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Features

Local horticulture workshops

[FEB. 10, 2003]  Logan County will be hosting two workshops on horticulture topics. Both will feature David Robson, an Extension educator in horticulture.

The first workshop, "Color in the Garden," is scheduled from 1 to 3 p.m. on Feb. 26 at the local Extension office. Reservations are needed by Feb. 21, and you may call 732-8289 to make your reservation. There is no cost for the program.

The second workshop is "Environmentally Friendly Gardening," which is scheduled for March 10 at the Extension office. The workshop will be from 7 to 9 p.m. Reservations are needed by March 6 and may be made by calling the office.

Pesticide applicator clinic

The last Logan County clinic for private pesticide applicators is scheduled for Thursday, Feb. 20, at the Extension office. The clinic will begin at 8:30 a.m. with the training session. The Illinois Department of Agriculture will give the exam at the conclusion of the training session.

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Certification is needed for individuals purchasing and applying restricted-use pesticides on ground that they own or operate. Most of the rootworm insecticides and other pyrethroid insecticides are restricted use, as are all atrazine herbicides.

Study guides are available at the office for $5 each. The guides are an excellent way to do some studying at home prior to attending the training session.

Preregistration is required for the clinic, as enrollment is limited. Reservations are taken on a first-come, first-served basis. For producers who miss this session, attendance at another county or testing in Springfield will be required.

[John Fulton]

Central Illinois agriculture update

[FEB. 6, 2003]  Newsletter prepared by Stu Ellis of the University of Illinois Extension in Macon County:

As the Southern Hemisphere crop takes shape, marketing specialist Darrel Good says the market will shift its focus to the stocks of U.S. crops, which are expected to be adequate, but small, going into the 2003 harvest season. The relatively small inventories mean that the size of the 2003 crops will have very important price implications. He says the dominant market factors will revolve around soil moisture and crop acreage.

The National Weather Service notes extensive dryness in many crop areas, including the Ohio Valley and Great Lakes region. Darrel Good says a weakening El Nino means a dry February and a wetter-than-normal March and April. But Darrel says spring and summer moisture will have a greater impact on crops than will current moisture levels.

Regarding acreage, the USDA will report intentions on March 31, based on a March 1 survey. Darrel Good says a number of factors will influence cropland acreage and the mix of that acreage by crop in 2003. These include the extent of weather damage to winter wheat, relative prices of spring-planted crops and spring weather conditions.

Until planting time, July corn futures have found support at $2.35. Darrel says the early January high just above $2.50 may be difficult to penetrate prior to spring. Volatility is likely from March forward, as spring and summer weather conditions unfold. The soybean market remains inverted, with March futures supported at $5.44 and July supported near $5.35, because of the high rate of export sales. March beans have a strong $5.85 ceiling.

If corn prices seem a bit low, (ending ratio of stocks to usage is 10 percent) Kansas State marketing specialist Bill Tierney says they are well below the average for the last 27 years. He contends market factors over the last seven to eight years have had a depressing effect on corn prices. But he says the steepness of the "price response" curve implies that any significant improvement in fundamentals could trigger a dramatic and large upward "correction" in prices.

To market corn, Tierney recommends an options strategy of the simultaneous purchase of a put option and the sale of an out-of the-money call option. A $2.40 December put cost 18 cents per bushel, while a $2.70 call cost 9 cents per bushel. For the net cost of 9 cents (plus commission) a producer could put a floor under the price of corn while leaving open the potential to capture an additional 30 cents per bushel if the market rallies to $2.70. Tierney warns you about a possible margin call and using crop revenue coverage insurance; see www.agecon.ksu.edu/risk/current.pdf.
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To increase your revenue, consider custom fieldwork for landowners or other farmers without a full line of production equipment. The primary issue is what fee should be charged. The Farmdoc website provides comprehensive machinery operation costs; see http://www.farmdoc.uiuc.edu/manage/
machinery/field_operations.asp. Don't forget to add on 15 percent to 20 percent for your return to labor and management, otherwise known as "profit."

How does your operation compare with other similar operations? Don't just compare your crops to your neighbor's crops, but compare your farm business to other similar farms throughout the state. You can do that with a new tool on the Farmdoc website; go to http://www.farmdoc.uiuc.edu/
finance/benchmarks.asp. (Use with Internet Explorer).

The Farmdoc benchmarks available so far are farm type (grain, swine, beef, dairy), debt-to-asset level, tillable acres, total assets, net worth, value of farm production, tenure level, farmer age, level of return on farm assets, net farm income and (for hog farms) the value of the farm. These comparison classifications are available for the past 10 years.

Will a threat to the food supply originate on your farm? The Illinois Terrorism Task Force has identified seven ways that might happen: human threats, biological, chemical, nuclear or radiological, explosive, incendiary, and cyber. And the group says it can respond to an alert within an hour. But the question is: "Who and what will sound the alarm?"

A potential food terrorism alert may be sounded in two ways. If somebody tries to introduce soybean rust into the soybean production system, one of the first protectors might be the producer who sees something happening in the fields, or it could be through satellite remote sensing picking up something odd going on in a field. The task force is just now in the discussion stage of a network that would collect and distribute data.

If you have a concentrated animal feedlot, you'll want to attend Extension's March 11 conference in Bloomington. Topics include good neighbor policies, water runoff, federal assistance funds, manure management and specie breakout sessions. Call (800) 345-6087 to preregister ($35) or send e-mail to Dr. Ted Funk at funkt@uiuc.edu for info.

