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Snowstorm, Rain May Cause Soybean Crop Loss
Six to 10 inches of snow may accumulate in central
Nebraska by the time a large and slow-moving storm system heads through
the area this week, according to the National Weather Service (NWS).
“To get a snowstorm now would be early for us, but we’ve had them
this early before,” says Victor Bohuslavsky, executive director of the
Nebraska Soybean Board. “This year has been a bad year to try to raise
anything. We’ve had a lot of hail and heavy rains, and now this.”
Soybean growers have been struggling with ground conditions all year,
says Bohuslavsky. “It’s been wet, and that’s why harvest has been
slow,” he adds. “In the eastern part of the state, there’s still
water standing.”
The incoming snow will likely accumulate in areas where there is more of
an emphasis on livestock than crop production, says Bohuslavsky.
However, “there’s still quite a bit of harvest left to do, and the
storm will be devastating to everyone.”
Rains earlier in the week had already hampered corn and soybean harvest
in eastern Nebraska, points out Bohuslavsky. “The beans west of Omaha
are already in standing water, and the producers there might lose their
crop.”
As of Sunday, roughly a quarter of the soybeans in Nebraska had yet to
be harvested, according to USDA’s Weather Crop Summary. To learn more
on the latest severe weather forecast, visit the following NWS Web link:
www.nws.noaa.gov/.
By John Pocock
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Soybean
Harvest Almost Complete In Iowa, Sluggish In
Missouri
USDA’s latest Weather Crop Summary shows soybean
harvest to be almost finished in states like Iowa, Ohio and Minnesota,
with estimates at or above 80% complete on Sunday. In contrast, USDA
shows soybean harvest to be only 27% complete in Missouri, 44% complete
in Arkansas and 53% complete in Kansas as of Oct. 19.
According to Tuesday’s USDA report, producers in the top-18
soybean-producing states have “harvested 67% of soybeans, 5
[percentage] points behind last year and 7 points behind the five-year
average.” It also states that “Missouri soybean development was 16
[percentage] points behind the five-year average, while elsewhere,
leaf-dropping was occurring within 7 points of the five-year average.”
To read the entire report, click here: usda.mannlib.cornell.edu/usda.
By John Pocock
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Significant
Soybean Crop Insurance Payments Likely
Many farm operators in Minnesota and surrounding
states will be facing reduced yields on some farm units in 2008, due to
late planting, floods, drought and severe storms. Many growers purchased
upgraded levels of federal crop insurance for the 2008 growing season
because of the excellent revenue guarantees available at the crop
insurance sign-up deadline on March 15, 2008. For producers who incur
losses to their 2008 corn and soybean crop – even minor yield
reductions – the added revenue guarantees that were purchased last
March are likely to pay big dividends this fall. Here is an analysis of
potential 2008 crop-loss scenarios and the likely crop insurance
indemnity payments with CRC or RA-HP policies:
Soybeans – The base price was $13.36/bu. at the 2008 crop insurance
enrollment deadline on March 15, which was the price used to establish
the revenue guarantee for CRC and RA insurance policies for 2008. The
harvest price for soybeans is estimated at $9.38/bu., as of Oct. 17. For
a soybean producer with an 80% RA-HP policy and a 45-bu. APH yield, and
an actual soybean yield of 35 bu./acre, there would be an RA-HP
insurance indemnity payment of nearly $150/acre at the current estimated
harvest price level. Actually, there would be some indemnity payment for
yields up to around 50 bu./acre. Payments for CRC policies would be
somewhat less, because the harvest price is limited to a low of
$10.36/bu. Standard APH crop insurance policies are yield only, and
would not be affected by the drop in harvest price.
To continue reading this article on possible crop insurance payments,
click here: cornandsoybeandigest.com/kentthiesse.
By Kent Thiesse, V.P., MinnStar Bank
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Prepare Now For Optimum Soybean Production In
2009
Soybean farmers can do a few simple things to optimize
yield in 2009 to ensure profits. The following is a list of nine tasks
that will help Missouri soybean farmers improve yield:
- Select fields you intend to plant to soybean in 2009 and test
a sample of the soil from each 10-acre block of each field for pH and
nutrients, if this has not been done since 2005.
