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Features
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U of I report provides guidance
on updating acres, yields
[JUNE
27, 2002]
URBANA — A recent University of Illinois Extension report
examines changes in the new farm bill and offers producers a method
for selecting between four alternatives in updating acres and
yields. "Updating Acres and Yields under the Farm Security and Rural
Investment Act of 2002" was prepared by Gary Schnitkey and Dale
Lattz, U of I Extension farm management specialists.
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"The new law includes
provisions authorizing direct and counter-cyclical payments for 2002
through 2007 crops," said Schnitkey. "These payments will be
determined using base acres and program yields. Farmers and
landowners have one-time decisions to make concerning these acres
and yields. They either can ‘update’ acres to reflect acres from
1998 through 2001 or they can ‘not update’ and have acres based on
those used to calculate Agricultural Marketing Transition Act (AMTA)
payments.
"If base acres are
updated, farmers also can update yields used to determine
counter-cyclical payments."
Under the new law,
three types of payments are available for program crops — direct
payments, counter-cyclical payments and loan deficiency/marketing
loan payments.
Direct payments are
available for corn, soybeans, wheat, oats, grain sorghum, barley,
upland cotton and rice. Payments will be made for 2002 through 2007
crops, and the payment will be the same in each year. Payments for a
crop on a farm will equal per-bushel payment rate times program
yield times the result of base acres times .85.
"The 2002 program
implemented a counter-cyclical program for all program crops," said
Schnitkey. "Those payments equal the trigger price, which is the
higher of loan rate or season-average price, times yield times base
acres times .85."
The trigger price, he
explained, equals a target price minus the direct payment rate. The
season-average price is calculated by the USDA for 12 months, with
the first month occurring near the beginning of harvest.
[to top of second column in this
article] |
"The yield is an
important variable that farmers have to make a decision about," he
noted.
Schnitkey summarized
the options available to producers.
"When base acres are
not updated, programs yields are also used to determine
counter-cyclical payments," he said. "Farmers can choose to update
acres and use program yields in determining counter-cyclical
payments. Another option is to update acres and use the 70 percent
difference method to update yields. Finally, farmers can update
acres and use the 93.5 percent method to update yields."
Schnitkey and Lattz
note that in some cases farmers will have to trade off the corn base
acre for the ability to update yields. For example, some farms have
a relatively high corn base compared to the current corn plantings.
Updating acres will result in the loss of corn base acres,
suggesting that the farm maintain its current base acres. However,
maintaining current base acres will not allow a farmer to update
yields, meaning that the counter-cyclical payments will be lower
than when base acres are updated.
The report examines a
number of options available to producers in making these choices.
Copies of the report can be accessed on
the Web at
http://web.aces.uiuc.edu/farm.doc/
manage/newsletters/fefo02_11.html.
[U of I news release]
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Weekly outlook: Reports and prices
[JUNE
26, 2002]
URBANA — Weather conditions
and crop prospects will be the dominating price factors for the next
few months, said a University of Illinois Extension marketing
specialist.
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"U.S. corn and soybean yield prospects
may be the most important price factors, but developments in other
areas will also be critically important," said Darrel Good. "In
particular, the market is taking note of dry conditions in
Australia, flooding in parts of China and Russia, and the slow
development of the monsoon in India.
"For coarse grains, world production
has been at a relatively high level since 1995-96. Individual
countries have had shortfalls in production, but the U.S. has had
consistently large crops since 1996."
For wheat, Good added, world production
has been relatively large since the consecutive small crops of
1994-95 and 1995-96.
"The current relatively low level of
U.S. and world stocks and the generally low prices of wheat and
coarse grains suggest that production shortfalls could have
significant price impacts," he said. "The market is beginning to
reflect production concerns, but price action may be relatively
conservative until the U.S. crops reach the critical reproductive
stages of growth."
Good’s comments came as he reviewed the
markets where corn and soybean prices continue to demonstrate
seasonal strength, influenced by a high rate of consumption and U.S.
and world crop concerns.
