A weekly publication of University of Illinois Extension, Dec. 21, 2007, Vol. 9 No. 35

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• The back 40 needs to be the back 42 says IL Extension Marketing Specialist Darrel Good. High domestic and foreign demand for US corn, beans, and wheat means a need for 7.4 mil. more acres and trendline yields, which will challenge the market. Read more of his newsletter at: http://www.farmdoc.uiuc.edu/marketing/weekly/html/121707.html .
• Darrel's corn calculation is based on the use of 12.69 bil. bu. in the current marketing year with a 1.8 bil. carryout. He says we'll need 13.6 bil. in the 2008-09 marketing year, which means the need for a 13.1 bil. crop. That will require a 151 bu. national average yield on harvested acreage of 86.7 mil., which is up 600,000 acres from the 2007 crop.
• Darrel's bean calculation is based on the use of 2.988 bil. bu. in the current marketing year which leaves only a 185 mil. bu. carryout. Even with declining exports, the US crop in 2008 will have to produce 2.9 bil. bu. to meet consumption, since carryout is minimal. That will required a 42.5 bu. crop on 68.2 mil acres, up 5.4 mil. from the 2007 crop.
• Darrel's wheat calculation is based on the need for 2.333 bil. bu. in the current marketing year, which leaves only 280 mil. bu. in ending stocks. Even with declining exports, a 2.2 bil. bu. crop is needed to meet the demand. That will require a 42 bu. yield from harvested acreage of 52.4 mil. acres, and that is 1.4 mil. more acres than in 2007.
• But, worldwide, what is the chance for 20 MMT more wheat and a return to normal wheat production, asks Ohio State's Matt Roberts? Importing nations may raise 5 MMT more, and if Canada and the EU reach normal production then stocks would stabilize. Roberts says July '09 & '10 futures are too high and are incentives to build inventory. He says deferred wheat sales are reasonable, but prices will be gone by harvest time.
• Regarding soybeans, Matt Roberts believes the US carryout is sufficient, but he says reports about Brazilian production are conflicting, with acreage anywhere from up 5% to unchanged. Minimal expansion there means greater pressure on exports in the US. He expects the market to buy more soybean acres and advocates hedge to arrive contracts which allow users to lock in the futures prices, then wait for improvement in the basis.
• Trendline yield may be elusive in 2008 says meteorologist Elwynn Taylor at Iowa State. His latest calculation is a 50/50 chance for 146 bu. corn, with a 64% chance of being below the trendline. Taylor says there is only an 18% chance at a record yield above 165 bu., and a 33% chance of a drought, which would be less than 135 bu. His estimate relies on current subsoil moisture, the statistical risk of drought, and the La Nina potential.
• USDA's pork production projection is for 21.849 bil. lbs. for 2007, up 3.7% from 2006 and a new record production. MO Extension's Glenn Grimes and Ron Plain say 2008 production should reach 22.25 bil., and they think USDA's 2007 estimate is too low.
• Per capita consumption is estimated at 50.7 lbs of pork in 2007 and 51 lbs. for 2008; but Grimes and Plain say total red meat consumption will be 221.1 lbs in 2007, a half pound down from 2006. They believe 2008 consumption will repeat 2007 levels.
• The export market is doing its share to underpin pork market prices, despite how soft they are. Iowa State's John Lawrence says October was a record month for exports at 312 mil. lbs. which is up 31% from 2007. Japan is buying 36% of the total, followed by Mexico and Canada. Pork exports to China are 218% higher than Oct. 2006.
• The John Lawrence crystal ball says pork slaughter will seasonally decline and add some strength to market prices, but pork supplies are at record levels. For cattle, tight packer margins are causing slaughter rates to drop. Steer carcass weights are at record levels, and delays in marketing will add to their weight and weaken sellers' leverage.
• The beef export market slowly improves, but is still 45% under the 2003 volume before the BSE problem. Japanese Oct. purchases were 45% above last year, and up 303% for the year. Mexico and Canada are the largest buyers, but both are down from 2006 levels. Don't be fooled by the 13,429% increase for So. Korea, because its only at 77 mil. lbs.
• Consumer demand for beef remains high in the analysis of Utah State economist Dillon Feuz, who says 2007 choice boxed beef will average $149.88, compared to $146.80 in 2006. He's forecasting $150-plus for 2008, but says NE feedlots lost $15/hd this year.
