tag:farmdocdaily.illinois.edu,2013://8 2013-06-18T18:52:30Z The goal of the farmdoc project is to be at the forefront of harnessing the power of the Internet to deliver answers to the tough economic questions that agricultural producers and managers face. Since its inception over a decade ago the farmdoc project has consistently delivered unbiased and timely economic information and analysis to agricultural producers and businesses. Farmers, extension educators, farm managers, market analysts and many others across the U.S. and around the world have come to rely extensively on the comprehensive and current information and analysis available at farmdoc sites. Agricultural news in crop insurance, agricultural law, farmland values, crop prices, agricultural outlook, farm management and agricultural taxation. Movable Type Pro 5.14-en tag:farmdocdaily.illinois.edu,2013://8.6071 2013-06-18T18:42:00Z 2013-06-18T18:52:30Z

Listen to MP3 podcast Soybean planting has been delayed in many areas of the Midwest. Since final planting dates for corn have passed, farmers who have purchased the COMBO insurance policy are eligible to take prevented planting payments for corn. Soon all final planting dates for soybeans will have passed and all Midwestern farmers will be eligible for soybean prevented planting payments. In this post, returns from prevented planting payments are compared to planting soybeans. For corn, prevented planting payments almost always will be larger than expected returns from planting soybeans in late June. Prevented planting payments for soybeans are less than prevented planting payments for corn. Taking the prevented planting payments for soybeans will become more economically attractive if soybean plantings are further delayed.

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Soybean planting has been delayed in many areas of the Midwest. Since final planting dates for corn have passed, farmers who have purchased the COMBO insurance policy are eligible to take prevented planting payments for corn. Soon all final planting dates for soybeans will have passed and all Midwestern farmers will be eligible for soybean prevented planting payments. In this post, returns from prevented planting payments are compared to planting soybeans. For corn, prevented planting payments almost always will be larger than expected returns from planting soybeans in late June. Prevented planting payments for soybeans are less than prevented planting payments for corn. Taking the prevented planting payments for soybeans will become more economically attractive if soybean plantings are further delayed.]]> tag:farmdocdaily.illinois.edu,2013://8.6069 2013-06-17T16:54:00Z 2013-06-17T18:22:32Z

Listen to MP3 podcast On June 28, the USDA will release the June I Grain Stocks and June Acreage reports that will set the tone for both old and new crop corn and soybean prices. These reports have the potential to provide large surprises.

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On June 28, the USDA will release the June I Grain Stocks and June Acreage reports that will set the tone for both old and new crop corn and soybean prices. These reports have the potential to provide large surprises.]]> tag:farmdocdaily.illinois.edu,2013://8.6068 2013-06-14T19:45:00Z 2013-06-14T19:56:17Z

It is no surprise to readers of farmdoc daily that ethanol production has played a major role in the grain price boom since 2006. Increasing ethanol production has been driven by a combination of market incentives and biofuels polices. Given the prominence of ethanol production it is important to track the profitability of the industry in order to assess likely ethanol production trends and potential impacts on grain market supply, demand, and prices.

Site Administrator www.farmdocdaily.illinois.edu farmdoc daily that ethanol production has played a major role in the grain price boom since 2006. Increasing ethanol production has been driven by a combination of market incentives and biofuels polices. Given the prominence of ethanol production it is important to track the profitability of the industry in order to assess likely ethanol production trends and potential impacts on grain market supply, demand, and prices. ]]> tag:farmdocdaily.illinois.edu,2013://8.6067 2013-06-13T13:03:00Z 2013-06-13T13:04:14Z

The publication entitled "Revenue and Costs for Corn, Soybeans, Wheat, and Double-Crop Soybeans" has been revised and is available on farmdoc. Revisions from the last publication includes an update of 2012 results and an updated to projections for 2013.

