Archive

Archive for March, 2012

Planting Intentions and Grain Stocks (3/30/12)

March 30th, 2012

Chad Hart , ISU Extension Grain Marketing Specialist, provides a summary of the March 9th report from USDA.

Today’s USDA reports showed acreage shifts outside the bounds of pre-trade expectations, but stock levels that were close to expectations.  For acreage, corn was well above expectations while soybeans and wheat were below.  Wheat is still gaining ground, but compared to the pre-trade estimate, wheat lost just over 1.5 million acres.  Corn acreage came in at 95.9 million acres, the highest acreage since the 1930s.  That is up nearly 4 million acres from last year.  The biggest gains are in the upper Midwest and Great Plains as North Dakota moves up 1.17 million acres and Minnesota, Iowa, Nebraska, Ohio, and South Dakota add between 300,000 to 600,000 acres each.  The intentions show record corn area in North Dakota, South Dakota, Minnesota, and Iowa.

Soybeans gave up roughly 1 million acres, with just over half of that drop occurring in Iowa.  The shift to more continuous corn is on.  North and South Dakota added soybean area.  In fact, North Dakota projects to have record soybean area as well.  Farmers up there intend to pull in a lot of the prevented planting area from last year.  Among the other crops, hay area is up, especially in the Southern Plains, while cotton area dropped by 1.5 million acres.

While the stock numbers came in as expected, they are moving in different directions for corn and soybeans.  Soybean stocks are up 10 percent from last year and quarterly disappearance is down 3 percent.  Corn stocks are down 8 percent from last year and quarterly disappearance is up 3 percent.  Wheat stocks are also down significantly from a year ago.

Ag Decision Maker (AgDM)

An agricultural economics and business web site.

Crop Outlook

Updated survey on farm employee compensation

March 20th, 2012

Contributed by William Edwards, extension economist

Over 20,000 people make their living each year as full-time employees on Iowa farms. Iowa State University and the North Central Risk Management Education Center recently conducted a survey to study the wages and benefits they receive. The average compensation paid to these employees in 2011 was $38,929 per year, before deductions for taxes. Cash wages accounted for $33,320, or 85 percent of this total. In addition, the average employee received fringe benefits valued at $4,185 and cash bonuses of $1,424.

In a similar survey conducted in 2006 the average farm employee received $34,640 in total compensation. The change represents an average annual increase of about 2.1 percent. Employees worked an average of 2,602 hours in 2011, so on an hourly basis cash wages averaged $12.96 and total compensation averaged $15.05. The average employee had 12 years of experience working on a farm, seven of which were with the present employer. Six percent of the employees included in the survey were female, and 16 percent were born outside the United States.

The most significant benefit provided was some type of insurance plan, usually medical. Other common benefits included housing, meals, farm produce, work clothing and recreational opportunities.

Factors such as farm size, employee duties, number of other employees supervised, education and years of farm experience had a major influence on how much each employee was paid. For more details about the farm employee compensation survey see the information file link.

Ag Decision Maker (AgDM)

An agricultural economics and business web site.

Whole Farm

Iowa farm custom rate survey for 2012 available

March 15th, 2012

Many Iowa farmers hire some custom machine work done in their farm business, or perform custom work for others. Others rent machinery or perform other services. The information in the 2012 Iowa Custom Rate Survey is based on survey responses from 276 Iowa farmers, custom operators and farm managers. For each operation, the average rate and the range reported are shown. Twenty-eight percent of the respondents perform custom work, 11 percent hire work done, and 61 percent indicated doing both.

Values are rates expected to be charged or paid this year, and include tractor, implement, fuel and labor. The average price for diesel fuel was assumed to be $3.25 per gallon. A fuel price increase of $0.50 per gallon will cause total machinery costs to increase by approximately 5 percent. This rate schedule is intended only as a guide. Actual custom rates may vary according to availability of machinery in a given area, timeliness, operator skill, field size and shape, crop conditions, and the performance characteristics of the machine being used.

Rental rates for some machinery items are shown on page 2 of the publication, along with a worksheet for estimating rental rates for other items. Ag Decision Maker website offers a Decision Tool to help custom operators and other farmers estimate their own costs for specific machinery operations. View the 2012 Custom Rate Survey.

Ag Decision Maker (AgDM)

An agricultural economics and business web site.

Crops, Machinery

Basically All of the Changes Are In South America

March 9th, 2012

Chad Hart , ISU Extension Grain Marketing Specialist, provides a summary of the March 9th report from USDA.

Traders were expecting USDA to tighten up corn and soybean supplies as we move into the planting season, based on thoughts of higher than expected ethanol production and recent increases in soybean exports.  But neither of these demands was changed in this morning’s report.  U.S. corn supply and use remained as it was projected last month, with 2011/12 ending stocks at 801 million bushels.  U.S. soybean supply and use also remained as it was projected at 2011/12 ending stocks of 275 million bushels.  The only substantive change domestically was the midpoint of the soybean season-average price, now at $12 per bushel, up 30 cents from last month.

Internationally, the numbers are mixed.  Corn production in Brazil was raised roughly 40 million bushels, based on improving conditions for the second corn crop.  And on balance, world corn production was raised about 37 million bushels.  For soybeans, the South American crop continued to shrink.  Argentina’s production was lowered 48 million bushels and Brazil’s production was reduced by 129 million bushels.  So while the U.S. soybean situation did not tighten, the world situation did.

Ag Decision Maker (AgDM)

An agricultural economics and business web site.

Crop Outlook