It's a long time between now and next spring, but it will be here before you know it. And for those of you considering a planting of small fruits, you really need to begin getting ready now. Often times the most popular varieties of plants are sold out shortly after the first of the year. So now is the time to place the order. There really is nothing in comparison to the taste of a freshly picked fruit- strawberry, raspberry, blackberry or blueberry. The store bought just can't compare!

Growing small fruits is not a difficult task. You'll need to conduct a soil test to determine the fertility level of the soil. Pick a site that gives full sunlight for a majority of the day. If it has a slight slope to allow for water and air drainage that's good. Hopefully it's a deep soil as well. These plants won't tolerate wet soils with standing water, so if need be a raised bed can be used. The raised bed can be as simple as plowed together furrows or more complex, using cement blocks or boards.

Order the plants from a reputable nursery; don't dig up plants from neighbors or friends. Small fruit plants die from diseases anyway (they all have limited life spans, the exception being blueberries) and the easiest way to get disease is by digging up older plants. Likewise, destroy any volunteer plants in the area. Go out 500-600' or so. These volunteer plants harbor insects and diseases. When you get your plants from the nursery, store them in a cool dry location until planting can take place- the sooner you can plant the better. We'll discuss strawberries with this column and address other small fruits in later columns.

There are some standard strawberry varieties that have proven themselves over the years. You should begin with these varieties and then experiment with others. Earliglow is the standard early berry. It's an exceptional tasting berry. However the size of the berry is small and it quickly gets smaller after a couple of pickings. Honeoye is the standard that all berries are compared to. It will mature 5 days or so later than Earliglow. It fruits for 3 weeks or so, and although size will diminish with later pickings, not to the extent of Earliglow. Its high yields make this a favorite. Jewel will mature about 5 days later than Honeoye. Excellent taste and quality picking are the traits of this variety. It will yield close to Honeoye but much higher than Earliglow. Allstar is another great tasting berry. The coloring of Allstar is somewhat lighter than other varieties. It will mature slightly ahead of Jewel and the taste is as good as Jewel. These are probably the standard varieties in our area.

Other varieties (and their maturity) that deserve consideration include: Annapolis (early), Cavendish (early mid), Darselect (mid) and Cabot (late). How many plants should you order? Many nurseries will sell varieties as bunches of 25 each. Rows should be between 3-4' apart, depending upon equipment. At the end of the year and for the length of the stand you'll want to have a row of plants between 14-18" in width.

You'll set plants anywhere from 18-24" between plants within the row. Spacing will depend upon time of planting (the earlier you plant the further apart the plants can be) and how aggressive the variety is (Honeoye is very aggressive whereas Cabot is not).

There are also everbearing and day neutral strawberries you can consider. These plants don't runner as much, putting energy into fruit production, so they might be a better fit with limited space available (container planting). However fruits will be smaller in size compared to June bearing varieties. SeaScape is an everbearing variety that will produce fruit in two peaks- July and again in late summer. Tribute and Tristar are two day neutral varieties.

Consider disease resistance in selecting any fruit varieties. Root diseases will eventually thin the stand and you'll have to replant. So selecting varieties with some resistance may allow for a longer stand.

Grain farms with a higher percentage of their acres cash rented will have much lower incomes when commodity prices decline than farms with lower percentages cash rented. This is illustrated for a 1,200 cash grain farm under four different price scenarios.

The farm used in income projections is a 1,200 acre grain farm that is further described in a November 17, 2011 farmdoc daily entry here. This farm has expected yields of 187 bushels of corn and 54 bushels of soybeans, grows corn on two-thirds of acres, has non-land costs of $546 per acre for corn and $306 per acre for soybeans, and has $480,000 of debt. Budgets for corn and soybeans are shown in the November 17th entry. The four price scenarios are:

1 .Projected 2012 prices ($5.40 for corn, $11.70 for soybeans),

2. Long-run prices ($4.50 for corn, $10.50 for soybeans),

3. Low price year ($3.50 for corn, $8.20 for soybeans), and

4. Poor price year ($3.00 for corn, $7.00 for soybeans).

Incomes are generated for a typical farm with 10 percent of acres owned, 30 percent share rented, and 60 percent cash rented ($275 per acre cash rent). The typical farm is compared to a farm that cash rents 100 percent of its acres for two cash rent levels: $275 per acre and $350 per acre.

