Relatively Quiet Report for Corn and Soybeans (6/10/15)

Chad Hart, ISU Extension Grain Marketing Economist, provides a summary of the latest USDA reports.

Hart_Chad-thumbThere are only a few changes in the U.S. corn and soybean outlooks from USDA. For corn, the only change is a 25 million drop in corn usage for ethanol from the 2014 crop. All other supply and demand numbers remain the same. And the season-average price midpoints hold at $3.65 per bushel for the 2014 crop and $3.50 per bushel for the 2015 crop. For soybeans, demand is ratcheted up a little bit. On the 2014 crop, both domestic crush and export demand are raised 10 million bushels. On the 2015 crop, crush is raised another 5 million bushels. Combined, this lowered 2015/16 soybean ending stocks to 475 million bushels. But the price outlook holds steady at $10.05 per bushel for the 2014 crop and $9.00 per bushel for the 2015 crop.

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A Very Quiet Report

Chad Hart, ISU Extension Grain Marketing Economist, provides a summary of the latest USDA report.

A Very Quiet Report (6/11/14)

97hartsmUSDA released its June update for crop supplies and demand and the updates were few and far between. For corn, there were no changes to the supply and demand estimates for the 2014 crop. Yield is projected at 165.3 bushels per acre.  Production is projected at a record 13.935 billion bushels, 10 million bushels above last year’s record crop. Total use is set at 13.385 billion bushels, down 250 million bushels from last year. 2014/15 ending stocks are set at 1.726 billion bushels, up 580 million bushels from the previous year. And the midpoint of the season-average price range remains at $4.20 per bushel.

For soybeans, there was one adjustment, but it was for the 2013 crop. 2013 domestic crush was increased 5 million bushels. Otherwise, as with corn, the projections remain the same. Yield is projected at 45.2 bushels per acre. Production is projected at a record 3.635 billion bushels. Total use is set at 3.45 billion bushels. 2014/15 ending stocks are set 325 million bushels, up 200 million from the previous year. And the midpoint of the season-average price range is $10.75 per bushel.

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The 1st Official Look at 2014

Chad Hart, ISU Extension Grain Marketing Economist, provides a summary of the latest USDA report.

97hartsmThe 1st Official Look at 2014 (5/9/14)

With the May World Ag. Supply and Demand Estimates report, USDA provides its 1st official set of projections for the 2014 crops. We can compare these numbers to USDA’s unofficial numbers from the Ag Outlook Forum they hold in February each year. On the supply side, the number to watch is the yield. And is typically the case with the 1st estimates, USDA maintains trendline yields for both corn and soybeans. Those are 165.3 bushels per acre for corn and 45.2 bushels per acre for soybeans. Given the acreage estimates from the March Prospective Plantings report, then 2014 shapes up to be a record year for corn and soybeans. On the demand side, all of the sectors (feed, ethanol, crush, and exports) are in play. And the current projections are generally higher than those from February. Ethanol and export demand for corn was raised for both old and new crop corn. The weak spot on the corn side is feed demand, as fewer animals translate to slightly smaller demand. Export demand for soybeans continues to soar to record levels, while domestic crush demand also grows (but more slowly than anticipated in February). In the February outlook, season-average price estimates were set at $3.90 per bushel for corn and $9.65 per bushel for soybeans. With the higher demand numbers with the May report, these estimates move to $4.20 for corn and $10.75 for soybeans. So with Iowa production costs in the $4.50 range for corn and $11 range for soybeans, the USDA projections still indicate negative returns for both crops, but the gap has shrunk significantly.

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New Guidelines for Cover Crop Termination Affects Crop Insurance

Contributed by Steven D. JohnsonFarm Management Specialist, Iowa State University Extension,, 515-957-5790


If you planted a cover crop last fall and need to terminate it this spring in fields that will be planted to corn or soybeans, when should you kill the cover crop? Timing for termination of a cover crop can affect whether the crop insurance coverage attaches for the corn and soybean crop yet to be planted.

The USDA’s Risk Management Agency (RMA) has issued new guidelines for cover crop termination in 2014 that are slightly different from last year.  RMA officials made these changes after meeting with officials from USDA’s Natural Resources Conservation Service (NRCS) and the Farm Service Agency (FSA). Through the interagency working group a consistent and flexible cover crop policy can be applied across all USDA agencies.

With the new guidelines farmers can hopefully obtain the conservation benefits of cover crops while minimizing risk of reducing yield to the following crop due to soil water use.

The NRCS Guidelines for 2014 use four strategic management zones across the nation. Iowa has two of those zones. As the accompanying map shows, about a third of Iowa (western portion) is in Zone 3, while the rest of Iowa is in Zone 4.

If you are in Zone 3, you must terminate the cover crop at or before planting the subsequent crop, which is likely corn or soybeans. In Zone 4, the rest of Iowa, you must terminate the cover crop at or within 5 days after planting the subsequent crop if you want the subsequent crop to be insured.

cover crop termination zones 2014

Termination is not about a date; it’s about when you are going to plant the subsequent corn or soybean crop.  The cover crop, if it is not 100% destroyed, will compete with corn or soybeans for moisture in the soil. That’s the reason for the different zones.

