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[AUG. 15, 2002]  A weekly publication of University of Illinois Extension, Macon County --

Aug. 12 is the release date for the USDA’s first objective yield estimate of corn and soybean crops. Pending USDA’s latest numbers, other estimates have been published:

1. F.C. Stone: corn at 9.032 B (125.3 b/a) and soybeans at 2.699 B (37.5 b/a)

2. Bill Tierney: corn at 8.69 B (123.2 b/a) and soybeans at 2.573 B (36.5 b/a)

3. Sparks: corn at 8.977 B (125 b/a) and soybeans at 2.677 B (37.2 b/a)

4. Doane: corn at 8.97 B (125.5 b/a) and soybeans at 2.75 B (38.2 b/a)

5. Allendale: corn at 9.114 B (127.9 b/a) and soybeans at 2.752 B (34.77 b/a)

6. USDA July: corn at 9.790 B (135.8 b/a) and soybeans at 2.860 B (39.7 b/a)

Most of the estimators are not expecting USDA to totally agree with them. USDA is expected to slowly ratchet down its estimate, instead of a sudden significant drop.

Volatile prices are common in the summer, says Extension marketing specialist Darrel Good, but he says this year’s daily yo-yo prices are unusual. One reason is the billion bushel range in corn estimates and the 360 million bushel range in soybean estimates. Another reason is the impact 2002 U.S. crop size will have on U.S. and world stocks.

He says price stability will not likely return until the market is comfortable with production prospects, and confidence in crop size may be delayed until the September or October USDA reports. History suggests that prices will peak early this year. Darrel adds that the high may have already occurred, or it could come as late as November, underscoring the difficulty of making pricing decisions. He advocates an averaging pricing strategy.

Yield estimating may be one of the most important activities you can do right now. It may not be fun, but knowing your potential production will enable you to market early and often. The old adage "short crops have long tails" could be the tale of the market this year. It will be much more profitable to forward sell now than take loan levels later.

The wind may have been secondary to problems such as corn rootworm larvae damage, soil compaction that hampered good root development or poor stalk strength. Do some good scouting now to prevent a recurrence next year.

Illinois farmland values have risen steadily in the past five years, according to USDA, which puts the average acre at $2,640, up $510 since 1998. Tillable land is $2,750. Cropland went up 4.4 percent nationally from last year. Values had been increasing more than 5 percent a year, so the rate of increase slowed from previous years, likely due to low commodity prices.

Problems with insects have been serious in some places and minor in others.

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Corn rootworm adults are being found in fields where they were never before seen. Root ratings are being made in 25 central Illinois counties to determine the pressure of corn rootworm larvae.

Corn borers did not materialize in threatening populations as had been expected. Since they require lots of moisture, the later summer drought negated reproduction.

Soybean aphids seem to have been limited in their infestations this year, both in Illinois and the rest of the Midwest. Nevertheless, scouting is still strongly encouraged.
Farm household income

Farm subsidies will be criticized when the public hears average farm household income is at $62,019, compared with $57,045 for all U.S. households. What the public will not hear is that from 1964 to 2000 income from off-farm earnings grew from $10 to $125 billion, while farmers’ net cash income from agriculture sources grew only $36 billion.

Convenience foods just took a new turn at the Illinois Pork Producers. IPPA is promoting "pork chop on a stick," a thick-cut rib chop specially trimmed so that the bone of the chop serves as the stick for the consumer to hold. The only place to find one is at the Illinois State Fair Commodity Pavilion. Sounds like an opportunity to "pig out."

Red ink is increasing for pork producers according to University of Illinois Farm Business Farm Management. Because of higher grain prices, feed costs could increase significantly and are expected to average about $21.75 per hundredweight, with non-feed costs estimated at $17.75 in 2002. Total costs of production would be $39.50 per hundredweight.

Black ink could increase for dairymen according to Mike Hutjens, Extension dairy specialist. He says milk production is up 2 percent, but demand is flat. The base price for milk has dropped $5 per hundredweight, but consumers have yet to see that cut. He said if producers would cut their milk production by 3 percent, their net income would increase $318 each day.

New, beginning and experienced shepherds are invited to attend the U of I Lambing School on Sept. 21. Topics covered include nutrition of the ewe, lambing barn preparation and obstetrics, grafting methods, raising orphan lambs, docking, and identification. Register by the Sept. 2 deadline at: http://sheepnet.outreach.uiuc.edu.

If fee hunting is a prospect for added farm income, plan to attend a Sept. 10 seminar near Pittsfield. You’ll learn management techniques to establish and maintain a successful fee hunting enterprise including information on harvest strategies, habitat development, economics and marketing. For more information about the 9:30 a.m. to noon workshop, call Mike Rahe at (217) 785-5594 or e-mail mrahe@agr.state.il.us.

