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Archive for April, 2012

On Tuesday, rumors of Bovine Spongiform Encephalopathy (BSE) findings in a California dairy cow sent the cattle market into a tail spin. When the case was finally confirmed by USDA, the market had already closed. Today, cattle futures prices are beginning to recover as U.S. beef trading partners say the news will not impact trade. Although this morning two major South Korean retailers said they would not be selling U.S. beef. Even though this new case may not supposedly impact the market, it has given the already volatile dairy industry a black eye. In light of the BSE finding in California, there continues to be misinformation about this disease. Below is a blog post that sheds some more light onto the situation.

Milk Isn’t “Mad” or Bad

The fourth case of BSE (bovine spongiform encephalopathy), also known as mad cow disease, to ever be found in the U.S. was confirmed today on a dairy farm in California. The Centers for Disease Control says that BSE “is a progressive neurological disorder of cattle that results from infection by an unusual transmissible agent called a prion.” Because BSE is a neurological disorder, it cannot be transmitted to humans through milk or meat. The bovine version of the human disease Crutchfield-Jacobs disease, BSE can only be transferred through the ingestion of neurological tissues, whether in the brain or bone marrow. This is important to note because there is a misconception that BSE is contagious from one cow to the next, although it is not.

So is the cow really mad? The nickname “mad cow disease” is widely used and likely originated from the behavior of one of the first cows to be infected with BSE in the UK. Because it is a neurological disease, it often causes the animal to lose control of basic mobility functions. The cows appear to act drunk or crazy, i.e., “mad.”

The case discovered today is an atypical strain. This means it rose spontaneously and was not transmitted through something the cow ingested. The USDA has not confirmed how the disease was contracted in the animal but has confirmed that the milk, meat and food supply is safe. “It was never presented for slaughter for human consumption, so at no time presented a risk to the food supply or human health,” says USDA Chief Veterinarian John Clifford. “Additionally, milk does not transmit BSE.” The carcass of the dead animal is now in the hands of the state’s ag department.  

While this means that the food safety system is working, today’s finding will undoubtedly cause fear in consumers. Similar to the first case of BSE in the U.S., which was found on Dec. 23, 2003, and was nicknamed the Christmas Cow, today’s events will likely lead to lower milk prices for dairy farmers. Since that time, only three others (including today’s) have been discovered in America. It is important to reassure your friends and neighbors that their milk is safe! “Milk isn’t Mad or Bad.

Yesterday afternoon, the USDA released its weekly crop progress report. Soybeans joined the mix and are outpacing average historical planting percentages as well.

As of April 22, 2012, the 18 primary corn producing states have planted 28% of their corn, compared to 8% one year prior. 16 of the states have planted more than their 5-year historical average. Illinois has already planted 59% of its corn which outpaces its 5-year average of 17%. 9% of the U.S. corn crop has emerged compared to 2% from a year ago.

National progress is the third highest for this date at 28%. Kentucky and Tennessee are the furthest ahead of their respective state averages.

As of the third week of April, 6% of U.S. soybeans have been planted, a 4% increase from a year ago.

As of April 22nd, 2012, the 6 primary spring wheat producing states have planted 57% of their crop, compared to the 5-year average of only 19%. South Dakota, which on average the past 5 years has 30% planted by this time, has almost planted their entire crop at 91%.

Winter wheat conditions have outperformed 2011′s conditions with 63% of the winter wheat crop in good or excellent condition, a 28% increase from last year. Winter wheat in very poor or poor condition is at 10%, a 30% decrease from one year prior.

Corn prices decreased by 0.2% over the past week ending at $6.22 per bushel, soybean prices increased by 1.2% over the past week ending at $14.37 per bushel, and wheat prices ended the week at $6.25 per bushel, a 1.5% increase from last week. Year-over-year corn prices are down 18.4%, soybeans are up 3.5%, and wheat is down 24.3%.

I have heard many mixed reports lately as to how planting progress is progressing but most have been local. The article below was posted on Ag Web today and talks a little more about the progress as a whole, not just locally.

Will the 2012 Corn Crop Be the Earliest Ever Planted?

April 20, 2012

By: University News Release

Courtesy of the farm doc daily site.

Issued by Scott Irwin and Darrel Good

Unusually warm weather in March and early April provided the opportunity to start planting the 2012 corn crop earlier than normal. While there is little doubt that some corn has been planted much earlier than usual, determining whether the crop in total is being planted at a record pace is not as straightforward as it may seem at first glance.