• With high feed prices, Feuz says alternative feeding and stocking programs may be able to add weight at a lower price. He says the industry will have to redefine its practices, and says that may dictate an altering of calving and weaning dates for those programs.

• The new Energy Bill will have a long term benefit for agriculture in the view of Purdue economist Chris Hurt, who says various ethanol feedstocks will be produced on farms.
  1) Corn will provide up to 15 bil. gal. by 2015, which requires more than 5 bil. bu.
  2) Refinery demand for corn will increase rapidly into 2009, outpacing production.
  3) Ethanol refineries will add facilities to process cellulose feedstocks such as cornstalks.
  4) Grazing lands in the South & Plains will provide prairie grasses for cellulosic ethanol.
  5) CRP acreage may largely shift toward cellulosic energy crops in areas of the country.
  6) New crops, such as sweet sorghum, tropical maize, & sugar cane will be produced.
  7) Most new feedstocks will be natural resource-based, so agriculture will reap rewards.
• No wonder lots of ethanol plants are being built! A 100 mil. gal. per year ethanol plant pumps $31.7 mil. and 168 new jobs into a local economy, says NE economist David Peters. That includes corn premium, tax base growth, and job multipliers. But he warns that rising corn prices and falling ethanol prices can idle plants and reverse the wealth.
• Farm operators and landowners who feel constrained by FSA rules in their attempts to develop innovative and flexible cash rent arrangements have another month to submit their comments to USDA which is considering rule changes. Many of the variable cash rent leases that have been negotiated have been determined to be cropshare leases by FSA. Comments must be submitted by Jan. 17 to Salomon.Ramirez@wdc.usda.gov .
• Strides have been made at the Univ. of IL in crossing soybeans with a distant cousin that has resistance to soybean rust, SCN, soybean aphids, and detrimental viruses. The cousin is tomentella, a native soybean-type plant from the So. Pacific, which can provide drought tolerance, yield genes, seed composition genes, and other disease and pest traits. Researchers believe germplasm can be available to commercial breeders by 2010.
• Iowa had average rainfall in 2007, but Iowa State agronomist Jim Rouse says soybeans did not grow in an average environment. He says most of his test plots had average yields between 49.7 and 54.6 bu., but the difference was attributed to the timing of the rainfall and its relationship to when the soybean plants were in flowering stage.
• The less the tillage, the higher the yield according to NE ag engineer Paul Jasa, whose test plots go back to 1981 with a dryland corn and soybean rotation. Corn yields were 132 with a plow-disk-disk system, 132 with a chisel-disk, 135 with a disk-disk, 135 with a disk, 142 for 26 years of no-till, and 134 on 25 years of tillage and 1 year of no-till.
• New herbicides and blends will be available for the 2008 crop. They include:
  1) Harmony with TotalSol has less a.i. and is applied on wheat at a higher rate.
  2) Prowl H2O can be used for winter annuals and grasses in wheat up to flag leaf.
  3) Prowl H2O will control summer broadleaves and winter annuals in alfalfa.
  4) Roundup PowerMax is 4.5 lbs. of glyphosate/gal. in a blend of adjuvants.
  5) Duramax & Durango DMA are 4 lb. blends of glyphosate/gal. with a surfactant.
• Thyroid, pancreas, pituitary and other glands produce hormones that may be disrupted by certain pesticides. The US EPA has targeted 73 pesticides to evaluate not because they impact your endocrine system, but because of their high risk for exposure to people or the environment, then all pesticide chemicals will be screened by the EPA. Find the list of the first 73 and program information at: http://www.epa.gov/endo/index.htm .
• As time passes, the nutritional value of corn stalks deteriorates for cattle. Rain and snow leach out soluble and digestible components, but Purdue forage specialist Keith Johnson says livestock have preferences for what part of the crop residue to consume first. He says cattle get less nutrition on the 10^th day of grazing than on the 1^st day in the cornfield.
• The "milk from contented cows" slogan was right on target to Univ. of IL animal scientist Stan Curtis. The animal with low stress is the productive animal, and Curtis says scientists need to better analyze the "state of being" of an animal, because producers can't manage what can't be measured. He says being able to understand its conscious feelings will help reduce its stress and convert the animal into higher performance.