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  October 22, 2007 A Penton Media Property Volume 2, Number 16  
TABLE OF CONTENTS
Drought-tolerant Corn To Boost Average Yields Even Higher

Need Tips For Growing Continuous Corn?

Grain Market Q & A, With ISU's Bob Wisner

Sen. Harkin: Agreement On Ag Committee Farm Bill

Corn Rootworm Populations Are Spreading East

Is U.S. Ethanol Growth In Stagnation?

House Passes 25 By '25, Renewable Fuels Bill

Wet Weather Raises Iowa Corn Quality Concerns

Farmland Prices At Odds With Farmland Returns?

MarketMaxx: Time To Wrap Up Your Trades

Ethanol Co-Products Could Lower Cost of Freshwater Fish Production

If Corn Is Biofuels King, Tropical Maize May Be Emperor

Warning: Assumptions Often Lead To Conflicts

Tips On Growing Corn On Corn: A Note From The Corn E-Digest Editor



Key Kernel
Drought-tolerant Corn To Boost Average Yields Even Higher
The expectation that corn yields will continue to climb dramatically each year may be unrealistic without either irrigation or significantly improved drought tolerance in corn, says Emerson Nafziger, University of Illinois Extension agronomist.

"Some people are predicting 250-bu. average corn yields by 2025, based on progress over the past few decades," says Nafziger. "If that happens, 300 bu./acre will be commonplace. However, to reach those types of yields, the plant's water-use efficiency will have to be greatly improved, and corn is already one of the most water-use-efficient crops that we have."

Corn plants require about 22 in. of water uptake to produce a 200-bu. corn yield, says Nafziger. He predicts that it would take about 33 in. of water to produce 300-bu. yields. In an average year, 33 in. is close to the total precipitation that much of the Corn Belt receives, but not all of that precipitation is available to a crop.

"Seasonal rainfall in Illinois averages only 16-21 in.," says Nafziger. "So, the plant would need to take up at least another 12-15 in. of water from the soil to make 300-bu. yields. It would be quite a trick for corn plants to do that routinely -- the root systems would have to be more extractive of water and would either need to grow deeper or be more finely divided than most systems are now."

Still, the Illinois corn crop took up a lot of water from the ground -- as much as 12 in. -- from planting until harvest this year, in areas where rainfall was only 8 in. or so, estimates Nafziger. So progress is being made, but "water still needs to be there when the crop needs it or we're in big trouble."

It will probably take irrigation to produce the high yields that people are projecting to become commonplace in another 20 years, if we assume that rainfall patterns will stay the same, speculates Nafziger. He cites the award-winning corn and soybean yields that Kip Cullers has achieved on his farm near Stark City, MO, as an example of what ample irrigation can do for yields.

However, that type of irrigation won't be applicable for most fields in Illinois, he adds. "In general, the Midwest is not a prime spot to irrigate, because we don't have the groundwater to do it," says Nafziger. "Irrigation is also an expensive investment that isn't necessary often enough to make it pay in much of the Midwest, except in sandy soils with good water availability. And, if people think having enough water to operate an ethanol plant is a big issue, then just wait until everyone wants to irrigate corn in the Midwest -- one inch of water over one acre is 27,000 gallons."

Plant breeders continue to improve hybrids to tolerate drought better, says Wenwei Xu, Texas A&M plant breeder. "We're breeding drought-tolerant corn lines to be more tolerant to high temperatures and to have bigger root systems that can take up more water from deep in the soil," says Xu. "Texas A&M released a couple of drought-tolerant corn lines in 2004 that were quite good. Most of the major seed companies have been licensed to use these lines in their breeding, and they are developing their own lines of drought-tolerance."

Texas A&M's drought-tolerant corn lines and hybrids have been tested in Iowa by the USDA Agricultural Research Service, adds Xu. "Those lines have looked very good in field trials over the last three years," he says. "Drought tolerance has been a major breeding effort for quite some time. Advances are being made every year."

