Around the County Frequent information updates for agricultural audiences Sun, 15 May 2005 13:02:08 -0500 https://web.extension.illinois.edu/lms/eb108/rss.xml Record Corn Yield Forecast Weakens Corn Prices https://web.extension.illinois.edu/lms/eb108/entry_13595/ Mon, 17 Sep 2018 12:58:00 +0000 https://web.extension.illinois.edu/lms/eb108/entry_13595/
  • Todd Hubbs
  • Department of Agricultural and Consumer Economics
  • University of Illinois
  • Source: Hubbs, T. "Record Corn Yield Forecast Weakens Corn Prices." farmdoc daily (8):172, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, September 17, 2018. Permalink

    The USDA crop production report released last Wednesday led to a drop in corn prices as a record yield forecast surprised the market. The December corn futures price dropped to contract lows by the close on Friday. While corn consumption continues at a healthy pace, the prospect of a massive corn crop will continue to put pressure on prices.

    The USDA September corn production forecast for 2018 came in at 14.827 billion bushels, up 241 million bushels over the August forecast. The corn yield projection of 181.4 bushels per acre, up 2.9 bushels from August, sits 5.3 bushels above the previous record. Over the last twenty years, the USDA's September yield forecast ended up higher than the final yield estimate only five times. A change in corn yield forecast that provides some hope would look like the 2010 crop year. The final yield estimate ended up almost ten bushels per acre below the September forecast during that crop year. The yield projection met some skepticism due to the record-busting yield projections in many Corn Belt states. While it is tempting to discount this yield projection, the September yield forecast over the last five years only witnessed a yield decrease once, and the change was for less than a bushel.

    Despite the strong record of accomplishment recently of USDA yield projections, the yields projected for top-producing states merit consideration. Yield prospects for the top ten states in harvested corn acreage this year, which compromise approximately 75 percent of all harvested acres, increased in eight of those states. Compared to the August forecast, yield prospects for the top ten states in corn acreage increased in Illinois, Iowa, Indiana, Ohio, Missouri, Nebraska, Kansas, and South Dakota. Yield prospects declined in North Dakota and remained the same for Minnesota. In six of those states, the forecasted yield came in at record levels. Illinois and Nebraska came in 13 bushels per acre above the previous record yield at 214 and 198 bushels per acre respectively. The forecasts for Ohio and South Dakota were 11 and 12 bushels per acre above their last record yields. Iowa and Indiana came in at a mere four and three bushel per acre above previous records respectively. While 2018 witnessed good growing conditions for corn, the forecasts for many Corn Belt states indicate large deviations from trend.

    On the back of the record yield projection, the forecast of total supply for corn during the 2018-19 marketing year increased 215 million bushels to 16.879 billion bushels. Beginning stocks fell by 25 million bushels on stronger consumption to close out the 2017-18 marketing year. The ending stocks estimate for 2018-19 increased by 90 million bushels to 1.174 billion bushels. The muted growth in ending stocks related to stronger use projections in all consumption categories due to rising production prospects and lower prices. The USDA increased to 2018-19 feed and residual use forecast by 50 million bushels to 5.575 billion bushels. Food, Seed, and Industrial consumption increased 125 million bushels to 7.13 billion bushels on stronger ethanol and industrial use. Corn export projections increased by 50 million bushels to 2.4 billion bushels. The forecast of the seasonal average corn price came in down 10 cents in a range of $3.00 -$4.00. An adjustment to this year's production forecast or a sharp demand increase appears necessary to see prices in the upper part of this range during the current marketing year.

    Despite the prospect of a large U.S. crop, increased consumption throughout the world continues to reduce global ending stocks. World production projections for 2018-19 increased 3.4 percent from last year's estimate to 42.08 billion bushels. The September world ending stocks forecast increased slightly to 6.18 billion bushels from August projections. World ending stocks are down 1.4 billion bushels from the 2017-18 marketing year estimate. The changes place world stocks to use at 11.7 percent, down from 13.4 percent last marketing year. The projected size of the Brazilian corn crop remained at 3.72 billion bushels, up 15 percent from the disappointing recent crop. Corn production projections for Argentina currently sit at 1.61 billion bushels, up 28 percent from this year's production estimate. An expansion in corn acreage looks probable in Argentina this year due to the recent policy change regarding export taxes in the soybean complex. At 8.85 billion bushels, Chinese corn production is up 4.21 percent from last year's estimate. A projected decrease in ending stocks in China by 766 million bushels, on stronger domestic use, encapsulates approximately 52 percent of the ending stocks decrease forecast for the world.

