This document printed from the University
of Illinois Extension Ag Update at http://www.extension.uiuc.edu/macon/
Extension Update
November 10, 2006
The corn crop is shrinking says USDA in its Nov. Crop Report. Production is forecast at 10.745 bil. bu., down 1% from Oct. The average yield is 151.2 bu., a decline due to lower grain weight per ear, primarily in the western and central Cornbelt. Stalk quality and lodging are a concern in remaining unharvested areas. Compared to 2005, yields are higher in all Cornbelt states except IA and MN. 2006 yield is second only to 2004.
USDA says ethanol will consume 2.15 bil. bu., but corn exports were cut 50 mil. bu. to 2.2 bil. Ending stocks were dropped to 935 mil. bu., compared to 996 mil. in Oct. and 1.971 bil. for 2005/06. The average farm price for 2006/07 was raised $.40 on both ends to $2.80-$3.20, well above the 2005/06 average of $2.00 and 2004/05 average of $2.06.
For the current marketing year, corn supplies are not small enough to force a year-over-year reduction in consumption, but may be small enough that consumption will have to be less than currently projected, says U of IL Extension Specialist Darrel Good, in his latest newsletter: http://www.farmdoc.uiuc.edu/marketing/weekly/html/110606.html .
Currently a high corn price environment would first create an adjustment in the feed and residual category, says Darrel Good. He says the export market response is less predictable because of the availability of other feed grains and the world livestock market. "Domestic processing use of corn would likely be the least responsive to supply shortages and high prices. In particular, corn used for ethanol production would likely not decline as it did in 1995-96, if crude oil prices remain at or above current levels."
The need for at least 9-12% more corn acres in 2007 will keep prices volatile through next spring, says Iowa State's Bob Wisner. At current price levels, farmers may want to carefully evaluate their cash-flow needs for this fall and winter. Despite strong demand, prices will have some down-side risk at times in the next few months. Read his newsletter at: http://www.econ.iastate.edu/outreach/agriculture/periodicals/ifo/ .
The bean crop is growing says USDA, with production forecast at 3.204 bil. bu. in the Nov. Crop Report. That sets a record yield, up 5% from 2005. The national average yield is projected to be 43.0 bu. IL & IA production are are both estimated at 502.5 mil. bu. following a drop in the IL average yield from 51 bu. per acre down to 50 bu.
The soybean crush is projected at 1.78 bil. bu., up from 1.775 bil. in Oct. and exports were left unchanged at 1.145 bil. Ending stocks increased to 565 mil. bu., compared to 555 mil. for Oct. and 449 mil. in 2005/06. The USDA raised the average price $.50 on both ends, $5.40-$6.40. The 2005/06 price was $5.66 and the 2004/05 price was $5.74.
Higher US soybean prices are encouraging to Brazilian farmers, says Iowa State's Wisner. "Our sources in Brazil indicate the sharp rise in soybean prices in the last 6 weeks is causing farmers there to re-think acreage plans, with a more likely reduction in acreage of 2-3%. The rise in prices also will encourage Brazilian farmers to apply inputs more generously than last year." He says planting conditions have been nearly ideal.
Wheat was left alone in the USDA report says Kansas State Extension Specialist Mike Woolverton. "The only thing the USDA changed from last month in its Supply and Demand Estimate report for US wheat was price, which was bumped up to a higher range of $4.15 to $4.55 per bushel. The high wheat price has already pulled more acreage into winter wheat, perhaps as much as 5 million acres." Read his marketing newsletter at: http://www.agmanager.info/marketing/outlook/newletters/default.asp .
Election Analysis #1: Both the House and Senate Agriculture Committees will have Cornbelt leadership for the first time in many years. The outgoing chairs are from VA & GA which provided southern rice and cotton producers with substantial political clout.
Election Analysis #2: USDA's Farm Bill proposal will receive a less friendly reception after Tuesday. Expect the 2007 Farm Bill to have more conservation, more food safety, and more support for organic production, but farm payment cuts are possible. Sugar policy reform is doubtful, but expect extension of the milk income loss contract (MILC.)
Election Analysis #3: Ethanol interests expect to benefit from the election, saying it will benefit more from a Democratic Congress, which will treat oil interests less friendly than the biofuels industry. Investor interest in ethanol company stocks rose Wednesday.
Election Analysis #4: NCBA expects mandatory country-of-origin labeling and animal identification in the new Congress and Farm Bill discussions may include consideration of bans on packer ownership and forward contracting. Exempting manure from EPA's Superfund laws is unlikely to move in a Democratic-controlled Congress.
