March 18, 2015

Cold Weather Maintenance Diets for Dairy Calves

Feeding a heifer dairy calf properly during cold weather can mean up to 1500 extra pounds of milk during her first lactation period. Todd Gleason has more on the increased cold weather maintenance diet that results in such a gain.


March 04, 2015

Pork’s Boom & Bust Price Cycle

Markets can take your breath away and the hog market over the past year has left many breathless says one Purdue University ag economist



February 10, 2015

Blown Away by the Soybean Export Number

The price of soybeans has been dropping and many in the trade are very worried about the potential for futures to continue to move lower. However, the February WASDE numbers may suggest some strength remains.


February 09, 2015

Finer Ground Corn More Digestible

An animal nutritionist at the University of Illinois has quantified the importance of particle size in ground feed for hogs.


February 06, 2015

Crude Oil Jumps Off Lows

The cost of a barrel of crude oil has dropped dramatically since last June. Back then the price was more the $100 per barrel. It dropped to nearly $44 a barrel earlier this year and has now begun to make a sharp turn higher. There are series of reasons for the rally says Bloomington based energies specialist for Growmark Harry Cooney. 

There has been a steelworkers strike at some of the refineries. This has caused some concerned. The rig counts have also declined. This number indicates how many oil wells are operational and the trade, which focuses on future supply, thinks the supply may peak out and then start to decline. 

However, it is important to remember says Harry Cooney crude oil started its price decline at around $107.00 a barrel. It is very unlikely the oil rig count contraction taking place now will greatly constrain supply. Still Cooney has been advising end users, like farmers that purchase gasoline and diesel in bulk, to lock in the price of their 2015 needs. 

The end users see these values, values they haven’t seen for four or five years, as an opportunity to lock in the price of fuel even though they’re above the recent lows. The price of fuel, unlike other inputs on the farm, has decreased more rapidly in percentage terms. 

Nitrogen fertilizer, for instance, has yet to drop in price.


February 05, 2015

Beef Expansion Is Underway

The nation's cattle producers are expanding the herd and they're doing it at a somewhat faster rate than had been anticipated.


January 30, 2015

Reviewing the Pace of Corn & Soybean Exports

Following the January 12 USDA Crop Production and Grain Stocks reports it has becoming increasingly clear that the story in the corn and soybean markets for the foreseeable future will be the ongoing pace of consumption.


Consumption of corn produced in the United States can be tallied as corn for used for ethanol, fed to livestock, or exported. The soybean consumption numbers are derived from an item called the crush… that’s when a soybean facility crushes the bean to extract the oil and meal from it. There is also the feed and residual number, and again exports. University of Illinois Ag Economist John Newton has explored the export numbers.

He says, holding all else constant, a lower rate of corn and soybean exports relative to current USDA projections would increase carryover stocks, and could produce downward pressure on prices. USDA, as of the January reports, expects corn exports will be 1.75 billion or 1750 million bushels for the current marketing year. Newton also says right now the actual numbers suggest corn exports will need to pick up to make it to seventeen-fifty.

With nearly 40 percent of the marketing year in the books, corn exports need to accelerate in order to reach the 1,750 million bushel WASDE projection. Based on the implied GATS estimate of 602 million bushels, 1,148 million bushels need to be exported during the remainder of the marketing year to reach the WASDE projection. On a weekly basis this total represents approximately 37 million bushels per week, and would require an increase of 57 percent over the current 10-week average export volume.

Again, in order to meet the USDA projected yearly exports total of 1.750 billion bushels the pace of corn exports needs to average 37 million bushels per week from mid-January forward. Using a similar set of calculations John Newton reports cumulative soybean exports for the 2014/15 marketing year total 1.312 billion bushels, up 18 percent from last year.

Based on the FGIS totals, then, to reach the 1,770 million bushel WASDE projection it’s implied that 458 million bushels of soybeans need to be exported during the remainder of the marketing year. On a weekly basis this total represents approximately 15 million bushels per week.

While corn exports are accelerating, the pace of soybean exports from U.S. ports is slowing down. Combining the outstanding sales with the remaining balance needed, Newton expects sales could come up 42 million bushels short of the WASDE projection. He thinks soybean exports will struggle to meet the lofty 1.77 billion bushel USDA estimate, but that it is entirely possible.


January 24, 2015

Issues Stemming from January USDA Report

The final 2014 crop production numbers delivered by USDA in the January reports leave three issues unresolved.The three problems, as identified by University of Illinois Ag Economist Darrel Good, center on the number of corn and soybean acres planted, the surprisingly small amount of corn used in the first three months of the marketing year, and the surprisingly large number of soybeans consumed in that same time frame. 

The first issue is that the difference between the total number of planted acres USDA NASS has reported over time and those officially reported by farmers to FSA has grown. The number of acres planted to wheat, corn, and soybeans as tallied by USDA NASS has steadily grown larger than the number of acres farmers are telling FSA they've sown. USDA has not offered an explanation. The difference in 2014 is nearly 9.3 million acres over the three crops says Darrel Good. 

He says the changing relationship between NASS acreage estimates and acreage reported to FSA may make early FSA reports less useful in anticipating NASS final acreage estimates.

The second issue is related to how much corn was used in the months of September, October, and November. Those are the first three months of the marketing year. USDA totals 4.25 billion bushels of disappearance of which feed and residual use accounted for 2.198 billion. This number is a 114 million bushels lower than the usage in the same period last year after it was revised down. The problem says the U of I number cruncher is that over time the range of usage represented in the first quarter figure as compared to total usage for the year has gotten wider.

First quarter use is no longer a reliable forecaster of total marketing year consumption.

It means a lot of uncertainty will persist in the marketplace about how much corn is being fed to livestock.The numbers do get better as time passes during the marketing year. The expectation is the March 31 Grain Stocks report will be more accurate.

The third issue with the January USDA figures is also in the consumption numbers. The implied residual disappearance of soybeans in the first quarter set a record. This might mean the size of the 2014 soybean crop was over estimated. While this is an issue, it will not be resolved for several months. Some insight will be forthcoming from the March Grain Stocks report. 

Time will eventually fix all three issues, but it is important to recognize them and the potential changes these may bring to the commodity markets.

Read Darrel Good's Original FarmDocDaily Post


January 19, 2015

Dramatic Changes in the Ethanol/Gasoline Relationship

The plummeting price of gasoline has caused a dramatic change in the relationship between the price of corn and the price of gasoline. However, this means little for how much ethanol will be produced and consumed.
 


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