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Archive for March, 2014

Corn Planted Acreage Down 4 Percent from 2013
Soybean Acreage Up 6 Percent
All Wheat Acreage Down 1 Percent
All Cotton Acreage Up 7 Percent

Corn planted area for all purposes in 2014 is estimated at 91.7 million acres, down 4 percent from last year. If realized, this will represent the lowest planted acreage in the United States since 2010; however, this will represent the fifth largest corn acreage in the United States since 1944.

Soybean planted area for 2014 is estimated at a record high 81.5 million acres, up 6 percent from last year. Compared with last year, planted acreage intentions are up or unchanged across all States with the exception of Missouri and Oklahoma.

All wheat planted area for 2014 is estimated at 55.8 million acres, down 1 percent from 2013. The 2014 winter wheat planted area, at 42.0 million acres, is down 3 percent from last year but up slightly from the previous estimate. Of this total, about 30.2 million acres are Hard Red Winter,  8.43 million acres are Soft Red Winter, and 3.35 million acres are White Winter. Area planted to other spring wheat for 2014 is expected to total 12.0 million acres, up 4 percent from 2013. Of this total, about 11.3 million acres are Hard Red Spring wheat. The intended Durum planted area for 2014 is estimated at 1.80 million acres, up 22 percent from the previous year.

Corn Stocks Up 30 Percent from March 2013
Soybean Stocks Down 1 Percent
All Wheat Stocks Down 15 Percent

Corn stocks in all positions on March 1, 2014 totaled 7.01 billion bushels, up 30 percent from March 1, 2013. Of the total stocks, 3.86 billion bushels are stored on farms, up 45 percent from a year earlier. Off-farm stocks, at 3.15 billion bushels, are up 15 percent from a year ago. The
December 2013 – February 2014 indicated disappearance is 3.45 billion bushels, compared with 2.63 billion bushels during the same period last year.

Soybeans stored in all positions on March 1, 2014 totaled 992 million bushels, down 1 percent from March 1, 2013. Soybean stocks stored on farms are estimated at 382 million bushels, down 16 percent from a year ago. Off-farm stocks, at 610 million bushels, are up 13 percent from last March. Indicated disappearance for the December 2013 – February 2014 quarter totaled 1.16 billion bushels, up 20 percent from the same period a year earlier.

All wheat stored in all positions on March 1, 2014 totaled 1.06 billion bushels, down 15 percent from a year ago. On-farm stocks are estimated at 238 million bushels, up slightly from last March. Off-farm stocks, at 818 million bushels, are down 18 percent from a year ago. The December 2013 – February 2014 indicated disappearance is 419 million bushels, down 4 percent from the same period a year earlier.

By: Kyle Imwalle – Mercer Landmark agronomist

With wheat coming out of dormancy soon it is time to start thinking about fusarium head blight.  Head blight is important because it doe s not only reduce yield, but it will reduce the quality and feeding value of the grain.  The severity of the fungus varies greatly year to year.

The infection occurs during the flowering stage and during wet weather.  If we have a dry spell during  flowering and early dough head blight in the crop can be nearly no existent.  If we do have few days of light rain during flowering you can see fields that are completely covered.  Fusarium does not affect only wheat, it also goes after corn, foxtail, quackgrass, crabgrass, and bluegrass.  In corn these fungi will cause ear, stalk and root rot diseases.

Head blight is confined to the head and peduncle.  The first thing you will notice is the spikelet will start to bleach, while the rest of the head is healthy and green.  As the fungus moves farther into the plant it will spread above and below the initial infection point. A closer look at infection will show a pinkish to orange mass of spores, these spores will spread by wind and animal to other plants.

If head blight is left it will produce mycotoxins which are deadly to livestock and humans.  Hogs are extremely sensitive to Gibberella Zeae, the main fungus in wheat which produces deoxynivalenol (DON) also known as vomitoxin.

Hogs that are given DON-infested grain may refuse it, which will cause poor weight gain. Cattle and poultry are affected by Don but to a lesser extent.