    The market now anticipates yield reports from the field as harvest commences and the October production forecast. Corn prices will be dependent on consumption throughout the marketing year barring a reduction in production levels. Corn use continues to show strength at the lower corn prices in place in the market. While there is potential for a higher corn yield as we move through harvest, the impact on corn prices may be minimal. Conversely, any reduction in corn yields sets up the potential for a strong rally.

    YouTube Video: Discussion and graphs associated with this article.

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    Closing in on 2018 Gross Revenue Estimates for Corn and Soybeans https://web.extension.illinois.edu/lms/eb108/entry_13581/ Wed, 12 Sep 2018 11:18:00 +0000 https://web.extension.illinois.edu/lms/eb108/entry_13581/ Gary Schnitkey
    Department of Agricultural and Consumer Economics -University of Illinois
    Recently released yield estimates and the announcement of Market Facilitation Program details allows for more accurate estimates of 2018 gross revenue for corn and soybeans. Gross revenue in 2018 could be near 2017 levels as long as 1) yields are exceptional and 2) some pre-harvest hedging occurred before May. Those farmers with lower yields or no hedging could have 2018 gross revenues well below 2017 levels. At this point, projections of 2019 gross revenue projections will be below 2018 levels.

    Revenues will be projected for high-productivity farmland in central Illinois. These 2018 projections will be compared to previous average gross revenues for farms enrolled in Illinois Farm Business Farm Management (FBFM). Table 1 shows the components of gross revenue projections, including crop revenue, Market Facilitation Program (MFP) payments, ARC/PLC payments, and crop insurance. Projections are made for both corn and soybeans with both stated on a per acre basis.

    Yields are projected at the highest level ever in 2018: 233 bushels per acre for corn and 70 bushels per acre for soybeans (see Table 1). For corn, the previous high was 231 bushels per acre occurring in 2014. The previous high for soybeans was 69 bushels per acre occurring in 2018 (for historical yields see Revenue and Costs for Illinois Crops). Note that these are average. There will be many farms with much higher yields. It is likely that some field averages on corn will approach 300 bushels per acre. Moreover, there will be areas with much lower yields. Several areas have been very dry, resulting in low yield estimates, and much lower revenue projections than given here.

    See the FULL article with tables and charts HERE. https://farmdocdaily.illinois.edu/2018/09/closing-in-on-2018-gross-revenue-estimates-for-corn-and-soybeans.html

    Source: Schnitkey, G. "Closing in on 2018 Gross Revenue Estimates for Corn and Soybeans." farmdoc daily (8):169, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, September 11, 2018. Permalink

     

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    U of I Releases Study on The Effects of Injectable Trace Minerals for Beef Heifers https://web.extension.illinois.edu/lms/eb108/entry_13524/ Fri, 10 Aug 2018 11:51:00 +0000 https://web.extension.illinois.edu/lms/eb108/entry_13524/
    Angus cow

    It can be a struggle for beef cattle producers to maintain mineral status, especially for cattle on pasture, so many implement a trace mineral supplementation program. But research on newer trace mineral strategies, including injectables, has been inconsistent and incomplete. In a set of recent studies, University of Illinois animal scientists study the effects of the injectable trace mineral Multimin®90 on reproductive performance in beef heifers.

    "We definitely have heard a lot of producers asking, 'What about this product? Does it work?' So we started to do studies on it," says Dan Shike, associate professor in the Department of Animal Sciences at U of I.

    In the first study, published in Translational Animal Science, Shike and his research team injected heifers with Multimin®90 at a rate of 1 milliliter per 68 kilograms, 33 days prior to artificial insemination (AI). The heifers were spread out in three herds across Illinois, in Champaign, Simpson, and Baylis.

    "In those three herds, we had variable results," Shike says. "In two of the herds, we had very good AI conception rates in our controls, so we were already doing well and did not see a response to the injectable. In the last herd, the controls were below where we would like to see. By giving the Multimin®90, there was an improvement in conception rates. In that particular case, it appeared that trace mineral was limiting."

    In the second study, in the Journal of Animal Science, Shike and his team injected Multimin®90 into heifers every 90 days from weaning to final pregnancy confirmation, at variable rates according to age, body weight, and label specifications. It is the first published study to evaluate the effects of repeated trace mineral injections.

    In this case, the injections had no effect on reproductive performance, but selenium and copper status improved compared to animals that received only saline injections.

