Grain prices will remain high over the next decade, fueled by high crude oil prices and new bioenergy mandates. That is the opinion of FAPRI which says, "New biodiesel mandates in the Americas and Europe almost double the price of biodiesel, pushing it to $6.00 per gallon with the doubling of net trade over the next decade." FAPRI says ethanol prices will fall in the next 5 years, then increase to a projected $1.52 per gallon.
FAPRI's expectation for corn prices is about $5 per bu. for the rest of the decade from ethanol, livestock, and export demand. Vegetable oil prices are expected to increase 1-3% annually for the rest of the ten year period. China is forecast to continue importing soybeans and will buy 57% of the world soybean trade at the end of the ten year period.
Tight US and global wheat stocks have pushed up prices says Daniel O'Brien at Kansas State Extension. He says world supplies declined 6% over the past 3 years, and in the same period, wheat trade declined 9%. But global stocks have declined 26%, causing humanitarian organizations to be concerned about wheat availability in poorer countries.
Interestingly, O'Brien says non-US wheat exports have declined 17% in the past 3 years, but US exports have increased 20% & 32% in the past 2 years. "This reinforces the idea that the US has been the primary source of available wheat for world exports during the 2007/08 marketing year – a fact that exacerbated the recent increases in US wheat prices."
Foreign wheat production will depress US exports, says O'Brien, raising US ending stocks to 538 mil. bu. for the next marketing year. However, he says US wheat prices are expected to be about $7, compared to the $6.65 per bu. in the current marketing year. He says that is due to the uncertainty about wheat production prospects here and abroad. http://www.econ.iastate.edu/outreach/agriculture/periodicals/ifo/IFO_2008/ifo030108.pdf
La Nina's days may be numbered, says Iowa State Meteorologist Elwynn Taylor, and he says that diminishes the risk of a serious Midwest drought. The changes underway in Pacific water temperature also suggest a good season for the High Plains. Taylor says the weather pattern may be shifting toward an El Nino. He adds that weather conditions in the US continue to reflect a La Nina, but the peak intensity has passed. Nevertheless Taylor says it is too early to write off a drought just because La Nina was diminished.
Midwestern snowfall could make this one of the 10 wettest winters. MO meteorologist Pat Guinan says there is still snowpack in IA, WI, and northern IL with soils near the point of saturation. He says MO will have one of the wettest winters since 1895, and IL expects to have its third wettest winter. He says average temperatures are near normal.
Name your poison: excess pork production or high feed prices. Without a choice, Chris Hurt at Purdue says the North American pork industry is on pace for the most damaging financial year ever. And his latest newsletter he says there seemingly is no cure until the breeding herd is cut. http://www.farmdoc.uiuc.edu/marketing/weekly/html/030308.html .
But that is not happening. Livestock economist Hurt says sow slaughter is not rising, and the high rate of farrowings will extend through Feb, with high volume marketing through next Sept. First quarter losses are forecast at $34/hd, and expecting prices to improve in the spring and summer, Hurt says expect a $47/live cwt average for the year.
Unprecedented volatility is how Hurt describes feed prices, pushing finishing costs near $60 this summer. That would yield a $27/hd loss, compared to the 1998 losses of $15/hd. Hurt says lean futures suggest higher cash prices, and using them provides hedging opportunities at $54 for the third quarter of 2008 and $52 for the fourth quarter of 2008.
On the positive side, pork exports were at a record level of 3.14 bil. lbs. in 2007, up nearly 5% from 2006. Beef exports were 1.43 bil. lbs., which is slow expansion but only 50% of 2003 levels. Poultry exports were 5.77 bil. lbs. Iowa State economist Shane Ellis says compared to 1990 exports, beef is up 42%, poultry up 405%, and pork is up 1,242%.
Despite corn prices, feeder cattle prices are strong. NE livestock economist Darrel Mark says from 1980-2005 a $1 increase in corn meant a $9 drop in feeder calf prices. But for 2006 & 2007, Mark says, "Feeder cattle prices have been less responsive to corn prices compared to the previous 16 years. In fact, a $1/bu corn price increase only led to a $3/cwt drop in feeder cattle prices on average during 2006 and 2007."
