February 11, 2009
During the past few years, producers have seen seed costs rise to record levels. Last summer's record crop prices no doubt led seed companies to believe producer incomes would allow these higher prices. However we've seen corn prices retreat almost 50% from those summer highs. And incomes based upon these lower prices just don't allow for much in the way of input price increases. Consequentially, we've seen a retreat of seed prices in many instances.
Producers are investigating any and all ways in which to improve efficiencies. And seeding rates are one of those concerns. In the Midwest over the past few years, there have been several studies to examine soybean seeding rates. And they've all led to the same conclusion- most producers overplant soybean seed, some by a great deal.
Eric Adee, at the U of I Monmouth Research Center ran a soybean seeding rate study for 3 years. He determined economic seeding rates based upon yield, soybean seed price and soybean selling price. These were seeding in 15" rows, using a pre-emerge herbicide, followed by one application of glyphosate (the key here is use of a pre-emerge herbicide to keep weed populations low). Stand counts ranged from 75,000-145,000 plants per acre, but yields only varied by 4 bushels/acre. These results are not much different than many other studies.
So, figuring economic seeding rates based upon seed cost and price received is a simple calculation. Using a seed cost of $40 per 150K seeds and a selling price of $9, the optimal final stand would be 114K plants. At a seed cost of $50 and selling price of $8, the optimal final stand would be 102K.
These are final stands, not seeding rates. You'll need to compensate for those seeds that don't germinate. You'll also need to use a pre-emerge herbicide (you should anyway to reduce weed resistance) to allow maximum yields by keeping weeds to a minimum in these stands.
Posted by John Fulton
at 9:02 AM |
February 6, 2009
- Ethanol throttled the 2007& 2008 corn market, now it put on the brakes. Marketing specialist Chad Hart at Iowa State says that is because of the shutdown in several ethanol plants. But the industry is still growing, and he says it should have exceeded 9 bil. gal. last year. He says the federal mandate is for 10.5 bil. gal. of ethanol this year. One industry leader recently estimated 2.7 bil. gal. of capacity is currently idled.
- Corn exports will fall 661 mil. bu. behind the export levels of last year and beans will fall 61 mil. Iowa State's Hart says the value of the dollar continues to be a problem for US exports. He says it will strengthen against most major currencies, except those of Japan and China, which are currently the top corn and bean export markets. More: http://www.econ.iastate.edu/outreach/agriculture/periodicals/ifo/IFO_2009/ifo020109.pdf
- Argentina is suffering the worst drought in the past 50 years, estimates Mike Woolverton at Kansas St., who says its government has estimated production with a 50% loss, and curtailed all wheat exports. He says the drought has cut 43% of soybean production in Paraguay, and reduced soybean yields 10% in southern Brazil.
- Woolverton says the Argentine drought and farmers' strike should show up in USDA's February 10 world supply and demand report. He says market speculators have begun building long positions as a result of the issues, and US farmers with stored crops may be major beneficiaries of the South American drought and political issues.
- US soybeans will be helped, since this is the time of year that global buyers turn to South America for soybeans, but the supply will be short and price will have to ration the supply, says Woolverton, adding that will become a dynamic in the acreage decision this year, but a soft demand from the recession will prevent any wild price moves.
- Focus on the demand, says Alan May at South Dakota State. "Consumption will continue. Demand has, and will likely continue to be, the key component in price direction. People still need food, livestock still need to be fed, and the ethanol industry will still need to buy corn to meet the demand for ethanol. The issue is the performance of demand in the months ahead and the corresponding production we will have in 2009." He says prepare to make sales when the opportunity arises and control input costs. Read Alan May's grain newsletters at: http://econ.sdstate.edu/Extension/CMA.htm .
- A weaker economy still wreaks havoc on fundamentals, says Mike Roberts at VA Tech.
1) Any corn strength is limited by bearish speculators. He's pricing up to 30% new crop.
2) Funds are adding to net bull soybean positions. He's pricing up to 40% of new crop.
3) Funds have reduced net bear wheat positions. He's pricing up to 15% of the new crop.
- If you are uncertain about ACRE, IL Extension's Gary Schnitkey says the 30% cut in loan rates may be a moot point, since, "It is unlikely that prices will fall below national loan rates between now and the end of the Farm Bill in 2012. Hence, the chance of receiving LDPs is low under both the traditional and ACRE alternatives."
- If you are uncertain about ACRE, which will cut Counter-Cyclical payments by 20% for those signing up, Schnitkey says, "Trigger prices in 2009 are $2.35 for corn, $5.36 for soybeans, and $3.40 for wheat. The chances of receiving counter-cyclical payments are low because it is unlikely that commodity prices will average below trigger prices."
- If you are uncertain about ACRE, Schnitkey says, "ACRE will pay for corn in 32% of the years and average $17 per planted acre. For soybeans, ACRE will pay in 16% of the years and average $6.50 per planted acre. These average payments will vary across farms based on the farm's average yield relative to the state's average yield." Read more at: http://www.farmdoc.uiuc.edu/announcements/agrinews/Jan_2009/agrinews_Jan_2009.html .
