Ag Decision Maker – September updates

Ag Decision Maker

Business Solutions for Farms and Agribusiness from Iowa State University Extension and Outreach

September Newsletter (pdf)

New and Updated Files


Iowa Farm Outlook

Livestock — Fall 2017 Calf Marketing Considerations
Crops — Another Year with the Same Issues


Ag Marketing Resource Center Renewable Energy Report


Choices


Ag Decision Maker (AgDM)

An agricultural economics and business website.

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Ag Decision Maker – August 2017 Updates

Ag Decision Maker

Business Solutions for Farms and Agribusiness from Iowa State University Extension and Outreach

August Newsletter (pdf)

New and Updated Files


Iowa Farm Outlook

Livestock — More Cattle Mid-Year, Lightweight Placements Up
Crops — The Market Is Still Not Sure About Crop Production


Ag Marketing Resource Center Renewable Energy  Report


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Despite Weather Issues, Yield Estimates Better Than Expected (8/10/17)

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

Chad Hart imageThe first official tour of the nation’s fields this summer resulted in better crop yield and production estimates than the market was expecting. The national corn yield estimate came in at 169.5 bushels per acre, down 1.2 bushels from trend, but that was still a couple of bushels above trade expectations. If realized that points to a 14.15 billion bushel corn crop, which would be the 3rd largest ever, continuing a string of large corn crops. The soybean yield estimate was 49.4 bushels per acre. That is 1.4 bushels above trend and sets up this year’s crop to exceed last year’s. So bushels and bins would continue to overflow with these estimates.

On the demand side, news was mixed. Soybean export projections were raised 75 million bushels, but domestic soybean crush was lowered by 10 million. Corn feed usage and exports were reduced by 25 million bushels each. Combined, the corn adjustments shrank 2017/18 ending stock projections by 52 million, but stocks are still projected above 2.25 billion bushels. For soybeans, ending stock projections rose by 15 million bushels, to 475 million. For prices, USDA held their price range for corn, leaving the midpoint at $3.30 per bushel. While for soybeans, the price range tightened a bit, losing a bit more than the high end than the low, with the midpoint now at $9.30 per bushel.

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Pricing drought damaged silage

Contributed by William Edwards, extension economist

Corn that has suffered severe drought damage is sometimes harvested as silage instead of as grain. It can still have significant feed value if harvested at the right stage. See the article “Alternatives for Drought-damaged Corn—Grain Crop or Forage” for harvesting recommendations. Any damaged acres that are covered by crop insurance should be viewed by an adjuster and released by the insurance company before harvesting takes place.

Grain producers may be willing to sell to the corn standing in the field, to be harvested by the livestock producer or a custom operator. The buyer and the seller must agree on a selling price.  The seller would need to receive a price that would give at least as good a return as could be received from harvesting the corn as grain. The buyer would need to pay a price that would not exceed the feeding value of the corn.  Within that range the price can be negotiated.

One ton of normal, mature standing corn silage at 60% to 70% moisture can be valued at about 10 times the price of a bushel of corn. For a $3.50 corn price, a ton of silage would be worth about $35 per ton. However, drought stressed corn may have only 5 bushels of grain per ton of silage instead of the normal 6 to 7 bushels. A value of about 9 times the price of corn would more appropriate. For silage with little grain content, a factor of 8 times the price of corn can be used.

If the crop is sold after being harvested and transported, those costs must be added to that value, typically $5 to $10 per ton, depending on whether it is done by a custom operator or the buyer, and the distance it is hauled. A buyer would only consider the variable costs for harvesting and hauling, whereas a custom operator would need to recover fixed costs, as well.

More information on valuing forage in the field, including an electronic spreadsheet for estimating a value for corn silage, for both the buyer and the seller, is available from Ag Decision Maker.

