Calculating N-Rates for Corn | with Emerson Nafziger

University of Illinois Agronomist Emerson Nafziger says deep prairie soils can provide up to one-hundred-pounds of N annually. This makes nitrogen fertilizer applications less limiting than once thought. Todd Gleason talks with Nafziger about how farmers should calculate anhydrous ammonia rates this fall.



Timing Fall Nitrogen
by Emerson Nafziger, Extension Agronomist - University of Illinois
original blog post

The substantial rain that fell over central and northern Illinois between October 5 and 15 mostly soaked into the soil that was dried out by crop water use, and harvest has moved back to full speed in most areas. With harvest, thoughts turn to application of fall ammonia in central and northern Illinois. Almost everyone is on board with waiting until soil temperatures are at or below 50 degrees before applying ammonia. Cool soil (along with use of nitrification inhibitor) lowers the rate of nitrification, so helps preserve N in the ammonium form. Nitrogen present in the soil as ammonium is safe from loss.

Once air and soil temperatures start to decline in October, it’s natural to anticipate that soil temperatures will reach 50 soon, so some are inclined to start to apply before soil temperatures reach 50 degrees. But if we apply when soil is at 60 degrees and soil temperatures fail to drop quickly, or if they rise again after application, nitrification will continue and will persist as long as soils stay warmer. In fact, nitrification does not stop dead at 50 degrees; as a biological process, its rate drops off as temperature falls, but temperatures need to near freezing for nitrification to stop completely.

So we need to wait to apply fall ammonia not only until soil temperatures are 50 or less, but until we have reasonable confidence that they’ll stay there. In Illinois, we normally consider November 1 to be the date at which we can be reasonably sure that soil temperatures won’t rise again until the next spring. That’s not a sure thing, however – in both of the past two years, soil temperatures have gone above 50 at least once between November and February. But most years it’s a reasonable starting date to balance keeping N safe with getting fall application done.

Minimum air temperatures have fallen into the 40s this past week, which has people wondering if it might be OK to go ahead and start applying now. Minimum soil temperatures 4 inches deep under bare soil (from the Illinois Water Survey http://www.isws.illinois.edu/warm/soil) have dropped to the upper 40s to low 50s over much of the state each day between October 16 and 18 this week. The problem with using only the minimum soil temperature is that it doesn’t represent the actual soil temperature in the ammonia application zone. As Figure 1 shows, minimum soil temperatures (on clear days) are typically five degrees or so less than average soil temperatures for the day. So even though we may need a jacket on cool mornings this week, ammonia applied now is not going to be in soils with temperatures less than 50 degrees for some days or weeks.


Figure 1. Soil temperature at 4 inches under bare soil at three Illinois Climate Network sites on October 17, 2017. Source: Illinois State Water Survey.

Air temperatures are forecast to stay in the 70s the rest of this week, to fall into the 50s (with lows in the mid to upper 30s) next week, then to rise again (with dry weather) for some period after that. We’re already past the average first frost date for central and northern Illinois, and even with more seasonal temperatures coming the last week of October, it doesn’t look like ammonia applied now will be as safe from nitrification and possible loss as will ammonia applied in November.

If the soil is in condition to apply ammonia, soil temperatures are in the upper 40s, and the 10-day forecast doesn’t show above-normal temperatures settling in, the last few days of October might offer an opportunity to start applying ammonia. But what if early November is warmer than normal, and soil temperatures remain above 50? Delaying application, of course, moves us closer to having safer soil temperatures.

Average Illinois fall temperatures have been trending slowly upward for some decades now, and as we have seen the last few years, waiting until November 1 does not assure low soil temperatures as consistently as it did in the past. So if a stretch of warm weather is still in the forecast at the end of October, it might make sense to wait a little longer. Otherwise, patience in waiting another 10 days will likely be rewarded, even if – as is often be the case when doing the right thing – the reward isn’t very visible.

Comparison of 2016 ARC-CO and PLC Payments

link to full farmdocDaily article

The United States Department of Agriculture will issue farm safety net payments this month. Todd Gleason has more on the payments for this year, and projections for next year with University of Illinois Agricultural Economist Gary Schnitkey. You may listen to that conversation.