    In explaining the result, Shike says it's complicated. "In pregnancy, there are so many factors, but the result is either yes or no. In this particular study, the limiting factor was not trace mineral. We had a tougher forage year, so all the heifers were a little lighter, thinner than expected. In this case, overall energy status was likely the most limiting."

    Even if it doesn't make a huge difference in reproductive performance, Shike still sees value in the product because trace minerals play critical roles in overall cattle health and productivity. And ingestible trace mineral products, such as free-choice minerals in pasture-fed cattle, can be hit-or-miss.

    "When producers ask about this, my first questions are, 'How have your AI conception rates been? Are you hitting a home run every year?' If so, then you probably don't have a trace mineral issue.

    "But if you've had poor AI conception in three out of four years, you need to start evaluating. It may not be trace mineral, but it's one of the things you should look at. Consider a different mineral program or an injectable. The value of an injectable is you pick the timing and you ensure every animal gets it."

    He says that value is worth it to some purebred seedstock producers, who view the injectable as a cheap insurance program. "If you can get a couple extra pregnancies out of this, you can pay for all your Multimin®90 for a couple of years in these operations."

    The first article, "Effect of an injectable trace mineral at the initiation of a 14 day CIDR protocol on heifer performance and reproduction," is published in Translational Animal Science [DOI: 10.2527/tas2017.0050]. Authors include Rebecca Stokes, Abigail Ralph, Alexander Mickna, Wesley Chapple, Adam Schroeder, Frank Ireland, and Dan Shike. The research was funded by the Illinois Beef Association and Multimin USA.

    The second article, "Effect of repeated trace mineral injections on beef heifer development and reproductive performance," is published in Journal of Animal Science [DOI: 10.1093/jas/sky253]. Authors include Rebecca Stokes, Mareah Volk, Frank Ireland, Patrick Gunn, and Dan Shike. The research was funded in part by Multimin USA.

    Source: Dan Shike, 217-333-0322, dshike@illinois.edu

    News writer: Lauren Quinn, 217-300-2435, ldquinn@illinois.edu

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    Soybean and corn export outlook https://web.extension.illinois.edu/lms/eb108/entry_13493/ Thu, 19 Jul 2018 15:01:00 +0000 https://web.extension.illinois.edu/lms/eb108/entry_13493/ Soybean and corn export outlook

    News Source:

    Todd Hubbs, 217-300-4688

    News Writer:

    Kelsey Litchfield, 217-300-7493

    URBANA, Ill. - The escalating trade issues between the U.S. and many of our trading partners continue to affect the outlook in both corn and soybean markets. Drastic price declines since Memorial Day show the impact of trade uncertainty and yield potential.

    "The prospect of large yields combined with trade issues set the baseline for determining export potential and price formation in both corn and soybean markets moving forward," says Todd Hubbs, University of Illinois agricultural economist.

    The USDA soybean export projection for the current marketing year totals 2.085 billion bushels, up 20 million bushels from last month's estimate. Census Bureau export estimates through May place soybean exports at 1.762 billion bushels. Census Bureau export totals came in 42 million bushels larger than cumulative marketing-year export inspections over the same period.

    As of July 12, cumulative export inspections for the current marketing year totaled 1.873 billion bushels. Hubbs explains that if the same difference in export pace continued through the current period, soybean exports would have totaled 1.915 billion bushels as of July 12. For the remainder of the current marketing year, 24.2 million bushels of soybean exports are required each week to meet the USDA projection.

    During the last four weeks, export inspections of soybeans averaged 24.5 million bushels per week. Low soybean prices encouraged sales to destinations other than China over the last few weeks. As of July 5, total outstanding sales for the current marketing year totaled 263 million bushels, which is well above the estimated 170 million bushels required to meet the USDA projection. While China looks to cancel the 26 million bushels of outstanding sales it possesses, total outstanding sales still sit above the estimated total to meet USDA projection for this marketing year.

    "Adjustments to 2018-19 marketing year trade numbers in the latest USDA forecasts present a bearish picture for soybean exports," Hubbs says. "A reduction of 250 million bushels, to 2.04 billion bushels, from last month's soybean export forecast is not a surprise given the current trade environment."

    In conjunction with lower U.S. soybean export projections, the USDA reduced the Chinese soybean import forecast to 3.491 billion bushels. The 73 million bushel reduction from last marketing year is the first decrease in year-over-year imports by China since the 2003-04 marketing year. While Chinese imports appear set to decrease, the USDA projects substantial increases in South American production next marketing year.

