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Nov 18 | WILLAg Newsletter

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November 18, 2018

This Tuesday you are invited to Normal, Illinois for the Farm Assets Conference. I’ve seen parts of the presentations that will be made and fully expect this to be an impactful event. The tickets are $40. Our doors open at 9:30am at the Marriott Hotel and Conference Center. If you arrive by 8am the Illinois Corn Growers Association will provide you with breakfast and you may attend their annual meeting prior to the Farm Assets Conference.

purchase your ticket by noon Monday
http://www.farmassetsconference.com

I’ve been traveling the last couple of weeks and thought you might find these three articles from the farmdocDaily website interesting.

Todd
Financial and Risk Management Decisions for 2019What to Expect from USMCA (or NAFTA 1.01)Nitrogen Loss Reduction Practices: What Do They Cost?Financial and Risk Management Decisions for 2019
Gary Schnitkey and Krista Swanson
Department of Agricultural and Consumer Economics
University of Illinois

With planning for next yea…

2018 Farm Assets Conference

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November 3, 2018

Dear Subscriber,

I hope your harvest season has gone well. As it winds down please consider making a trek to Normal, Illinois for the 2018 Farm Assets Conference. This is a pivotal year for agriculture. Things from this point forward will be different. Changes are coming rapidly. We’re going to address some of the possibilities.

Please come and listen. Please come and ask questions. Personally, I use these events as learning experiences to help tailor the daily WILLAg radio programming. It is a direct reaction to the questions you ask.

The cost is only $40 and we’ve put together a fantastic agenda. Do scroll down to find out more. The 2018 Farm Assets Conference is in Normal, Illinois at the Marriott Hotel and Conference Center on November 20th. Our doors open at 9:30am. The Illinois Corn Growers Association annual meeting precedes it at 8:00am.

buy your tickets now

Todd E. Gleason, Farm Broadcaster
University of Illinois Extension | WILLAg.org
tgleason@illinois.edu or …

WANL181031

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October 31, 2018
Market Facilitation Payments Program a Go for DecemberHow will the 2019 Acreage Mix ChangeUnwinding New Era Crop Acreage and Prices


Register for the Farm Assets Conference today. The cost is just $40 and includes the price of parking and your noon meal. Come to learn more about how large corporations like Anheuser Busch and McDonald’s are reaching all the way through the supply chain to tap farmers on the shoulder looking for production practices and seed characteristics which meet their needs. It is likely to change how commodity crops are marketed over the next decade. The CME Group, ADM, Cargill, Bunge, and Louis Dreyfus are already preparing for this eventuality. However, might it be possible the middleman in the system will become a distribution system rather than the marketing arm? We’ll explore these concepts during the 2018 Farm Assets Conference.

Register Online today or by calling 800–898–1065

Click here to see the full agenda or scroll to the bottom of this …

Corn and Soybean Acreage Prospects for 2019

As US farmers finish the fall harvest, considerable speculation will occur over the next few months about the acreage decisions they’ll make for 2019. Todd Gleason discusses how current market conditions support an acreage increase next year for corn and a reduction for soybeans with University of Illinois agricultural economist Todd Hubbs.farmdocDaily article
by Todd Hubbs, University of IllinoisProspects for 2019 crop acreage levels begin with expectations about planted acreage for principal crops. In 2018, acreage planted in principal field crops expanded to 322 million acres, up 2.9 million acres from the previous year. A large share of increased acreage came from an expansion of spring wheat acreage by 2.18 million acres, cotton acreage by 1.4 million acres, and hay acreage by 1.28 million acres. Corn and soybean acreage decreased by 1.03 and .997 million acres respectively. Illinois increased planted acreage by 188,000 acres like most of the primary Corn Belt states. A significa…

Take a Good Hard Look at Selling Soybeans

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The price of soybeans rallied out of the October USDA Crop Production report. This is because it showed fewer acres of the crop would be harvested this season. University of Illinois analyst Todd Hubbs thinks the upside potential is limited, “I don’t know if this thing is sustainable. It doesn’t feel that way to me. Moving through the rest of the harvest year and towards the start of 2019, I think we are going to have to see some kind of production issues in the South American crop or if China breaks and doesn’t hold out completely on taking U.S. soybeans before we see a sustained upward movement. I think the upside potential is limited.”

