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Cattle prices

[OCT. 22, 2002]  URBANA — While live cattle prices are currently several dollars above cash prices, the latest USDA Cattle on Feed report will provide incentives for futures to move even higher, and cash prices are likely to follow — at least in the short run, said a Purdue University Extension marketing specialist.

"Finished cattle prices should push into the higher $60s in November and perhaps to near $70 by the end of the year," said Chris Hurt. "Further strength is now expected early in 2003, as beef production finally begins to decline.

"Prices are expected to reach the mid-$70s by late March or early April. Supplies are expected to remain about 2 percent to 3 percent below year-earlier levels for the remainder of 2003, with prices continuing to average in the low to mid-$70s in the summer."

Hurt’s comments came as he reviewed the September report that made cattle price prospects shine a bit brighter, as the number of cattle in feedlots was down 6 percent on Oct. 1.

"After a year of larger cattle slaughter and heavy weights, some moderation in slaughter runs can be anticipated by early 2003," he said. "Monthly cattle-on-feed numbers have been 5 percent to 7 percent below year-earlier levels since July. This means that supplies of slaughter cattle will likely begin to drop in early 2003 and will continue to be smaller through next year."

Prior to the report, there was an anticipation that the number of cattle placed in September would be up by 11 percent. However, placements were up only 2 percent. In addition, September marketings, at 2 percent higher than last year, were greater than pre-report anticipations. Other encouraging information from the report was that placements of heavyweight cattle were down. As an example, September placements of 800-pound and heavier cattle were down 16 percent, indicating a potential gap in fed supplies in the first quarter of 2003.

"The number on feed is lower in areas more severely impacted by drought and higher in areas with normal or high corn yields," said Hurt. "Drought-impact states with fewer cattle on feed include Idaho, Kansas, Oklahoma and Texas. Iowa, with an excellent corn crop, has more cattle on feed."

So far this year, beef production has been up 3.8 percent. This is composed of about 1 percent more marketings and nearly 3 percent greater weights. In the third quarter, total production was up by 5.6 percent, with the head count up about 3.1 percent and weights up by 2.5 percent. In the third quarter, dairy cow slaughter was up about 11 percent, indicating a relatively quick reaction by the dairy industry to rising feed prices and low milk prices.

"This means that dairy cow numbers will likely be down a few percentage points in the January inventory report," said Hurt. "Beef cow slaughter was up only 1 percent in the summer, as cows from drought areas in the western Plains and Mountain States were primarily moved further east to pasture rather than heading to slaughter."

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Weights remain the thorn in the side of the industry, Hurt noted. After Sept. 11, 2001, the rapid drop in finished cattle prices caused feedlot managers to withhold cattle in the first seven weeks after the event. By the end of 2001, weights had risen by about 3 percent and continued to rise into March 2002, when they were up 5 percent. During the coming year, weights are expected to moderate due to higher feed prices and higher fed-cattle prices. However, weights may not come down to year-earlier levels until next spring.

"With the large beef supplies this year, prices have been disappointing," said Hurt. "In the first three quarters of 2002, prices for Nebraska choice steers averaged $66.35 per hundredweight, compared with $74.83 for the first three quarters of 2001.

"Prices have dropped about 3 percent for each 1 percent increase in beef supplies — a large reaction of prices to changes in supply."

For the year 2003, beef supplies are expected to drop by about 3 percent, pork supplies are expected to be down by 2 percent, and total poultry supplies may rise by less than 2 percent. As a result, 2003 appears to be a year of recovering prices and much better profit prospects for livestock producers.

The depressed live cattle market and higher feed costs also took a toll on feeder and calf prices. In the first three quarters of 2002, 750- to 850-pound feeder steers at Oklahoma City averaged only $79, a full $10 below the average in the same period in 2001. For calves, the decline was even more severe. The price of 500- to 550-pound steer calves averaged $94 per hundredweight, $12 below the average in the same period in 2001.

Improved finished cattle prices are expected to be supportive to feeder cattle prices, averaging in the low $80s in the last quarter of 2002 in Oklahoma City and improving to the mid- to higher $80s by spring. Steer calf prices are expected to average in the higher $90s in late 2002 before moving up to the $103-$105 range in the spring at Oklahoma City. Prices in the eastern Corn Belt tend to be about $3 to $5 below Oklahoma City.

"By the fall of 2003, strong finished cattle prices and the potential for moderating feed costs point to even stronger calf and feeder prices," said Hurt. "Maintaining brood cow numbers, or even moderate expansion, seems to be the most favorable management strategy."

[U of I news release]

[OCT. 21, 2002]  Wide-A-Wake 4-H Club hosted the recent Logan County 4-H International Night program at the Logan County Extension building. Approximately 60 youth, parents and club leaders at the Oct. 14 event enjoyed a variety of foreign foods and table displays.

