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Friday, May 29, 2015

SPOT NEWS - EPA's Sleight of Hand in the RFS

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SPOT NEWS - EPA’s Sleight of Hand in the RFS
Scott Irwin, Ag Economist - University of Illinois

U.S. EPA has proposed rules to guide the mandated use of biofuels in the nation’s energy supply Todd Gleason has details.

The proposal would push forward the use of advanced biofuels…
1:01 radio



The proposal would push forward the use of advanced biofuels like diesel made from soybeans, but University of Illinois Ag Economist Scott Irwin says it falls short of what he sees as the congressional intent of the law.

Irwin :23 …biofuels in our domestic fuel consumption.
Quote Summary - So what I find is a real sleight of hand by the EPA to label this proposal as consistent with the intent of Congress to push the consumption of biofuels in our domestic fuel consumption.
Irwin says U.S. EPA’s argument the proposal pushes forward the use of corn based ethanol is untrue. Factually EPA’s proposed levels for 2014 and 2015 are below real consumption. The same case can be made for 2016. Once the proposal is published in the Federal Register, it will be open for public comment until July 27, 2015.

Scott Irwin Discusses June 2015 RFS Proposal

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Scott Irwin Discusses June 2015 RFS Proposal
Scott Irwin, Ag Economist - University of Illinois

EPA has released new numbers for its Renewable Fuel Standard obligations. It set increases across the renewable fuels spectrum, but they come up short of the original Congressional mandates. Here is how University of Illinois Ag Economist Scott Irwin sees the rule.

Irwin 6:18 …so they will have no impact.

That was University of Illinois Ag Economist Scott Irwin discussing the United States Environmental Protection Agency’s latest Renewable Fuel Standards proposal. The rule, once posted to the Federal Register, will be open for public comment through July 27, 2015.

Thursday, May 28, 2015

RINs Market Predicts Higher BioFuels Proposal

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RINs Market Predicts Higher BioFuels Proposal
Scott Irwin, Ag Economist - University of Illinois

INTRO - U.S. EPA is set to release for comment the guidelines for how much renewable fuel must be used in the United States. Todd Gleason has more from the Univesity of Illinois on what the proposal might say.

Corn and soybean farmers have a lot at stake when U.S. EPA…
1:01 radio
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EXTRO - EPA could release its Renewable Fuel Standards as early as today. Scott Irwin thinks it would not be be surprising for EPA to propose biodiesel mandates ranging from 1.8–2.3 billion gallons and ethanol mandates from 13.8–14.5 billion gallons.



University of Illinois Ag Economist Scott Irwin has used the free market price of a related product, something called a RIN (rin), as an indicator of what the proposal might show.
Irwin :35 …change in policy from the preliminary 2013 proposal.
Quote Summary - If the RINs market is correct then this is a big win for biofuels. Big win. Because it means the total RFS mandate levels are not going to be cut beyond what is allowed in the law in terms of waiving the cellulosic mandate. This is a huge change in policy from the preliminary 2013 proposal.
The benefits, for farmers, will show up in the soybean based biodiesel and vegetable oil markets says Irwin, and not in the corn and ethanol markets. RINs’ pricing suggests EPA will propose biodiesel mandates close to the congressional statutes in a way that would also help fulfill the need in the corn based ethanol niche.

RFS2 Set to Ramp up Biodiesel Usage

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RFS2 Set to Ramp up Biodiesel Usage
Scott Irwin, Ag Economist – University of Illinois

U.S. EPA has stalled the release of the annual usage mandates for bio fuels in the United States. These are due out each November, but neither the 2014 or 2015 figures have been released. EPA is scheduled to put forth new numbers next week (today June 1). In the meantime, it might be important to consider just how using the default numbers would play out for the production of ethanol and biodiesel. Todd Gleason explores the issue…

The United States congress set renewable fuels mandates… 3:26 radio
3:50 self contained

The United States congress set renewable fuels mandates a few years ago. It also gave U.S. EPA the power to adjust those mandates. EPA hasn’t done so for the 2014 calendar year, or for 2015. We’ll dispose of the political baggage and simply focus on the results of using the default statutes written into the law.

It says the nation must use 14.4 billion gallons of ethanol in 2014, but at the rate of no more than 10 percent of the gasoline consumed. This ten percent is actually 1.1 billion gallons less than the 14.4 billion gallon mandate. This is what University of Illinois Ag Economist Scott Irwin calls the renewable gap and the only way to fill it, really, is with biodiesel – usually processed from soybean oil.