Limited because, even if this year’s crop is hurt some by the poor harvest conditions so far it will remain a record breaker. Right now USDA has it at 4.7 billion bushels. There are plenty of soybeans in the world. That makes it a buyers market and price is going to depend a whole lot upon how many U.S soybeans can be exported says Hubbs, “Basically…

A Good Year for Pumpkins

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This year’s pumpkin crop is the best in the last two decades. That means there will be plenty of jack-o-lanterns for Halloween and lots of pie filling for Thanksgiving.When the pumpkin crop in Illinois is big that means the whole nation can celebrate fall says Mohammad Babadoost from the Univeristy of Illinois, “We are number one in both of them, jack-o-lantern and processing pumpkins. Far, far ahead of any other state.” More than 90% of the pumpkin pie filling sold in the United States comes from two processing plants located near Peoria, Illinois. This year the pumpkins feeding into those plants are yielding a record breaking 27 tons per acre. The average is about 23. This is pretty amazing given that a plant disease nearly wiped out the whole industry in the state a couple of decades ago. Babadoost is naturally proud of his University of Illinois work to salvage the industry from the disease and he continues to work with farmers today to provide them crop production and protection …

Reviewing Prices and Market Facilitation Payments

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read farmdocDaily article



As the trade conflict with China continues, prices for many agricultural commodities remain relatively low. Illinois corn and soybean prices dipped to new lows in September, coinciding with the latest rounds of tariffs.



The difference between selling an entire crop at spring forward bid prices compared to the September average cash prices makes a substantial difference in income on an average central Illinois grain farm.



University of Illinois Agricultural Economist Gary Schnitkey reviews how this plays out on a 1700 acre corn and soybean farm in Illinois this year, and what the prospects look like for next year.

Trump Admin Still Has Some Biofuels Work to Do

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Last Tuesday President Donald Trump made a campaign trip to Council Bluffs, Iowa. There he told a very excited crowd his administration would be backing corn farmers and ethanol. The President leaned into the mic and gave corn farmers a little insider news they’ve been clamoring to hear since U.S. EPA pronounced gasoline blended with 15 percent ethanol would be ok to use in all cars made since 2001, “We are a little bit early. I shouldn’t say it now, but we are going with E15 year-round.” Mr. Trump is a little early. Today E15 can be used about 9 months out of the year in much of the nation. During those other three months, the summer months, it has been prohibited. U.S. EPA will need to write some rules about how to make the year-round use happen. Those will need to be approved, and clearly the oil industry will mount court challenges. If all goes well more corn will be used to make ethanol for E15, but it won’t make a difference in the balance sheets for corn says University of Illi…

Expected E15 Announcement No Big Deal

President Trump at his Council Bluffs, Iowa rally Tuesday is expected to announce a waiver to allow year-round use of gasoline blended with 15% ethanol (E15). Todd Gleason reports it may make little difference in how much corn is used to make ethanol.

2019 Illinois Crop Budgets are Dismal

The numbers look bad for Illinois grain farmers next year. That’s the only conclusion Gary Schnitkey can draw when he puts the costs up against the incomes for corn and soybeans in 2019. Schnitkey, an ag economist at the Univesity of Illinois, says fuel and fertilizer costs are expected to go up. Prices aren’t and that’s the dismal part says Schnitkey, “Probably the one thing that has changed relative to recent years is that corn is expected to be more profitable than soybeans. Again, that is largely due to our use of $3.60 for a 2019 corn price and $8.50 for soybeans. This switches the profitability around. That’s driven by trade concerns, particularly with China and what that has done to commodity prices.”Here’s an example of the bottom line for next year’s budget. A northern Illinois farmer might expect to have $174 to split between the farmer and the landowner for corn and $143 for soybeans. This return is considerably below the cost of cash rent and roughly, says Schnitkey, near …

Turner Hall Transformation | the smart classroom

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Six years after more than 100 alumni, faculty, students, and friends of Illinois gathered to kick-off a 5 million dollar fundraising campaign, the University of Illinois Turner Hall transformation has been completed. 1964 ag sciences grad William Kirk and his wife, Lillian, made a $500,000 donation to seed the project.

