AuthorThe “FOCUS ON AG” column is sent out weekly via e-mail to all interested parties. The column features timely information on farm management, marketing, farm programs, crop insurance, crop and livestock production, and other timely topics. Selected copies of the “FOCUS ON AG” column are also available on “The FARMER” magazine web site at: https://www.farmprogress.com/focus-ag Archives
May 2024
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Spring fieldwork got off to a good start in many portions of the Upper Midwest in mid-April; however, conditions have been much different in late April and early May. Frequent rainfall events and above normal precipitation have kept most farmers out of the field since late April. In some areas, it may take several drier days in order to return to full-scale fieldwork, and the resulting soil conditions may be less conducive for good planting conditions. In addition, except for a few brief stints of some warmer temperatures, very cool and cloudy weather conditions have existed throughout the region in the past couple of weeks. This has slowed germination and emergence of the corn and soybeans that were planted prior to the prolonged rainfall events. Some standing water and flooding has occurred in areas that have received high amounts of rainfall and near small rivers and streams. This may require replanting of crops in some of these areas.
Some portions of the Upper Midwest had very good corn and soybean planting progress in mid-April. Farmers in some areas were able to take advantage of some brief planting windows that existed from April 12-15 and again from April 21-25. As a result, portions of the region, such as South Central and Southwest Minnesota and Northern Iowa, have 80-90 percent of the corn and 30-40 percent of the soybeans planted, while other areas of the region have very little crop planted. Normally by early May, Midwest farmers have made some significant planting progress on Spring fieldwork. For farm operators that were able to plant some corn during April, there has been some concern about the seedling viability of that corn due to the extended period cool and damp soil conditions that has existed across the region. The good news is that the weather forecast for mid- May appears to be much more favorable for corn and soybean development in most areas of the Upper Midwest. The USDA Weekly Planting Progress Report released on April 29 indicated that 27 percent of the intended U.S. corn acreage for 2024 was planted by that date. This compares to the 5-year average of 22 percent of the corn planted by that date. As of April 29, Minnesota had 30 percent of the corn planted, compared to a 5-year average of 18 percent, while Iowa had 39 percent planted, compared to a 5-year average of 28 percent planted. Other States that were ahead of the 5-year average in corn planting progress on April 29 included Missouri at 63 percent, South Dakota at 13 percent, Wisconsin at 10 percent, and North Dakota at 6 percent. Illinois and Nebraska were both near the 5-year average for corn planting progress at 25 percent and 22 percent, while Indiana and Ohio were behind the normal pace for corn planting with less than 10 percent planted in both States. As of April 29, 18 percent of the U.S. soybeans had been planted, compared to the 5-year average of 10 percent planted by that date. One piece of good news for farm operators in many portions of the Upper Midwest is that recent rainfall events have helped ease drought concern for the early portions on the 2024 growing season. Many areas of the primary corn and soybean production areas in the Upper Midwest were listed as “abnormally dry” to “severe drought” in the weekly U.S. Drought Monitor entering the month of April. However, frequent rainfall events and above normal precipitation during April have either eliminated or greatly shrunk to drought concern area in the weekly update. There should now be adequate soil moisture this year for good corn and soybean germination and early season plant growth in most areas of the Upper Midwest. In addition, the amount of stored soil moisture in the top 5 feet of soil has now been restored to much improved levels, compared to the soil moisture conditions that existed after harvest in 2023 and in early Spring this year. The University of Minnesota Research and Outreach Center at Waseca, Minnesota, recorded 4.53 inches of rainfall during April, which was 1.23 inches above normal, and has recorded over two inches of additional precipitation during the first few days of May. This followed several months of below normal precipitation at the Waseca site. The total precipitation for 2024 at the Waseca site is now near normal. The good news is that most rainfall events were not extreme and have left the soil conditions very favorable for early season plant growth. Soil temperatures at the Waseca site were well above normal in mid-April; however, have dropped below normal by early May. The average soil temperature at the 2-4 inch level on April 15 at the Waseca research location was above 55 degrees Fahrenheit (F), which is