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January 30, 2015

Further Evidence on the Competitiveness of Ethanol in Gasoline Blends

The sharp decline in gasoline prices beginning in the summer of 2014 and the persistence of relatively high ethanol prices has raised questions about the competitiveness of ethanol in gasoline blends and the potential impact on ethanol and corn demand. In previous farmdoc daily articles we addressed this issue from the perspective of the ratio of ethanol and CBOB prices that would be required to keep ethanol competitive in gasoline blends. Here, we address the issue from the perspective of the relationship of ethanol prices to the price of other octane enhancers. In particular, we consider the price of the aromatic compounds benzene, toluene, and xylene. These compounds have octane ratings generally similar to that of ethanol and have been routinely used as octane enhancers in gasoline blends.

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Posted by Scott Irwin and Darrel Good   Permalink  

January 28, 2015

The Profitability of Biodiesel Production in 2014

A farmdoc daily article last fall indicated that 2014 was shaping up to be a very tough year for biodiesel producers. Since that article was published there have been some major developments such as the collapse in crude oil prices and reinstatement of the biodiesel tax credit. The purpose of this article is to provide a full-year review of biodiesel production profitability in 2014.

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Posted by Scott Irwin   Permalink  

January 27, 2015

Expected Payments from ARC-CO and PLC

Differences in expected payments between Agricultural Risk Coverage - County Coverage (ARC-CO) and Price Loss Coverage (PLC) will be an important factor when making the program choice decisions offered under the 2014 Farm Bill. Realization of Market Year Average (MYA) prices and county yields from 2014 through 2018 will affect differences in payments. Much of the focus will be on price levels.

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Posted by Gary Schnitkey, Jonathan Coppess, Carl Zulauf, and Nick Paulson   Permalink  

January 26, 2015

Reviewing the Pace of Corn and Soybean Exports

Following the January 12 USDA Crop Production and Grain Stocks reports it's becoming increasingly clear that the story in corn and soybean markets for the foreseeable future will be the ongoing pace of consumption. Series to monitor include ethanol production, soybean crush, feed and residual use, and exports. Last week's article reviewed feed, seed, and residual uses of corn and soybeans. Today's article will continue the review of corn and soybean consumption data by category by focusing on the pace of corn and soybean exports.

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Posted by John Newton   Permalink  

January 23, 2015

More on 'Is Bigger...Better'

The idea that larger farms have a more efficient cost structure was explored in the July 18, 2014 article. That earlier article looked at some of the variable costs (crop costs and power & equipment costs) that seem to be attention getting when considering economies of scale in farming.

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Posted by Bradley L. Zwilling, Brandy Krapf and Dwight Raab   Permalink  

January 22, 2015

Indicated ARC-CO and PLC Payment for 2014 Crop Year Corn, Soybeans, and Wheat by State: January 2014

This article provides payment indicators for ARC-CO and PLC based on the January 12, 2015 WASDE mid-price estimate and NASS's crop production annual reports for corn, soybeans, and wheat. The term, payment indicator, is used because the estimates use state yield not the county yield used by ARC-CO or farm payment yield used by PLC. Thus, the indicators are not estimates of payments an individual FSA farm will receive. Nevertheless, they should help frame perspectives and questions regarding crop program choices.

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Posted by Carl Zulauf, Sanghyo Kim, and Gary Schnitkey   Permalink  

January 21, 2015

Base Acre and Yield Updating Decisions: Push to the Finish

The deadline for completing base acre and yield updating decisions is February 27th. While the decisions usually are straightforward, collecting the information and completing the process will take some time. For this reason, beginning the process now seems prudent.

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Posted by Gary Schnitkey, Jonathan Coppess, Nick Paulson, and Carl Zulauf   Permalink  

January 20, 2015

Issues Stemming from January USDA Reports

The USDA's final estimates of 2014 U.S. production and estimates of December 1, 2014 stocks released on January 12 revealed some potentially important issues for the corn and soybean markets. Three issues are addressed here: 1) the large difference between National Agricultural Statistics Service (NASS) estimates of planted acreage and planted acreage reported to the Farm Service Agency (FSA), 2) the surprisingly small feed and residual disappearance of corn during the first quarter of the 2014-15 marketing year, and 3) the surprisingly large seed and residual disappearance of soybeans during the first quarter of the 2014-15 marketing year

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Posted by Darrel Good   Permalink  

January 16, 2015

Analysis: ARC-IC vs. ARC-CO Payments Using Illinois and Kansas Farm Management Association Data

Farm Service Agency (FSA) farm operators can elect 1 of 3 crop programs for the 2014-2018 crop years by the end of March 2015. ARC-CO (Agriculture Risk Coverage - county) and PLC (Price Loss Coverage) have drawn the most attention. The third option is ARC-IC (ARC - individual). Since ARC-CO and ARC-IC are variations of the same policy concept, a question of interest is, "How do potential payments from the ARC programs compare?" This article provides one perspective on this question using farm level yield data from the Illinois and Kansas farm management associations.

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Posted by Carl Zulauf, Andrea Hershey, Gary Schnitkey, and Gregg Ibendahl   Permalink  

January 15, 2015

An Update on the Farm Bill Toolbox and Farm Bill Decisions

Now that the calendar has turned to 2015, the decisions of the 2014 Farm Bill loom large. The Farm Bill Toolbox, designed to be a one-stop resource for educational tools for all program decisions, has been updated and is being re-launched. Feedback from users has driven the upgrades and improvements to the web site. A reminder of the farm program decision deadlines and highlights of the Farm Bill Toolbox's contents are provided by this article to help landowners and farmers as they close in on the decisions for this farm bill.

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Posted by Jonathan Coppess, Gary Schnitkey, Nick Paulson, Carl Zulauf   Permalink