For soybeans, both the domestic crush
and exports continue at a pace above that projected by the USDA. The
expected return of China to the import market should keep the pace
of U.S. exports high, especially in the light of continued problems
in Argentina.
"Based on the USDA’s weekly export
inspection report, U.S. exports through June 20 were 5 percent
larger than cumulative shipments of a year ago," said Good. "For the
year, the USDA has projected a 3.5 percent increase. Unshipped sales
as of June 13 totaled some 97.5 million bushels, compared to 74.2
million bushels of outstanding sales on the same date last year.
"Similarly, the cumulative domestic
crush during the first three quarters of the marketing year is
estimated at 1.3 billion bushels, 4.7 percent larger than the crush
during the same period last year. For the year, the USDA has
projected an increase of 3.3 percent."
[to top of second column in this
article]
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Good said that for corn, the pace of
exports compared to that of last year, accelerated in the second and
third quarters of the marketing year. The USDA’s export inspection
report indicated that cumulative shipments as of June 20 were 3
percent larger than the total of a year ago. However, unshipped
sales as of June 13 totaled 252.5 million bushels, compared to 290.1
million on the same date last year. For the year, the USDA projects
that exports will reach 1.925 billion bushels, 10 million less than
shipments of a year ago.
"Corn exports were very large during
the summer of 2001," said Good. "The recent rapid pace of shipments
will have to continue if the USDA projection is to be reached."
The USDA’s June Grain Stocks report
will be released on June 28. The market will use the June 1 corn
stocks estimate to gauge the rate of domestic use of corn during the
third quarter of the marketing year.
"If the pace of consumption was in line
with the USDA projection, June 1 stocks of corn should have been
near 3.67 billion bushels, about 250 million less than on the same
date last year," said Good. "Soybean stocks on June 1 should have
been near 690 million bushels, based on the estimates of use during
the third quarter of the year."
In addition to the grain stocks report,
the market will have considerable interest in the acreage report to
be released on the same date.
"Late planting, particularly in the
eastern Corn Belt, suggests that the acreage report will reflect a
fair amount of intentions rather than actual plantings," said Good.
"Still, the report will be an important benchmark for judging the
final planted acreage of the major crops. The market expects the
report to show a significant switch from corn to soybean acreage due
to the lateness of the planting season in some areas.
"The report
is also expected to reflect failed wheat acres being planted to
other crops. Some private analysts have projected a significant
increase in sorghum acreage, compared to March intentions, due to
replanting of failed wheat acreage. In addition to the acreage of
individual crops, the report will give some perspective on the
magnitude of abandoned acreage."
[U of I
news release] |
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Weekly outlook: USDA reports
[JUNE
25, 2002]
URBANA — It is premature to
suggest that the highest corn and soybean prices of the year have
been established, said a University of Illinois Extension marketing
specialist.
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"Consumption of both corn and soybeans
continue at a rapid pace, and considerable production uncertainty
remains," said Darrel Good. "Some sort of averaging strategy for
pricing remaining old crop inventories still appears attractive.
"New crop soybean prices are still
below the Commodity Credit Corporation (CCC) loan rate. Harvest
delivery prices for corn are marginally below the loan rate in most
areas. The market is offering an average price of about $2.15 for
delivery from harvest to the summer of 2003. That is equal to the
midpoint of the USDA’s projection for the marketing year average
price."
Good’s comments came as he reviewed
recent USDA reports. The monthly reports of World Agricultural
Supply and Demand Estimates and Crop Production provided some
fundamental support for corn and wheat price prospects. In the case
of wheat, the USDA now forecasts the 2002 U.S. crop at only 1.823
billion bushels, which is 63 million smaller than the May forecast
and 135 million smaller than the 2001 harvest. The forecast
represents the smallest crop since 1988. U.S. stocks at the end of
the 2002-03 marketing year are projected at 555 million bushels, the
smallest year-ending inventory in six years.