Phase I of the Turner Hall Project transformed the crop science and soil science laboratories into 21st-century learning environments. Undergraduate courses are taught in these two labs. Donors also funded a two-story renovation of the west lobby. In total, Phase I renovated 7136 square feet. These renovated spaces allow for active learning, utilizing new technologies. The Dow AgroSciences Crop Sciences Laboratory and the Monsanto Soil Science Laboratory welcomed students for the first time in fall 2015.



Phase II construction began in 2017 and will conclude in 2018. This 38,377 square foot, three-floor renovation will fully transform classrooms on the first and second f…

New Lab Dedicated to Commodity Crop Bioprocessing

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The market for commodity crops processed into new products is expected to more than double in the next six years to some 490 billion dollars. The IBRL building on the Univesity of Illinois campus in Urbana-Champaign is investing in the future of these agricultural innovations.

The last week of September a new building was dedicated on the University of Illinois campus in Urbana-Champaign. The Integrated Bioprocessing Research Laboratory is designed to bridge the gap between discovery and commercialization. IBRL’s director, Vijay Singh, says every year some 250 invention disclosures are filed at the University of Illinois. Most are never commercialized because there isn’t a proof of concept facility to scale up new ways to process ethanol or other agricultural biofuels.



The labs in IBRL, Singh says, will do just that, “This facility is also a link joining academia with business development. With plug and play utilities and flexible equipment offerings, IBRL is agile enough to serve a v…

2019 Crop Budgets Suggest Dismal Corn and Soybean Returns

Even with cost-cutting and savings measures, University of Illinois Agricultural Economist Gary Schnitkey says, for the moment, it seems unlikely farmers will have positive returns on rented farmland in 2019. Todd Gleason has more…

Small Refinery Exemptions and Ethanol Demand Destruction

farmdocDaily articleThere is widespread interest in whether small refinery exemptions (SREs) under the RFS have “destroyed” demand for ethanol in the physical market. Todd Gleason discusses the point with University of Illinois agricultural economist Scott Irwin.

Trump Trade Policy Crashes Soybean Basis

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China, the number one destination for all U.S. soybeans, has stopped buying because of the President’s trade policies. Normally those bushels would be exported via the PNW (the Pacific Northwest) grain export terminals. That gate has closed says NDSU’s Frayne Olson and now all those bushels are expected to try and move through the other export gate at the Port of New Orleans.

Olson says “The challenge we have in the soybean market is that the basis levels are trying to choke off the inflow of grain. Local basis is all about what’s the inflow rate versus the outflow rate. The problem is our out-flow rate is very slow. So, the local basis level is going to continue to fall until it chokes off that inflow and where that magic number depends upon where you are.”

If you look at a fall 2018 map of soybean prices across the United State you can see how grain flow is backing up into the St. Louis export terminals. The PNW can handle about 25 train loads of soybeans a day. St. Louis can manag…

Soybean Exports since the Onset of Tariffs

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by Todd Hubbs, University of Illinois

The evolving developments with tariffs between the U.S. and China continue to influence the outlook for soybean prices. The relationship between U.S. and competitor export prices along with the changing nature of trade flows merit monitoring during the 2018–19 marketing year.



The implementation of tariffs on Chinese goods and the subsequent retaliation led to an adjustment of trade flows in world soybean markets over the last few months. As the tariffs, went into effect, a price gap opened between Brazilian and U.S. export prices. The gap continuously widened when comparing an index of soybean prices at the port of Paranagua and New Orleans prices since early June.


This chart illustrates how the price of U.S. soybeans for export at the port of New Orleans has dropped below the price of Brazil sourced soybeans from the port of Paranagua since June of 2018.

