The March 31 Grain Stocks Report

The reports USDA releases March 31 will set the tone of agricultural trade for three months in Chicago.



Once every quarter the National Agricultural Statistics Service takes a census of the available bushels of corn, soybeans, and wheat. It is called the Grain Stocks report. It is not exactly a survey, but rather more of an actual accounting, in his case of what’s stored in Illinois, says NASS State Statistician Mark Schleusener, “…to measure the whole supply of grains and oilseeds USDA NASS does on farm surveys. Those are done with producers to find out what they have in their grain storage bins. Off farm storage tallies bushels in the mills and the elevators using a census as of March 1. All commercial storage facilities are contacted”.

Nationwide more than 9000 commercial storage facilities are contacted for the census side of the Grain Stocks report. The survey side - that done with farmers - is sent to more than 80,000 producers with an 80 percent response rate. The goal is to get a very accurate accounting of the bushels available for use.

Where the bushels are stored changes across the season. December 1 it is stored on farm. Through the winter months these bushels slowly move to the elevators and mills and eventually, in the case of corn, the bushels are shipped down the river for export, or fed to livestock, or turned into ethanol. The bushels are used.

If you add what’s used to what’s left - the Grain Stocks number - the sum should be the total available supply for the year. However, tracking the middle usage number for corn - bushels fed to livestock - isn’t possible. That’s why USDA calls this number Feed & Residual. This season it is supposed to be 5.3 billion bushels. The question is how much of that 5.3 billion has already been consumed. There in lies the guess says University of Illinois Ag Economist Darrel Good.

Quote Summary - If the most recent pattern is being followed this year and USDA’s 5.3 billion bushel usage for the year is correct, then use for the first half the year should total 3.9 billion bushels with 1.7 of that used in the second quarter. If that is the case, the total use during the second quarter would have been 3.75 billion bushel and leave March 1 stocks at 7.45 billion.

On-the-other-hand, if the usage pattern is more like it was prior to 2010, there could be another 200 or 300 million bushels of corn accounted for in the Grain Stocks figure because it hasn’t yet been consumed. It will still be consistent with a 5.3 billion bushel usage figure for the year.

The Grain Stocks report for corn has a wide range then of acceptable figures from around 7.4 to 7.7 billion bushels. It makes the Grain Stocks number not so important, and puts a great deal more weight on the Prospective Plantings report to be released on the same date, March 31.

How Much Would a Corn Acre in 2015 Make

The ag economists at ILLINOIS have done an interesting exercise to see how much an acre of corn might gross in 2015. Or maybe it might be better explained as what would happen in 2015 if this year was like 1979.



Or what if it were like 2012, or 1983, or 1995, or just pick a year. The idea is to give farmers some hard data on how variable gross revenue from a corn acre is over time by moving that time into 2015. So that’s what U of I ag economists Gary Schnitkey did.

He wanted to look and see what gross revenues would be like for 2015 considering crop revenue, crop insurance, government payments, and price risk. The goal was to know under what conditions would a corn acre produce higher gross revenues this year?

The question then is, “In 2015 what would revenue be like this year if a year like 1972 happened?”.

"When we looked at it, 50% of the revenues were above and 50% of the revenues were below $825 per acre."

Schnitkey put those all into a table on the Farm Doc Daily website from 1972 to 2014. It shows how much of gross revenue would come from price x yield, crop insurance, and government payments.

At $825 most $300 an acre cash rented farms in central Illinois would lose money. Over the span of the years this would happen about 75% of the time and a big yield does not solve the problem - it takes higher prices from some other force. You may read the “Gross Revenues in 2015” article on the Farm Doc Daily website.

How USDA NASS Counts Acres

USDA has just wrapped up its survey of more than 80,000 U.S. farmers. The agency uses the information to develop the March 31st acreage forecast.

In the spring USDA’s National Agricultural Statistics Service division contacts farmers in hopes of learning how much of each crop they expect to plant. The agency contacts farmers across the United States. Corn and soybean farmers are of particular interest. This year more than 4000 Kansas farmers were tapped, along with around 3700 in Nebraska and about 3000 in each of the Dakotas, Iowa, and Illinois. Another 2000 farmers each were contacted in Indiana and Ohio.

Quote Summary - Our goal is to make sure we are measuring small, medium, and large farms. So, we use what’s called a stratified sample.

That’s NASS Illinois State Statistician Mark Schleusener.

Quote Summary - That is a fancy way of saying for the biggest farms, we are going to talk to all of them; for the large, but not biggest we will talk with one out of three of those and for the medium, maybe one out of ten; and for the smaller farms we might measure one out of twenty-five of those.

Each farmer surveyed is asked how many acres they operate. How much of that land they intend to plant to corn or soybeans, and how much might already be in wheat. They’re also asked about oats, sorghum, and hay. The response rate goal, and usually achievement, is an amazing eighty percent.

