A weekly publication of University of Illinois Extension, Oct. 26, 2007, Vol. 9 No. 27

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• High soybean prices could push 2008 South American production over 105 mil. acres and production to 4.34 bil. bu. under current projections. But Extension economist Darrel Good says US producers may be needed to increase acreage by 4-5 mil. next year. And he says, "The price of soybeans needed to accomplish that size of increase depends to a large degree on the corn prices and the magnitude of increase in wheat seedings."
• Once the South American growing season is underway, IL Marketing Specialist Darrel Good believes, "Prices will largely take direction from the market's take on the needed increase in US acreage in 2008. The generally weak basis and the $.42 carry from Nov 2007 to July 2008 futures offer a decent opportunity for hedging farm-stored soybeans. Holding some soybeans unpriced may be prudent as well, given all the production uncertainty into 2008." Read his outlook. http://www.farmdoc.uiuc.edu/index.html .
• Darrel Good's quarterly corn outlook says 2008 corn demand will be 12.975 bil. bu. and with a 152 bu. trend yield, harvested acreage will need to be 85.36 mil. He says 2008 acreage could drop 4.2 mil. acres and we would have sufficient supplies with the nearly 2 bil. bu. carryover. "With December 2008 corn futures above $4.00, corn still appears to be potentially more profitable than soybeans in the heart of the corn belt for 2008."
• Corn prices should remain in the upper part of USDA's estimated range says Darrel Good, "With 20% of the 2007 US crop likely already sold at an average price above $3.00 per bushel and the futures market contracts for the 2007-08 marketing year trading from $3.69 to $4.04 it seems likely that the average price for the year will be near the upper end of the USDA's projected range for the average price." He says the weak basis will improve, and with the large carry in the futures market, storage will be profitable.
• But what if you don't have storage? Marketing Specialist Jim Hilker at Michigan State says the corn market will not pay commercial storage costs. He says consider selling if you think prices will decline, or use a basis contract if you think they will rise. "Other alternatives are a minimum price contract or selling your crop now and buying a call option now or a later in the season. Calls are expensive, but not as expensive as commercial storage plus lost interest." http://www.msu.edu/user/hilker/outlook.htm .
• If you are running out of bin space and bins are available to rent, what is a fair rental rate to pay for a grain bin? Owners should cover depreciation, insurance, repairs, tax, and interest: http://www.extension.iastate.edu/agdm/wholefarm/html/c2-24.html . Ohio State economists say the rate should be between that cost and commercial rates. Issues to resolve are: aeration, repairs, insurance claims, utility costs, and grain quality problems.
• From red ink to black ink will be the case for most dairy farms say IL Extension economist Dale Lattz from producer records statewide. "Milk prices will likely exceed costs in 2007 resulting in positive profit margins for dairy producers. Higher milk prices will be the reason for the increase in returns. The average price received for milk in 2006 was 17% lower than the average in 2005. The average milk price for 2007 is projected to be about 50% more, or about $6.35 per hundredweight, than the average for 2006."
• 2006 dairy revenue was down and costs were high says Lattz in his newsletter, http://www.farmdoc.uiuc.edu/manage/newsletters/fefo07_16/fefo07_16.html . "The average net price received per 100 pounds of milk was $12.88 which was less than total costs of $16.77. The average price received for milk in 2005 was $15.46. The 2006 price received for milk was the lowest since 2003. On a per cow basis, total returns from milk were $2,508 compared to the total cost to produce milk of $3,271 per cow."
• Cattle profits have risen more than production according to Purdue economist Chris Hurt, who says prices will be at record high levels, despite a recent fade. Price expectations for the final quarter had been excessive as cash prices reached $95 in early September. However, prices have moderated to near $90 and averages in the final quarter now appear likely to be in the low-to-mid $90s. Cattle will remain profitable to own, he says in a newsletter. http://www.farmdoc.uiuc.edu/marketing/weekly/html/102207.html .
• How profitable will cattle be next year? Purdue livestock economist Chris Hurt says, "For the entire year of 2008, cattle prices are expected to make new record highs, averaging $1 or so above this year's $92 average. High prices will eventually encourage expansion of the cow herd, but that is not expected until at least mid-2008 or even 2009."
