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Articles from 2016 In May

Survey notes fertilizer, pesticide use in soybean, spring wheat and oat fields

Survey notes fertilizer, pesticide use in soybean, spring wheat and oat fields

The Upper Midwest Field Office of the USDA National Ag Statistics Service released its annual 2015 Agricultural Chemical Use Surveys of farmers who planted soybean, spring wheat and oats and their fertilizer and pesticide use, as well as pest management practices.

Here’s what NASS learned from Minnesota farmers:

Soybean fertilizer use

Survey notes fertilizer, pesticide use in Minnesota soybean, spring wheat and oat fields

Of the three primary macronutrients, potash was the most widely used on soybean acres planted in the state. Minnesota farmers applied potash to 29% of planted acres at an average rate of 60 pounds per acre per year. Macronutrients nitrogen and phosphate were applied to 19% and 27% of soybean acres, at an average rate of 14 and 50 pounds per acre per year, respectively. The secondary macronutrient, sulfur, was applied to 6% of acres planted to soybeans.

Pesticide use in soybeans

Herbicide active ingredients were applied to 96% of the soybeans planted. Glyphosate potassium salt was the most widely used pesticide overall, and was the active ingredient with the greatest total amount. Fungicide and insecticide active ingredients were applied to 11% and 56%, respectively, of soybean acres planted in Minnesota.

Spring wheat fertilizer use

Nitrogen was the most widely used on spring wheat—95% of planted acres—at an average rate of 105 pounds per acre per year. Macronutrients phosphate and potash were applied to the majority of acres, at an average rate of 38 and 34 pounds per acre per year, respectively. The secondary macronutrient, sulfur, was applied to 30% of acres planted to spring wheat.

Pesticide use in spring wheat

Herbicide active ingredients were applied to 97% of the spring wheat acres planted. Tebuconazole was the most widely used pesticide overall, and MCPA, 2-ethylhexyl was the active ingredient with the greatest total amount. Fungicide and insecticide active ingredients were applied to 76% and 41% of spring wheat acres planted, respectively.

Fertilizer use in oats

N was the most widely used on oats with farmers applying N to 60% of planted acres at an average rate of 49 pounds per acre per year. Macronutrients phosphate and potash were applied to 50% and 53% of the oat acres, at an average rate of 26 and 45 pounds per acre per year, respectively. The secondary macronutrient, sulfur, was applied to 21 percent of acres planted to oats.

Pesticide use in oats

Herbicide active ingredients were applied to 43% of the oat acres planted in Minnesota. 2,4-D, dimethylamine salt was the most widely used pesticide overall, and was the active ingredient with the greatest total amount.

Cheese prices hit a seven-year low

Cheese prices hit a seven-year low

Declining cheese prices will result in a Class III price not seen since September and October 2009, according to Bob Cropp, University of Wisconsin-Madison dairy economist.

"On the CME 40-pound block cheddar cheese averaged $1.42 per pound in April, but has ranged from $1.36 per pound to $1.27 in May, the lowest since July and August of 2009," Cropp says. "Cheddar barrels averaged $1.42 per pound in April, but ranged from $1.40 to $1.27 per pound in May, the lowest since March and August of 2009.

Cropp notes the Class III price was $13.63 in April and dropped to $12.75 in May compared to $16.19 last year and $22.57 in 2014.

Cheese prices hit a seven-year low

Despite increased production and building stocks butter remains above $2 per pound. Domestic commercial disappearance of both butter and cheese remain good, Cropp says.

"Last year, butter exports were 10.7% higher, American cheese, however was 3.1% lower, but other cheese varieties were 8.8% higher making total cheese disappearance 3.9% higher. Overall, exports remain soft."  

According to the USDA, butter exports were 26% higher a year ago and exports were well below the record 2014 exports. Cheese exports continue to run well below a year ago, with March exports 26% lower than a year ago. Imports of dairy products were higher and equivalent to 3.9% of milk production.

Cropp is growing concerned about declining exports, building dairy product inventory and lower milk prices.

"Unless milk production slows and/or exports improve milk prices will show a very slow recovery in the months ahead," he says. "Despite much lower milk prices milk production continues to show strong increases in the Northeast and Midwest more than offsetting lower milk production in some Western states. Cow numbers have increased each month thus far this year. There is an ample supply of dairy replacements."

The lower slaughter number may be due to slaughter cow prices much lower than a year ago.