- Apply lime, phosphate and potash, where needed, as soon as
possible.
- Break hardpans by subsoiling if the soil dries enough before
planting time next spring.
- Improve drainage of the fields to reduce problems due to
seedling diseases.
- Sample soils during early winter if soybean cyst nematode
problems are suspected and then have the samples analyzed for nematodes.
These results will be useful when selecting varieties for 2009.
- Select varieties based on University of Missouri soybean
yield trials; examine yields at: agebb.missouri.edu
and the yields of varieties in your own and your neighbor’s
fields.
- Hire a commercial seed treater to apply a fungicide to seed
that you will plant in April or that you will plant in heavy clay soils
prior to mid-May.
- Plant at the best time for optimum soybean yields; soybean
yields generally begin to
decline when planted after early June.
- Consider hiring a consultant.
Following these suggested procedures will give soybean farmers a better
chance of producing a profitable crop during 2009.
By Allen Wrather, University of Missouri-Delta
Center
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Farm Outlook
Positive For 2009, But Careful Planning Needed
In the year ahead farmers will probably continue to
realize fairly strong cash receipts, but by the same token they will see
significant increases in input costs.
Overall, the farm sector may very well see a downturn in profits in 2009
compared to 2008, according to the American Farm Bureau Federation. AFBF
held its national outlook conference earlier this month in Boston. More
than 50 Farm Bureau economists and commodity specialists were on hand to
gain an understanding of the crop, livestock and inputs situation and
outlook so they can better provide the farmers they serve with the
market intelligence they need.
By many measures, American agriculture may be in the best financial
shape it’s ever been, but there are potential storm clouds building on
the horizon, speakers generally concluded. “The bottom line is that
farmers need to exercise caution as they plan for the new year,” says
Terry Francl, AFBF senior economist.
Most farmers should not have trouble getting credit, but they will have
to work closely with their lenders and carefully prepare crop budgets,
Francl says. In the upcoming growing season, farmers will face a
traditional challenge: input costs continuing to rise, while the weaker
economy could well push commodity prices lower.
To read more of this article on the farm outlook for 2009, click here:
www.fb.org.
Source: American Farm Bureau
Federation
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The Future Of
Futures
Will corn and soybean futures exist two years from
now? That's not a prediction. It's merely a question because the
ingredients for the grain futures markets to no longer exist are being
stirred in the bowl as this is written.
In college I was taught – and still believe – that the function of
the futures market was twofold.
First was the one of price discovery and the second was to allow
producers and buyers a means of hedging their risk in the market. I am
not at all sure that either function works anymore.
For the last two years our company has been pounding the drums that the
impact of index funds would be a double-edged sword. Farmers loved them
as long as they kept pushing prices higher, but as we warned many times,
if and when crude oil prices – which made up the majority of the fund
assets – turned down, the funds would be forced to sell grain futures
in order to keep the funds balanced. That is exactly what has occurred
since June this year and now we are paying the price.
When it comes to price discovery, how is it at all possible to have an
indication what a commodity is really worth when almost the entire long
position is held by speculative index funds? It's not normal buyers
buying this market that use it. As a result, the futures market has
become one gigantic crap game and the people (farmers) who need to be
playing the game the most are in the process of leaving the table.
To continue reading about grain futures markets, click here: cornandsoybeandigest.com/marketing.
By Richard Brock, President of Brock
Associates
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New
Grain-Equity Tool To Help Farmers Forward Contract
Cargill AgHorizons and Wells Fargo are collaborating
on a new contracting program designed to help farm families capitalize
on grain-contracting opportunities in today’s volatile markets. The
offering, called EliteHEDGE, will be available in all markets jointly
served by Wells Fargo and Cargill AgHorizons.
EliteHEDGE enables growers to leverage the value of their
deferred-delivery grain sale commitments to Cargill via a Wells Fargo
line of credit, which is used exclusively to offset the hedging costs of
the contract until final delivery of grain to a Cargill-approved
delivery point. The arrangement provides eligible producers greater
access to credit in contracting for the sale and delivery of their
grain.
