Notes from the Illinois Soybean Summit | Rockford Edition

This morning, March 11th, DTN Progressive Farmer meteorologist Bryce Anderson told farmers at the Illinois Soybean Summit weather would cap this year’s potential yields. Todd Gleason is emceeing the event, and asked Anderson if he means it is unlikely for yields to be better than USDA’s trendline.

The Senior Grains Analyst for Farm Futures Magazine was also at the summit. Bryce Knorr told the group to reward market rallies.

The Illinois Soybean Summit took place Friday March 11, 2016 in Rockford.

Consumption Pace of Corn & Soybeans

FarmDocDaily Article

The price for corn has traded in a 25 cent range over the last two months. The price of soybeans has mostly traded within a 40 cent range. Todd Gleason explores this sideways pattern and how the pace of consumption has contributed the stable, if low, price structure.



The sideways price pattern reflects on-going expectations of adequate supplies of both crops writes Darrel Good on the FarmDocDaily website. He says there is plenty to meet consumption needs during the current marketing

Tillage Practices Vary Across the United States

USDA ERS, Washington, D.C. -

 

No-till and strip-till are two of many tillage methods farmers use to plant crops. In a no-till system, farmers plant directly into the undisturbed residue of the previous crop without tillage, except for nutrient injection; in a strip-till system, only a narrow strip is tilled where row crops are planted. These tillage practices contribute to improving soil health, and reduce net greenhouse gas emissions. During 2010-11, about 23 percent of land in corn, cotton, soybeans, and wheat was on a farm where no-till/strip-till was used on every acre (full adopters). Another 33 percent of acreage in these crops was located on farms where a mix of no-till, strip-till, and other tillage practices were used on only some acres (partial adopters). In the Prairie Gateway, Northern Great Plains, and Heartland regions—which account for 72 percent of corn, soybean, wheat, and cotton acreage—more than half of these crop acres were on farms that used no-till/strip-till to some extent. Partial adopters have the equipment and expertise, at least for some crops, to use no-till/strip-till; these farmers may be well positioned to expand these practices to a larger share of cropland acreage. This chart is from the ERS report, Conservation-Practice Adoption Rates Vary Widely by Crop and Region, December 2015. 

Issues Stemming from January USDA Report

The final 2014 crop production numbers delivered by USDA in the January reports leave three issue unresolved.

The three problems, as identified by University of Illinois Ag Economist Darrel Good, center on the number of corn and soybean acres planted, the surprisingly small amount of corn used in the first three months of the marketing year, and the surprisingly large number of soybeans consumed in that same timeframe.

The difference between the total number of planted acres USDA NASS has reported over time and those officially reported by farmers to FSA , USDA’s Farm Service Agency, has grown. The number of acres planted to wheat, corn, and soybeans as tallied by USDA NASS has steadily grown larger than the number of acres farmers are telling FSA they’ve sown. USDA has not offered an explanation. The difference in 2014 is nearly 9.3 million acres over the three crops says Darrel Good.

He says the changing relationship between NASS acreage estimates and acreage reported to FSA may make early FSA reports less useful in anticipating NASS final acreage estimates.

The second issue is related to how much corn was used in the months of September, October, and November. Those are the first three months of the marketing year. USDA totals 4.25 billion bushels of disappearance of which feed and residual use accounted for 2.198 billion. This number is a 114 million bushels lower than the usage in the same period last year after it was revised down. The problem says the U of I number cruncher is that over time the range of usage represented in the first quarter figure as compared to total usage for the year has gotten wider.

First quarter use is no longer a reliable forecaster of total marketing year consumption. It means a lot of uncertainty will persist in the marketplace about how much corn is being fed to livestock.

The numbers do get better as time passes during the marketing year. The expectation is the March 31 Grain Stocks report will be more accurate.

The third issue with the January USDA figures is also in the consumption numbers. The implied residual disappearance of soybeans in the first quarter set a record. This might mean the size of the 2014 soybean crop was over estimated.

While this is an issue it will not be resolved for several months with some insight coming from the March Grain Stocks report.

Time will eventually fix all three issues, but it is important to recognize them and the potential changes these may bring to the commodity markets.

WILLAg Farm Assets Outlook Panel Discussions

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.

