We have received several reports of injury from seed corn maggot that has reduced stands of Nebraska soybeans. The greatest risk for seed corn maggot injury is when a green manure or animal manure is incorporated just before planting. The female flies are attracted to lay eggs on sites with decaying organic matter. The seed corn maggot will also feed on germinating crop seeds and can reduce seedling vigor and, if abundant enough, reduce plant stands. In many cases this year, recently killed cover crops may have attracted seed corn maggot to lay eggs in the affected fields. The relatively mild winter this year may have increased winter survival of seed corn maggots. Planting dates this year may have overlapped with peak activity of seed corn maggot flies more than in past years.
Delay planting until soil temperatures promote rapid seed germination.
Avoid planting for at least two weeks after fresh organic materials have been incorporated into soil.
Degree-day models can guide decisions about adjusting planting date to avoid periods with high larval abundance. Seed corn maggot development is estimated using a base temperature of 39°F (3.9°C) for the degree-day calculation.
Avoid planting during peak fly emergence. For the first three generations this occurs when 354, 1080, and 1800 degree days have accumulated, respectively since January 1.
Use of a labelled insecticidal seed treatment on corn or soybeans should provide adequate protection against seed corn maggot, except when there are high densities of these insects. Growers not using insecticidal seed treatments can modify their planting dates to minimize injury from these insects by monitoring growing degree days. There are several generations of seed corn maggots in Nebraska.
Coronavirus Food Assistance Program (CFAP) Rules Announced
On Wednesday May 20th, the USDA released more information on the Coronavirus Food Assistance Program (CFAP). In today’s article we provide a broad overview of the CFAP and how payments will be determined for the major eligible non-specialty crops, livestock, and dairy. Applications for CFAP payments open May 26th and close August 28th with additional information and forms available from USDA at https://www.farmers.gov/cfap.
While payment calculations may seem fairly complicated, farmers should focus on the information they will need to provide to process their CFAP applications. For non-specialty crops required information includes total 2019 production and unpriced inventories as of January 15th. For cattle and hog producers, information on total head of sales from January 15th to April 15th, and maximum animal inventories from April 16th to May 14th will be needed. For dairy producers, total milk production during the first quarter of 2020 will be required to process payments.
CFAP Payment Calculations and Examples
The following description is based on the text in the CFAP final rulemaking. For non-specialty crops and livestock, farmers will ultimately receive two installments of a single CFAP payment. Farmers will receive 80% of the CFAP payment as a first installment. The second 20% of the CFAP payment will be made if sufficient funds are available based on a total allocation of $16 billion for CFAP direct payments ($9.5 billion from funds provided in the CARES Act and $6.5 billion from the remaining available Commodity Credit Corporation (CCC) funds).
The total CFAP payment is based on two separate rates from the different funding sources. This is largely for administrative purposes due to the fact that the funds for payments are coming from two different sources. For farmers, the source of the funds received in their overall payment likely has no significance.
Non-specialty Crop Payments Including Corn and Soybeans
CFAP payments for non-specialty crops are made on eligible inventory for each eligible commodity. Eligible inventories are defined as the lower of:
“self-certified unpriced inventory that an eligible producer has vested ownership in as of January 15, 2020” (Final Rule, p. 30826), or
50 percent of the eligible producer’s 2019 production of the commodity.
The final rule defines “unpriced inventory” as “any production that is not subject to an agreed-upon price in the future through a forward contract, agreement or similar binding document” (Final Rule, p. 30831). This adds no small amount of complexity and the potential for confusion, and will no doubt raise many questions as the program is implemented. FSA has added further that eligible inventory must be subject to price risk as of January 15, 2020, which means “any production, sales, and inventory that is not subject to an agreed-upon price in the future through a forward contract, agreement, or similar binding document” and “must still be at risk of price fluctuations after January 15, 2020, to be eligible for payment” (USDA FSA, CFAP Notice).
CARES Act funds are used for payments on half of the producer’s eligible inventories, while CCC funds are used for payments on the other half of eligible inventories. These two sources for the payments – CARES Act funds and CCC funds – are summed to provide the total payment received by the farmer.
Note that in the case of non-specialty crops, the total CFAP payment can be simplified by multiplying eligible inventories by the simple average of the CARES Act and CCC Payment Rates. The CARES Act, CCC, and average payment rates are provided below in Table 1.
As an example, take an illustrative CFAP payment for corn. Calculations will be illustrated on a per acre basis. A farmer had 200 bushels per acre of production in 2019, meaning that the maximum bushels available for CFAP payments is 100 bushels per acre (200 bushels of production times 50%). The farmer had 140 bushels of unpriced inventory on January 15, which means that the producer’s eligible corn inventory is 100 bushels per acre (lower of 1/15/20 unpriced inventory or 50% of 2019 production). The total CFAP payment is
$33.50 per acre (100 bushels x $.335 average rate).
Payments will be made in two installments:
$26.80 per acre, which is 80% of $33.50. This is the guaranteed installment.
$6.70 per acre, which is 20% of $33.50. This second installment is contingent on sufficient funding being available.
There are a number of questions remaining for non-specialty grains, with most of those questions revolving around the definition of unpriced grain.
Cattle and Hog Payments
For cattle and hogs, the CARES Act payment portion is calculated by multiplying the CARES Act payment rate for the relevant species times total head sold from January 15th to April 15th, 2020. The CCC portion is calculated by multiplying the CCC payment rate times the highest inventory held between April 16th and May 14th, 2020. CARES Act and CCC payment rates for cattle and hog categories are provided in Table 2.
As a simple example, take a feeder cattle finisher who:
Sold 500 head of finished cattle between January 15 and April 15. These cattle had an average weight over 1,400 pounds, meeting the definition of Slaughter Cattle (fed) in Table 2. The total CARES Act payment on these sales would be $107,000 (500 head x $214).