Irwin :25 …something is most likely to be biodiesel

Quote Summary - That number gets much bigger in 2015 because the ethanol mandate jumps to 15 billion gallons. So, if the E10 blend wall is 13.5 billion gallons, then there is an additional 1.5 billion gallons in 2015 that has to be filled with something. We argue that something is most likely to be biodiesel.

This sounds like biodiesel usage would need to top 2.6 billion gallons in 2015, but that’s not quite the case says Irwin.

Irwin :67 …gallons a year each of the next four years.

Quote Summary - Well, the arithmetic is quite interesting because of the growth in obscure component of the advanced RFS2 mandate, ‘undifferentiated advanced’. That component was 2 billion gallons for 2014 and the arithmetic works this way. 1.28 billion gallons of biodiesel gets a multiplier, into equivalent gallons of ethanol, of one and one half, which is almost exactly 2 billion gallons. So, biodiesel met that undifferentiated number in 2014. But now, that component in the statutes, is going to jump 500 million gallons a year each of the next four years.

Topping out at five billion gallons in 2022.

Irwin :25 …million gallons easily for 2015.

Quote Summary - The bottom line is it doesn’t take us very long to get a scenario where, either through domestic production or imports of biomass based diesel in its forms, where we need 2 to 2.5 million gallons easily for 2015.

This is only if the statutes are ultimately fully enforced. Admittedly this is a big wildcard, but it is the law and until U.S. EPA acts it is the mandate says the U of I ag economist.

Irwin :07 …we are going to have a big biodiesel boom.

Quote Summary - If they are going that direction we are going to have a big biodiesel boom.

Scott Irwin follows the Renewable Fuels Standard at the University of Illinois. You may read more from him on the farm doc daily website.

Reducing Illinois Cash Rents Imperative

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Reducing Illinois Cash Rents Imperative
Gary Schnitkey, Ag Economist - University of Illinois

An ag economist on the University of Illinois campus is continuing his calls for farmers and landowners to lower cash rents. Todd Gleason has more on the reasons why.

It’s all about the math says Gary Schnitkey…
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It’s all about the math says Gary Schnitkey. The U of I ag economists has done the crop budgets for this year and suspects next year, 2016, won’t be any better. If cash rents don’t go down almost all row crop farmers in the state will be faced with some acres that lose money.

Schnitkey :25 …at an average cash rent.

Quote Summary - Right now the average cash rent in the state is in the two-nineties and, if we have a $3.75 corn price, operator and land returns would be in the two-twenties. Cash rents would have to come down sixty to seventy dollars to match that $3.75 price. Given normal yields farmers would lose sixty to seventy dollars (per acre) at an average cash rent.

That’s for the crop in the ground and growing right now. It gets worse. Schnitkey is using as average corn price of $3.75 a bushel, but USDA is projecting the season’s average cash price at $3.50 a bushel. Even if the price of corn goes up, this year looks like a loser.

Schnitkey :31 …the prices we are currently seeing

Quote Summary - Normal yields sold at a $3.75 cash price will produce a loss on cash rented acres. If the cash price of corn manages to get into the four dollar range it will produce less of a loss, but even a $4.25 cash price would produce a thirty dollar per acre loss. So, cash rents increased in response to a $5.00 per bushel corn price and now those rents need to come back down to match the prices we are currently seeing.

The numbers Schnitkey uses to develop crop budgets are aggregated from the state’s Farm Business Farm Management record keeping service. He says the sixty to seventy dollar per acre loss is consistent across the whole of the state using local average cash rent bids (by county) and the $3.75 cash price for corn. The farms most at risk, generally, will be those with more than 1500 row crop acres - usually about 80 percent of those acres are cash rented - and the really big farms. The biggest farms in the state generally pay the highest cash rents and own less than five percent of the cropped acres.

Tuesday, May 26, 2015

Monitoring Soybean Consumption & Production Prospects

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Monitoring Soybean Consumption & Production Prospects
Darrel Good, Ag Economist - University of Illinois

The trade has turned its primary attention to the soybean crop being planted across the United States, but as Todd Gleason reports, that doesn’t mean it has fully discounted last year’s harvest as market maker.

This year the United States Department of Agriculture expects…
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This year the United States Department of Agriculture expects about one-point-eight billion bushels of soybeans will be used within U.S. borders. This is more than last year and it appear USDA is on target with its projection. The pace of domestic crush has steadily picked up as the fiscal year has passed. University of Illinois Ag Economist Darrel Good says the pace needs to pick up a bit more to make the target.

