A weekly publication of University of Illinois Extension, Nov. 3, 2006, Vol. 8 No. 28

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

• Unexpected strength in the soybean market has set contract highs. Extension's Darrel Good says, "The 20% increase in soybean prices over the past 7 weeks has come from about equal increases in soybean meal and soybean oil prices. Basis levels have generally strengthened on the rally. The central IL basis is the strongest for this time of year in 6 years." More: www.farmdoc.uiuc.edu/marketing/weekly/html/103006.html .
• But Darrel Good says, "While current prospects for large US and world stocks of beans at the end of this year suggest that '07 acreage should be reduced, the concern is that the decline could be too extreme if bean prices are not competitive with corn. Nov. '07 futures near $7 are likely high enough to keep beans sufficiently competitive with Dec corn futures near $3.40." He says $7 may increase South American acreage.
• The USDA will release a new forecast of crop size on Nov. 9, with expectations that the forecast will not be smaller than the October forecast, says Extension Marketing Specialist Darrel Good. "In addition, most continue to see the potential for a record large South American harvest in 2007 and a further build-up in world stocks this year."
• Higher feed costs for hogs have resulted from the recent run up in corn and soybean meal prices. At Iowa State, Extension's John Lawrence says it will cost $4.50 to $5.00 more to feed a hog to finishing weight, or $6-$6.75 more per cwt of carcass weight.
• If high corn prices are hurting the profitability of your hog feeding operation, Lawrence says replace 10% of the ration with distillers' dried grains. With $3 corn, $185 SBM, and $95 DDGS, a 10% substitution will save $2.62 per ton of feed or up to $1 per head. Use his DDGS calculator: http://www.ipic.iastate.edu/ethanol/ISUCalculator.xls .
• Higher feed costs for cattle have also resulted says Lawrence, who calculates $5-$6.50 extra per cwt, depending on the weight of the cattle and the ration. The result is that feeders have less money to spend to buy the calves. Lawrence's latest newsletter is at: www.econ.iastate.edu/outreach/agriculture/periodicals/ifo/documents/ifo103106.pdf .
• Feedlot cattle do well on either wet or dry forms of ethanol co-products says Lawrence. The DDGS will replace corn and 2/3 of the commercial supplement, but not vitamins. "At $3/bu corn and $35/ton modified DGS, the cost savings per head is $40 and $65 per head when fed at the 20% and 40% of dry matter levels for 650 pounds of gain.
• If corn approaches $4, then Univ. of IL livestock nutritionist Larry Berger has a cheaper alternate feed. He's blending corn stalks and wet distiller's grain. Early in his research, Berger says the meat does not grade as well, and cattle are on feed longer than with corn.
• Conservative market prices and projected crop budgets for 2007 show corn with higher returns than soybeans by $23/A in northern IL and $16/A in central IL. But Univ. of IL economists say beans beat corn by $10/A in southern IL. Unlike most years, a corn-corn rotation in northern and central IL beats corn-beans, and they expect an acreage switch. Prices used in the 2007 crop budgets were $2.75 for corn and $6.25 for soybeans.
• If you use $3.25 for corn in your 2007 crop budget, you'll need $8.47 for beans in northern IL, $8.33 in central IL, and $7.37 in southern IL to justify equal acreage according to ag economists Gary Schnitkey and Dale Lattz. They say, "Projected prices can change between now and harvest, particularly if large acres shift to more corn. Hence, there are risks in making large acreage shifts." Hedging will manage those risks.
• But if you switch, beware! Ag economists say, "Increasing corn acres above a 50-50 corn-soybeans rotation in 2007 will result in more corn-after-corn production in 2008. For example, a 2/3 corn – 1/3 soybeans rotation in 2007 only allows for 1/3 of corn-after-soybean production in 2008. Hence, 2007 acreage decisions could impact 2008 returns."
• What about wheat? Wheat returns also are relatively high given a $3.75 per bu. wheat price. Wheat returns in northern IL are projected to be above soybean returns. Wheat and double-crop soybean returns exceed soybean returns in southern IL. Review the analysis at: http://www.farmdoc.uiuc.edu/manage/newsletters/fefo06_18/fefo06_18.html .