    Argentine recovery from last season's drought and expanded acreage in Brazil place soybean production forecasts in the region at 7.1 billion bushels, up 808 million bushels from the current marketing year. Barring a resolution to current trade issues, soybean exports next marketing year will struggle despite the low prices currently in place.

    "The prospect of record corn yields and the uncertainty surrounding trade continue to place pressure on corn prices. At 2.4 billion bushels, the USDA estimate for corn exports during the current marketing year appears somewhat optimistic given cumulative exports to date and unshipped sales," Hubbs explains.

    Export estimates by the Census Bureau through May place corn exports for the marketing year at 1.656 billion bushels. Through July 12, cumulative export inspections totaled 1.907 billion bushels. Using the relationship between export inspections and Census Bureau totals, exports for corn currently sit at 2.01 billion bushels.

    According to Hubbs, for the remainder of the marketing year, export inspections need to average approximately 56 million bushels per week to meet the USDA projection. For the last four weeks of export inspection data, corn exports averaged 56.7 million bushels per week. Total outstanding sales for the current marketing year sit at 454 million bushels, which is above the 394 million bushels required to reach the USDA projection.

    "While corn exports may fall short of the current estimate, the blistering export pace in the second half of this marketing year looks set to continue into the fall," Hubbs adds.

    Current USDA projections for corn exports during the 2018-19 marketing year total 2.225 billion bushels, up 125 million bushels from last month's projections. World import projections during the upcoming marketing year provided by the USDA sit at 5.95 billion bushels, up 193 million bushels over the current marketing year estimates.

    A low price and poor corn crops in South America and the Black Sea region provide an outlook for continued strength in corn exports moving into the next marketing year. Current export sales data give indications to support this idea. As of July 5, corn outstanding sales for the 2018-19 marketing year sit at 183 million bushels, a 41 percent increase in sales from the same time last year.

    Exports in both corn and soybeans built some strength over the last few weeks as lower prices spurred demand. Current estimates of export pace place both crops on track to meet or come near USDA projections for this marketing year.

    "The size of the 2018 crop domestically and in key producing regions will provide a critical factor in determining U.S. export potential next marketing year," Hubbs says. "A resolution of trade issues with China and NAFTA partners would provide needed support. Current developments appear to make this a low-probability event in the near term."

    Discussion and graphs associated with this article are available here: https://youtu.be/dJV-2WZlvxA

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    Try togetherness: Study promotes cooperative weed management to curb herbicide resistance https://web.extension.illinois.edu/lms/eb108/entry_13402/ Mon, 04 Jun 2018 10:45:00 +0000 https://web.extension.illinois.edu/lms/eb108/entry_13402/


    corn and soybean

    In the fight against herbicide resistance, farmers are working with a shrinking toolkit. Waterhemp, a weedy nemesis of corn and soybean farmers, has developed resistance to multiple herbicide modes of action, often in the same plant. Even farmers using the latest recommendations for tank mixtures are fighting an uphill battle, with long-distance movement of pollen and seeds bringing the potential for new types of resistance into their fields each year.

    In a study released this week, scientists at the University of Illinois and USDA's Agricultural Research Service offer a new tool that is not only highly effective, it's free. All it costs is a conversation.

    "I think we're at a point now where farmers are looking for new tools. This tool is free, but it requires that people talk to each other and work together as opposed to doing everything on their own," says Adam Davis, research ecologist with USDA-ARS and adjunct professor in the Department of Crop Sciences at U of I.

    The tool is cooperative weed management – in other words, making decisions about how to manage herbicide-resistant weeds in cooperation with neighboring farms. The more farms working together, and the larger area covered, the better.

    Davis and his team tested the efficacy of farmer cooperation using a computer simulation of waterhemp resistance evolution through time and space. They ran the simulation using real numbers and management practices from the past, starting in 1987, to arrive at a realistic representation of herbicide resistance in waterhemp in 2015. Then they forecast 35 years into the future to determine how resistance might change under different management and cooperation scenarios.

    "The crux of the story is that if you do good stuff and you aggregate it at larger spatial scales, it gets even better. If you do bad stuff and you aggregate it at large spatial scales, it gets even worse," Davis says.

    The "bad stuff," according to the simulation, is using a single herbicide mode of action year after year. Resistance to a single chemical evolved and spread very quickly throughout the simulated landscape, especially if everyone was spraying the same one every year.