Had a maximum of 250 cattle on hand between April 16 and May 14. These cattle will receive a CCC payment of $33 per head, for a total of $8,250
The total CFAP payment then is $115,250 ($107,000 +$8,250). This payment will be received in two installments:
$92,200 or 80% of $115,250. This is the guaranteed installment.
$23,050 or 20% of $115,250. This second installment is contingent on sufficient funding being available.
For dairy, the CFAP payment is based on production during the first quarter of calendar year 2020. CARES Act funds are used to compensate total first quarter production at a rate of $4.71 per cwt (first quarter production x $4.71). CCC funds are used to compensate 101.4% of first quarter production at a rate of $1.47 per cwt (1.014 x first quarter production x $1.47).
The total CFAP payment rate on first quarter production is $6.20 per cwt ($4.17 + 1.014*$1.47). The first installment would be $4.96 per cwt (80% x $6.20), while the second installment would be for the remaining $1.24 (20% of $6.20).
Application, Producer Eligibility and Payment Limits
To be eligible for a CFAP payment, a person or legal entity must complete a CFAP application between May 26th and August 28th. Applications will become available on Tuesday, May 26th from FSA but producers can begin pulling together the needed information at any time.
The adjusted gross income limit for payment eligibility is $900,000 using the average of the 2016, 2017, and 2018 tax years. This limit does not apply if 75 percent of AGI comes from farming, ranching, or forestry.
Total CFAP payments, across all eligible commodities, are limited to $250,000 per person or entity. For corporate entities, including limited liability companies and limited partnerships, a maximum of three shareholders are eligible for a total payment limit of $750,000. Eligible shareholders must contribute at least 400 hours of active management or labor. USDA continues the provision for joint ventures and general partnerships that permit multiplication of payments for each general partner.
Finally, the Farm Service Agency has provided a helpful webinar for CFAP with basic information on preparing for signup (USDA FSA, CFAP Introductory Webinar). As it becomes available, more information will be provided.
After Memorial Day, farmers can begin to enroll in the Coronavirus Food Assistance Program (CFAP) for direct payments on 2019 crop inventories that have not been sold or contracted, or up to 50% of the total production in 2019. For corn farmers, the payment rate is $0.335 on the eligible inventory and for soybeans it is $0.475 per bushel. Information on total production in 2019, and unpriced inventories as of January 15th will be needed from the farmer to process payments. In its cost-benefit analysis for the final rule, USDA estimates that $2.293 billion in CFAP payments will go to corn, $845 million to soybeans, and $442 million for cotton.
Total non-specialty crop payments are projected at up to $3.758 billion. Note these estimates do not incorporate the effect of payment limits, and assume payments are made on the cap of 50% of 2019 production. Note also that CFAP payments are in addition to any ARC/PLC payments triggered for the 2019 crop year, as well as 2019 MFP and WHIP support.
CFAP payments for cattle and hogs will be based on two pieces of information required from the farmer. These are sales between January 15th and April 15th, and unpriced inventories from April 16th to May 14th. USDA estimates a total off $5.06 billion in payments to cattle producers, and $1.6 billion for hogs. Dairy producers will need to provide information on milk production from the first quarter of calendar year 2020, and are projected to receive $2.77 billion in CFAP payments. Note that USDA’s aggregate payment estimates for livestock account for the effect of payment limits.
Many questions remain regarding program implementation and payment calculations, many of which are surrounding the definition of “unpriced inventories” used for non-specialty crops and livestock.
Source: Nick Paulson, Gary Schnitkey, Jonathan Coppess, Krista Swanson, and Carl Zulauf, Farmdocdaily
Rural Mainstreet Index Inches Up from April’s Record Low
The Creighton University Rural Mainstreet Index (RMI) increased slightly from Aprils’ record low. According to the monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy, May’s reading represented the third straight month with close to record lows.
Overall: The overall index for May increased to 12.5 from April’s record low 12.1, but down significantly from March’s weak 35.5. The index ranges between 0 and 100 with a reading of 50.0 representing growth neutral.
“Since this time last year, livestock and grain prices have sunk by 19.1% and 4.7%, respectively. Accordingly, approximately 73% of bankers reported restructuring farm loans. As a result of the restructuring, bank CEOs expect farm loan defaults to expand by only 5.4% in the next 12 months,” said Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.
Jeff Bonnett, president of Havana National Bank in Springfield, Illinois, expects the Rural Mainstreet economy to be up six months from now if the covid-19 lockdown has ended.
Farming and ranching: Farmland prices continue to slide. May’s reading fell to 39.7 from April’s 40.9. This is the 77th time in the past 78 months the index has been below growth neutral.
The May farm equipment-sales index increased slightly to 21.9 from 20.0 in April. This marks the 80th month straight month that the reading has remained below growth neutral 50.0.
Donald Vogel, president and CEO of Farmers National Bank in Prophetsville, Illinois, “Beginning to have a rain pattern (too much) similar to 2019.”
Banking: Borrowing by farmers expanded for May, but at a slower pace than in April. The borrowing index slipped to 72.2 from April’s 75.8. The checking-deposit index soared to 86.1 from April’s 65.6, while the index for certificates of deposit and other savings instruments increased to 48.6 from 48.4 in April.
This month bankers were asked to assess the PPP. Fully 100% of bankers gauged the federal Paycheck Protection Plan as successful, and more than one of five bank CEOs support PPP expansion.
Said Lonnie Clark president of the State Bank of Chandler, Chandler, Minn. “Our farmers are taking the brunt of this and those with a negative Schedule F and no W-3 got no help from the PPP.”
James Brown, CEO of Hardin County Savings Bank in Eldora, Iowa said, “I think the community banks in the Midwest should be very proud of the number of small businesses we helped in the PPP program.”
