8:00 am | Illinois Corn Growers Association Annual Meeting
9:30 am | Farm Assets Registration Desk Opens
10:30am | The Supply Chain Wants You - premiums & contracts
Angie Slaughter, Vice President Procurement - Anheuser-Busch InBev
Rickette Collins, Sr. Director Global Supply Chain - McDonald's Corporation
Ken Dallmier, President and COO - Clarkson Grain Company
Brad Allen, AgriEdge Specialist - Syngenta
Noon | Lunch
1:00pm | Agriculture at Research Park
Laura Weisskopf Bleill
Associate Director, University of Illinois Research Park
1:15pm | Trade, Tariffs, Grain Flow and the Farm Economy
Gary Schnitkey, University of Illinois
Jonathan Coppess, University of Illinois
Bruce Sherrick, ILLINOIS TIAA Center for Farmland Research
2:00pm | Break
2:30pm | WILLAg Commodity Marketing Panel
Pete Manhart, Bates Commodities
Bill Mayer, Strategic Farm Marketing
Merrill Crowley, Midwest Market Solutions
Wayne Nelson, L and M Commodities
Todd Hubbs, University of Illinois
The price of soybeans rallied out of the October USDA Crop Production report. This is because it showed fewer acres of the crop would be harvested this season. University of Illinois analyst Todd Hubbs thinks the upside potential is limited, “I don’t know if this thing is sustainable. It doesn’t feel that way to me. Moving through the rest of the harvest year and towards the start of 2019, I think we are going to have to see some kind of production issues in the South American crop or if China breaks and doesn’t hold out completely on taking U.S. soybeans before we see a sustained upward movement. I think the upside potential is limited.”
Limited because, even if this year’s crop is hurt some by the poor harvest conditions so far it will remain a record breaker. Right now USDA has it at 4.7 billion bushels. There are plenty of soybeans in the world. That makes it a buyers market and price is going to depend a whole lot upon how many U.S soybeans can be exported says Hubbs, “Basically it doesn’t look like other importers are picking up the loss of the Chinese market like we would like them to.”
When you look at last year and the huge amount of exports Brazil did in the second-half of the marketing year, and even the strength in the latter quarter of the U.S. marketing year, you can see tariff action picking up in forward buying and movement of soybeans thinks the U of I number cruncher. So far in this marketing year we haven’t seen much Chinese movement. In the last export inspections report about 5 million bushels went to China. Still, they seem to be sitting it out and not buying soybean from the United States. This is happening even though the price of U.S. soybeans, when compared to the price of Brazilian soybeans delivered to China, are very competitive.
It all brings Hubbs back to that word “limited”. He sees the upside price potential in soybeans as limited by an enormous supply in the United States and around the world, “If you are thinking about marketing soybeans, I’d take a good hard look at the price we are seeing right now because ending stocks are set at 88 5 million bushels for the 2018/19 marketing year and barring some kind of uptick in exports from the U.S. that may be the low end of reasonable projections depending on what the crop ends up doing here in the U.S.”
This year’s pumpkin crop is the best in the last two decades. That means there will be plenty of jack-o-lanterns for Halloween and lots of pie filling for Thanksgiving.
When the pumpkin crop in Illinois is big that means the whole nation can celebrate fall says Mohammad Babadoost from the Univeristy of Illinois, “We are number one in both of them, jack-o-lantern and processing pumpkins. Far, far ahead of any other state.”
More than 90% of the pumpkin pie filling sold in the United States comes from two processing plants located near Peoria, Illinois. This year the pumpkins feeding into those plants are yielding a record breaking 27 tons per acre. The average is about 23. This is pretty amazing given that a plant disease nearly wiped out the whole industry in the state a couple of decades ago.
Babadoost is naturally proud of his University of Illinois work to salvage the industry from the disease and he continues to work with farmers today to provide them crop production and protection advice. He says pumpkins are a high value crop that work well into a row crop rotation, “Very well. In fact pumpkin rotated with corn or even soybean is a very good crop rotation program.”
Even better, pumpkins can provide two sources of income should the farm want to diversity into a little agro-tourism.
As the trade conflict with China continues, prices for many agricultural commodities remain relatively low. Illinois corn and soybean prices dipped to new lows in September, coinciding with the latest rounds of tariffs.
The difference between selling an entire crop at spring forward bid prices compared to the September average cash prices makes a substantial difference in income on an average central Illinois grain farm.
University of Illinois Agricultural Economist Gary Schnitkey reviews how this plays out on a 1700 acre corn and soybean farm in Illinois this year, and what the prospects look like for next year.
Last Tuesday President Donald Trump made a campaign trip to Council Bluffs, Iowa. There he told a very excited crowd his administration would be backing corn farmers and ethanol.
The President leaned into the mic and gave corn farmers a little insider news they’ve been clamoring to hear since U.S. EPA pronounced gasoline blended with 15 percent ethanol would be ok to use in all cars made since 2001, “We are a little bit early. I shouldn’t say it now, but we are going with E15 year-round.”
