RFS Matters for Biodiesel

Soon the United States Environmental Protection Agency should release its annual update to the Renewable Fuel Standard mandates. This year’s RFS is really important to the biodiesel industry.

More often than not when the federal government’s Renewable Fuel Standard is discussed people are thinking about corn based ethanol or other feedstocks that can produce ethanol. However, when U.S. EPA finally releases the RFS mandates - supposedly sometime this month - it may be the biodiesel industry that pays the most attention.

Quote - The industry for which the RFS is really a life or death matter is biodiesel.

That’s University of Illinois Ag Economist Scott Irwin. Biodiesel, by-the-way, is mostly produced from soybean oil.

Quote Summary - Because if the EPA would choose to go back to the RFS statutory level mandates, at least for a few years in the short run, it would launch - likely - the biggest boom in biodiesel’s history. But, if they choose to stay on the path of the proposals from 2013 it would cut the knees out from under the industry. The biodiesel industry is waiting on the edge to find out what happens.

This edge made the industry unhappy with the federal government earlier this year when it opened the door for biodiesel imported from Argentina to qualify as an advanced biofuel under the U.S. RFS mandates. Scott Irwin sees this move far more favorably the industry.

Quote Summary - I favor the position that EPA is likely to move the mandate levels back up near or to the statutory levels this year, or at least by 2016. This would necessitate a tremendous boom in biodiesel production. It would be more than current U.S. production capacity. So, one view of the Argentine biodiesel announcement is that it is a precursor of the statutory requirements and related documentation of enough registered biodiesel both inside and outside the United States to fill the mandates.

It may be, then, that the January announcement allowing Argentine biodiesel to qualify as an advanced biofuel in the United States sets the stage for U.S. EPA to follow the letter of the law as written by congress. It is not possible to do so without additional gallons of advanced fuel from some source.

2014 Loss Experience for Revenue Protection Products

by Gary Schnitkey

Most of the 2014 insurance payments on COMBO products have been entered into Risk Management Agency’s Summary of Business, allowing us to calculate loss performance for individual products accurately. This article describes loss performance for Revenue Protection (RP), a revenue insurance plan used to insure most acres in the United States.



Corn, soybeans, and wheat had loss ratios of 1.04, .54, and 1.12, respectively. Loss ratios were above 1.0 in many counties of Iowa and Minnesota for corn and soybeans. Counties in the southern Great Plains had loss ratios above 1.0 for wheat. In Illinois, RP loss ratios were .40 for corn and .24 for soybeans.

Corn

In 2014, RP was used to insure 69.9 million acres of corn in the United States, representing 88% of total acres insured with crop insurance. Total premium on RP products was $3,350 million and total crop insurance payments were $3,484 million, giving a loss ratio of 1.04 ($3,484 in losses divided by $3,350 in total premium). A loss ratio above 1.0 means that insurance payments exceeded premiums. Over time, average loss ratios should equal near 1.0. On a per insured acre, insurance payments equaled $49.86 per acre (see Table 1).

Loss experience varied tremendously across states. For the eleven states with the most insured acres, RP’s loss rate was the highest for Minnesota at 3.01 and the lowest for Missouri at .11 (see Table 1). Iowa had a loss ratio of 2.21 while Illinois had a .40 loss ratio.

For Midwest states, the 2014 projected price was $4.62 per bushel while the harvest price was $3.49 per bushel. The harvest price was 75% of the projected price, meaning that coverage levels of 80% and 85% would have crop insurance prices if the actual yield did not exceed the guarantee yield. While much of the country had above average corn yields, there were areas of the country where yields were at or below guarantee yields. These areas included northern and central Iowa, Minnesota, and Wisconsin. As a result, RP products had high loss ratios in these areas, as illustrated in Figure 1 which shows RP loss ratio by county (see Figure 1). In most other areas of the country, loss ratios were well below 1.0. As one would expect, loss ratios were higher in areas with lower relative yields.

Soybeans

In 2014, RP was used to insure 65.2 million acres of soybeans in the United States, representing 88% of total acres insured with crop insurance. Total premiums were $2,092 million and total payments were $1,126 million (see Table 2). Total payments were far less than total premiums resulting in a loss ratio of .54. Since 2008, loss ratios for soybeans across all policies have not exceeded 1.00. On a per insured acre basis, insurance payments equaled $17.27 per acre.

Loss experience for soybeans had less range than those for corn. For the eleven states with the most insured acres, RP’s loss ratio was the highest for Minnesota at 1.25 and the lowest for South Dakota at .18. Iowa had a loss ratio of 1.07 while Illinois has a .24 loss ratio.