USDA is forecasting milk production for the year to be 1.8% higher than last year with little change in cow numbers but higher production per cow.

"But, this could change," Cropps points out. "There are predictions for a hot summer similar to the summer of 2011 which significantly reduced milk per cow in Northeast and Midwest states."

But, there doesn’t seem to be much optimism for improved exports this year.

"Milk production continues well above year ago levels in the 28 EU countries," Cropp says. "China has started to increase imports but at a level well below what was imported during 2013 and the first half of 2014. Russia still has a ban on imports from the EU. Much lower oil prices has reduced exports to oil producing countries. So world demand remains soft resulting in depressed world dairy product prices."

USDA is not forecasting much improvement in milk prices this year. The Class III price is not expected to be any higher than $14.15 during the fourth quarter and average for the year between $13.15 and $13.65 compared to the average last year of $15.80. Current Class III futures stay below $14 until August and peak below $15 in December.

Cropp says, "I am a little more optimistic than these forecasts based on the assumptions that milk production will increase less, domestic sales remain strong and some improvement in exports. But it's a difficult year for dairy producers." 

Location and condition of fields key to arrival of black cutworms

Location and condition of fields key to arrival of black cutworms

It’s not a crisis situation – yet – but scouting should commence as damage is showing up in Ohio corn from black cutworns.

“We’ve seen some fields with cutting damage,” says Kelley Tilmon, a field crop entomologist with Ohio State University Extension and the Ohio Agricultural Research and Development Center.

Already, there have been reports of high numbers of black cutworm in traps across the Midwest set up by entomologists to determine the number of moths migrating up from the South, which suggests that the pests may be in some fields, she said.

However, that doesn’t always mean that they will be out in fields in higher numbers, Tilmon says.

Location and condition of fields key to arrival of black cutworms

“Adult black cutworm moths lay eggs that hatch into the cutworm caterpillars,” she says. “Developing larvae feed on emerging corn, meaning growers need to look out for corn with leaf feeding or stem cutting as the crop emerges.

“Although there are some hotspots for egg laying, these predictions are far from exact. “Because the pest can cause stand loss in corn, Tilmon says, “This is a reminder that growers need to be on the lookout.”

Female black cutworm moths tend to lay eggs in fields with heavy weed cover, and as the weeds are killed by herbicide or tillage, the larvae move on to feed on emerging corn, she adds.

Black cutworms can cause severe cutting of the plant, with the resulting stand loss in corn generally associated with below- or at-ground-level feeding injury, which occurs below the growing point, Tilmon said.

Another concern for crop damage is the fact that much of the corn in the region is being planted relatively late this spring, as cooler, wetter weather conditions have delayed many growers from getting out into their field.

“So corn will be rather small when the larvae of these pests begin their heavier feeding,” Tilmon says. “Thus, the potential for plant injury and subsequent economic losses will be much higher than normal because of the size of the corn.”

Across Ohio, as of the week ended May 22, only 51% of corn was planted, according to the U.S. Department of Agriculture’s National Agricultural Statistics Service. That compares to 84% that had been planted by the same time last year and 66% that had been planted on average during the same time period over the past five years, the agency said.

And 28% of corn has emerged as of the week ended May 22, the agency said. That compares to 62% emerged by the same time period last year and 41% emerged on average during the same time period over the past five years, the agency says.

Growers should start scouting for black cutworm as soon as the corn begins to emerge, Tilmon says.

“Cutting damage is pretty obvious to see,” she said. “It looks like the plants have been clipped off if the feeding of the plants happens above ground.

“Underground feeding results in the plants having more of a wilted appearance. So growers should be on the lookout for more than one type of damage.”

Rescue treatments can be applied if necessary, Tilmon says, noting that if the cutting damage is above ground, cut plants will likely recover if a timely rescue treatment is applied.

Crop prices, land values and cash rent predictions

Crop prices, land values and cash rent predictions

Don’t expect higher corn and soybean prices this fall, according to a survey of farm managers, ag lenders and others attending the 89th annual Iowa State University Soil Management and Land Valuation Conference held May 18 in Ames.

Over 280 farm managers, rural appraisers, real estate brokers, ag lenders and others attended this year’s conference. And 191 of them participated in the survey, which asked for their predictions for corn and soybean prices, land values and cash rent.

