Is the soybean market buying too many acres? IL Extension's Darrel Good wonders if that might not be the case with the current combination of high soybean prices and bearish fundamentals. He says with the current 595 mil. bu. carryover from the old crop, it would take a 12 mil. acre reduction with trend yields to create a shortage of soybeans. Read his newsletter: http://www.farmdoc.uiuc.edu/marketing/weekly/html/021207.html .
Darrel Good says in his newsletter, there are many bearish factors in the bean market: 1) USDA has twice lowered export projections, expecting 4 bil. bu. from So. America. 2) High costs for soybean meal and soy oil for biodiesel will restrict the domestic crush. 3) Current El Nino concerns are too premature to anticipate drought parallels with 1988. 4) While prices could move higher on such news, current prices could also evaporate.
Price premiums for corn are strong for delivery later into the early summer, according to Purdue's Chris Hurt, who says bids at some locations are 30 to 35 cents more for June delivery vs. today. "With a 30 cent price premium for June delivery vs. nearby delivery, corn stored on-farm could pay an added 10 cents in interest costs to gain the 30 cent June delivery premium for a net gain of 20 cents per bushel," says Hurt. Read his newsletter at: http://www.agecon.purdue.edu/extension/prices/grains/corn.asp?ID=39 .
As spring draws near, refine your crop production budgets. Iowa State economists suggest: 1) raise expected corn and bean yields by 5 bu. per acre, 2) drop fuel price to $2.05/gal. 3) raise seed cost to $1.82/1,000 kernels with seeding rate up by 5,000/Acre, 4) Cut N costs to $.31/lb. 5) lower herbicide by $8 and insecticide by $1 per acre. 6) for herbicide tolerant soybeans, herbicide costs dropped $3.00. 7) raise crop and hail insurance by $2 per acre. 8) raise the interest rate to 8%, labor rate to $11 per hour, and raise cash rent $5, $10, $ 15 depending on low, medium, or high quality land. Read more at: http://www.extension.iastate.edu/agdm/articles/holste/HolFeb07.html .
With higher corn prices and lower nitrogen costs than in 2006, Nebraska agronomists are recommending higher N application rates, but within reason. Using the guideline of 8:1 (corn price to N price) the economic adjustment was to reduce application rates which also cut yield. Today's ratio is 13:1 to 15:1 which means more N can economically be applied, but the incremental yield increase has to be noted and excess runoff restricted. Read more: http://cropwatch.unl.edu/archives/2007/crop2/nitrogen_rates.htm .
Look hard at crop insurance as a way to assure the high revenue potential this season for corn and beans. Crop insurance decisions have a March 15 deadline. IL Extension's Gary Schnitkey has a helpful web site for Cornbelt farmers to evaluate all crop insurance decisions at: http://www.farmdoc.uiuc.edu/cropins/index.asp . Do it now.
If you are planting more corn, Iowa State agronomists have given the go-ahead to start early. Typically, April 20 to May 20 is the window to plant for 100% yield. IA agronomists say based on recent research, a 100% yield may be achievable with planting corn prior to April 20. http://www.ipm.iastate.edu/ipm/icm/2007/2-12/plant.html .
If you are planting more corn, you may also want to slightly increase your population, say the Iowa State agronomists. "Greater variability in final population exists with planting dates prior to May 1. If planting early, especially before mid-April, the seeding rate should be taken into consideration and potentially increased by up to 5 percent."
If you are planting more corn, remember the yield drag on second year corn says Iowa State's Michael Duffy, "There is some discussion that the new hybrids have removed the yield differences. The greatest yield reductions are primarily between first- and second-year corn. The yield response continues to trend downward after the second year and eventually stabilizes after the third or fourth year. Yields of corn following corn for several years never achieve those of corn following soybean. Soybeans will yield 5 to 8 percent higher when they follow two or more years of corn as opposed to just one year." Read more at: http://www.ipm.iastate.edu/ipm/icm/2007/2-12/economics.html .
Weather markets usually raise grain prices, but Purdue's Chris Hurt says watch the weather for the cattle market as well. "Weather in 2007 will also be a major factor in the direction of the beef industry. Weather will affect not only pasture and forage output, but also prices for corn and soybean meal. Harmful weather would seem to have only one direction on calf and feeder prices and that is downward." His cattle market letter is at: http://www.agecon.purdue.edu/extension/prices/cattle/feb2007.asp .
