Monthly Archives: May 2010

Second CSP Sign-up

Iowa NRCS announced a second sign-up period for the Conservation Stewardship Program, known as “CSP.”  The program evaluates the environmental value and impact of already-established conservation practices AND helps producers, landowners, and forested land operators incorporate and add new solutions as well. Eligible participants receive incentive payments relative to benefits their conservation operations provide. However, the turn-around time for landowners and producers to get signed up for CSP this year is short­, June 11, 2010. It is critical that potential applicants make contact with local NRCS offices and get signed up for the program before the deadline. If you are a potential applicant for this program or you know someone who deserves to be recognized and compensated for a long-term commitment to conservation and natural resource protection, get in touch with NRCS today! To learn more, visit

Ag Decision Maker (AgDM)

An agricultural economics and business web site.

Higher Fuel Prices Boost Custom Farming Costs

Contributed by William Edwards, extension economist

Adjusting custom machinery rates for increasing fuel prices has been a difficult problem this year.  In the 2009 Iowa Farm Custom Rate Survey, Iowa State University Extension Economists suggested that respondents assume that diesel fuel would cost an average of $2.25 per gallon delivered to the farm.  However, fuel prices have increased somewhat since then. 

If the price of diesel fuel increases by $1.00 per gallon (bulk rate delivered to the farm), the total cost of performing tillage operations will increase by 10 to 15 percent, depending on the depth at which soil is tilled.  Total costs for less power intensive operations such as planting, spraying, harvesting and hauling will increase by 7 to 10 percent.

Another way to adjust custom rates is to use ISU Ag Decision Maker file, “Fuel Required for Field Operations,” which contains estimated fuel consumption values per acre for many common operations. Multiplying the fuel used per acre by the change in the price of fuel since the survey was conducted can provide an estimate of the most recent cost increases per acre. 

Alternatively, custom operators can keep a record of the actual fuel they use for specific operations and calculate the added fuel cost, or the person hiring the work done can provide the necessary fuel.

Ag Decision Maker (AgDM)

An agricultural economics and business web site.

Latest USDA Reports Summary

Chad Hart, ISU Extension Grain Marketing Specialist, provides a summary of the latest USDA Crop Reports.

chad_hartUSDA put out its first official numbers for 2010 and the markets saw the report as slightly bullish.  But many of the changes go back into previous years.  Starting with corn, USDA made a long-term adjustment to feed and corn sweetener use.  Based on U.S. Bureau of Census data on net trade of sweeteners and starch, USDA raised sweetener use back to 1997/98 and offset that change by lowering feed and residual use by the same amount.  For the 2009/10 crop year, the adjustment in feed is 75 million bushels, partially reflecting increasing supplies of distillers grains from ethanol.  For 2009/10, ethanol use was raised 100 million bushels and export use was raised 50 million.  On the production side, USDA resurveyed North and South Dakota and adjusted production down 21 million bushels.  So overall, ending stocks coming out of 2009/10 were lowered 161 million bushels to 1.738 billion bushels.  The season-average price remained at $3.60 per bushel.

For 2010/11, USDA used the acreage estimates from the March reports, but did increase the yield above the 20 year trend on the basis of early planting.  The yield was set 163.5 bushels per acre.  This projects to production of 13.37 billion bushels, which would be another record.  On the demand side, feed is projected to fall 25 million bushels from 2009/10 as livestock continues to consolidate.  Ethanol use is set at 4.6 billion bushels as margins remain at breakeven or better and exports are up 50 million from this year.  Ending stocks for 2010/11 are projected at 1.818 billion, up 80 million.  For 2010/11, the midpoint of the season-average price is $3.50 per bushel.

For soybeans, the 2009/10 adjustments kept ending stocks at 190 million bushels.  Exports and crush demand was raised and the residual moved to offset.  World demand for soybeans continues to support exports.  The season-average price was raised to $9.50 per bushel.  For the 2010/11 crop, USDA stayed with the March acreage numbers and trend yields.  Production is projected at 3.31 billion bushels.  The export outlook is bearish as South American supplies come online.  The projection is at 1.35 billion bushels, down 105 million.  Crush demand is also projected to be down next year as well.  With strong supplies and weakening demand, ending stocks are projected at 365 million bushels, up 175 million, and season-average price estimates are down, with the midpoint at $8.75 per bushel.


Ag Decision Maker (AgDM)

An agricultural economics and business web site.