WARNING SIGNS: As depressed commodity prices and plunging farm income continue to plague the ag economy, experts are advising farmers to make financial adjustments to survive the downturn.

The survey respondents believe by November 2016 corn prices will be $3.75 and soybeans $9.44 per bushel. They predict Iowa cropland values will average $7,776 per acre in November 2016 and $7,572 in November 2017. The table accompanying this article shows the survey predictions for land values and commodity prices for 2016, as well as estimates for future years. It shows land value estimates for the state average as well as for regional areas: northwest, northeast, southwest and southeast.

Warning signs ahead for farm financial conditions

A panel discussion by ag lenders and farm managers concluded that downward pressure on cash rents in Iowa will continue into 2017. Factors causing this decline include low crop prices, financial stress on farmers, tighter lending conditions and lower land values. Low prices like we’ve recently seen are likely to continue for the foreseeable future, unless something unexpected happens such as a drought in the summer of 2016.

Farmers need to lower their breakeven costs by making adjustments to their fixed and variable costs. They can do that by focusing on ways to trim crop production costs without hurting yields, by negotiating lower cash rents, by controlling machinery and equipment expenditures and by lowering family living expenses.

Adjustments will need to come in farmer spending

Participants in the panel discussion agreed that adjustments will need to be made in farmer spending, there will be more cash flow/income statement problems, and the need to communicate with landlords is greater than ever. Tenants who are heavily leveraged and who cash rent most of the land they farm have the greatest exposure to financial problems.

Cash rents move in the same direction as land values and both are connected to crop prices, production costs and net profit per acre. But cash rents tend to lag behind changes in farm income. One reason is because farmers generally hesitate to give up rented land for fear they will never get it back. Some farmers are willing to subsidize rented land with cash reserves. That can’t continue for an extended period of time.

This economic downturn differs from 1980s Farm Crisis

The panelists explained why they don’t see a repeat of the 1980s farm crisis, but they emphasized that changes need to be made in financial management by farmers in 2016 and the next few years.

The current challenge, which will likely grow worse, is a cash flow shortage driven mainly by high cash rent, machinery and equipment investments and living expenses. The current downward cycle in the ag economy is different from the 1980s farm financial crisis, the panel pointed out. That situation was driven by high land prices, high levels of debt relative to asset values, high interest rates and variable rate loans. Loan requirements nowadays are more stringent.

Another difference is crop insurance is available today that provides greater coverage and financial protection as a risk management tool. Crop revenue protection policies weren’t available in the 1980s.

Landlords’ response to soil conservation/water quality

At the May 18 conference, there were also presentations concerning climate change and the likelihood of continuing to see wet springs in Iowa. Related to that topic was a presentation by another speaker about the extensive need for more soil conservation and water quality improvement practices to be put on the land. Who will pay for these practices? Landlords or tenants?

With 55% of Iowa’s cropland being rented, it looks like landowners will need to consider investing in these practices, such as helping to pay for the establishment of cover crops and use of other conservation measures. The “financial pushback” of tenant operators is not likely to be changing without adjustments in cropland rental agreements. That was the “take away” message of this particular discussion at the conference.

You can view the conference presentations online

The conference featured discussions on six topics, with ISU Extension and Outreach researchers having a strong presence throughout the event. The overall theme was issues and implications for soil management and land valuation. Topics of conversation for the conference included:

* Evaluating Hunting Leases: Implications for recreational land values. Presented by Tom Steen, the Hunting Lease Network, Farmers National Company

* Global Economic Outlook: What does a slowing China and a strong U.S. dollar mean for U.S. agriculture? Presented by Nathan Kauffman, assistant vice president, Omaha Branch executive and economist, Federal Reserve Bank of Kansas City

* Panel Discussion on Current and Future Cash Rents in Iowa by three agricultural lenders and farm managers. Moderated by Alejandro Plastina, assistant professor and Extension economist at Iowa State University, and panelists include Jim Knuth from Farm Credit Service of America, Scott Neff from Wells Fargo Bank and Mike Downey from Hertz Farm Management

* Excessive Spring Rain Will Be More Frequent (except this year): Weather tools to manage it. Presented by Chris Anderson, assistant director Climate Science Group at Iowa State University

* Soil Fertility Management with Tight Crop Production Margins. Presented by John Sawyer, professor and Extension specialist in soil fertility and nutrient management at Iowa State University

* Cover Crops, Wetlands and Conservation Drainage: Why we need to adopt and how many acres are needed. Presented by Matt Helmers, professor and Extension agricultural engineer in agricultural and biosystems engineering at Iowa State University

The link to the presentations is

For farm management information and analysis visit ISU's Ag Decision Maker site; ISU Extension farm management specialist Steve Johnson's site is at

Editor’s note: Wendong Zhang is an assistant professor of economics at Iowa State University who organized the recent 89th Annual ISU Soil Management and Land Valuation Conference. It is ISU’s longest running conference.