The problems include:

       Corn planting is generally spread over a relatively long time period.

       The timing of planting differs substantially by region of the country.

       There are several ways to characterize how early or late the crop is planted.

One consistent measure is the date at which planting in those states in the heart of the Corn Belt reaches 50% completed, as reported in the USDA’s weekly Crop Progress report. We previously examined this measure in the report found here. (View the latest planting progress reports with AgWeb’s interactive planting maps.)

Here we review the history of corn planting progress in the states of Illinois, Indiana, and Iowa for the period 1960 through 2011. We calculate the number of days before or after May 1st that planting reached 50% complete in each of the three states.

Since planting progress is reported on a weekly basis, the date of 50% completion is calculated assuming equal daily planting progress during the week that 50% was reached or exceeded. For example, if planting progress for a particular state was reported at 42% on May 1st and 63% on May 8th, we assume that 3% of the crop was planted each day during the week and that planting progress reached 50% on May 4th. For that year, planting progress reached 50% 3 days after May 1st.

The history of the number of days before and after May 1st that planting progress reached 50% in Illinois is shown in Figure 1. The first observation is that over time there has been a clear trend of reaching 50% completion earlier.

The overall tendency towards earlier planting over time means that a 50% date that is 15 days after May 1st in say, 1975, is comparable to a 50% date of May 1st in 2012. So, in order to make “apples-to-apples” comparisons of planting progress over time we de-trended the 50% planting date observations, much like yield observations over time are de-trended to reflect changing production technology and management practices. This is accomplished by subtracting the fitted trend line prediction each year from the actual 50% observation. The result is a “de-trended” series of 50% dates that are comparable over time. After looking at the trend-adjusted calculations of the number of days before or after May 1st that corn planting progress reached 50 percent in Illinois, Indiana, and Iowa, respectively. Several observations can be made.

First, the number of days before or after May 1st of 50% completion has been in a much narrower range for Iowa than for the other two states.  Second, planting tends to reach 50% complete later in Indiana than in the other two states. Third, the range in the trend-adjusted date of reaching 50% completion has been larger in all three states over the past two decades than in the previous three decades, particularly in Illinois and Iowa.

What About 2012?

The USDA’s Crop Progress report released on April 17th (delayed one day due to technical difficulties) indicated that as of April 15th planting progress had reached 41% in Illinois, 24% in Indiana, and 5% in Iowa.

For planting to equal the previous record early date, an additional 9% of the crop needs to be planted by April 18th in Illinois (3% per day after April 15th), an additional 26% needs to be planted by April 25th in Indiana (2.6% per day after April 15th), and an additional 45% needs to be planted by April 22nd in Iowa (6.4% per day after April 15th).

It appears that a new record early date for reaching 50% planting completion could be reached in Illinois this year and perhaps in Indiana as well. It is less likely for record early planting to occur in Iowa. The April 23rd Crop Progress report will encompass the previous record early planting dates for Illinois and Indiana, with the report on April 30 to encompass the previous record early date for Indiana.

The trend calculations for 2012 are for planting to reach 50% complete on April 28th in Illinois, April 29th in Iowa, and May 8th in Indiana. For planting to reach 50% complete in Indiana by the trend date of May 8th, only 1.1% of the crop needs to be planted per day after April 15th. Similarly, to reach 50% complete by the trend date of April 29th in Iowa, only 3.2% of the crop needs to be planted per day after April 15th. 

Market Implications of Early Planting

Corn planting in 2012 will reach the 50% completion date earlier than any other year since 1960 in Illinois and perhaps in Indiana as well. While Iowa is not likely to set a record early date, it is likely that Iowa will reach 50% complete well before its trend date.

While some records will be set in 2012 it is important to keep in mind that other years have seen corn planting almost as early. The main market implication is that a smaller than average percentage of the U.S. corn crop is likely to be planted late (after May 20) and incur the yield penalty associated with late planting. As indicated in our post of March 23 a smaller than average portion of the crop planted late supports the expectation for the 2012 corn yield to be about two bushels above trend, if there are no other offsetting factors later in the season.

After the USDA released its March 30th crop report the market opened limit up leaving many trader’s, including myself , scratching our heads as to why?  A co-worker of mine phrased it best that day when he said “You can’t feed acres”. He meant that even though farmers intended to plant the most acres since pre world war two, it didn’t matter. What the market saw was that stocks were tight and demand was still going strong.