• Mark your calendar for Farm Income 2007 seminars presented by Univ. of IL Extension beginning Dec. 7 in Springfield. Topics include: outlook for commodity prices, IL farm income outlook, Farm Bill, biofuels, machinery costs, planning beyond 2008, energy, legal and tax issues, and risk management. Get dates, schedule, program details and pre-register ($50) at: www.farmdoc.uiuc.edu or call 217/333-5506.
• For the second year in a row, the IL dairy industry made money. U of IL ag economist Dale Lattz says the average net milk price was $15.46 and production costs averaged $14.79. Total returns per cow from milk were $3,161 vs. cost per cow of $3,015. Lattz says milk production will be up in 2006, with milk prices declining. Since feed and non-feed costs are expected to remain mostly steady, he is predicting negative profit margins. Read more: http://www.farmdoc.uiuc.edu/manage/newsletters/fefo06_17/fefo06_17.html
• Did you have a 2006 corn borer problem? In IL 33% of the corn plants were infested (up from 24% in 2005), but they were less concentrated. Univ. of IL entomologists say western IL cornfields had either no infestations or were 80% to 100% infested. 49% of the fields had no ECB infestation, but were not necessarily planted with Bt corn.
• The corn borer researchers say the larger the population in the fall, the greater the potential population for first-generation European corn borers the following spring. Obviously, weather and natural control agents will have a major impact on corn borer populations in 2007, and corn growers in western IL should be on alert nonetheless.
• Enhance your revenue by tracking your local basis, and do that easier with a new web-based tool designed for calculating, monitoring, and evaluating the near-by basis, spot cash prices, and near-by futures prices on Thursday of each week. Enter your cash price and the tool can calculate averages and ranges, by date, for basis, cash prices, and futures prices. Find the basis tool at: http://www.farmdoc.uiuc.edu/fasttools/index.asp .
• If a cover crop is on your fall to-do list, U of IL Extension's Mike Plummer says the key to successful cover crops is to get them planted early in a weed-free field so they can get maximum growth before winter. He says in some watersheds, cover crops are listed as a cost-share program with the Soil and Water Conservation District or the NRCS.
• If your fields continue to be wet, you could have a compaction problem next year and in future years. There are some tricks today to prevent problems tomorrow, including tire pressure, removing wheel weights, emptying the combine when partially full, and watching traffic patterns in a field. Read the detailed list: http://corn.osu.edu/#E .
• With new Bt hybrids for rootworm control being released for 2007, entomologists say more research is needed to find out reasons for mediocre performance in field trials. With increased corn acreage being anticipated in 2007, and more Bt acreage expected, bug gurus at the Univ. of IL say, "Not all transgenic corn rootworm hybrids (even those with the same event) offer the same level of root protection against corn rootworms."
• The corn rootworm report indicates some unusual trends, suggesting different feeding patterns. "In many instances the primary roots were very short and densely covered with secondary roots. The injured roots had a characteristic "bottlebrush" appearance. On many root systems, it appeared as if primary roots had been "pinched" off due to intense corn rootworm feeding activity. Evaluating these roots for rootworm larval injury was difficult primarily due to the profusion of secondary roots that were found near corn rootworm injury sites. More is at: http://www.ipm.uiuc.edu/bulletin/article.php?id=635 .
• No-tillers should use the fall to control perennial weeds. Univ. of IL weed specialists say, "As day length becomes shorter and temperatures become cooler, perennial plant species begin to move food back into their roots. Since food reserves are moving downward in the plant during the fall, more translocated herbicide moves into the roots of perennial species, and control is generally much greater than can be achieved in spring."
• Higher rates of 2,4-D can be used in the fall, compared to springtime say weed experts, and fall applications should be made before many hard frosts occur, as leaf tissue damage caused by hard freezes usually decreases herbicide absorption. If possible, try to make applications on days when air temperatures range into the 50s and sunshine is abundant.
• With soybeans blooming 10 days earlier than they did 30 years ago, Iowa State meteorologist Elwynn Taylor says perhaps you should think, "Favorable weather from July 20 on gives a favorable soy yield." Taylor says that's an estimate at best and much depends on the plant stage and condition and the soil conditions in your fields. "I suspect that whoever first said August was the most important weather month for soy did not mean to imply that weather does not influence final yield every day from planting (on)."