Controlling head blight is a three pronged approach. There are a few varieties of cereal grain that are resistant. Make sure you spray you fields for weeds that are susceptible to the fusarium fungus. On the chemical side spraying a fungicide that use an active ingredient in the triazole (Prosaro®)class are the most effective if they are sprayed during the early flowering stage. Spraying can be done wither by ground or air. For ground application Purdue University recommends applying a minimum of 15 gpa with 6.5 to 8.3 fl. Oz. of Prosaro®.

If you have any questions about your wheat fields or would like help in accessing your disease pressures please contact your local Mercer Landmark Agronomy Sales Representative.

Yesterday, March 25th, was National Agriculture Day and agriculture was being recognized across the Nation and Ohio. I attended a Rotary Ag Day and had the pleasure of listening to Gary Cooper, the Chief Operating Officer of Cooper Farms speak.  Cooper Farms is the largest turkey producer in Ohio and the 12th largest in the U.S.  It is always refreshing to hear how integral Northwest Ohio truly is in supplying our Nation with value added products.  Better late than never, but below are some local and Ohio farm facts.

Fun Farm Facts…

  • Pork is the most widely eaten meat in the world.
  • The average person consumes 584 pounds of dairy products a year.
  • The average dairy cow produces seven gallons of milk a day, 2,100 pounds of milk per month, and 46 glasses of milk a year.
  • Today’s American farmer feeds about 155 people worldwide. In 1960, that number was 25.8.
  • The heaviest turkey ever weighed 86 pounds, about the size of an average third grader.
  • It is possible to lead a cow upstairs but not downstairs because a cow’s knees cannot bend properly.
  • The longest recorded flight of a chicken is 13 seconds.

Interesting Agriculture Facts

  • Ohio is 9th in pork production.
  • Total impacts on Ohio’s economy is more than $800,000,000.
  • 25% of the hogs raised in Ohio are exported to other countries.
  • One acre of corn can produce enough ethanol to run a car for some 72,000 miles on E-10 Unleaded.
  • Ethanol uses 40% of the U.S. corn grown.
  • One bushel of corn yields about 2.8 gallons of ethanol.
  • Agriculture employs more than 24 million American workers (17% of the U.S. workforce.)
  • 1940’s – The number of tractors on farms exceeds the number of horses and mules.
  • 1930’s – The worst drought in U.S. history covered more than 75% of the country.
Soil temperatures do not appear to be conducive to corn planting in the next 16 days… Central Illinois often starts in the first 10 days of April…

Cold weather continues to effect the Great Lakes. Due to ice conditions, the Montreal to Lake Ontario portion of the Seaway has postponed opening until March 31. The Welland Canal (gets vessel traffic around Niagara Falls) will open on March 28. The Soo Locks are set to opened yesterday. Thunder Bay – the huge Canadian port on the west end of Lake Superior reports 4 feet of ice in the harbor – it remains closed.

Historic first 70 degree day in Chicago is March 26. Tom Skilling says it could happen this weekend – not too far behind normal. We will need several more of them in quick order to keep from slipping too far behind.

By: Fran Howard, Contributing Writer

Analysts expect planting intentions to favor soybeans when USDA releases its long-awaited Prospective Plantings report on March 31.

“I think USDA will increase acreage in beans significantly, by 5 million or 6 million acres and keep corn acreage close to last year,” says Peter Georgantones, account executive at Abbott Futures in Minneapolis. “Spring wheat could be shortchanged.” An increase of 5 million acres would by far be a record-high planting of soybeans.

Producers planted a record 77.4 million acres to soybeans in 2009. Last year, they planted 76.5 million acres to soybeans.

Allendale, a brokerage firm in McHenry, Ill., expects soybean planting intentions to surpass 83 million acres. Using Allendale’s estimate of harvested acreage and a trend yield of 44.29 bu. per acre, this year’s soybean production would be a record high 3.639 billion bushels. Last year’s production was 3.289 billion bushels.

With November soybean futures near $11.90 per bu., Georgantones thinks producers should have a third of their corn marketed.

Corn Not Forsaken

Georgantones expects producers to plant between 93 million and 94 million acres to corn this year, but some estimates call for only 91 million acres. USDA’s latest projection was 92 million acres.

“Farmers love to plant corn,” he says. With July futures at $4.90, corn still provides a profit, assuming a breakeven of $4.25.

