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Too early to sell the 2017 soybean crop?

Published September 26, 2016

URBANA, Ill. – Soybean prices during the last five months of the 2015-16 marketing year averaged much higher than during the first seven months of the year. According to a University of Illinois agricultural economist, the average daily bid price at central Illinois locations was $8.67 during the first seven months and $10.28 during the last five months of the year. Those daily prices ranged from $8.40 on March 1, 2016 to $11.58 on June 30, 2016.

“Through the first half of the 2015-16 marketing year, the soybean market traded on the basis of prospective year-ending stocks of U.S soybeans of 450 to 460 million bushels,” says Darrel Good. “The 2015 U.S crop was very large, following an equally large crop in 2014; the 2016 South American crop was expected to be record large; U.S. exports were expected to be 150 million bushels smaller than in the previous year; and U.S. producers were expected to expand planted acreage in 2016 following the weather-induced decline in 2015.”

As it turned out, Good says the South American crop was 225 million bushels smaller and U.S. exports were 250 million bushels larger than projected in March, U.S. producers increased soybean plantings less than expected, and the USDA’s Sept. 1 Grain Stocks report to be released on Sept. 30 is expected to show marketing-year-ending stocks of only195 million bushels. If confirmed, year-ending stocks will have been below 200 million bushels for two consecutive years following early year expectations for stocks to exceed 450 million bushels. Ending stocks have exceeded 200 million bushels only once since 2008.

“Soybean prices have now receded from the summer highs, with central Illinois bid prices currently averaging about $9.30, still about 75 cents higher than prices a year earlier,” Good says. “Prices have declined as new-crop soybeans have become available and have alleviated some of the tightness in old-crop supplies, resulting in a much weaker basis than experienced earlier in the month. In addition, early yield reports tend to confirm USDA’s forecast of a record-high U.S. average yield this year, with some potential that the yield will exceed the current forecast of 50.6 bushels per acre.”

With consumption during the 2016-17 marketing year already projected to be record large, Good says an increase in the average yield forecast (without an unexpected decline in the estimate of harvested acreage) would likely result in an increase in the current projection of year-ending stocks of 365 million bushels. 

According to Good, two additional factors point to the potential for additional weakness in soybean prices as the 2016-17 marketing year unfolds. First, is the likely rebound in South American production in 2017.

“The USDA expects a modest increase in soybean acreage for harvest in South America next year,” Good says. “Although an increase of only 1.5 percent is currently projected (mostly in Brazil), normal yield levels result in a projected 3.5 percent (220 million bushels) year-over-year increase in South American production. If that large crop materializes, the pace of U.S. exports would be expected to experience the normal sharp seasonal decline beginning in the spring of 2017.

“A second factor that could contribute to lower soybean prices is an increase in soybean acreage in the U.S. in 2017,” Good says. “Although it is too early to form solid expectations about U.S. acreage, low prices of other commodities relative to soybeans would be expected to result in some switch away from those crops to soybeans. In particular, the large increase in corn acreage in 2016, prospects for relatively large year-ending corn inventories, and the relatively high cost of producing corn would be expected to result in fewer corn acres in 2017.”

Futures prices for the 2017 corn and wheat crops are higher than prices for the 2016 crop, but those prices are still low relative to prices for the 2017 soybean crop. The USDA’s Winter Wheat Seedings report released in the second week of January 2017 will provide the first indication of acreage response to current price levels.

Good says the size of the 2017 soybean crop will still largely hinge on the average yield. “It will be interesting to observe if three consecutive years of above trend U.S. average soybean yields will alter early expectations for the average yield in 2017.”

Although the potential for larger South American and U.S. soybean crops in 2017 are widely recognized, prices for the 2017 crop remain well supported. November 2017 futures are currently trading only about 3 cents below November 2016 futures and July 2018 futures are 19 cents below July 2017 futures. Bids for 2017 harvest delivery in central Illinois are near $9.15.