[Stu Ellis]

[AUG. 14, 2002]  URBANA — Producers interested in determining payments from various alternatives for acre and yield information required by the 2002 farm bill can download a spreadsheet program that will help them in the task. The spreadsheet is located on the University of Illinois farmdoc site, http://www.farmdoc.uiuc.edu/.

"The decision tool is a Microsoft Excel spreadsheet developed by William Edwards at Iowa State University and to which an Illinois database has been added," explained Dale Lattz, U of I Extension farm management specialist, who, along with colleague Gary Schnitkey, developed the Illinois version.

To reach the spreadsheet, click first on "Policy" on the main page and then on "Farm Bill Decision Tool Spreadsheet" under the "2002 Farm Bill" category.

"We’ve updated the tool with new information as better interpretations of the new farm bill have developed," explained Lattz.

Lattz added that producers will be able to see the spreadsheet and use it in a display at the U of I College of Agricultural, Consumer, and Environmental Science’s Agronomy Day, on Aug. 22 at the South Farms.

[U of I news release]

[AUG. 13, 2002]  URBANA — After the USDA August crop reports pushed 2002 marketing year futures prices to new contract highs, the market will now try to decide how subsequent crop forecasts will differ from the August forecast, said a University of Illinois Extension marketing specialist.

"In addition, the market will try to evaluate the strength of demand," said Darrel Good. "Together, these factors will determine how much rationing has to be accomplished and how high prices will have to go to ensure the rationing job will take place.

"For now, I still anticipate an early season high in both corn and soybean prices."

Good’s comments came as he reviewed the USDA’s August Crop Production report, which contained a surprisingly small forecast of the 2002 U.S. corn and soybean crops and a much lower estimate of the wheat crop. If final production estimates are near the August forecast, the consumption of U.S. corn and soybeans will have to decline during the 2002-03 marketing year. This will be the first year of "rationing" since 1995-96.

The 2002 U.S. corn crop is forecast at 8.886 billion bushels, nearly 200 million less than the average trade guess. The small production figure reflects a forecast of harvested acreage of only 71 million acres and a national average yield of 125.2 bushels per acre. The forecast yield is 13 bushels below last year’s yield and would be the lowest in seven years.

"Compared to yields of a year ago, the largest declines are expected in the Northeast, the Southeast, the far western Corn Belt and the eastern Corn Belt," said Good. The average yield of 146 bushels in Iowa is expected to be the same as last year’s yield, while the average yield of 140 bushels in Minnesota is expected to be 10 bushels above last year’s average. Forecast yield declines are 12 bushels for Illinois, 32 bushels for Indiana and 26 bushels for Ohio."

For the 2002-03 marketing year, the USDA sees a 115-million-bushel increase in domestic processing use of corn and a 100-million-bushel increase in exports.

"In order to keep year-ending stocks above a pipeline level, domestic feed and residual use is expected to be reduced by 225 million bushels," said Good. "The needed cut in feed use of corn is compounded by expectations of a small sorghum crop. That crop is forecast at 380 million bushels, 135 million smaller than the 2001 crop."

Good added that the small U.S. feed grain crop is not expected to be offset by larger production in the rest of the world. At 621 million tons, the foreign crop is expected to be the same size as last year’s crop, with smaller crops in Argentina and the former Soviet Union offset by larger crops in China. World coarse grain consumption is expected to exceed production by 36 million tons, or 4.2 percent. The USDA projects the 2002-03 marketing year average price of corn in a range of $2.30 to $2.70 per bushel, compared with $1.93 for the year just ending.

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The 2002 U.S. soybean crop is projected at 2.628 billion bushels, 262 million smaller than the 2001 crop and the smallest crop since 1996.

"The projection reflects harvested acreage of just over 72 million acres and a national average yield of 36.5 bushels per acre," said Good. "The yield forecast is 3.1 bushels below last year’s average and would be the lowest yield since 1995.

"Compared to last year’s yields, significant declines are expected in the eastern Corn Belt except for Michigan and Wisconsin, the Southeast, and the far western Corn Belt. Higher yields are expected in Iowa, Michigan, Minnesota and Wisconsin."

For the 2002-03 marketing year, consumption of U.S. soybeans will have to decline in order to maintain carry-over stocks at a pipeline level of about 150 million bushels. The USDA projects a 25-million-bushel reduction in the domestic crush and a 240-million-bushel (22.6 percent) reduction in exports.

The small U.S. soybean crop is expected to be partially offset by a larger South American harvest in 2003. That crop is projected at three billion bushels.