North Carolina State University graduate student Rachel Atwell stands in front of a winter pea test plot at the Piedmont Research Station in Salisbury NC State is looking at winter pea as a grain forage and cover crop in North Carolina
<p><span style="font-size: 12.8px; line-height: 20px;">North Carolina State University graduate student Rachel Atwell stands in front of a winter pea test plot at the Piedmont Research Station in Salisbury. N.C State is looking at winter pea as a grain, forage and cover crop in North Carolina.</span></p>

Winter peas could be grain, forage and a cover crop in North Carolina

Researchers at North Carolina State University are looking to winter peas as a possible feed grain crop for North Carolina livestock production.

Speaking at the 2016 Central Piedmont Small Grains Field Day at the Piedmont Research Station in Salisbury April 21, Rachel Atwell, a graduate student at N.C. State under the advisement of Chris Reberg-Horton, associate professor and organic cropping specialist,  said winter peas show potential as a grain, cover crop and forage crop in North Carolina. “Winter pea is a legume, similar to soybean, that has high protein content depending on variety ranging from 20 to 35 percent,” Atwell said.

A benefit of winter peas over soybeans is that winter peas don’t have to be heated prior to animal consumption, which means a potential reduction in processing costs for winter peas as a livestock feed ration. “Winter peas also fit well into the North Carolina producers’ rotation. It can be planted from mid-September through mid-October, and in our experience it can be harvested at a similar time as wheat, possibly slightly later,” Atwell said.

Stay current on what’s happening in Southeast agriculture: Subscribe to Southeast Farm Press Daily.

At the Piedmont station, Central Crops station, and Caswell station, N.C. State is examining 18 genotypes provided by the USDA winter pea breeder. “Most of the breeding efforts for winter pea have occurred in the northwest United States so the genetics really have not been screened or adapted to the Southeast and North Carolina,” Atwell explained. “We are screening these genetics in monoculture but also in mixture with small grains.”

Atwell points out that having a small grain in the mixture with winter pea enhances the nutritive content if it is going to be direct fed to livestock. “Winter pea and small grains can be harvested simultaneously and we experienced good success harvesting winter pea and wheat together last year using the soybean sieve in our combine. We are still trying to wrap our heads around  timing of  harvest of these winter peas because many genotypes have indeterminate growth habits,” she said.

Still, disease pressure is a challenge for winter pea production. In Salisbury and at another winter pea research site in Clayton, ascochyta blight and fusarium wilt have impacted winter peas. In addition, Atwell noted that sclerotinia pressure was high at the Kinston winter pea research plot. “There is work that needs be done in sclerotinia resistance in these pea genotypes,” she said.

Last year, reliable winter pea yield data was only found at the Clayton research site. The highest yielding winter pea genotypethere in mixture with wheat produced 1,400 pounds per acre while wheat yields were between 10 to 20 bushels per acre, Atwell noted.  Winter pea was seeded at 60 lbs/acre in mixture and wheat was only seeded at 30 lbs/acre to avoid outcompeting the winter pea. “We are looking forward to having three more locations of yield data this year to inform the results that we observed last year,” she said.

“One thing that became obvious is some of the highest yielding pea genotypes are dwarf genotypes which are going to have limited value as forage and cover crops. We have started another trial where we are evaluating these genotypes in monoculture and in mixture with oats, barley and wheat to try to widen the window of forage harvest and get an idea of forage and cover crop quality,” she said.

“Right now we are focusing on getting the best genetics for winter pea in North Carolina for these different end uses. And if this is something that is going to take off in popularity, there is definitely more agronomic work that would need to be done to make reliable recommendations in this system,” Atwell said.

Prime time to control Canada thistle and multiflora rose

Prime time to control Canada thistle and multiflora rose

When is the best time to control Canada thistle and multiflora rose in pastures? That time is approaching soon, says Brian Lang, Iowa State University Extension field agronomist in northeast Iowa. Multiflora rose is best sprayed when it is in full bloom. 

