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The farmdoc team at the University of Illinois has created a model projecting the average fall price for corn and soybean futures in October. University of Illinois Agricultural Economist Gary Schnitkey says, at USDA’s current projected yields, it puts December corn futures at $3.10 and November Soybean futures at $8.36.
Given current yield estimates, a statistical model suggests that the harvest price for crop insurance in Midwest states will be near $3.10 per bushel. Higher yields, above current estimates, would be expected to result in lower prices and vice versa. Thus, higher prices could happen if 2020 yields are lower than the trend. Conversely, an above trend yield would likely result in lower prices. A harvest price below $3.00 per bushel is a distinct possibility with above trend yields.
Given current yield estimates, a statistical model suggests that the harvest price for crop insurance in Midwest states will be near $8.36 per bushel. Higher yields, above current estimates, would be expected to result in lower prices and vice versa. Thus, higher prices could happen if 2020 yields are lower than the trend. Conversely, an above trend yield would likely result in lower prices. A harvest price below $8.00 per bushel is a distinct possibility with above trend yields.
Researchers at the University of Illinois were in the field this week counting insects in cereal rye used as a cover crop ahead of corn. It's all part of the work ILLINOIS Extension Entomologist Nick Seiter is doing with cover crops.
This University of Illinois cover crop research is funded in part by Illinois NREC. The Nutrient Research Education Council was created by state statute in 2012 and funded by a 75-cent per ton assessment on bulk fertilizer.
University of Illinois ag policy specialist Jonathan Coppess and ILLINOIS Extension Farm Broadcaster Todd Gleason discuss the USDA CFAP coronavirus direct payment announcement.
CFAP payments for corn and soybeans max out at 1/2 of total production and are subject to other payment limitations. The calculation compares 1/2-of-total-production to 100% of total-unpriced-inventory on January 15th. The smaller of those two numbers is multiplied by the payment rate to attain the full CFAP payment. FSA will provide a spreadsheet for the calculation and other related paperwork starting May 26, 2020.
$0.33.5 for corn
$0.47.5 for soybeans
CFAP funds will be distributed in two checks. The first will be 80% of the full amount. The second will be up-to-the remaining 20% depending on available funding. It could be prorated to a smaller amount.
This payment rate schedule was developed by University of Illinois Ag Economist Gary Schnitkey. The payment schedule is not Illinois specific or an all-inclusive commodities list. See farmers.gov for USDA CFAP details.
NOTE - the video above includes a playlist. Use the menu icon in the upper right-hand corner of the video to see other webinars from the farmdoc Daily Live series.
farmdoc Daily LIVE
In this series of webinars, the University of Illinois farmdoc team discusses the impact and influence of COVID-19 on farmers and agriculture.
The following webinars may be found in the video playlist at the top of the page. The titles below are linked to the corresponding video and the slide set.
E1 | Coronavirus & Ag - Overview
The Farmdoc team led an overview of COVID-19 impacts on agriculture. The stage was set by Scott Irwin with an overview of the COVID-19 and the economy. Nick Paulson discussed consumer responses, Gary Schnitkey described supply chain concerns, Jonathan Coppess discuses policy actions, and Todd Hubbs described grain market concerns.
E2 | Lessons from Infectious Disease and Livestock
Jim Lowe, an expert in infectious diseases in the College of Veterinary Medicine at the University of Illinois, shares his perspectives on Coronavirus as it relates to the lessons already learned from the livestock sector. Recent important updates related to COVID-19 and agriculture were shared by Gary Schnitkey.
E3 | Financial Perspectives on Agriculture and Coronavirus
Nick Paulson, a farmdoc team member, will lead a discussion of COVID-19 concerns related to agricultural finance. Nathan Kauffman (Vice President and Omaha Branch Executive) and Cortney Cowley (Economist, Regional Affairs Department), from the Federal Reserve Bank of Kansas City, will be guests and provide important perspectives. Any recent important updates related to COVID-19 and agriculture will be shared.
E5 | Outlook and Farm Policy Moving Forward
USDA Chief Economist Rob Johansson outlines the economic impact of COVID-19 on the agricultural to date and some of the programs in place to aid the sector, and University of Illinois Ag Policy Specialist Jonathan Coppess provides analysis of the policy provisions and process.
E6 | Acreage Decisions 2020
Todd Hubbs, ILLINOIS Extension Ag Economist Gary Schnitkey, ILLINOIS Extension Ag EconomistTodd Hubbs provides the latest outlook on acreage decisions for 2020. Gary Schnitkey examines the cash flow and management decisions associated with 2020 acreage shifts.
E7 | COVID–19, Ag Assets, & Lending Markets
COVID-19 is affecting America’s farmers, ranchers, and landowners in numerous and varied ways. Join Jackson Takach, chief economist with Farmer Mac, and Bruce Sherrick, Professor and Director of the TIAA Center for Farmland Research and a farmdoc team member, as they explore the drivers and linkages between the global pandemic, the related economic stoppage, farm assets, and agricultural finance.
