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Low Returns, Crop Prices Keeping Pressure on Farmland Values



(Boone, IA, August 31, 2016) – Illinois farmland values continued their pullback around the state during the first half of 2016 as prices retraced between an estimated 3.3 percent and 7 percent. Continued low net returns and softening commodity prices are cited as the primary cause of the decrease. This is according to the Mid-Year “Snapshot Survey” information gathered by the Illinois Society of Professional Farm Managers and Rural Appraisers as well as the Illinois Farm and Land Chapter of the REALTORS® Land Institute (RLI). The data analysis is provided by Gary Schnitkey, Ph.D., with the University of Illinois College of ACES. The survey is part of an ongoing and larger annual Land Values and Lease Trends project conducted by the Society.

The survey results were released today at the Farm Progress Show being held in Boone, IA.

According to the survey, below $4 per bushel prices paid for corn are expected to continue into 2017 with some decreases in production costs expected. Cash rents paid are also expected to drop about $20 per acre.

Farmland Values and Volumes
Survey respondents indicated that land values decreased 3.3 percent for Excellent-quality farmland; decreased 4.5 percent for Good-quality land; 5.6 percent of Average-quality land; and dropped 7.0 percent for Fair- quality land.

(In a normal year, Excellent- quality farmland averages over 190 bushels of corn per acre, Good- quality farmland averages between 170 and 190 bushels per acre, Average- quality farmland averages between 150 and 170 bushels per acre, and Fair- quality farmland averages below 150 bushels per acre. )

Respondents estimated prices paid for Excellent-quality farmland during the first half of 2016 averaged $11,100 per acre; $9,400 for Good land; $7,600 for Average-quality land; and $5,800 for Fair-quality farmland. Sixty three percent of those responding to the survey reported that less farmland was sold during the year and 85 percent expect the same amount of land, or less, to be available for sale in 2017. Typical buyers (64 percent) continue to be other farmers and there are no expectations of significant changes in this.

Respondents indicate they are split on whether there will be the same or more demand for land with 48 percent expecting there will be some decreases in demand and 51 percent anticipating no change or a very slight increase.

Price Expectations
Overall, respondents are more pessimistic about prices at midyear this year compared to recent surveys with a full 90 percent expecting some further decreases in values ranging from 1 percent to 10 percent. Corresponding decreases on per-acre-return are also forecast with 49 percent expecting a drop between $25 and $50 per acre and 16 percent predicting decreases of more than $50 per acre. A mere 2 percent expect returns to increase and then only very modestly.

Cash Rents
While a full 93 percent expect corn yields to be above average they expect the price for corn to be around $3.45 per bushel. A full two-thirds of respondents expect a ‘slight’ decrease in production costs. All of this leads to expectations that cash rents will continue their decline along the lines of land productivity.

Expected rents for 2017 for Excellent- and Good-quality land are expected to decrease by 7 percent; 9 percent for Average land; and 6 percent for Fair farmland.





Currently the most popular type of lease arrangement is for Cash Rent (32 percent) followed by Share Rent (29 percent), Variable Cash Rent (20 percent), Modified Share Rent (12 percent) and Custom Farming (7 percent). Respondents indicate Share Rent leases and Fixed Cash Rents will decrease in use while Variable Cash Rents will become more popular.

The ISPFMRA will be conducting its annual Land Values and Lease Trends Survey over the upcoming winter months. The results of this larger survey will be released at the 2017 Illinois Land Values Conference set for March 23, 2017 at the DoubleTree by Hilton in Bloomington, IL.

Pro Farmer Midwest Crop Tour






Why USDA's Ear Weight is Unlikely to Change



Illinois State Fair Sale of Champions

Illinois Governor Bruce Rauner purchased the Grand Champion Steer at the Illinois State for a record setting $104,000.

Governor Rauner Announces Illinois State Fair Foundation

The Illinois State Fair has a new funding source. Governor Bruce Rauner has announced the creation of the Illinois State Fair Foundation. He says it is a non-governmental, non-political, privately run 501c3 Not-for-Profit to be operated by farmers and community leaders.

