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.

Corn exports have heated up says IL Extension’s Darrel Good, and have already reached 41% of 2005 crop exports. And he adds, “With the world wheat crop about 5.2% smaller than the 2005 crop, and world wheat consumption expected to drop by 1.4% the export demand for corn is expected to remain very strong over the next several months.” Read his newsletter.

Darrel Good says the stocks-to-use ratio suggests a $2.77 marketing year average price, but USDA is forecasting a $2.80-$3.20 average price, and the futures market is implying a $3.25 average price. He says the futures price is based on a declining production estimate, trader doubts that consumption has declined, and the need to buying 2007 acres.

WWII had ended and American farm boys returned to plant the largest corn crop ever in 1946 to help feed a hungry world. Most memories of that have faded, but will be revived in 2007 says Purdue Extension’s Chris Hurt, who says 88-89 mil. acres like 1946 will be needed to raise an extra 1.4 bil. bu. of corn to feed 150+ hungry ethanol plants.

Chris Hurt expects corn to push out some southern cotton acres, to be planted in parts of sorghum territory, and in the northern Plains where wheat acreage will give way. But that is only 1-2 mil. additional acres, and the Purdue economist says to get 10 mil. new corn acres most of it will have to come from soybean acreage in the Midwest.

What does Hurt expect for prices? “It is very early to be projecting prices for 2007, in that so many events, including harmful weather and international events, can affect those prices very strongly, but right now I’m using corn prices in the $3.40 per bu. range for the ‘07 crop.” That requires ethanol plants to operate at capacity to support that demand.

Soybean prices will follow the corn market, says IL Marketing Specialist Darrel Good, although the stocks-to-use ratio suggests a $5.45 price, the futures market is trading $6.25. He says soybean meal prices are supported by higher corn prices and soybean oil prices are being supported by expectations of rapidly expanding bio-diesel production.

Buckle your seatbelt and hang on with the market flow, says Kansas State economist Mike Woolverton. He’s expecting: fluctuations in grain and oilseed prices to continue as traders shift in and out of positions; corn prices will remain high through the marketing year; very little, if any, reduction in area planted to soybeans in Brazil; a reduction in US soybean acreage this spring; reductions in spring and soft red wheat; an increase in double-crop beans following wheat in the Western Corn Belt; and a sharp drop in wheat price in the spring as world producers respond to high prices by planting more acres. Read his newsletter.

It may not be widely known, but beans are now being crushed for their oil. Iowa State’s Bob Wisner says, “Because of expanding demand for biodiesel, the more appropriate carryover for the years ahead appears to be the one that is based on crushings for oil. Soybean meal in the years ahead will face increased competition from distillers’ grain and solubles. Prospects for declining soybean carryover stocks in later years will be a supporting influence on this season’s soybean prices, despite the current large supplies.”

Regarding ethanol, Iowa State’s Wisner says if all the proposed plants are built, Iowa would be a corn deficit state by 25% and would have no corn for either feed or exports. Compare that to 2005, when non-ethanol uses of corn accounted for 58% of the crop.

Don’t have a good handle on the ethanol economy? Wisner’s 11/15 newsletter says:

1. A $1 hike in corn price raises the cost of producing ethanol by about $0.36 per gallon.
2. The $1.50 rise in corn prices has raised ethanol production costs by about $0.54/gal.
3. Refiner margins were narrow in late Sept. and early October, but have risen $050/gal.
4. Each $0.10 increase in ethanol prices means refiners can pay an extra $0.28 for corn.
5. The maximum price newer plants can pay for corn may be in the $4.50 per bu. range.

The 2006 corn crop may get smaller if the fortunes of Ohio farmers don’t reverse. They are only 68% harvested, compared to the 5-year average of 83%. Ohio State agronomist Peter Thomison says stalk lodging and root lodging are reducing quality and making it difficult to harvest corn, subsequently reducing yields from lost and moldy corn ears.