For Midwest states, the 2014 projected price was $11.36 per bushel while the harvest price was $9.65 per bushel. The harvest price was 85% of the projected price. Even at an 85% coverage level, farmers had to have actual yields below guarantee yields before insurance payments were made.
Most counties across the United States had loss ratios well below 1 (see Figure 2). Areas with loss ratios above 1.00 included counties in northern and central Iowa, Minnesota, northern Wisconsin, and some counties in Michigan, and New York.

Wheat

In 2014, RP was used to insured 40.8 million acres of wheat, representing 85% of total acres insured with crop insurance. Total premiums were $1,330 million and total payments were $1,490. The loss ratio was 1.12 and payments averaged $36.60 per insured acre.

Figure 3 shows a map of county loss ratios for wheat RP polices. As can be seen, many counties in Texas, Oklahoma, and Kansas had loss ratios above 1.00. Many farms in this area had low yields. Other areas of payments occurred in Washington, Wisconsin, Illinois, and along the Mississippi Delta. Large areas with low loss ratios include Montana, North Dakota, South Dakota, Virginia, North Carolina, and South Carolina.

Summary

Lower prices for corn and soybeans resulted in RP payments for corn and soybeans. These payments were made in northern and central Iowa and Minnesota. Because of above average yields, loss ratios were low in most of Illinois, Indiana, and Ohio.

LINK to FarmDocDaily Article: 2014 Loss Experience for Revenue Protection on Corn, Soybeans, and Wheat

More Hogs than Expected

The USDA March Hogs and Pigs report did little to help explain why numbers were high, other than to simply admit that hog inventory counts from previous surveys were too low.



Pork supplies in the first quarter of 2015 were expected to rise one percent. In reality, first quarter pork production was up five percent. This is because they were 4.5 percent more hogs that weighed about a half percent more than their year earlier counterparts. More hogs at heavier weights has pushed prices down says Chris Hurt, and that’s not the end of it.

Quote Summary - There is an even more price depressing force coming to the market as the number of hogs coming to market in the most recent four weeks has remarkably been ten percent higher than year-ago levels. Higher than expected current numbers may mean that the breeding herd expansion is larger than USDA surveys have indicated and/or that PED death losses were smaller than producers reported to USDA.

If there has been an undercount of animals, the possibility remains says Chris Hurt for higher market numbers than anticipated for the rest of the year.

As a result of the higher actual marketings in the first quarter, USDA revised last summer’s pig crop upward by nearly three percent. As always, “the proof is in the pudding” meaning that if actual winter slaughter is higher than accounted for by last summer’s pig crop, last summer’s pig crop has to be revised upward. USDA did this by increasing the estimated number of farrowings. Hurt has been wondering, based on USDA’s numbers, if the breeding herd has been expanded.

While USDA raised the size of last summer’s farrowings, the size of the breeding herd was not increased. This still leaves unanswered the question of whether the breeding herd is actually higher, which would indicate that the breeding herd has expanded more rapidly than indicated by USDA survey numbers. If the breeding herd has expanded more rapidly than future animal numbers may also be higher than indicated by the USDA counts.

More pigs coming to market in the first quarter than expected must have come from a larger breeding herd thinks Hurt. He says current marketing numbers have been averaging ten percent higher. If the marketing herd is larger, then marketing numbers could continue to surprise the market on the high side and hog prices will stay depressed.

April WASDE Big for Corn

The March 31 USDA reports resolved some questions for the corn market, but left a couple of items hanging. The April 9 supply and demand tables will give the report some true balance.



Most traders saw last week’s USDA reports as a bad sign for the price of corn. The acreage figure was on the high end of trade expectations and the grain stocks number appears to show a slower than estimated pace of consumption. University of Illinois Ag Economist Darrel Good has a different take.

Quote Summary - Taken at face value the corn stocks number implies less feed and residual usage during the first half of the marketing year than the trade expected. It is about 69 percent of USDA’s projection for the year, 5.3 billion bushels. Over the last four years the first half feed use has been 74 percent and if the market assumes the actual uses is factually 74 percent then the 5.3 billion is not reachable.

However, Darrel Good goes on, if you look at the history prior to the past four years, which he considers anomalous, first half feed usage averaged something between 65 and 68 percent - not 74 percent .

Quote Summary - If we are on that path this year, then 5.3 billion bushels is still reachable, and we might do even more given the expansion in livestock numbers. Broiler numbers are up 3 to 4 percent. The winter pig crop is 7 percent larger than last year. It mens core feed demand should be very robust the last half of the marketing year.

Clearly says the ILLINOIS ag economist the market did not interpret USDA’s Grain Stocks report in this fashion. It, he says, likely expects the April 9 WASDE estimates to show a lower feed usage number and consequently an increase in the year ending stocks for corn.