Schnitkey, his University of Illinois colleagues Nick Paulson & Jonathan Coppess, and Ohio State’s Carl Zulauf also explored how the 2016 ARC County payments would compare to those from its counterpart USDA safety net program, PLC. This exploration is a head to head look at how each program performed.

Check the farmdocDaily website for full details at www.farmdocdaily.illinois.edu.

The four academics compared PLC and ARC-CO payment levels per base acre in 2016. They looked at corn and wheat and then did a simple calculation for each to illustrate which USDA farm safety net program made the largest payments for 2016. They calculated by county, for the whole of the United States, the average county-wide ARC payment and then subtracted from it the calculated average county-wide PLC payment. The differences where mapped.

2016 Corn Payments | ARC-CO minus PLC

For corn, it shows ARC-CO payments per base acre exceed those from PLC in most of the counties in the western, Great Plains, and southeastern regions of the US. In more than 60% of counties where the ARC and PLC programs are available for corn base, the ARC-CO payment is at least $10 per base acre larger than the average PLC payment. The ARC-CO payment per base acre is more than $20 larger than the average PLC payment per base acre in more than 50% of counties.

The exception to this is in the Midwest. Many counties in Illinois, Iowa, Missouri, Wisconsin, Minnesota, and North Dakota would receive larger payments from PLC for the 2016 corn crop. Despite low prices, high yields in this region had an offsetting effect on ARC-CO payments. Average PLC payments exceed ARC-CO payments for corn by more than $10 per base acre in 27% of counties across the United States, and by more than $20 per base acre in 17% of counties. Most of those counties are in the corn belt.

This is not an unexpected outcome as ARC was projected to make much larger payments in the first years of the program, and then to taper off with PLC expected to make larger payments in the closing years of the current farm bill. It did this more evenly across the United States for the 2016 wheat base.

The vast majority of counties trigger larger PLC payments per base acre for 2016 wheat. The average PLC payment is more than $10 larger than the ARC-CO payment in nearly 92% of counties with ARC and PLC programs for wheat base. The average PLC payment is more than $20 per base acre larger than the ARC-CO payment in more than 57% of the counties. This large payment difference of more than $20 per base acre captures the main wheat producing areas of the country.

2016 Wheat Payments | ARC-CO minus PLC

Again, while low wheat prices had the effect of triggering PLC and ARC-CO payments, most wheat producing areas experienced high yield levels, offsetting the price effect for ARC-CO payments. Less than 1% of counties triggered an ARC-CO payment per wheat base acre larger than the average PLC payment.

In summary, the farmdoc team finds low commodity price levels led to PLC payments being triggered for a number of program crops in 2016, including corn and wheat. Their models show the size of PLC payments per base acre vary regionally by the size of PLC program yields for those crops, with larger payments being triggered in areas with larger program yields. This includes the Midwest region for corn, and the Midwest, Great Plains, and Western regions for wheat.

Exploring Corn & Soybean Stocks

Last week’s Grain Stocks report should reduce the ending stocks for both corn and soybeans this month.

USDA’s quarterly grain stocks estimate suggests there are fewer bushels of corn and soybeans leftover from last year than have been reported so far. University of Illinois Commodity Grain Markets Specialist Todd Hubbs says corn is off by 56 million bushels and soybeans are down 44 million, “I’d say one thing out of the stocks report is the idea that corn and soybean consumption is starting to get stronger as we move through the year. This is especially the case in some areas we didn’t see before like feed. For the soybean ending stocks, USDA adjusted 2016 production. This isn’t a shocker, but it did change the balance sheet.”

I’d say one thing out of the stocks report is the idea that corn and soybean consumption is starting to get stronger as we move through the year. This is especially the case in some areas we didn’t see before like feed.

Having said that, Hubbs admits the 2016/17 projected carryouts for corn and soybeans remain very large. It’s possible to roll forward the September grain stocks report to forward figure the October USDA Supply & Demand table… or at least some of the adjustment. When you do that it shows corn carry out at 2.295 billion bushels and soybean ending stocks at 301 million. It is a matter then, says, Hubbs, of laying off the heavy supply-side against growing consumption - which for the moment is hampered by low river water levels that have been causing transportation problems to the Gulf of Mexico. Hubbs says, “The strong demand, the strong consumption, that we’ve been seeing is a good sign as we move through the next marketing year if we can keep it up. Right now we are suffering under these supply and transportation issues.”