The private foundation was created after the Illinois State government failed to pass legislation last year to create a similar board. The private foundation will work to restore and maintain the Illinois State Fair in Springfield, and the DuQuoin State Fair in the southern part of the state.

You may follow the progress of the Pro Farmer Midwest Crop Tour August 22-25 on WILLAg.org. Watch for live in field results from the tour scouts as they gather information from corn and soybean field across the Midwest. The updates will come directly from a series of crop scouts. Monday through Thursday we'll also bring you audio updates from Pro Farmer's Brian Grete and Chip Flory. Those updates will air during the 2:06-2:36pm Closing Market Report. Friday Brian Grete will join the Commodity Week panel to review the tour results, Pro Farmer's official estimation of the 2016 crop, and compare those to USDA's August report. You may learn more about the tour on the Pro Farmer website.

2016 Illinois Corn & Soybean at Mid-Season with Emerson Nafziger

Urbana - University of Illinois Extension Agronomist Emerson Nafziger discusses the potential of the corn and soybean crops at mid-season.

PLAYLIST

  • Corn (tipback)
  • Soybean (tall)
  • Growing Degree Days (frost)

IPPA Responds to Chicago Tribune "The Price of Pork" Series

Chicago Tribune “The Price of Pork”
Jennifer Tirey, Executive Director - Illinois Pork Producers Association

New Site for August 18th U of I Agronomy Day

Agronomy Day on the University of Illinois campus is Thursday August 18th.

Agronomy Day at ILLINOIS has moved this year. It’ll be a bit further south of campus at the new facilities on the First Street farm says University of Illinois Extension Weed Scientist Aaron Hager.

The south First Street facility is about 3 miles or so from the usual place, however, it is in a different city on the map. The address is Savoy. Just go straight south from the U of I’s football and basketball arena’s on First Street and you’ll find the farm on the east side of the road. The doors open at 7am Thursday August 18th, with a meal at the noon hour.

Marketing a Low Priced High Volume Corn Crop

The price of corn is predicted to stay low this coming year because the size of the crop should be really big. Todd Gleason has more on just how a farmer might go about marketing under such conditions.

The numbers aren’t pretty as it relates to this year’s corn crop, at least other than the number of bushels in the bin. It should be a great big one, something on the order of 15 billion bushels thinks Darrel Good. Each of those bushels will be worth a lot less than they would have been earlier in the year and now farmers must figure out how to make a lower price and a higher yield result in a sustainable income. The price is too low to call it anything more than sustainable and the crop is too big to put it all in storage says the University of Illinois agricultural economist.

Quote Summary - So, some sales must be made between now and the end of the harvest period. Getting the extra bushels sold in the next few weeks is probably a good idea as pressure continue on futures and basis through harvest. So, if you are looking at an extra 20 to 30 bushels to the acre that you normally do not have, then you should get that priced and out of the way. However, storing the crop is the decision of choice, and the one I would choose at this point. The dilemma is that it may require a fairly long storage period to see a price recovery.

It won’t be quick or even large says Darrel Good, but a recovery should come as the days pass in 2017 and the trade looks forward to the next crop year. Storing corn on the farm and waiting for a higher price is a simple enough decision. Storing it at the grain elevator is a much tougher prospect.

Quote Summary - You’ll spend about 30 cents a bushel to hold corn to next spring. Right now the carry in the market is about that. If you look at harvest time bids plus spring basis there is about a 30 cent carry in the market and this makes commercial storage a breakeven operation at this point other than just holding for higher futures prices. Still, there is likely to be an opportunity to payoff on that, but it will take a much higher price recovery to pay for off-farm storage costs than is the case for on-farm.

You may read more about marketing corn from Darrel Good on the Farm Doc Daily website. A new article on commodity marketing is posted each Monday afternoon.

Control Mosquito Larvae & Protect Yourself

Foggers used by cities and towns can be a pretty effective tool for controlling mosquitos. They can even be used around the house. It is best, however, to start with the basics. Both types of disease carrying mosquitos need standing water to hatch. Get rid of it, especially if it is nasty water says University of Illinois Extension Entomologist Phil Nixon.