Good :09 …of a year earlier by about eight percent.

Quote Summary - To reach the USDA projection, the crush during the last four months of the marketing year needs to exceed that of a year earlier by 7.7 percent.

The NOPA crush estimate for May is scheduled for release on June 15, and that’ll offer more insight into domestic usage. The other primary point of usage is the export market for soybeans.

Good :26 …that’s an average of about 5.4 million bushels per week.

Quote Summary - The USDA projects that U.S. soybean exports during the current marketing year will reach a record 1.8 billion bushels, 9.3 percent more than the previous record of last year. With about 14.6 weeks remaining in the marketing year, cumulative USDA export inspection estimates have reached 1.722 billion bushels. For the first seven months of the marketing year, export inspections tracked Census Bureau export estimates very closely. To reach 1.8 billion bushels for the year, exports during the final weeks need to total about 78 million bushels, or about 5.35 million bushels per week.

The last five weeks have seen exports above 10 million bushels each. It very likely, thinks Darrel Good, that USDA’s export projection for soybeans will be easily met. This brings him to the ending stocks figure, or the number of bushels to be leftover at the end of the fiscal year in September. That number will be calculated and it could result in an adjustment of the size of last year’s crop, and then there is this year’s crop.

Good :49 …intended to be planted in that state.

Quote Summary - Until very recently, few concerns have been expressed about the 2015 soybean production season. Planting has proceeded at a pace that exceeds the previous 5-year average pace and expectations have been for acreage to exceed intentions reported in the USDA’s March Prospective Plantings report. The recent weather pattern, however, has generated a few issues. In particular, the area of extreme rainfall amounts in Texas and Oklahoma that extends into southern Kansas and parts of Arkansas have raised a few concerns about the timeliness of planting and the potential for some prevented planting. The focus is on Kansas due to the combination of the slow pace of planting (17 percent as of May 17) and the magnitude of soybean acreage (3.8 million) intended to be planted in that state.

For the U.S as a whole, there is some measurable yield loss as the percentage of the crop planted after May 30 increases. For the period from 1986 through 2014, the percentage of the crop planted after May 30 has ranged from nine percent (2012) to 66 percent (1995) and averaged 34 percent. With 45 percent of the crop reported planted as of May 17, the percentage of the crop planted after May 30 this year will not likely exceed the average of the previous 29 years due to the rapid pace of planting in northern growing areas. The impact, if any writes Darrel Good in his Weekly Outlook posted online to Farm Doc Daily, of the extreme wetness on the magnitude of planted acreage of soybeans should be revealed in the USDA’s June 30 Acreage report.

Monday, May 25, 2015

Negative Returns & Down Pressure on Cash Rents

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FDD: Negative Returns & Down Pressure on Cash Rents
Gary Schnitkey, Ag Economist - University of Illinois

Original Article

Up next Todd Gleason talks with University of Illinois ag economist Gary Schnitkey about cash rents. As it stands today farmers on highly productive land in central Illinois are likely to loose about $70 for every cash rented acre planted to corn.

I’m University of Illinois Extension’s Todd Gleason…
4:56



Surveys conducted by the Chicago Fed and the Illinois Society of Professional Farm Managers and Rural Appraisers indicate that 2015 cash rents have decreased between $20 and $25 per acre from 2014 levels. If these reductions occur, the majority of farmers still will have negative returns from cash rent farmland given current corn and soybean price levels. At a $3.75 per bushel corn price and a $9.50 soybean price, cash rents need to decrease from 2014 averages by around $70 per acre before farmer return is zero. Even given mid-$4.00 prices for corn, farmers will not have positive returns given cash rents at 2014 averages.

Operator and Land Returns

Table 1 shows estimates of 2015 operator and land returns. Operator and land returns represent the returns that can be split between the landowner and farmer. If operator and land returns are $300 per acre and cash rent is $250 per acre, the farmer will have a $50 per acre return. Operator and land returns are based on revenues, yields, and costs shown in the 2015 Crop Budgets and are averaged over the corn and soybean crops.


Operator and land returns are given for four different regions: Central Illinois with high-productivity farmland (Central-High), Northern Illinois (North), Central Illinois with low productivity farmland (Central-Low) and Southern (South) Illinois. In Table 1, regions are arrayed from the highest yielding on the left (Central-High) to the lowest yield region on the right (South). Operator and land returns decrease with lower yields. Even though these are Illinois specific regions, returns shown in Table 1 are generalizable to a wider geographical area.