• Recent studies show that anywhere from 60-75% of soybean fields are now being left untilled following fall soybean harvest, however the 25% of soybean stubble that is being tilled has shown significant soil erosion over the past 5 years, says IL Extension Natural Resources educator Bob Frazee. He says agronomists recommend against fall tillage of soybean stubble, and Frazee says trends are showing compliance with that philosophy.
• Do yourself a favor and clean out any buckthorn on your farm, which serves as the overwinter host for soybean aphids. IL Extension's John Church says it stays green longer than most plants, making it easily identified. Smaller plants can be pulled without regrowth, but larger plants that are cut off need to be treated with herbicides or fire to prevent regrowth. See: http://www.glifwc.org/invasives/Rhamnus_cathartica/id.html .
• Lambsquarters that just won't die are becoming yield killers in corn and particularly in soybeans because of its growing resistance to glyphosate. It has developed resistance to ALS inhibitors and triazines as well, says Purdue weed scientist Bill Johnson. He says no-tillers need to have 2, 4-D in a burndown program, and the best thing to use against lambsquarters is a soil-applied herbicide, since nearly every one works on lambsquarters.
• Lush growth of winter wheat should not be a concern, say Ohio State agronomists. They say more fall growth means tillering is completed before dormancy and the plants will begin reproductive growth with the spring warm up. It improves winter hardiness, and decreases the potential for heaving in the spring. They add that recent surveys in Ohio have indicated minimal problems with rust, diseases, and aphids in wheat fields.
• Wet soils throughout much of the Cornbelt will yield compaction problems next spring says MN soils specialist Jodi DeJong-Hughes, but her advice is just be careful while you harvest the crop. http://www.extension.umn.edu/cropenews/2007/07MNCN45.html .
  1) Tracks or duals on combines and grain carts will provide better floatation options.
  2) Use the proper tire size and inflation for the carrying capacity of your equipment.
  3) 80% of compaction occurs on the first pass, so keep the grain cart in the same track.
• Mark your calendar for the National No-till Conference, Jan9-12 in Cincinnati. Speakers are Extension specialists, crop consultants, experienced no-tillers, and others. Details and registration information: http://www.lesspub.com/cgi-bin/site.pl?ntf/ntfConf .
• If you are storing corn wet, what is the cost to dry it? Ag Engineer Ken Hellevang at ND State says 11¢ will get it from 21% to 16% moisture, based on a 7¢/kwh rate with airflow of 1.25 cfm and 7 weeks of air. Adjust your electric rate accordingly. He says add another 15¢ if you warm the air 3-5 degrees and dry it down to 13.5% moisture. Get more details: http://www.plantmanagementnetwork.org/pub/cm/news/2007/CornDrying/ .
• If you fear aflatoxin, "Harvest corn early and dry it down to 14% moisture for immediate marketing or 12% for long-term storage to help manage aflatoxins," says SD State plant pathologist Larry Osborne. He says keeping the crop in the field allows moisture to fluctuate and enhances the potential for more toxins to grow and reproduce.
• Aflatoxin poses risks to livestock, particularly dairy cattle says SD dairy specialist Alvaro Garcia, "Consumption of low concentrations by animals sensitive to aflatoxins can lead to death in 72 hours. Health and productivity of animals that eat corn contaminated with non-fatal levels of aflatoxins is seriously impaired." He said screening can cut aflatoxin content in whole kernels 86-89% compared to fines.
• Slowly, but surely, we are moving toward a new Farm Bill. The Senate Committee on Agriculture, Nutrition, and Forestry approved a measure Thursday which may get full Senate consideration next week. Among the provisions, the pending proposal:
  1) Lets farmers choose between a conventional subsidy or an average crop revenue
  2) Creates a permanent disaster aid program, replacing yearly ad hoc programs
  3) Increases loan rates and target prices for soybeans, wheat, and some other crops.
  4) Eliminates the 3-entity rule for payment limitations, with payments going to a person.
  5) Funds conservation programs at $4 billion, with full CRP funding.
• Bypassing the Senate Ag Committee, other senators have introduced an alternate Farm Bill for full Senate consideration which would take money from typical farm program payments and spread it to producers of fruit, vegetable, and other crops around the US.