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Sunday, December 14, 2014

Ethanol Production Profits Dim as Gasoline Prices Plummet

by Scott Irwin & Darrel Good

The magnitude of the decline in crude oil and gasoline prices has taken nearly everyone by surprise. NYMEX nearby crude oil futures this week touched $60 per barrel, almost $50 less than peak prices last summer. This is a major economic event with potentially far-reaching impacts for biofuels markets. We examined some of these impacts in two recent farmdoc daily articles (November 12, 2014; December 4, 2014). Our conclusion was that current high ethanol prices relative to gasoline prices, as illustrated in Figure 1, might slow the growth in domestic ethanol consumption, but would not likely result in consumption that is less than the 10 percent blend wall. In contrast, the high price ratio may represent a threat to

Saturday, December 6, 2014

The Pace of Corn Consumption




Darrel Good, Ag Economist – University of Illinois

Now that the nation’s corn harvest is complete, traders have turned their full attention to the rate at which the crop is being used. Todd Gleason has more on the pace of corn consumption.

There are three primary uses for corn…

United Nations Declares 2015 the Year of Soils

International Year of Soils

The United Nations Food and Agriculture Organization has designated 2015 the International Year of Soils. The organization hopes to raise awareness of the need to protect productive soils around the planet. It has entrusted a Global Soil Partnership with this task. The partnership has five pillars of action.


The 5 pillars of action

The Global Soil Partnership will support the process leading to the adoption of sustainable development goals for soils.

It will contribute to environmental wellbeing through, for example, preventing soil erosion and degradation, reducing greenhouse gas emissions,

Thursday, December 4, 2014

Crude Oil Crash - Start Pricing Needs

Each Tuesday during the Closing Market Report we talk with an energy analyst. This week Growmark's Harry Cooney turned his attention to OPEC, the dramatic drop in the price of a barrel of crude oil, and what to do about pricing 2015 fuel needs. You may listen to the conversation here.

Friday, November 14, 2014

Farm Assets Conference Tickets Available Now



FARM ASSETS CONFERENCE
10:15am - 5:00pm November 24, 2014

Marriott Hotel & Conference Center
201 Broadway St, Normal, IL 61761

This is a new signature event for WILLAg.

The WILLAg Farm Assets Conference sponsored in part by the Farm Credit System hopes to provide farmers and landowners decision​making tools for their business assets. The $25 registration fee includes the noon meal. Those attending can expect to hear pricing information on agricultural commodities from WILLAg’s regular ON AIR experts, learn how the new farm bill might impact crop insurance decisions going forward, to effectively analyze and choose between the new federal ARC and PLC programs, and explore the value of farm land.

Friday, November 7, 2014

Corn & Soybean Commodity Distribution










A G R I C U L T U R E
University  of  Illinois

Todd E. Gleason, Farm Broadcaster
1301 W Gregory Dr, Rm75  MC710
College of Agricultural, Consumer & Environmental Sciences
Urbana, Illinois  61801

tgleason@illinois.edu
work (217) 333-9697





POPULATION NOTES

* 0001 - 200 million people on the planet

* 1800 - 1 billion people on the planet
   - 300 man hours to produce 100 bushels wheat from

Wednesday, October 29, 2014

Ag Census Mapping Tool Makes Data Visual

Every five years the United States Department of Agriculture takes a census. USDA NASS collects all kinds of data about farm production in the U.S.A. The agency has developed a tool to map this data. It is a way to visualize agricultural production, income, wealth distribution, management type, and the demographics of farmers. These three maps show the primary growing regions for corn, soybean, and wheat. The darkest green areas represent acres where the cropland is at least 45 percent sown to the crop listed. The corn belt is easy to see, and not that much of a surprise. However, the primary soybean growing regions of the nation are bit more diverse than you might expect and seem to follow the Mississippi Valley watershed from New Orleans to St. Louis, along the Ohio River Valley and the mighty Missouri River.

Thursday, October 23, 2014

How Many Corn Acres in 2015



If corn farmers want a break even price for their crop next year, they’ll need to plant fewer acres of it. Todd Gleason has more on how one ag economist has forward figured the number of corn acres needed in 2015 to push cash prices back above four dollars a bushels.

Monday, October 13, 2014

Store Corn for Higher Prices Later

The price of corn isn’t great if you are a farmer trying to sell it at a profit. However, the good news may be that prices later in this year and next are likely to get better.