almost ideal for good corn and soybean planting conditions. After briefly dropping below 50 degrees F, the average soil temperatures have remained in the 50-55 degree F range during most of late April and early May. Research has shown that 50 percent corn emergence will occur in 20 days at an average soil temperature of 50 degrees F, which is reduced to only 10 days at an average temperature of 60 degrees F. This may help explain why some of the corn that was planted 2-3 weeks ago has been quite slow to emerge. The good news is that temperatures are predicted to get warmer in the next couple of weeks. Even though planting dates have been delayed in many areas of the Upper Midwest, most University and private agronomists are encouraging producers to be patient with initiating field work, and to wait until soil conditions are fit for good corn planting and seed germination. Given the high cost per acre of seed corn, and the limited availability of some of the best yielding corn hybrids in 2024, most growers do not want to take the risk of planting corn into poor soil conditions. Normally, in mid-May, the soil temperatures warm up quite rapidly, so concern over cool soil temperatures becomes less of an issue. It is expected that full-scale corn and soybean planting will resume as soon as the field conditions dry out and are fit for planting. Timely corn planting in the Upper Midwest is usually one of the key factors to achieving optimum corn yields in a given year. According to research at land-grant universities and by private seed companies, the “ideal time window” to plant corn in Upper Midwest in order to achieve optimum yields, if soil conditions are fit for planting, is typically from about April 15 to May 10. Based on long-term research, the reduction in optimum corn yield potential with planting dates from May 10-15 in many areas of the region is usually very minimal and is quite dependent on the growing season weather that follows. Even corn planted from May 15-25 has a good chance of producing 90-95 percent of optimum yield potential, assuming that there are favorable growing conditions following planting. The ideal window to plant soybeans in the Upper Midwest and to still achieve optimum yields starts in late April and extends until mid-May or even beyond in some years, so there is still ample time to get the 2024 soybean crop planted. Even though corn planting is off to very slow start in some areas in 2024, compared to other years, the good news is that there are still opportunities for timely planting and close to optimal yields. In both 2022 and 2023, a large amount of corn in the Upper Midwest was planted in mid-to-late May. Minnesota achieved a record state average corn yield of 195 bushels per acre in 2022 and ended with a statewide yield of 185 bushel per acre in 2023, which probably would have been higher had it not been for drought conditions late in the growing season in portions of the State. On the other hand, the corn planting dates were also delayed in the 2019 crop year in many portions of Minnesota, when the statewide average corn yield was only 173 bushels per acre, which was the lowest statewide corn yield in recent years. The biggest difference in those years was that the growing conditions after planting in 2022 and 2023 were almost ideal in many areas from late May until early July. By comparison, the 2019 corn crop was planted late into poor soil conditions, which was followed by less-than-ideal conditions throughout much of the growing season. Most farm operators in the Upper Midwest will likely not switch intended 2024 corn acres to soybeans unless the corn planting dates get extended into late May or beyond. By April, producers have typically finalized decisions for seed, fertilizer, and other crop inputs for the growing season, so they are likely to continue with their planned crop rotations as long as possible. In addition, there is not currently a big advantage in the projected market price at harvest this year for either corn or soybeans. New crop corn and soybean prices for the Fall of 2024 have remained fairly low in recent months due to weaker than expected demand and export volume, together with USDA projecting increases in corn and soybean inventories by the end of 2024. Note - For additional information contact Kent Thiesse, Farm Management Analyst, Green Solutions Phone - (507) 381-7960; E-mail - kentthiesse@gmail.com
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Many crop producers in the Midwest were enrolled in the Ag Risk Coverage (ARC-CO) farm program choice on their corn and soybean base acres for the 2023 crop year. With the advent of much lower corn and soybean market prices since the 2023 harvest season, many farmers are now wondering if there will be any 2023 ARC-CO payments for corn and soybeans for the 2023 crop year. Producers have a farm program choice each year on all eligible crops between the Ag Risk Coverage (ARC) and Price Loss Coverage (PLC) farm program choices. Any potential ARC-CO or PLC payments for the 2023 crop year would be paid to producers in October of 2024.