Details are still uncertain, but Congress is moving toward a disaster assistance bill for agriculture, which would provide a payment equal to 42.25 percent of 2002 direct payments if a disaster threshold is met. Those levels are still up for debate by the conference committee. The Senate reconsidered a plan that would give money to all farmers, a veritable public relations nightmare.

[Stu Ellis, University of Illinois Extension,
Macon County]

Weekly outlook
Beef prices and expansion

[FEB. 4, 2003]  URBANA -- Cattle numbers continue to drop, but there are signs that herd expansion may begin later this year, said a Purdue University Extension marketing specialist.

"The cattle market is trading at lofty levels, which makes it even more vulnerable to uncertainties, including a potential armed conflict and a still shaky recovery in the general economy," said Chris Hurt. "In addition, continued drought in the Mountain States, as well as the central and northern Plains, could keep cow slaughter much larger than anticipated and reduce the number of heifers retained for replacements."

Hurt's comments came as he reviewed the beef cattle market outlook. The beef cow herd inventory was reported as smaller in the USDA’s January 2003 report on cattle. Now at 32.9 million head, the beef cow herd has dropped 7 percent since 1996. The current beef cow cycle is now 14 years old, with the previous low on beef cow numbers occurring in 1989.

"This very long cycle will likely come to a close later this year, as producers have retained about 1 percent more heifers for replacements, with the number of replacements that will calve in 2003 up 3 percent," said Hurt.

The number of beef cows on Jan. 1 was down a modest 0.5 percent. In the eastern Corn Belt, numbers were down 1 percent, led by declines in Illinois (down 19,000 cows) and Ohio (down 20,000 cows). Indiana, Wisconsin and Michigan each reported some increase in beef cow numbers. Around the country, small increases in cow numbers occurred in the western Corn Belt, the southern Plains and the Southeast. All other regions had decreases.

"The northern and central Plains as well as the western United States all had decreases due to the pervasive drought that limited pastures and forage supplies in 2002," said Hurt. "Current drought indicators show no signs of improvement in most of these regions."

For the dairy herd, cow numbers were up by 0.4 percent.

"Unfortunately, there is still no sign that producers are reducing cow numbers in response to the dismal milk prices in 2002, which were the lowest since 1980," said Hurt. "In addition to a slightly higher number of cows in production, heifers being retained for breeding stock were up 1 percent. The continuation of higher milk cow numbers is a sign of even larger milk supplies this year."

With declining beef cow numbers and increasing milk cow numbers, the total number of cows is down only a modest 0.3 percent. The 2002 calf crop was down only 0.2 percent.

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Cattle-on-feed numbers were down 8 percent as of the beginning of the year. While placements in both November and December were moving back upward, the number of market-ready cattle coming out of feedlots will be small in coming months. Carcass weights in 2002 were up 2.8 percent and accounted for most of the 3.8 percent increase in total beef production for the year.

"So far this year, beef supplies have been down nearly 3 percent, providing the primary reason for finished cattle price strength," said Hurt. "First-half supplies will be drawn from the number of steers weighing over 500 pounds -- down 1.2 percent -- and heifers weighing over 500 pounds not headed back for replacements -- down 1.7 percent. Second-half supplies will be drawn from the number of calves weighing less than 500 pounds on Jan. 1 -- down 1.3 percent.

"Beef supplies for the rest of the year will also be influenced by marketing weights, by weather and drought conditions, and the resulting rate of cow slaughter."

Cold weather limited gains this winter and resulted in some delays of cattle coming out of feedlots, contributing to the 3-percent drop in January beef production. In the last half of the winter, there will be some "catching up" of marketings, which will contribute to larger supplies. Beef production may be down about 1 percent in the first quarter and down 2 percent in the second quarter. Heifer retention could begin to accelerate in the second half of the year and, combined with declining cow slaughter, may also reduce total beef supplies by as much as 3 percent to 4 percent.

"Choice cattle prices are expected to dim somewhat in the next few weeks as slaughter supplies increase from the cold-weather delays," said Hurt. "However, prices could still reach new highs in the very lows $80s in late March and early April. The decline in prices in the summer is not expected to be as severe as normal, with prices dropping back into the lower $70s by the end of the summer. Prices in the fall are expected to move into the mid-to-higher $70s."

Hurt said calf prices in the fall of 2003 are expected to recover substantially compared with last fall.

"As an example, Oklahoma City 500-550-pound steers averaged $88.38 last fall," he said. "If finished cattle prices remain strong, and if feed prices moderate with 'normal' weather this summer, calf prices could return to the very high $90s to low $100s per hundredweight."

[University of Illinois news release]

Honors & Awards

Ag Announcements

Agriculture scholarships available

[JAN. 27, 2003]  The Lincoln/Logan County Chamber of Commerce will award two scholarships to high school seniors or college students from Logan County who are studying or will study agriculture for future careers in ag-related businesses.

Scholarship winners will be chosen based on their commitment to agriculture as a future career, academic performance, involvement in extracurricular activities, financial need and work experience. The committee is particularly interested in candidates who will return to the Logan County area to pursue their careers.

Applications are available from the Lincoln/Logan County Chamber of Commerce --  (217) 735-2385; 303 S. Kickapoo St., Lincoln, IL 62656 -- or at any high school in Logan County.

Completed applications are due to the Lincoln/Logan County Chamber office in Lincoln by Friday, Feb. 28. Applications will be reviewed soon afterward, and winners will be notified of their award. Winners will be recognized at the Logan County Ag Day breakfast on Wednesday, March 19.

[News release]

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