According to recently released U.S. Court data calculated by the Farm Bureau, Chapter 12, U.S. family farm bankruptcies for the 12-month period ending March 2020 rose to 627 filings, a 23% increase from the previous 12 months. While this is well below the filings in the 1980s, it still raises concerns for rural communities across the U.S.
Over the 12-month period ending in March 2020, a net increase of 41 of the bankruptcies were in the Rural Mainstreet region. Increases by state were: Iowa +23, Nebraska +22, South Dakota +7, and Minnesota +5. Reductions by state were: North Dakota -10, Kansas -4, Colorado -1, and Wyoming -1.
Rural Mainstreet Bank CEOs expect farm loan defaults to expand by only 5.4% over the next 12 months. Almost three fourths of bankers have restructured farm loans to deal with weak farm income.
Hiring: The employment gauge rose to a frail 17.1 from April’s record low 9.4.
Confidence: The confidence index, which reflects bank CEO expectations for the economy six months out, sank to 22.1 from April’s 27.4. Weak agriculture commodity prices, and layoffs have decimated economic confidence among bankers.
Home and retail sales: The home-sales index increased to 48.6 from April’s 35.9. The retail -sales index for May expanded to a frail 11.1 from April’s record low 4.5. U.S. March retail sales suffered their biggest one month decline in three decades. “The retail shutdown from covid-19 devastated the region’s retailer,” said Goss.
Each month, community bank presidents and CEOs in nonurban agriculturally and energy-dependent portions of a 10-state area are surveyed regarding current economic conditions in their communities and their projected economic outlooks six months down the road. Bankers from Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming are included.
This survey represents an early snapshot of the economy of rural agriculturally and energy-dependent portions of the nation. The Rural Mainstreet Index (RMI) is a unique index covering 10 regional states, focusing on approximately 200 rural communities with an average population of 1,300. It gives the most current real-time analysis of the rural economy. Goss and Bill McQuillan, former chairman of the Independent Community Banks of America, created the monthly economic survey in 2005.
Below are the state reports:
Colorado: Colorado’s Rural Mainstreet Index (RMI) for May fell to 9.8 from April’s regional high of 13.3. The farmland and ranchland-price index sank to 38.4 from 40.9 in April. Colorado’s hiring index for May sank to 6.5 from April’s 12.5. “Between the first week of January 2020 to the first week of May, U.S. Department of Labor reported that the state’s insured unemployment rate rose from 0.8% to 8.6%,” said Goss.
Illinois: The May RMI for Illinois dipped to 8.7 from 8.9 in April. The farmland-price index decreased to 38.0 from April’s 39.4. The state’s new-hiring index slumped to 2.7 (0.0 indicates that all bankers surveyed reported declines in employment) from last month’s 6.3. “Between the first week of January 2020 to the first week of May, U.S. Department of Labor reported that the state’s insured unemployment rate rose from 2.1% to 11.8%,” said Goss. Jim Eckert, president of Anchor State Bank in Anchor, reported, “Illinois Governor Pritzker’s lock down of the entire state due to Wuhan China virus problems in Chicago and Cook County have badly damaged Illinois’ economy. Down state businesses have been badly hurt and many will not survive this prolonged “martial law lite.”
Iowa: The March RMI for Iowa rose to 8.2 from March’s regional low 7.1. Iowa’s farmland-price index dropped to 37.9 from April’s 38.8. Iowa’s new-hiring index for May climbed to 19.4 from April’s regional low of 4.2. “Between the first week of January 2020 to the first week of May, U.S. Department of Labor reported that the state’s insured unemployment rate rose from 2.3% to 11.7%,” said Goss.
Kansas: The Kansas RMI for April rose to 9.2 from April’s 8.9. The state’s farmland-price index slumped to 38.1 from 39.4 in April. The new-hiring index for Kansas wilted to 3.4 from 5.7 in April. “Between the first week of January 2020 to the first week of May, U.S. Department of Labor reported that the state’s insured unemployment rate rose from 0.8% to 8.8%,” said Goss.
Minnesota: The May RMI for Minnesota increased to 14.2 from April’s 12.0. Minnesota’s farmland-price index climbed to 41.2 from April’s 40.5. The new-hiring index for May expanded to 15.1 from April’s 8.2. “Between the first week of January 2020 to the first week of May, U.S. Department of Labor reported that the state’s insured unemployment rate rose from 2.4% to 14.7%,” said Goss.
Missouri: The May RMI for Missouri rose to 15.3 from April’s 11.3. The farmland-price index increased to 43.2 from 40.3 in April. Missouri’s new-hiring index for May climbed to 11.2 from April’s 6.1. “Between the first week of January 2020 to the first week of May, U.S. Department of Labor reported that the state’s insured unemployment rate rose from 1.1% to 8.8%,” said Goss.
Nebraska: The Nebraska RMI for May slipped to 10.0 from April’s 10.1. The state’s farmland-price index slipped to 38.5 from last month’s 39.8. Nebraska’s new-hiring index plunged to 7.2 from April’s 14.5. “Between the first week of January 2020 to the first week of May, U.S. Department of Labor reported that the state’s insured unemployment rate rose from 0.5% to 7.1%,” said Goss.
North Dakota: The North Dakota RMI for May slumped to 11.4 from 11.9 in April. The state’s farmland-price index declined to 38.9 from 40.4 in April. The state’s new-hiring index moved upward to 11.7 from April’s 7.6. “Between the first week of January 2020 to the first week of May, U.S. Department of Labor reported that the state’s insured unemployment rate rose from 1.4% to 8.7%,” said Goss.
South Dakota: The May Rural Mainstreet Index (RMI) for South Dakota climbed to a very weak, but regional high of 19.3 from April’s 13.2. The state’s farmland-price index increased to 41.6 from April’s 40.9. South Dakota’s new-hiring index contracted to 12.1 from March’s 49.4. “Between the first week of January 2020 to the first week of May, U.S. Department of Labor reported that the state’s insured unemployment rate rose from 0.7% to 5.7%,” said Goss.
