The corn crop in Southern Minnesota and Northern Iowa is being planted in very rapid fashion when soil conditions are fit for planting. During a 4-day period from April 24-27, nearly ideal planting weather resulted in a large amount of corn being planted in most portions of South Central Minnesota. Crop experts have estimated that as much as 15 percent of the corn raised in a given area can be planted in one day, when field and soil conditions are at optimal levels, such as they were during that 4-day period. As of April 27, it was estimated that 50-65 percent of the 2012 corn crop has been planted at many locations in Southern Minnesota. Some producers have finished their corn planting, and are now waiting a bit to begin planting soybeans, hoping for a bit warmer soil temperatures. Soybeans can be planted up until about May 20-25 in order to maintain optimum yield potential. In general, soybean yields are much less sensitive to planting dates than corn. [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 ... ]
For the past 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. This has been accomplished with a relatively small investment of Federal tax dollars. [ read more ... ]
Like the start of a big race, or the beginning of a Championship game, farmers in Southern Minnesota and Iowa are likely to begin the initiation of full-scale field work on April 11, or shortly after. April 11 is the earliest corn planting date allowed by the USDA Risk management Agency (RMA), in order to maintain full crop insurance replant coverage on the 2012 crop. Corn planted prior to April 11 is not eligible for replant coverage, if the crop is damaged by frost, heavy rains, or hail damage; however, the crop is still insured with full crop insurance coverage, as long as the producer follows all other crop insurance requirements. The earliest planting date for soybeans in Southern Minnesota and Iowa is April 21. [ read more ... ]
The Conservation Reserve Program (CRP) is likely to be a key focal point during the development of the next Farm Bill in the coming months. In an era when the Congress and the Administration are looking to reduce the Federal budget deficit, there will be pressure to reduce the current annual expenditure of just under $2.0 billion on the CRP program, including about $1.7 billion in annual rental payments. Most experts expect the size of the CRP program to be reduced from the current maximum level of 32 million acres to around a maximum of 25 million acres in the next Farm Bill. [ read more ... ]
During March, several all-time record temperatures have been set in Minnesota and Iowa. At the University of Minnesota Research Center at Waseca, the 2012 high temperature hit 79 degrees four straight days from March 17-20, and set seven record March high temperatures by March 21. [ read more ... ]
On March 30, 2011, 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 on March 1. 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... ]
USDA has announced a General Conservation Reserve Program (CRP) sign-up from March 12 through April 6, 2012, at County Farm Service Agency (FSA) offices throughout the Country. There are approximately 6.5 million acres of CRP land with expiring contracts on September 30, 2012. General CRP sign-ups were also held in 2011, when 3.75 million acres were accepted into CRP, and in 2010, when about 4.2 million acres were accepted into CRP. In 2011, the Conservation Reserve Program (CRP) celebrated its 25th anniversary, and over two and a half decades of conservation success. CRP was originally established in the 1985 Farm Bill. Today, there are over 400,000 landowners participating in CRP, most of which are farmers and ranchers, and there are currently just under 29.7 million acres under some-type of CRP contracts. [read more...]
National Ag Week is being celebrated March 4-10 all across the United States, and Thursday, March 8, has been designated as “National Ag Day”. 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 ... ]
Farming is a business that involves a certain amount of risk, whether it be weather risk, disease risk, financial risk, marketing risk, etc., and most farm operators have developed strategies to manage those risks. One of the strategies that is used to manage grain and livestock marketing risk is to “lock-in” a profitable price for the grain or livestock that is being produced, using forward contracts or price “hedging” positions. One risk that farmers have never worried about is that the so-called “segregated funds” that they have in a grain or livestock hedging account would somehow be at risk. This all changed on October 31, 2011, when a company called MF Global Financial filed for bankruptcy. [ read more ... ]
Recently, an article posted on the Yahoo Education page on www.yahoo.com created quite a stir in agriculture circles. The article listed the “college majors that are useless”, based on a 2012 study. Interestingly, the article listed “Agriculture” as the number #1 “useless degree” in the U.S.. According to the study, there will be 5 percent less jobs available in “Agriculture” in the 10-year period from 2008-2018, as compared to the previous 10-year period. The article described “Agriculture” coursework as crops, plant diseases, animal husbandry, and basic veterinary science, which appears to be a quite limited perspective of agriculture-related career opportunities. [ read more ... ]
During the past few years, many comparisons have been made with the agricultural economy that existed in the late 1970’s, with record grain prices, high farm profits, and rapid increases in land values. Here are some things to consider : [ read more... ]
As we look ahead to 2012, crop revenues are likely to remain strong, though possibly not as high as 2011 revenue levels; however, rising crop input costs and land rental rates could reduce profit potential, and add more risk to 2012 crop production. The profit margins in the livestock sector look improved for 2012, but could also get quite tight if feed costs increase during the next twelve months. The short-term operating credit needs for agriculture are likely to increase in the coming year, given the increases in farm input expenses and land rental rates for 2012. Credit availability for agriculture should remain good for farm businesses that are on a solid financial base; however, credit could get tighter for farm businesses that are in a “higher-risk” financial position. [ read more ... ]
