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Thursday, September 29, 2016

Grain Farm Working Capital Nearly Exhausted

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Grain Farm Working Capital Nearly Exhausted
Gary Schnitkey, Agricultural Economist - University of Illinois

Four consecutive years of lower commodity prices has nearly exhausted the financial resources of U.S. grain farmers. Todd Gleason looks into the problem with an agricultural economist from the University of Illinois.

Working capital is used by farmers…
1:49 radio
1:59 radio self contained

Working capital is used by farmers to buffer their low income years. They do this by building up their bank accounts, grain inventories and other assets during years of plenty. A review of the farms in the Illinois FBFM recording keeping service shows farmers did that from 2006 to 2012 says University of Illinois Agricultural Economist Gary Schnitkey.

Schnitkey :25 …working capital anymore.

Quote Summary - So, that was the era of high commodity prices and high incomes. Farmers increased working capital, then, and now we are in the process of reducing again. By the end of 2016, it will be at about the same levels it was from pre–2006. These are tight levels without large buffers of working capital.

There comes a point, says Schnitkey, as working capital declines at which it can no longer be used to meet shortfalls. This is the point when farmers will begin to refinance debt.

Schnitkey :33 …of financing those cash shortfalls.

Quote Summary - For example, farmers are now reducing grain inventories and increasing operating notes. Eventually those notes will need to be refinanced. This is when the lender will step in and require collateral on the note, and then term it out. So, that is the process. The working capital is gone, and now we must look at other means to finance cash shortfalls.

Things aren’t dire yet on the farm, however, borrowing to cover cash shortfalls must be stemmed. This will require some fortitude on the part of the farm family. Their annual living expenses will need come down along with the rest of the farm expenses; input costs, cash rents, and the like.

Wednesday, September 28, 2016

Too Early to Sell the 2017 Soybean Crop

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Too Early to Sell the 2017 Soybean Crop
Darrel Good, Agricultural Economist - University of Illinois

There’s a nagging question farmers are wondering about as they harvest what is quite likely to be their best soybean crop ever. Is it so good, so plentiful, that it might be time to consider selling some of next year’s crop. Todd Gleason has more…

Let’s start with some plain facts…
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3:39 radio self contained

Let’s start with some plain facts. The price of soybeans from April through August was higher, on average, than it was in the prior seven months. This says Darrel Good is because the trade expected there to be a whole lot of soybeans leftover from last years harvest by the time right now arrived. Something like 450 million bushels. That didn’t happen. The South American crop failed and U.S. exports jumped by 250 million bushels. Like most of the previous years, all but one since 2008, this left fewer than 200 bushels in the bin from the previous season’s soybean crop. Here’s how Good, a University of Illinois Agricultural Economist, says that should all play out in the coming months.

Good :23 …during the 2016–17 marketing year

Quote Summary - With consumption during the 2016–17 marketing already projected to be record large, an increase in the average yield forecast (without an unexpected decline in the estimate of harvested acreage) would likely result in an increase in the current projection of year-ending stocks of 365 million bushels. Two additional factors point to the potential for additional weakness in soybean prices during the 2016–17 marketing year

First, and you can read this on the Farm Doc Daily website, USDA expects a modest increase in soybean acreage for harvest in South America next year. While an increase of only 1.5 percent is currently projected (mostly in Brazil), normal yield levels result in a projected 3.5 percent (220 million bushels) year-over-year increase in soybeans from the southern hemisphere. If that large crop materializes, the pace of U.S. exports would be expected to experience the normal sharp seasonal decline beginning in the spring of 2017. A second factor that could contribute to lower soybean prices, says Darrel Good, is an increase in soybean acreage in the U.S. next year.

Good :49 …expectations for the average yield in 2017.

Quote Summary - While it is too early to form solid expectations about U.S. acreage, low prices of other commodities relative to soybeans would be expected to result in some switch away from those crops to soybeans. In particular, the large increase in corn acreage in 2016, prospects for relatively large year-ending corn inventories, and the relatively high cost of producing corn would be expected to result in fewer corn acres in 2017. Futures prices for the 2017 corn and wheat crops are higher than prices for the 2016 crop, but those prices are still low relative to prices for the 2017 soybean crop. The USDA’s Winter Wheat Seedings report released in the second week of January 2017 will provide the first indication of acreage response to current price levels. The size of the 2017 soybean crop will still largely hinge on the average yield. It will be interesting to observe if three consecutive years of above trend U.S. average soybean yields will alter early expectations for the average yield in 2017.

