Like the start of a big race, or the beginning of a championship game, farmers in Minnesota and Iowa are anxiously awaiting the initiation of full-scale field work. Very cool temperatures and moist soil conditions have existed across the region during most of the month of April, resulting in cold soil temperatures and soil conditions which have not been conducive to the initiation of corn planting in Minnesota and Iowa. A few farm operators have planted some peas and small grain crops in isolated locations in recent days; however, in most areas, soil conditions have remained too cold and wet to begin full-scale Spring fieldwork. [ read more ... ]
For over four decades, an annual event called “EARTH DAY” has been held in late April across the United States, which has been a time for all U.S. citizens to reflect on our Country’s environmental resources, and what we can do individually and as communities to help enhance our environment for the next generation. In recent years, it has become fashionable to point the “finger of blame” at agriculture and farmers for many environmental issues. However, in reality farmers have been some of the best “environmental stewards” in the U.S. in the past couple of decades. [ read more ... ]
An alternative to leasing farmland is a “Custom Farming Agreement”. In a typical Custom Farming Agreement, the custom operator agrees to perform all the machine operations on the owner’s land in exchange for a set fee or rate. The landowner pays for all seed, fertilizer, chemicals, crop insurance, and other input costs; receives the all grain produced and all eligible farm program payments on the land; and is responsible to store and market the grain. [ read more ... ]
In 2012, most farmers in Southern Minnesota and Iowa began full-scale field work during the week of April 10-17, with most of the corn being planted by the end of April. By comparison in 2013, we are not likely to see much full-scale field work across the region until after April 15, and we are probably a couple a weeks away, at a minimum, from seeing a significant amount of corn being planted. Soil temperatures are still well below minimal acceptable levels for planting corn, and there is still a considerable amount of frost in the ground in many areas. Some portions of Southeast and Central Minnesota still have sinficant snow cover to melt. [ read more ... ]
On March 28, 2012, USDA released its “Prospective Plantings Report” and its “Quarterly Grain Stocks Report”. These were very highly anticipated USDA Reports, due to the uncertainty in grain prices in recent months, as well as with the tight USDA estimated grain stocks that existed in recent months. Typically, these late March USDA Reports are very critical to farm operators and grain traders because these reports tend to have a high impact on grain market prices in the Spring and early Summer. This is the time of the year when many farm operators try to sell remaining grain inventories from the previous growing season, as well as look for opportunities to forward price a portion of the anticipated crop for the current year. In a majority of years, corn and soybean prices usually reach their peak price in the Spring months, from April until June. [ read more ... ]
As would be expected with increasing fuel costs, average 2013 custom rates for farm work have a1so risen, compared to 2012 custom rates. Most custom rates for farm work in 2013 are listed at 3-5 percent above the rates for similar operations in 2012, with an average increase of about 4 percent. In addition to higher fuel costs, increasing cost for new and used machinery, and rising repair costs, are also factors in the higher custom rates. [ read more ... ]
“National Ag Week” is being celebrated March 17-23 all across the United States, as well as in Minnesota, with Tuesday, March 19, being designated as “National Ag Day”. As we celebrate “National Ag Week”, it is a good time to reflect on all the traditions and advancements that help make the U.S. agriculture industry second to none ! [ read more ... ]
In 2013, the Conservation Reserve Program (CRP) is celebrating its 27th anniversary, and over two and a half decades of conservation success. CRP was originally established in the 1985 Farm Bill, and today has over 390,000 landowners participating, most of which are farmers and ranchers, and currently has just over 27.0 million acres under some-type of CRP contracts. Another General CRP will be held in 2013, with the sign-up period from May 20 through June 14, 2013, at local FSA Offices. [ read more ... ]
On February 8, USDA released the latest World Agriculture Supply and Demand Estimates (WASDE) Report, which showed slight increase in the expected U.S. corn ending stocks for 2012-13, compared to the January estimates. The projected 2012-13 corn ending stocks are now estimated at 632 million bushels, as compared to 602 million bushels in the January report. By comparison, corn ending stocks at the end of 2011-12 marketing year were 932 million bushels, and were just over 1.1 billion bushels at the end of the 2010-11 crop year. The all important corn “stocks-to-use” ratio for 2012-13 is estimated to be near 5.6 percent by the end of the current marketing year, which is slightly higher than the lowest ever stocks-to-use percentage of 5.0 percent in 1995-96. That will put the corn stocks down to slightly over 20 days of usage, which is still quite tight. [ read more ... ]