2012 is setting up to be another interesting year in the agriculture industry, following a fairly profitable year in 2011 for most crop and livestock producers in the upper Midwest., with the exception of some erratic weather problems in some areas during the year. Following are some items that are likely to be on the forefront in the agriculture industry 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 in 2011. Following are some highlights regarding crop production, grain prices, crop input costs, and livestock profits for 2011. [ read more ... ]
In mid-November it appeared that we may be heading for a quick resolution toward adopting a new Farm Bill. U.S. Senate Ag Committee Chair, Senator Debbie Stabenow (D-Michigan), and U.S. House Ag Committee Chair, Representative Frank Lucas (R-Oklahoma), drafted potential new Farm Bill language to be included in a proposed Congressional Super Committee agreement to reduce the Federal Budget deficit by $1.2 trillion. The Super Committee did not reach agreement, so there was never an opportunity to have the new Farm Bill proposal included in any final agreement. [ read more ... ]
The continued strength in corn and soybean commodity prices in the past few months, and the resulting projected increase in crop income per acre, has caused many landlords to consider significant increases in cash rental rates on rented farm land for 2012. This comes after substantial increases in many rental rates from 2008-2011. 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 2012, 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 2012, as compared to the 2011 crop year. An alternative to the proposed high cash rental rates for 2012, or potentially even higher rental rates in the future, may be for producers and landlords to consider a “flexible cash lease” rental agreement, which allows the final cash rental rate to vary as crop yields and market prices vary, or as gross revenue per acre exceeds established targets. [ read more ... ]
Corn and soybean producers across the Midwest had very good Fall harvest season, with many farm operators completing harvest by early November. Producers need to pay close attention to monitoring grain that is stored in on-farm grain bins for potential storage problems. Much of the corn and soybeans in 2011 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 cold to quite warm. [read more ... ]
USDA announced in earlier this Fall that sign-up for the 2012 DCP and ACRE programs at County Farm Service Agency (FSA) Offices will not start until January 23, 2012, and will continue through June 1, 2012. There is no scheduled advance direct payment for 2012, so the entire 2012 direct payment will be paid to producers after October 1, 2012. Producers that enrolled in the ACRE program in 2009, 2010 or 2011, or that opt for the ACRE program for 2012, will have their total direct payments reduced by 20 percent for 2012. Producers that have changes in owned and rented land for 2012 will need to have those adjustments made at the County FSA office prior to enrolling in the 2012 DCP program. Any changes in government farm programs resulting from a potential new Farm Bill most likely would not be implemented until the 2013 crop year. [ read more ... ]
Cash corn and soybean prices have been strong for the past 12-18 months, which is spurring some very rapid and dramatic increases in annual cash rental rates. Cash corn prices in Southern Minnesota are near $5.75 per bushel as of 11-21-11, and cash soybean prices are near $11.00 per bushel; however, local corn prices were as high as $7.00 per bushel in early September, and were above $6.00 per bushel, until mid-November. Local cash soybean prices were above $13.50 per bushel in early September, before dropping back to the current price levels. Producers can still forward price their 2012 corn at a new crop local price near $5.00 per bushel, and 2011 soybeans near $11.00 per bushel, which are slightly below the current cash grain prices. These higher commodity price levels for 2011 corn and soybeans, as well as very good price prospects for the 2012 crop year, are definitely being reflected in higher land rental rates across the Midwest. [ read more ... ]
Balancing the Federal budget and making budget reductions has been receiving major attention in recent months. Major developments have included the debt ceiling /deficit reduction bill passed by Congress this past Summer, and the current 12-member Congressional super committee that was named to develop an adjustment plan for the federal budget deficit. If the Super Committee can not reach an agreement, the Administration will be authorized to make across-the board cuts in nearly all Federal programs. [ read more ... ]
What a difference a decade makes ! In 2000, U.S. ethanol production was less than 2 billion gallons per year, with 54 ethanol plants operating in the Country, and many of them being quite small. The estimated ethanol production for 2011 is over 13 billion gallons per year, with over 200 ethanol plants operating in 29 States, with a majority of the ethanol plants in the Midwest. Today, over 85 percent of the motor fuel sold in the U.S. contains some type of ethanol blend, and the use of ethanol has reduced the need for oil imports from OPEC and other nations by about 445 million barrels per year, which saved the U.S. about $34 billion. In 2010, it was estimated that there were over 7 million “flex-fuel” vehicles in use in the U.S., compared to virtually none a decade ago. [ read more ... ]
In the Fall of 2010, Sheila Bair, Chair of the Federal Deposit Insurance Corporation (FDIC), raised a few eyebrows when she suggested that we could be headed for a “farm land financial bubble”, due to the very rapid increase in farm land values in recent years. The FDIC oversees the financial health of many of the Community Banks that are involved in agricultural lending. Since that time, the Kansas City Federal Reserve Bank has also raised similar concerns, which raises the question …… Are we headed for a “financial bubble” in land values ? [ read more ... ]