Here’s what Darrel Good thinks this all means at the moment. With so much production uncertainty over the next 10 months, a strong pace of Chinese buying, and the recent history of smaller than expected year-ending stocks, it is not completely surprising that the market is not yet reflecting the potential for a growing surplus of soybeans during the 2017–18 marketing year. The question for producers, he says, is whether or not current prices offer a pricing opportunity for a portion of the 2017 crop. The answer is more likely to be yes for those who intend to increase soybean acreage in response to the current corn, wheat, and soybean price relationships.

Gardening | Why Not to Cut Your Perennials this Fall

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Gardening | Why Not to Cut Your Perennials this Fall
Kim Ellson, University of Illinois Extension Educator - Cook County, Illinois
source

Most gardeners will associate the cutting and removal of perennials and raking of leaves as typical autumn chores. Naturally we want to ensure we are left with a garden that looks tidy and presentable, and we can rest assured that come springtime we will not have to tackle these chores in addition to controlling spring weeds. However removing all this plant material can be fatal for next year’s butterfly population.

Building Your Compost Pile

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Building Your Compost Pile
Duane Friend, Extension Educator - University of Illinois
Source

Put a pile of leaves, a cardboard box and a watermelon in your back yard, exposed to the elements, and they will eventually decompose. How long each takes to break down depends on a number of factors. Backyard composting is a process designed to speed up the breakdown or decomposing of organic materials. Let’s take a closer look at how we manipulate the process and speed things up.

Friday, September 23, 2016

Not Much Chance USDA Will Change Corn Yield or Acreage

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Not Much Chance USDA Will Change Corn Yield or Acreage
Darrel Good, Agricultural Economist - University of Illinois

Barring a weather catastrophe in the United States, there isn’t much that’s likely to change USDA’s corn production calculation. Todd Gleason has more…

Early corn yield reports have been good… 1:58 radio
2:09 radio self contained
2:00 tv 2:10 tv cg

Early corn yield reports have been good, but pretty variable. There are more than few concerns about a disease called diplodia, too. Some are beginning to piece these items together to make a case for USDA to lower its corn yield estimate. This isn’t very likely thinks University of Illinois Agricultural Economist Darrel Good.

Good :27 …estimate are bucking history, but you can’t rule it out.

Quote Summary - The fact is, if you look at the last 20 years of history, there is a strong tendency of the corn yield estimate to get higher in January compared to what it was in September. This has happened 70% of the time in the last 20 years, and almost 70% of the time in the last 40 years. So, those looking for a lower estimate are bucking history, but you can’t rule it out.

Maybe not, but even if the USDA yield changes it won’t be by much thinks Darrel Good. Certainly not enough to really alter the supply/demand balance sheet changing it from a surplus to a tight supply situation. He doesn’t expect USDA to change the acreage numbers much either. This is because the difference between the Farm Service Agency reported acreage figures released in August and then again in September was very small.

Good :35 …where we are right now, we are right in that range.

Quote Summary - Which tells me reporting has occurred in a very timely fashion, and probably early. Therefore I wouldn’t look for an FSA increase in subsequent reports. So, now we look at where is FSA compared to the NASS estimate? Historically when the dust settles on corn, NASS acreage is three to three-and-a-half percent higher than FSA, about two percent higher on soybeans, and if you look at where we are right now, we are right in that range.

Consequently, Darrel Good does not expect NASS to change its corn acreage estimate very much going forward. If this is the case, it leaves the U.S. with record corn yield and production figures.

Thursday, September 22, 2016

Bring Herb Plants Indoors

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Bring Herb Plants Indoors
source

Herbs can be attractive as well as tasty in the home says Sandy Mason from University of Illinois Extension.

Don't Let Your Herbs Go to Waste

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Don’t Let Your Herbs Go to Waste
Press Release

Drying herbs concentrates the flavors and freezing allows recreation of summer freshness throughout the year.

Wednesday, September 21, 2016

Hand Washing Prevents Disease

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Hand Washing Prevents Disease
Diane Reinhold, Extension Nutrition & Wellness Educator - University of Illinois
Press Release

Think about this: Do you wash your hands after taking out the garbage? Touching your face or hair? Petting the dog? Changing a diaper? Blowing your nose? Sneezing? Before and after putting on a Band-Aid? Before sitting down for a meal? Before and after handling raw meat? After using the bathroom? According to the 2015 annual Healthy Hand Washing Survey, only 66% of Americans report washing their hands after using the bathroom. Washing hands is the simplest and one of the most effective methods in preventing food poisoning. Spending an extra 20–30 seconds in the restroom properly washing hands can prevent hours spent in there later due to food poisoning.