Mr. Trump is a little early. Today E15 can be used about 9 months out of the year in much of the nation. During those other three months, the summer months, it has been prohibited. U.S. EPA will need to write some rules about how to make the year-round use happen. Those will need to be approved, and clearly the oil industry will mount court challenges.
If all goes well more corn will be used to make ethanol for E15, but it won’t make a difference in the balance sheets for corn says University of Illinois Agricultural Economist Scott Irwin, “Not for this year and I am confident not for next year.”
So the E15 announcement, while a long run win for corn ethanol, rings a little hollow. The Administration’s other big farm country biofuels problem is EPA’s use of the Small Refinery Exemptions or SRE. The good news here, says Illinois’ Irwin, is that ethanol usage has been holding strong despite EPA letting some refineries out of the mandate to produce gasoline blended with a home grown fuel like ethanol made from corn.
However, there is a problem with oil pressed from soybeans to make biodiesel says Irwin, “And the total amount of biodiesel, because of the Small Refinery Exemptions, has probably gone down at least 10 percent. So, there has been real demand destruction from the Small Refinery Exemptions, but it is in biodiesel and not ethanol.”
US EPA has through November to announce its final decisions related to the volume of biofuels it will require in the nation’s gasoline supply in 2019. It may or may not include some guidance on how it expects to use the Small Refinery Exemptions going forward. So far, it has said it will make no comment on that point.
President Trump at his Council Bluffs, Iowa rally Tuesday is expected to announce a waiver to allow year-round use of gasoline blended with 15% ethanol (E15). Todd Gleason reports it may make little difference in how much corn is used to make ethanol.
The numbers look bad for Illinois grain farmers next year.
That’s the only conclusion Gary Schnitkey can draw when he puts the costs up against the incomes for corn and soybeans in 2019. Schnitkey, an ag economist at the Univesity of Illinois, says fuel and fertilizer costs are expected to go up. Prices aren’t and that’s the dismal part says Schnitkey, "Probably the one thing that has changed relative to recent years is that corn is expected to be more profitable than soybeans. Again, that is largely due to our use of $3.60 for a 2019 corn price and $8.50 for soybeans. This switches the profitability around. That’s driven by trade concerns, particularly with China and what that has done to commodity prices."
Here’s an example of the bottom line for next year’s budget. A northern Illinois farmer might expect to have $174 to split between the farmer and the landowner for corn and $143 for soybeans. This return is considerably below the cost of cash rent and roughly, says Schnitkey, near the 2005 returns.
Six years after more than 100 alumni, faculty, students, and friends of Illinois gathered to kick-off a 5 million dollar fundraising campaign, the University of Illinois Turner Hall transformation has been completed. 1964 ag sciences grad William Kirk and his wife, Lillian, made a $500,000 donation to seed the project.
Turner Hall West Lobby
Phase I of the Turner Hall Project transformed the crop science and soil science laboratories into 21st-century learning environments. Undergraduate courses are taught in these two labs. Donors also funded a two-story renovation of the west lobby. In total, Phase I renovated 7136 square feet. These renovated spaces allow for active learning, utilizing new technologies. The Dow AgroSciences Crop Sciences Laboratory and the Monsanto Soil Science Laboratory welcomed students for the first time in fall 2015.
Phase II construction began in 2017 and will conclude in 2018. This 38,377 square foot, three-floor renovation will fully transform classrooms on the first and second floors of Turner Hall, as well as advanced laboratories in the basement. Transformed classrooms feature new technologies, state-of-the-art equipment, new flooring, HVAC and lighting. It encompasses a new computer lab, new “smart” classroom, new conference room and student collaboration areas.
The market for commodity crops processed into new products is expected to more than double in the next six years to some 490 billion dollars. The IBRL building on the Univesity of Illinois campus in Urbana-Champaign is investing in the future of these agricultural innovations.
The last week of September a new building was dedicated on the University of Illinois campus in Urbana-Champaign. The Integrated Bioprocessing Research Laboratory is designed to bridge the gap between discovery and commercialization. IBRL’s director, Vijay Singh, says every year some 250 invention disclosures are filed at the University of Illinois. Most are never commercialized because there isn’t a proof of concept facility to scale up new ways to process ethanol or other agricultural biofuels.
The labs in IBRL, Singh says, will do just that, “This facility is also a link joining academia with business development. With plug and play utilities and flexible equipment offerings, IBRL is agile enough to serve a variety of needs across the bioprocessing industry.”
However, it’s not just the IBRL building on the University of Illinois ag campus that creates this commercialization synergy. There’s the Food Science pilot plant, the Institute for Genomic Biology, the array of greenhouses, the energy farm where all kinds of crops are explored for biofuels, and Research Park where big data technology is fused with the hard sciences. Together, Vijay Singh believes, these create an unmatched eco-space that can drive a bio-economy in Illinois and beyond.