“In times of unprecedented volatility and skyrocketing input costs,
many producers have cited the growing inability to forward contract
grain more than 12 months out as their biggest concern,” says Dan Dye,
Cargill AgHorizons president. “EliteHEDGE provides the benefits of
transparency – farmers can see exactly the hedging costs needed to
carry their forward contract to delivery.”
With approvals from Cargill and Wells Fargo, a grain farmer can use the
EliteHEDGE offering to fund deferred contracts beginning with the 2009
crop season and beyond.
For more information about Cargill, visit: www.cargill.com. For more information
about Wells Fargo, click here: www.wellsfargo.com/.
Source: Cargill AgHorizons
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Big And
Small Changes Convert To Fertilizer Dollars Saved
Except for cash rent, corn producers now spend more
for fertilizer than any other input. Today, there is intense interest in
fertilizer use because of the high cost of fertilizer and the reduced
value of the commodity produced. Unlike the fabricated “scare” of
the Asian soybean rust issue of the past few years, the problem of
higher fertilizer prices combined with lower commodity prices is
real.
To address this serious challenge, crop producers are making changes in
their fertilizer management practices – some big, some small. I’ll
use three examples to illustrate the impact of various changes on
fertilizer costs.
To continue reading this article on ways to reduce fertilizer costs,
click here: minnesotafarmguide.com/blog/?p=266.
By George Rehm, University of Minnesota
Extension
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Fall
Tillage Consideration For Soybean Disease Mangement
Fall tillage operations become a consideration at
harvest time, and plentiful soil moisture makes moisture conservation a
non-issue. However, the management of soybean diseases could be a
consideration if you have fields with severe disease problems this year.
Tillage is an effective way to manage many crop diseases, because it
reduces the pathogen-infested crop residue and adjusts soil temperature
and moisture. Several of the soybean diseases prevalent in areas of Iowa
this year can be effectively controlled with tillage practices, and some
cannot.
Tillage practices are very effective in reducing the risk from almost
all of Iowa’s soybean foliar and stem diseases – such as Cercospora
leaf spot, brown spot, frogeye leaf spot, downy mildew, bacterial
blight, brown stem rot and Phomopsis. Pathogens of these diseases
survive in crop residues in the absence of a soybean crop. When infested
crop residues are buried in soil, their decomposition rate increases and
the fungi die. Tillage reduces the amount of pathogens that survive to
the next crop.
To read more about how tillage can be used to control some soybean
diseases, click here: www.extension.iastate.edu.
By XB Yang, Iowa State University
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Land
Whoa!
The average value of prime Iowa farmland punched
through the $5,000/acre ceiling early this year.
Top-quality farmland in the bellwether state hit $5,200/acre, according
to the latest survey of farm realtors by the Iowa Realtors Land
Institute. That's up 21% for the year ending March 1.
It's the same story across the Corn Belt. Farmland values continued to
push higher in 2007 and the first half of 2008, driven by record grain
prices and strong farm income. But the boom may be losing steam as
soaring production costs and softer grain prices dampen farm income
prospects.
To continue reading this article on the current cost of farmland, click
here: cornandsoybeandigest.com/ag-issues/1015_land_whoa/.
By Liz Morrison
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Wetlands
Reserve Program Now Exceeds 2 Million Acres
Landowners have enrolled more than 2 million acres in
USDA's Wetlands Reserve Program (WRP), a significant contribution toward
increasing the nation's wetlands, announced Agriculture Under Secretary
of Natural Resources and Environment Mark Rey on Tuesday.
“We have gained wetland acreage, thanks to the stewardship ethic of
the nation's farmers and ranchers,” said Rey. “Because of this
achievement, USDA was able to help President Bush exceed his goal of
improving, restoring and protecting at least 3 million acres of wetlands
in less than five years.”
Rey announced the WRP milestone at the farm of Charles and Patricia
McCain in Albion, PA, about 25 miles southwest of Erie. The McCains
recently enrolled 342 acres, or slightly more than half their farm, into
the program.
There is WRP enrolled acreage in each state. New WRP enrollments in
Alabama, Florida, Georgia, Iowa, Minnesota, Missouri, North Carolina,
Pennsylvania and Vermont contributed to this conservation achievement of
having more than 2 million acres enrolled in WRP. Enrolled acres for
each state are available at: www.nrcs.usda.gov.