It’s not to say a bullish market is around the corner, but that demand should provide a series of marketing opportunities over the coming months.

Friday’s USDA Grain Stocks Unlikely to Change Corn Market

Friday the United States Department of Agriculture will close out last fall’s harvest and marketing year with the release of the fourth quarter Grain Stocks report. Todd Gleason reports it is not expected to impact the price of corn.

Corn and Soybean Production Outlook in 2017-18

Given the price reaction, the market remains uncertain about the USDA’s September forecast of 2017 corn and soybean production. Todd Gleason has more with the commodity markets specialist from the University of Illinois.

USDA NASS Soybean Objective Yield Pod Weight

Tuesday’s USDA Crop Production report included a very heavy soybean pod weight. Todd Gleason talks with USDA NASS Chief of the Crops Branch about the weight, how it is calculated, and how it might change over time.

Storing Corn and Soybeans in 2017

The current price structure of corn and soybean futures markets indicate positive carry in both markets and raises the question of whether producers should make decisions about grain sales. The decision by producers to store corn or soybeans should be determined by the returns to storage.

There will be a lot of corn around this fall. USDA projects about sixteen-and-half billion bushels when you add what’s leftover from last year to this year’s harvest. It is projecting about four-point-eight billion bushels of soybeans. That’s a lot of both crops, but University of Illinois agricultural economist Todd Hubbs isn’t worried about running out of space to store it. In fact, the market is urging farmers to go ahead and store both crops at the moment by pricing futures contracts for later in the year a bit higher than the nearby months. The difference is called the carry says Hubbs. Having said that, he says the carry probably doesn’t pay out for commercial storage like you would see for on-farm storage, but there is a nice carry in the market for both crops.

The carry probably doesn’t pay out for commercial storage like you would see for on-farm storage, but there is a nice carry in the market for both crops. - Todd Hubbs, University of Illinois

Harvest bids says Hubbs for corn and soybeans possess a weak basis. This means the difference between the futures price in Chicago and the local cash prices across the nation are generally wider than normal. In central Illinois, for example, that bid is about 7 cents wider than usual. It seems there could be some room for improvement.

When we look at the fundamentals of the corn and soybean markets they’ve been poor says Hubbs, “We are looking at higher yields than expected and large crops in South America. Still, on the corn side, it looks like demand through the 2017/18 marketing year should be really good. Ethanol grind will be really strong, exports should be there especially at these price points, and I believe feed usage should be up across the board. I think there is some strength in corn demand.”

Demand for soybeans may be a slightly different story. However, the domestic crush has been strengthening and exports to China remain super strong. The ag economist explains, “when we think about storing into next year and hedging the storage, basis is a real issue. This is particularly true in Illinois. This year we should see a typical basis pattern for corn because of the supply and demand factors. There may be a lot of basis risk in soybeans. There is really no discernible pattern for spring basis in soybeans. Some years we have a positive basis. This year we had a really weak basis for soybeans. So, I think there is a lot of basis risk when you think about storing and hedging soybeans and you should take that into consideration.”

The uncertainty surrounding corn and soybean yield projections for 2017 says Todd Hubbs may encourage a patient approach to pricing crops. By storing corn and soybeans unpriced, one holds an expectation of prices increasing by more than the cost of owning and storing them. Over the short term, significantly higher prices require a large reduction in the production forecasts by the USDA on September 12 or October 12. Over a longer horizon, higher prices may occur if demand is stronger than currently forecast. Southern hemisphere crop problems could also materialize to provide a price increase.

Farm Journal Midwest Crop Tour

Assessing the Prospects for 2017 Corn Production

The August Crop Production report surprised many market observers by forecasting 2017 corn production at 14.153 billion bushels. In particular, the corn yield forecast of 169.5 bushels per acre came under scrutiny due to higher than expected yield forecasts in major producing states. The question is whether the corn production forecast will change enough to result in higher prices than those currently reflected the market.



read blog post

How USDA NASS Gathers Crop Production Report Data

USDA NASS will release the first corn and soybean Crop Production Report of the season Thursday, August 10th, 2017. Todd Gleason talks with USDA NASS State Statistician Mark Schleusener about how the information is collected and calculated.

