A weekly publication of University of Illinois Extension, Oct. 20, 2006, Vol. 8 No. 26

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"The information you need, and the voice you always wanted."

• With USDA's corn crop estimate at 10.905 bil. bu, and consumption projected at 11.89 bil. bu. pushing fall cash prices toward $3, U of IL Extension's Darrel Good wonders how producers will respond to higher corn prices for the 2007 planting season. In his newsletter, http://www.farmdoc.uiuc.edu/marketing/weekly/html/101606.html , Good says available cropland is fully utilized and there is little opportunity to expand acres.
• Increased ethanol demand and diminished carryover stocks are primary reasons to grow more corn in 2007, says Iowa State's Bob Wisner, "With the corn needed to replenish stocks, the US would need at least 6.5-7.5 mil. more corn acres harvested for grain next year. That is based on a US average corn yield of 160 bu. per acre on all acres." Wisner says, "Even with the increases, corn supplies would be expected to be very tight." Read Wisner's newsletter at: http://www.econ.iastate.edu/outreach/agriculture/periodicals/ifo/
• Darrel Good at U of IL also wonders how Congress will respond to higher prices, as it prepares the 2007 Farm Bill, "Projected prices are well above current support prices so that producers may receive only direct payments for the 2006 crops. The main issue is whether these higher prices are expected to persist." Good says, "Congress could view this as an opportunity to move the focus of policy away from price supports."
• With oil prices falling, how profitable is that ethanol plant down the road? USDA Chief Economist Keith Collins says the monthly rate of return on capital early last summer with 40% equity was 200-250%. Other speakers at a St. Louis energy conference said ethanol will remain competitive with oil prices, as long as they do not drop below $40/ barrel.
• Doubletakes will be common when farmers book nitrogen. N is cheaper because natural gas prices are cheaper. The $15 natural gas in the fall of 2005 is now $5 natural gas in the fall of 2006, all because of lack of disruptions in the supply line and more available storage. Anhydrous ammonia prices should be in the $350/ton. neighborhood.
• Soybean rust discoveries in southern IL were not a surprise to U of IL Extension's Suzanne Bissonnette, who said, "Officials from the state of KY had recently reported the presence of the disease in 8 counties directly adjacent to that section of IL. Cornbelt farmers this winter should review http://www.sbrusa.net for management information.
• Beware of soybean aphids in 2007 say Ohio State entomologists. "We expect the soybean aphid's two-year cycle to continue next year, and are predicting the soybean aphid to again rear its ugly head and become a significant problem." They say large numbers of aphids are being found on buckthorn and predict problems next summer.
• Ethanol's ability to bid higher prices for corn than pork producers, will keep pork producers hedging, says Purdue's Chris Hurt. "The next two years may be a period of great concern for the pork sector as higher feed prices cut or eliminate profits. This likely means most producers will want to be more risk averse by having more of their corn price risk booked ahead through forward contracts or through futures and/or options hedges. There will be some tendency to also forward price hogs as well." Read his newsletter at: http://www.farmdoc.uiuc.edu/marketing/livestockoutlook/html/101806/101806.html .
• With corn prices at present levels, the costs of gain have increased to near $60 per cwt for cattle says Utah State livestock specialist Dillon Feuz. "That adds about $50-55 to the cost of feeding out a 750 pound steer and increases the cost for feeding a 550 pound steer by $60-65. Feedlots have spent most of 2006 in the red and will likely try and pass most of this higher cost of gain back to cow-calf producers and stocker operators in the form of lower prices." Read more: http://www.lmic.info/memberspublic/InTheCattleMarket.html
• Heifer slaughter has been well behind steer slaughter, implying herd expansion. But Kansas State's Jim Mintert doubts much expansion this year, "Fourth quarter cow and heifer slaughter will ultimately determine what happens. But slaughter data from the first nine months of 2006 does indicate that US producers have not shifted into liquidation mode this year." http://www.oznet.ksu.edu/news/sty/2006/cattle_expansion101306.htm
• Don't kill your cattle with accidental poisoning from landscape trimmings. With forage short they may be attracted to what you discard near the fence. Most toxic are English or Japanese yews. The most common tree species of concern are black locust (leaves, pods, seeds), buckeye / horse chestnut (leaves, nuts, bark), red maple (leaves), red oak (acorns, buds), and wild cherry (leaves). Tomatoes and potatoes are also related to nightshade. For more on poisonous plants: http://www.vet.purdue.edu/depts/addl/toxic/cover1.htm .
• Want to plant wheat, but beans still in the field? Ohio State agronomists say, "Wheat planted this late is certainly at greater risk for poor stand establishment (fewer tillers per foot of row), increased winter kill, and spring heaving." But if warmth continues, even wheat planted as late as the first week of November may still do fairly well. They say seed at higher rate to compensate for fewer tillers. More at: http://corn.osu.edu/#A .
• Grow your own is the concept behind production of miscanthus and switchgrass as biofuels for farm homes, and Univ. of IL researcher Stephen Long will brief farmers on the process at a Nov. 10 field day at Tayloville. He says pellet-burning stoves compete well. Pre-register at: https://webs.extension.uiuc.edu/registration/?RegistrationID=331 .
• In another ethanol note, IN Sen. Richard Lugar and IA Sen. Tom Harkin say there is growing demand for ethanol on the east and west coast, and there should be dedicated pipelines that feed ethanol from the Cornbelt. They are promoting a feasibility study.