Quote Summary - Those mosquitos are quiet biters, they will sneak up and bite you. They are the ones in the case of the northern house mosquito, transmitting west nile virus and in the case of the Asian tiger mosquito Zika virus, if it gets established this coming summer. Both of these mosquitos tend to be short range flyers, usually a quarter to half a mile, and so what you do on your own property and what your neighbors do can make a huge difference in the numbers of these mosquitos and the likelyhood of being bitten.

The first line of defense says Phil Nixon, and the Centers for Disease Control, is to protect your own person and your family. Use an EPA-registered insect repellant. Clean out your gutters and get rid of standing water. If you want to go further, in the case of a backyard get together for instance, even in the Midwest where Zika carrying mosquitos are unlikely to appear, call in bigger guns like Daren Bohannan. He owns a Mosquito Squad franchise.

Quote Summary - So, when we are treating your yard here in the Midwest, we are probably not killing any of the aegypti, but there are some other mosquitos that carry other diseases like West Nile and heart worm for your pets. So, I think more people are concerned in the local area here in central Illinois with just the nuisance of mosquitos.

Once final note on mosquitos. You heard Phil Nixon say the two disease carrying types sneak up on you. Those two types aren’t particularly noisy. So, less to worry about if you hear that mosquito buzzing by just before you feel its bite.

Rachael Erin Nichole

Sunday July 17, 2016

She was doing everything right, and we still lost our Rachael Erin Nichole. She went quickly into the evening sunlight yesterday in Branson, Missouri. A place she and her mother both love.

Claranne and I thank our friends and family for their prayers. Rachael was with us only briefly, but it seemed as natural to us as if she'd been in our home all her life. We loved her as our own, and our children had already adopted Rach as a sister. She is gone from us far to soon... a heart transplant miracle from five years ago that simply succumbed suddenly and without warning.



Rachael loved life and everyone surrounding her. She knew no stranger, and endearingly called most aunt or uncle. Her world was filled with her pets, technology and innocence. She loved movies and General Hospital and the color pink. She had an infectious smile and a dismissive, but sweet eye roll, that could simultaneously amuse and correct. She wanted everyone to be happy. 
Visitation will begin at 9 a.m. Thursday July 21, 2016 at Sacred Heart Catholic Church in Peoria, Illinois followed by a memorial Mass of Christian burial at 10 a.m., with Father Jim Pankiewicz as celebrant. A committal service will follow at the Chapel of Peace at Parkview Cemetery. A celebration of life gathering immediately follow.

Todd & Claranne Gleason
1603 Spring Creek Drive
Mahomet, Illinois 61853  

Donations in Memory of Rachael Van Dyke may be made to Ronald McDonald House RMHC of St. Louis at http://www.rmhc.org/ The charity helped Rachael and her family in their time of need.
1. website - http://www.rmhc.org
2. then hit red DONATE flag
3. choose RMHC of St. Louis near the bottom of the RMHC CHAPTER TABLE
4. select Donation in Memory
5. fill in your information
6. make HONOR/MEMORIAL INFORMATION = Rachael Van Dyke
Should you want to notify the family of your donation select "Send eCard" and put Todd Gleason under Email Recipient Name and todd.e.gleason@gmail.com under email address.

Soybean Prices Dominated By Supply Uncertainty

The price of soybeans is being driving by supply side uncertainties.

The new crop November soybean contract traded at the CME Group in Chicago reached its current contract high price of $11.86 a bushel about a month ago. This is $3.22 above the low made last November. University of Illinois agricultural economist Darrel Good says as is typically the case this time of year, price direction will now be mostly determined by the estimated size of the U.S. crop, with the pace of consumption playing a minor role.

Quote Summary - Forecasts of an upcoming period of above normal temperatures in the U.S., a continuation of strong export sales, and a strong pace to the domestic crush have helped support the recent modest price rally.

While the strong pace of export sales and the domestic crush may have provided modest support for soybean prices, the major focus writes Darrel Good in this week’s Weekly Outlook found on the FarmDocDaily website has been and will continue to be on U.S. weather and yield prospects.