Stephen Wongratanamajcha, currently a student at Lincoln Christian College, was the featured speaker. Stephen was born in Burma and grew up in Chiangmai, Thailand. He is a member of the Lisu tribe. He is married and has three children, a daughter who is 14½ and sons 13 and 4 years old. He spoke about the different food, sports, religious cultures, weather and holidays in Thailand.

Chester 4-H Club represented Mexico with their displays and foods; Pioneers represented India; Wide-A-Wake chose Germany for their dishes and display; and the Millennium Clovers prepared dishes and displays from Poland.

To learn more about the 4-H Japanese Exchange, 4-H International Foreign Youth Exchange or the 4-H program, please contact the Logan County 4-H office at 732-8289.

[News release]

[OCT. 21, 2002]  URBANA — Although there have been significant improvements in soybean yields during recent decades, the percentage of the crop lost to diseases has remained virtually unchanged at 15 percent of total production. Major diseases, such as soybean cyst nematode and sudden death syndrome, continue to plague the soybean industry, with annual losses totaling 12 million metric tons.

While new sources of resistance have been identified for at least some of the important soybean diseases, improved sources of resistance are still required to achieve meaningful progress in protecting growers from continued losses. Scientists also need to more fully understand how those resistance genes are expressed in the plant and how they can be incorporated into commercial varieties available to growers.

To meet this challenge, the University of Illinois recently launched the Soybean Disease Biotechnology Center, with the mission of identifying and creating new sources of disease tolerance and resistance that will increase the profitability of the industry. The center will be based at the U of I’s National Soybean Research Laboratory. Funding for this new effort was provided by the U.S. Department of Agriculture.

"The center will bring the power of the new genetic sciences to bear upon SCN and other major soybean diseases that continue to rob growers of yield every year," said Steve Sonka, director of the NSRL and one of the coordinators for the project. "It is expected that the center will also become the first line of defense against new and emerging soybean diseases, such as soybean rust."

The primary goal is to reduce the annual losses to soybean diseases and to identify new sources of resistance from the genetic stocks available in USDA’s National Soybean Germplasm Collection, housed at the U of I.

"Additional efforts will focus on moving those resistance genes into elite soybean cultivars, using the latest biotechnology techniques," Sonka said. "We also will be identifying how the movement of resistance genes into the new cultivars will affect other important attributes, such as yield, protein and oil content. There will be a high priority on disseminating this information directly to the soybean industry through Web-based programs such as the Varietal Information Program for Soybeans and through a wide range of publications and media outlets."

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As part of this project, the NSRL has assembled two teams of U of I scientists to conduct research that directly meets those objectives. The team headed by Professors Lila Vodkin, Jack Widholm and Steve Clough will apply leading-edge technologies to dissect the complex interactions of the soybean with specific pathogens and develop biotechnology strategies to control those diseases.

"This group will use the latest approaches in structural and functional genomics and genetic transformation to achieve that goal," Sonka said. "One of these innovative techniques involves so-called ‘gene-shuffling,’ which has tremendous potential to rapidly generate new resistance genes. Other techniques at the cutting edge of science will allow them to determine if the genes are effective and to insert them into soybean plants for increased resistance."

The other scientific team, headed by Professors Terry Niblack and Chris Lambert, will focus on genetic analysis of SCN virulence and how that knowledge of pathogen virulence can be used to protect soybean resistance in the future.

"The ability to use biotechnology to predict SCN virulence through genetic markers will provide an invaluable tool for growers," Sonka said. "Success in this goal would provide growers for the first time with a wide array of soybean varieties with maximum resistance to SCN genotypes found in their specific fields. For both teams, special emphasis will be placed on communicating the results quickly and effectively to both industry and the growers."

[U of I news release]

Scoop on the harvest

Wrapping up good yields

[OCT. 18, 2002]  The harvest in the Lincoln area is pretty well wrapped up for the year, according to elevator managers in the area, and producers are generally pleased that both corn and beans are coming in with better yields than expected.

"Our producers probably feel pretty good compared to some of their neighbors," said Hugh Whalen, general manager of East Lincoln Farmer’s Grain Company. "Farmers in southern Illinois, Indiana and Ohio have had very poor crops this year."

"We feel very fortunate compared to producers close to us," said Don Ludwig, general manager of the Elkhart Grain Company. "You can see a drop-off in yield even as close as Decatur."

"In our area, we’ve very lucky. We’ve had good yields and good harvest weather. Showers slowed the harvest down by hours, not days," said Paul Seaman of Emden Farmer’s Grain Company.

Whalen said Monday producers in his area are 70 percent done with both soybeans and corn.

"The soybean crop seems to be pretty good. Some fields are not spectacular, but a lot are in the 50-bushel-per-acre area. It’s one of our better bean crops in the last two years."