Quote Summary - Yes, our goal is an 80% response rate on all surveys and we use several methods of data collection. Every producer in the sample receives a letter with a planting intentions questionnaire. The letter also has instructions for reporting to a secure internet website. These are both inexpensive ways of gathering data. The people that do not respond will be called. If this doesn’t work then someone will make a farm visit for a face to face. Both these methods are more effective, in general, but also are more expensive.

The biggest problem NASS faces when taking the acreage survey is that farmers usually haven’t yet made all their planting decisions. The agency knows this and is satisfied with best estimates. The individual reports are confidential by law and the data collected is exempt from legal processes.

The data can be aggregated at the county, state, and national level. Computers flag any large acreage changes at the individual level so that an analyst can check for a data entry error or make a follow up call. The state statisticians review the total number of crop acres for any major changes - total crop acres generally remain constant - and then submit the estimates in an encrypted file to USDA NASS in Washington, D.C. There more analysis is done and the final report is produced for release March 31.

Cold Weather Maintenance Diets for Dairy Calves

Feeding a heifer dairy calf properly during cold weather can mean up to 1500 extra pounds of milk during her first lactation period. Todd Gleason has more on the increased cold weather maintenance diet that results in such a gain.

You can get more milk from a cow if you treat it right as a calf says University of Illinois Dairy Specialist Phil Cardoso. This is especially the case if those calves are fed a proper maintenance diet during periods of cooler (not necessarily cold) weather when they are very young.

Quote Summary - The maintenance diet supplies all the energy needed for the development of the immune system, for growth, and for the calf to live. There is a thermal neutral zone in which the calves nutritional needs are flat, outside of this zone it needs more energy to generate more heat the winter or to cool down in the summer. During the winter the calf needs to generate energy to heat themselves.

The temperature at which additional feed is needed to keep the calf operating at a maintenance level for growth isn’t so low. It starts at 59 degrees fahrenheit. To this end ILLINOIS uses a simple table to guide dairy farmers in how much extra milk replacer a young calf would need when it is cold stressed. The table has temperatures on one side of the graph and the calf’s weight on the other.

The supplemental energy is provided by the standard 20 percent fat / 20 percent crude protein milk replacer. An example of how the table works would be to find the weight of the calf, say 110 pounds, and the temperature outside. If it is 50 degrees the calf needs four quarts of milk replacer. If it is colder, 41 degrees, it would take 4.26 quarts.

The colder it gets the more milk replacer the calf needs in its regular maintenance diet, at least if the goal is to achieve an extra 1500 pounds of milk once the calf becomes a cow. Those wanting to view the easy to use University of Illinois dairy calf maintenance diet table will find it on the Dairy Focus website.

The Next Mile Post for Soybeans & the Crush

Farmers and the trade are very concerned the price of soybeans will fade over the next six months.

There are a couple of mile posts indicators most will be watching as it relates to the production of soybeans. University of Illinois Ag Economist John Newton says the next one up is the Prospective Plantings report due March 31st from the United States of Department of Agriculture.

Quote Summary - The Prospective Plantings report is a big one. It will give us an idea of how many acres of soybeans U.S. farmers expect to sow this spring. I’m also going to continue to watch the domestic soybean crush and U.S. soybean exports. The nation is on pace to export a record volume this year and USDA maintains this number will increase next year. This would be back to back record soybean export years and certainly worth monitoring. Can the world consume soybeans and the current level? If this is possible, then that should provide some price floor, even some positive price pressure from where we are today.

Exports are reported weekly by USDA and starting in August the ag department will begin reporting the soybean crush totals monthly. The agency is picking up and tweaking a discontinued Census Bureau report.

Quote Summary - The monthly numbers will aid the trade in monitoring the pace of the domestic soybean crush. Another item to keep in mind is the importance of the RFS (Renewable Fuel Standards). It may, at some point, cause soybeans to be crushed for oil. This would have implications for soybean meal and soybean meal prices and this may offset corn fed in the residual balance sheets. These are all things to watch. Some are long run and some are short run; the pace of consumption and soybean crush being the two short run things I’m watching.

You may read more from the University of Illinois ag economists on the Farm Doc Daily website. A new article is posted there each business day of the year.

Soybeans + Numbers

Those listening to the markets every day know there is a big difference between the number of acres the trade thinks will be planted to soybeans and the number of acres USDA is so far projecting. These aren’t as far apart as you might think and there may even be some positive wiggle room in them.



The trade has long thought U.S. farmers will plant about 86 million acres of soybeans. USDA thinks they’ll plant 83 and half million. Because USDA is using

Pork's Boom & Bust Price Pattern

Markets can take your breath away and the hog market over the past year has left many breathless says one Purdue University ag economist.



A year-ago in March, the new PED virus was

Estimated 2014 ARC County Payments

Farmers throughout the nation are deciding which of the new farm programs to take. Another piece of that puzzle was put into place when USDA released the county wide corn and soybean yields late last month. These can be used to estimate some of the 2014 farm program payments.