Winter annuals, like deadnettle and henbit provide a winter haven for SCN says Purdue nematologist Jamal Fagihi. The life cycles of winter weeds and SCN do overlap and the potential exists for SCN population increases on winter annual weed hosts. He says a new generation has hatched since fields were harvested. He’s recommending spraying herbicides to control winter annuals, if your fields have weeds and your soil has SCN.

Pay attention to aphid predators says Purdue entomologist Bob O’Neil, who built cages to keep predators away from the soybean aphids. The caged population increased fourfold, while the uncaged aphid numbers decreased from natural predators. Pirate bugs eat up to 8 aphids per day and lady beetles consume 30-40 a day. Extension specialists can show $10-12/A savings.

Problems with Bt rootworm corn which appeared in IL in 2005, have been found in Iowa in 2006, and researchers are developing theories for the alleged failure of the trait. Entomologist Marlin Edwards says the rootworm population could have been high, the gene wasn’t transferred, or the lethal protein wasn’t high enough at larvae feeding time. Read his report.

No decisions yet, but reorganization has been recommended for several Univ. of IL research stations, driven in part by budgetary concerns. Task Force findings include:

1. Operate and expand the Orr Research and Education Center at Perry.
2. Revitalize the animal research programs at Dixon Springs Agriculture Center.
3. Continue to study options for the horticulture programs at Dixon Springs.
4. Expand the St. Charles field program for horticulture and environmental research.
5. Close Monmouth and Shabbona facilities in lieu of a new Northwestern IL facility.
6. Close Brownstown and Dixon Springs crop facilities for a new South-central IL site.

Cowboys saw red in 2005, say IL Extension economists, who analyzed feedlot records and said costs exceeded returns by $5.68 per 100 pounds of beef produced. Eleven enterprises were in the study, and the lower returns were attributed to higher prices paid for feeder calves, some 8% more than 2004 prices and the highest paid since 1980. Read more.

High feed costs have deflated cattle futures says Ohio State economist Brian Roe, who says the value of a 750 feeder steer has lost $120 since early Sept., based on CME futures contracts. Since then corn has gone up $1 and SBM futures $30. That steer will eat another 60 bushels of corn and 120 lbs of meal, which is $62 more in feed. So Roe says about half of the drop in 750-pound feeder cattle futures prices can be chalked up to extra feed costs. See his calculations.

Feed costs for hogs increase about $9/head or $4.50/cwt of carcass weight, as corn prices rise through $2, $3, and $4 thresholds. Iowa State Extension’s John Lawrence says $3 corn means a nearly $43/ cost, and $4 corn pushes it to $52. He said if hogs are marketed at an optimal weight with $2 corn, that weight is less at $3 corn. Use his optimal weight calculator.

If you feed distillers’ grain to hogs to save money, Lawrence says, “Average daily gain was lower at the 20% and 30% levels than at the 0% and 10% levels, and the 30% ADG was lower than the 20% ADG. The DDGS30 also required more feed per pound of gain than did the other three diets that were alike. As a result of the lower DDG, the DDGS20 and DDGS30 had lower selling weights for the same number of days on feed.”

Illinois livestock operators with more than 300 animal units can update their Livestock Management Certification at one of 11 Extension seminars beginning Dec. 18. Topics include: concrete construction, fertility of manure, manure sampling, feeding DDGS, odor control, and the new regulatory website. Registration details.

Cellulosic ethanol is more studied than produced currently, but if you want to learn about producing grass fuel pellets for biomass ethanol plants, mark your calendar for Dec. 6, and plan to hear various speakers address the topic at Richland Community College in Decatur, IL. Details are available by e-mailing: sfjohn@agwatershed.org .

Sign-up began in October, but if you need cash from USDA’s Direct and Counter Cyclical Program, it will be available in December for those who have visited FSA offices or used USDA’s e-DCP service on the Internet. Maximum payments will be 22% of the direct payment rate of 28¢ for corn, 44¢ for beans, and 52¢ for wheat.

In Washington; Senators cannot agree whether to vote on a $4.9 bil. disaster aid bill; Ag Secy. Mike Johanns says ethanol will get the corn it needs without robbing CRP acreage.

Stu Ellis

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