    "If you take the cheap route, you'll save some money in the short term on your herbicide costs, but in the long term, you'll have a much greater likelihood of developing resistance," Davis notes.

    But if farmers invested in tank mixtures of herbicides representing three or four modes of action, the evolution and spread of resistance was delayed, and the delay got longer with increasing levels of cooperation.

    "The message is not to use the most expensive herbicide program possible; the message is to use the available tools to manage your weeds better," Davis says. "If you do that on your own farm, certainly it's going to help. If you do it on a bunch of adjoining farms, it's going to help even more. You can buy a couple of decades of time, in terms of delaying herbicide resistance evolution, by aggregating the best practices at large spatial scales."

    The simulation looked at management on individual farms, cooperatives of 10 neighboring farms, and cooperative weed management areas, comprising 10 neighboring farmer cooperatives. Davis says the specific number of farms making collective weed management decisions isn't as important as the spatial scale they cover. He suggests forming weed management areas at the township scale and above.

    The concept is simple, but farmers treasure their independence. How will it work?

    Davis points to existing regional farm associations, such as drainage districts or commodity groups, as possible models for how weed management cooperatives might operate. He also suggests involving custom applicators in decision-making and implementation, since they're already out there servicing multiple farms in a region.

    The researchers are asking additional questions of the simulation, adding non-chemical control options like cover crops, crop rotation, and the Harrington Seed Destructor, to see how much more effective they get at larger scales. They're also trying to quantify how much non-compliance a cooperative weed management area can withstand before its effectiveness falls apart.

    But for now, the study suggests preserving the effectiveness of existing herbicides is worth the trouble of making nice with the neighbors.

    The article, "Confronting herbicide resistance with cooperative management," is published in Pest Management Science [DOI: 10.1002/ps.5105]. Co-authors include Jeffrey Evans, Alwyn Williams, Aaron Hager, Steven Mirsky, Patrick Tranel, and Adam Davis. The research was supported by USDA NIFA AFRI Award 2012-67013-19343, and is part of the USDA-ARS Area-Wide Pest Management Project.

    Source: Adam Davis, 217-333-9654, asdavis1@illinois.edu

    News writer: Lauren Quinn, 217-300-2435, ldquinn@illinois.edu

    Date: June 4, 2018

    Editor's note: Images to accompany this story are available at http://go.illinois.edu/CWMA

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    Impacts of Chinese Soybean Tariffs on Financial Position of Central Illinois Grain Farms https://web.extension.illinois.edu/lms/eb108/entry_13316/ Thu, 19 Apr 2018 09:25:00 +0000 https://web.extension.illinois.edu/lms/eb108/entry_13316/
    "Such a tariff would result in lower soybean prices and have numerous price and cost effects. We evaluate these impacts on the 2018-2021 financial performance of an average 1,700 acre grain farm located in central Illinois. Our analysis indicates a 25% tariff would result in a significant deterioration in cash flow. An attendant 20% farmland price decline would result in over a $500,000 decline in the farm's net worth by 2021."

    For the full story and analysis see this Farmdoc Daily article:

    http://farmdocdaily.illinois.edu/2018/04/impacts-of-chinese-soybean-tariffs.html]]>
    Invitation for Farmers - Petersburg Poultry Event is April 19. https://web.extension.illinois.edu/lms/eb108/entry_13306/ Thu, 12 Apr 2018 10:25:00 +0000 https://web.extension.illinois.edu/lms/eb108/entry_13306/ https://www.ilstewards.org/get-a-piece-of-the-poultry-pie-april-19th/

    Consumers in Chicago and St Louis will dish out a premium for pastured poultry from Illinois growers.

    Cavan Sullivan and his family at Petersburg Poultry Processing have the market relationships and infrastructure to meet the demand butneed more birds raised.

    Farmers and farm organizations can learn about how local producers can "Get a Piece of the Poultry Pie" on April 19. Local, state and federal economic development agencies will be on hand to talk about what services and programs they have to offer producers to launch a successful value-added pastured poultry enterprise.

    When: Thursday, April 19, 8:30 a.m.-12:30 p.m.

    Where: Tour of Petersburg Processing at 8:30am

    Meet at Hand of Fate Brewing Company at 10am

    107 E. Douglas St., Petersburg, IL

    Space is limited: RSVP by phone or email to: (800) 526-9943 or (217) 528-1563 RETAC@WIU.edu or ISA@ILStewards.org

    https://www.ilstewards.org/get-a-piece-of-the-poultry-pie-april-19th/

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