Monday, September 19, 2016

Waiting for a Shift in U.S. Corn Acres

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Waiting for a Shift in U.S. Corn Acres
Darrel Good, Agricultural Economist - University of Illinois

Farmers in the United States are about to harvest one of their best corn crops ever and prices are low. Todd Gleason reports they may need to hang on to the crop for while if they want a better offer, and that could take a shift to soybeans next spring.

The United States Department of Agriculture…
1:50 radio
2:06 radio self contained

The United States Department of Agriculture judges this year’s corn crop to be a record breaker. If it all comes in as predicted in USDA’s September reports there will be none bigger, and the market believes it so far. The price of corn has dropped about a dollar a bushel since earlier in the summer. This price isn’t likely to change much thinks Darrel Good until some new information comes along in one of the USDA reports, and that might not be until next spring.

Good :28 …relief on the supply side of the corn market.

Quote Summary - As long as we have that kind of carryover prospects, the market sees no reason to push prices higher to reduce consumption. The big response we’ll be looking for is acreage in the U.S. next year. Will the price of corn now, compared to the price of soybeans, result in some acreage shift from corn to soybeans next year; perhaps giving us some relief on the supply side of the corn market.

This shift, if it comes, would be from farmers responding to market signals. Right now the price of soybeans compared to corn suggest farmers in the United States should seriously consider changing up next year’s crop mix, planting more soybeans. As for marketing this year’s corn crop, well, Darrel Good says it’s a waiting game for corn, and may very well be directly related to the acreage response.

Good :21 …could anticipate much of rebound in spot prices.

Quote Summary - There is some carry in the market. It is not huge. Prices remain fairly low. You’d say storage is a better option for corn, but you’ll have to store it at least through the first of the year, maybe into the spring of the year, before you could anticipate much of a rebound in spot prices.

Darrel Good writes about the commodity markets each Monday. The articles are posted to the FarmDocDaily website.

Thursday, September 15, 2016

The Big Story from the Monday Reports

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The Big Story from the Monday Reports
Darrel Good, Agricultural Economist - University of Illinois

The big story from the September USDA reports is the size of the soybean crop in the United States. Todd Gleason has more on the implications of the fifty plus bushel to the acre yield.

2:53 radio
3:08 radio self contained

The soybean crop in the United States is big. Record breaking, in fact, on two fronts. The 50.6 bushel to the acre national average yield is the largest ever, and it will consequently produce a record breaking four-billion-two-hundred-and-one million bushels of beans. This staggering number makes USDA’s August guess at the size of the crop look meager. It was 1.7 bushels to the acre less and when the September number was released the trade collectively gasped and turned in hopes to the consumption part of the USDA Supply and Demand table. They were most definitely surprised says University of Illinois Agricultural Economist Darrel Good.

Good :35 …last year, even with a larger crop.

Quote Summary - I think the market was really looking for perhaps an unchanged to smaller forecast. And were caught leaning the wrong direction. At this point we are looking at a crop over 4 billion bushels. The good news is the projection of consumption remains pretty high. So, USDA is not expecting a huge build up of inventories this year and think that we could still average around $9 a bushel for the marketing year. This is pretty close to what we did last year, even with a larger crop.

The market is trying to digest all of this bearish news, while at the same moment turning its attention southward. Brazilian and Argentinian farmers are just beginning to sow their summer crops. Which brings us to marketing the big soybean crop in the United States. Floods in Argentina earlier this year decimated its soybean crop. U.S. farmers benefited as importers turned to them to provide their soybean needs. Back in June it was thought the United States would have 370 million bushels leftover from last year’s crop when September arrived. The rains, the harvest time floods in South America, changed every thing and importers gobbled up U.S. soybeans leaving just 195 million bushels available. It tells Darrel Good now is a better time to sell soybeans rather than later.

Good :39 …majority of the soybeans right out of the field.

Quote Summary - You know I think so. Particularly on soybeans if you can get an early harvest. We are seeing some decent basis levels on soybeans right now. We are coming off a period in central Illinois when spot soybean prices were running well above November futures. Twenty to thirty cents above, but it has begun to erode. However, we are still looking at prices pretty close to option value. It says to me with big yields and that kind of price, well over $9.00, revenue looks pretty good by selling some soybeans at least, if not a majority of the soybeans right out of the field.