In early January, Congress voted to extend the 2008 Farm Bill, which expired on September 30, 2012, for an additional year, with a new expiration date of September 30, 2013. This means that most existing programs in the 2008 Farm Bill will continue for the 2013 growing season. The USDA Farm Service Agency (FSA) recently announced that sign-up for the 2013 farm program will begin on February 19, 2013, at local FSA Offices, and run through August 2, 2013. [ read more ... ]
The 2012 crop year and the major drought that affected much of the United States is now behind us; however, many areas of the Western Corn Belt, including much of Southern and Western Minnesota continue to face drought concerns for the coming 2013 crop year. Anytime we have a major disaster, such as the 2012 drought, it is always good to review what happened or didn’t happen, and to use those findings to strategize for the future. Following are some key observations relative to the 2012 drought that can help farm operators and the agriculture industry plan for the coming years : [ read more ... ]
Now is the time to start planning crop insurance strategies for the 2013 crop year, even though the crop insurance enrollment deadline for corn, soybeans, and spring wheat in the Upper Midwest is not until March 15, 2013. For the first time in 2013, wheat producers in most of West Central and Northwest Minnesota, Northeast South Dakota, and most of North Dakota will be eligible for the TA-APH endorsement. The TA-APH will likely be quite attractive to many Midwest corn and soybean producers, as well as wheat producers in those selected areas. The coming crop year will likely feature a high level of price volatility, along with considerable drought risk in many areas of the Midwest. [ read more ... ]
As part of the Congressional agreement that was passed to avoid to so-called “fiscal cliff”, the 2008 Farm Bill was extended through the 2013 crop year, and will now expire on September 30, 2013. The extension of the current Farm Bill was viewed as a big disappointment to several members of Congress from both parties, as well as by many agricultural organizations and other groups that were hoping for reform in ag policy with a new Farm Bill. In late April, 2012, the U.S. Senate passed a version of the new Farm Bill, which was followed by the U.S. House Agriculture Committee passing a new Farm Bill out of Committee during the Summer of 2012. However, the U.S. House failed to take up the new Farm Bill on the House floor prior to the end of the 2012 Congressional session, resulting in the one-year extension of the current Farm Bill. [ read more ... ]
2013 is setting up to be another interesting year in the agriculture industry, following a very profitable year in 2012 for most crop producers in the upper Midwest, and a fairly negative profit year for most livestock producers. 2012 ended with a Farm Bill Extension, but without a new Farm Bill, to replace the current Farm Bill that officially expired on September 30, 2012. Following are some items that are likely to be on the forefront in the agriculture industry for 2013 : [ read more ... ]
This is the second of a two-part article highlighting what happened agriculturally in 2012. This article will focus on a review of 2012 livestock production, input costs, and grain prices this week, following a review of 2012 crop production and weather conditions in the previous article. Following are some highlights regarding livestock production, input costs and grain prices for 2012 : [ read more ... ]
As we reach the end of the year, it is a good time to reflect on what happened agriculturally in the region and across the United States in 2012. This will be a two-part article, with a review of 2012 crop production and weather conditions this week, and a review of livestock production, input costs, and grain prices in the next article. Following are some highlights regarding crop production and weather conditions for 2012 : [ read more ... ]
The current Farm Bill expired on September 30, 2012, and some programs will be discontinued without a new Farm Bill, or an extension of the current Farm Bill. In late April, 2012, the U.S. Senate passed their version of the next Farm Bill, which was followed by the U.S. House Agriculture Committee passing a Farm Bill out of Committee during the Summer months. However, the U.S. House failed to take up the Farm Bill on the House floor prior to the Congressional recess before the 2012 Election. [ read more ... ]
The so-called “fiscal cliff” is a name that has been attached to the combination off spending cuts and tax increases at the Federal level that are scheduled to take effect at the end of 2012, if Congress fails to reach an agreement to address the Federal budget deficit. Both the U.S. Senate and the U.S. House are trying to find a Federal Budget compromise that can be passed by both Houses of Congress, and ultimately signed into law by President Obama. Congress has set up legislation that will allow the automatic tax increases and federal spending reductions to occur, if no budget agreement is reached. [ read more ... ]