Table 1 shows net incomes given that Revenue Protection (RP) crop insurance policies are purchased at 80 percent coverage levels. This crop insurance scenario represents 2012, given that crop insurance projected prices are near $5.80 per bushel for corn and $12 per bushel for soybeans. In this case, crop insurance will make payments when revenues fall, thereby reducing income falls in the face of price declines. For the "typical" farm, the 2012 projected prices of $5.40 per bushel for corn and $11.70 per bushel for soybeans results in $222,100 of net farm income. A 100 percent cash rent farm with a $275 per acre cash rent has projected net farm income of $200,500. Raising cash rent to $350 per acre reduces net farm income to $110,500.

Long-run prices of $4.50 per bushel for corn and $10.50 per bushel for soybeans represent estimates of the average price over the next five years. Prices will vary from these long-run averages, but when all prices are averaged over time, the average will be close to the long-run prices. At long-run prices, the typical farm has $86,500 net farm income. The cash rent farms have significantly lower incomes of $40,900 for the 100 percent cash rent farm with $275 per bushel cash rent and -$49,100 for a $350 per bushel cash rent. For the typical farm, net income fall $35,600 from the projected 2012 prices to the long-run prices. For the same price change, net income fell $159,600 for the cash rent farms.

Lower prices result in lower net farm incomes. For low prices ($3.50 for corn, $8.20 for soybeans) and poor prices ($3.00 for corn, $7.00 for soybeans), net incomes are $34,100 to $33,700 for the typical farm, -$20,700 to -$21,100 for the 100% cash rent farm with $275 per acre cash rent, and -$110,700 to -$111,100 for the 100% cash rent farm with $350 per acre cash rent. Net incomes do not vary much between the low and poor price scenarios because crop insurance payments are offsetting crop revenue declines as commodity prices decline.

Net incomes also are projected without crop insurance. Without crop insurance represents the case where crop insurance prices have adjusted downward before projected prices are set in February, resulting in crop insurance not protecting against price declines. Without crop insurance, net incomes will be much lower at the low and poor price scenarios. At the low price scenario ($3.50 corn, $8.20 soybeans), results in -$82,400 net income for the typical farm, -$157,800 for the 100% cash rent farm with $275 per acre cash rent, and -$247,800 for the 100% cash rent with $350 per acre cash rent (see Table 2). All farms would face negative incomes. The cash rent farms would have serious deterioration of the financial position.

Summary

Projected 2012 prices of $5.40 per bushel for corn and $11.70 per bushel for soybeans results in above average incomes and most farms would have good financial incomes. Price reductions to long-run averages result in lower incomes, particularly for farms with high percentages of cash rent. At high cash rents, farms with 100% of their farm cash rented would have negative incomes. Lower prices would result in further reductions in net incomes.

When lower commodity prices occur, farms with high amounts of cash rents will face difficult decisions. Attempts may be made to lower cash rents so large financial losses do not occur. Alternatively, these farms will have to absorb financial losses under the hope that commodity prices turn upward quickly so that the farm moves into a positive income situation.

Published average cash rents mask the variability that exists in the farmland rental markets. To quantify variability, 2010 cash rents from individual farms in the Illinois Farm Business Farm Management (FBFM) are subtracted from average cash rents published by the National Agricultural Statistical Service (NASS). The resulting distribution is shown in Figure 1. In 2010, 35 percent of the farm cash rents are within $20 of the average county cash rent. Nineteen percent are between $20 and $60 per acre higher than the average county rent while 10 percent of the farm rents are $60 higher than the average county rent. Twenty-six percent are between $20 and $60 lower than the average county rent and 10 percent are over $60 below the average county rent.