The PLC program payments are “price-only” and are based on comparing the 12-month national market-year average (MYA) price for a given crop compared to the established reference price for that year. If the 12-month average price is lower than the reference price, the producer would earn a PLC payment for that year. Enrollment in the PLC program has been fairly low in recent years due to corn and soybean commodity prices that have been well above the established PLC reference prices. The ARC-CO farm program choice includes a formula that uses 5-year average county-based yield calculations and 5-year average MYA prices to establish a benchmark revenue for the farm. The final calculated revenue for the farm is the actual county yield for a given year times the final MYA price for the year. If the final calculated revenue is lower than 86 percent of the benchmark revenue for the year there would be an ARC-CO payment for that year. There is also an “ARC-IC” farm program choice, which is based on farm-level yields; however, in many instances the ARC-IC program has less payment potential than the ARC-CO program. Many times understanding the formula for the ARC-CO programs can be a bit confusing. Sometimes it can be easier to understand by reviewing the data and results for the ARC-CO program from previous years. For information on current and past benchmark yields, prices and revenues, historical ARC-CO payment levels, and other farm program information, producers should access the USDA ARC-PLC web site, which is at: www.fsa.usda.gov/arc-plc The 2023 corn and soybean yields in many portions of the Midwest ended up better than expected, considering the very dry weather that existed in many areas during much of the growing season. In the areas that had final 2023 county average yields that were near or above the established 2023 county benchmark yield for the county, there will likely be very little chance of receiving any 2023 ARC-CO payment this Fall. However, in portions of the region that had final county yields that were well below average, there could be some possibility for a small ARC-CO payment. The 2023 county yield data for all crops in every State is available on the USDA National Agricultural Statistics Service (NASS) web site at: http://www.nass.usda.gov/. The market year average (MYA) price for corn and soybeans is 12-month national average price in a given year from September 1st during the year of harvest until August 31st the following year, which is then finalized on September 30th in the year following the production year for the crops. This is why any farm program payments that are earned for a given crop year are not paid by USDA until after October 1st in the following year. The marketing year to calculate MYA prices for wheat and other small grain crops is from June 1st in the year of harvest until May 31st the following year. The 12-month national average MYA price for a given crop is based on the monthly average market price received by farm operators across the United States, which is then “weighted” at the end of the year, based on the volume of bushels sold in each month. The USDA MYA price estimates can be tracked on a monthly basis in the monthly USDA World Agricultural Supply and Demand Estimates (WASDE) reports. The next WASDE report will be released on May 10. Following is a brief summary of potential 2023 farm program payments for each crop:
In summary, unless a producer was in a county that had greatly reduced yields in 2023 due to drought or other weather issues, it is unlikely that there will be any 2023 ARC-CO payments earned for corn, soybeans or wheat for the 2023 crop year. In addition, there will not be any 2023 PLC payments for any of the three crops. It may be possible that there will be either PLC or ARC-CO payments for other farm program eligible crops. Looking ahead to the 2024 crop year, there could be more potential for farm program payments for corn and soybeans. The 2024 reference prices for potential PLC payments in 2024 increased to $4.01 per bushel for corn and $9.26 per bushel for soybeans. The 2024 benchmark prices for ARC-CO payments increased to $4.85 per bushel for corn and $11.12 per bushel for soybeans. If current price trends continue past the 2014 harvest season into to 2025, there will be an increased likelihood for corn and soybean ARC-CO payments, especially in any counties that have reduced crop yields in 2024. The wheat reference price for 2024 remained at $5.50 per bushel and the 2024 reference price increased to $6.21 per bushel. Note - For additional information contact Kent Thiesse, Farm Management Analyst, Green Solutions Phone - (507) 381-7960; E-mail - kentthiesse@gmail.com
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Since 1970, an annual event called “Earth Day” has been held in late April across the United States. This event has been a time for all U.S. citizens to reflect on our Country’s environmental resources, and what we can do individuals, businesses and as communities to help enhance our environment for the next generation. Many times, farmers and the agriculture industry are portrayed as part of the problem for many the environmental issues that we are facing in the United States. However, in reality the agriculture industry has made some significant advancements in recent decades to help many farmers enhance their environmental efforts.
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