Extension Update is a weekly summary of news from Extension, government, and other attributable sources, focused on marketing, farm management, and other issues that are of interest to Midwestern farm owners and operators.

You check current prices at the elevator, but have you looked at 2007 crop prices? CBOT futures exceed $3 for 2007 corn and are nearly $3.25 for 2008 corn. Even the new crop can be hedged next July for $2.90. Do traders think we have a short crop this year?

Darrel Good says futures prices reflect a crop under 146 bushels for a national average, and more than 3 bushels below the trendline. The Extension Marketing Specialist says assuming that the historic relationship between futures prices and the average monthly cash price received by farmers holds for the year ahead, that means a $2.75 cash price, based on an ending stocks to use ratio of 7.2%, or 845 million bushels in Aug. ’07. Read his newsletter.

The current corn crop will have to deteriorate rapidly, in order to reach those lower yields that are currently being traded says Darrell Good. The crop is over 60% good to excellent, and Darrel says it has to be 53% by the end of the growing season to yield what traders expect.

Soybean prices may also be higher than what crop size and use would indicate, and what USDA is expecting for a season average, according to Darrel Good. The historic price and inventory relationship supports a marketing year average price of $5.45, but based on current price trends, it may be $5.70 if 2006 beans provide a trend yield. Current prices reflect a season average well into the $6 range based on yield and use.

Weather patterns, weekly crop condition reports, and export sales will be key market influences, says Iowa State’s Bob Wisner. “New crop export sales reports through early July indicate foreign buyers so far have not become overly concerned about US crop prospects. If August crop forecasts are near current USDA projections of 149 bu/A and 40.7 bu/A on beans, new crop prices would have significant downside risk into fall.” Read his newsletter.

Corn roots are likely 7 feet deep in good (and well managed) soils, says Iowa State Meteorologist Elwynn Taylor. He says, “That gives an extra 12 days of water to the crops. (If your corn leaves have been rolling up in the heat) take 3% off the highest yield on record for the field for each 12 hours of rolling during the 7 days after silk show. Take 1% off for each 12 hours of rolling before or after the silking week.”

Long term crop projections have been developed by the FAPRI economists who say:
1) Marketing year 2010/11 corn use will be 12.5 bil. bu, with an average $2.64 price.
2) Marketing year 2010/11 beans use will be 2.9 bil. bu, with an average $5.88 price.
3) Marketing year 2010 ethanol use will be 9.2 bil. gal, with an average $1.87 price.

Corn tolerates high temperatures very well, but Extension’s Emerson Nafziger says there is a limit. He says, “Even well-watered corn starts to deteriorate fairly quickly once temperatures rise above 115 degrees. Such damage involves actual “cooking” of plant proteins, and the plant recovers very slowly from such damage, if at all. There might have been some of this in South Dakota recently, when temperatures reached above 115.”

Soybeans don’t tolerate very high temperatures, but Production Specialist Nafziger says, “Temperatures less than 100 degrees are not usually a problem for soybeans that have adequate water. Most of the crop is thus not quite at its most critical stage, which begins once pod numbers are being set and pods start to fill. Still, plants that undergo water stress now will lose more flowers to abortion and will need a period of better conditions within the next few weeks in order to set enough pods for maximum yield.”

Bugs, bugs, and more bugs. We’ll scout the entire Midwest to see what can be found:

• Illinois: Large numbers of western corn rootworm adults with extensive rootworm larval damage in some fields; Japanese beetles continue to generate concern, but green June beetles should not; numbers of bean leaf beetles in so. IL soybean fields are larger than recent years; numbers of green stink bugs are large in some soybean fields in so. and w. IL., which can cause significant yield losses by feeding on soybean pods.
• Indiana: Lots of reports of corn rootworm larval damage, including reports that some rootworm control products failed; western bean cutworm moths are being captured in pheromone traps; numbers of Japanese beetles are large in so. IN; soybean aphids are few and far between, with no reports of densities approaching the economic threshold.
• Iowa: Significant numbers of western bean cutworm moths are being captured and egg masses being found; larger numbers of Japanese beetles than usual in c. IA.; very few soybean aphids, although a few fields in nw. IA have been treated with insecticides.
• Michigan: Lots of corn rootworm larval damage in both 1st and 2nd year corn; there are a lot of Japanese beetles, which may pose a threat to late-planted corn; no aphid activity.
• Minnesota: 2006 has been a “banner year” for aphids in small grains, sugar beets, and soybeans and many fields of soybeans have been treated with insecticides.
• Nebraska: More reports of corn rootworm larval damage than usual, but extended diapause in northern corn rootworms is expected; captures of western bean cutworm moths in pheromone traps have exceeded 1,000 per night in c. NE; a few soybean aphids are beginning to show up; two spotted spider mites are showing up in fields that have been hot and dry; a few isolated reports of cowpea and alfalfa aphids in alfalfa.
• Ohio: Western bean cutworms have been captured for the first time along the OH-IN border; soybean aphids are hard to find, but numbers of potato leafhoppers are large.
• Wisconsin: Corn rootworm larval pressure is heavy in many fields and they seem to be creeping northward; a few western bean cutworm moths have been captured; not many reports of Japanese beetles; numbers of soybean aphids are small in most areas; infestations of potato leafhoppers in alfalfa are significant in some areas.

“Odd” is the description for wilting soybeans, which have some, but not all, of the symptoms of phytophthera. Specialist Suzanne Bissonnette says, “The typical stem canker seems to be missing, and the roots of affected plants aren’t quite as badly rotted as one would expect.” She expresses concerns about the potential for loss of resistance, saying some “resistance genes (are) no longer effective in some parts of Illinois.” Compare your problems with her photo of a wilting soybean plant.

Before applying fungicides, Ohio State agronomists say scout certain fields to determine whether a disease is present. First examine no-tilled fields and fields with susceptible hybrids and use that information as a guide as to whether you are likely to have a disease problem. Gray leaf spot, northern corn leaf blight, and eye spot fungi all survive in corn residue left on the soil surface from the previous crop, show up first in no-till fields.

Although he’s speaking to pork producers, Purdue’s Chris Hurt suggests corn prices will suffer, before they improve. He says, “It’s probably time to fill every inch of space with corn as the last of the relatively cheap corn may be available late this summer and fall. With ending stocks of over 2.0 bil. bu., basis levels should be weak and futures premiums for next spring and summer are large. This means that ownership of cash corn from now through harvest will likely pay handsome dividends for hog producers.”

The cost-price squeeze will be the challenge for pork producers in the coming year, says Chris Hurt. “Hog prices over the coming 12 months are forecast to average $44.50 on a live weight basis, which is about $2 lower than the average of the past 12 months. While hog prices are expected to be $2 per live CWT lower, profits are expected to drop by around $4. This implies that production costs are anticipated to be roughly $2 higher.”

Significant economic relationships are changing, says Chris Hurt, “In the upcoming era, corn producers may see much less support from the government and more from market prices. Livestock producers will be caught in a transition period as higher corn prices are not immediately reflected in higher meat prices. But over time, higher corn prices will be reflected in higher meat prices and livestock producers will be able to cover the higher costs of production. The higher corn price era will also mean that taxpayers will provide much less support to crop farmers, but pay higher food prices.” Read his newsletter

Along with concerns of contracting Avian flu, Extension veterinarians say many other wildlife diseases are transferable to humans. Rabies can be carried by any mammal, but most often skunks and bats. Raccoon roundworm is transferred when its eggs are accidentally ingested if someone contacts raccoon feces. Leptospirosis is contracted from domestic pets which pick up bacteria from wild animals. Both your doctor and your vet need to be consulted. Read the newsletter.

Both Houses of Congress have now passed the Water Resources Development Act, but their different versions must be compromised and approved again, before being sent to the President for signing. Many farm groups pushed for passage and now must push for annual appropriations bills, to ensure that lock and dam refurbishments are funded.

The farm gate blog was honored this week, by being selected by USDA as a resource for farmers, and subsequently will be linked to the US Department of Agriculture web site.