Wheat production in the rest of the
world is forecast at 540.2 million tons. That forecast is 2.6
percent larger than the 2001-02 crop but 4.2 million tons smaller
than the May forecast.
"Compared to last month’s forecast,
smaller crops are expected in Australia, China, eastern Europe and
the former Soviet Union," said Good. "World wheat stocks are
expected to decline for the third consecutive year. Still, wheat
supplies are expected to be large enough that consumption can
continue at a normal pace."
For corn, the major surprise in the
June report was a smaller forecast of the 2002 U.S. crop. The May
forecast was based on the March Prospective Plantings report and
trend yields. This month, the USDA lowered its expectation of corn
plantings by one million acres due to delayed planting in the
eastern Corn Belt. In addition, the projected average yield was
reduced from 137.9 bushels to 135.8 bushels to reflect the expected
impact of late planting.
As a result, the 2002 crop is now
forecast at 9.65 billion bushels, 285 million smaller than the May
forecast and only 143 million larger than the 2001 crop. With
expanded exports and increased domestic processing use of corn, the
smaller crop is expected to reduce stocks at the end of the 2002-03
marketing year to 1.3 billion bushels, the lowest level in six
years.
[to top of second column in this
article]
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"While this month’s downward revision
in the projected size of the 2002 U.S. corn crop was a friendly
surprise, the market had a modest response," said Good. "The reduced
forecast was logical, but there is still a lot of uncertainty about
both acreage and yield. The USDA’s National Agricultural Statistics
Service will release an acreage report on June 28. This report will
reflect an early June survey, so it will not be the final word on
planted acreage.
"However, the report will provide a
good benchmark for judging actual planted acreage. Yield prospects
will reflect weather conditions for the remainder of the summer. The
National Weather Service is projecting near-normal precipitation and
temperature for the majority of the growing season. The market will
continue to take a wait-and-see attitude about yield prospects."
The June report also contained a
smaller forecast of foreign coarse grain production. At 629 million
tons, the forecast is 2.2 percent larger than last year’s crop, but
1.7 million tons smaller than the May forecast. World coarse grain
stocks at the end of the 2002-03 marketing year are forecast at
111.2 million tons, the lowest year-ending inventory in seven years.
For the 2002-03 U.S. soybean marketing
year, the USDA lowered the projection of beginning stocks by 20
million bushels, increased the 2002 crop projection by 20 million
bushels, reduced the export projection by 10 million, and increased
the projection of year-ending stocks by 10 million bushels. The
first projections for the 2002-03 marketing year for the rest of the
world will be released next month.
"The average daily cash price of corn
in central Illinois moved to the highest level since harvest on June
13, while the highest post-harvest price of soybeans was established
on June 5," said Good. "It is common for the highest cash prices of
the marketing year to be established in June. The relatively
favorable near-term weather outlook suggests that prices may soften
somewhat."
However,
Good repeated, it is too early to assume that the highest prices of
the year have been reached.
[U
of I news release]
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The farm bill
[JUNE
24, 2002]
With a new farm bill in place, the
questions turn to how to make the most of some opportunities this
farm bill provides. Keep in mind that information is just now coming
out on the bill and is not from the official source (the Farm
Service Agency). It just seems like U of I Professor Bob Hauser has
just about the best information out there at this time.
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Provisions of the farm bill, as now known, are these: the Loan Rate
Program, counter-cyclical payments, direct payments, payment caps,
Conservation Title, and changes to programs for milk and wool and
for mohair, to name a few.
Loan rates were basically increased for corn and decreased for
soybeans. The 2002 loan rates are $2.06 for corn and 5.16 for
soybeans in Logan County. This is changed from $1.95 and 5.41 for
2001. These rates come in to play with market prices that are below
these rates.
The Counter Cyclical Program is based on a 12-month price average,
to compensate producers during very low commodity price periods.
