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 and soybean prices have moved into a sideways to lower trend, says Marketing Specialist Darrel Good. That results from the lack of new fundamental information flowing into the marketplace. But he says that will change over the next several weeks as USDA reports are released and more information is available about So. American crops.

Mark your calendar for USDA reports on Jan 12, says IL Extension’s Darrel Good:

• Crop Production Report will have the final 2006 corn and soybean crop estimates.
• Grain Stocks will report Dec 1 inventory and detail rate of feed and residual use.
• World Supply/Demand will show dwindling stocks and amplify 2007 corn estimates.
• Wheat Seedings will show acreage response to high wheat prices vis-à-vis corn.

Darrel Good says the Wheat Seedings report is expected to show a large increase in hard red winter wheat, but expectations are mixed for soft red winter wheat. He says farmers in the Eastern Cornbelt and southeastern US may have responded to higher wheat prices, or were drenched out by fall rains. Either way, that will have an impact on corn acreage. Read more.

Regardless of recent price trends, SD Extension’s Alan May says corn prices are still at historically high levels. He says, “It is still important to evaluate what $3.00 corn means to your bottom line. It has been very rare to have prices at this level, for both old and new crop corn. It just seems practical to make some sales now, especially for new crop corn. In addition, write a marketing plan that forces you to make sales if prices move higher and if prices should move lower.” Read more.

Will other Cornbelt states confirm the IL trend regarding corn planting percentage (CCP)? IL Extension economist Gary Schnitkey says in 2005, “41% of the farms decreased CPPs and 29% of the farms increased CPPs by more than 5 points. If this variability continues into 2007, a considerable number of IL farms will decrease CPPs even if the average CCP increases. Southern IL acres likely will be weather driven, but Schnitkey says crop budgets suggest northern and central IL corn acreage will be larger. Read more.

USDA’s Christmas present to the Environmental Working Group is a lump of coal in farmer stockings. EWG has received 15 million additional records of USDA program payments. It has all the details of 11 years of subsidies worth $165 billion distributed to farmers. The latest batch identifies farmers receiving benefits from farm corporations.

Pesticide applicators will not require pollution discharge permits under new EPA rules when spraying pests in or near water. That includes control of pond weeds, mosquitoes, and aerial timber spraying where it may reach lakes or streams. Spray drift rules still are pending. Read more.

Stink bug populations are increasing says MO Extension entomologist Wayne Bailey, and that does not bode well for soybean yields. Stink bugs puncture pods fostering disease and malformed and off-color soybeans. He says they also damage the ability of a soybean plant to dry down prior to harvest. He attributed the trend to more no-till, warmer weather, and letting weeds get bigger in the spring before spraying.

Scout early for corn disease in 2007 because of carryover in corn after corn. MO Extension pathologist Laura Sweets warns, “If weather conditions are favorable for disease development, a disease may occur earlier in the season or at more damaging levels because inoculum was present in close proximity to the developing corn.” Read more.

Potential 2007 corn diseases will require different management responses:

• Prevent seed rots and seedling blights with warm planting and fungicides.
• Prevent foliar disease with resistant varieties, crop rotation, & right population.
• Prevent stalk rot with proper population, strong stalk hybrids & timely harvest.
• Prevent ear & kernel rots by protecting plant from ear-feeding insects.

Feeder calf prices declined 8 weeks to $112/cwt while corn prices climbed well above $3. With 75 bushels of corn needed to finish a calf, SD market specialist Alan May says the impact of higher corn prices is $85/head with a $160/head loss in feeder calf value.

Price risk during backgrounding can be substantial says Alan May, potentially unraveling the demand for March feeders. He says there is substantial price variability from year to year, with the largest changes in the past two and adds, “The current cost to protect against a price decline is about $4 per cwt. May says a synthetic put strategy may be preferred as it would place a floor price much closer to the futures level.”

Ethanol is so tied to Iowa agriculture that Iowa State economists can say it pushed up land prices by 10%. The $290 jump from 2005 pushed the average Iowa land price to $3204, the first time it had surpassed $3,000. Economist Mike Duffy said it was good for older farmers wanting to retire, but bad for young farmers wanting to get started farming.

The next issue will feature the Dec 22 Cattle on Feed Report and the Dec 27 quarterly Hogs and Pigs Report. These will be good barometers for judging corn and soybean meal use in the wake of rising grain prices. Cattle placements and farrowing intentions will indicate producer response to higher feed and lower livestock prices the past 3 months.

Stu Ellis

Leave a Comment

Name (required)

Email (will not be published) (required)

Website