By John Pocock

Cob And Kernel
Need Tips For Growing Continuous Corn?
Farmers who want advice on growing continuous corn now have a Web site geared just for them, thanks to the editors of The Corn And Soybean Digest (CSD). Current content includes tips on residue management, soil fertility, disease and insect management and five specific tips to chop yield drop.

Click here to visit CSD's corn on corn Web site and to start gleaning management recommendations: cornandsoybeandigest.com/cornoncorn/.

Source: The Corn And Soybean Digest
Grain Market Q & A, With ISU's Bob Wisner
Be careful what you ask for. Corn, soybean and wheat prices are all strong this fall, but some farmers are now in a dilemma over which crops to grow for 2008. Others have unsold grain on hand and wonder if they should sell it now or wait for possibly higher prices later.

To help farmers better understand the current grain marketing situation and to provide advice on what to do, Bob Wisner, Iowa State University Extension economist, answers some questions currently talked about in Corn-Belt coffee shops. Here they are:

Question: What is the expectation for continued strong grain prices this marketing year?

Answer: Strong corn and soybean prices appear likely to be more long-lasting than wheat prices, due to the continued expansion in biofuels production. How strong they are in the next few years will be determined by how quickly the infrastructure for transporting, distributing and marketing ethanol can be expanded.

Ethanol production has expanded more rapidly than the infrastructure's ability to absorb it. Depressed ethanol prices and historically high corn prices are slowing (but not halting) the expansion in corn processing for ethanol. The biofuels expansion is setting the stage for a battle among corn, wheat, soybeans and cotton for cropland in 2008 and the next several years. The acreage battle is not just here in the U.S., but also is occurring in Europe and South America.

The market's current extremely strong wheat prices appear likely to be a one-year event, although wheat prices will receive some support over the next several years from the rapid expansion in ethanol production and competition with feed grains for cropland. This year, there are similarities for wheat markets compared to 1995-1996, since the wheat market is being driven by very severe drought in Australia for two consecutive years and with weather problems in Europe, the U.S., parts of the former Soviet Union, Canada and other areas.

Question: Can we expect corn exports to stay strong?

Answer: I believe the strong foreign demand for U.S. corn this year is largely weather-driven, although long-term growth in the world economy and the weak dollar also are positive influences. Corn and wheat exports going back to the early 1900s and even earlier have shown a saw-tooth pattern, with years of strong exports being followed the next year or two by a sharp drop in exports.

This year, with $9-10 weather-driven wheat prices, wheat feeding in international markets has become very expensive. That in turn has shifted demand to U.S. corn. Normally, 4 billion bushels or more of wheat are fed annually in international markets. That's twice as much as normal U.S. corn exports. Very high wheat prices this fall will stimulate a sharp increase in wheat plantings world-wide and, weather-permitting, probably a sharp decline in wheat prices in late spring and summer of 2008. That should allow wheat feeding to shift back to its long-term pattern, but at the expense of a drop in U.S. corn exports.

One unknown in corn export prospects for the next few years, however, is China. With its economy growing at 8-10% annually and the rising incomes of middle class Chinese, demand for meat is expanding rapidly there. China has a huge potential for increasing its low (by western standards) corn yields, but it remains to be seen whether its farmers can do that fast enough to keep pace with the growing meat demand. If China should become a net corn importer, that would be a strong positive influence on corn prices as Chinese livestock producers and feed mills there compete with expanding demand for corn in the U.S. and other countries for ethanol production.

Question: How is current U.S. corn feed use impacting prices?

Answer: Indications of reduced feed use are slightly tempering corn prices, although grain traders are skeptical that actual corn feeding has declined as much as indicated. The bigger-than-expected drop in indicated corn feeding occurred during the summer quarter of 2007. One factor that may have contributed to it is an extremely wet wheat harvest from Kansas southward through the wheat belts of Texas and Oklahoma. That situation led to a lot of down wheat, sprout damage and related problems. So, feeding of low-quality wheat in the U.S. this summer likely was considerably larger than normal and substituted for corn.