However, since then corn prices have traded both sides of unchanged still confusing farmers but over the past week corn prices have declined substantially. Does this mean that the 2011 crop has been rationed? It is probably since the release of the USDA’s WASDE report on April 10th, May and December futures have declined by $.26 and $.22 respectively. The recent weakness in old crop prices started with the USDA’s unchanged forecast of ending stocks of 801 million bushels. This was contrary to what many believed was going to happen. Following the smaller-than-expected estimate of March 1 stocks revealed on March 30, the market had anticipated that the April WASDE report would contain a larger forecast of feed and residual use and a smaller forecast of ending stocks.

New crop prices continue to reflect the larger-than-expected planting intentions revealed on March 30, an early start to the planting season, and the recent improvement in soil moisture conditions in a large part of the Corn Belt. While futures prices have declined over the past week, basis levels remain generally strong and the May/July futures inversion has increased. These relationships suggest on-going tightness in stocks and/or a slow rate of movement relative to the pace of consumption. While evidence about the pace of consumption is mixed, expect corn prices to remain under pressure until there is convincing evidence that the necessary rationing has not occurred or concerns about 2012 production develop.

With all the talk of farmers going to fields early this year, I found this article on Ag Web today that specifically references Ohio farmers and their crops. Now I am not agronomist, so I found it interesting. What stood out to me the most was the recommended time for planting corn in Ohio.

Corn growers wanting to ensure a healthy crop with strong yields need to plan ahead, including knowing when to plant, when and if to till, and how to make the right seed depth adjustments based on soil conditions, says an Ohio State University Extension expert.

“Mistakes made during crop establishment are usually irreversible, and can put a ‘ceiling’ on a crop’s yield potential before the plants have even emerged,” said agronomist Peter Thomison.

  Following are some proven practices that will help get a corn crop off to a good start:

Till only when necessary and under proper soil conditions. Avoid working wet soil, and reduce secondary tillage passes. Perform secondary tillage operations only when necessary to prepare an adequate seedbed. Shallow compaction created by excessive secondary tillage can reduce crop yields. Deep tillage should be used only when a compacted zone has been identified and soil is relatively dry. Late summer and fall are the best times for deep tillage.

Complete planting by early May. The recommended time for planting corn in northern Ohio is April 15 to May 10, and in southern Ohio April 10 to May 10. But if soil conditions are dry and soil temperatures are rising quickly, and the 5-7-day forecast calls for favorable conditions, start planting before the optimal date. During the 2-3 weeks of optimal corn planting time, there is, on average, about one out of three days for field work. This narrow window of opportunity further emphasizes the need to begin planting as soon as field conditions allow, even though the calendar date might be before the optimal date.

Avoid early planting on poorly drained soils or those prone to ponding. Yield reductions resulting from ‘mudding the seed in’ may be much greater than those resulting from a slight planting delay. Also, if dry corn seed absorbs cold water as a result of a cold rain or melting snow, ‘imbibitional chilling injury’ may result. Cold water can cause similar injury to seedling structures as they emerge during germination. Such injury in corn seed ruptures cell membranes and results in aborted radicles, proliferation of seminal roots and delayed seedling growth.

Adjust seeding depth according to soil conditions. Plant between 1.5 to 2 inches deep to provide for frost protection and adequate root development. In early to mid-April, when the soil is usually moist and evaporation rate is low, seed should be planted no deeper than 1.5 inches. When soils are warming up and drying fast in late May or early June, corn may be seeded more deeply, up to 2 to 2.5 inches on noncrusting soils. Consider seed-press wheels or seed firmers to ensure good seed-soil contact.

Adjust seed planting rates on field-by-field basis. Adjust planting rates by using the yield potential of a site as a major criterion for determining the appropriate plant population. Higher seeding rates are recommended for sites with high yield potential, high soil-fertility levels and water-holding capacity. Follow seed company recommendations to adjust plant population for specific hybrids.

I know this is a few days late, but I couldn’t help myself. Everyone needs a midweek funny.

Jimmy Kimmel: “Thirty thousand kids and their parents participated in the annual White House Easter Egg Roll, which has been going on for years. At this point, there has to be thousands of undiscovered Easter eggs on the lawn of the White House. Future civilizations will think we were ruled by chickens.”