Allendale expects corn plantings of 92.349 million acres, the fourth largest since 1944. Using the firm’s estimate of harvested acreage and a trend yield of 163 bu. per acre, this year’s corn crop would be the second largest ever at 13.781 billion bushels. Last year’s record-large crop was 13.925 billion bushels.

“It’s going to be a tough year for farmers to make money. Next year could be even more challenging,” says Georgantones. He recommends that corn producers have one-third of their crop sold at current price levels.

“I think we are close to the highs on corn,” he adds.

One issue that USDA has not yet factored into its balance sheet is the effect that porcine epidemic diarrhea virus (PEDV)—first found in the United States in May 2013—will have on feed demand for corn. PEDV is being blamed for the recent sharp increase in hog and pork prices.

Late Planting

While it is way too early to talk about late planting, it’s not too late to talk about this year’s delayed spring.

“The Ohio River Valley could be two to three weeks behind this year due to snow and cold, and the Upper Midwest has so much frost in the ground from this cold weather, I think we’ll start planting late as well,” says Georgantones. “But you can still make good yields planting corn in May.

By: Sara Schafer, Business and Crops Online Editor

The annual acreage competition is always a wild card. Experts weigh in on which crops will claim the most ground this year.

With the brutal weather nearly every corner of the U.S. has seen this winter, it’s hard to believe some farmers in the South have already begun rolling planters through their fields. For the upper Midwest, planting may still be a few months away. But, questions abound for which and how much of the major crops will be planted this spring.

Corn has definitely been king the last few years, as high prices and strong yields coaxed farmers in 2013 to dedicate more than 95 million acres to the crop. With this year’s significantly lower corn prices, how many farmers will switch back to a more-even mix of corn and soybeans? Or will farmers dedicate acres to other crops, such as cotton, spring wheat or rice?

During its late-February Agricultural Outlook Forum, USDA pegged this year’s acreage mix to be:

  • 92 million acres of corn, (down 3.4 million acres from 2013)
  • 79.5 million acres of soybeans, (up 3 million acres from 2013)
  • 55.5 million acres of wheat, (up 700,000 acres from 2013)
  • 11.5 million acres of all cotton, (up 1.1 million acres from 2013)

On March 31, USDA will release its forecast for planted acreage in its annual Prospective Plantings report. What will the report say?

So far, signs point to a heavy swing toward soybeans. Soybean prices have climbed significantly since January. China has been buying hefty amounts of soybeans from the U.S. and weather reports from South America show droughty conditions may clip their soybean production. “The market is trying to make sure farmers plant more bean acres,” says Bob Utterback, Farm Journal Economist and president of Utterback Marketing.

Yet, Utterback says crop rotation and agronomic considerations, historically, trump price incentives. “Farmers don’t typically like to shift their production mixes significantly from year to year,” he says. “With the dry weather we’ve had and issues with continuous corn, I think guys have wanted to shift back to a rotation between corn and beans.”

In Illinois, several economic incentives are in place to sway farmers into planting soybeans. Gary Schnitkey, University of Illinois ag economist, says soybeans are projected to be more profitable than corn, especially if a field was planted in in corn the previous year.

With lower prices projected compared to recent years, farmers will have to carefully assess input decisions to ensure profits. “Farmers will need more bushels to cover the costs of inputs,” he says. Since soybeans are a cheaper crop to plant, he thinks farmers could lean that way. “Also, late planting may cause earlier switches to soybeans,” Schnitkey says.

The last few years of high corn prices have caused farmers in areas beyond the Corn Belt to dedicate large amounts of land to the crop. Now, Jerry Gulke, president of The Gulke Group, says those fringe states might shy away from corn.

“The big question is what what will the minor corn states do?” he says. “For the states that average 140 bu./acre corn, $4 corn doesn’t look great, especially considering their expenses are the same as states that average 200 bu./acre corn.”

Last year’s wet harvest combined with a lot of unpriced grain in storage is also reducing corn’s attractiveness for this year. “The love affair with corn when it was $7 isn’t so amorous right now,” Gulke says. “They are looking for something else, such as cotton, spring wheat or even peanuts.”

Gulke is expecting potential acreage swings in the Delta, Dakotas and far Eastern Corn Belt. But, he says, corn acres need to decrease 5% in all states to make the market even semi-nervous. “That would mean the outlying states really move, as well as the heart of the Corn Belt,” he says. “Somebody is going to have to drop big-time.