Site Administrator www.farmdocdaily.illinois.edu farmdoc. Revisions from the last publication includes an update of 2012 results and an updated to projections for 2013.]]> tag:farmdocdaily.illinois.edu,2013://8.6066 2013-06-12T21:42:00Z 2013-06-12T21:49:36Z

In a post last week, we provided an analysis of the price of corn that could result in retail E85 prices being breakeven with E10 prices based on the relative energy value of the two fuels. In that analysis, the price of ethanol was assumed to be at a level that would allow ethanol producers to cover all costs of production for a given price of corn.

Site Administrator www.farmdocdaily.illinois.edu In a post last week, we provided an analysis of the price of corn that could result in retail E85 prices being breakeven with E10 prices based on the relative energy value of the two fuels. In that analysis, the price of ethanol was assumed to be at a level that would allow ethanol producers to cover all costs of production for a given price of corn. tag:farmdocdaily.illinois.edu,2013://8.6065 2013-06-11T10:26:00Z 2013-06-11T10:27:08Z

Commodity program payments under alternative House and Senate proposals are estimated for corn produced in McLean County, Illinois. Payments are estimated for 2013 through 2016 given average yields for three price scenarios: 1) a $4.50 Market Year Average (MYA) price for each year from 2013 through 2016, 2) a $4.00 MYA price, and 3) a $3.50 MYA price. Under all price scenarios, the Average Crop Revenue Election (ACRE) program has higher payments than commodity programs proposed by the Senate and House Agriculture Committees.

Site Administrator www.farmdocdaily.illinois.edu Commodity program payments under alternative House and Senate proposals are estimated for corn produced in McLean County, Illinois. Payments are estimated for 2013 through 2016 given average yields for three price scenarios: 1) a $4.50 Market Year Average (MYA) price for each year from 2013 through 2016, 2) a $4.00 MYA price, and 3) a $3.50 MYA price. Under all price scenarios, the Average Crop Revenue Election (ACRE) program has higher payments than commodity programs proposed by the Senate and House Agriculture Committees. tag:farmdocdaily.illinois.edu,2013://8.6064 2013-06-10T16:37:00Z 2013-06-10T16:37:49Z

Listen to MP3 podcast The corn market appears to be having difficulty anticipating the likely size of the 2013 U.S. crop. Over the past three weeks, December 2013 corn futures have traded from a low of $5.12 to a high of $5.735 as production expectations continue to unfold.

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The corn market appears to be having difficulty anticipating the likely size of the 2013 U.S. crop. Over the past three weeks, December 2013 corn futures have traded from a low of $5.12 to a high of $5.735 as production expectations continue to unfold.]]> tag:farmdocdaily.illinois.edu,2013://8.6063 2013-06-07T18:21:00Z 2013-06-07T20:28:32Z

This post examines the potential for market distortions caused by the price support programs currently proposed in the House and Senate 2013 Farm Bills. It is common for discussion of market distortion to focus on the level of price supports, but the degree of distortion reflects the interaction of all of a program's parameters. One of the hot topics in business today is the role of product design. In many respects, this post is a discussion of policy design and the potential consequences of design decisions.

Site Administrator www.farmdocdaily.illinois.edu This post examines the potential for market distortions caused by the price support programs currently proposed in the House and Senate 2013 Farm Bills. It is common for discussion of market distortion to focus on the level of price supports, but the degree of distortion reflects the interaction of all of a program's parameters. One of the hot topics in business today is the role of product design. In many respects, this post is a discussion of policy design and the potential consequences of design decisions. tag:farmdocdaily.illinois.edu,2013://8.6062 2013-06-06T17:31:00Z 2013-06-06T18:27:20Z

The current farm bill proposals being debated in the Senate and House continue to include price supports in the commodity title while repealing the current system of direct and countercyclical (DCP) payments. More detailed discussions of the modified price support programs - AMP in the Senate, and PLC in the House - were provided in recent posts. Today, attention is turned towards comparing the expected payments each program might generate for corn and soybean producers.