Termination means growth has ended for 100% of the cover crop in the field. These NRCS Guidelines basically state that you have to terminate growth of the cover crop before crop insurance coverage attaches to the corn or soybean crop you plant in that field.

You can still graze or hay a cover crop, but crop insurance will not attach to the crop following a cover crop if termination of the cover crop is not done according to these new guidelines. The key is you want to kill the cover crop if you want the crop insurance coverage to attach. Contact your crop insurance agent if you have questions. The 2014 Cover Crops Crop Insurance and NRCS Cover Crop Termination Guidelines FAQs are at:

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Questions about Late Harvest, Low Prices Addressed by Iowa State

A news release from Iowa State University Extension and Outreach by Charles Hurburgh, Agricultural and Biosystems and Willy Klein, ISU Extension and

Members of the extension crops team from Iowa State University responded to producer questions related to the late spring, dry summer and slow crop development by holding meetings in north central Iowa last week.

Extension field agronomists Mark Johnson and Paul Kassel discussed crop maturity, crop drying, potential effects of an early frost, and pre-harvest preparations at meetings held in Clarion, Wesley and Sheffield. Charles Hurburgh, extension grain quality and handling specialist, spoke of 2013 crop quality, including moisture and test weight variability, potential diseases, and the best practices for handling and storing the crop.Iowa State specialists Chad Hart, extension economist, and Kelvin Leibold, extension farm management specialist, reviewed the 2013-2014 crop market outlook at the meetings.For the benefit of those not attending the meetings, ISU Extension and Outreach has made video recordings of the presentations available on the Iowa Grain Quality Initiative website at

Get more crop news from ISU Extension and Outreach
The extension crops team makes the most current information related to crop, harvest, storage and handling issues available through the Iowa Grain Quality website and Integrated Crop Management (ICM) News, an online newsletter. ICM News articles are published at; newsletter subscribers receive notification when new articles are published.Hart and Leibold are frequent Ag Decision Maker authors. Ag Decision Maker (AgDM) updates and news are available The AgDM newsletter and updates are published every month; subscribers receive notification of the publication of new materials.As the drought situation continues in Iowa, new material is added to the Dealing with Drought – 2013 webpage. The webpage offers information for dealing with crops, livestock, stress, home and yard and financial concerns during drought situations at

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Harvesting Wet Corn to Provide Challenges

Contributed by Steve Johnson, Extension Farm Management Field Specialist,

Johnson_Steve_smWhile half of Iowa’s corn crop was planted by mid-May, much was pushed back several weeks. Some fields were replanted more than once and as a result pollinated into August.

The bottom line for many growers is that corn maturity has been delayed. The problem with harvest may be a wetter than normal crop created by a combination of late planting and then impacted by hot, dry conditions during grain fill.

Iowa farmers are now expected to harvest about 13.5 million acres of corn, that’s 200,000 acres less than last year’s drought ravaged crop. The latest USDA estimate is that Iowa would average 162 bushel per acre, below the 30-year state trend yield by 17 bushels. The variability of corn yields and moisture levels is going to be large across the state. Much depends on the corn planting date and the water holding capacity of the soils.

Some corn plants that died prematurely may already be harvested, but much of Iowa’s crop will be slow to dry down in the field. It will need to be harvested and dried down to near 14 or 15 percent moisture to avoid a discount or extend storage time for bushels to be marketed later. Delivery of wet corn sold will carry moisture discount at roughly 2 percent times the points of moisture above 15 percent times the cash contract price.

For corn harvested at 25 percent moisture and averaging 170 bushels per acre dry, that’s about $90 per acre with corn valued at $4.50 per bushel. This amount roughly equals the cost of commercial drying charges using a 1.4 percent shrink factor and 4.75 cents per point of moisture. Drying and storage of corn may be a problem as harvest gets underway.

Heavy drying needs
The key thing for a grower is to think ahead about corn moisture levels, drying and storage costs — be prepared. There’s an abundant supply of propane out there. The challenge this fall — if harvested grain needs a lot of drying — will be having the propane in the right place at the right time.

Perhaps the most important factor in dealing with corn at higher moisture levels at harvest is getting the combine set up right. Some things to remember are:

  • A properly adjusted combine can handle corn between 20 and 30 percent moisture, but expect grain damage to increase unless careful attention is paid to combine settings.
  • Be sure to select a ground speed adequate to keep separator and cleaning shoe at full speed. Adjust your hydrostatic transmission to maintain the engine near rated speed under varying crop conditions.
  • Operate the corn head as high as possible to reduce getting wet plant material in the combine, which can significantly reduce the machine’s ability to thresh and separate the grain.
  • Before changing concave clearance, make sure it is level side-to-side in a conventional combine or front-to-back in a rotary combine so that the adjustment is uniform.