Tuesday, October 7, 2014

Tuscola, Illinois - Small Town Big Impact



Today Tuscola, Illinois will announce it will be home to a new granular urea plant. It will be built by Cronus and employee nearly 200 on completion. The plant will provide farmers within a 150 mile radius a local source for nitrogen fertilizer.

The video included here was produced by the City of Tuscola to highlight its agricultural industrial complex.

Friday, September 26, 2014

USDA Finalizes Farm Program Rules

by Jonathan Coppess, Gary Schnitkey, Nick Paulson, and Carl Zulauf
University of Illinois College of ACES and The Ohio State University

Thursday, September 25, 2014, U.S. Secretary of Agriculture Tom Vilsack announced the regulations for the Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs created by the 2014 Farm Bill. Along with the regulation, Secretary Vilsack also announced the public release of the web-based decision tools that have been developed under cooperative agreements with the Farm Service Agency. This article provides more information on these items.
Background
The Agriculture Act of 2014 (the 2014 Farm Bill) revised the commodity support programs beginning with the 2014 crop year. Direct payments, counter-cyclical payments and the Average Crop Revenue Election payments were eliminated by this farm bill. In place of those support programs, three new programs were created for covered commodities or program crops. These programs are: Agriculture Risk Coverage, County Option (ARC-CO), Agriculture Risk Coverage, Individual Farm Coverage (ARC-IC), and Price Loss Coverage (PLC). The 2014 Farm Bill also provided one-time opportunities for farm owners to update the payment yields for the FSA farm and a one-time opportunity to reallocate the base acres among program crops planted on the FSA farm. Finally, the farm bill included funds for the development of web-based decision aids or tools that farmers, landowners and others could use to help sort through the program decisions required.

Discussion
The University of Illinois as the lead institution for a national coalition has worked under a cooperative agreement to develop the web-based decision tools. In addition to the web-based tools, the coalition has also created an online resource site affiliated with farmdoc and will be conducting outreach, education and training on the programs and the web-based tools. The following is an overview of the resources currently available.
(1) The Farm Bill Toolbox on farmdoc: a one-stop resource for all aspects of the farm bill program decisions, it is available here (or by entering the following web address: http://farmbilltoolbox.farmdoc.illinois.edu) provides a seven-step decision process or matrix to guide producers through the program decisions and use of the web-based tool. The Toolbox also provides one-page fact sheets and links to additional resources such as previously published articles and new articles on farm bill program issues and topics. Finally, the farmdoc team will be conducting weekly webinars explaining the programs, the web-based tool and analysis, as well as program and harvest updates. These webinars will be every Friday morning at 8:00 a.m. (CST) beginning September 26th and continuing through the end of October. Webinars will be archived and available for review. Additional webinars are also available in the archives. For registration, more information and archives please visit the Farm Bill Toolbox.
(2) The Agriculture Policy Analysis System (APAS): available here (or by entering the following web address: http://fsa.usapas.com) this web-based application provides the ability to calculate updated payment yields for the FSA farm, calculate reallocated base acres for the FSA farm and analyze, compare and understand the program choices (ARC-CO, ARC-IC and PLC/SCO). Program analysis and information is available in two forms. First, the Sample Farms button allows for a quick program comparison and analysis based on a data-generated sample farm for your state and county, both expected program payments and per-acre, crop-by-crop payments. Producers can also select the Build Your Own Farm (BYOF) option that will allow them to input their farm-specific information and run estimates of program payments. Both options also provide a "safety net" analysis using specific revenue targets and providing the probability of reaching those revenue targets under different program scenarios.
(3) Farm Service Agency: the APAS web-based tool is also available on the FSA website, along with detailed fact sheets and other related program information (available here or by entering the following web address: www.fsa.usda.gov/arc-plc).
FSA has not announced a final deadline for making the farm program decisions (payment yields, base acre reallocation and program election), but it is anticipated that the deadline will be sometime in 2015, maybe as late as March. Producers and landowners are encouraged to wait until later in the year or early next year. More information about prices and yields will be known at that time, allowing for a more informed, better decision. With many farmers already in the fields, or about to begin harvesting, there is no immediate action needed. There is time to learn more about the programs, use the web-based tools and understand the analysis before any decision will have to be made. Updates on deadlines and program decisions will be available on the Farm Bill Toolbox and through farmdoc daily.