“With so much production uncertainty over the next 10 months, a strong pace of Chinese buying, and the recent history of smaller than expected year-ending stocks, it is not completely surprising that the market is not yet reflecting the potential for a growing surplus of soybeans during the 2017-18 marketing year,” Good says. “The question for producers is whether or not current prices offer a pricing opportunity for a portion of the 2017 crop. The answer is more likely to be yes for those who intend to increase soybean acreage in response to current price relationships.”

 

Sep27

"Digital Wellness and Food Security: The role of the media in safeguarding/endangering the integrity of information"

2:00 PM - 3:00 PM
Lucy Ellis Lounge of the Foreign Languages Building

Sponsored by the Center for African Studies.

Ms. Rachel Fischer and a number of master level library students from the University of Pretoria in South Africa will speak on the topic of “Digital Wellness and Food Security: The role of the media in safeguarding/endangering the integrity of information.”

Our speakers note that “while not all industries are focused on food security, most industries and individuals do make use of information and communication technologies (ICTs). By allowing for cross-discipline interaction, we are able to have continuous dialogues on matter impacting on our digital and real-life wellbeing.”

As always, our guests will invite your questions and participation after the talk. We look forward to seeing you on Tuesday!

Farming with forests

Published September 22, 2016
Trees with annual crop
Forest windbreaks can benefit crops and the environment
  • In the race to feed a growing population, it is important to consider sustainability.
  • University of Illinois researchers are promoting the practice of agroforestry—the intentional planting of trees and shrubs with crops or livestock—to achieve sustainability goals.
  • A number of practical and policy challenges have prevented adoption of agroforestry practices on a large scale in the U.S.
  • If adopted more widely, agroforestry could benefit wildlife, soil and water quality, and the global climate. 

URBANA, Ill. – Feeding the world’s burgeoning population is a major challenge for agricultural scientists and agribusinesses, who are busy developing higher-yielding crop varieties. Yet University of Illinois researchers stress that we should not overlook sustainability in the frenzy to achieve production goals.

More than a third of the global land area is currently in food production. This figure is likely to expand, leading to deforestation, habitat loss, and weakening of essential ecosystem services, according to U of I agroecologist Sarah Taylor Lovell and graduate student Matt Wilson. To address these and other problems, they are promoting an unconventional solution: agroforestry.

Agroforestry is the intentional combination of trees and shrubs with crops or livestock. Or, as Wilson simply puts it, “You stick trees or shrubs in other stuff.”

The researchers describe five agroforestry practices:

  • Alley cropping: field crops planted between rows of trees.
  • Silvopasture: trees added to pasture systems.
  • Riparian buffers: trees planted between field edges and river edges.
  • Windbreaks: trees planted adjacent to planted fields and perpendicular to the prevailing wind pattern.
  • Forest farming: harvest or cultivation of products—such as mushrooms, ginseng, or ornamental wood—in established forests.

Each of the five practices can benefit conventional and organic agroecosystems in similar ways. Woody plants can provide habitat for beneficial wildlife, prevent soil erosion, sequester atmospheric carbon, and absorb nutrient runoff while providing farmers with additional streams of income in the form of lumber or specialty products like nuts or berries. Each specific practice also provides unique benefits. For example, trees added to pasture landscapes provide shade to grazing livestock.

Farmers might be concerned about the trees casting too much shade on crops, but it is simply a matter of choosing the right complement of species. For example, the combination of winter wheat and walnut trees in an alley cropping system works well.

“Winter wheat grows in the late winter or early spring, but the walnut doesn’t leaf out until late spring,” Wilson explains. “So, when you mix the two together, you’ve got the benefit of having two crops growing in different parts of the year.”

Lovell adds, “The grain crop growing near the trees can actually force the trees to grow deeper roots. This can benefit individual trees because the root zone they’re forced to occupy gives them greater access to water.”