RIGHT CHOICE: Only a few herbicides are highly effective at controlling Canada thistle in pastures; choose and properly use the right one, advises ISU’s Brian Lang. An extensive root system is what makes this weed so difficult to control.

This topic is discussed in the following ICM News article by ISU weed management specialist Bob Hartzler at: Additional management options (biological, mechanical, grazing, basal bark and foliar herbicide treatments) for multiflora rose control are provided in this nine-page publication from Ohio State University:

To eliminate Canada thistle, you have to kill the roots
Canada thistle is best controlled if sprayed right before or soon after buds start to develop, says Lang. The persistent nature of Canada thistle is due largely to its extensive root system. In order to eliminate this weed, the entire root system must be drained of energy reserves. No matter what strategy is used (herbicides, tillage, mowing), it will take repeated measures to bring established patches under control. 

Canada thistle is not tolerant of shade, thus the first step is to invigorate competition from desirable forage species planted in the pasture, he advises. This may involve fertilization, liming, overseeding and adjusting animal stocking rates. Overgrazing is a common cause of infestations since the animals over-eat the surrounding vegetation and not the thistles. 

Simply applying herbicides while ignoring pasture health won’t work
Simply applying herbicides while ignoring the health of the pasture will generally not provide acceptable results. Only a few herbicides are highly effective on controlling Canada thistle in pastures. Standard herbicide programs for biennial thistles are generally not adequate against established stands of Canada thistle. 

Herbicide programs containing either picloram (Tordon, Grazon) or clopyralid (Stinger, Curtail) have proven most effective against Canada thistle. While more costly than other treatments, their performance warrants the cost when Canada thistle is the target, says Lang. ISU Extension research trials in eastern Iowa found that spring applications (late-May to early June) of herbicides provide better control of Canada thistle than fall applications, and there was little benefit to a combined fall and spring treatment. 

Extensive root system makes this weed difficult to control
“Aboveground shoots of Canada thistle are relatively easy to kill with herbicides,” notes Lang. “It's the extensive root system that makes the weed so difficult to control.” “Both picloram and clopyralid are also persistent in the soil and readily absorbed by roots, with picloram being more mobile in soil than clopyralid,” he says. The added mobility of picloram is also the reason for picloram products to be classified as Restricted Use Pesticides, since picloram can easily move off the target site with runoff water.”

Controlling equisetum (horsetail) in corn and soybean fields
For those farmers and others who are trying to put a little hurt on Equisetum weed that’s showing up in corn and soybean fields, here is some advice from ISU’s Bob Hartzler. “While no herbicide offers control of this weed, research suggests our best chance at suppression is with flumetsulam (Python, Hornet). Python is labeled for both corn and soybean, whereas Hornet is registered for use in corn.” FYI, you’ll find the Equisetum fact sheet at

Iowa Corn Promotion Board secures USDA matching funds

Iowa Corn Promotion Board secures USDA matching funds

USDA announced last week it will make available $250,000 to match checkoff investments from the Iowa Corn Promotion Board (ICPB), Illinois Corn Marketing Board and Nebraska Corn Board for phenotyping research. This is part of a larger $130 million research initiative announced by USDA to fund research, education and Extension projects. The ICPB initiated the phenotyping research initiative, now known as Genomes to Fields, to expand the understanding of interacting effects that corn genetics and crop environments have on corn yields.

Need a better understanding of how genes of corn plant work

FROM GENOMES TO FIELDS: Iowa Corn Promotion Board has been funding research on corn phenotyping for several years. The goal is to expand the understanding of factors that affect corn genetics and crop environments, and the effect this has on yield.

"We thank USDA for providing us the ability to advance our plant productivity research," says Curt Mether, a corn farmer from Logan, Iowa. He is research and development committee chair for the Iowa Corn Promotion Board.

Mether says, "Our goal is to make the connection in understanding how genes of the corn plant perform under different environmental growing conditions and how various plant traits will be impacted. If scientists can predict how corn traits will perform, given their understanding of the genes in a hybrid and how they react to environment stressors, this will enable plant breeders to design better corn plants for improved productivity to meet the growing demand for food, feed and fuel in the future."