County wide yields as calculated by USDA's National Agricultural Statistics Service along with the estimated season's average cash price - the marketing year average - can be used to forward figure 2014 ARC County payments. It is possible therefore to know

Farm Bill Sign Up Extended

USDA has extended the deadline to update base acres and yields under the new farm bill until March 31st. The original deadline for landowners to make initial decisions related to the new farm safety net was Friday February 27, 2015.

U.S. Secretary of Agriculture Tom Vilsack made the announcement saying it is an important decision for producers, because the programs provide financial protection against unexpected changes in the marketplace.

The Secretary says USDA is working to ensure landowners and farmers have the time, the information, and opportunity to review their data, and to visit the Farm Service Agency to make solid informed farm bill decisions.

If no changes are made to yield history or base acres by March 31, 2015, the farm’s current yield and base will be used. A program choice of ARC or PLC coverage also must be made by that same date or there will be no 2014 payments for the farm and the farm will default to PLC coverage through the 2018 crop year.

2015 USDA Agricultural Outlook Forum

Last week the United States Department of Agriculture presented its view of the commodity markets.



Thursday USDA Acting Chief Economist Robert Johansson made a presentation on the current agricultural landscape during the 2015 USDA Agricultural Outlook Forum. Interestingly, he set the tone by showing how commodity prices have been trending downward for more than 60 years.

Yield Exclusion and Crop Insurance

When farmers go to their federal crop insurance agents in March they may have a new decision to make. The new Yield Exclusion option may allow some producers to increase their covered yields.

U.S. Soybean Production Prospects for 2015

There are lot of soybeans in the world. Last fall U.S. farmers harvested a record crop, and their counterparts in South America are doing the same right now.

Farm Program Sign Up Deadlines & Decision Aids

Farm Program Sign Up Deadlines & Decision Aids
Jonathan Coppess, Ag Law & Policy Specialist - University of Illinois

Time is running out for landowners and farmers to decide what to do about the new farm programs. They have until the end of February to make the first two decisions, and must make a final choice by March 31st. Todd Gleason reports on the decision aids available on the University of Illinois Farm Doc Daily website.

FarmDocDaily is hosted by the ag economists…
2:51

FarmDocDaily is hosted by the ag economist at a the U of I, including Ag Policy Specialist Jonathan Coppess. The home page includes a link to something called the Farm Bill Toolbox. There you’ll find decision tools, and a brand new link under Resources named Farm Program Decision Guide.

Coppess :18 …it is all right there.

Quote Summary - It is just a PDF file available on the website. It is something to take home with you, to go to your landlord with, to sit down with your brothers and dad over family discussions with about what your are going to do (about the farm program). It is all right there.

Right there in an easy to download, print out, and use file. It in includes the deadlines - February 27th to make the first two decisions about payment yields and base acre allocation, and March 31st for the final program choice. All of which must be recorded at the local F-S-A office, the Farm Service Agency. The first two decisions, the ones due Feb 27th, should be pretty easy for row crop farmers. Take the highest yields and use the base acre allocation with the most corn acres.

Coppess :25 …if landowners aren’t getting in there soon.

Quote Summary - There is no reason to delay those decisions because the program choice follows on March 31st. It is the one where farmers will want to know a little more about the 2014 county yields. Still, the payment yields and base acre decisions should be made now, otherwise, there will be some long lines at the FSA office if landowners don’t get to the office soon.

The county yields, as released by USDA NASS this month, will help determine how much the ARC County payment will be for last fall’s crop. Once those are released, it will be easier to compare ARC County to the other two farm programs, ARC Individual and PLC.

Coppess :47 …in order to trigger a payment.

Quote Summary - The county yields will determine the ARC County payment. The final number won’t be calculated until the Market Year Average Price is released next fall. Still, it will be the indicator used to calculate and trigger the 2014 ARC County payments.

Knowing the approximate 2014 ARC County payment should help farmers make a final farm program choice. It is important to remember the choice is a five year decision not a one year commitment. The online Farm Bill ToolBox walks producers through seven steps in hopes they’ll make an informed choice.

Finer Ground Corn More Digestible

Finer Ground Corn More Digestible
Hans Stein, Swine Nutritionist - University of Illinois

An animal nutritionist at the University of Illinois has quantified the importance of particle size in ground feed for hogs.




Grinding corn to finer particle sizes can increase its feed efficiency by up to five percent says Hans Stein.

They don’t gain any more, but they eat less to gain the same. Pigs adjust their energy intake. It means there is more available energy in corn when it is ground finer. The pigs eat less, the feed conversion is improved, and it takes fewer pounds of feed to produce a market weight hog.

Stein is a swine nutritionist at the University of Illinois. He investigated the affect of different particle sizes of ground corn when fed to pigs. The corn was ground to 800, 600, 400, and 300 microns.