There are five price scenarios in Table 1. The first is a $3.75 per bushel corn price and $9.50 per bushel soybean price, slightly above current bids for delivery of 2015 grain. These prices are used to determine crop revenue given the expected yields for each region. For example, the expected yields for the Central-High region are 198 bushels per acre for corn and 57 bushels for soybeans (see Table 1). Gross revenue also include ARC/PLC and crop insurance payments, both of which decrease with higher prices.

At a $3.75 corn price and a $9.50 soybean price, the operator and land return for the Central-High region is $226 per acre (see Table 1). The average cash rent in 2014 is $293 per acre, implying a farmer loss of $67 per acre ($226 operator and land return - $293 cash rent). Other regions have similar levels of loss: -$77 per acre for the North region ($188 operator and land return - $265 cash rent), -$73 in the Central-Low region ($170 operator and land return - $243 cash rent), and -$71 in the South region ($92 operator and land return - $163 cash rent). Note that $20 to $25 per acre decreases in 2015 cash rents do not lead to positive farmer returns given that cash rents started at average levels.

Longer-Run Price Levels

Current price levels may be below long-run prices. Previous analyses (farmdoc daily, February 27, 2013) suggest that longer run prices may be around $4.60 per bushel for corn and $10.60 for soybeans. Obviously these higher prices will result in higher operator and land returns, as is illustrated in Table 1. Take the $4.50 corn price and $11.00 soybean price. These prices give $298 per acre of operator and land return in the Central-High region. Note that the $298 operator and land return is near the 2014 cash rent of $293 per acre. At this price level, the operator and land returns for all regions are near the average 2014 cash rent levels. The nearness suggests that cash rents would need to decline if long-run prices are in the $4.50 per bushel range for corn and $11.00 per bushel range for soybeans. In the past several years, increases in cash rents likely overshot levels supported by long-run prices.

Note that the above analysis is based on non-land costs remaining at current levels of roughly $600 per acre for corn and $370 per acre for soybeans. These cost levels are at historically high levels (farmdoc daily, March 29, 2011). Decreases in fertilizer, seed, and chemical costs could reduce the need for decreases in cash rents.

Setting 2016 Cash Rents

Table 1 can be used to gain a feel for the relative size of downward pressures placed on cash rents in 2016. Given that costs do not change, operator and land returns shown in Table 1 will be accurate for 2016.

Expected 2016 commodity prices during the fall of 2015 will have a bearing on pressures place on cash rents. If corn and soybean prices respectively remain near $3.75 and $9.50 per bushel, cash rents will need to decrease by around $70 per acre from 2014 average levels before farmer returns are near zero. Obviously larger decreases would be needed before farmer returns become positive. Pressures will be reduced with higher price expectations. Take the price scenario having respective corn and soybeans prices of $4.25 and $10.50 per bushel. Under this scenario, rents would have to be decreased by $19 to $37 per acre, depending on region, from 2014 average levels to have farmer returns at $0 per acre. For farmers to have positive expected returns without cash rent of non-land costs, corn and soybean prices respectively need to be in the high-$4.00 and mid-$11.00 range.

Summary

Given current price levels, avenge cash rents levels need to decrease by over $70 per acre for farmers to have returns near zero. Continued pressures on cash rents will occur in 2016 unless significant increases in prices occur from their current levels. Unless non-land costs decrease, prices must be in the high $4.00 range before downward pressures are not placed on average cash rents.

Thursday, May 21, 2015

Anticipating Changes in Corn & Soybean Acreage

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Anticipating Changes in Corn & Soybean Acreage
Darrel Good, Ag Economist - University of Illinois

Twice a year USDA tries to officially predict how many acres of corn and soybeans U.S. farmers will plant. Todd Gleason has more on the anticipated changes this year as we move from the March Prospective Plantings survey to the June Acreage report.

A pretty good start to the growing season in the middle part…
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A pretty good start to the growing season in the middle part of the country has commodity traders thinking more and more about the number of acres farmers have planted, especially to corn and soybeans. The under current of this collective thought process clearly points to more soybean acres and fewer corn acres. USDA will update the March pre-planting season survey of farmers with more concrete numbers the last day of June. Back in March farmers, with a little USDA data adjustment, said they would sow about 84.6 million acres of soybeans and 89.2 million acres of corn. University of Illinois Ag Economist Darrel Good took a look at the recent historical data - going back to 1996 - to see just how acreage usually changes from March to June.

Good :30 …the final estimate was below the June estimate.