Key objectives of this research are to:

* Develop a public corn phenotype database to allow study of mechanisms by which genes interact with the environment to influence traits

* Develop new methods and devices to analyze the relationship between genetic, trait and environmental data to predict performance of plants

* Be able to predict the growth and yield of a corn plant given the genetic background and the environment

* Convert the corn genome sequence into functional knowledge

Scientists who are seeking funding from this USDA grant announcement must also request a letter of support from the Iowa Corn Promotion Board. Scientific proposals are due to USDA on July 28, 2016. "This is another example of checkoff dollars being leveraged on behalf of corn farmers to improve long-term profitability," says Mether. “The Iowa Corn Promotion Board works to develop and defend markets, fund research, and provide education about corn and corn products.”

Missouri&#039;s flood threat, hay delay and soybean planting midway

Missouri's flood threat, hay delay and soybean planting midway

Wet weather continues to plague Missouri farmers struggling to get soybeans in the ground and hay out of the field.

Last week, soybean farmers saw just less than three days suitable for planting. Still growers report 59% of the 2016 crop planted, according to the latest USDA Crop Progress Report.

Average rainfall statewide reached 2.42 inches, 1.32 inches above normal. Counties in northwestern and southeastern Missouri experienced rainfall amounts anywhere from 4 to 6 inches.

Flooding threat

SOYBEANS EMERGE: Soybeans are 37% emerged across the state. Still some growers in west central and southwest Missouri are struggling to get the crop in the ground. These areas are just one-third of the way into the soybean planting season.

Excessive precipitation caused the Missouri River to rise putting pressure on levees. Friday, May 27, the U.S. Army Corps of Engineers declared a flood emergency for the Missouri River. Heavy rain filled tributaries and caused the river water levels to jump rapidly. The rising waters threatened to meet the 2011 flood crest levels. The forecast was one that the Gov. Jay Nixon declared a state of emergency.

However, as of yesterday, the river levels were falling with nearly all river gauge locations below flood stage.

Tough hay season

The rain also created problems for Missouri hay growers. Hay cuttings were put on hold for much of the state as farmers waited out storms.

It will take a few days of dry, sunny weather to get hay harvest back on track. University of Missouri Extension is warning farmers against putting up wet hay. This wet hay could lead to spontaneous combustion causing damage to bale and barn.

Corn update

Most of the corn planting wrapped up with the state 13 points ahead of the 5-year average. Those who do not have corn in the ground are reporting switching to soybeans.

And the corn crop looks good. The USDA Crop Progress Report, farmers say that roughly 74% of the crop is in good or excellent condition. 

Stick with your long-term soybean risk-management plan

Stick with your long-term soybean risk-management plan

The latest USDA Crop Progress Report showed 73% of the soybean crop is now planted, which was right in the middle of trade expectations, and just slightly ahead of our historical pace but nothing to excite the trade. The big question still remains: How wil the front end of the market respond once the funds begin to more aggressively roll or liquidate their long positions?

Many fundamental insiders believe they roll aggressively to new-crop contract, because that's where the more traditional bullish story will arise if U.S. producers are thrown a weather type curve-ball. Personally, I think the funds stay a bit more front-end loaded and roll more than we would suspect into the AUG16 and SEP16 contracts. Remember, a large portion of the crowd that's currently in the game tend to like the thinner markets and seem to have a much more event-driven mindset.

Several of the larger players appear to be cross-hedging geopolitical risk that could negatively impact their recent bullish bets in the emerging markets. In other words, they are not speculating on a late-summer weather event here in the U.S. but rather more nearby headlines that could be associated with logistical complications and hiccups inside Argentina and Brazil.

While the U.S. crop is being grown in the ground, the world is dependent on Argentina and Brazil to deliver supply. The problem is recently elected President in Argentina, Macri, who is trying to implement radical change but is being sharply opposed by public sector unions and labor forces. Since taking office, Macri's government has supposedly trimmed a net 12,000 jobs from the public payroll, while the private sector has lost  thousands. Forecasts for annual inflation in Argentina are now up around 35-40% and moving higher. The higher input costs have squeezed local business margins, and unions have registered over -140,000 jobs being lost between January and April.

At the same time, the current President of Brazil, Rousseff, has been suspended from office and facing a very high probability of being impeached, which could create major social unrest and extreme uncertainty inside the Brazilian borders.