Asian rust confirmations are ballooning, according to Purdue pathologists, who say a weather-based spore dispersal and deposition model indicated that from Sept. 22 through 24, spores from the Delta region were carried up the Mississippi Valley into southeastern IL and much of IN. Since late Sept., when the dispersal model predicted spores were being transported north from the Delta area, rust has been found in 26 counties in AR, 17 in TN, 18 in KY, 4 in MO, and 8 in IL, in addition to the 6 counties in IN.
The Purdue Asian rust team says this summer and last, weather was dry in much of the South, and rust spread so slowly there until late in the season, until weather became more favorable. If the summer is wetter in the South, rust may develop more rapidly there than it has done so far. The events of Sept. and Oct. of 2006 suggest that if that happens, and rust is present in MS, LA, and east TX, the eastern Cornbelt states could be at risk. More: http://128.210.99.160/entomology/ext/targets/p&c/PandC2006/PandC24_2006.pdf
While the soybean aphid migration to and egg laying upon buckthorn this fall may sound like impending doom for next year's soybean crop, there is a glimmer of hope, say Purdue entomologists. In the midst of the birthing and egg-laying aphids were multitudes of predators. For 2007, as in the previous three odd years (2001, 2003, 2005), the stage seems to be set for a significant risk of soybean aphid infestations next season. More is at: http://128.210.99.160/entomology/ext/targets/p&c/PandC2006/PandC24_2006.pdf .
The Missouri River has low water, but so does the state. MO Extension specialists say low rainfall for the past 5 years, increased population and industrial growth point to a need for water conservation. 75 monitoring wells around the state have less water in them than 10 years ago. Taste can also become a problem, and water specialist Bob Broz says, "When water must flow longer distances through underground rock it dissolves more material as it travels. This can result in problems with taste and odor."
Weather delays for harvest also mean potential soil compaction from combines, grain carts, and tractors driven on wet soil. Ohio State Extension Engineer Randall Reeder suggests not overinflating tires, removing excess weight, not filling grain cart to capacity, empty the combine grain tank before it is full, and add more tires or tracks.
If you've not booked 2007 seed yet, visit the University of Illinois Variety Testing Programwebsite at http://vt.cropsci.uiuc.edu/ for yield results on corn, soybeans, and forages that were conducted in U of IL field trials over a wider range of environments than single unreplicated strip plots. Extension's Robert Bellm says latter may be helpful, but seed purchase decisions should be made by averaging yields from various locations.
Do you book fuel now or later? AR Extension's Bobby Coats believes oil prices are near, if they are not at the bottom. "Demand and oil cartel supply adjustments should have prices pushing back up to $75 over the next few months. Then, a pullback in oil prices back down to $60 or below by the spring of next year wouldn't be unexpected."
If you are in the market for equipment, it may pay to read what the Assn. of Equipment Manufacturers believes will be slow or quick to sell. Its annual report of ag business is at: http://www.aem.org/Trends/IndusOut/ . In brief, slow movers will be 2- and 4-wheel drive tractors over 100 hp, and modest declines in the majority of other products. Combine sales are expected to increase 1.1% in 2007. Planter sales will be down 4.7%, self-propelled sprayers down 3.6%, and field cultivators down 3.0%.
Plans are underway for a 2nd ag-oriented high school in Chicago. Educators say: 1) Agriculture is the largest employer in the state 2) 75% of IL agricultural education students go to college and become industry leaders 3) 25% of IL civilian workforce is employed in agriculture 4) 69% of IL job growth is related to agriculture 5) 9% growth is projected in the next decade 6) IL agricultural education enrollment has doubled the lastdecade to 26,329 7) 60% of IL Ag Ed enrollment is now urban students, and 34% are female
Mark your calendar. Extension ag economists Mike Boehlje (Purdue), David Kohl (VA Tech), Danny Klinefelter (AR), and Kevin Dhuyvetter (Kansas St.) headline the Dec. 13 & 14 Farm Futures Management Summit in St. Louis. www.farmfutures.com .
The Extension Update on Central Illinois Agriculture is e-mailed on Friday to selected subscribers and is also on the Internet (at www.extension.uiuc.edu/macon/agupdate/ or www.farmgate.uiuc.edu .) It is created weekly by former Extension Specialist Stu Ellis, who remains reachable at: shellis@uiuc.edu .