Why have feeder calf prices stayed relative strong despite high corn prices? Darrel Mark has 3 reasons. http://www.lmic.info/memberspublic/InTheCattleMarket.html 1) Calf supplies are very tight as a result of liquidation in the cow herd 2) Ample bunk space in feed yards 3) Feeding of ethanol byproducts which improves performance, and lowers cost of gain.
Beef demand at the consumer level for the 3 month period of Nov 2007 to Jan 2008 was down 1.8% from a year earlier, say Glenn Grimes and Ron Plain at Missouri. The weakness is probably due to high energy costs and large competition meat suppliers. The good news about demand in the beef industry is that live fed cattle demand for these 3 months of Nov to Jan was up 2.6% from 12 months earlier. Large exports of beef and population growth are probably the main reasons for the stronger live fed cattle demand.
If planning spring wheat, consider when heads will fill. Kansas St. agronomist Jim Shroyer says that is a hot, dry time in Kansas and the wheat will have low test weight and shriveled grain, along with low yields. He says if spring wheat is still on your agenda, choose a variety with early maturity, with resistance to leaf diseases. He says it is not realistic to anticipate hard red spring wheat anywhere will draw Minneapolis prices.
IA Weed specialist Bob Hartzler chuckles at the DowAgro Sciences ads for SureStart, Sonic, and Durango, about being new herbicides, and says they are combinations of 6 herbicides, none of which is less than 15 years old. Hartzler says they are still good weed management tools and will slow down glyphosate resistance. He nominates the ad for the "Hall of Shame." http://www.weeds.iastate.edu/mgmt/2008/old%20herbicides.htm .
Your corn fields are not the only fields where excess rainfall has floated corn stalks toward drain inlets. And you need to know they are not going to decompose before planting. Purdue agronomist Tony Vyn says drainage and yield will be reduced. 1) Spread them back out with a tillage tool or blade, preferably on frozen soil. 2) If the residue is no more than 2" thick, tined tow cleaners can do the rest. 3) Burning the residue is an option, but move the pile away from plastic drain tiles. 4) The residue can be buried, but that's hard if it is in a low wet spot.
Speaking of flooded areas, did your soybeans produce enough N before being flooded out that will be sufficient to take a nitrogen credit for this year's corn crop? Ohio State agronomists say the nitrogen present comes from biomass degradation, because an insufficient amount would have been produced by the soybean nodules to benefit corn.
Wooly and fluffy fields interfere with planting if you are a no-tiller, so burn-down is one of your critical decisions in the spring. The Purdue weed crew says glyphosate or paraquat will do, but give 7 days for the glyphosate to work. However, with glyphosate resistant horsetail around, the Purdue specialists recommended a pint of 2,4-D ester. However, that delays soybean planting by 7 days, or 30 days if more than a pint is used.
Out smart the bugs, if you can, suggest Ohio State entomologists, and that means judicious use of preventative measures. http://corn.osu.edu/index.php?setissueID=220#B 1) For rootworms first use transgenic seed before insecticides and seed treatments. 2) Corn borers can be controlled with transgenics, if you really need to control them? 3) Flea beetles and Stewart's wilt can be controlled with resistant corn hybrids. 4) If plowing under heavy weed growth, seed treatment is needed for seed attackers. 5) For fields with a lot of black cutworm, alternate transgenics with seed treatments. 6) Seed treatment will not manage bean leaf beetle populations, so don't waste money. 7) If beans are food grade, use foliar sprays for bean leaf beetles after emergence.
Monthly prices for diesel fuel are computed to be 40% more than 2007 prices, based on fuel futures, through planting season. For the balance of the growing season, diesel prices will be at least 30% more than last year, comparing month to month says Kansas St. economist Kevin Dhuyvetter. http://www.agmanager.info/energy/PriceForecasts.pdf
Every farm needs a poly tank, but before you buy a new one, ensure it is the right one for the job it needs to do. IL Extension specialist Dennis Epplin says don't buy just on price, but when pricing, compare tanks with similar specifications. If you are hauling liquid chemicals it may require a specific gravity rating. Baffles, tie downs, multiple walls, heaters, insulation, valves, sight glasses, and pad locking are alternatives.
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 .