Payments will be triggered when corn prices fall below $2.32 per
bushel for 2002 and 2003, and $5.36 for soybeans. These payments are
figured on payment bushels.
[to top
of second column in this article]
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The Direct Payment Program provides a fixed payment of 28 cents per
bushel of corn and 44 cents per bushel of soybeans, based on payment
bushels.
Many of the other provisions are still being checked out, but for
most farmers in our area it looks like about $15 per acre more will
be available than under the past farm bill.
For more information,
follow the U of I Farmdoc link:
http://web.aces.uiuc.edu/farm.doc/
policy/index.html. There is also a calculator there to look at
some of those scenarios that are available to you.
[John Fulton]
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Local FFA shines at convention
[JUNE
22, 2002]
Floods of blue corduroy jackets filled the Prairie
Capital Convention Center June 11 to kick off the 74th annual
Illinois FFA Convention. FFA members from across the state were
recognized for their outstanding achievements throughout the year.
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Section 14 members
were very involved over the three-day convention with luncheons,
main sessions and elections.
Illinois FFA members
and guests were honored to have our national FFA secretary, Robin
Niehaus, visiting her home state for the convention.
The newly elected
2002-2003 Illinois FFA officer team is Jay Kelley of Section 5,
president; Rebecca Yandell from Section 25, vice president; Emilee
Bocker of Section 2, reporter; Drew DeRiemacker from Section 3,
secretary; and Meagan Wells of Section 23, treasurer.
Aside from elections,
Section 14 members received various awards. Kent Leesman racked up
awards in the Risk Management Essay Contest, being in the top ten in
the nation, being a top ten chapter president and a STAR Farmer
finalist. Chelsea Frost of PORTA was an FFA talent performer, along
with several Section 14 members in the FFA Band and Chorus. Natalie
Coers of the Hartsburg-Emden FFA Chapter was named among the top ten
chapter reporters.
[to top of second column in
this article] |
Kate Wrage of the
Hartsburg-Emden FFA Chapter was recognized as the Section 14
candidate for her American FFA degree.
Eleven Section 14 FFA
members were honored to receive their state FFA degree as the
convention came to a close.
For more information about the Illinois
FFA, visit www.illinoisffa.org
or www.ffa.org.
[Natalie
Coers, Section 14 FFA reporter] |
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Illinois FFA convention news
[JUNE
17, 2002]
As the 74th state FFA
convention got under way last week, Section 14 members gained
recognition for their outstanding achievements from the past year.
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At the second session three Section 14
members were recognized for winning their respective proficiency
areas. Kent Leesman of Hartsburg-Emden won in the Grain Production
Entrepreneurship area for his work on the family farm. Chelsea Frost
of Porta won in the Safety area for her work as a lifeguard, and
John Sullivan of Porta won in Wildife Production and Management
Entrepreneurship.
Also, Kate Wrage of Hartsburg-Emden was
recognized for being a Section 14 American FFA Degree candidate.
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Robin Niehaus, the national FFA
secretary, gave the keynote address entitled "Full Speed Ahead."
She challenged FFA members and guests to sing in the car, put the
pedal to the metal and turn on their headlights for a journey of a
lifetime.
We wish all
the members who received awards the best of luck in national
competition.
[Natalie
Coers, Section 14 FFA reporter]
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Bt corn doesn’t
harm
earthworm populations
[JUNE
17, 2002]
URBANA — Creatures in the
soil, such as earthworms and mites, have a positive effect on soil
quality and, in the long run, farmers may want to manage their soils
to protect and nurture these creatures. This is the focus of a new
study at the University of Illinois and the Illinois Natural History
Survey.
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"We know soil invertebrates are
beneficial," said Ed Zaborski, a soil invertebrate ecologist with
the Illinois Natural History Survey. "They have a positive impact on
the soil system and, ideally, we would like to manage farmland to
produce the best possible benefits from them."