WRP, administered by USDA's Natural Resources Conservation Service, was
reauthorized in the 2008 Farm Bill. It provides technical and financial
assistance to eligible landowners to address wetland, wildlife habitat,
soil, water and related natural resource concerns on private
agricultural land. The program provides financial incentives to protect,
restore and enhance wetlands on their property. This voluntary program
strives to achieve the greatest wetland functions and values and optimum
wildlife habitat on every enrolled acre.
The enrollment options for landowners are permanent easements, 30-year
easements and a restoration cost-share agreement, as well as 30-year
contracts on acreage owned by Indian Tribes. Additional information on
WRP and other conservation programs is available at www.nrcs.usda.gov.
Source: USDA
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The Perfect Storm For
Agriculture
The island of agriculture, particularly the grain
sector, has been oblivious to the economic downdraft of the general
economy until recently. Is the perfect storm brewing? What are the
potential ingredients?
- First, the new presidential administration decides to lower tariffs
and subsidies on alternative energy, reducing demand for grain.
- Second, changes in tax laws encourage higher tax rates on earnings
and capital gains, changes in estate tax paid and alterations to 1031
exchanges, requiring more taxation.
- Third, the dollar strengthens compared to other currency worldwide,
reducing export potential.
- A prolonged U.S. and global recession reduces the demand for food
and fuel.
- A worldwide shortage of liquidity increases interest rates and
results in an agrilender or lender entrenchment.
- The American public perceives that agriculture is doing well and
creates a public and media backlash to the industry and new
initiatives.
Storms could be brewing off the coast of the island of prosperity for
grain agriculture. If many of these events co-exist and an unexpected
black swan event occurs, a chain reaction could result very quickly, so
start building up your economic storm fortress.
To read more articles written by Dave Kohl, click here: cornandsoybeandigest.com/davidkohl/.
By Dave Kohl, Corn & Soybean Digest
trends editor
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Parents Can Request
Soymilk
USDA has announced that parents or legal guardians may
request soymilk as an alternative to cow's milk for children receiving
National School Lunch and Breakfast program meals. Like cow's milk,
fortified soymilk helps build strong bones with calcium and vitamin D
and contains vitamin A, iron and heart-healthy soy protein. Fortified
soymilk is also cholesterol-free and contains lower amounts of saturated
fat and fewer calories than milk.
The change caters to the growing diversity of program participants and
accommodates lactose intolerance, dairy allergies or cultural diet
restrictions.
To download a copy of USDA’s rules and regulations on milk substitutes
for the school lunch program, click on this PDF Web link: www.fns.usda.gov/.
Compiled By Greg Lamp
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A Note From The Soybean E-Digest
Editor: Banks Are Still Loaning Money
I recently received a note in answer to my request for
reasons for optimism in the face of largely depressing news that we’ve
been encountering lately.
“My bank, which did not participate in the subprime debacle, is still
loaning me money,” writes Michael Rozell, from southeast South Dakota.
“God bless 'em!”
I agree that banks are still lending money, and that’s a good reason
for optimism as farmers begin to prepare for the 2009 crop. However, I
did also receive a reason for concern from another reader.
“The deflationary environment that we are in today will touch every
industry, especially agriculture and production agriculture,” writes
Vince Reincke, Tuscola, IL. “The futures markets are already giving
you a preview of why agriculture is already caught. Agriculture was
caught when ‘funds’ began pumping massive amounts of money into the
futures markets, which drove the price up, and prices came down as that
money exited the market. In the name of tightening credit, the once
untouchable ‘demand’ will decline. The U.S. dollar's strength will
lead to further demand destruction.”
Furthermore, Reincke predicts that crop input prices must also come down
soon, which will be good news for farmers when and if it happens.
As always, you’re welcome to write to me if you have a comment on any
topic related to soybean production, or if you have concerns or
questions about this issue. When writing, please let me know your name,
where you farm or work, what your thoughts are and whether or not I have
permission to use your comment in a future Soybean E-Digest
newsletter. You can contact me (John Pocock) at: john.pocock@penton.com.
I look forward to hearing from you. Stay safe, thanks for your
readership – and farm on!
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