Wyoming: The May RMI for Wyoming inched up to 11.6 from April’s 11.5. The May farmland and ranchland-price index fell to 39.0 from 46.5 in April. Wyoming’s new-hiring index increased to 12.3 from April’s 6.4. “Between the first week of January 2020 to the first week of May, U.S. Department of Labor reported that the state’s insured unemployment rate rose from 1.2% to 6.5%,” said Goss.
Tables 1 and 2 summarize the survey findings. Next month’s survey results will be released on the third Thursday of the month, June 18.
With the recent frost events that occurred the weekend of May 9-10, 2020 in portions of the State, some are questioning the need to replant soybean. It’s important to assess potential recovery before making replant decisions. Soybeans are more resilient than one may think! Please see Evaluating Freeze and Chilling Injury to Corn and Soybeans for more information.
The following weather data was provided by Al Dutcher.
The following information was shared as part of a June 14, 2019 article entitled “Considerations after Crusted Soybean” by authors Jenny Rees, Jim Specht, Roger Elmore, Aaron Nygren, and Nathan Mueller. Research links have been updated for 2020. While that article was regarding crusting issues, the research and information can apply to many factors that can contribute to reduced soybean stands such as the freezing temperatures experienced this year.
For optimum yields and economics based on soybean population studies for 13 years, we have recommended a final plant stand of 100,000 plants per acre.
Soybeans compensate for reduced stands through increased branching. Based on research and observations, we recommend leaving an early planted soybean stand of at least 50,000 plants per acre that has fairly uniform spacing throughout the field. We realize that can be hard! University of Wisconsin found only a 2 bu/ac yield increase when replanting early soybeans between 50,000 and their optimum stand of 100,000-135,000 plants/acre.
For stands less than 50,000 plants per acre, plant a similar maturity into the existing stand; don’t tear out or kill an existing stand as early planted soybeans have a higher yield potential.
If you’d like to test this for yourself, consider an on-farm research study! Simply leave a planter pass of your existing stand, plant into your existing stand for a planter pass, and alternate this across your field. Please see this protocol for more information.
Research with Low Populations
Soybeans greatly compensate for reduced populations by increasing branching. Nebraska On-Farm Research from eastern Nebraska and western Nebraska for 12 years of combined data showed only a 1.3 bu/ac yield increase when seeding 180,000 soybean seeds/acre compared to 90,000 seeds/acre in 15-inch or 30-inch rows. (No studies were in sandy soils). Average final plant stands became 154,924 vs. 83,067 plants per acre respectively. Updated 2020 research information can be found in this CropWatch article. Specific examples with lower final plant stands follow:
A non-irrigated field in Nuckolls County in 2006 was hailed at the cotyledon stage, so planted populations of 100K, 130K, and 160K became average actual stands of 74,417; 89,417; and 97,917 plants per acre with a 4 bu/ac yield difference between highest and lowest plant populations. The average yield in the field was 40 bu/ac.
An irrigated field in Hamilton County in 2010 showed a 3 bu/ac yield difference between planted stands of 80K versus 120K seeds/acre. Final plant stands weren’t taken.
A York County irrigated field in 2018 comparing 90K, 120K, and 150K became final plant stands of 60,875, 88,125, and 121,750 plants/acre with yields of 93, 94, and 97 bu/ac respectively.
As you assess plant stands, keep in mind that a gap in one plant row will be compensated by plants in the adjacent flanking rows. They will form extra branches to take advantage of the sunlight. Thus single-row gaps may not be as yield-reducing as you might think, especially in narrower row spacings.
Any anticipated yield loss from the reduced stand must be balanced against the anticipated yield loss from replanting after the optimum planting date. Nebraska research has consistently shown the benefit of early soybean planting for higher yields. This is mainly due to node accrual on the main stem which allows for an increased potential for pods and seeds compared to planting later. Thus, replanting may not out-yield the original planted stand even at lower plant populations. Thorough scouting on foot or ATV and taking numerous counts may help pinpoint certain areas within a field to spot in/replant a portion of the field instead of the entire field.
Weed control is another factor, depending on the time of year, for soybean replant consideration. Leaving a poor stand may result in poor weed control or increased herbicide costs. Replanting may entail additional costs for seed, tillage, and replanting in addition to the potential yield penalty imposed by a later-than-normal planting date. We also recommend a fungicide seed treatment when replanting soybean.
When in doubt, consider testing this for yourself! Leave checks in your field that can be compared to where you replant. You can also consider this as an on-farm research study by contacting your local Extension Educator like a grower in Platte County did in 2014. He originally planted 145,000 seeds/acre on May 10 no-till into heavy corn residue. With a plant stand of 75,000 plants per acre, he chose to replant soybeans in strips across the field. He left the original stand and planted an additional 145,000 seeds/acre. Final yields were 58 and 57 bu/ac for the original and replanted stand, respectively.
COVID-19 Impacts on Livestock Markets Persist, While Fed Says Ag Sector “Under Severe Stress”
Recent news articles continue to highlight the ripple effects COVID-19 is having on some aspects of the U.S. livestock market. Meanwhile, the minutes from the Fed’s April meeting noted that, “The agricultural sector was under severe stress due to falling prices for some farm commodities and pandemic-related disruptions, such as the closing of some food processing plants.”
The Post article explained that, “The disruption to the meatpacking industry has left a roughly two-month backlog of pigs across Iowa and in surrounding states, hundreds of thousands of animals that were ready to be slaughtered weeks ago but increasingly have nowhere to go.
“With packed farms and animals growing too large to be processed by plants not yet running at full capacity as companies try to keep vulnerable workers safe, many hog farmers are being forced to do the unthinkable: kill their pigs and dispose of their bodies instead of having them processed for food.”