While corn harvest may begin later than normal this fall, farmers will want to be prepared early.

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“Ag Cycles” and Iowa Agriculture

John Lawrence , ISU Extension Director for Ag and Natural Resources, provides an update of analysis completed and information available.

ISU Extension and the ISU Economics Department have put together a series of papers titled “Ag Cycles.” This collection of papers is an analysis of the current state of Iowa agriculture from the crop, livestock, and land market perspective. It examines the question of price levels and price risk going forward. It also includes a recent analysis and papers from the Federal Reserve Bank of Kansas City, which examines previous agricultural cycles and how they played out through borrower’s behavior. Combined, this analysis provides lessons from the past and milestones as potential guides to the future.

Agricultural production and prices have always been cyclical. The influence of weather on production is one factor. The tendency of individuals to react rather than anticipate market signals also contributes to boom and bust periods. The length of the cycle differs with the commodity, and the weather and cyclical prices in one commodity will influence cyclical behavior in another market.

 This analysis is not intended to be a forecast of annual prices in the coming months or years. Nor is it predicting gloom and doom for agriculture. Rather, it is intended to help put current economic conditions into a historic context, better understand the factors that will influence prices and margins in the future, and help you prepare for whatever direction the market turns.

This series of papers can be found in Ag Decision Maker at

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High Grain Prices means “The Russians are Coming”

Contributed by Kelvin Leibold, Extension Farm Management Field Specialist, Leibold_K03-L

With several years of extremely high grain prices the world of agriculture is changing.

1). We are seeing profits increasing to all-time highs. This is creating a strong incentive to expand land use which could result in a substantial decline in crop prices worldwide.

2). Cost of production has increased but not as much as revenues have increased resulting in motivation for producers to boost output.

3). Boosts in production may outpace increase in demand in the short run. Boosts in production of wheat, for example, will drag down the price of all crops.

I recently returned from Voronezh, Russia which is located in the “black earth zone” where the soils are as black as Iowa and they have enough organic matter you can scrape it loose with your foot. These are ideal soils for raising sugar beets or potatoes. They can also raise corn and soybeans. In the short run they are seeing a lot of demand for feed from the domestic livestock industry. Dairy is growing extremely fast with assistance from the government in the form of interest rate subsidies.

Land values for top land range from $250 to $750 per acre, depending on the quality of the “land title” and no property taxes. If they get adequate rain corn yields can reach 175 bushels per acre. One feels quite at home talking about seed corn companies, machinery suppliers and GPS technology. Labor is a lot different as are certain overhead costs.

Walking the fields of EKONIVA,, gives one a good sense of their vastness at almost 460,000 acres. They have almost 3,000 employees. Not bad for a company that started off with $200,000 in capital less than twenty years ago. This is just one example. Black Earth Farms,, is another operation with over 750,000 acres, mostly owned, which has been operating since 2005. High prices have encouraged the expansion of these and the development of many more farms. Producers from the UK, Germany, Sweden and other western European countries all faced with limited land availability and high taxes have looked to the east for opportunities.

It remains to be seen how competitive these farms will be in the long run. Competition is a function of production costs, land rents, and infrastructure (ex. Transportation costs). Russia also joined the World Trade Organization in 2012 and this will impact their domestic livestock in the coming years as we should export more meats and dairy products into their country.

On a closing note and a little closer to home: in 2012 which was more profitable on the average – an acre of corn in Iowa or in North Dakota? It’s not only the Russians to think about!

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Small Adjustments This Month (7/11/13)

Chad Hart , ISU Extension Grain Marketing Economist, provides a summary of the latest USDA report.


This morning’s supply and demand report mostly held to expectations.  Old crop stocks remain very tight, while new crop stocks are projected to increase.  Acreage was set by the June “Acreage” report and yields were held steady.  That put an additional 30 million bushels of soybeans in the 2013/14 projections, while corn production slipped by 55 million bushels.  On the demand side, there were no adjustments to soybean demand.  Corn feed was raised 50 million bushels for old crop, but lowered 50 million for new crop.  New crop exports were also lowered 50 million.  In the end, projected 2013/14 prices remain the same, $4.80 for corn and $10.75 for soybeans.

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A Few Fireworks before the 4th (6/28/13)

Chad Hart , ISU Extension Grain Marketing Economist, provides a summary of the latest USDA report.

97hartsmWhile the stocks numbers were a little tighter than expected, the big news in the Acreage and Grain Stocks reports was the corn planted area.  The consensus was for significantly lower corn area, with some shifting to soybeans.  The reports came back with a slight increase in corn area and a more sizable increase in soybeans.  Needless to say, the corn number was a blow to the markets.  But beyond the corn planting number, the more interesting story may be the harvested area projection.  Based on the June survey, USDA projected that 89.1 million acres of corn would be harvested.  Will the soggy conditions in the western Corn Belt, especially Iowa, lower this number as we move through the growing season?


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