European farmers are ahead of their U.S. counterparts in terms of their adoption of agroforestry practices. “It’s very common in Europe. A lot of farmers are already doing hedgerows, which are similar to windbreaks, as part of their agroforestry systems, and even more integrated systems are fairly common,” Lovell says.

Wilson suggests that there are cultural barriers to adopting agroforestry practices in the U.S. “We’ve had some farmers share sentiments like, ‘why should I plant trees? My grandpa spent his whole life tearing trees out so he could put crops in.’ There’s definitely some perception that trees are not good in a farm landscape. Trying to overcome that has been a challenge,” he says.

Another obstacle in the U.S. is a policy mindset that treats production and conservation as completely separate functions of the land. For example, farmers are prohibited from harvesting or selling products from land designated for conservation, as in the USDA’s Conservation Reserve Program. There are USDA programs that support certain agroforestry practices such as wind breaks, but government support for more integrated practices is generally lacking. That’s why Lovell’s team is advocating for farmers to utilize marginal land.

“We are working with farmers to identify lands that are less productive, sensitive, or marginal, and suggesting those as the places to start transitioning,” Lovell explains. Or, she suggests, farmers could plant young “edibles” (trees and shrubs bearing fruit or nuts) in a CRP easement. By the time the CRP lease expires in 10 to 15 years, the trees would be mature, bearing edible—and potentially profitable—products.  

The long timeframe needed for trees to establish and mature may discourage some farmers, but the researchers offer a strategy for the transition period. In an alley cropping system with hazelnut and chestnut trees, for example, they suggest growing edible shrubs and pasture between rows. Farmers can expect to start harvesting and selling hay almost immediately, and will start seeing fruit production from the shrubs within a couple of years. Eight to ten years after establishment, trees will begin producing nuts.

“We’re looking at economic strategies to maximize profit from the very beginning,” Lovell says.

Despite the challenges, the researchers insist the environmental benefits are worth the trouble. “If you have trees in a system, you’re holding soil, preventing runoff, and ameliorating greenhouse gas emissions. At the same time, you are getting a harvestable product. This combination of environmental services and agricultural production makes agroforestry an exciting opportunity to both feed the world and save the planet,” Wilson says.

The article, “Agroforestry—The next step in sustainable and resilient agriculture,” is published in Sustainability. The research was supported by the Jonathan Baldwin Turner Fellowship though the Department of Crop Sciences at the University of Illinois. The full text of the article is freely available at the journal’s website.    

Land-grant universities create animal feed database

Published September 22, 2016

URBANA, Ill. – Twenty-one land-grant institutions, including the University of Illinois, as well as partner organizations are collaborating to provide researchers, Extension professionals, regulators, feed industries, and producers with up-to-date, research-based information on the nutrient needs of agricultural animals.

Since forming in 2010, the National Animal Nutrition Program has created a database of animal feed ingredients. The database is a vital tool to inform cost-effective production decisions, animal welfare policies and procedures, and to guarantee the safety and nutritional value of consumers’ food.

Ryan Dilger, an associate professor in the Department of Animal Sciences at University of Illinois serves on the project committee.

Activities conducted by the program aid in the development of feeding strategies and research to enhance animal health, which allows for better productivity and lowered costs. Consumers will also benefit from safer, more nutritious meat, dairy, and eggs.

So far, the program has collected and sorted 1.5 million feed ingredient records to create a reliable database that is used by organizations in over 30 countries, including the United Nations Food and Agriculture Organization.

The National Animal Nutrition Program is a National Research Support Project supported by the Agricultural Experiment Stations with funds administered by the U.S. Department of Agriculture’s National Institute of Food and Agriculture. The feed database is only one of many accomplishments of the NANP since its inception in 2010.

For a list of the participating land-grant universities and to read more about the database, go to http://agisamerica.org/twenty-one-land-grant-universities-create-animal-feed-database/. For more information about the NANP, visit https://nanp-nrsp-9.org/.

Adapted from a press release from Agriculture Is America.