Overall, the average of cash rents from FBFM data are close to the averages from NASS. Over the entire state, FBFM rents average within $2 per acre of the NASS average county rents. This suggests that NASS data provides good indications of average county cash rents.

While NASS averages are accurate, average county rents mask the variability in rents within a county. Only 35 percent of farm cash rents are within $20 of the average rent. This leaves many cash rents that vary significantly from averages.

Furthermore, average cash rents from FBFM used in Figure 1 likely understate variability. Data used in constructing rents are average for a farm. Many farms have rented land from more than one landlord. Hence, a farm likely has some rents that are above the average and other rents that are below the average.

There are cash rents significantly above the average. For example, there are three percent of the farm rents that are $100 higher than the average county cash rent. In 2011, the average county cash rent in McLean County is $233 per acre (see FEFO 11-16). This would imply that that three percent of farm rents are above $333 per acre ($233 average plus $100). These above-average cash rents generally receive a great deal of public attention.

Given the nature of averages, there also must be rents below the average. As can be seen in Figure 1, 8 percent of the leases are between $60 and $100 lower than the average and 2 percent are $100 below the average.

Implications

Some of the difference in cash rents can be explained by differences in land productivities, with higher productivity leading to higher cash rents. Even given the productivity explanation, there is a large difference in rents across farms.

To a large extent, land owners and farmers are aware of the differences that exist in rents. Much of the difference in cash rents likely is due to desires of land owners and relationships between land owners and farmers. Quantifying these desires and relationships is difficult.

The distribution of cash rents points out difficulty in relying on average to cash rents. It also suggests that "high" cash rents should be taken as a limited indication of all rents within the rental market.

Illinois growers can now access a new "app" on their Android phones that calculates optimum nitrogen fertilizer application rates, said Dennis Bowman, University of Illinois crop systems Extension educator.

A few years ago, U of I Extension specialists started recommending the Maximum Return to Nitrogen (MRTN) model for calculating the economic optimum nitrogen rate. Several Corn Belt states collaborated on developing this system and created a common website for farmers to use, extension.agron.iastate.edu/soilfertility/Help.aspx.

This system takes input from the farmer on current fertilizer and corn prices as well as the farmer's location and crop rotation, and then creates a customized recommendation.

Using this information, Bowman recently created an "app" for Android smartphones or tablets.

"This app will take your input and calculate the optimum MRTN-based nitrogen application rate," Bowman said. "It will also show you the range of application rates that keep you at the top of the MRTN curve."

The 2012 University of Illinois Corn & Soybean Classics will mark the 15^th year of this educational program related to crop production and pest management.

"The 2012 program emphasizes crop production, pest management, economics, and the interactions among them," said Aaron Hager, U of I Extension weed specialist. "Market updates will be provided throughout the day, and communication between speakers and participants is encouraged."

The dates and meeting locations for the 2012 Corn & Soybean Classics are:

January 10 (Tuesday): Mt. Vernon Holiday Inn

January 11 (Wednesday): Springfield Crowne Plaza

January 12 (Thursday): Champaign I Hotel and Conference Center

January 16 (Monday): Bloomington DoubleTree Hotel

January 17 (Tuesday): Malta Kishwaukee College

January 18 (Wednesday): Moline i wireless Center

January 19 (Thursday): Quincy Holiday Inn

Program speakers and their respective topics of discussion include: Richard Cooke – It's Still about Yields: Developments in Drainage in Illinois; Gary Schnitkey – Evaluating Rotation and Other Factors that Impact Profitability and Risk; Aaron Hager – Move Over, Waterhemp, Make Way for Palmer Amaranth; Carl Bradley – Wilts, Spots, Blights and Streaks: Old and Emerging Diseases of Corn; Mike Gray – Insect Surveys in Producers' Corn and Soybean Fields: What did We Learn?; Fabián Fernández – Measuring Soil Fertility the Right Way; and Emerson Nafziger – Fixing What Ails Continuous Corn.