Also, the double- and triple-digit percent increases in corn plantings in the South led to much more early harvested corn in August being available for feeding or export than in the past. If this corn was used in August (or was in transit), it would not have been picked up in the stocks report. Therefore, it would appear statistically as having been fed as old-crop corn. Livestock marketing weights dropped back a little, also tending to reduce corn feeding. One more influence on corn feeding is the expansion in feeding of distiller's grain. However, that influence was not new to this year. It has been affecting corn feeding for the last several years and would show up as a reduction in the amount of corn apparently being fed.

Question: Did we grow too much corn in 2007 and will we likely see a switch to soybeans and wheat?

Answer: It looks clear that corn supplies will be fully adequate for the next 10 months, due to the 20% increase in corn plantings last spring and generally good yields in major corn-growing areas. Carryover stocks will likely increase substantially by next August 31, with the exact amount depending on how quickly ethanol infrastructure can be expanded to absorb sharply increased production. Some of those increased stocks likely will be needed in 2008-2009.

The flip side of this picture is the very tight wheat and soybean supplies that have developed, as well as a tightening cotton supply-demand picture. This year's huge increase in corn acreage came as a result of a 16% drop in soybean plantings, a 29% drop in cotton acreage and an 8% decline in non-durum spring wheat acreage. Markets for these other crops now see the need for buying back part of the acreage lost to corn in 2007.

It would not be surprising to see 1.5-3 million acres in the eastern Great Plains, eastern Corn Belt, and South shifting from corn and soybeans to wheat this fall. Soybeans may well need 5-7 million more acres in 2008 than were planted this year. Most of that likely will come from corn. At this writing, it looks like next year's corn acreage could be down 5-7 million acres from 2007. If so, that will tighten corn supplies starting next fall.

Question: What else should corn growers consider when thinking about how many acres to plant in 2008 and when to market any unsold corn?

Answer: Some important points to keep in mind are:
  1. Both the corn and soybean markets are offering very good returns for storing, hedging or forward contracting grain for delivery next spring and summer -- if you have adequate on-farm storage. If you have one or more semi-trucks and can watch basis bids at several markets in a 40-100-mile radius, then that is an additional bonus. I lean toward leaving the basis on forward contracts open until later, especially if you are in an area that has a lot of ethanol plants and feed mills.
  2. The weak returns for processing corn into ethanol are a caution for spring and summer corn prices. There is downside risk, especially if weather permits a sharp increase in foreign wheat production and a shift back to foreign wheat feeding in the late spring and summer.
  3. Corn and soybean prices this winter will be driven by indications of acreage patterns in South America, U.S. acreage prospects for spring 2008 and South American weather. South American soybean acreage to date looks like it may be up 5-7% from last season, along with a sizeable increase in corn plantings. That, plus a large shift back into soybeans in the U.S. would suggest that the top in the bean market may occur this winter. Bean prices in 2008 could look like corn prices did in 2007.
A wild card in the picture is that weather analysts indicate a La Nina weather pattern appears to be emerging. That increases the chance of drought in South America this winter and in the U.S. next summer. So watch weather developments closely. And in marketing decisions, keep in mind the scale-up concept with increasing sales as prices rise. Also, keep in mind that offer contracts (offering buyers a price and/or basis where you are willing to sell) can be very useful tools for new and old-crop sales. Lastly, remember the old rule that you can't go broke taking a profit.

By John Pocock
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Sen. Harkin: Agreement On Ag Committee Farm Bill
The discovery of $3-3.5 billion in savings from a slightly altered version of the revenue counter-cyclical program that's been making the Washington rounds has helped put the Senate's 2007 Farm Bill back on track.

Senate Agriculture Committee Chairman Tom Harkin announced during a telephone news conference Wednesday (Oct. 17) he had reached a basic agreement on the new Farm Bill with key members of the committee. He said he expected to report the bill to the Senate floor during a mark-up session scheduled for Oct. 24.