Ms. Bailey indicated that, “The National Pork Producers Council has estimated as many as 10 million hogs will be euthanized by the end of the summer because of coronavirus-related disruptions in meat processing. In Minnesota, the situation is already dire — with an average of 2,000 pigs a day being killed, according to the state agriculture department. About 90,000 pigs have been euthanized in the state in the past six weeks.”
And on Saturday, Tammy Grubb repented at The News & Observer (Raleigh, N.C.) Online that, “Farmers statewide have started euthanizing 1.5 million chickens because of coronavirus-related slowdowns in the meat processing plants, a top agriculture official said Friday.
“It is the first time during the COVID-19 pandemic that North Carolina farmers have had to take the drastic step of euthanizing, or depopulating, their animals, Assistant Agriculture Commissioner Joe Reardon told The News & Observer.”
Michael Corkery, David Yaffe-Bellany and Derek Kravitz reported on the front page of today’s New York Times that, “Along with nursing homes and prisons, meatpacking facilities have proven to be places where the virus spreads rapidly. But as dozens of plants that closed because of outbreaks begin reopening, meat companies’ reluctance to disclose detailed case counts makes it difficult to tell whether the contagion is contained or new cases are emerging even with new safety measures in place. The Centers for Disease Control and Prevention said there were nearly 5,000 meatpacking workers infected with the virus as of the end of last month. But the nonprofit group Food & Environment Reporting Network estimated last week that the number has climbed to more than 17,000. There have been 66 meatpacking deaths, the group said.”
The Times article explained that, “After some slaughterhouses did close, restaurants and stores experienced significant shortages of meat, leading Mr. Trump to issue an executive order designating meat plants ‘critical infrastructure’ that must stay open.
But the order did not address crucial issues like testing, leading many companies to reopen plants or keep them operating without fully assessing whether employees had contracted the virus.
And on the front page of today’s Washington Post, Taylor Telford reported that, “Tyson Foods, the largest meat processor in the United States, has transformed its facilities across the country since legions of its workers started getting sick from the novel coronavirus. It has set up on-site medical clinics, screened employees for fevers at the beginning of their shifts, required the use of face coverings, installed plastic dividers between stations and taken a host of other steps to slow the spread.
“Despite those efforts, the number of Tyson employees with the coronavirus has exploded from less than 1,600 a month ago to more than 7,000 today, according to a Washington Post analysis of news reports and public records.
“What has happened at Tyson — and in the meat industry overall — shows how difficult it is to get the nation back to normal, even in essential fields such as food processing. Meat companies have spent hundreds of millions of dollars on measures such as protective gear, paid leave and ventilation systems since they were forced to shut dozens of plants that were among the top coronavirus hot spots outside urban areas.”
The Post article pointed out that, “But the industry has still experienced a surge in cases, and some companies say they are limited in just how much they can keep workers separated from one another. Only a portion of the labor force has gone back to work — some workers kept away on purpose — and the nation’s meat supply remains deeply strained as barbecue season gets underway.”
“As of May 20, officials have publicly linked at least 15,300 COVID-19 infections to 192 U.S. meatpacking plants, according to tracking by the Midwest Center for Investigative Reporting. At least 63 workers have died.”
Harriet Ryan, writing in today’s Los Angeles Times, reported that, “The union that represents workers at a Vernon meatpacking plant where at least 153 have come down with COVID-19 called Monday for the immediate closure of the facility, saying there was no evidence measures taken to control the coronavirus were working.
“The outbreak at the Farmer John plant, a division of Smithfield Foods that produces Dodger Dogs and other pork products, is by far the largest in Los Angeles County to occur outside of a nursing home, prison or other residential setting, according to data from the county’s Public Health Department.”
Meanwhile, Reuters writer Tom Polansek reported last week that, “U.S. frozen pork inventories fell in April, when they typically rise, and beef inventories dropped more than normal as the coronavirus pandemic shut slaughterhouses and prompted grocers to limit customers’ buying, government data showed on Thursday.
“About 20 meat plants shut last month while consumers were stocking freezers during state-imposed lockdowns. U.S. President Donald Trump ordered the plants to stay open after meatpackers warned of shortages.
“Total pork inventories in cold-storage facilities declined about 2 million pounds to 614.8 million pounds as of April 30, compared to a month earlier, according to U.S. Department of Agriculture data. Normally supplies increase 27 million pounds from March to April, said Rich Nelson, chief strategist for broker Allendale.
“Total beef inventories fell by about 12 million pounds to 490 million pounds, exceeding the average decline of about 6 million pounds from March to April.”
More broadly, Reuters writer Ana Mano reported this week that, “Nearly 340 meatpacking workers at a single BRF SA plant in southern Brazil have tested positive for the novel coronavirus, the company said on Monday.
“Brazilian meatpacker BRF said in a statement that 6.6% of its 5,132 workers at its Concórdia plant in Santa Catarina state had tested positive for the virus.”
On Wednesday, the Federal Reserve Board released minutes from its April meeting, which stated in part that, “The agricultural sector was under severe stress due to falling prices for some farm commodities and pandemic-related disruptions, such as the closing of some food processing plants.”
Also last week, Associated Press writer Roxana Hegeman reported that, “Farmers across the nation leaned more heavily upon the federal government last year to finance their agricultural operations amid low commodity prices and trade disputes, and more of the money they borrowed is now delinquent.
“Although the U.S. Agriculture Department said it has not seen a significant change in loan delinquency rates because of the coronavirus pandemic, it expects an impact if the economic fallout continues.
The AP article noted that, “A state-by-state breakdown for the last two years of delinquent direct and government-backed loans that The Associated Press obtained through an open records request from the USDA’s Farm Service Agency offers a glimpse into financial difficulties faced by producers that varies widely by geography and industry.