We discovered amino acid and phosphorous digestibility does not change with particle size. Pigs are very efficient in digesting those nutrients, but when it came to starch we found a linear increase in digestibility as we reduced the particle size of corn. The highest digestibility was with the lowest particle size of corn.

This is because more starch is digested in the pig’s small intestine, causing more glucose to be absorbed and therefore increasing the amount of available energy.

The energy in the corn grain increased as we reduced particle size. A pig will get more energy out of one pound of corn if it is ground to 300 microns instead of 800 microns.

This is were the savings come in to play. The feed conversion rate improves by about one-point-two percent for every 100 micron reduction in particle size, saving seven pounds of corn to finish a pig.

Or producers wanting to formulate diets to a prescribed amount of energy could reduce fat in the ration. Fat is usually used to add more energy, but corn ground to a smaller particle size could replace it. The pigs should perform the same using corn ground to a smaller particle size.

There are a couple of negatives to the smaller grind. The feed doesn’t flow nearly so well and there is an increased risk of stomach ulcers. The ILLINOIS nutritionist says hog producers should try smaller grinds over time, ratcheting down a hundred microns every couple of months. Rations with higher fiber contents will be most successful at the lower particle sizes.

Crude Oil Jumps Off the Lows

Crude Oil Jumps Off the Lows
Harry Cooney, Growmark Energies Specialist - Bloomington, Illinois

The price of crude oil has rallied off it’s lows. Todd Gleason has more on the reasons why.

The cost of a barrel of crude oil has dropped… 1:51

The cost of a barrel of crude oil has dropped dramatically since last June. Back then the price was more the $100 per barrel. It dropped to nearly $44 a barrel earlier this year and has now begun to make a sharp turn higher. There are series of reasons for the rally says Bloomington based energies specialist for Growmark Harry Cooney.

Quote Summary - There has been a steelworkers strike at some of the refineries. This has caused some concerned. The rig counts have also declined. This number indicates how many oil wells are operational and the trade, which focuses on future supply, thinks the supply may peak out and then start to decline.

However, it is important to remember says Harry Cooney crude oil started its price decline at around $107.00 a barrel. It is very unlikely the oil rig count contraction taking place now will greatly constrain supply. Still Cooney has been advising end users, like farmers that purchase gasoline and diesel in bulk, to lock in the price of their 2015 needs.

Quote Summary - The end users see these values, values they haven’t seen for four or five years, as an opportunity to lock in the price of fuel even though they’re above the recent lows. The price of fuel, unlike other inputs on the farm, has decreased more rapidly in percentage terms.

Nitrogen fertilizer, for instance, has yet to drop in price.

Beef Expansion Is Underway

Beef Expansion Is Underway
Chris Hurt, Extension Ag Economist - Purdue University

The nation’s cattle producers are expanding the herd and they’re doing it at a somewhat faster rate than had been anticipated.

USDA, in the semi-annual update of cattle numbers, calculates the total number of cattle and calves has increased by a bit more than one percent. It is the first increase in the cattle inventory since 2007. The industry suffered high feed prices and poor pasture conditions in the Southern Plains over the intervening years. 2014 provided a series of reasons to change course says Purdue University Extension Ag Economist Chris Hurt.

Quote Summary - There were multiple incentives to expand in 2014. These were led by record high cattle prices, with finished cattle averaging near $155 per live hundredweight and Oklahoma 500–550 pound steer calves averaging $250 per hundred. The other part of the incentive was more abundant feed due to a retreating drought in the Central and Southern Plains that restored range conditions and to favorable feed crop production in 2013 and 2014 which lowered corn and protein feed costs.

The most significant expansion is underway in the beef herd where beef cow numbers are up two percent from year-ago levels. The number of beef heifers being held back to enter the breeding herd is up four percent. Significantly, the number of those retained heifers that will calve this year is up seven percent. This means 61 percent of the beef heifers that have been retained to enter the breeding herd were already bred at the start of this year. The 2014 beef cow herd expansion, thinks Hurt, is likely the beginning of a multi-year increase.

Quote Summary - It is common for the beef herd to be in expansion for four to six years. With 2014 registering as the first year of expansion, expansion could continue through most of this decade. If so, peak beef production on this cycle would not be expected until early in the next decade.

Beef supplies, however for this year, will not change much. This might lead one to anticipate prices to be near the $155 finished cattle price of 2014. However, 2014 was an exceptional year, and meat prices in general this year may be lower explains Chris Hurt. Currently, futures markets are heavily discounting cash cattle prices, suggesting 2015 average finished cattle prices in the higher $140’s. However, he expects finished cattle prices to average $150 to $157 in 2015, with prices in early spring in upper $150s and the lower $160’s and then to fall to near $150 in summer and then to end the year in the mid-$150s.