The savings -- and funding from a Senate Finance Committee tax package -- would provide $4.2 billion in extra money for food stamps, $1 billion to expand the Fresh Fruit and Vegetable Program in the nation's schools, $1.3 billion for biomass energy research and $3.7 billion more for Harkin's treasured conservation programs.

To read this article in its entirety, click here: deltafarmpress.com/news/071018-agreement-committee/.

By Forrest Laws
Corn Rootworm Populations Are Spreading East
Populations of western corn rootworm and its variant counterpart continue to increase in fields throughout western and northwestern Ohio, and are even beginning to spread east, according to Ohio State University Extension sampling.

In preliminary data of the first year western corn rootworm variant, 26 of 93 fields reported have reached or come close to the threshold of five adult corn rootworm beetles per trap per day, says Ron Hammond, an OSU Extension entomologist with the Ohio Agricultural Research and Development Center. "This year we have seen populations similar, if not slightly more, to what we saw last year with regards to the variant," he says. "Most of these fields are still in the northwest and west-central portions of the state, from Fulton County down to Darke County, and as far east as Crawford County.

"In terms of the normal western corn rootworm, we are seeing higher populations throughout the area, as well," adds Hammond. "Unlike five years ago, when the pest was something we had to just simply be aware of, now it's getting to be a concern."

Entomologists are also continuing to see high levels of corn rootworm injury this past summer, both in corn following corn and in first-year corn following soybeans. Larvae hatching in cornfields following corn, or, in the case of the variant, hatching into cornfields that had been in soybeans the previous season, cause the most significant damage by feeding on corn roots. In severe cases, corn lodging can occur and reduce yields.

Fields reaching threshold numbers will need a preventive treatment for rootworm if corn is planted into those fields next spring, advises Hammond. There are many management options available to growers to help control populations and reduce feeding injury. They include:
  • Granular insecticides -- Several granular insecticides are available, and all do a good job against corn rootworm populations. "The most important thing about using granules is to make sure the granular equipment is properly calibrated and the granules are applied properly at planting," says Hammond.
  • Liquid insecticides -- Like granule insecticides, these products are effective in controlling rootworm larvae.
  • Seed treatments -- Currently there are two seed treatments that are effective against the corn rootworm: Cruiser and Poncho. "They do a good job against low to moderate populations, but they may not do a good job against high populations," says Hammond. "If populations are severe, then we don't recommend using the products."
  • Crop rotation -- In areas not impacted by the western corn rootworm variant, crop rotation is the best management practice. "Crop rotation still does the job in breaking the cycle," says Hammond. Continuous cornfields are most at risk for corn rootworm problems, since most adults lay eggs in cornfields for larvae emergence in the following year's corn crop.
  • Transgenics -- Corn hybrids with single or stacked traits can be used, especially in fields impacted by the corn rootworm variant. "There are several Bt-rootworm transgenic hybrids that can be used to control the rootworm," says Hammond. "If using a transgenic hybrid, a grower must plant a 20% refuge within or adjacent to the transgenic corn." The refuge prevents the corn crop from losing its resistance to corn rootworm.
Sampling is the first step in determining the level of corn rootworm populations in a given field, notes Hammond. "Unless you have sampled your field, you don't know for sure if you will have a problem with corn rootworm," he says. "If growers haven't sampled their fields for next season's management, then they should check with their Extension office to see where the county is in terms of populations. It will at least give growers an idea as to whether or not they should treat."

Extension specialists have been tracking corn rootworm populations in Ohio for the past decade. For more information on corn rootworm, refer to the OSU Extension Agronomic Crops Team Web site at agcrops.osu.edu. Additional information on corn rootworm management can be found at ohioline.osu.edu/ent-fact/0016.html.