Most vulnerable are beginning farmers and smaller agricultural operations that typically get their financing through the agency’s direct loan program. Those are typically the riskiest borrowers who cannot get financing elsewhere.
“The agency directly lent those farmers more than $12.7 billion dollars, and more than $639.4 million of that amount was delinquent as of April 30. That represents an increase of $1.26 billion in direct loans under that program and a jump of more than $8 million in delinquencies compared with the same date a year ago. Nationwide, 18.76% of government direct loans were delinquent.”
Meanwhile, Wall Street Journal writer Bob Tita reported last week that, “Deere & Co. said the coronavirus pandemic will intensify a yearslong slump in agricultural equipment sales, as farmers further reduce spending amid lower demand for their crops and livestock.
“Deere on Friday reset its profit forecast for this year at a significantly lower range after tossing out its previous guidance in March as the pandemic disrupted its farm-and-construction equipment businesses.”
July corn futures prices hovered between $3.15 and $3.25 since late April. Corn prices continue to stay within a relatively narrow range and that pattern may remain for the next several weeks. The potential for prices to move out of the range depends on supply issues and, more importantly, the nascent economic recovery.
As the economy begins to reopen, the tentative steps taken thus far still point to considerable uncertainty for economic growth both at home and abroad. Lower growth and elevated joblessness hurt the prospects for a rapid recovery. The adoption of lower growth targets in China hints at subdued economic activity that may influence Southeast Asian markets. Unemployment in the U.S. plateaued recently but sits at very high levels that look to continue into next year. On top of this dismal picture for economic activity, expectations of a massive 2020 corn crop endure despite planting issues in some regions. At 15.995 billion bushels, the 2020 crop forecast sets up the potential for ending stocks well over three billion bushels next marketing year. The prospect of corn acreage falling from 97 million acres seems to strengthen every day as delayed planting in some areas lingers. As of May 17, twenty percent, or around 19.4 million acres, remained unplanted. North Dakota, Pennsylvania, and Tennessee sit well behind the five-year average planting pace. In those three states, a little over four million acres remain unplanted. The prospect of 2 million acres of corn removed from the crop via prevent plant or acreage switching appears quite feasible. While an acreage reduction reduces a portion of the supply burden, it may not matter for prices unless demand picks up or severe weather issues impact yield.
Lower corn use associated with ethanol production leads the way in consumption loss. While some recovery from the ethanol production bottom seen in early April occurred over the last few weeks, a step back in gasoline demand last week holds some concern. After showing rapid recovery over the previous four weeks to near 7.4 million barrels a day, gasoline demand dropped back to near 6.8 million barrels per day last week. While the drop may be a temporary blip, gasoline demand over the next few weeks holds an important signal for ethanol producers looking to ramp up production. The USDA releases an estimate of the amount of corn used for ethanol production during April on June 1. Weekly estimates of ethanol production from the Energy Information Administration (EIA) indicated that domestic ethanol production since the start of April declined from a year ago by nearly 42 percent. Ethanol production should see increases in domestic gasoline consumption as we open the economy. For the current marketing year, the USDA projects the amount of corn used for ethanol and co-product production at 4.95 billion bushels. At present, corn use for ethanol needs to come in around 1.47 billion bushels for the remainder of the marketing year, which sits about eight percent lower than 2019 levels over the same period. A recovery in ethanol production necessary to hit the USDA number may fall short of that projection. If ethanol production begins to show strength, corn prices look to move higher.
Corn export inspections and export sales picked up with the lower prices associated with the lockdown. For the marketing year, the USDA projects that U.S. corn exports will reach 1.775 billion bushels. Cumulative export inspections since April 2 averaged 45.5 million bushels per week, compared to 30 million bushels per week from January to April. Export commitments for the year (shipments plus outstanding sales) as of May 14 came in at 1.554 billion bushels, compared to commitments of 1.864 billion bushels on the same date last year. Exports appear slightly behind the pace to meet current projections. Strong corn prices in Brazil and a deteriorating second crop hold hope for continued strength in U.S. exports moving into the summer.
The USDA currently projects feed and residual use of corn for the entire marketing year at 5.7 billion bushels, five percent larger than the previous one. The rate of feed and residual use of corn during the first half of the marketing year came in at 3.975 billion bushels. Over the last five years, first half feed and residual use averaged 68.6 percent of the marketing year total with last year’s 62.6 percent showing up as an outlier. First half use this marketing year comes in at 69.7 percent of the current projection. Severe disruptions to livestock supply chains create substantial uncertainty regarding feed use for the remainder of the marketing year. A large portion of this information is encapsulated in prices, but a continuation of issues in processing hurts corn use. The June 1 inventories’ estimate to be released on June 30 provides the first indication of how the pandemic impacted feed and residual use.
The present outlook projects corn prices staying near the present range under current economic conditions and crop expectations. A relatively narrow sideways price pattern is expected over the near term. A run-up in prices requires a deterioration on the supply side or a substantial uptick in economic activity.
Using the Forecasting System to Assess the Risk of Head Scab
The head scab risk tool can be used to assess the risk of head scab and to help guide fungicide application decisions. Here are a few guidelines for using the system and interpret the output:
1.) Go to the website at www.wheatscab.psu.edu. You will see a map of the United States with some states in green, yellow, red, or gray.
2.) STOP. Before you try to interpret the map, make sure that you select:
The flowering (anthesis) date for your field,
Winter wheat (the class of wheat we grow in Ohio), and
The susceptibility of the variety planted in your field.
3.) Zoom in to Ohio and move the “Counties” slider over to the right to see county lines.
4). Zoom in further to your county and move the “Streets” slider over to the right to see major highways.
5.) Find the approximate location of your field and assess the risk for head scab (*susceptible variety):
Scab susceptible soft red winter wheat variety planted in my field in Wooster, OH.
Flowering on May 26, 2020.