Monday, September 15, 2014

USDA Updates Cash Rents by County

 

In recent weeks, two sources released cash rent information for Illinois. The U.S. Department of Agriculture released county average cash rents for 2014. The Illinois Society of Professional Farm Managers and Rural Appraisers released 2014 and expected 2015 cash rents for professionally managed farmland. Expected 2015 rents point to decreasing cash rent levels on professionally managed farmland. Whether or not other cash rents follow professionally managed cash rents down is an open question.

Average Cash Rents in Illinois

The National Agricultural Statistical Service (NASS) - an agency of the U.S. Department of Agriculture - released 2014 average rents per county on September 5, 2014. A number of counties do not have cash rents reported, likely because statistically reliable rents could not be obtained with survey responses.

As can be seen in Figure 1, there is a considerable range in cash rents across Illinois. Four counties had average cash rents over $300 per acre: Logan ($308 per acre), Piatt ($303 per acre), Sangamon ($302 per acre), and Ogle ($300 per acre). Except for Ogle County, these high-rent counties are located in central Illinois. The five counties with the lowest cash rents are Johnson ($80 per acre), Williamson County ($92 per acre), Perry ($106 per acre), Saline ($107 per acre), and Franklin ($108 per acre). These counties with the lowest cash rents are located in southern Illinois. Generally, average cash rent levels are related to productivity, with counties having more productive farmland have higher cash rents than those counties with less productive farmland (farmdoc daily, September 10, 2013).

figure1.jpg

Overall, 2014 average cash rents were higher in 2014 than 2013. According to NASS, the average rent in Illinois increased from $224 per acre in 2013 to $234 per acre in 2014, an increase of 5%. This continued a string of years of large increases. Since 2006, average state rents in Illinois have increased from $132 per acre in 2006 to $234 per acre in 2014, an increase over this eight year period of 77%.

Professional Cash Rents Levels

The Illinois Society of Professional Farm Managers and Rural Appraiser released results of its annual mid-year survey. This survey asked for 2014 and expected 2015 cash rents on professionally managed farmland. These rents, along with 2013 cash rents from a previous survey, are shown in Table 1. Average rent levels are shown for four classes of farmland productivity:

Excellent - expected corn yields are over 190 bushels per acre
Good - expected corn yields are between 170 and 190 bushels per acre,
Average - expected corn yields are between 150 and 170 bushels per acre, and
Fair - expected corn yields are below 150 bushels per acre.
table1.jpg

Average cash rents decreased between 2013 and 2014. For excellent quality farmland, cash rents decreased from $396 per acre to $374 per acre in 2014, a decrease of $14 per acre.

Decreases for professionally managed farmland stands in contrast to average cash rents, which increased from $224 per acre in 2013 to $234 per acre in 2014. Farm managers follow agricultural markets, likely much more closely than land owners without management. As a result, farm managers likely set rents closer to those suggested by market conditions. Cash rents on professionally managed farmland increased faster than average cash rents between 2006 and 2013, when returns rose as a result of higher prices. Now that prices have decreased from levels experienced during 2009 through 2013, farm managers are lowering cash rents. On farmland, not managed there may be considerably more lagged relationship between changes in returns and changes in rent levels.

On professionally managed farmland, cash rents likely will continue to decline into 2015. For all quality classes, Society members indicated that rents would be lower in 2015. For excellent quality farmland, for example, cash rents are projected to decrease from $374 per acre in 2014 to $338 per acre in 2014, a decrease of $36 per acre (see Table 1). If the decrease occurs, cash rents would decrease by about 10%.

There is a considerable range in cash rents for similar productivity farmland within a small geographical area, with some rents above the average by $100 and other rents below the average by $100. Below average cash rents could continue to increase to "catch up" with average levels. At the same time, above average cash rents could decrease, as indicated by results from the Illinois Society. These two forces could counter each other, leading to stable or maybe even increasing average cash rent levels.

Projections are for much lower returns in 2014 and 2015 return (farmdoc daily, July 8, 2014). Even with decreases in cash rents projected by the Illinois Society, farmer returns would be projected to decrease because returns have decreased more than cash rents.

Summary

Rents on professionally managed farmland could decrease in 2015. Other above average cash rents could decrease as well. However, below average cash rents may remain stable or increase. Overall, rent decreases likely will not cover decreases in lower returns projected for 2014 and 2015.

Setting Silage Chop for Best Digestion

Corn silage can make up to as much as thirty to forty percent of a dairy cow’s diet. So, it is really important to get it right. That starts in the field. See more on some University of Illinois work on harvesting silage.