"The forecast suggests that the South American crop will exceed the U.S. crop for the first time," said Good. "South American exports are expected to jump by 40 percent during the 2002-03 marketing year. World inventories of soybeans are expected to be reduced to the lowest level in five years. The USDA projects the season’s average price of soybeans in a range of $5.15 to $6.05, compared to the $4.35 average price for the year just ending."

The U.S. wheat crop is estimated at 1.686 billion bushels — 63 million smaller than the July forecast and 272 million less than the 2001 harvest. As a result, inventories of U.S. wheat are expected to be reduced to 467 million bushels by the end of the marketing year (June 1, 2003).

"That would be the smallest year-ending inventory in six years," said Good. "Like coarse grains, foreign wheat production is not expected to offset the smaller U.S. crop. Foreign production is forecast at 526 million tons, almost identical to the size of the 2001-02 harvest.

"Smaller crops in Argentina, Australia, Canada, Eastern Europe and the former Soviet Union are expected to be offset by larger crops in the European Union and India. World wheat stocks are expected to decline for the fourth consecutive year. The USDA projects a season’s average price in a range of $3.20 to $3.80, compared to last year’s average of $2.78."

[U of I news release]

Chinese soybean germplasm could
hold key to future yield increases

[AUG. 12, 2002]  URBANA — The soybeans grown today in Illinois are descended from Chinese varieties that were introduced into the United States between 1910 and 1930. Eight of those varieties contribute 75 percent of the genes in the current varieties grown here.

And, according to Randy Nelson, curator of the USDA Soybean Germplasm Collection at the University of Illinois, that narrow genetic base could well limit future progress to increase yields.

"In recent years, we have seen new diseases develop, such as sudden death syndrome and white mold," he said. "We also have found changes in the pathogen populations of other diseases, such as Phytophthora rot and soybean cyst nematode. Finding new genes for resistance to those diseases is critically important for health of soybean production in Illinois."

He notes that the maximum genetic diversity for any trait is most likely to occur in varieties from China because the soybean originated there.

"During the time that the soybean became a major crop in Illinois, we had no opportunity to exchange germplasm with China," Nelson said. "In 1992, the Illinois Soybean Checkoff Board, the Illinois Agricultural Experiment Station and the USDA’s Agricultural Research Service finally established a major germplasm exchange with the Chinese Ministry of Agriculture. Over the following eight years, this collaboration increased the number of Chinese varieties in our collection from 2,900 to nearly 6,100."

Those new additions came from 27 provinces in China, representing all the soybean growing areas in the country. Prior to 1992, nearly 80 percent of the Chinese varieties in the collection came from only three provinces in northeast China, and many provinces were not represented at all.

"Extensive research supported by the United Soybean Board has now demonstrated the genetic uniqueness of those exotic Chinese varieties and the value of that diversity," Nelson said. "Improved resistance has been found for nearly all the diseases that have been evaluated."

For example, the highest known level of resistance to sudden death syndrome was found among those varieties, as well as new sources of resistance to soybean cyst nematode, white mold, brown stem rot, Phytophthora rot and leaf-feeding insects. Preliminary data also indicates that tolerance to drought may exist in varieties from the area adjacent to the Gobi Desert.

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"Ongoing genetic research is aimed at determining how those new genes can be incorporated into the commercial varieties grown in Illinois and across the country," he said. "This exotic germplasm clearly has the potential to improve the yield of the varieties that growers in our state will use in the future."

During the last six years, 14 experimental lines have been released for use by universities and private companies to develop improved varieties.

"By making comparisons at the DNA level, we can estimate how closely soybean lines are related, even when we have no pedigree information," Nelson said. "Based on DNA similarities, the major ancestral lines of the U.S. varieties have been placed into six genetic groups. The new exotic parents represent nine genetic groups that are distinct from those contained in the major U.S. ancestral lines."

Nelson points out that the most recent releases from this research were evaluated at nine regional locations in 2001.

"One line derived from 25 percent exotic germplasm exceeded the yield of the best commercial variety by nearly 12 percent and was the highest yielding entry in the test," he said. "Another experimental line derived solely from the exotic Chinese lines equaled the yield of the best commercial variety we tested. Those results indicate that the use of this exotic germplasm from China has the potential to enhance disease resistance, increase yield, and improve seed composition in the future."

Details on Chinese germplasm and other research projects will be featured at Agronomy Day 2002 on Aug. 22 at the Crop Sciences Research Education Center, located south of the University of Illinois’ main Urbana campus.

For more information, including directions and a listing of all of the research projects to be presented at Agronomy Day 2002 visit www.cropsci.uiuc.edu/agronomyday or call (217) 333-4424.

[U of I news release]

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