170.6 bushels per acre. That was the estimate of the Macon County corn crop on August 4th when 27 local farmers and agribusiness folks collected nearly 100 samples throughout Macon County for the 2004 crop yield survey. However, you may see a great deal higher or lower yield. The variation throughout the county was 95 bushels per acre from the highest in Austin Township to the lowest yield sample in Milam Township.

Other significant factors that were noticed by the crop surveyors were gray leaf spot that was found in nearly all townships, Japanese Beetle damage, spots of extensive corn rootworm infestations, and areas of wind damage with down and lodged corn.

Last year's estimate of 170 bushels per acre was low compared with the final estimate of 188 bushels actually harvested.

How many gallons of rain water fell on the Macon County Extension seed corn plot from mid-April to mid-August this year? Jim Snow, Jr. tediously calculated that statistic at 21.6 million gallons. No one came close to the answer at the August plot tour dinner, which was ironic given the wet weather. Coincidentally, the tour itself was washed out, but everyone is invited to visit the plots on Riley Road South of Elwin and examine dozens of corn and soybean varieties to guide your decision-making for 2005 crops.

Speaking of 2005, Dr. Darrel Good said next year's corn crop will have to be big again to meet growing demand for US corn. While we are carrying 914 million bushels into the new crop year, Darrel says there is record domestic demand for corn and a lack of export competition. While the 2004 corn crop may make upwards of 10.9 billion bushels, he says inventory will be relatively tight.

Dr. Good spoke to the attendees at the Extension Plot Tour dinner and expressed doubt the corn crop is as big as USDA predicted August 12, because the market has rallied since that time based on fears of early frost and slow maturity. He believes a fall price rally may occur to provide marketing opportunities.

Regarding soybeans, Darrel Good also said the market is concerned about the lateness of the crop and fears cold weather may also hurt the bean crop. He said some market advisors are projecting prices at $6.50 or higher because of threatened US production. However, he said a good South American crop would wash the world in soybeans and price realities have to be observed.

Extension Crop Systems Educator Dennis Bowman said V-shaped formations on lower corn leaves are an indication the plant is pulling nitrogen out of the tissue for kernel production. That action at this time of year means N supplies is balanced with demand, but producers would not want to see that indication earlier in the year. He also reported that ears are remaining in an upright condition, and with the ability to catch rainwater, ear rots may be frequently seen this fall.

Bob Daggett of Farm Business Farm Management warned about the tax implications of the higher prices most farmers have received this year, and suggested that a visit with a tax advisor would be in order before any payments are taken for fall grain sales.

Attendees of the plot dinner had the opportunity to look over 44 varieties of soybeans and take a first hand look at 50 corn hybrids. The seed company representatives provided a information on company seed genetics and new seeds displayed in the plot.

Is this a turning point?

New crop prices have been in a downward trend for months since the November contract for soybeans started the slide in the first part of May and the December contract for corn started the first part of June. The main question is, can the US produce 11 billion bushels of corn and 3 billion bushels of soybeans?

Although there are good supplies of oil stocks in the world, the lack of a large soybean crop in 2003 provided some excellent marketing opportunities early in the year for the 2004 crop. It is interesting that the combination of local shortages of soybeans and the weakness of the US Dollar verses foreign currencies provided these opportunities. Many of the soybeans planted in the northern quarter of the United States were planted late due to wet weather. If there is a frost scare, this can give the operators in Central Illinois a chance to price some grain.

There was a worldwide shortage of corn and feed grains in 2003 even though the US had an abundance of corn. Exports were good early in the year and ethanol production reached a new record every quarter. The currency situation in the world along with the short supply of the crop made raising corn a money-making business.

The August report came out at 10.9 billion bushels of corn and 2.88 billion bushels of soybeans. The disappearance figures for corn were 10.7 billion bushels leaving an estimated carryover of 1.13 billion bushels. The disappearance numbers for soybeans were 2.79 billion bushels leaving a carry over of 190 million bushels. Keeping in mind that the "magic" numbers for carryover is 1 billion bushel of corn and 100 million soybeans to calm the volatile markets we say in the spring it may be an interesting year.

By the first of October everyone will have a reasonable estimate on how much grain was produced; then the exports, the strength of the US Dollar, and how much grain can we consume domestically (ethanol and soybean oil) are going to be the key price factors from now till spring planting.