Bad weather usually means reduced cattle marketings and stronger prices; but not this year, frustrating many producers. Kansas State's Jim Mintert says, "Severe winter storms normally slow down fed cattle marketings, reduce weights, and lower beef production which leads to markedly higher prices. The reason appears to be that cattle slaughter and beef production, at least so far, have not slowed down in response to the storms."
Cattlemen can look forward to some stronger spring markets, says Mintert, "Weights are expected to continue to fall more sharply than normal as poor feeding conditions are more widely reflected in market ready cattle. And fed cattle slaughter volume is likely to tighten as winter turns to spring. This combination should lead to reduced boxed beef production, which will be supportive of fed cattle prices in late winter and spring."
If you have hogs, they probably have porcine circovirus type 2, whether they show it or not. Symptoms include anorexia, rapid weight loss, generally unhealthy pigs, skin discoloration or lesions, respiratory problems and diarrhea. But Kansas State researchers believe they have a vaccine to control PCV2, which cut the mortality rate by 50% and increased growth rate by 10%. They are unsure when the vaccine will be available.
If you own CRP land, do you pay self employment tax? A recent ruling by the IRS says "Participation in a CRP contract is a trade or business" and that the 10-year term during which a CRP participant has duties to perform in "tilling, seeding, fertilizing, and weed control" assures the "continuity and regularity" necessary to be a trade or business." And that means landowners with CRP need to pay the 15.3% tax. Tax advisers may be helped by knowing: http://www.extension.iastate.edu/agdm/articles/harl/HarlFeb07.html .
Spring tillage raises 2 concerns to Purdue's tillage specialist Tony Vyn. "One is moisture management. It is very important to manage for achieving uniform moisture conditions in the seed row area. Secondly, it is all about compaction avoidance, because if we smear the soil or compact the soil excessively, we will be much more vulnerable to root restrictions – especially if the later spring weather turns hot and dry." For eastern Cornbelt producers with light soil, planning 2nd year corn, Vyn is urging no-till.
Atratzine degradation occurs more rapidly where the soil microbes are used to it says Bob Hartzler of Iowa State. The assay found that atrazine's half-life ranged from 8 to 11.5 days in soils with no history of triazine use, whereas in soils from fields with a long history of triazine use the half-life was less than one day." He says rapid degradation of atrazine would greatly reduce its performance as a pre-emergence herbicide, but atrazine would still function effectively as a post emergent product.
Diesel engines across the Cornbelt have not wanted to start on recent cold mornings, but Missouri ag engineer Leon Schumacher says biodiesel may even be more balky than No. 2 diesel. He suggests reducing the biodiesel content to reduce the potential for the fuel to gel and avoid flow problems as the fuel is being pumped through the fuel filter.
Many farmers pitch questionnaires, but 3,000 randomly selected IL farmers may want to take a second look at a four page survey being mailed by IL Extension on behalf of lawyers who want to know what legal issues are perplexing to farmers. With agriculture in transition, such issues could be: contract issues, leases, liability related to new land uses like agritourism, or legal issues related to other niche marketing strategies. Answers will help Extension and attorneys better prepare educational materials for agriculture.
Replace your oral lease with a written document says IL Extension's Don Uchtmann. 1) It brings discipline to the negotiations and focuses on key leasing issues. 2) It identifies agreements and preserves it when memories may have faded. 3) It clearly describes the property, time period, amount of rent and when paid. http://www.farmdoc.uiuc.edu/legal/articles/ALTBs/ALTB_07-01/ALTB_07-01.pdf .
Is someone in your operation retiring in the near future? Generational transfers usually are not well planned because issues are tough. Nebraska Extension's Dave Goeller asks some simple questions: http://www.agecon.unl.edu/Cornhuskereconomics/2-7-07.pdf : 1) What do you own? How much is it worth? And how much do you owe? 2) Are your assets titled in joint tenancy or by tenants in common? 3) To whom do you want to transfer or give your assets? 4) What is the time frame for making that transfer of assets? 5) How long do you want to exert control over your assets? 6) For long term care, is there income, insurance or Medicaid available?
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 .
