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Trend-Adjusted APH Yield Option

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 ... ]

 

Farm Bill Extension For 2013

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 ... ]

 

Looking Ahead To 2013

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 ... ]

 

2012 Ag Year In Review --- Part II

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 ... ]

 

2012 Ag Year In Review --- Part I

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 ... ]

 

New Farm Bill Update

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 ... ]

 

"Fiscal Cliff" Will Affect Farm Operators

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 ... ]

 

Potential Grain Storage Problems

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 ... ]

 

2012 Custom Rate Charges

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 ... ]

 

EPA Denies RFS Waiver

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 ... ]

 

Nov. 9 USDA Report

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 ... ]

 

Flexible Cash Leases

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 ... ]

 

Higher Land Rental Rates For 2013

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 ... ]

 

October 11 USDA Crop Report

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 ... ]

 

2012 Crop Insurance Considerations

With Federal Crop Insurance, every year is different, and with the multiple options available to producers, there are many variable results from crop insurance coverage at harvest time. 2012 will be no different, with some producers choosing Yield Protection (YP) policies (yield only) versus Revenue Protection (RP) policies (yield and price). Producers also have differences in the level of coverage, and some producers chose “optional units”, while other producers chose “enterprise units” for 2012. [ read more ... ]

 

2012 Harvest Progress

Corn and soybean harvest is progressing at a very rapid rate in most portions of Southern Minnesota and Northern Iowa, as a result of almost perfect harvest conditions. As of September 21, harvest progress for both corn and soybeans was at 25-50 percent completed in much of South Central and Southwest Minnesota. This level of harvest progress is more typical of mid-late October than late September. Most of the crops have matured beyond any potential damage from a killing frost. [ read more ... ]

 

September 12 USDA Crop Report

The USDA Crop Report released on September 12 made a slight decrease in the expected U.S. corn and soybean production for 2012, as compared to the August USDA estimates, reflecting the severity of the 2012 drought in many areas of the U.S. USDA is now estimating the total 2012 corn production at 10.7 billion bushels, which slightly below the 10.8 billion bushel estimate in August. Total U.S. corn production was 12.3 billion bushels in 2011, 12.5 billion bushels in 2010, and 13.1 billion bushels in 2009. If the 2012 projections hold up, this would be the lowest total U.S. corn production since 2006. [ read more ... ]

 

2012 Corn Harvest Underway

The very warm growing season this year has pushed the 2012 corn crop very rapidly toward maturity. Corn harvest has begun in many areas of South Central and Southwest Minnesota. The corn moisture content is in the 20-25 percent range on early planted corn, which is more typical of early October conditions. Corn yields in 2012 are expected to be quite variable across Southern Minnesota, depending on timely rainfalls, soil types, planting date, and corn hybrids. So far, the early corn yields in many areas have been pleasantly surprising, considering the extremely dry conditions that existed throughout most of July and August across the region. [ read more ... ]

 

RFS Being Challenged By Drought

The 2012 drought has brought the Renewable Fuels Standard (RFS) into the forefront. The RFS regulations are managed by the U.S. Environmental Protection Agency (EPA), and those regulations are quite complicated. The RFS requires that minimum levels of renewable biofuels must be used to blend gasoline in the U.S. Corn-based ethanol is the primary fuel ingredient that is used to meet the RFS requirement. Currently ethanol makes up about 10 percent of the U.S. fuel supply, with just over 13 billion gallons of ethanol per year being produced in the U.S. [ read more ... ]

 

Crop Insurance Key To risk Management

Many farm operators across the upper Midwest are facing the most severe crop loss since 1988, with some producers facing the most significant drought since the 1930’s. There will undoubtedly be large financial losses in many areas of the regions to farm operators, associated businesses, and local communities, even in some portions of Southern Minnesota. However, the financial losses to corn and soybean producers in 2012 will be somewhat mitigated by Federal Crop Insurance coverage. [ read more ... ]

 

Livestock Industry Under Stress

The corn and soybean meal market prices have responded to the current U.S. drought with dramatic market increases. Chicago Board of Trade (CBOT) December corn futures prices rose to over $8.00 per bushel by mid-August, an increase of nearly $3.00 per bushel since mid-June, or about a 60 percent increase in about two months. Similarly, CBOT soybean meal prices have increased by nearly $200.00 per ton in recent months, and are now over $500.00 per ton. Corn and soybean meal are important feed ingredients for all segments of the livestock industry. [ read more ... ]

 

USDA AUGUST 10 CROP REPORT

Due to the severe drought affecting much of the major corn and soybean producing areas of the United States, the August 10 USDA Crop Report was very highly anticipated. A large percentage of the primary crop growing areas in Illinois, Indiana, Iowa, Missouri, Nebraska, and Kansas are in severe to extreme drought conditions, with major reductions in crop yields. Portions of Wisconsin, North and South Dakota, Ohio, and Southern Minnesota have also experienced some drought conditions. The USDA crop estimates were based on crop conditions as of August 1, and the USDA Crop Report verified the severity of the 2012 drought. [ read more ... ]

2012 Drought Being Compared to 1988

Ask most current farmers over 40 years old in the Upper Midwest about the worst drought that they remember, and 1988 would be a common response. However, that could potentially change after this year, as the drought in many areas of the Midwest in 2012 is setting up to be quite severe. Large portions of Illinois, Indiana, Iowa, Ohio, Missouri and other States are indicating potential for major crop losses, while growing areas of Nebraska, Minnesota, and South Dakota are facing serious extended dryness that could lower crop yields.  [ read more ... ]

 

Head-High Corn By July 4

For generations, the standard measure for corn growth was “knee-high by July 4th, which meant that the corn plant should be able to produce a crop for that year. Of course, most farmers a couple of generations ago had much lower yield goals for their corn than the farmers of today. Today, “waist-shoulder high” corn by July 4th is a more typical, and has resulted in some very good corn yields in most areas in recent years. It is difficult to get exceptional corn yields in the Southern half of Minnesota or in Iowa, if corn is only “knee-high” or smaller on July 4th[ read more ... ]

 

Land Values Rise

The rapid rise in farm land values in Minnesota and other areas of the Upper Midwest are discussed quite often by farmers and other rural residents across the region. Many times the extremely high value land sales generate most of the discussion. Of course, there are many other land transactions that take place throughout the year that are recorded at County Offices, but are not usually made public. When looking at trends in land values, it is important to look at all of land sales data. [ read more ... ]