Extrapolating Yields from USDA's Crop Conditions

It’s about this time of year that USDA’s Crop Condition reports can be used, in part, to develop corn and soybean yields.

The agricultural economists at the University of Illinois have been tweaking yields out of the USDA crop conditions reports for quite some time. They say the later in the season it gets the more accurate they become. Right about now is usually when the good to excellent ratings, along with all the rest, begin to zero in on what’s really happening across America says Darrel Good, "We do know that the initial ratings for both crops are generally a bit on the high side. That is crops always look good early in the season before weather has had its chance to take a toll on the crop. And then on average ratings decline as you go to the final report of the year. If you recognized that bias, and correct the weekly observations for that bias the in-season ratings can be very useful because there is a very high correlation between final ratings and yields."

Typically, says Good, by mid-July the ratings for corn are pretty close. This is on average. That point is later in the season for soybeans, usually sometime in early August. Here are the yields the U of I has generated from this week’s USDA Weekly Crop Progress and Conditions report (July 30, 2017).

Darrel Good - If we relied entirely on the crop conditions model, today’s ratings would point to of 167.2, with soybeans at 47.7.

"If we relied entirely on the crop conditions model", says Good, "today’s ratings would point to of 167.2, with soybeans at 47.7. Again, I’m not sure I would ever rely one-hundred-percent on crop conditions as a way to form crop expectations, but as one component it does give you a good barometer or where we are."

One other note here on making calculations. A one percent move in the good and excellent category is worth about 7/10ths of a bushel says Darrel Good. This week corn is 15 points lower in those categories than last year when the national yield was 174.6. If you add in the trend line bump and do the math, it’s in that 166–167 range.

EPA Must Make Good Lost Biofuels Gallons

The courts have ruled in favor of biofuels made from corn and soybeans.

The U.S. Circuit Court of Appeals for Washington, D.C. under took a case to define the meaning of three words in the Renewable Fuel Standard written by the United States Congress. The three words, a phrase, are “inadequate domestic supply”. Congress through them says University of Illinois Agricultural Economist Scott Irwin granted the Environmental Protection Agency, the EPA, the right to grant a waiver allowing energy producers not to follow the law, “Which commonsense would say, yes, you need that kind of escape clause in the statute that would say if a biofuel is not being produced you cannot require someone to consume it.”

The Obama Administration’s EPA interpreted the clause to also mean inadequate domestic demand, and consequently limited the mandated use of biofuels in the United States. The court ruled on how the EPA limited biofuels in 2016, however, it may be, thinks Irwin, that EPA will need to make good actions it took in 2014, 2015 and 2016. This may mean the gallons of biofuels not mandated for use in those three years will have to be produced and used says Irwin, “That’s right, and they even conveniently provided a table in the ruling with their calculations of how much mandate was waived that should not have been. In the three years this added up to 2.24 billion gallons of ethanol equivalents was at play in the cuts that have now been basically declared illegal.”

In the three years this added up to 2.24 billion gallons of ethanol equivalents at play in the cuts that have now been basically declared illegal.

It would take about 800 million bushels of corn to make that much ethanol. However, because there are two parts to the RFS relating to ethanol, it’s not likely corn based ethanol will be the big winner when it comes to making up the lost gallons thinks Scott Irwin, “Because of the E–10 blend wall I think, ultimately, the beneficiary of this will be biodiesel or more broadly speaking biomass based diesel. It has been filling the gaps in the E–10 blend wall in the ethanol mandate for a number of years and I don’t see why that would change dramatically with this rule making.”

Because of the E–10 blend wall I think, ultimately, the beneficiary of this will be biodiesel…

The back fill will require about one-point-five billion gallons of biodiesel. It would use about 11 billion pounds of feed stock. The number one feed stock is soybean oil.