Quote Summary - Personally, I wouldn’t be surprised if the WASDE number is a bit lower in the April report. They may come down 100 million bushels on the feed and residual use projection and put all of that into the projected year ending stocks number. I think that is the way the market is leaning. Unfortunately, we won’t get another real read on that until we get the June Grain Stocks report three months from now.

Between now and then the trade will mostly forget about old crop corn feed usage as it concentrates more energy on divining how the 2015 corn harvest will affect the price of corn.

The Footprint of Chinese Demand for U.S. Soybeans

One out of every four bushels of soybeans harvested by U.S. farmers last fall, if the trend continues, will be shipped to China.



Two University of Illinois agricultural economists have measured the footprint of Chinese demand for soybeans. John Newton, along with Todd Kuethe (keeth-ee), say this one nation takes 13 bushels from every acre of soybeans produced in the United States.

Quote Summary - The Chinese are bringing in more than a billion bushels of soybeans a year from the United States. That’s more than the states of Illinois and Iowa produced combined. Their total needs from around the world amount to more than 60 million acres. Twenty-one million of those come from the U.S. This is more soybean acres than can be found in Illinois, Iowa, and Michigan. The Chinese have a very large footprint in the U.S. soybean market.

Large today, but twenty years ago China imported just 18 million bushels of soybeans from the United States, or 2 percent of U.S. soybean exports. Demand from this one nation grew from that meager amount to more than a billion bushels, 65 percent of the exports, because of double digit growth in its economy. This growth has slowed, and for some it is now a caution sign…but not for John Newton, yet.

Quote Summary - The world bank is projecting the Chinese economy is going to grow at about 6.9 to 7.4 percent through 2017. This is greater than the United States. Their economy is still growing at a significant rate. They have just plateaued some in recent years. So, you look at the growth rate in the Chinese economy as one indicator. Another indicator is crushing margins in China. Part of the reason they’ve increased their consumption of U.S. soybeans is because they’ve increased crushing capacity in mainland China. So long as their crushing margins are favorable it is still possible to bring U.S. soybeans to China and crush them.

These projections support China maintaining soybean consumption at or above current levels.

---

Darrel Good on the March 31 Reports

USDA Extends Farm Bill Sign Up One Week

The United States Department of Agriculture has extended the farm bill sign up period, again. A month ago USDA opted to allow the two farm bill deadlines to be consolidated into one ending date. It was scheduled to close Tuesday March 31st.

The sign up period has been extended a full week says U.S. Secretary of Agriculture Tom Vilsack. The deadline is now April 7th.

The secretary reports 98 percent of farm land owners have updated information needed to calculate payments made under the new farm programs, but only 90 percent of the farms are enrolled.

Those farms not enrolled by the deadline will receive no 2014 crop year payments and the farm will default to the Price Loss Coverage enrollment option for the 2015 through 2018 crop years.
Sign up can be completed at local Farm Service Agency offices.

Winter Feeding & the Cow Calf Operation

Winter nutrition for the cow calf operation is key. It may be the best opportunity to positively affect real income.

This was the message heard during the annual Beef & Beyond conference. It was clear and concise. The winter feeding program at a cow calf operation separates profitable farms from less profitable operations. It depends a lot on stored feed says University of Illinois Beef Cattle Specialist Dan Shike.

Quote Summary - How much stored feed are they having to purchase and what is their winter feeding program. We would like to graze as many days as we can, but if we can’t graze we have to feed them something. What’s the least cost approach.

Least cost only works if the cows meet acceptable performance standards. These are to maintain appropriate body condition, to calve once a year, and to wean off as heavy a calf as possible, but there’s more.

Quote Summary - We’ve not given much consideration in the past to the fetus. We’ve focused on the cow. We’ve focused on the calf that is nursing on her, but she’s also been bred and has a developing fetus inside of her. So, the nutrition management of the cow impacts the development of the fetus. There is plenty of data from human epidemiological studies and other animal models that maternal nutrition, or nutrition during gestation, has lifelong impacts on the progeny.

The results with beef cattle are mixed in this area of study and varies from region to region mostly as it relates to available forages. This seems obvious, but the clear message is if the cows are in poor body condition and not being fed enough there is a great deal of risk to hurting the calf. Under winter feedlot conditions this means the properly managed cow produces a calf which eventually yields better marbling. Heifer calves kept for breeding benefit from good nutrition in the womb, too. They weigh more, mature earlier, and have better conception rates.

Quote Summary - All these benefits come later in life at a year or two of age. It was set when the fetus was 3 to 4 months of age during mid-to-late gestation. All because the cow was in good body condition. A condition score of 5 or 6. On the flip side, a short term restriction in nutrition of a cow already in good condition isn’t particularly harmful. If the cow is already thin, say a body condition score of 4 or less, you should anticipate you’re restricting the fetus. If she is in good condition, even if her nutrition is restricted, the cow will mobilize body reserves to supply the appropriate nutrients to the fetus.