The April WASDE forecasted an unchanged balance sheet for U.S. corn. This coms as a surprise as most analysts expected U.S. corn ending stocks to significantly decrease after last month’s Quarterly Stocks Report indicated an 8% drop in corn held in all positions. As predicted, soybean production and stocks decreased worldwide.


U.S. ending stocks remained at 801 million bushels due to a decrease in expected ethanol use and an increase in expected wheat consumption compared to corn. Corn usage for ethanol production remained unchanged from last month at 5.0 billion bushels. The Energy Information Administration’s latest report indicated average daily ethanol disappearance was at a 23-month low in January, increasing ethanol stocks to a record high. Larger than expected wheat supplies and competitive pricing compared to corn imply wheat could be the choice of feed this year. The projected range for season-average corn prices was narrowed on both ends of the range by 10 cents to $6.00 to $6.40.

2011/12 global coarse grain supplies were decreased by 4.3 million tons reflecting a 4.0 million ton decrease of Chinese corn beginning stocks due to increased 2010/11 corn feed and residual use. We will continue to watch the amount of U.S. corn acres planted as the U.S. is poised to plant the largest amount of corn acres since before World War II.


2011/12 U.S. soybean exports were increased this month by 15 million bushels due to soybean crush experiencing higher than expected meal disappearance resulting in exports increasing by 15 million bushels. The U.S. season-average price range for 2011/12 was projected at $12.00 to $12.50 per bushel. Global oilseed production for 2011/12 was projected 5.2 million tons lower to 440.6 million tons. Weaker foreign production accounts for the decrease. Soybean production in Brazil was lowered 2.5 million tons from last month as warm temperatures and insufficient amounts of rainfall continued to decrease yields. Argentina and Paraguay soybean production was also lowered.


U.S. wheat ending stocks for 2011/12 were projected 32 million bushels lower in April as feed and residual usage was increased. The season-average price was narrowed by 5 cents on both ends to $7.20 to $7.40 per bushel. Global wheat supplies for 2011/12 were lowered 0.5 million tons due to decreases in beginning stocks worldwide. Global wheat consumption was also increased due to an expected rise in feed and residual use as wheat appears to be a cheaper feed alternative to corn.

The grain markets will continue to watch South American production of corn and soybeans as weather has had an adverse affect on yields.  Tomorrow officially marks the beginning of the U.S. corn planting season in many regions of the Corn Belt and we are excited to get this year’s crop in the ground.

For some farmers waiting to plant is like Santa coming early and then telling a young child they can’t open any of the gifts for a couple of days. It’s almost impossible to get them to wait! Even though today is the insurance deadline for at least Ohio, some farmers are still trying to balance their desire to plant corn early with concerns that weather conditions could turn cold and wet. Everything but the calendar says it’s time to plant corn. Even so, many Corn Belt farmers are already in the field with their planters.

The USDA released the first weekly Crop Progress report of the year this past Monday April 2nd. Because of the ideal weather in most areas through the bulk of March Traders were looking for corn to be 5-7% planted at this point, compared to 1-2% last year.  The USDA is reporting corn plantings at 3% as compared to 2% last year and 2% 5-year average.  The biggest drag on planting was Texas reporting 48% planted vs. 53% last year and 50% 5-year average.  Aside from slower than usual plantings in Texas we did see some states post progress numbers that we would not expect to have started planting this early in the season.  Some standouts being:  Illinois at 5%, Indiana at 1%, Missouri at 7%, Michigan at 2%!?! Nebraska at 1%, Ohio at 1% and Tennessee at 15%.

The trade expectations may have been a bit optimistic however. If the current forecast holds we could be set to see a huge jump in planted acreage in short order.  Texas will get planted, and this report reflects the fact that conditions WERE ideal, but not everywhere. I know some farmers did elect to plant earlier, but they did not go full bore. They planted 60 acres here and 40 there, knowing the potential risk.  Potential upsides to planting early: corn has the opportunity to emerge, get a strong start and pollinate ahead of high temperatures and dry conditions. Potential down sides to early planting are the risk of frost and/or a prolonged cold snap. If you have looked at the extended forecast tonight and into the weekend it is leaning more to the downside potential than upside.

For my brave friends in Michigan who have started planting corn, please call me as I would love to buy you lunch!  HoRah! For now, my personal opinion is to wait. All the benefits you get by planting now you’ll still get through much of April.  But as we have seen this year has been very unique and it’s only April 5th so anything may go.