The main short term uncertainty surrounds the duration of an upcoming period of above normal temperatures for much of the soybean production area. With so much of the growing season remaining, however, yield uncertainty could persist for several more weeks. The resulting price fluctuations will provide opportunities for producers to make additional sales in the run-up to harvest.

There is enough time and enough uncertainty in the market at this point for rallies to still come. When this happens Darrel Good believes farmers should reward the market with additional soybean sales.

July 5 | USDA NASS Weekly Crop Progress Report



NOAA Predicted 7 Day Rain Fall Starting July 1



June 17 | USDA NASS Weekly Crop Progress Report





Statistical Methodology
via USDA NASS

Weekly Crop Progress Report Survey Procedures: Crop progress and condition estimates are based on survey data collected each week from early April through the end of November. The non-probability crop progress and condition surveys include input from approximately 4,000 respondents whose occupations provide them opportunities to make visual observations and frequently bring them in contact with farmers in their counties. Based on standard definitions, these respondents subjectively estimate the progress of crops through various stages of development, as well as the progress of producer activities. They also provide subjective evaluations of crop conditions.

Most respondents complete their questionnaires on Friday or early Monday morning and submit them to the National Agricultural Statistics Service (NASS) Field Offices in their States by mail, telephone, fax, e-mail, or through a secured internet website. A small number of reports are completed on Thursday, Saturday, and Sunday. Regardless of when questionnaires are completed, respondents are asked to report for the entire week ending on Sunday. For reports submitted prior to the Sunday reference date, a degree of uncertainty is introduced by projections for weekend changes in progress and condition. By the end of the 2015 season, over 90 percent of the data were being submitted through the internet website. As a result, the majority of all data are submitted on Monday morning, significantly reducing projection uncertainty.

Respondents are sent written reporting instructions at the beginning of each season and are contacted periodically to ensure proper reporting. Terms and definitions of crop stages and condition categories used as reporting guidelines are available on the NASS website at www.nass.usda.gov/Publications/National_Crop_Progress.

Estimating Procedures: Reported data are reviewed for reasonableness and consistency by comparing with data reported the previous week and data reported in surrounding counties for the current week. Field Offices summarize the reported data to district and State levels, weighting each county’s reported data by NASS county acreage estimates. Summarized indications are compared with previous week estimates, and progress items are compared with earlier stages of development and historical averages to ensure reasonableness. Weather events and respondent comments are also taken into consideration. State estimates are submitted to the Agricultural Statistics Board (ASB) along with supporting comments, where they are compared with surrounding States and compiled into a National level summary by weighting each State by its acreage estimates.

Revision Policy: Progress and condition estimates in the Crop Progress report are released after 4:00 pm ET on the first business day of the week. These estimates are subject to revision the following week.

Agronomy Day on the South Farms August 18, 2016

URBANA, Ill. – Have questions about pest resistance or curious about the use of drones in agriculture? Plan to hear more on these and other topics related to crop sciences at the 59th annual Agronomy Day at the University of Illinois on August 18.

Field tour topics and speakers for Agronomy Day 2016 were recently announced. Topics include:

TOUR A
Cataloging the weapons arsenal of the Fusarium head blight pathogen
Genetic resistance for northern leaf blight and Goss’ wilt in corn
Stripe rust and scab resistance in wheat
Bt resistance in corn rootworm beetles Nematodes: How does the worm turn?

TOUR B
Nitrogen management: Balancing profitability with sustainability
Economics of nutrient management
Land values
Six weed management predictions to keep you up at night
Investigating low crop emergence in edamame

TOUR C
The show must go on: Balancing water use under continuously changing environmental conditions
Cover crops for soybean and corn rotation
Soybean planting date and variety maturity
Managing soybeans for high yields Drone information and demonstration

TOUR D
*Offered at 8:30 a.m. and 10:30 a.m. (tentative) with limited availability, as attendees will be transported offsite to SoyFACE. Attendees will need to sign up in advance at the registration table. Tours will last one hour.

What is SoyFACE?
Improving maize tolerance in air pollution CO2
Improving drought tolerance and water use efficiency in C4 crops

For a full list of this year’s speakers and topics, visit http://agronomyday.cropsci.illinois.edu/.