The body condition score runs from one to nine with scores of five or six considered optimum. Scores of eight or nine are too fat, scores below four are too thin.

The Final Days of the USDA Report Data

Tuesday the Department of Agriculture will release one of its most anticipated reports of the year. It began collecting data from farmers at the beginning of this month. The crop acreage data is compiled, encrypted and transferred to Washington, D.C.

USDA contacts more than 80,000 farmers across the United States in March. It asks them a series of questions. One in the series is about which crops and how many acres of each they expect to plant this season. The agency sends all those farmers a letter to do this. Those not responding get a phone call, and then if they still don’t respond receive a face-to-face visit. The collection was completed Wednesday March 18th. Last Friday the Illinois and Missouri National Agricultural Statistics Service staffs, if the schedule went as Mark Schleusener expected, should have been reviewing the information.

Quote Summary - The last few days before publication there is an analysis period. Friday morning we are going to look at a balance sheet. We’ll add up all the corn, soybeans, wheat, hay, etcetera, and CRP. In Illinois the total is pretty constant across years with the mix of crop acres changing from one year to the next. So, we’ll make estimates on acreage in each, add them up, and compare it to previous years to see if the sum of the parts makes sense. We’ll do that Friday morning and then submit our estimates in an encrypted file to our Washington, D.C. headquarters. There will be more analysis done under secure conditions and the report comes out March 31.

This analysis is done by National Agricultural Statistic Service staff. Schleusener says the staff is primarily gifted in two area; statistics and agriculture. And he says the sum of those two qualifications is what’s required to do a good job for NASS. Schleusener serves at the NASS Illinois State Statistician.

Quote Summary - So, we are looking at what the number shows. What comes out of the computer, and how that compares to previous surveys and other factors. For instance, this balance sheet approach is a way to make sure we don’t go off-the-rails by being a little bit too high on each crop and a lot too high overall. The balance sheet makes sure we don’t go in that direction.

It gives the analysts a chance to see errors before the Prospective Plantings figures are reported up the chain or out the door. The Prospective Plantings report will be released in Washington, D.C. at noon eastern time Tuesday March 31, 2015.

Soybean Stocks Overshadowed by Prospective Plantings

March 31st traders and farmers are likely to pay a great deal more attention to the number of soybean acres USDA expects will be planted this season than the number of soybean bushels left in the United States. However, the stocks figure may hold some surprises.

Last December the United States Department of Agriculture reported a surprisingly low Grain Stocks number for soybeans. The agency counts up available bushels of most crops once a quarter; in December, March, June, and September. University of Illinois Ag Economist Darrel Good says the December 1 soybean stocks number implied a record large residual use of soybeans during the first quarter (September-November) of the 2014–15 marketing year.

Quote Summary - Some have explained this low figure by suggesting a larger number of bushels of soybean were in transport on December 1 than in previous years. This explanation was apparently favored by the market and caused March 2015 soybean futures to close 36 cents lower on the day of the surprisingly small estimate. Another possible explanation is that the size of the 2014 soybean crops has been overestimated.

This argument might be supported by higher than expected soybean prices this year given the estimated size of the surplus projected to be generated by the large 2014 crop. In addition, basis levels have been generally strong for most of the year. Basis is the difference between the price of a futures contract in Chicago and the local cash bid.

USDA’s March 1, 2015 estimate of soybean stocks may add some clarity to this debate writes Darrel Good in his Weekly Outlook posted to the Farm Doc Daily website. Expectations for the magnitude of March 1 stocks are based on the estimate of December 1 stocks, imports during the quarter, and estimates of soybean consumption during the quarter.

If the size of the 2014 soybean crop has been accurately estimated, the March 1 stocks estimate should imply a large negative seed and residual use during the second quarter of the 2014–15 marketing year. That was the case in previous years of very large implied residual use during the first quarter of the marketing year. Seed and residual use during the second quarter of the marketing year, for example, was estimated at –38 million bushels last year, –22 million bushels in 2012–13 and –42 million bushels in 2009–10. A reasonable expectation this year might be near –90 million bushels. A March 1 stocks estimate near 1.41 billion bushels, then, would be consistent with the estimated size of the 2014 crop and known use of soybeans through February.

Given this, if the USDA’s Grain Stocks report shows something substantially different than 1.41 billion bushels on hand, then it should renew the debate over the size of last fall’s soybean harvest. Such a debate, however, would not be resolved for another six months. The USDA’s estimate of the crop size is frequently revised, but not until the release of the September 1 stocks estimate. It comes on September 30th this year.

Good says, historically, implied seed and residual use of soybeans during the first half of the marketing year has not been a good predictor of the size or direction of any subsequent change in the estimated size of the crop.

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.