E8 | Crop Supply Logistics this Spring
Scott Irwin will be joined by Jeff Bunting of FS Growmark to discuss crop input supply and logistics issues that may arise due to the coronavirus pandemic. Scott will provide a brief overview of recent grain market developments and Jeff will then provide an overview of crop input supply and logistic issues.
E9 | Rural Economy Stimulus: CARES and PPP Funding
The CARES Act includes a number of programs targeted at supporting small businesses. Rural businesses in Illinois have choices about participating in the Paycheck Protection Program (PPP). Join Bob Rhea and Dale Lattz from FBFM, and Nick Paulson from the farmdoc team, as they identify the key components of this new legislation and the impact on business owners.
E10 | Getting the 2020 Crop Planted
Even with good corn and soybean yields following record-late planting in 2019, there is increased urgency in getting the 2020 crops planted on time. Emerson Nafziger will talk about the start of the 2020 planting season, current conditions, and planting date, depth, and seeding rate decisions in the coming weeks.
E11 | The Impact of the Coronavirus Pandemic on Food Prices and Retail Food Sector
The retail food sector has been put under substantial stress by the coronavirus pandemic. What started out with runs on toilet paper quickly escalated to empty meat and bread aisles at grocery stores. Scott Irwin will join Jayson Lusk of Purdue University to discuss how the pandemic has impacted food prices and logistical issues in this crucial sector of the American economy.
E12 | An update on Policy and Political Outlook for Coronavirus Pandemic Relief
Less than a month ago, Congress enacted the CARES Act to provide $2 trillion in relief for the wide range of challenges from the Coronavirus pandemic. Questions remain about implementation, the outlook for additional relief, and a general perspective on the political and policy discussions at the federal level for the food and agricultural sector.
E13 | Nick Paulson and Joe Glauber on Ag Trade
U.S. agricultural trade policy, China's push to reconfigure international supply chain lines, the entrance of Brazil and Ukraine into the commodity export markets, and the coronavirus pandemic have all disrupted the once relatively stable U.S. corn and soybean export markets. University of Illinois Agricultural Economist Nick Paulson and IFPRI's Joe Glauber will explore the policies and fundamentals behind the changes and probe the future impact.
E15 | US-China Agricultural Trade and Shifting Consumption Patterns in China
Over the past two years, policy actions have had major impacts on trade in agricultural products between the US and China. In addition, shifts in consumption patterns are changing the demand for agricultural products by Chinese consumers. Nick Paulson will be joined by Wendong Zhang, assistant professor in Agricultural Economics at Iowa State University, for a discussion of these issues and how they impact the outlook for U.S. agricultural exports.
E16 | Agricultural Law Issues and the COVID-19 Pandemic
The COVID-19 pandemic has sent shockwaves through the agricultural production system and raised unique legal issues for input suppliers, crop and livestock producers, and processors. The Director of the National Agricultural Law Center, Harrison Pittman, along with University of Illinois Agricultural Lawyers A. Bryan Endres and Jonathan Coppess, will explore the pandemic’s impact on the legal enforceability of agricultural contracts, protections afforded under commodity-specific statutes such as the Perishable Agricultural Commodities Act and the Packers and Stockyards Act, regulatory compliance issues with potential large-scale euthanasia of livestock, state-level meat inspection laws, application of the Defense Production Act in the agricultural context, and a new generation of farm foreclosure moratorium laws. There will also be an update on additional relief measures, payment limits and current policy discussions at the federal level.
E17 | Eligible Uses and the PPP Loan Forgiveness Process
Many businesses, including farmers and other agricultural enterprises, applied for and received Payroll Protection Program (PPP) loans. To qualify for loan forgiveness, loan funds can only be used to pay for certain expenses. Join Bob Rhea and Dale Lattz from FBFM and Nick Paulson from the farmdoc team to discuss these issues.
E18 | Farm Policy, Farm Incomes, and Upcoming Management Decisions
An Update on farm policy will be provided with a discussion of the Coronavirus Food Assistance Program. This webinar will also include an income outlook given different potential payment schemes. Difficulties in making 2021 decisions given the current policy environment will be described.
E19 | What is the Outlook for the Ethanol Industry Going Forward
The ethanol production industry has been severely impacted by demand destruction caused by coronavirus restrictions. The purpose of this webinar is to examine the financial damage done to the industry and the outlook for recovery through the end of 2020. Scott Irwin and Todd Hubbs of the farmdoc team will be joined by Eric Moseby, General Manager of Lincolnland Agri-Energy in Palestine, Illinois to discuss these issues.
E20 | Coronavirus and The Pork Industry: Perspectives from The Maschhoffs
Bradley Wolter, CEO of The Maschhoffs, will share his perspectives on the impacts that Carnivorous has had on the pork industry, with discussion on human resource, pig health, and supplier issues. Gary Schnitkey will provide an economic update as well as background on recent trends in the pork industry.