- The national cattle inventory is 1.6% under January of 2008, with beef cows down substantially, lighter heifer retention, but a slight rise in the dairy herd. The national herd is 31.7 million, the least since 1963, and with heifer retention down 2%, the herd will continue to decline into next year says Iowa State livestock economist Shane Ellis.
- Shane Ellis says cattle feeders have started to push back on prices they are willing to pay to regain profitability. "Compounded by lower feeder cattle prices, there will continue to incentive for producers to reducer their herds to exit the business." Read his newsletter at: http://www.econ.iastate.edu/outreach/agriculture/periodicals/ifo/IFO_2009/ifo020109.pdf
- Cattle numbers are down, yes, but Purdue's Chris Hurt says be patient on prices. "The USDA (Cattle on Feed) report will increase cattle prices in the short-run, but more central to a price turn around will be the perceived progress of the general economy. On that front, consumers are not likely to feel better about their budgets for several more months as unemployment continues to rise into the spring and summer."
- Hurt does not give much hope for a rapid recovery. "The improvement in the economy is still months away, and may well be late 2009 and 2010. This leaves the possibility that finished cattle prices only return to the mid-to higher $80s this spring with mid-$80s this summer. If so, prices might not move back above $90 until very late in 2009 and early 2010. Read more: http://www.farmdoc.uiuc.edu/marketing/weekly/html/020209.html .
- Consumer demand for meat is weak, according to MO livestock economists Glenn Grimes and Ron Plain. They say 2008 pork demand was down 3.5%, beef demand was down 4.1% compared to 2007. Export-driven live hog demand is up 6%. They say consumer demand will remain weak in 2009, but fewer chicken supplies will help pork.
- Your New (crop) Year's resolution may need to be better weed control. IL Extension crop specialist Jim Morrison says herbicide resistant weeds need special attention:
1) Regular field scouting can identify stands of weeds that just won't go away.
2) Rotate herbicides, which work on different parts of weeds (site of action.)
3) Combine mechanical weed control with herbicide applications.
4) Clean tillage and harvest equipment regularly to prevent weed transfers.
- Weeds rob your nitrogen say Michigan St. specialists, who add that a 95% control can be achieved when weeds are 9 in. tall, but corn yields are cut by 25 bu. per acre. They say there is no yield loss when weeds are 4 in., but 12 in. weeds produce a 9% yield loss. In terms of nitrogen, the Maximum Return to Nitrogen (MRTN) rate was 96 lbs per acre when weeds were controlled at 4 inches, compared with an MRTN rate of 200 lbs per acre when weeds were controlled at 12 inches. Bigger weeds absorb more nitrogen.
- Your combine is too efficient and may not be leaving enough corn on the ground to sustain the cattle you turned out on the cornstalks. NE forage specialist Bruce Anderson says 4% of the corn was left in the field 10-15 years ago, but today it is about 1 lb. less grain per acre for every bushel harvested. He says cattle already need extra protein.
- OH corn yields were 5 bu. under trendline, but OSU agronomist Peter Thomison says they could have been worse. He says the wet spring and protracted dry spell hurt the crop, but he says if August had been blistering hot, which it was not, then corn yields would have been comparable to 2002 when the state average yield was a paltry 89 bu. Thomison also says Hurricane Ike clobbered corn stalks, causing widespread lodging.
- Does stacked trait corn yield better than non-GMO corn? Not really say Ohio St. agronomists, who note that 2/3 of the state last year was planted to transgenic corn and it is getting harder to get non-GMO corn. They say some farmers believe stacked traits are matched with high yield hybrids, but the agronomists say different genetic backgrounds respond differently to genes and there is no research indicating the stacking traits increase yield. Read their current C.O.R.N. newsletter at: http://corn.osu.edu/
- Your thoughts about the pros and cons of 2,4-D are being solicited by the US EPA which has been asked by the National Resources Defense Council to cancel the 2,4-D registration based on the fact the EPA cannot prove it does not harm anyone and human health effects were not all considered. Information about submitting comments is at: http://www.epa.gov/fedrgstr/EPA-PEST/2008/December/Day-24/p30527.htm .
- "Question everything," say Michigan State fertility specialists in their latest newsletter, including the way you fertilize crops. They are strongly advocating soil tests, given the current prices. And they say if you take your own soil test, consider the soil compaction, and question if it may be limiting the crops ability to absorb water and nutrients.
- "The number of farms hit bottom, and is increasing slightly," says Greg Preston who heads up the NASS office in IN. He was describing the 2007 Ag Census released by USDA, which indicated the turnaround of a 60 year trend. With the ever-increasing age of farmers, Purdue's Kevin McNamara expects more land transitions in the future, including sales to other farmers, subdivisions of farms, and housing developments.
Posted by John Fulton
at 7:58 AM |