*Map is red in the area of my field, meaning that scab risk is high.
6.) Find the approximate location of your field and assess the risk for head scab (**moderately resistant variety):
Moderately resistant soft red winter wheat variety planted in my field in Wooster, OH.
Flowering today, May 26.
**Map is green in the area of my field, meaning that scab risk is low.
Continue to use the tool to monitor the risk of head scab over the next several days as more fields in the northern half of the state approach anthesis. If the risk is moderate-high (the map is yellow or red) at the time of flowering, you should consider applying Prosaro, Caramba, or Miravis Ace, at anthesis (flowering) or within the first 4-6 days after flowering. Learn how to identify the flowering or anthesis growth stage here:
According to EIA data analyzed by the Renewable Fuels Association for the week ending May 22, ethanol production shifted 9.2% higher, or 61,000 barrels per day (b/d), to 724,000 b/d-equivalent to 30.41 million gallons daily and the largest volume since March. However, production remains tempered due to COVID-19 disruptions, coming in 31.5% below the same week in 2019. The four-week average ethanol production rate rose 7.8% to 651,000 b/d, equivalent to an annualized rate of 9.98 billion gallons.
Ethanol stocks thinned by 1.9% to a 19-week low of 23.2 million barrels. Inventories tightened across all regions except the Rocky Mountains (PADD 4), including a 7.8% drop in the West Coast (PADD 5). Total reserves are 2.4% above year-ago volumes.
The volume of gasoline supplied to the U.S. market, a measure of implied demand, rebounded by 6.8% to 7.253 million b/d (111.19 bg annualized). Gasoline demand remained 22.8% lower than a year ago.
Refiner/blender net inputs of ethanol followed, rising 4.7% to 712,000 b/d, equivalent to 10.91 bg annualized but 24.9% below the year-earlier level.
There were no imports of ethanol recorded for the eleventh consecutive week. (Weekly export data for ethanol is not reported simultaneously; the latest export data is as of March 2020.)
Source: Renewable Fuels Association
Evaluating Freeze and Chilling Injury in Corn and Soybeans
The weather has definitely taken a turn to the cold side over the weekend and into this week. Across Nebraska lows at or below 32°F were recorded over the weekend. Clear conditions coupled with temperatures in the 30s can be favorable for frost formation; especially in low lying areas within fields, but can be highly variable. So, what does this mean for our crops?
Plant tissues typically do not freeze when the air temperature around them is 32°F.
The reason is because solutes are present in the membrane-bound cytoplasm (and also just outside of cell membranes) and they act like a very modest anti-freeze. Thus, plant tissue usually does not freeze until the tissue temperature reaches 30°F to 28°F (i.e., -1 to -2C). When you examine the last spring freeze risk probability table, use the 28°F not the 32°F freeze risk.
Source: Pearce, R.S. 2001. Plant Freezing and Damage. Annals of Botany 87:417-424.
Freeze and Chilling Injury in Corn
First off, let’s start with corn. For those of you with emerged corn, remember that the growing point (apical meristem) right now is likely around three quarters of an inch underground in corn and won’t be above ground until around V5-V6. Therefore, any damage to above ground leaves that shows up in the days following injury is unlikely to kill the plant, but may cause superficial damage to young leaves. In this situation, wait 3 to 5 days to evaluate the regrowth of new tissue from the whorl. Injury directly following a frost can appear very severe the day or two days following a frost, but as long as the growing point is unharmed the crop should recover. You can slit open the stems to observe the growing point. A healthy growing point should be yellow/white in color, not brown.
What about corn that hasn’t emerged yet? This depends on when the field was planted. In general, the coleoptile is susceptible to freezing temperature but we would likely need to have temperatures in the mid or lower 20’s for several hours to cause damage so that’s not likely to be a concern with this cold snap. However, when we add the planting timing into the mix, things can change. For fields that were planted just before the cold snap there may be an increased risk for imbibitional chilling due to moisture and soil temperature fluctuations.
As corn seeds take up water the cell membrane stretches and cells expand. When a damaged cell membrane rehydrates, it may not return to its normal shape and size; creating “leaky” cells. This, in turn, is likely to reduce growth rate and interfere with growth of the emerging seedling. Debate exists about what specific temperature and timing causes imbibitional chilling. However, corn plants that imbibe cold water (in the low 40s) in the first 48 hours after planting undoubtedly are affected.
Freeze and Chilling Injury in Soybeans
Now let’s switch to soybeans. Similar to corn, temperatures would have to get very low to damage seedlings still underground that had germinated. If plants have emerged, there are several things going in the soybeans’ favor to avoid damage. First off, our warmer soil temps heading into this cold spell likely helped raise the air temperatures right at the soil surface, which should reduce damage. Secondly, the cotyledons are actually somewhat frost tolerant since they are 95% water and fairly thick, so low temperatures are needed for more time to cause damage. However, soybeans that are just emerging with the hypocotyl hook exposed at or just above ground level, can be the most at risk for damage. The hypocotyl hook is the area of the stem below the soybean cotyledon. Anything that impacts it will result in seedling death. Watch for plants that have soft, mushy, or pinched hypocotyls.
Soybeans that had been planted just before the cold snap are also susceptible to possible damage during germination. Germination for soybeans consists of a quick uptake of water (imbibitional phase), typically less than 24 hours, followed by a slower uptake of water known as the osmotic phase. Chilling during the imbibitional phase can cause severe problems because water is needed to rehydrate the cotyledons and embryo to the point that cell membranes become functional. Cold temperatures interfere with proper hydration of those membranes. The imbibitional phase may complete without chilling injury in cooler soils (45°F) if the soil is moist but not saturated and no cold rains/cold snaps occur within 24 hours.