Using the APAS Sample Farm

Using the APAS Sample Farm
Jonathan Coppess, Ag Policy Specialist - University of Illinois

Farmers and landowners wanting to learn more about the new farm programs and the sign up process can visit the Farm Bill Toolbox online. It was developed by the ag economists at the University of Illinois and Ohio State. Just search Google for Farm Bill Toolbox and you’ll find a seven step decision making process. There is also a link from the Farm Bill Toolbox to USDA’s APAS (ay-pass) website.

APAS stands for Agricultural Policy Analysis System. Jonathan Coppess from the University of Illinois says the two systems are related to each other.

Quote Summary - The way we look at it is that the APAS site gives you the chance to calculate expected payments and the Farm Bill Toolbox is the education outreach and analysis. So, you may use the two in an interrelated way. In fact we often make presentations using both, jumping back and forth from the APAS Tools to the Decision Steps.

The seven Decision Steps in the Farm Bill Toolbox guide farmers and landowners through the sign up process. The APAS Tool allows them to put their own farm numbers into the programs to see how different scenarios would work over the project five year life of the new farm safety net. Those wanting a quick view can simply use a sample farm from their own county - no matter where they live in the nation.

Quote Summary - The sample farmers are very usually friendly way to get an idea what program payments might be expected in your county. You simply choose your state and county, and a projected price series - one from USDA, one from the Congressional Budget Office, or the or the FAPRI numbers - and APAS simulates a farm sized at about $500,000 in gross revenue. The models use historical values from the county and estimates payments for a farm of that size.

The APAS sample farm is a quick way to benchmark, says Coppess, the new farm programs and how they might perform in a given county under varying price scenarios and program choices. APAS estimates farm payments based on crop, price, and program choice.

Those wanting to use the APAS Tools and the Farm Bill Toolbox can find each online.

Signing Up for the Farm Programs

The time to sign up for the farm programs has arrived. Decisions will need to be made in February and January. Read on for a quick lesson in the process, and then please visit the Farm Bill Toolbox website created by the ag economists at the University of Illinois. Landowners and farmers should find the seven step decision process in the toolbox very valuable as an aid to making the new farm program choices.

The deadline for making two of the three farm program choices is the end of February. University of Illinois Ag Economists Gary Schnitkey, Jonathan Coppess, & Nick Paulson along with The Ohio State’s Carl Zulauf penned an article about the acreage allocation and yield update decisions. It follows;

Base Acre and Yield Updating Decisions: Push to the Finish
The deadline for completing base acre and yield updating decisions is February 27th (see steps 2 and 3 of “7 Steps” on Farm Bill Toolbox). Choosing between alternatives for each of these decisions is relatively straight forward:

1) For yield updating, select the highest yield for each program crop.

2) For base acre reallocation, choose the allocation that maximizes acres in program crops with the highest payments, given that the desire is to maximize program payments.

While the decisions usually are straightforward, collecting the information and completing the process will take some time. For this reason, beginning the process now seems prudent.

Landowners Officially Make the Decisions
Decisions will be made for each Farm Service Agency (FSA) farm. For each farm, there will be a landowner who owns the farm. Under rental arrangement, there also will be a producer who farms the land.

Landowners are responsible for making the base acre reallocation and yield updating decisions. While the landowner officially makes the decisions, in many rental situations producers have the proper power of attorneys to complete paperwork for these decisions. FSA has a record of whether proper power of attorneys exists for each farm. If an appropriate power of attorney does not exist and the landowner wishes the producer to complete the process, a power of attorney will need to be signed for farmers or farm managers to complete the decisions. If a power of attorney does not exist, the landowner will need to complete the process for base acre and yield updating decisions.

Collect Yield Data
If program yields are to be updated, yields are required for each year the crop was planted from 2008 through 2012. Documentation is not required at signup. However, documentation will be required if the FSA farm is audited during the life of the Farm Bill. The method of documentation will need to be indicated at signup. In many cases, crop insurance records will be used to provide documentation. These records are the actual yearly yields used to calculate Actual Production History (APH) yields. An explanation of using crop insurance records for documentation is available here (farmdocdaily December 23, 2014).

It will not be uncommon that documentation for a yield will not exist for a year. For example, a producer may have only farmed the land in 2010 through 2012 and cannot obtain documentation for 2008 and 2009.

If a yield is provided without documentation under an audit, farm program payments may have to be repaid and a fine could result. When yield documentation does not exist, a plug yield will need to be used. The plug yield equals 75% of the county average. When documentation cannot be provided, the plug yield should be used for 2008 and 2009

Plug yields for each county and crop are publicly available. FSA has this information. They can be obtained from the Payment Yield Update tool on the APAS website. The plug yields also are contained in the Base Acre and Yield Updating tool, a Microsoft FAST spreadsheet available for download at the FAST website.

Yields can be reported to FSA using CCC–859. This form is available here.

Make an Appointment with FSA
An appointment should be made immediately with FSA. If possible, yields for updating should be completed before this meeting. Bringing completed CCC–859 forms will facility the signup process.