Producers are concentrating on bringing in the soybeans now, even if there is still corn in the fields, he said, because rain will shut off the bean harvest.

"Beans will swell up and pick up moisture quickly, while corn picks up little moisture from rain."

The corn harvest is also about 70 percent complete, with good yields, similar to last year’s, he said.

The downside on the bean crop is prices, which have been low for the last four to five years. Beans were at $5.09 per bushel Monday, 56 cents lower than they were a month ago. Corn prices were also lower Monday, at $2.38, 24 cents lower than last month’s price.

"We’re hoping the price will go up and we’ll see a post-harvest rally in November, because there was a very low carryover from last year," Whalen said. "However, Brazil and Argentina are planting their crops now, and we are anticipating they will increase production this year."

He said he had not seen much bean disease, nor has he detected aflatoxin, a toxin produced by molds in the soil, in the corn in his area. Aflatoxin in large quantities can poison livestock, and the Federal Food and Drug Administration has set guidelines for the amount of infected corn livestock can eat.

"We don’t have it, and I don’t think we will see much of a problem with it," Whalen said.

Aflatoxin hasn’t been a problem at Elkhart either, according to Ludwig. "We sent samples from a 75-car trainload to be tested, and they came back with not trace of aflatoxin," he said.

The bean harvest in the Elkhart area is 70 percent done and the corn at least 80 percent, he said. Beans yields and quality are both good, better than last year, and the yield could creep up to around 50 bushels per acre.

Late-planted corn is coming in now, and the yield is close to that of earlier-planted corn, in the low 160-bushel-per-acre yield. "We’re surprised how well the late-planted beans and corn came in," he said.

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Seaman reported Monday that his area is almost done with both corn and beans.

Bean yields are in the low to mid-50s, with a few 60-bushel yields, he said. Corn is averaging 170 to 175 bushels per acre.

Seaman has seen some bean disease and some insect damage from grasshoppers, which have been worse than usual this year. The bean disease, called sudden death syndrome, causes smaller beans and aborted pods.

Seaman also hopes to see a price rally down the road, but he says South American countries are expected to be putting in a big crop this year and may outproduce the United States on soybeans.

Mark Hunsley of Burtonview Co-op said Monday his area is about 80 percent done with both corn and beans and will finish within the next two weeks. The good weather has really helped the harvest, he said.

Bean yields are in the mid- to upper 50s and corn in the mid-170s. He has seen a little sudden death syndrome in the beans but no aflatoxin in the corn.

Producers in his area are generally satisfied with the corn harvest but somewhat disappointed in the beans.

Hartsburg Grain Company general manager Jeff Duckworth said his area is 85 percent done with corn and 75 percent to 80 percent done with beans.

"We expect to be busy this week, but next week we expect to be slacking off. We’re just making sure we’ve got enough room to handle everything."

Duckworth has seen some SDS in the beans. "Farmers say all that rain early in August fostered the growth of disease. Then it got hot and let the disease take over. It’s the worst we’ve had in recent memory. Beans would have been real good if sudden death hadn’t hammered them."

Bean yields are still in the 50s range, though, and he hopes to see prices go up a little. "We usually get a bounce in price after the harvest and through Thanksgiving."

In spite of their problems, producers in the Lincoln area are still fortunate, he said. "There are a lot of elevators south and east of here that are not filling up. We’re pretty lucky."

The central Illinois area is fortunate, too, to have good markets for its crops, Whalen said. "Archer Daniels Midland and Staley in Decatur handle roughly a million bushels of corn a day. We have a pretty good export market with the river system, loading up at Havana and taking the crops down to the Gulf of Mexico. We have a good rail system too. We send a lot of corn to the Arkansas and Texas chicken markets. We also ship food-grade corn to Mexico. Central Illinois is not just a processor, we’re an export market as well."

[Joan Crabb]

Hartsburg corn plot results

[OCT. 14, 2002]  Fall brings with it many reports of yields, from both fields and plots. Many of these yields should be used together to select hybrids or varieties. Of course your personal experience should also play a key role in selections. Some of the value-added crops need to be looked at as well.

The Hartsburg Field was a cooperating site this year in one of the studies of value-added traits for corn. The same varieties were planted in multiple locations and will have statistics and economic data run on them at the University of Illinois. Grain samples will also be tested for specific traits. See the chart below for the unofficial, unreplicated yield numbers from Hartsburg without the value-added economics. You can check on contract premiums if you are interested in these varieties.

Other research projects at the Hartsburg Field have been harvested and sent to campus for yield data and analysis. These include nitrogen application based on amino sugar test and nitrogen and manure application rates. You will probably see some of this data at the winter agronomy offerings from around the state.

[John Fulton]

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