What about soybeans where the unifoliate leaves are exposed? Unlike corn, once the cotyledons emerge, all of the potential growing points are above ground so damage could occur. However, the key word in this last statement is growing points, as in more than one. So, even if low temperatures damage the stem tip, there are still two more growing points where the cotyledons attach that the soybean could regrow from. While this will set back the plant and cause two stems to form, there is no need to replant if these growing points remained viable.
Specht, Jim, Greg Kruger, Jenny Rees, Roger Elmore, Patricio Grassini, Keith Glewen, Tom Hoegemeyer. April 24, 2017. Corn, Soybean Planting Considerations before this Week’s Cold Snap. University of Nebraska CropWatch. Accessed 5/8/2020
Cost to Produce Corn and Soybeans in Illinois—2019
In 2019, the total of all economic costs per acre for growing corn in Illinois averaged $878 in the northern section, $912 in the central section for farmland with “high” soil ratings, $887 in the central section for farmland with “low” soil ratings, and $851 in the southern section. Soybean costs per acre were $630, $672, $629 and $652, respectively (see Table 1). Costs were lower in southern Illinois primarily because of lower land costs. The total of all economic costs per bushel in the different sections of the state ranged from $4.38 to $4.95 for corn and from $10.50 to $12.54 for soybeans. Variations in this cost were related to weather, yields, and land quality.
These figures were obtained from farm business records kept by farmers enrolled in the Illinois Farm Business Farm Management Association. The samples included only farms with more than 500 acres of productive and nearly level soils in each area of the state; these are farms without livestock. Farms located in the 22 counties north and northwest of the Illinois River are included in the sample for northern Illinois. Farms from 36 counties below a line from about Mattoon to Alton are in the sample for southern Illinois. The remaining 44 counties make up the sample for central Illinois. The sample farms averaged 1,592 tillable acres in northern Illinois, 1,527 acres in the central section with high soil ratings, 1,535 acres in the central section with lower soil ratings, and 1,652 acres in southern Illinois.
Cost of Production for Corn Compared to 2018
Costs per bushel of corn in 2019 as compared to 2018 were higher in all regions of the state. Costs per bushel were higher due to lower yields. Costs per bushel were 51 cents higher in northern Illinois, 68 cents higher in central Illinois with the higher rated soils, 85 cents higher in central Illinois with the lower rated soils and 62 cents higher in southern Illinois.
The average corn yield in 2019 was 23 bushels per acre lower than 2018 in northern Illinois, 29 bushels to 32 bushel lower in central Illinois and 16 bushels lower than 2018 in southern Illinois. The 2019 average corn yield in the different geographical locations ranged from 19 bushels lower to 1 bushel per acre higher than the five-year average from 2015 to 2019.
Costs per acre for corn were mostly higher in all the different geographic regions in Illinois compared to 2018. Across the state, total costs per acre to produce corn varied from no change to a 5 percent increase. Fertility, drying, and nonland interest costs increased the most.
Cost of Production for Soybeans Compared to 2018
Production costs per bushel of soybeans in 2019 increased in Illinois in comparison to 2018. Costs per bushel increased due to lower yields. Soybean yields ranged from 4 to 10 bushels per acre lower in 2019 compared to 2018. Changes in costs per bushel ranged from $1.90 lower in southern Illinois to $1.29 lower in northern Illinois.
Total costs per acre increased in Illinois when compared to 2018. Costs decreased $10 per acre in northern Illinois, increased $8 per acre in central Illinois with the higher rated soils, increased $6 per acre in central Illinois with the higher rated soils and increased $24 per acre in southern Illinois when compared to 2018. Average soybean yields in the different areas ranged from 4 bushels lower to no change in bushel per acre when comparing to the five-year average from 2015 to 2019.
Total costs to produce corn for all combined areas of the state were $891 per acre. This is $30 per acre higher than 2018. Variable costs increased $25 per acre or 4 percent, other nonland costs increases $7 per acres, and land costs decreased $2 per acre. In 2019, cash costs accounted for 47 percent of the total cost of production for corn, other nonland costs were 29 percent, and land costs were 24 percent. The average corn yield for all combined areas of the state was 194 bushels per acre resulting in a total cost of production of $4.59 per bushel. The average corn yield in 2019 was the lowest in the last 4 years, 27 bushels to the acre less than 2018. Total costs per acre were the highest in the last four years while total costs per bushel were the highest in the last four years as well.
Total cost per acre to produce soybeans increased, from $644 per acre in 2018 to $651 per acre in 2019. Nonland interest accounted for most of the increase. Variable costs accounted for 33 percent of the total cost of production for soybeans, other nonland costs 34 percent and land costs 33 percent. The average soybean yield for all combined areas of the state was 59 bushels per acre resulting in a total cost of production of $11.03 per bushel. The cost per bushel to raise soybeans the last five years averaged $10.20 per bushel.
Forecasts for Illinois production costs in 2020 look to be more using Gary Schnitkey’s 2020 crop budgets and the USDA’s Cost-of-Production Forecasts as a guide. For corn, 2020 variable costs are projected to decrease 3 percent, mainly due to soil fertility costs. For 2020, soybeans have a smaller projected decrease of variable costs of 2 percent. This decrease is also primarily due to soil fertility costs. These decreases coupled with additional cutting of overhead and land costs will aid with lower projected prices for 2020.
The author would like to acknowledge that data used in this study comes from the local Farm Business Farm Management (FBFM) Associations across the State of Illinois. Without their cooperation, information as comprehensive and accurate as this would not be available for educational purposes. FBFM, which consists of 5,500 plus farmers and 60 plus professional field staff, is a not-for-profit organization available to all farm operators in Illinois. FBFM field staff provide on-farm counsel with computerized recordkeeping, farm financial management, business entity planning and income tax management. For more information, please contact the State FBFM Office located at the University of Illinois Department of Agricultural and Consumer Economics at 217-333-8346 or visit the FBFM website at www.fbfm.org.