Yield Updating Decision
Two alternatives for the program yield will exist for each program crop (see farmdocdaily April 3, 2014 for more detail):

• The current program yield. These yields were reported for each FSA farm in a letter received from FSA in August 2014.
• The updated yield equal to 90% of the average of yields from 2008 through 2012. If a year’s actual yield is below the plug yield, the plug yield will be used instead of the actual yield. If an actual yield does not exist for a year in which the crop was planted, the plug yield will be used in the update yield calculation.

Choose the highest yield. The decision can differ by crop for an FSA farm.

Base Acre Reallocation Decision
There are total base acres on each FSA farm. Landowner will be given two alternatives for dividing those total base acres into acres for each program crop (see farmdocdaily March 6, 2014 for more detail):

• Current allocation of base acres on the farm. These acres were sent to landowners and producers in a letter received in August 2014.
• Reallocated base acres. Total base acres are reallocated based on plantings from 2009 through 2012. Actual plantings were described in a letter received in August 2014. Total base acres under reallocation will equal base acres if current base acres are retained.

This decision is important as Price Loss Coverage (PLC) and Agricultural Risk Coverage at the county level (ARC-CO) will make payments in 2014 through 2018 on base acres. Planted acres in those years will not influence payments.

Many individuals will wish to make the allocation that maximizes commodity program payments, suggesting that the allocation be selected that places most acres in the crops with the highest expected payments. Estimating expected payments by crop requires forecast of prices and yields in 2014 through 2018. Obviously, forecasts can be wrong and crop rankings can vary from forecast rankings. With the knowledge of potential differences, estimated expected payments per program crop by county are available in the sample farms section of APAS. These same estimates also are available in the Base Acre and Yield Updating tool (available at the FAST website).

Users can see expected payment per program crop under different price forecasts for individual counties. In most counties, however, the following ranking exists:

• Corn will have higher expected payment
• Wheat will have lower expected payments than corn
• Soybean will have lower expected payments than corn and wheat.

Corn and soybeans are only program crop: Given the above program crop ranking, choosing the acre alternative with the most corn acres likely will maximize program payments.

As an example take a farm whose current allocation is 60 acres of corn and 40 acres of soybeans. The reallocation alternative based on 2009 through 2012 plantings is 75 acres of corn and 25 acres of soybeans. Note that both alternatives total 100 total base acres. The above ranking suggests that the reallocated alternative (75 acres of corn and 25 acres of soybeans) will have the highest expected payments.

Corn, soybeans, and wheat are the program crops: When these three program crops exist, the reallocation with the lowest acres in soybeans while maximizing corn acres usually will result in the highest expected payments. Use of the Base Acre and Yield Updating Tool is advisable in these cases.

Summary
In many cases, making choices for base acre reallocation and yield updating will be relatively straightforward. Collecting yields, getting the proper power of attorneys, and signing proper election forms will take time. Beginning the process now is important. The process needs to be completed by February 27, 2015.

2015 ADAO Schedule

All-Day Ag Outlook Meeting Schedule
March 10, 2014 - Beef House
16501 Indiana 63
Covington, Indiana 47932

Registration
8:45am eastern / 7:45am central

Opening Remarks
9:25am eastern / 8:25am central

Cash Grain Panel
9:30am eastern / 8:30am central
Greg Johnson, The Andersons - Champaign, Illinois
Aaron Curtis, MIDCO - Bloomington, Illinois
Matt Bennett, Channel Seeds - Windsor, Illinois
Chuck Shelby, Risk Management Commodities - Lafayette, Indiana

Land Values 2015
10:15am eastern / 9:15am central
Murray Wise, CEO Murray Wise Associates - Champaign, Illinois

Break (20 min)

Livestock 2015
11:05am eastern / 10:05am central
Chris Hurt, Purdue University - West Lafayette, Indiana

Futures 2015
11:35am eastern / 10:35am central
Sue Martin, Ag and Investment Services - Webster City, Iowa

Lunch and Trade Show
12:20pm eastern / 11:20am central

Soybean Commodity Panel
1:30pm eastern / 12:30pm central
Curt Kimmel, Bates Commodities - Normal, Illinois
Wayne Nelson, L&M Commodities - New Market, Indiana
Mike Zuzolo, Global Commodity Analytics & Consulting - Atchison, Kansas
Bill Mayer, Strategic Farm Marketing - Champaign, Illinois

Corn Panel
2:15pm eastern / 1:15pm central
Dan Zwicker, CGB Enterprises - Mandeville, Louisiana
Pete Manhart, Bates Commodities - Normal, Illinois
Jacquie Voeks, Stewart Peterson Group - Champaign, Illinois
Bill Gentry, Risk Management Commodities - Lafayette, Indiana

Reviewing the Pace of Corn & Soybean Exports

Following the January 12 USDA Crop Production and Grain Stocks reports it has becoming increasingly clear that the story in the corn and soybean markets for the foreseeable future will be the ongoing pace of consumption.