Quote Summary - n the 19 years from 1996 (the first year that farm policy allowed for more planting flexibility) through 2014, the final estimate of corn planted acreage exceeded the estimate of March planting intentions in seven years, in a range of 308 thousand to 3.073 million acres. Acreage was less than intentions in 12 years, in a range of 32 thousand to 1.917 million acres. The direction (although not magnitude) of the change was correctly signaled by the June estimate in 13 years and incorrectly signaled in six years. The final estimate of planted acreage of corn exceeded the June acreage estimate in only five years, in a range of 47 thousand to 750 thousand acres. In the other 14 years, the final estimate was below the June estimate in a range of 28 thousand to 2.014 million acres.

In those same 19 years, the final estimate of soybean planted acreage exceeded the estimate of March planting intentions in 10 years. Acreage was less than intentions in nine years. The direction of the change from March intentions to final acreage estimate was correctly signaled by the June estimate in 16 years and incorrectly signaled in three years.

That is… USDA’s final crop acreage number published in the January Crop Production report followed the direction of the change up or down from March to June for both corn and soybeans in the majority of all the years… however, that’s the whole of the historical account. Things have been a bit different as of late.

Good :44 …could explain some of the changes in the estimates.

Quote Summary - Recent history reveals a checkered pattern of changing corn and soybean acreage estimates from March intentions to the final estimate. Many of those changes may have been related to producer responses to changing prices and/or weather conditions. Not fully appreciated, however, is the role that sampling errors might play in the changes in acreage estimates through the cycle. There is a tendency to view the acreage estimates as precise estimates based on a census of producers. The USDA reports that combined sampling errors are typically between one and three percent. The size and direction of these errors through the acreage estimating cycle could explain some of the changes in the estimates.

As for this year, Darrel Good writes in his online Weekly Outlook found on the Farm Doc Daily website that there seems to be some consensus the June 30 USDA Acreage report will show the combined acreage of corn and soybeans exceeds the March intentions, with slightly fewer corn acres and substantially more soybean acres. He says that logic seems to ignore the likelihood intentions reported in March should have already reflected CRP decisions and close to zero prevented plant acres.

So, for the most part, an expected increase in acreage is based on the perception March intentions did not account for all the crop land acreage. As pointed out in the farmdoc daily article of April 2, 2015, that conclusion should be tempered by recognizing the sampling variability inherent in acreage estimates. Even so, an increase of one to three million acres in the estimate of planted acres of principal crops, mostly soybeans says a Darrel Good, would not be a surprise.

Thursday, May 14, 2015

Farmland Income for 2015

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Farmland Income for 2015
Gary Schnitkey, Ag Economist - University of Illinois

Farmers across the Corn Belt are going to make a lot less money this year than they have in the past. And, as Todd Gleason reports, if something doesn’t change, things may be even worse next year.

The farms most likely to lose money are cash…
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The farms most likely to lose money are cash rented by their tenants. The fixed land cost per acre is generally too high as related to commodity prices for corn and soybeans. University of Illinois Ag Economist Gary Schnitkey ran the disappointing numbers and his price points were higher than the season’s average cash prices USDA released earlier in May. USDA is predicting a $3.50 cash price for corn.

Schnitkey :39 …and we see pretty low farmland returns for 2015.

Quote Summary - We’re using $3.75. I would note as the market year average price is lowered the ARC and Crop Insurance payments should increase. This is a mitigating factor as prices go lower. We’re using $3.75 for corn and $9.50 for soybean, vs WASDE at $9.00, and we see pretty low farmland returns for 2015.

If the cash rent paid is near average levels for the county, then Schnitkey’s figures show an expected $67 per acre loss on highly productive central Illinois farmland. Share rent leases do better, but still it’s pretty bad.

Schnitkey :08 …receiving a lower return because of the share rent.

Quote Summary - Twenty-one dollars of profit, but obviously the landowner is receiving a lower return because of the share rent.

Those two numbers, 67 and 21, are the profits and loss based off a blend of corn and soybeans being grown. Specifically Schnitkey says his crop budgets are projecting gross revenue from corn in the low to mid $800 per acre range.

Schnitkey :37 …this fall, and tough cash rent, fertilizer, and seed choice decisions.

Quote Summary - Between 2010 and 2013 those corn gross revenues averaged above $1000 per acre. It is really difficult to see a situation where we have gross revenues above $1000 per acre (this year). We are moving into a situation, unless we see dramatic price increases, where revenues and returns are tight. It will lead to cash flow issues this fall, and tough cash rent, fertilizer, and seed choice decisions.