Zaborski’s study looks at earthworms
and mites as possible indicators of soil condition and how they
respond to insect control strategies. He makes up bags of crop
residues and buries them in field plots consisting of three
different corn hybrids, each with a Bt line and a non-Bt line. Half
of the plots are treated with insecticides. Every few weeks, some of
the bags are collected and the invertebrates extracted. Through the
process, he can discover the numbers and species of invertebrates
that are decomposing the residue.
"We can determine the impact of
insecticides, the growing crop and the quality of the residues.
After analyzing the residues, we’ll know the rate of decomposition
for several points in time. So, we can look at the effect of insect
control strategies on the soil process and decomposition."
Zaborski says there doesn't seem to be
any negative effect to earthworms caused by the Bt endotoxin.
"For the lines of corn used in our
study, it looks like the impact of genetically engineering corn to
produce the Bt toxin was no greater than the genetic differences
between various corn hybrids."
He has also discovered that certain
soil mites might respond to a particular residue based partially on
their reproductive strategy. Invertebrates that reproduce quickly
and in large numbers when food is plentiful are known as "r"
strategists. In one corn variety, mites with these characteristics
were more abundant on residue containing the Bt gene than on the
non-Bt variety.
[to top of second column in this
article]
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"One reason could be that, if the plant
could not break down the Bt toxin, some residues would be slightly
higher in nitrogen. That means there’s a greater amount of protein
available there to support a rush of microbial activity, and mites
would benefit from feeding on these microbes."
Zaborski’s approach is a unique way to
study the effect of Bt crops on the soil.
"Often, researchers test a very small
set of animals. I’m looking at a couple hundred different species.
It’s a whole interacting, functioning community. And I’m measuring
the community, instead of individual species, which offers a much
better chance of finding any risk associated with the technology,"
he said.
Initial results also show that, in
crops treated with insecticides, juvenile night crawlers were more
abundant than in crops not sprayed with insecticides.
"We’re not
sure why this happened," he said. "One hypothesis is that the
insecticides killed spiders and beetles that would be predators of
earthworms. So the spraying improves the reproductive success of
earthworms. Unfortunately, those predators can also help control
crop pest."
[Gary Beaumont,
University of Illinois College of ACES]
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Honors
& Awards
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Logan County 4-H
Bicycle Show results
[JUNE
26, 2002]
The Logan County 4-H Bicycle
Show was on June 15. Ten 4-H’ers participated in this year’s show.
Mathew Runyon of Broadwell won the bicycle award, donated by
Lincoln McDonald’s Restaurant.
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Chosen
as state fair delegates were Mathew Runyon of Broadwell, Bicycle
Adventures II; Ben Buse, Beason, Bicycle Adventures II; Kelli
Brooks, Lincoln, Bicycle Adventures II; and John Brooks, Lincoln,
Bicycle Adventures III.
Chosen
as a state fair alternate was Zack Huffer, Lincoln, Bicycle
Adventures II.
All 4-H
participants and their ratings are listed below.
2002 4-H Bicycle Show
results
Bicycle award
Mathew
Runyon, Broadwell
Top rating award
Max Buse,
Beason
[to top of second column in
this article] |
Blue awards
Bicycle
Adventures I — David Carter, Lincoln; Ryan Huffer, Lincoln; Hayden
Zimmer, Lincoln
Bicycle
Adventures II — Douglas Alberts, Hartsburg; Kelli Brooks, Lincoln;
Ben Buse, Beason; Max Buse, Beason; Zack Huffer, Lincoln; Mathew
Runyon, Broadwell
Bicycle
Adventures III — John Brooks, Lincoln
State fair delegates
Bicycle
Adventures II — Kelli Brooks, Ben Buse, Mathew Runyon
Bicycle
Adventures III — John Brooks, Lincoln
State fair alternate
Bicycle
Adventures II — Zack Huffer, Lincoln
For further information on Logan County
4-H, contact the Logan County 4-H office, 980 N. Postville Drive,
Lincoln, IL 62656; or phone (217) 732-8289.
[News release]
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