Consumption of corn produced in the United States can be tallied as corn for used for ethanol, fed to livestock, or exported. The soybean consumption numbers are derived from an item called the crush… that’s when a soybean facility crushes the bean to extract the oil and meal from it. There is also the feed and residual number, and again exports. University of Illinois Ag Economist John Newton has explored the export numbers.

He says, holding all else constant, a lower rate of corn and soybean exports relative to current USDA projections would increase carryover stocks, and could produce downward pressure on prices. USDA, as of the January reports, expects corn exports will be 1.75 billion or 1750 million bushels for the current marketing year. Newton also says right now the actual numbers suggest corn exports will need to pick up to make it to seventeen-fifty.

With nearly 40 percent of the marketing year in the books, corn exports need to accelerate in order to reach the 1,750 million bushel WASDE projection. Based on the implied GATS estimate of 602 million bushels, 1,148 million bushels need to be exported during the remainder of the marketing year to reach the WASDE projection. On a weekly basis this total represents approximately 37 million bushels per week, and would require an increase of 57 percent over the current 10-week average export volume.

Again, in order to meet the USDA projected yearly exports total of 1.750 billion bushels the pace of corn exports needs to average 37 million bushels per week from mid-January forward. Using a similar set of calculations John Newton reports cumulative soybean exports for the 2014/15 marketing year total 1.312 billion bushels, up 18 percent from last year.

Based on the FGIS totals, then, to reach the 1,770 million bushel WASDE projection it’s implied that 458 million bushels of soybeans need to be exported during the remainder of the marketing year. On a weekly basis this total represents approximately 15 million bushels per week.

While corn exports are accelerating, the pace of soybean exports from U.S. ports is slowing down. Combining the outstanding sales with the remaining balance needed, Newton expects sales could come up 42 million bushels short of the WASDE projection. He thinks soybean exports will struggle to meet the lofty 1.77 billion bushel USDA estimate, but that it is entirely possible.

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.

The Ethanol to Gasoline Relationship

The plummeting price of gasoline has caused a dramatic change in the relationship between the price of corn and the price of gasoline. However, this means little for how much ethanol will be produced and consumed.

Farmers May Not Benefit from Bumper Crops

Corn and soybean farmers harvested a bumper crop in 2014 — a record 14.2 billion bushels of corn and a record 3.97 billion bushels of soybeans, according to the U.S. Department of Agriculture. Here & Now’s Jeremy Hobson spoke with Chad Hart, an agricultural economist at Iowa State University, about what the record crop means for the farmers’ revenue, since they’re selling the crops at a lower price.

Here & Now airs during the noon hour on WILL AM580.

WILLAg All Day Ag Outlook March 10th

The March 10th meeting includes a continental breakfast and Beef House Lunch all for just $25 per ticket.

Riding the Feeder Cattle Roller Coaster

by Paul Peterson - University of Illinois

Futures prices were limit-down for 5 days in a row in mid-December 2014, the most limit-move days in a livestock contract since the BSE (mad cow) selloff in December 2003. Daily price limits in feeder cattle futures were increased from 3 cents per pound ($3/cwt) to 4½ cents per pound ($4.50/cwt), with provisions for additional expansions if needed; complete details are presented here.

For the 22 trading days in December 2014, the January 2015 feeder cattle futures contract had 10 days with price moves up or down of 3 cents per pound or more. And on the first trading day of January 2015, prices closed limit-up at the new 4½ cent daily limit, starting out the New Year with a bang (Figure 1). In contrast, February 2015 live cattle futures have had just 2 limit days (both down) since December 1, and February 2015 hog futures have had none.

So why have feeder cattle prices been so volatile lately? It helps to think about feeder cattle prices as the "shock absorber" between fed cattle prices on one end, and corn prices on the other. When buying feeder cattle, feedlots look at the gross feeding margin, which is

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,

RFS2 Set to Ramp up Biodiesel Usage

U.S. EPA has stalled the release of the annual usage mandates for bio fuels in the United States. These are due out each November, but neither the 2014 or 2015 figures have been released. EPA says it will put forth new numbers next spring. In the meantime, it might be important to consider just how using the default numbers would play out for the production of ethanol and biodiesel.



The United States congress set renewable fuels mandates a few years ago. It also gave U.S. EPA the power to adjust those mandates. EPA hasn’t done so for the 2014 calendar year, or for 2015. We’ll dispose of the political baggage and simply focus on the results of using the default statutes written into the law.

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

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…

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.

WILLAg Farm Assets Outlook Panel Discussions

Old Iron Plowing Fever

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.

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

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.

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.

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.

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.

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 26^th 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.

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.

ILLINOIS' Carl Bradley on SDS & White Mold in Soybean

Some farmers like to see a little SDS because it occurs more often in high yield years for soybeans.