Site Administrator www.farmdocdaily.illinois.edu The current farm bill proposals being debated in the Senate and House continue to include price supports in the commodity title while repealing the current system of direct and countercyclical (DCP) payments. More detailed discussions of the modified price support programs - AMP in the Senate, and PLC in the House - were provided in recent posts. Today, attention is turned towards comparing the expected payments each program might generate for corn and soybean producers. tag:farmdocdaily.illinois.edu,2013://8.6061 2013-06-05T20:34:00Z 2013-06-05T20:35:12Z

We and others have written extensively about the impending ethanol blend wall. The blend wall is defined as the maximum amount of ethanol that can be consumed in the domestic motor fuel market if ethanol blending is limited to 10 percent of total motor fuel consumption. The blend wall becomes an issue when the implied RFS mandated requirement for renewable or conventional biofuels consumption exceeds the size of the blend wall. Technically, there is not a mandate for conventional biofuels consumption. There is a mandate for total consumption of biofuels and a mandate for consumption of advanced biofuels. Since advanced biofuels have generally not been economically attractive, consumption of those fuels has not exceeded the mandate so that the difference between the total and advanced mandate has been met with conventional biofuels, almost entirely corn-based ethanol. It is this difference that is thought of as the mandate for conventional biofuels.

Site Administrator www.farmdocdaily.illinois.edu We and others have written extensively about the impending ethanol blend wall. The blend wall is defined as the maximum amount of ethanol that can be consumed in the domestic motor fuel market if ethanol blending is limited to 10 percent of total motor fuel consumption. The blend wall becomes an issue when the implied RFS mandated requirement for renewable or conventional biofuels consumption exceeds the size of the blend wall. Technically, there is not a mandate for conventional biofuels consumption. There is a mandate for total consumption of biofuels and a mandate for consumption of advanced biofuels. Since advanced biofuels have generally not been economically attractive, consumption of those fuels has not exceeded the mandate so that the difference between the total and advanced mandate has been met with conventional biofuels, almost entirely corn-based ethanol. It is this difference that is thought of as the mandate for conventional biofuels. tag:farmdocdaily.illinois.edu,2013://8.6060 2013-06-04T14:49:00Z 2013-06-04T15:12:37Z

Non-land costs continued to increase in 2012. Data from Illinois Farm Business Farm Management indicate that non-land costs in central Illinois on high-productivity farmland averaged $581 per acre for corn in 2012, up $78 per acre from non-land costs in 2011. Non-land cost for soybeans averaged $353 per acre, up $50 per acre in 2011. Non-land costs in 2012 represent record high levels for both corn and soybeans.

Site Administrator www.farmdocdaily.illinois.edu Non-land costs continued to increase in 2012. Data from Illinois Farm Business Farm Management indicate that non-land costs in central Illinois on high-productivity farmland averaged $581 per acre for corn in 2012, up $78 per acre from non-land costs in 2011. Non-land cost for soybeans averaged $353 per acre, up $50 per acre in 2011. Non-land costs in 2012 represent record high levels for both corn and soybeans. tag:farmdocdaily.illinois.edu,2013://8.6059 2013-06-03T16:51:00Z 2013-06-03T16:51:50Z

Listen to MP3 podcast Hog production has returned to profitability as hog prices rallied from the mid-$50s per live hundredweight in March to the low $70s today. Moderation in feed prices after the USDA's March Grain Stocks report was released in late March also helped reduce costs of production with second quarter costs averaging about $67 per live hundredweight compared to an estimated $70 in the first quarter. Delayed planting that is raising concerns about fewer planted acres and reduced yields has most recently sent corn and meal prices trending to the upside, raising concerns that hog production costs will not drop as much as some had anticipated.