A Weather Market & Corn Yields

Each day the weather changes and just as often, it seems, so has the direction of corn prices. Todd Hubbs from the University of Illinois was of the opinion a couple of weeks ago that corn market had a some upside potential. It did, but now, maybe it doesn’t. This has him thinking about the number of acres of corn in the United States, the impact of the weather on yield, and how the market might react August 10th when the United States Department of Agriculture releases the first corn crop production report of the season, "We talk about increased corn acreage and maybe a yield loss below trend. Is that seven bushels to the acre, five bushels, or two bushels. It is really hard at this point to say, but I am looking at, out of my little model, 168 bushel national yield.

Still it is hard to say what USDA is going to put out on August 10th. Hubbs says he is looking forward to seeing what they say about yields. If the market is pricing in 164/165 bushels to the acre for yield corn and USDA releases a 168/169 yield, then Hubbs says the price moves won’t be good.

Here’s the upshot for Hubbs. He does not think the amount of corn left over from last year is particular oppressive to the market place. It’s big, but not enough to really weigh heavily on price. So, if this year’s corn crop isn’t near average there will be upside price potential, “I’m not as high on corn prices as I was before, but I think there is still a possibility. I see the seasonal average farm price for 17/18 corn in that $3.80 to $3.85 range with some runs.”

I see the seasonal average farm price for 17/18 corn in that $3.80 to $3.85 range with some runs - Todd Hubbs

You may read more from University of Illinois Agricultural Economist most Monday’s on the farmdocDaily website.

Soybeans More Profitable than Corn

read blog post

Soybeans have been more profitable than corn over the last three years, and an ILLINOIS agricultural economist expects that to continue to be the case this year and next.



Gary Schnitkey has updated crop budgets for highly productive central Illinois farmland. It shows, as was the case in 2013, 2014, 2015, & 2016, that planting soybeans will make farmers more money than planting corn this year and in 2018. The cash price of corn will need to exceed $4.00 a bushel if that is to change, at least with soybeans in the high $9.00 a bushel range. Schnitkey in his farmdocDaily article, you can find that online, says there are four points to be aware of as it relates to the 2017 and 18 crop budgets.

1. first, these can change as expected yields and price evolve
2. second, repeating this, corn needs to be above four bucks if it is to really compete
3. third, total returns from highly productive central Illinois soils won’t be as much this year as in 2014, 15, or 16.
4. fourth and finally - cash flows are likely to be very tight this year and next.

Corn Belt Crop Tour 2017 | July 18-22

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* hit the square in the upper right corner of the map to take it full screen.
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If you'd like to contribute a photo and commentary please email tgleason@illinois.edu. Send the photo, nearest town, county, and state location. Also, include a couple of sentences about planting date and conditions.




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2018 EPA RFS Still a Biofuel Push

by Scott Irwin & Darrel Good, Agricultural Economists
University of Illinois
read full blog post

Implications

We analyzed the magnitude of the “push” in production and consumption of biofuels implied by the proposed rulemaking for the Renewable Fuels Standard (RFS) for 2018 released last week. We find that the proposed standard for 2018 implies a measurable push in the consumption of conventional ethanol since the mandate exceeds expected domestic consumption. The magnitude of that gap is estimated at 640 million gallons for 2018, compared to the estimate for a record large gap in 2017 of 738 million gallons. The gap ranged from 260 to 457 million gallons in 2014–2016. The advanced biofuels mandate is estimated at 684 million gallons in 2018, compared to the estimate of 900 million gallons in 2017 and the actual gap of 438 million gallons in 2016. Our analysis of the proposed rulemaking for 2018 implies:

(1) The EPA under the new Administration is “staying the course” on the implied conventional ethanol mandate with that mandate at the statutory level of 15 billion gallons. If that policy continues and the rate of increase in domestic gasoline consumption does not accelerate more rapidly, there will continue to be a notable conventional ethanol gap beyond 2018.

(2) The push in advance biofuels production and consumption remains large, but is smaller than in 2017 as both the total biofuels mandate dropped and the mandate for undifferentiated advanced biofuels declined marginally. However, the minimum undifferentiated mandate will increase by statute in 2019 to 4.5 billion gallons. So, even though the biodiesel mandate is proposed to stay constant at 2.1 billion gallons for 2019, the total advanced mandate gap could jump another 260 million gallons (4.5 –4.24 billion gallons).