Source: Ohio State University Extension
Is U.S. Ethanol Growth In Stagnation?
Even with record petroleum prices last week, the price for ethanol isn't keeping pace enough to spur growth for the industry, according to Bob Wisner, Iowa State University Extension economist.

"Current ethanol processing margins in Iowa appear to be near the break-even level for many plants and even below break-even for some," says Wisner. "Actual margins will vary with location, transportation facilities, distance from major urban markets, size of plant, success of the plant's merchandiser in booking corn when prices are low and other factors."

However, profit margins for ethanol plants in states that are closer to major urban markets and/or have more beef feedlots or dairy production are faring somewhat better, he adds. "The current pressure on margins is slowing but not halting the expansion in industry capacity," notes Wisner. "The problem is not lack of demand for ethanol from a consumer perspective. Instead, it is bottlenecks in the infrastructure that restrict movement of ethanol from the Corn Belt to big demand areas on the East and West Coasts and the South."

A differential of roughly 50 cents between western Corn Belt wholesale ethanol prices and wholesale gasoline prices plus the 51 cent blending credit are strong incentives to expand infrastructure capacity, points out Wisner. "If Congress decides to increase the mandated yearly ethanol production to the 8.5-9.5 billion gallon level, effective in 2008, this would be a further significant incentive to improve the infrastructure and thereby encourage continued expansion in ethanol production capacity," he adds.

By John Pocock
House Passes 25 By '25, Renewable Fuels Bill
The House of Representatives passed a resolution expressing the sense of Congress that by the year 2025 at least 25% of the total energy consumed in the U.S. should come from homegrown, renewable sources. Today, renewable energy sources provide approximately 6% of total U.S. energy needs. The resolution was introduced by Congressmen Collin Peterson (D-MN), chairman of the House Agriculture Committee, and Bob Goodlatte (R-VA), ranking member of the House Agriculture Committee.

By P. Scott Shearer
Wet Weather Raises Iowa Corn Quality Concerns
Rain has caused significant delays and potential damage to the Iowa corn crop. As of Oct. 14, 63% of the nearly 14 million acres of corn in the state remained mature yet unharvested. Little has been harvested since then.

Several Iowa State University Extension crop and grain quality experts offer advice on how to handle the extreme moisture affecting the unharvested corn crop in Iowa. Click here to read their recommendations: www.extension.iastate.edu/news/2007/oct/071902.htm.

Source: Iowa State University
Farmland Prices At Odds With Farmland Returns?
Likely increases in cash rents will bring farmland prices and capitalized values more closely in line with the historical average difference, according to a University of Illinois (U of I) Extension study.

"Recent increases in farmland prices raise questions about whether the farmland price increases are outpacing increases in farmland returns," says Gary Schnitkey, U of I Extension farm financial management specialist and author of the study, "Are Farmland Prices in Line with Farmland Returns?"

USDA's list of average prices for Illinois masks differences across the state, notes Schnitkey. For example, farmland prices are much higher near Chicago. Because of those differences, price-to-return relationships vary across the state.

"Farmland prices increased from $490/acre in 1970 up to $2,023/acre in 1982," he says. "Then, prices decreased, reaching a low of $1,149/acre in 1987. Since 1987, farmland prices have increased each year, with the average yearly increase 7%.

"Since 2003, increases have been above 7%," adds Schnitkey. "Farmland prices increased 7.4% between 2003 and 2004, 27.6% between 2004 and 2005, 14.1% between 2005 and 2006, and 13.9% between 2006 and 2007. Between 2003 and 2007, farmland prices increased by $1,900/acre -- 78%."

To read entire U of I farmland study results, click here: www.farmdoc.uiuc.edu/manage/newsletters/fefo07_15/fefo07_15.html.

Source: University of Illinois Extension
MarketMaxx: Time To Wrap Up Your Trades
When the first MarketMaxx game started about three years ago, players were pondering whether $2.50 corn or $7 soybeans were smart trades. Have times changed, or what?