For what it is worth, Gary Schnitkey and the rest of the University of Illinois ag econ FarmDoc team believe current commodity prices are at the bottom end of the new era plateau range and not at the top end of the old era. It doesn’t help net income on the farm, but it does offer hope for the future.

Tuesday, May 12, 2015

Use Multiple Effective Herbicides to Control Weeds

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Use Multiple Effective Herbicides to Control Weeds
Aaron Hager, Extension Weed Scientist - University of Illinois

Going forward farmers should think more about using multiple herbicides that will control resistant weeds than simply using a single control method. Todd Gleason has the terms of this statement.

University of Illinois researchers pulled more that 500 site…
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University of Illinois researchers pulled more that 500 site years worth of data from a retail applicator to see how resistant weeds developed in farmers’ fields. What they found is this says U of I Extension Weed Scientist Aaron Hager… slowing the development and spread of resistant weeds happened best when a farmer used several different effective herbicides to control the weed every time an application was made. Here’s Hager.

Hager :20 …in tank mixtures when we make post emergence applications.

Quote Summary - What the results are suggesting is that using a residual herbicide can certainly be effective and helpful, but we really need to use multiple effective herbicides for each application. We also need to use multiple effective herbicides in tank mixtures when we make post emergence applications.

Here’s how farmers should consider applying this knowledge to their operations as it relates to the new soybean herbicide trait products entering the market.

Hager :37 …multiple effective herbicides every time we make an application.

Quote Summary - Really, here’s what our results are suggesting. Simply putting a residual down and then following up with a pre-mix combination of glyphosate with either 2–4D or dicamba, if the glyphosate effectiveness is already lost to that field, is not doing what we should be doing in using multiple effective herbicides every time we make an application. So, would there possibly be a third tank mix component we could include in a two way mix of dicamba glyphosate or 2–4D glyphosate if glyphosate effectiveness has already been compromised in that field.

Likewise, says Hager, a farmer should consider how many different modes or mechanisms of action can be made when the soil residual herbicide is applied prior to planting.

Friday, May 8, 2015

More Red Meat Available Per Person this Yea

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More Red Meat Available Per Person this Year
Chris Hurt, Purdue Extension Ag Economist - University of Illinois

VOICER

The supply of meat in the United States is on the upswing this year. It had fallen off by about twenty pounds per person between 2007 and 2014, but now it’s making a come back says Purdue Extension Agricultural Economist Chris Hurt.

Hurt :26 …lost meat availability from 2007 to 2014.

Quote Summary - USDA estimates are that per capita meat availability could surge by nearly nine pounds this year. Chicken and turkey lead the way with over five pounds of increase and pork adds an impressive increase of near four pounds per person. This means that the meat industry in one year has restored about 45 percent of the lost meat availability from 2007 to 2014.

This calculation does not include any reduced availability due to the Avian Influenza outbreak. It is likely to reduce total poultry (chicken and turkey) meat production in 2015.

Thursday, May 7, 2015

Slowing Herbicide Resistance Evolution

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Slowing Herbicide Resistance Evolution
Aaron Hager, Extension Weed Scientist - University of Illinois

Weed scientists from the Univesity of Illinois have been trying help farmers manage the inevitable development of herbicide resistance for more than two decades. Todd Gleason reports there is now proof which advice actually works.

Plants are quite capable of evolving…
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Plants are quite capable of evolving. Weeds like waterhemp have evolved. These weeds are resistant to some of the herbicides used to control them. It was thought, by many weed scientists, this evolution would take place much more quickly with the overuse of any particular active ingredient. So, extension specialists like Aaron Hager from the University of Illinois promoted the rotation of herbicides and modes of action. They didn’t have proof this would work, but now they do with qualifications.

Hager :47 …tank mixed herbicides every time an application is made.

Quote Summary - We realized we didn’t have emperical data to describe the efficacy of the recommendations on a large landscape wide level. A project was started to determine which may be the best methods to slow the evolution of herbicide resistance. For example is it more effective for a farmer to rotate herbicides within a given year or between years? Or is it even more effective to use tank mixed herbicides every time an application is made.

Using the records of a retail applicator the scientist poured through more than 500 site years worth of field level data. The final analysis included 66 variables for each of the fields surveyed for the presence or absence of glyphosate resistant waterhemp.

Hager :14 …present in any particular field, was the management.

Quote Summary - To make a long story short, the analysis showed the most important determination, as to whether or not glyphosate resistance was present in any particular field, was the management.

The management of the field as a whole, not just as it related to glyphosate.

Hager :35 …were made to control a particular population.