(3) The relatively large conventional ethanol gap implied for 2017 and 2018 suggests that the current discount in the price of D6 (ethanol) RINs relative to D4 (biomass-based diesel) RINs will continue to narrow towards equality (e.g., farmdoc daily, December 4, 2015).

(4) Biomass-based diesel is likely to remain the “marginal gallon” for filling both the conventional and advanced mandate gaps. This means relatively large levels of biodiesel production will continue to be required which in turn will require large levels of fats and oils feedstock.

USDA's June 30 Grain Stocks Report for Corn

USDA’s release of the Quarterly Grain Stocks report on June 30 will provide an estimate of corn stocks in storage as of June 1, 2017. Since many of the consumption categories for corn can be derived from data provided during the marketing year, this estimate provides the ability to calculate the magnitude of feed and residual use of corn during the third quarter. The calculation offers the basis for evaluating the probable feed and residual use during the entire marketing year and imparts information on the potential size of ending stocks.

While the information imparted by the June Acreage report released on the same day will likely eclipse the Quarterly Grain Stocks report, the estimated corn stocks have important implications for the current marketing year.

The supply of corn available during the first half of the 2016–17 marketing year is the base for estimating June 1 stocks. Corn stocks at the beginning of the quarter were estimated at 8616 million bushels in the March Grain Stocks report. Currently, the Census Bureau estimates for corn imports are only available through April. In the first half of the marketing year, corn imports totaled 26 million bushels. Imports for the third quarter might have been around 12 million bushels. By combining imports with the beginning stocks, total available supply for the second quarter comes in at 8628 million bushels.

An estimate of corn exports for the third quarter is based on the cumulative weekly export inspections estimate available for the entire quarter. Cumulative marketing year export inspections through May totaled approximately 1738 million bushels. During the first eight months of the marketing year, total Census Bureau corn exports were greater than cumulative export inspections by 45 million bushels. Assuming the margin is maintained through May, corn exports through three quarters of the year equaled 1783 million bushels. Since exports in the first half of the marketing year totaled 1095 million bushels, the estimate for third quarter corn exports equals 688 million bushels.

The Grain Crushing and Co-Products Production report released on June 1 estimated corn used for ethanol and co-product production during March and April of 2017 at 893 million bushels. Weekly estimates of ethanol production provided by the Energy Information Administration indicates ethanol production increased by 5.5 percent in May 2017 from the preceding year. By calculating the amount of corn used to produce ethanol from these May numbers, corn used for ethanol production in May was approximately 449 million bushels. Total use for the quarter is estimated at 1342 million bushels.

Corn used to produce other food and industrial products during the 2016–17 marketing year is projected at 1470 million bushels by the USDA. Using historical corn use data, typically around 75 percent of the final marketing year food and industrial products use occurs in the first three quarters of the marketing year. If this historical pattern holds and the USDA projection is correct, corn use for the first three quarters of the marketing year totaled 1102 million bushels. Corn use during the first half equaled 689 million bushels which set the third quarter use estimate at 413 million bushels.

The current USDA projection for feed and residual use sits at 5500 million bushels. The historical pattern of feed and residual use in corn may provide some indication of the third quarter use. For the five previous marketing years, use during the first three quarters of the marketing year ranged from 90.5 – 94.2 percent of the marketing year total with an average of 91.6 percent. Third quarter feed and residual use ranged from 15 to 21 percent of the total use over this time span. For this analysis, the 91.6 percent average during the first three quarters of the previous five marketing years is used to calculate expected feed and residual use during the third quarter. If the USDA projection is correct, feed and residual use during the first three quarters of the 2016–17 marketing year totaled 5038 million bushels. Feed and residual use equaled 3797 million bushels in the first half. Therefore, the third quarter estimate totals 1241 million bushels.

By adding the estimates for exports and domestic uses, the total use of corn during the third quarter is estimated at 3684 million bushels. The total use estimate for the third quarter places June 1 corn stocks at 4944 million bushels. At this level, June 1 stocks come in 222 million bushels larger than the estimated 2016 June 1 corn stocks.