- Dr. Darrel Good

Producers and landowners need to use much lower prices when projecting returns for the 2005 cropping than those used for 2004 projections, said a University of Illinois Extension farm financial management specialist. "These prices suggest using caution when making cash rent bids for 2005," said Gary Schnitkey.

Schnitkey's findings are contained in a Farm Economics: Facts & Opinions article available online at the farmdoc website or directly at: http://www.farmdoc.uiuc.edu/manage/newsletters/fefo04_12/fefo04_12.html .

Schnitkey noted that many observers believe that cash rents for the 2005 cropping year will rise above 2004 levels because average cash rents have been increasing in northern and central Illinois for the past several years. Moreover, higher commodity prices during late 2003 and the first half of 2004 led to projections of higher agricultural profitability and were anticipated to further increase cash rent bids.

However, Schnitkey's calculations using the Farm Rent Evaluator spreadsheet tool available on farmdoc's FAST section project a different scenario. The spreadsheet compares returns for seven alternative leases based on user-entered farm budgeting information. Returns in Schnitkey's paper are reported for traditional 50 percent rent leases and cash rent leases having payments ranging from $140 per acre up to $200 per acre.

As Schnitkey noted, a picture of 2005 emerges from the analysis that is at variance with popular conceptions. "Returns for cash rents in 2005 produced in the model are considerably lower than 2004 levels," said Schnitkey. "Forecasted returns given a $140 per acre cash rent payment and average costs are $64 per acre for 2004 and $36 for 2005, a decline of $28 per acre.

"The $160, $180, and $200 cash rents also have declines of $28 per acre between the 2004 forecast and the 2005 forecast. Cash rents of $180 and $200 per acre generate farmer returns of minus-$4 and minus-$24, respectively." Schnitkey said that using $28 of return as a benchmark finds farmer returns for cash rents of $140 and $160 per acre exceeding the benchmark price.

He added that individual farmer results will vary from those in his report as cost structures and yields can vary tremendously across farms. His results should be viewed as indicative of trends between 2004 and 2005 rather than projections for a specific farm. "But forecasts of returns for 2005 are lower than 2004," he said. "This fact does not support an increase in cash rents."

Producers and landowners need to use much lower prices when projecting returns for the 2005 cropping than those used for 2004 projections, said a University of Illinois Extension farm financial management specialist. "These prices suggest using caution when making cash rent bids for 2005," said Gary Schnitkey.

Schnitkey's findings are contained in a Farm Economics: Facts & Opinions article available online at the farmdoc website or directly at: http://www.farmdoc.uiuc.edu/manage/newsletters/fefo04_12/fefo04_12.html .

Schnitkey noted that many observers believe that cash rents for the 2005 cropping year will rise above 2004 levels because average cash rents have been increasing in northern and central Illinois for the past several years. Moreover, higher commodity prices during late 2003 and the first half of 2004 led to projections of higher agricultural profitability and were anticipated to further increase cash rent bids.

However, Schnitkey's calculations using the Farm Rent Evaluator spreadsheet tool available on farmdoc's FAST section project a different scenario. The spreadsheet compares returns for seven alternative leases based on user-entered farm budgeting information. Returns in Schnitkey's paper are reported for traditional 50 percent rent leases and cash rent leases having payments ranging from $140 per acre up to $200 per acre.

As Schnitkey noted, a picture of 2005 emerges from the analysis that is at variance with popular conceptions. "Returns for cash rents in 2005 produced in the model are considerably lower than 2004 levels," said Schnitkey. "Forecasted returns given a $140 per acre cash rent payment and average costs are $64 per acre for 2004 and $36 for 2005, a decline of $28 per acre.

"The $160, $180, and $200 cash rents also have declines of $28 per acre between the 2004 forecast and the 2005 forecast. Cash rents of $180 and $200 per acre generate farmer returns of minus-$4 and minus-$24, respectively." Schnitkey said that using $28 of return as a benchmark finds farmer returns for cash rents of $140 and $160 per acre exceeding the benchmark price.

He added that individual farmer results will vary from those in his report as cost structures and yields can vary tremendously across farms. His results should be viewed as indicative of trends between 2004 and 2005 rather than projections for a specific farm. "But forecasts of returns for 2005 are lower than 2004," he said. "This fact does not support an increase in cash rents."