The gap reached its broadest level late last week at approximately $1.90 per bushel differenc…

Selling Soybeans Across the Scale

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This fall farmers will harvest a record sized soybean crop. USDA says about 4.7 billion bushels. They’ll need a home and farmers in North Dakota are really worried. About 2/3rds of their crop is shipped by rail to the Pacific Northwest for export to China. The Trump administration trade policies have mostly closed that market says North Dakota Senator Heidi Heitkamp, “What I would tell you is not only have you disrupted the markets and we have taken a haircut, you may not be able to sell them which is something I’ve been talking about for a long time.” Heitkamp was speaking to farmers in Fargo at the Big Iron farm show this week.

The cash price of soybeans has tumbled across the whole of the Midwest and some elevators are telling farmers not to bring their beans to town. Those soybeans from the Dakota’s and Minnesota are going to try and find another way out of the country. That’s probably through St. Louis and down the Mississippi River. It’s a brutal cash price situation that back…

Market Mitigation Signup | an interview with Gary Schnitkey

Sign up for the trade and tariff compensation package from the United State Department of Agriculture is open. Todd Gleason has more on how and when farmers and landlords should fill out the paperwork.

Marketing Corn & Soybeans this Fall

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The dramatic fall in the price of corn and soybeans earlier in the year has put farmers in a unique marketing position. They must decide how much of the drop is due to the expected bumper crop size of the harvest and how much comes from the Trump Administration trade policies. University of Illinois Agricultural Economist Todd Hubbs says determining when those disputes might be settled is key to making good marketing decisions.

Great Corn Grind, but Ethanol Stocks are Building

Dan O’Brien from Kansas State University discusses the state of ethanol production and stocks. While grind has been tremendous, stocks are building, and plant profitability looks to be near breakeven.

2018 Cash Rents were up $5/acre in Illinois

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University of Illinois Agricultural Economist Gary Schnitkey discusses the surprise $5 an acre cash rent increase seen in the state wide 2018 survey numbers and how farm economics look going into the 2019 growing season.

by USDA NASS
see the 2018 USDA Land Values Survey

Agricultural Land Values Highlights

The United States farm real estate value, a measurement of the value of all land and buildings on farms, averaged $3,140 per acre for 2018, up $60 per acre (1.9 percent) from 2017 values.


Regional changes in the average value of farm real estate ranged from an 8.3 percent increase in the Southern Plains region to 1.4 percent decrease in the Northern Plains region. The highest farm real estate values were in the Corn Belt region at $6,430 per acre. The Mountain region had the lowest farm real estate value at $1,140 per acre.


The United States cropland value averaged $4,130 per acre, an increase of $40 per acre from the previous year. In the Southern Plains region, the average cropland …

AirScout Precision Agriculture Startup

A startup on the south end of the University of Illinois campus is using thermal imaging to help precision agriculture become prescription agriculture. Todd Gleason has more on how AirScout is helping farmers take advantage of their precision-guided equipment.

The Trump Administration, Ethanol, & the RFS

During a U.S. Senate hearing, Acting EPA Administrator Andrew Wheeler answered questions about ethanol, biofuels, the RFS, and small refinery waivers. He appears to be holding the same line Scott Pruitt took during his time at the helm of the agency with some notable differences.

Breeding Barley to Make Budweiser

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You might think of Anheuser Busch as a beverage company producing great American beers like Budweiser. However, as Todd Gleason reports from Idaho Falls, Idaho, it is a highly integrated agricultural company.

Trade Tariff Farmer Compensation Package

The Trump Administration’s has a $12 billion dollar plan to compensate farmers for damages done so far by the trade dispute with China and other nations. Here’s what’s known, so far, about how the plan will work.The largest part of that money will be paid out to soybean producers, though direct payments will also be made for other commodities including corn, wheat, sorghum, cotton, dairy, and pork. USDA Chief Economist Rob Johansson told reporters on the line the initial damage calculation has already been made, “We’ve calculated what the damage is to producers facing these illegal tariff actions. We are working out the specific details and will be working it out as a rule making action in a couple of weeks and that will have our estimated rates. As the Secretary mentioned, this will be playing out over time and we do look to allowing for the Administration to successfully negotiate a deal here with our trading partners. And so, the program will be flexible to allow that.” Again, Joha…