Quote Summary - Really the thing that was a bit surprising was that simply rotating herbicides within a year, or perhaps even between years didn’t have any positive affect of slowing the evolution of herbicide resistance. Factually, rotating herbicides year to year showed a higher incidence of resistance compared to areas where multiple tank mixtures were made to control a particular population.

Aaron Hager concludes the best way to slow evolution of glyphosate resistant waterhemp is to expose any given population to more than one effective herbicide every time an application is made.

RFS Matters for Biodiesel

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RFS Matters for Biodiesel
Scott Irwin, Ag Economist - University of Illinois

The United States Environmental Protection Agency now says it will not update the Renewable Fuel Standard mandates until November. Todd Gleason reports this year’s RFS, no matter when it is released, is really important to the biodiesel industry.

More often than not when the federal government’s…
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More often than not when the federal government’s Renewable Fuel Standard is discussed people are thinking about corn based ethanol or other feedstocks that can produce ethanol. However, when U.S. EPA finally releases the RFS mandates it may be the biodiesel industry that pays the most attention says University of Illinois Ag Economist Scott Irwin.
Irwin :36 …to find out what happens.
Quote Summary - The industry for which the RFS is really a life or death matter is biodiesel. Because if the EPA would choose to go back to the RFS statutory level mandates, at least for a few years in the short run, it would launch - likely - the biggest boom in biodiesel’s history. But, if they choose to stay on the path of the proposals from 2013 it would cut the knees out from under the industry. The biodiesel industry is waiting on the edge to find out what happens.
This edge made the industry unhappy with the federal government earlier this year when it opened the door for biodiesel imported from Argentina to qualify as an advanced biofuel under the U.S. RFS mandates. Scott Irwin sees this move far more favorably the industry.
Irwin :41 …outside the United States to fill the mandates.
Quote Summary - I favor the position that EPA is likely to move the mandate levels back up near or to the statutory levels this year, or at least by 2016. This would necessitate a tremendous boom in biodiesel production. It would be more than current U.S. production capacity. So, one view of the Argentine biodiesel announcement is that it is a precursor of the statutory requirements and related documentation of enough registered biodiesel both inside and outside the United States to fill the mandates.
It may be, then, that the January announcement allowing Argentine biodiesel to qualify as an advanced biofuel in the United States sets the stage for U.S. EPA to follow the letter of the law as written by congress. It is not possible to do so without additional gallons of advanced fuel from some source.

Wednesday, May 6, 2015

Poultry Research & the University of Illinois Campus

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Poultry Research & the University of Illinois Campus
Ken Koelkebeck, Extension Poultry Specialist - University of Illinois

Illinois is NOT known as a key chicken production state. Regardless of this fact, the state’s Land Grant university is a primary player in the poultry industry. Todd Gleason has this review of ILLINOIS’ applied research prowess and its relationship to the state’s agricultural feed production history.

Farmers in the Prairie State raise corn and soybeans…
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Farmers in the Prairie State raise corn and soybeans and they do it really well. These crops are used to feed animals and birds; chickens. Lots of chickens, but most of them are reared in other states. Much of the feed comes from Illinois and so does the research that supports the nation’s poultry industry says Ken Koelkebeck (coal-keg-beck) from the University of Illinois.

Koelkebeck :33 …that came out color sexed males or females.

Quote Summary - One of the first things we did was to develop a specific line that allowed the color sexing of baby chicks. This was very important because it made it easy to do research. We had two breeds, back in the 1950’s, when crossed together that produced chicks that came out color sexed males or females.

All the female chicks are brown and all the male chicks are yellow. It is really hard to tell the sex of the chick otherwise. The research breed is maintained and used on campus still today.

Koelkebeck :34 …happened starting January 1, 2006.

Quote Summary - It has been very important over the last thirty or forty years. We’ve developed nutritional programs like the non-feed withdrawl molting program. The industry, after ten years of research at ILLINOIS, has adopted it as the standard method for molting laying hens. This happened starting January 1, 2006.

Today more than eighty-five percent of the commercial egg laying operations molt their hens using the University of Illinois developed method. The history of the specialized research breed along with the powerhouse production of poultry feed stocks in the state, corn and soybeans, continue to converge to make the Urbana Champaign campus one of the top five poultry research universities.

Cost of Diesel & the Farm

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Cost of Diesel & the Farm
Gary Schnitkey, Ag Economist - University of Illinois

The price of diesel has dropped and, as Todd Gleason reports, this should be helpful to U.S. farmers.

