June 26, 2017

USDA’s June 30 Grain Stocks Report for Corn

USDA’s release of the Quarterly Grain Stocks report on June 30 will provide an estimate of corn stocks in storage as of June 1, 2017.  Since many of the consumption categories for corn can be derived from data provided during the marketing year, this estimate provides the ability to calculate the magnitude of feed and residual use of corn during the third quarter.  The calculation offers the basis for evaluating the probable feed and residual use during the entire marketing year and imparts information on the potential size of ending stocks.  

While the information imparted by the June Acreage report released on the same day will likely eclipse the Quarterly Grain Stocks report, the estimated corn stocks have important implications for the current marketing year.

The supply of corn available during the first half of the 2016-17 marketing year is the base for estimating June 1 stocks.  Corn stocks at the beginning of the quarter were estimated at 8616 million bushels in the March Grain Stocks report.  Currently, the Census Bureau estimates for corn imports are only available through April.  In the first half of the marketing year, corn imports totaled 26 million bushels.  Imports for the third quarter might have been around 12 million bushels.  By combining imports with the beginning stocks, total available supply for the second quarter comes in at 8628 million bushels.

An estimate of corn exports for the third quarter is based on the cumulative weekly export inspections estimate available for the entire quarter.  Cumulative marketing year export inspections through May totaled approximately 1738 million bushels.  During the first eight months of the marketing year, total Census Bureau corn exports were greater than cumulative export inspections by 45 million bushels.  Assuming the margin is maintained through May, corn exports through three quarters of the year equaled 1783 million bushels.  Since exports in the first half of the marketing year totaled 1095 million bushels, the estimate for third quarter corn exports equals 688 million bushels.

The Grain Crushing and Co-Products Production report released on June 1 estimated corn used for ethanol and co-product production during March and April of 2017 at 893 million bushels.  Weekly estimates of ethanol production provided by the Energy Information Administration indicates ethanol production increased by 5.5 percent in May 2017 from the preceding year.  By calculating the amount of corn used to produce ethanol from these May numbers, corn used for ethanol production in May was approximately 449 million bushels.  Total use for the quarter is estimated at 1342 million bushels.

Corn used to produce other food and industrial products during the 2016-17 marketing year is projected at 1470 million bushels by the USDA.  Using historical corn use data, typically around 75 percent of the final marketing year food and industrial products use occurs in the first three quarters of the marketing year.  If this historical pattern holds and the USDA projection is correct, corn use for the first three quarters of the marketing year totaled 1102 million bushels.  Corn use during the first half equaled 689 million bushels which set the third quarter use estimate at 413 million bushels.

The current USDA projection for feed and residual use sits at 5500 million bushels.  The historical pattern of feed and residual use in corn may provide some indication of the third quarter use.  For the five previous marketing years, use during the first three quarters of the marketing year ranged from 90.5 – 94.2 percent of the marketing year total with an average of 91.6 percent.  Third quarter feed and residual use ranged from 15 to 21 percent of the total use over this time span.  For this analysis, the 91.6 percent average during the first three quarters of the previous five marketing years is used to calculate expected feed and residual use during the third quarter. If the USDA projection is correct, feed and residual use during the first three quarters of the 2016-17 marketing year totaled 5038 million bushels.  Feed and residual use equaled 3797 million bushels in the first half.   Therefore, the third quarter estimate totals 1241 million bushels.

By adding the estimates for exports and domestic uses, the total use of corn during the third quarter is estimated at 3684 million bushels.  The total use estimate for the third quarter places June 1 corn stocks at 4944 million bushels.  At this level, June 1 stocks come in 222 million bushels larger than the estimated 2016 June 1 corn stocks.

A June 1 corn stocks estimate that supports the USDA projection of 5500 million bushels of feed and residual use during the 2016-17 marketing year is considered neutral for corn prices.  An estimate of corn stocks that deviates more than 100 to 150 million bushels from market expectations would provide an indication of changes in domestic feed and residual and alter expectations for ending stocks.  This analysis indicates an estimate near 4944 million bushels should not change expectations that feed and residual use is on track to meet the marketing year projection.


June 23, 2017

Wood Chip Bioreactor Controls Tile Line Nitrate Load

The Dudley Smith research farm in Illinois is tiled and wired. Todd Gleason has more on how the University of Illinois is doing nitrogen loss research near Pana.

Farmers gathered this week for a peek at the nitrogen loss control methods installed in Christian County. It’s a farm that rolls just a bit, but is pretty typical for the area other than the pastures on a portion of it. They came to hear from Laura Christianson. She’s a University of Illinois Crop Scientist, “At the Dudley Smith farm we have a wood chip bioreactor installed. A wood chip bioreactor is a little mini water treatment plant to clean nitrate out of tile drainage. The thing that makes the Dudley Smith bioreactor different is that is has baffles inside it. So, rather than the water just running straight through the wood chips, like most bioreactors, this bioreactor has baffles in it to make the water move in more of an S shape to improve how much nitrate is taken out of the drainage water”.

Early indications are the baffle is working as hoped. Wood chip bioreactors, even without the baffles, can remove between 20 and 40 percent of the annual nitrate load from a tile line. It’s technology farmers are interested in seeing and hopefully, says Christianson, deploying, “I think farmers are interested in wood chip bioreactors because it is something they can do that doesn’t impact their production practices. It is an edge of field practice, so you can keep on in the field however you are comfortable, but this catches that nitrate at the edge of the field before it goes down stream”.

A bioreactor is pretty simple to build. Use a backhoe to make a trench near the end of the tile, put a plastic liner in the trench, fill it with wood chips, be sure to have control structures on the inlet and outlet, and cover it with dirt. The chips will need to be replaced about every 10 years.


June 22, 2017

What Makes a Top Third Farm

There are just two items that make the difference between a top third farm and an average farm. This University of Illinois study was on a small set in McLean County. This was done to limit the influences of weather and a few other factors. Gary Schnitkey says he wanted to know why some farms made more than others. Turns out, the answer is pretty simple say the ag economist, “What we found were distinct cost differences between the two groups. This was a $45 per acre difference between the average group and the high return group. The $45 came primarily in two items; machinery depreciation and interest cost.”

The more profitable farms tended to have lower machinery and non-land interest cost. The two are related.

If you buy more machinery, you have more depreciation and likely more interest costs. Other differences included storage costs, with high profit farms storing less at elevators and their cost of hired labor was lower, too. Over all, these farms usually had lower costs, but these are the cost groups that stood out.

A couple of notes. The most profitable farms expanded acreage at a faster pace than those in the average group. They also had higher average yields for soybeans and did a better job of marketing soybean.


June 22, 2017

Feeding Wheat Co-Products to Pigs

Research from the University of Illinois is helping to determine the quality of protein in wheat middlings and red dog. Both are co-products of the wheat milling process. Each can be fed to pigs and other livestock.

There is information about the digestibility of crude protein in some wheat co-products produced in Canada and China, says University of Illinois Animal Scientist Hans Stein, but only very limited information about the nutritional value of wheat middlings and red dog produced in the United States.

Stein and U of I researcher Gloria Casas fed wheat middlings from 8 different states and red dog from Iowa to growing pigs. Despite the variety in the wheat middlings sources the concentration of crude protein were generally consistent. However, they did find some variation in the digestibility of the amino acids.

The red dog contained slightly less crude protein than wheat middlings. 

Stein says the results of this study provide guidance to producers who hope to incorporate wheat co-products into diets fed to pigs. The paper appears in the June 2017 issue of the Journal of Animal Science. The National Pork Board provided funding for the study.


Page 1 of 40 pages  1 2 3 >  Last ›