…anecdotal

Conserving Soil & Protecting Water - it's kinda what we do...

Post by Todd E. Gleason.

Farm Program Decision & WILLAg Outlook Panels Scheduled

Book your WILLAg event today for this fall or winter. We'll be glad to work with you to set up a WILLAg Panel of analysts to discuss the commodity markets, arrange for University of Illinois campus based agricultural specialists in economics, crops, or livestock, or simply to come speak to your group or organization. Contact Todd Gleason for complete details.

Todd E. Gleason, Farm Broadcaster
College of ACES / Univesity of Illinois Extension
tgleason@illinois.edu or (217) 333-9697

Click on an event for complete details...

 

August Corn Estimates

Pro Farmer Midwest Crop Tour results are plotted here against the United States Department of Agriculture National Agricultural Statistic Service corn yield projections and the Pro Farmer Newsletter estimates. USDA NASS estimates are as of August 1, 2014 and the Pro Farmer crop tour yields were taken the week beginning Monday August 18. The Pro Farmer estimates were made August 22, 2014.

The final Pro Farmer Midwest Crop Tour estimates tallied corn and soybean yields across seven Midwestern states stretching through the primary corn growing counties in the United States. The tour is watched closely by those in the grain and oilseed trade. However, it should be noted USDA gathers much more objective and survey based information about the size of U.S. crops. 

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2014 Midwest Pro Farmer Tour Results

Corn        Soybean      State

182.11     1342.42       Ohio
185.03     1220.79       Indiana
196.96     1299.17       Illinois
178.75     1173.59       Iowa
163.77     1103.26       Nebraska
170.76     1031.54       Minnesota
152.71     1057.80       South Dakota

ARC-CO and PLC Payment Indicator Using August WASDE U.S. Yield and Price

by Carl Zulauf, The Ohio State University & Gary Schnitkey, University of Illinois

The 2014 farm bill gives Farm Service Agency (FSA) farm owners the option to choose their crop program for the 2014 through 2018 crop years. A factor, perhaps key factor that will influence this decision is the payment by the program choices for the 2014 crop year. This article uses the just released U.S. yield and price estimates in the August 2014 World Agricultural Supply and Demand Estimates (WASDE) to calculate an indicator of potential payments by the Agriculture Revenue Coverage - county program (ARC-CO) and the Price Loss Coverage (PLC) program. The indicator estimates are for the 2014 crop year for barley, corn, oats, long grain rice, medium (and short) grain rice, sorghum, soybeans, and wheat.  These are indicator estimates because they use U.S. yield not county yield or farm payment yield, as ARC-CO and PLC use, respectively.  AR-CO payments, for example, will vary across counties, with some counties having no payments due to high yields and some counties having large payments due to low yields.  Thus, this article is not estimating payments that an individual FSA farm owner would receive.  Nevertheless, the indicator estimates using U.S. yields should help frame questions and perspectives for FSA farm owners regarding program choices.

Calculation of Estimated Program Payments

ARC-CO makes payments when county revenue for the crop year is less than 86% of the county's benchmark revenue.  ARC-CO pays when actual revenue is between 76% and 86% of benchmark revenue.  PLC makes payments when the U.S. crop year average price is less than the crop's reference price.  The reference price is

Ag Economist Darrel Good Discusses August USDA Reports

Four Items of Interest for the Week of August 10, 2014

U of I Agronomy Day Thursday

A note for the weekend with four items from Todd Gleason ACES / Extension / WILLAg.

1. Check out WILLAg's Commodity Week! I tried an experimental format and would like to know what you think. Panelist included Matt Bennett, Jacquie Voeks, & Mike Zuzolo. Shoot me an email with your thoughts - tgleason@illinois.edu.
2. Watch your email for WILLAg's Crop Production & WASDE Newsletter special from Dave Dickey. The reports are due out from USDA at 11am central Tuesday.
3. Thursday is Agronomy Day on the University of Illinois campus in Urbana-Champaign. Todd will emcee the day on the south farms just east of the State Farm Center (the Assembly Hall) on St. Mary's road. See details a bit further down.
4. Thursday night kicks off the fall WILLAg Outlook Panel schedule in Shelbyville. The details are slow coming in on that one, but check out this webpage Monday for the finalized event.

Todd Gleason

tgleason@illinois.edu

(217) 333-9697

twitter @commodityweek

http://www.willag.org     

http://m.willag.org     

http://www.narrowrow.com

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Thursday August 14, 2014 - 7am-Noon

Explore the latest breakthroughs in agriculture and technology with researchers and Extension specialists from the University of Illinois this Thursday at the University of Illinois south farms research plots. The day starts at 7am just to the east of the State Farm Center (Assembly Hall) on St. Mary's Road. Each tour lasts about an hour, so please come early if you plan to take all four tours. Field tours depart from the St. Mary's location, making stops at

Would You Eat GMO Sweetcorn

Post by Todd E. Gleason.

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.