And as is indicated by the down-the-stretch selling prices among leaders on MarketMaxx 2007, winners in the contests from The Corn And Soybean Digest will be at or way above lofty numbers. There are nearly 7,000 MarketMaxx players this year. And knowing how to handle today's wild and volatile markets is what makes a program like MarketMaxx an important educational tool for players and others, says Richard Brock, marketing consultant for The Corn And Soybean Digest and head of Brock & Associates, Milwaukee, WI.

"The number one thing that using MarketMaxx has taught them is the extreme volatility of the grain markets," says Brock, speaking of regular 50-70 cents/bu. weekly market swings. "If they are futures and options traders, they have really seen the ups and downs."

The latest MarketMaxx leading corn and soybean prices can be viewed at www.marketmaxx.net/. That's also where final trades must be made in this year's game before it officially ends at midnight Oct. 31.

To continue reading this article on the MarketMaxx grain marketing game, click here: cornandsoybeandigest.com/marketing/marketmaxx-marketing/.

By Larry Stalcup
Ethanol Co-Products Could Lower Cost of Freshwater Fish Production
Add this to the list of ethanol's potential benefits: lowering the cost of fish production.

Fish feed is a major expense for many aquaculture operations. New research by Agricultural Research Service scientists shows that ethanol co-products can provide protein for fish feeds at a lower cost than the soybean-corn combinations commonly used.

The recent proliferation of ethanol processing facilities has led to a surplus of distiller's dried grains with solubles, or DDGS -- a nutrient-rich processing co-product that is often used to feed livestock.

DDGS is relatively protein-rich and lacks some of the undesirable characteristics that make many plant protein sources less suitable for use in fish feeds. In addition, DDGS is cheaper and more palatable to fish than soybean-corn combinations.

To read this article in its entirety, click here: www.ars.usda.gov/is/pr/2007/071019.htm.

By Laura McGinnis
If Corn Is Biofuels King, Tropical Maize May Be Emperor
When University of Illinois (U of I) crop scientist Fred Below began growing tropical maize, the form of corn grown in the tropics, he was looking for novel genes for the utilization of nitrogen fertilizer and was hoping to discover information that could be useful to American corn producers.

Now, however, it appears that maize itself may prove to be the ultimate U.S. biofuels crop. Early research results show that tropical maize, when grown in the Midwest, requires few crop inputs, such as nitrogen fertilizer, chiefly because it does not produce any ears. It also is easier for farmers to integrate into their current operations than some other dedicated energy crops because it can be easily rotated with corn or soybeans, and can be planted, cultivated and harvested with the same equipment U.S. farmers already have. Finally, tropical maize stalks are believed to require less processing than corn grain, corn stover, switchgrass, Miscanthus giganteus and the scores of other plants now being studied for biofuel production.

To read this article in its entirety, click on the following U of I pdf Web link:
www.bioenergy.uiuc.edu/pdf/Tropical%20Maize.pdf.

By Marilyn Upah Bant

Off The Cob
Warning: Assumptions Often Lead To Conflicts
Passing the farm on to the next generation often proves to be a difficult task for farm families. "Many conflicts come from people assuming things," says Duane Hund, coordinator of the K-State Farm Analyst Program. "If mom and dad aren't open, it leads to assumptions. They need to be clear on who gets what."

A K-State workshop series to help farm families with the difficulties of transition are being held this winter in Junction City and Hays, KS. For more information, visit www.agmanager.info/Transitions/2007.

Source: Kansas State University Research & Extension
Tips On Growing Corn On Corn: A Note From The Corn E-Digest Editor
If you've had success growing corn on corn recently and would like to share tips for other farmers on what might help them to improve, please let me know who you are, where you farm and what specific things worked best.

If you have any other ideas on what you'd like to see covered in a future issue of the Corn E-Digest, or if you have concerns or questions about this issue, please write me (John Pocock) at: jpocock@csdigest.com.

As always, thanks for your readership.


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