USDA says ARC/PLC Sign Up Winter 2015

Friday the United States Department of Agriculture Farm Service Agency made a series of announcements related to the new farm programs' signup period. Farmers will make final irrevocable decisions between the ARC & PLC programs sometime after January 1, 2015.

timeline posted to USDA FSA website August 1, 2014

Letters are in the mail this month notifying farm operators of current base acres and yields, along with 2009-2012 planting histories. The letter asks these numbers be confirmed or updated as the first part of the sign up process. 

Online tools are under development at the University of Illinois to aid producers throughout the nation. Those tools may be ready by the official end of summer (September 22, 2014), but have not yet been released.

The following note was posted the USDA FSA website August 1, 2014;

WASHINGTON, Aug. 1, 2014 — U.S. Department of Agriculture (USDA) Farm Service Agency (FSA) Administrator Juan M. Garcia announced today that farmers should start receiving notices updating them on their current base acres, yields and 2009-2012 planting history. The written updates are an important part of preparing agricultural producers for the new safety net programs established by the 2014 Farm Bill.

“We’re sending these reports to make sure that farmers and ranchers have key information as they make critical decisions about programs that impact their livelihood,” said Garcia. “It’s important that producers take a few minutes to cross check the information they receive with their own farm records. If the information is correct, no further action is needed at this time. But if our letter is incomplete or incorrect, producers need to contact their local FSA county office as soon as possible.”

Verifying the accuracy of data on a farm’s acreage history is an important step for producers enrolling in the upcoming Agriculture Risk Coverage (ARC) program and the Price Loss Coverage (PLC) program. Later this summer, farmers and ranchers will have an opportunity to update their crop yield information and reallocate base acres.

“We’re working hard to prepare and educate farmers on the new programs created by the 2014 Farm Bill,” added Garcia. “I encourage producers to bring their USDA notice to any scheduled appointments with the local FSA county office. This will help ensure they have the information they need with them to discuss the available program options.”

By mid-winter all producers on a farm will be required to make a one-time, unanimous and irrevocable election between price protection and county revenue protection or individual revenue protection for 2014-2018 crop years. Producers can expect to sign contracts for ARC or PLC for the 2014 and 2015 crop years in early 2015.

Covered commodities include barley, canola, large and small chickpeas, corn, crambe, flaxseed, grain sorghum, lentils, mustard seed, oats, peanuts, dry peas, rapeseed, long grain rice, medium grain rice (includes short grain rice and temperate japonica rice), safflower seed, sesame, soybeans, sunflower seed, and wheat. Upland cotton is no longer a covered commodity.

It is True – 20% of the Farms Produce Most of the Value

The 2012 Census of Agriculture hold many unique facts. Researchers at the University of Illinois have been digging through the numbers to find some plumbs. Todd Gleason reports it seems an old adage is borne out by the figures.

There were about 75 thousand farms in Illinois when the 2012 Census of Agriculture was taken by the United Stated Department of Agriculture. The census, by two different measures – acreage operated & value of production – suggests the majority of Illinois farms are small by either categorization. However, there are two interesting facts that flow with these categorizations. The smaller the farm the more likely it is to produce livestock of less total value, and the larger the farm the more likely it is to produce crops – mostly grains and oilseeds - of much greater value.

The Census of Agriculture defines a farm as any place from which $1,000 or more of agricultural products were produced and sold, or normally would have been sold, during the reference year. The Census classifies each farm's production specialization based on the North American Industry Classification System (NAICS). A "Livestock" farm is

Will Crop Insurance Make Payments in 2014?

by Gary Schnitkey, University of Illinois

In Illinois, crop insurance payments on corn likely will be lower in 2014 than in 2012 and 2013. Crop insurance payments in 2014 likely will not be large for soybeans. For both corn and soybeans, harvest prices will be lower than projected prices. However, above average yields likely will counter price decreases, leading to low crop insurance payments. Somewhat ironically, crop insurance payments likely will be lower in 2014 than in 2012 and 2013. At the same time, revenue and returns will be much lower in 2014 than in 2012 and 2013.

Product Choices of Farmers

In this article, focus is placed on revenue insurance products at high coverage levels, as most farmers purchase these products. The four revenue products available in