The sooner the better and the higher the quick ship premium, although those are likely to disappear quickly.

Monday, September 12, 2016

Fall Lawn Care | seeding & over-seeding

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Fall Lawn Care; seeding & over-seeding
Tom Voigt, Extension Turf Grass Specialist - University of Illinois

Fall is the best time of year to plant grass says Tom Voigt. He is a turf grass specialist for University of Illinois Extension. Take time this fall to assess your yard, patch dead areas, control weeds, and fertilize.

Dealing with Tree Leaves

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Dealing with Tree Leaves
Rhonda Ferree, Extension Horticulture Educator - University of Illinois

Rather than bagging or removing fallen leaves, University of Illinois Extension horticulture educator Rhonda Ferree suggests using them in your yard.

“The tree leaves that accumulate in and around your landscape represent a valuable natural resource that can be used to provide a good source of organic matter and nutrients for use in your landscape,” Ferree says. “Leaves contain 50 to 80 percent of the nutrients a plant extracts from the soil and air during the season. Therefore, leaves should be managed and used rather than bagged or burned.”

Ferree says adding a 2-inch layer of leaf mulch adds approximately 150 pounds of nitrogen, 20 pounds of phosphorus, and 65 pounds of potassium per acre. Due to natural soil buffering and breakdown in most soil types, leaf mulch also has no significant effect on soil pH. Even oak leaves, which are acid (4.5 to 4.7 pH) when fresh, break down to be neutral to slightly alkaline.

According to Ferree, there are four basic ways leaves can be managed and used in the landscape.

A light covering of leaves can be mowed. Simply leave the shredded leaves in place on the lawn. This technique is most effective when a mulching mower is used. In fact, during times of light leaf drop or if there are only a few small trees in your landscape, this technique is probably the most efficient and easiest way to manage leaf accumulation.

Mulching is a simple and effective way to recycle leaves and improve your landscape. Leaves can be used as a mulch in vegetable gardens, flower beds and around shrubs and trees. Leaves that have been mowed or run through some other type of shredder will decompose faster and are much more likely to remain in place than unshredded leaves. Unshredded leaves also tend to mat together, which can impede water and air infiltration. Ferree uses a chipper/shredder/vacuum to pick up her leaves, which she uses instead of purchased mulch in her landscape beds.

Leaves can be collected and worked directly into garden and flowerbed soils. A 6- to- 8-inch layer of leaves tilled into a heavy, clay soil will improve aeration and drainage. The same amount tilled into a light, sandy soil, will improve water and nutrient-holding capacity. A recommended strategy for using leaves to improve soil in vegetable gardens and annual planting beds is to collect and work them into the soil during the fall. This allows sufficient time for the leaves to decompose prior to spring planting. Adding a little general purpose fertilizer to the soil after working in the leaves will hasten their decomposition. Try composting your leaves. Compost is a dark, crumbly, earth-smelling form of organic matter that has gone through a natural decomposition process. If you have a garden, lawn, trees, shrubs, or even planter boxes or houseplants, you have a use for compost. For additional information composting, visit the University of Illinois Extension website.

Ferree also recommends jumping in the pile of leaves “at least once.”

Wednesday, September 7, 2016

Grain Farm Income & Cash Rent Outlook

by Todd E. Gleason



Urbana, Illinois - Wednesday morning September 7, 2016 University of Illinois Extension Agricultural Economist Gary Schnitkey presented a webinar looking forward into 2017. The discussion centered on farm profitability, projected income, and cash rents. You may the watch the webinar. What follows is a summary of the hour long content.







The USDA WASDE monthly average corn price is $4.67 from 2006 to 2016. The price of corn has been below this average since the fall of 2013 & Gary Schnitkey believes it is likely to continue to stay below this average through the 2017/18 crop year.

Each year USDA tracks the average marketing year cash price. This price is updated monthly in the World Agricultural Supply and Demand Estimates report. The average cash price for corn from 1975 to 2005 is $2.33, $5.95 for soybeans. This is a long term national average cash price. The USDA projected estimates for this marketing year (2016/17) are currently $3.15 and $9.10. The USDA estimate for the 2015 crops is $3.60 and $9.05. This last set can be used to compute expected ARC County payments to be delivered this fall.







Here is a [link](http://farmdoc.illinois.edu/fasttools/index.asp) to the FarmDoc Fast Tools web page from which you may download an Excel spreadsheet to project ARC & PLC payments.