Agronomy Day attracts more than 1,000 people each year seeking the latest information on technology and techniques to improve food and fuel production. This year, agronomy day will be held in a new location at 4202 South 1st Street in Savoy, Illinois. For more information on speakers, displays, and location, join Agronomy Day 2016 on Facebook or visit the Agronomy Day website.

National GMO Labeling Bill in Motion

The U.S. Senate’s agricultural committee has reached a food labeling bill agreement that could set aside the state of Vermont’s GMO law. Ranking members Pat Roberts of Kansas, a Republican, and Debbie Stabenaw, a Michigan Democrat, announced a digital codes compromise. If the full Senate and the House pass the legislation food packages containing a narrowly defined set of genetically engineered ingredients would include a digital disclosure code or an on package symbol or language that the Agriculture Department would approve. The code, which could be scanned by a smartphone, would be accompanied by the sentence, “Scan here for more food information”.

The compromise narrowly defines genetically modified for the purposes of food labels. Only ingredients derived from GMO’s made by transferring genes from one organism to another would require labeling. Foods made with ingredients where the genetic code is edited - a deleted or duplicated gene for example - would not require the GMO notifications.

COMMENTARY: Robert's Rules of Order

What risks are there to organizing a sit-in on the floor of the House of Representatives?
Will the Ethics Committee be called to action?
Honestly, what happened on the floor of the House in my opinion is deplorable. It breaks down the rules of debate that are set up for just reasons to allow the majority (whichever party or however it is comprised) to rule. The rules allow debate to be orderly, and for the minority opinion to be heard. It does not require a vote on that opinion. This works for all parties/individuals and I am fearful what happened here will have far reaching and ill affects.
Robert’s Rules of Oder were devised, originally, from the rules of the House of Representatives. The House, therefore, has a long and storied history of orderly debate: http://www.rulesonline.com

The foundations of democracy have been shaken by this action.

Soybean Stocks, Acreage, and Weather

The price of soybeans has rallied so much this season that one agricultural economist is doubtful there is much additional upside potential.

New crop soybeans are worth about two-and-half dollars more today than back in February when farmers purchased insurance to cover the price risk inherent in farming. The rise has to do with a short crop from South America, above average temperatures in the United States, and only scattered rainfall in the mid-section of the nation. Farmers can now sell beans for about $11 a bushel for fall delivery, and that doesn’t seem too bad to University of Illinois agricultural economist Darrel Good.

Quote Summary - While there is a potential for prices to move even higher with stressful summer weather, that potential may be less than the potential for corn, depending on the magnitude of planted acres, since soybean prices have already experienced a sharp rally and soybean yields are less sensitive to summer weather than are corn yields.

The path soybeans have taken to higher prices is pretty clear. The July contract at the CME Group in Chicago is up 25% since April 1, 2016. The rally came as the market came to grips with a 200 million bushel reduction in the estimated size of the combined Argentine and Brazilian soybean crops and the resulting surge in export demand for U.S. soybeans. The next stop on this price train forward is the end of month reports from the United States Department of Agriculture. USDA will release the Acreage and Grain Stocks reports June 30th. Darrel Good calculates the expected June 1 Grain Stocks for soybeans near 842 million bushels.


Soybean Inventory Estimate
(in billion bushels)

1.531 March 1, 2016 Inventory
+ .006 Imports
- .173 Exports
- .487 Crush
- .035 Feed & Residual

0.842 June 1, 2016 Inventory


He believes there is room for a surprise in the Acreage Report. USDA’s survey of farmers in March put expectations at 82.236 million acres. This number could be higher for a couple of reasons. The consensus seems to be that the June Acreage report will reveal that acreage exceeded intentions due to some switching of intended corn acreage to soybeans as the result of the increase in soybean prices relative to corn prices since March and the delayed corn planting in parts of the eastern Corn Belt.

Soybean acreage may also exceed intentions, writes Darrel Good on the FarmDocDaily website, as a result of total acreage of spring planted crops exceeding intentions reported in March.