What we have to understand is that there has been a lot of big-money placed on the table and put behind the hopes of change for these two nations. I have to imagine if the new leaders can somehow turn things around there is a fortune to be made by investors who have been willing to be buyers at the bottom. Just keep in mind these very same investors are extremely smart and constantly looking for strategies and ways to "cross-hedge" and protect their downside exposure, i.e. "long the soybean market." 

From where I sit, the new-crop NOV16 contract and a U.S. weather story are simply icing on the cake, but certainly not of their primary interest or concern, hence the reason I believe a larger portion than we think, stay "front-end" centric. As a producer, I feel lucky to have been able to reduce a large portion of our new-crop price risk at profitable levels. I'm sure I will be kicking myself if prices continue to rally higher, but from a risk-management perspective it's clearly the right move and fits our longer-term goals and business objectives.

I continue to monitor the NOV17 contract, hoping I will eventually see prices move north of $10 per bushel, giving us another opportunity to reduce a bit more longer-term price risk. As a spec, I continue to stay on the sideline believing their are much easier shots to take.



Land values decline, continuing correction

In March 2016, the Federal Reserve Bank in Minneapolis reported a decline in the average value of non-irrigated cropland of 3.5 percent in the north-central states, compared to a year earlier. This included a 4.3 percent annual decline in farmland values in Minnesota, a drop of 4.6 percent in both Wisconsin and North Dakota, and a decline of 1.6 percent in South Dakota. Montana had the largest year-to-year decline, with a drop in land values of over 24 percent. These land value results were based on a survey of agricultural banks in the listed states, conducted by the Federal Reserve Bank.

Many agricultural experts and economists have been warning for the past few years that we could be headed for a significant correction in farmland values in the Midwest. Based on recent data, there appears to be evidence that a reduction in average land values has been occurring in some regions of the U.S., including the Upper Midwest. Much lower corn and soybean prices in 2014 and 2015 have resulted in significant reductions in farm income levels, thus putting downward pressure on average land values in many areas.

In contrast to most other land value surveys, the USDA Land Value report released in July 2015 showed that average farm real estate values increased by 2.4 percent across the United States from June 2014 to June 2015. The USDA survey involves only producers, and includes the value of farmland, along with the value of buildings and improvements. The USDA survey did show an average decline of 1.1 percent in Minnesota farmland values, and a decline of 5.9 percent in Iowa. The USDA land value survey results are somewhat more optimistic than most other land value surveys, and more favorable than analysis from most noted land economists.

Iowa State University does a comprehensive land value survey each December, which is regarded as one of the best resources on trends in Midwest farmland sales. Iowa farmland values rose at an incredible pace from 2000 to 2013, with only one minor decline in 2009, before more significant declines of 8.9 percent in 2014, and 3.9 percent in 2015. This was the first time that the Iowa land value survey has shown two consecutive years of decline since 1998 and 1999. The 2015 Iowa Farmland Value Survey showed a decline in land values in eight of the nine crop reporting districts, with the greatest decline at 6.7 percent in the north-central district. Only the northwest district showed a slight increase of 0.7 percent in land values in December 2015, compared to December 2014. 

Trends in farmland values in southern Minnesota are probably fairly close to the trends shown in the Iowa land value survey, reflecting the lower crop prices and tighter profit margins. Similar to Iowa, land values in portions of southeast and south-central Minnesota have shown a greater decline than some other areas of the state, such as southwest Minnesota. Some isolated land sales across southern Minnesota have still been reported at fairly high values per acre; however, the overall trend in the past 18-24 months has been a decline of 10-20 percent from the peak land values in 2013 and early 2014.

One of the best sources of farm real estate values in Minnesota is the University of Minnesota Land Economics website. This website is updated annually after September 30, and accesses a data base of various land values, based on farm land valuations reported to the state revenue office by county assessors offices throughout the state each year, which are adjusted annually based on actual land sales in a given county. This website allows for selected sorts by county, state economic regions, watersheds, etc., as well as by types of land.

Record 2015 crop yields in many areas of the Upper Midwest, along with some improvement in crop prices in spring 2016, has seemed to stabilize land values somewhat during the first few months of the year. Most likely, the future trends in crop prices, along with the level of 2016 crop yields and livestock profitability, will determine if land values continue to stabilize, or if we see further declines in land values later in 2016 into 2017. An increase in interest rates by the Federal Reserve Bank in the next year or two would also likely have a negative impact on land values. The good news is that there still seems to be fairly good demand by both farm operators and investors to purchase land, especially when it drops to a certain level.