The program will begin at 9 a.m. and conclude by 3 p.m. Question-and-answer sessions are scheduled for both morning and afternoon sessions. A noon lunch and a proceedings booklet containing synopses of all presentations will be provided to each registrant.

Registration is now open at www.cropsciconferences.org/. Pre-registration is $60 through December 16. Registrations received between Dec. 17 and Jan. 1, and all on-site registrations are $75. Additional questions may be directed to 800-321-1296.

Many Illinois farmers have been disappointed with 2011 corn-after-corn yields, reporting significantly lower corn-after-corn yields compared to corn-after-soybean yields. So as to provide guidance for 2012 planting decisions, break-even corn-after-corn yields are calculated for farms in northern, central Illinois with high-productivity farmland (central-high), central Illinois with low-productivity farmland (central-low) and southern Illinois regions. Break-even corn-after-corn yields are between 24 and 35 bushels lower than corn-after-soybean yields.

Break-Even Corn-After-Corn Yields

Break-even corn-after-corn yields are calculated in Table 1 and require soybean returns, corn-after-corn non-land costs, and corn price information. Calculations are shown for northern Illinois. In northern Illinois, soybean returns are projected at $342 per acre (54 bushel soybean yield x $12.00 soybean price - $306 non-land costs). This soybean return, along with corn-after-corn non-land costs and corn price, are used to find the break-even corn-after-corn yield. For $542 per acre of non-land costs for corn and a $5.50 corn price, the break-even corn-after-corn yield is 161 bushels per acre (161 bushels = ($342 soybean return + $542 corn non-land costs) / $5.50 corn price). This means that corn-after-corn with 168 bushel yield will give the same return as soybeans with 54 bushel yield.

The 168 bushel break-even corn-after-corn yields for northern Illinois is 29 bushels below the 190 bushel projected yield for corn-after-soybeans. This suggests that the break-even yield drag between corn-after-soybeans and corn-after-corn is 29 bushels in northern Illinois. Calculations in other regions indicate:

a. The break-even corn-after-corn yield in central-Illinois with high productivity farmland is 163 bushels per acre, 35 bushels below the 198 projected corn-after-soybean yield.

b. The break-even corn-after-corn yield in central Illinois for farms with low-productivity farmland is 160 bushels, 24 bushels below the 184 bushel projected corn-after-soybean yield.

c. The break-even corn-after-corn yield in southern Illinois is 1437bushels per acre, 24 bushels below the 161 bushel projected yield for corn-after-soybeans.

Obviously these break-evens vary with differing prices, yields, and costs. Farms will have different yields and costs; hence, break-evens vary across farms.

Break-Even Corn-After-Corn Yields for Differing Prices

Projected corn and soybean prices impact break-even corn-after-corn yields. Table 2 shows break-even corn-after-corn yields for differing corn and soybean prices, given costs and yields typical of northern Illinois. Break-even yields decrease as corn price increase. Break-even yields decrease as soybean price decreases.

Historical Break-Even Corn-After-Corn Yields Relative to Soybean Yields

For northern Illinois, the 161 bushel break-even corn-after-corn yield is 3.0 times the 54 bushel per acre projected soybean yields. The 3.0 ratio is low compared to historical ratios. From 2000 to 2010, the corn-to-soybean break-even ratio has averaged 3.3 (see Figure 1), meaning the corn yields had to be 3.3 times higher than soybean yields to break even. This current relatively low ratio suggests that market signals are favoring corn production over soybean production.

Summary

Break-even corn-after-corn yields for 2012 are presented in this paper. These break-evens corn-after-corn yields are between 24 and 35 bushels lower than corn-after-soybean yields. The 2012 break-even corn yields relative to soybean yields are low from a historical perspective. While farmers are questioning whether to continue with as much corn-after-corn, market prices and costs suggest corn is relatively more profitable than soybeans from an historical perspective.

Issued by Gary Schnitkey
Department of Agricultural and Consumer Economics
University of Illinois.