Other Factors at Play

Grain storage capacity, equipment purchases and tillage practices keep farmers locked in to certain crops, Utterback says. “Most farmers made their acreage decisions in the fall,” he says. “I’d say 75% of the acres were decided when farmers did fall tillage.”

Another major issue is crop insurance. The spring insurance prices are $4.62 for corn and $11.35 for soybeans, which means there is some major market risk before insurance kicks in, Gulke says.

With these lower spring insurance prices, Gulke says, the push for farmers to plant corn or soybeans into the summer is gone. “The incentive to plant every acre—no matter what the timeframe is—is just not there,” he says. “Last year we planted corn until June 15 in Iowa. I don’t think we’ll see that because the market isn’t paying you to do that.”

Whether farmers own or rent their land could also be a factor. “If you own the land, you have more flexibility,” Utterback says. “If you are renting it, you will plant the crop that makes you the absolute most money. I think from a cash flow standpoint, there is less risk with beans.”

This article is from 2014 Bloomberg News:

Milk futures in Chicago jumped to an all-time high Monday, as surging U.S. dairy exports depleted supplies available for domestic consumers.

Shippers sold 162,999 metric tons of milk powder, cheese, butterfat and whey in January, up 19 percent from a year earlier, according to the latest data from the U.S. Dairy Export Council. Almost 15 percent of milk production went to exported goods, up from 12 percent a year earlier, the group said. Cheese shipments climbed 46 percent.

A rise in global demand for U.S. dairy goods comes as a drought threatens output in California, the nation’s top producer. Milk prices have jumped 21 percent this year, signaling higher costs for consumers and restaurants such as Domino’s Pizza Inc. and Potbelly Corp., while the cost of cheddar cheese also reached a record Monday.

“Exports of cheese and dry milk products have been very strong,” Aishwarya Deep Govil, a risk management adviser for Rice Dairy LLC in Chicago, said in a telephone interview. “This move up has caught everybody off guard because demand has been stronger than the increase in milk production.”

Class III milk futures for March delivery rose 0.9 percent to settle at $23.49 for 100 pounds at 1:10 p.m. in Chicago after touching a record $23.61. April futures rose the 75-cent maximum allowed by the exchange to $23.12.

Food Costs

World food prices in February posted the biggest gain in 19 months, and dairy costs reached a record, according to the United Nations. U.S. milk production rose 0.9 percent to 17.255 billion pounds in January from a year earlier, the Department of Agriculture said last month. The government is scheduled to release the February production report on March 19.

Spot wholesale 40-pound blocks of cheese climbed 1.6 percent to $2.40 a pound today on the CME, the highest since the data began in 1997.

Chicago-based sandwich chain Potbelly will increase prices to cover inflation from dairy, pork and beef products this year, chief financial officer Charles Talbot said on a Feb. 18 earnings call. Organic foods producer Annie’s Inc. also cited cheese prices last week as as part of a “tough commodity-inflation environment.”

© Copyright 2014 Bloomberg News. All rights reserved

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By: Amy Battles- Mercer Landmark Agronomist

We have been having several growers questioning whether the wheat crop will amount to anything this year. After kicking off the year with a Polar Vortex followed by what seemed to be never ending wind chill, wind gust, blizzard, and flash flood warnings it seems unlikely that this year’s wheat crop will make it. However- don’t eliminate your 2014 wheat crop yet.

After hardening wheat can tolerate temperatures between 0⁰-10⁰F easily with good snow cover. According to the Ohio State University, “Plants are only killed by low temperatures if the crown (lower stem) is damaged. Although there were negative air temperatures, soil temperatures remained in the upper 20s to low 30s.” But what about the spots in your fields that sat under water for 5+ days? Luckily, during dormancy the negative effects of flooding take longer to impact plant tissues since dormant plants require less oxygen. Hence, the higher the temperature the faster the rate of oxygen depletion. When temperatures are 65⁰F or higher we can expect yield reduction from flooding/saturated soils within 48 hours.

As said by Joel Ransom of North Dakota State University Extension, “There is limited data on the effect of flooding on winter wheat when temperatures are below 40 degrees…. However I did receive a report this week from someone in Canada, who found winter wheat surviving after being under water for three weeks.”

