, it is apparent that producers now place increased importance on the role of bioenergy in the farm bill policy arena. Closely behind in terms of producer preference were increasing opportunities for small and beginning farms and ranches, and the assurance of a safe, secure, abundant and affordable food supply." More: http://agecon.unl.edu/pub/cornhusker/9-20-06.pdf .
• The NE survey also found, "Commercial-scale producers ranked all 5 parts of the farm income safety net (disaster assistance, insurance programs, marketing loans, counter-cyclical payments and direct payments) as a higher priority than any other program. Small-scale producers who see fewer benefits from safety net programs ranked working land conservation programs higher than everything except disaster assistance programs."
• The nation's two largest hog producers, Smithfield and Premium Standard, say they plan to merge, which would give Smithfield control of 20% of hog production and 31% of pork processing. Currently, the top 4 firms control 50% of production and 64% of processing. Several Cornbelt Senators have asked the US Department of Justice to review the plan contending independent farmers would be hurt by reduced competition.
• Declining fuel prices may be good news to most farmers, except those participating in ventures to build ethanol plants. Of the 45 plants set to sell public stock this year, the 33^rd this week cancelled those plans, saying it would wait for better market conditions.
• New ethanol refining technology has been developed at Purdue, which increases the ethanol volume from a bushel of corn up to 2.85 gallons. The process also produces corn oil, corn fiber, gluten, and zein, the protein used in fiber and plastic production.
• Over $2 million in federal funds is being channeled to the Univ. of IL, Purdue, Iowa State, Univ. of MN, and Ohio State to study management of subsurface drainage systems that retain crop nutrients, as well as control moisture available for crop development. Controls on water levels in fields will be monitored and adjusted by satellite. Such an installation is being considered for the 2007 Farm Progress Show site at Decatur, IL.
• Spring calves, to be weaned this fall, are candidates for a pre-conditioning program regardless of who sponsors it, says IL Extension Specialist Justin Sexten. And before calves leave you, age and source verification must be done. Find available programs at http://processverified.usda.gov/ and http://www.ams.usda.gov/lsg/arc/qsap.htm .
• Open cows are like employees who get paid without working, and Extension's Sexten says cull them before the breeding season. Give pre-breeding vaccinations for IBR, BVD, PI³, BRSV, Lepto and Vibrio 30-45 days before starting an estrus synchronization program or the breeding season. Your veterinarian has vaccination recommendations.
• 1 year separated House and Senate passage of Mandatory Price Reporting legislation for livestock and meat. The old law expired a year ago which required daily price and volume information reported to USDA. The Senate just voted to renew the bill and the President is expected to sign it soon. Visit: www.ams.usda.gov/LSMNpubs/index.htm .
• Emergency grazing of CRP has been extended to 30 states impacted by drought and this moves the date up from Sept. 30 to Sept. 15. The CRP rental payments will be reduced only 10%, instead of the typical 25%. Details are at: http://disaster.fsa.usda.gov . Affected Cornbelt states include: IL, IA, KS, MI, MN, MO, NE, ND, SD, and WI.
• USDA's Cattle on Feed estimates will be released following the market close on Friday. The trade is estimating a 107% to 111% expansion, with an average of 108.8%. If that holds, it would be the largest expansion since USDA began the report series in 1996.
• Mark your calendars for Farm Income 2007 workshops, presented by IL Extension's FarmDoc team. Locations are Springfield, Dec. 7; Rochelle, Dec. 12; Moline, Dec. 13; Urbana, Dec. 19; and Mt. Vernon, Dec. 20. Details and program schedule will be posted at: http://www.farmdoc.uiuc.edu/announcements/announce_all.html#FI07schedule .