A June 1 corn stocks estimate that supports the USDA projection of 5500 million bushels of feed and residual use during the 2016–17 marketing year is considered neutral for corn prices. An estimate of corn stocks that deviates more than 100 to 150 million bushels from market expectations would provide an indication of changes in domestic feed and residual and alter expectations for ending stocks. This analysis indicates an estimate near 4944 million bushels should not change expectations that feed and residual use is on track to meet the marketing year projection.

Another Rough Income Year for Grain Farmers

It looks like 2017 will be another rough year for grain farmers in the United States. Even in Illinois, where the trend line yield for corn is 200 bushels to the acre and 61 for soybeans, the average income on a 1500 acre grain for this year is just $25,000. That’s not good says University of Illinois Agricultural Economist Gary Schnitkey, “That $25,000 isn’t enough to cover all the family living withdrawals and capital purchase expenses needed for a family farm of this size. Seventy to eighty-thousand dollars is needed to be sustainable in the long run. So, we are looking, again, at some financial deterioration if these projections hold”.

That $25,000 isn’t enough to cover all the family living withdrawals and capital purchase expenses needed for a family farm of this size. Seventy to eighty-thousand dollars is needed to be sustainable in the long run.

It is a projection that wasn’t quite so low earlier in the year. Then, like today, Schnitkey was using an average cash sales price of $3.70 a bushel in the Illinois crop budget for corn. What has caused the University of Illinois forecast to come down is the decline in soybean prices. Earlier in the year it was $9.70 for price, but now it has come down and Schnitkey is using $9.00 in the 2017 soybean crop budget. Even this is above the current fall delivery price at about $8.85 in central Illinois.

University of Illinois 2017 Projected Crop Budgets

A decline in soybean prices to $9.00 likely will trigger 2017 ARC-CO payments, given county soybean yields are at trend levels. As a result, U of I’s 2017 projections build in a $15 per acre government payment. It won’t arrive until the fall of 2018, but an estimated $20 payment from last year’s crop should arrive this fall.

In 2017, revenue is projected to be $755 per acre for corn, down by $77 per acre from last year. Gross revenue for soybeans is projected at $564 per acre, $140 per acre lower than in 2016.

Post-Emergence Herbicides in Corn

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It is time for farmers to control weeds in their corn fields. However, the cool, wet start to the growing season makes it doubly important to read and follow herbicide labels.

The post-emergence herbicide labels they’ll be following usually allow applications to be made at various growth stages says University of Illinois Extension Weed Scientist Aaron Hager. He says it is really important to read the label, making sure to get the height, or the stage, maybe both, of the crop correct.

This is because most all of the products for corn have a growth stage listed on the label beyond which applications, at least broadcast applications, should not be made. It is usually either plant height - measured at the highest arch of the uppermost leaf at least 50% out of the whorl - or a leaf number. Hager says if both are listed, then it is important to use the more restrictive of the two, For example, because of some of the weather conditions we’ve had across a large part of the state this year we may have corn plants which are older than their height would suggest. Using the leaf collar method is typically a better way to stage the development of the corn plant. If you can do both the height and the counting, the leaf collar method is the better method to determine the stage of the corn plant."

Using the leaf collar method is typically a better way to stage the development of the corn plant. - Aaron Hager, University of Illinois

Corn plants under stress conditions may be more prone to injury from post-emergence herbicides. On that note, Hager says farmers should be sure to consult the product label when selecting spray additives. Many labels suggest changing from one type of additive to another when the corn crop is stressed. Also, trying to save a trip across the field by applying a post-emergence corn herbicide with liquid nitrogen as the carrier is not advisable. The U of I weed scientist says while applying high rates of UAN by itself can cause corn injury, adding a post-emergence herbicide can make it worse.

Crop Progress & June Acreage Could be Really Bearish

There is a rule of thumb for marketing that says “Consider the crop year normal until that is no longer the case.” Yesterday’s USDA Weekly Crop Progress report - despite the rainy weather - tells us the nation’s farmers are on pace this season. They’ve planted 84% of the corn crop and 53% of the soybeans. For University of Illinois Agricultural Economist Todd Hubbs this suggests, at a minimum, farmers need to really think about making new crop soybean sales prior to the USDA’s June 30th Acreage Report.

Hubbs writes about commodity prices each week for the University of Illinois. Those articles are posted to the farmdocDaily website each Monday.