A R C vs P L C | #farmbill18

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The farmdocDaily team has written an article projecting future farm safety-net payments. Unless the conference committee members change ARC-Co (ark-county) dramatically, most corn farmers will choose P-L-C this time around.



excepts from the farmdocDaily article
by Gary Schnitkey, Jonathan Coppess, Nick Paulson, & Carl Zulauf

The House and Senate have respectively passed their versions of a 2018 Farm Bill. Now a conference committee will attempt to work out the differences. Both include the Agricultural Risk Coverage at the County Level (ARC-CO) and Price Loss Coverage (PLC) farm safety net programs first made available in the 2014 bill. The House version eliminates a third program— ARC at the individual farm level (ARC-IC) — while the Senate leaves it in.

ARC-CO pays when county revenue (county yield x marketing year average price) is below a revenue guarantee. The revenue guarantee equals .86 times a benchmark yield times a benchmark price. Benchmark yields and benchmark prices ar…

Jul 23 | USDA Weekly Crop Progress Reports

Around the nation, USDA reports 81% of the corn crop is silking. The rolling 5yr-avg is 62%. 18% of the crop has entered the dough stage, the 5yr-avg is 8%. The corn crop is in slightly better condition than last week as is the soybean crop. It now stands at 70% good or excellent with 44% of the crop setting pods. The 5yr-avg is about half that amount. Winter wheat harvest is 80% complete.

A Commodity Markets Interview with Todd Hubbs

The commodity markets seemed to have found a bottom for the moment. Todd Gleason has more on what may be next with University of Illinois Agricultural Economist Todd Hubbs.

July WASDE to Reflect Tariffs

This Thursday’s USDA’s monthly supply and demand estimates will include the impact of the Trump Administration’s tariffs. Gary Crawford talks with the chair of the World Agricultural Outlook Board Seth Meyer about the July WASDE. The report is scheduled for release at 11 a.m. central time Thursday, July 12, 2018.

When Farmers Should Spray for Japanese Beetles

Japanese beetles are showing up in corn and soybean fields. These can do enough damage to cause yield losses, but it is fairly unlikely. The University of Illinois has published thresholds for when farmers should spray crops to protect them from the Japanese beetle. Nick Seiter says there needs to be a lot of beetles and a whole lot damage done before a producer should spend money on a rescue treatment, “Most of the reports that I am getting, as you would expect and as is typical, are below the treatment thresholds. These are 25 percent defoliation after bloom and 35 percent before bloom for soybean and the threshold for silk clipping in corn is consistent clipping to half-an-inch or less regularly throughout the field. I had a question yesterday about what to do when you have both Japanese beetles and corn rootworm clipping silks in the field. The answer is the same, the clipping has to be down to half-an-inch or less consistently through the field while pollination is still ongoing.…

China Tells Farmers To Grow More Soybeans

U.S. House Passes Farm Bill Legislation

The U.S. House of Representatives passed farm bill legislation late Thursday, June 21, 2018. Before its passage, I asked @ACESIllinois Jonathan Coppess how the vote might go, what the bill contains, and how it compares to the Senate’s version of the legislation.

Nothing to do about Seedling Diseases in Soybean

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Soybean seed treatments aren’t working at the moment and there’s nothing a farmer can do.



If you drive around much you’ll have noted some drown out areas in soybean fields, probably across the whole of the corn belt. Those are pretty easy to spot, but there are some areas that look like they’ve not been underwater - at least not for very long, if at all. They’re wilted back and showing signs of seedling diseases says University of Illinois Extension Plant Pathologist Nathan Kleczewski, "You must remember these soybeans have been in the ground for 30 or 40 days and seed treatments are going to only give us two to three weeks of protection.

Under perfect conditions your are going to see about three weeks of protection says the researcher, and we’re well past that point now. Kleczewski says while it is unusual at this point in the season, the Plant Clinic at the University of Illinois has been getting in samples of treated soybeans that are clearly suffering from seedling diseases, …