Many corn and soybean producers across the Midwest completed harvest by mid-October, and now need to pay close attention to grain that is stored in on-farm grain bins for potential storage problems. Much of the corn and soybeans in 2012 were harvested and placed into grain bins at very warm temperatures; however, we have had a wide range of temperatures in the past several weeks, from fairly warm to quite cold. [read more ... ]
An increased number of farm operators are now providing some type of custom work to other farmers during the growing season. Many times, the farmers involved in custom work arrangements wonder what a fair custom rate is for the various faming practices that were performed. Iowa State University releases the annual “Iowa Farm Custom Rate Survey” each year in February, which is based on a survey of custom operators, farm managers, and ag lenders on what they expect custom farm rates to be for various farm operations to be for the coming year. This is probably the most widely used and updated custom rate information that is available in the Upper Midwest. [ read more ... ]
The U.S. Environmental Protection Agency (EPA) recently announced that it would be denying the request for a waiver of the Renewable Fuels Standard (RFS). The EPA indicated that the agency did not find the necessary evidence to support a finding of “severe economic harm” that would have warranted the RFS waiver to be granted. EPA used a series of economic analyses and modeling done in conjunction with USDA and the U.S. Department of Energy (DOE). EPA indicated a strong recognition of the severe drought in 2012, along with the economic hardship it has placed on livestock producers; however, based on the analysis conducted, EPA did not feel there was enough justification for a RFS waiver at this time. [ read more ... ]
The USDA Report released on November 9 increased the estimated total soybean production in 2012 to 2.97 billion bushels, which is 4 percent above the 2.86 billion bushel estimate in October. The 2012 soybean production estimate is still 4 percent lower than the 2011 U.S. soybean production of 3.09 billion bushels, and 11 percent below the 2010 production level of 3.33 billion bushels. This production increase is a fairly major production adjustment for this late in the year. [ read more ... ]
We have received a large number of inquiries for information on the potential use of “flexible cash leases” for the 2013 crop year. Flexible leases also work well for newer or younger farm operators that may not be able to afford the higher cash rental rates for farm land. A flexible lease makes it easier to use a crop revenue insurance policy, along with some forward pricing of grain, as risk management tool for farm operators. Most Ag Lenders are quite supportive of the use of flexible leases by farm operators, as a risk management tool. A flexible lease, with a fair base rental rate, allows landlords the security of a solid base rental rate, while having the opportunity to share in added profits when yields and crop prices exceed expectations. Flexible leases are a nice alternative for Landlords that want to continue to work with long-standing farm operators with cash rental arrangements, without setting cash rental rates too high to keep the current tenants. [ more ... ]
The continued strength in corn and soybean commodity prices in the past few months, and the resulting increase in crop income per acre for 2012, has caused many landlords to consider significant increases in cash rental rates on farm land for 2013. This comes after substantial increases in most rental rates from 2008-2012. Many crop producers are concerned that the favorable crop prices may not last long term, and that the gross income per acre in future years may not be high enough to justify the higher cash rental rates that are being proposed for the 2013, or potential future rental rate increases. In addition, crop input costs for seed, fertilizer, chemicals, fuel, and crop drying are likely to be higher in 2013, after a rise of about 10-20 percent for the 2011 and 2012 crop years. [ read more ... ]
The October 11 USDA Crop Report showed significant increases for both corn and soybean yields in Minnesota, as compared to September Crop Report. This corresponds closely to actual corn and soybean yields being reported from many areas of the State, which have been better than expected, given the extremely dry weather conditions that existed in several areas. Crop yields in the Southwest and South Central parts of the State have been highly variable due to the drought conditions that existed during the last half of the 2012 growing season. However, it appears that adequate stored soil moisture resulting from the above normal rainfall in May, along with some timely rainfalls during the critical portion of the growing season, helped achieve the better than expected 2012 corn and soybean yields in many areas of the State. Minnesota is certainly the “bright spot” in the U.S. in 2012 for corn and soybean yields, as nationwide yield results come in during this drought year. [ read more ... ]
