October Crop Production Report

The October 12 Crop Production report had a negative reaction in the grains market just after its release but the markets have rebounded since. Let’s take a deeper look at the numbers that what was covered in the initial news reports.

Planted corn acreage was updated in 10 objective yield states (IL, IA, KS, MN, NE, OH, SD, WI). The changes increased acreage by 0.3% from the previous report and +7.5% from last year. Corn yield was lowered by 1 bu/acre nationally or -0.6%. Total productions was lowered 0.2% from the previous report, however corn production is still projected at +10.7% from last year. total production is projected at 15.1 billion bushels which would be 900 million bushels higher than the largest corn crop in 2014. Seven new record yields are projected, including Iowa and Illinois where about half of the US corn crop is produced. The US yield, 173.4 bu/ acre would be a record as well Nebraska’s corn yield is projected to beĀ  181 bu/acre which is 3 bu lower than the previous report.

Soybean acreage was updated as well in the October WASDE report but the change was less than +0.1% compared to September’s report. The expected soybean acreage is 1.6% higher than last year. The big change was in projected yield, 1.6% higher than the previous report and 7.1% more than last year. The 2016 US soybean yield is projected at 51.4bu/acre and would be a record. The higher yield comes from much better pod set than in other years.All of this yields to a record high total soybean production of 4.27 billion bu, 314 million bu more than the highest production.Eleven states are expected to have record yields including Nebraska, 61, bu/acre.

Late Season Corn Disease: time to scout!

Reports are coming forward of various disease problems in this year’s corn crop. Some of these diseases include ear rot, anthracnose and stalk rots. Wet warm late season weather can increase the possibility of stalk and ear diseases and worsen any already present. Now is the time to scout fields to determine which may have problems. Farmers may decide to harvest fields with stalk rot earlier to avoid loss. They may also look for varieties that are more resistant to stalk rots when buying next year’s seed, especially in fields that have a history of problems.

Several links are included below which cover current year disease reports in the Corn Belt as well as background on ways to identify and manage the problems.

http://cropwatch.unl.edu/stalk-and-ear-rot-diseases-developing-early-few-fields

http://cropwatch.unl.edu/plantdisease/corn/bacterial-stalk-rot

http://cropwatch.unl.edu/plantdisease/corn/fusarium-stalk-rot

http://crops.extension.iastate.edu/cropnews/2016/09/scout-now-ear-rots

When Will Non-Land Crop Costs Decline?

11 months ago, Gary Schnitkey, University of Illinois Ag Economists, wrote an article reviewing previous periods of non-land cost rises and subsequent reductions after the corn supply shock abated which preceded the cost rise. Two time periods had rapid non-land cost increases, 1972-1982 and 2006-2013. From 1972 to 1982 non-land costs for corn production increased from $85 to $236, more than double. From 1982 to 1988 those same costs did decline but by 18%, approximately 4% annually.

From 1996 to 2005 non land costs remained flat averaging$252 per acre for corn, before they started to rise in 2006. Schnitkey estimated that 2013 would be the peak cost year at $615/acare. If that is correct and cost declines following the same pattern as 1982-1988, we can expect to see corn non-land costs will drop to $504, but not till 2019. Annual declines of only $18.50 are not large enough to allow break-even at current corn prices and cash rental rates. Cash rental rates arelikely to decline over the next few years. How much would only be a guess.