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Hog production has returned to profitability as hog prices rallied from the mid-$50s per live hundredweight in March to the low $70s today. Moderation in feed prices after the USDA's March Grain Stocks report was released in late March also helped reduce costs of production with second quarter costs averaging about $67 per live hundredweight compared to an estimated $70 in the first quarter. Delayed planting that is raising concerns about fewer planted acres and reduced yields has most recently sent corn and meal prices trending to the upside, raising concerns that hog production costs will not drop as much as some had anticipated. ]]> tag:farmdocdaily.illinois.edu,2013://8.6058 2013-05-31T14:42:00Z 2013-05-31T16:15:06Z

This post is the fifth in a series that contrasts and compares the farm prosperity of the 1970s with the current period of farm prosperity. It examines the response of corn, cotton, soybean, and wheat production during the two periods of prosperity, both in the U.S. and the rest of the world. These 4 crops are examined because they have the largest quantity and value of exports among U.S. crops.

Site Administrator www.farmdocdaily.illinois.edu This post is the fifth in a series that contrasts and compares the farm prosperity of the 1970s with the current period of farm prosperity. It examines the response of corn, cotton, soybean, and wheat production during the two periods of prosperity, both in the U.S. and the rest of the world. These 4 crops are examined because they have the largest quantity and value of exports among U.S. crops. tag:farmdocdaily.illinois.edu,2013://8.6057 2013-05-30T19:59:00Z 2013-05-30T20:19:45Z

Listen to MP3 podcast Due to continuing wet weather, some farmers will not have planted all their corn by the final planting dates contained in their crop insurance policies. Once the final planting date has been reached, a farmer that has purchased the COMBO product (RP, RP with exclusion, or YP) will have the option of taking a prevented planting payment. In many cases, taking the prevented planting payment will be an economically attractive alternative.

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Due to continuing wet weather, some farmers will not have planted all their corn by the final planting dates contained in their crop insurance policies. Once the final planting date has been reached, a farmer that has purchased the COMBO product (RP, RP with exclusion, or YP) will have the option of taking a prevented planting payment. In many cases, taking the prevented planting payment will be an economically attractive alternative.]]> tag:farmdocdaily.illinois.edu,2013://8.6056 2013-05-30T17:44:00Z 2013-05-30T18:05:46Z

A recent post provided the magnitude of crop insurance losses related to the drought and other events of 2012, showing the concentrated losses in the heart of the corn belt, and corresponding closely to the areas experiencing the most severe drought conditions. Ensuing debates related to the Crop Insurance Title in the Farm Bill, and arguments by both supporters of crop insurance, and opponents alike have pointed to the experience and have used individual details to argue such things as: payments were too high to farmers; or, that more shallow loss coverage is needed; or, or that company losses were too great, or that rates are too high or too low; or, that subsidy was greater than needed to attract participation -- the point is that a single year's loss experience does not provide a very complete context to evaluate the performance of the program, and the extreme nature of the drought led to numerous extreme individual experiences. Furthermore, it is actually quite difficult to meaningfully aggregate across time due to the changing nature of coverage provided year to year, evolving product designs and customer shares, and the overall scale of the program that follows both price levels and participation rates through time.

Site Administrator www.farmdocdaily.illinois.edu A recent post provided the magnitude of crop insurance losses related to the drought and other events of 2012, showing the concentrated losses in the heart of the corn belt, and corresponding closely to the areas experiencing the most severe drought conditions. Ensuing debates related to the Crop Insurance Title in the Farm Bill, and arguments by both supporters of crop insurance, and opponents alike have pointed to the experience and have used individual details to argue such things as: payments were too high to farmers; or, that more shallow loss coverage is needed; or, or that company losses were too great, or that rates are too high or too low; or, that subsidy was greater than needed to attract participation -- the point is that a single year's loss experience does not provide a very complete context to evaluate the performance of the program, and the extreme nature of the drought led to numerous extreme individual experiences. Furthermore, it is actually quite difficult to meaningfully aggregate across time due to the changing nature of coverage provided year to year, evolving product designs and customer shares, and the overall scale of the program that follows both price levels and participation rates through time.