Our best bet is to wait to make stand evaluations until the wheat is completely green from warmer temperatures for at least 10 days. To conduct stand evaluations in your wheat fields prior to tillering choose 10-15 areas in the field and count the number of plants per foot of row. Twelve plants/foot will still result in a good number of head-bearing tillers/acre. Refer to the chart below relating plants per square foot to yield potential from Penn State. For fields with tillers, Ohio State University states that “15 tillers per square foot is considered minimum for an economic crop. The number of tillers per square foot is equal to the number of tillers in 19.2 inches of 7.5 inch rows.”

If you have any questions about your wheat fields or would like help in accessing your wheat stand please contact your local Mercer Landmark Agronomy Sales Representative.

After almost a $1.00 pull back, May Soybeans have now bounced back to within 42 cents of the highs.  Fund and technical buying have helped the soybeans to recover, but is this the start of a new leg higher in this bull move?  Or is this a continuation of a topping formation?

Since the end of January old crop soybeans have rallied over $2.00 from the lows.  This strength has come from fund buying and concerns about tight stocks.  Soybean exports are on a record pace and the fear is that the US could be left with a historically tight ending stocks figure if these strong exports continue.  On top of this the funds, which are largely technically driven, have jumped into the market and helped add fuel to the rally.  However, last week the USDA reported only a 5 million bushel reduction in the projected carry over and soybeans fell sharply from the highs.

The fundamental picture for soybeans is a highly contested matter at the moment.  On one side you have the bull camp who feel that even with cancellations from China export demand needs to be increased dramatically which would leave ending stocks at historically low levels and below what the USDA considers “pipeline supplies”.  On the other side you have the bear camp that will argue that a projected record world carry over should keep global soybean prices in check and that the US could even import a large amount of soybeans if need be.

This debate continues to rage on, but until last week the bull camp was firmly in the drivers seat.  Now, things are a bit more two sided.  With South America moving along with harvest and shipping out soybeans the question is will we now see more Chinese cancellations or imports of South American soybeans?  We heard early last week that China had canceled 30-40 cargoes of South American soybeans and that at least some of them were on their way to the US.  Without any import reporting system in place it is hard to tell to what extent we are actually seeing South American imports, but the stories are certainly out there.

The question really is – can soybeans break through to new highs and extend the rally, or is this just part of a larger, longer term topping formation.  Certainly the extent of fund buying will have a hand in determining this.  But funds are not usually the ones to break new highs.  This usually comes from bullish fundamental news.

Corn continues to hold near the upper end of the $0.30 cent induced “Russian Rally.”  As a result I have been asked more than once lately if corn will go to $5? There are a lot of different scenarios to look at before anyone can begin to answer this question.

The South American harvest is rolling right along and Argentine corn will soon start placing more pressure on US exporters.  Traders continue to hear talk of China kicking US cargoes, while at the same time perhaps recently buying 2-3 cargoes of Ukraine corn.  This is making me a bit uncertain in regard to Chinese demand and therefore is prompting me to halt all sales and take a more “wait and see” approach.  It was originally thought the Chinese were flush with their own domestic corn and were simply kicking the US cargoes because they didn’t need the supply (not necessarily the GMO issue that they are using to allow the cancelations). Now all of a sudden the Chinese are bringing in corn from Ukraine.  Not that this is a major move or game changer, especially when you consider China has made huge investments in Ukraine infrastructure, and this could simply be part of the annual pay-back, but it is something to pay attention to.

From here on out I truly believe it will be ALL about “Mother Nature” and the US weather. If producers can get 80% of the estimated US corn acres in the ground by mid-May, the trade will breath a big sigh of relief, the USDA will more than likely raise their yield estimates a hair higher and price premium will start to be removed.  If on the other hand US spring weather proves to be difficult and less than 80% of the anticipated acres get planted by mid-May, the trade will get nervous and price could continue to push beyond it’s current levels. As a producer, I am comfortable being 50% sold/hedge rolling into the planting season.  From a spec perspective, the extremely cold soil temps in many US locations could make planting corn a real race against time, but at the same time the recent run up in price may encourage producers to plant more acres… Lots of rapidly changing moving parts to consider in the next 60-days. Be patient!