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July 2017 updates from Ag Decision Maker

Ag Decision Maker

Business Solutions for Farms and Agribusiness from Iowa State University Extension and Outreach

July Newsletter (pdf)

New and Updated Files


Iowa Farm Outlook

Livestock — Large Hog Supplies Should be Manageable
Crops — Some Fireworks for the 4th


Ag Marketing Resource Center Renewable Energy  Report


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Acreage Shifts and Crop Flows (6/30/17)

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

The Acreage and Grain Stocks reports were released June 30th. And for the most part, the numbers were within the range of expectations.  The corn numbers ran a bit higher than the trade expectations, but the soybean numbers were a bit below. For corn, national acreage was estimated at 90.9 million acres. That is roughly 900,000 acres more than farmers indicated in March. Producers in Iowa, Nebraska, Kansas, North Dakota, Michigan, and Colorado increased corn plantings, raising corn acreage by at least 100,000 acres in each state when compared to the March projections. Meanwhile, producers in Illinois, Indiana, and South Dakota reduced corn area by at least 100,000 acres in each state. For soybeans, national acreage was estimated at 89.5 million acres, just 31,000 acres more than the March intentions. While farmers in Illinois, North Dakota, and Missouri increased soybean plantings significantly when compared to intentions, farmers in Iowa, Indiana, Kansas, and Louisiana offset those gains. Overall, the trade expected more soybeans and less corn. And the bigger surprise is likely the smaller soybean acreage number.

National stocks for both crops were up 11 percent compared to last year, but that was to be expected given the record production for both crops last fall. The key feature in the stocks report to me was the disappearance rates  For corn, quarterly disappearance was up 9 percent, while for soybeans it was up 18 percent.  So crop usage remains robust and has continued to chew through the large supplies.  Combined, these reports provided a little positive news for the crop markets.

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June 2017 updates from Ag Decision Maker

Ag Decision Maker

Business Solutions for Farms and Agribusiness from Iowa State University Extension and Outreach

June Newsletter (pdf)

New and Updated Files


Iowa Farm Outlook

Livestock — Strong Prices with Large Slaughter Suggest Firm Meat Demand
Crops — The Challenge of a Global Market


Ag Marketing Resource Center Renewable Energy  Report


Choices

Theme Overview: U.S. Commodity Markets Respond to Changes in China’s Ag Policies
China’s Evolving Agricultural Support Policies
U.S. Agricultural Exports to China Increased Rapidly Making China the Number One Market
Food Security in China from a Global Perspective
The WTO Dispute on China’s Agricultural Supports


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May 2017 updates from Ag Decision Maker

Ag Decision Maker

Business Solutions for Farms and Agribusiness from Iowa State University Extension and Outreach

May Newsletter (pdf)

  • Cash rental rates fall for a fourth consecutive year in Iowa
  • Ag cooperatives consolidating, too

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New and Updated Files


Iowa Farm Outlook

Livestock — Higher Production Trims Livestock Prices, Cash Receipts
Crops — Rain and Grain


Ag Marketing Resource Center Renewable Energy  Report


Choices

Theme Overview: Farm Labor Issues in the Face of U.S. Immigration and Health Care Reform
Sustaining a Healthy Farm Labor Force: Issues for Policy Consideration
Trump, Immigration, and Agriculture
Anti-Immigration Reform and Reductions in Welfare: Evidence from the Meatpacking Industry


Ag Decision Maker (AgDM)

An agricultural economics and business website.

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April 2017 updates from Ag Decision Maker

Ag Decision Maker

Business Solutions for Farms and Agribusiness from Iowa State University Extension and Outreach

April Newsletter (pdf)

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New and Updated Files


Iowa Farm Outlook

Livestock — More Hogs, Higher Prices Reflect Strong Demand
Crops — Big Crops and Big Uncertainties


Ag Marketing Resource Center Renewable Energy  Report


Center for Agricultural and Rural Development Agricultural Policy Review


Ag Decision Maker (AgDM)

An agricultural economics and business website.

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