U.S. farmers struggling to find ways to cut cost…
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U.S. farmers struggling to find ways to cut cost will find the price of diesel fuel somewhat comforting. It is one of their larger input costs for the production of a row crops like corn or soybeans. This year that fuel cost will be sharply lower says University of Illinois Ag Economist Gary Schnitkey.

Schnitkey :19 …diesel fuel over the last four years.

Quote Summary - Since 2011 on through 2014 diesel fuel prices have average about $3.50 per gallon. Today’s cost is about a 36% decline. It is a significant decline in the cost of diesel fuel from the last four years.

Here’s how that costs translates directly to the farm. Last year fuel cost Illinois farmers, on average, $24 per acre of corn production. A 36% drop puts that estimated cost this year at $15 per acre. It’s a nine dollar savings, but certainly not enough to really ease the coming income woes of the American corn farmer comments Schnitkey.

Schnitkey : …and for that matter soybeans in the state.

Quote Summary - The total cost to raise an acre of corn is about $600. So, the fuel savings is a relatively small portion of the total cost of producing corn, and for that matter soybeans in the state.

Schnitkey thinks producers should certainly consider taking advantage of the diesel fuel prices today. The other two items of note related to energy costs concern drying corn in the fall and nitrogen fertilizer. The ag economist thinks drying costs should be much lower this fall. As for the cost of nitrogen fertilizer - and this would be for next year - well he says…

Schnitkey :09 …maybe someday that will come down.

Quote Summary - Patients, relative to nitrogen fertilizer and buying it, might be a good thing. Because maybe someday that will come down.

The cost of nitrogen fertilizer this year is actually higher than it was last year. Its primary creation cost is for natural gas.

Tuesday, May 5, 2015

Beef Industry Continues Lower Production Trend

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Beef Industry Continues Lower Production Trend
Chris Hurt, Purdue Extension Ag Economist

The beef industry stands alone in 2015 in its continued reduction in supplies available to consumers. Todd Gleason has more on why it is set apart from the rest of the livestock industry.

2014, by contrast, was a special year for the animal production…
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2014, by contrast, was a special year for the animal production industry. It set record high farm level prices for cattle, hogs, broilers, turkeys, milk and eggs. 2015 should see much lower annualized prices after the surprisingly fast expansion of the poultry, pork and dairy industries. Beef stands alone in the continuation toward lower production. This does not necessarily mean the price of beef will remain record high. Live cattle futures are suggesting a return to a more normal seasonal price pattern this year. This would mean that while beef cattle have so far traded higher than last year, that pattern would end now says Purdue University Extension Ag Economist Chris Hurt.

Hurt :26 …a couple of dollars lower than 2014.

Quote Summary - The futures tone stays weak through summer with prices falling to the middle $140s by the end of summer and then rallying to the low $150s toward the end of the year. With prices so far this year and futures estimates for the remainder of the year, finished steers would average $153, a couple of dollars lower than 2014.

That’s Chris Hurt’s view, however, USDA has a different take. Agency forecasters in the April 9 WASDE (wahz-dee) report took a much more bullish path with $163.50 at the mid-point of their annual estimated range. Also of note is that USDA analysts increased the potential range of prices as the year progresses. One reason to increase a price forecast range is because of greater uncertainty says Hurt.

Hurt :19 …with annual prices near last year’s $155.

Quote Summary - My judgement is that ultimate prices may be somewhere between these two. Current high $150s prices could drop to the very low $150s by late summer and recover to the mid-$150s by the end of the year, with annual prices near last year’s $155.

One thing seems certain, explains Chris Hurt in his May 4th article on the farmdocdaily website 2014 was an extraordinary year for the animal industries. So comparing this year’s prices to last year’s prices may bring inherent dangers. The beef industry, he says, is the only one which will not increase production this year and therefore has a reasonable chance of seeing annual price averages near 2014 levels.

Monday, May 4, 2015

Can Herbicide of Choice Still be Used Post Planting

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Can Herbicide of Choice Still be Used Post Planting
Aaron Hager, Extension Weed Scientist - University of Illinois

VOICER

The fast pace of corn planting in the state of Illinois has farmers and chemical applicators racing one another across the fields. University of Illinois Extension Weed Scientist Aaron Hager has this advise for farmers wondering what to do if the corn was planted before their residual herbicides were applied.

Hager 1:57 …by the corn size restriction listed on the label.

That was University of Illinois Extension Weed Scientist Aaron Hager. You may read his thoughts on weeds and herbicides on “The Bulletin” website. Search Google for bulletin comma Illinois.