The following tables detail gross revenue per acre for highly productive central Illinois farmland. These are actual, as derived from the Illinois Farm Business Farm Management records, and projected revenues.







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Operator and land returns have been declining for both corn and soybeans for several years. However, returns from soybeans have been out performing corn since 2013. Schnitkey predicts this will continue through 2017. It would be the fifth year of higher returns for soybeans than corn. Raising corn on cash rented farmland has been a loser since 2014.

Total income on all Illinois corn and soybean farm (all types of owned & cash rented combined) for 2016 projects a breakeven income year.




Schnitkey says farmers will face three key decision making factors as they consider cash renting farmland for 2017, and that it might be better to give up some of the land based on these considerations.




Across the board the University of Illinois agricultural economist says farmers might need to rethink crop rotations. Soybeans have proved better for several years, and it may be time to adjust to this reality. This or it needs to get cheaper to plant corn. Back in 2000 it costs $63 less to sow and harvest an acre of soybeans. This year the difference was more than $200 an acre of non-land costs in favor of soybeans over corn.



Last week the professional farm managers in Illinois suggested they'd be lowering cash rents by about $20 next year (ISPFMRA Survey). Gary Schnitkey's number is a more conservative $17 an acre based on the fact not all land is professionally managed. Neither of these would be enough to make a cash rented farm break even given $3.50 corn and $9.00 soybeans (2017 | by expected corn yield across Illinois).



So what's the impact on the price of farmland? Well, says Schnitkey, if interest rates stay low the price of farmland will drop by approximately the same percentage change as the cash rent drops. Because cash rent changes very slowly, this is good news for farmland owners, bankers, and producer owners.





Each Tuesday Gary Schnitkey posts a new article to the FarmDocDaily website. Periodically he and the other agricultural economist at the University of Illinois hosts webinars. You may register for upcoming webinars and watch those that have already concluded on this page.


Friday, September 2, 2016

Labor Day (First Monday in September)

Labor Day (First Monday in September)
Source: US Embassy Stockholm Sweden

This piece is self contained. It needs no anchor intro

I’m Todd Gleason for University of Illinois…
3:19

I’m Todd Gleason for University of Illinois Extension with a history of labor day in the United States. It’s adapted from a story found on the United States Embassy to Sweden’s website.

Eleven-year-old Peter McGuire sold papers on the street in New York City. He shined shoes and cleaned stores and later ran errands. It was 1863 and his father, a poor Irish immigrant, had just enlisted to fight in the Civil War. Peter had to help support his mother and six brothers and sisters.

Many immigrants settled in New York City in the nineteenth century. They found that living conditions were not as wonderful as they had dreamed. Often there were six families crowded into a house made for one family. Thousands of children had to go to work. Working conditions were even worse. Immigrant men, women and children worked in factories for ten to twelve hours a day, stopping only for a short time to eat. They came to work even if they were tired or sick because if they didn’t, they might be fired. Thousands of people were waiting to take their places.

When Peter was 17, he began an apprenticeship in a piano shop. This job was better than his others, for he was learning a trade, but he still worked long hours with low pay. At night he went to meetings and classes in economics and social issues of the day. One of the main issues of concern pertained to labor conditions. Workers were tired of long hours, low pay and uncertain jobs. They spoke of organizing themselves into a union of laborers to improve their working conditions. In the spring of 1872, Peter McGuire and 100,000 workers went on strike and marched through the streets, demanding a decrease in the long working day.

This event convinced Peter that an organized labor movement was important for the future of workers’ rights. He spent the next year speaking to crowds of workers and unemployed people, lobbying the city government for jobs and relief money. It was not an easy road for Peter McGuire. He became known as a “disturber of the public peace.” The city government ignored his demands. Peter himself could not find a job in his trade. He began to travel up and down the east coast to speak to laborers about unionizing. In 1881, he moved to St. Louis, Missouri, and began to organize carpenters there. He organized a convention of carpenters in Chicago, and it was there that a national union of carpenters was founded. He became General Secretary of the United Brotherhood of Carpenters and Joiners of America.

The idea of organizing workers according to their trades spread around the country. Factory workers, dock workers and toolmakers all began to demand and get their rights to an eight-hour workday, a secure job and a future in their trades. Peter McGuire and laborers in other cities planned a holiday for workers on the first Monday in September, halfway between Independence Day and Thanksgiving Day.  On September 5, 1882 the first Labor Day parade was held in New York City.