Oct04

Webinar by Extension Forester Christopher Evans

2:00 PM - 3:00 PM
Register for Webinar: https://web.extension.illinois.edu/registration/?RegistrationID=15245

Jumping worms are exotic earthworms that were first found in Illinois in 2015. These invaders have the potential to drastically alter the soil and plant communities, impacting both natural ecosystems and residential landscaping. In 2016, reports of new populations have been coming in from across the state.

Join Extension Forester Chris Evans for an in-depth update on jumping worms in Illinois. This one-hour webinar will provide an update on the distribution of jumping worms in Illinois, discuss new research on their impacts to natural and managed lands, remind everyone how to identify jumping worms, and provide information on reporting new populations.

 Jumping Worms Update—Illinois

Webinar - October 4, 2-3pm

 To Register— https://web.extension.illinois.edu/registration/?RegistrationID=15245

 For more information:

Chris Evans— cwevans@illinois.edu, 618-695-3383

Christopher Evans, Extension Forester

Soil management may help stabilize maize yield in the face of climate change

Published September 20, 2016
cover crops
Winter cover crops (oat on left, oilseed radish on right) on Lily Lake Farm, in Lily Lake IL
  • Given that predicted climate changes are expected to affect maize yields, many researchers and companies are focusing on improving maize varieties to withstand more stressful environments.
  • A new study shows that climate effects on maize yield can be mitigated by soil water holding capacity and soil organic matter.
  • Cover cropping and other methods of improving soil organic matter may result in a more stable maize crop in future climates.

URBANA, Ill. – How will we feed our growing population in the face of an increasingly extreme climate? Many experts suggest the answer lies in breeding novel crop varieties that can withstand the increases in drought, heat, and extreme rainfall events predicted in the not-too-distant future. But breeding is only part of the equation, according to new research from the University of Illinois and several collaborating institutions across the Midwest.

“It might not be necessary to put all the stress of climate adaptation and mitigation on new varieties. Instead, if we can manage agroecosystems more appropriately, we can buffer some of the effects of climate instability,” says U of I and USDA Agricultural Research Service ecologist Adam Davis.

To find the management tool that could ameliorate the effects of climate instability, Davis and his collaborators had to go beyond the traditional field-scale experiment. “We had to think at a much broader spatial scale,” he notes.

The team obtained weather, soil, and yield data from every county in four states—Illinois, Michigan, Minnesota, and Pennsylvania—across a span of 15 years. They then used a new analytical approach, which borrowed from economic concepts, to determine the effects of weather and soil properties on maize yield.

“The things that were most effective at buffering against the different forms of yield instability were soil organic matter and water holding capacity,” Davis says. This pattern was true across all years and all study locations.

Greater water holding capacity, which increases with more soil organic matter, gives crops an advantage in hot, dry climates. They can continue to take up water from the soil, which means continued growth and strong yields even in adverse climates.

The good news for farmers is that they may be able to manage for improvements in water holding capacity, giving them a potential tool to support novel maize varieties. “In locations with coarse soils, you can see really quick and gratifying responses to soil organic matter amendments,” Davis says.

Davis suggests a number of practices to increase soil organic matter, including using cover crops, avoiding excessive soil disturbance, increasing crop rotation length, and adding composted manures. He points out that cover crops might be the best choice for some farmers.

“Cover crops are a great way for improving soil organic matter; even small amounts of cover crop biomass seem to have soil organic matter benefits,” Davis explains. “They also can have weed suppressive benefits, so cover crops may represent a win-win scenario.”

No matter which amendment practice farmers choose, he says, “soil organic matter amendments are an important place to start building a cropping system resilient to climate change.”

The study, “Soil water holding capacity mitigates downside risk and volatility in US rainfed maize: Time to invest in soil organic matter?” is published in the journal PLOS One. Funding was provided by the Agriculture and Food Research Initiative of the USDA’s National Institute for Food and Agriculture. The full article is accessible at the journal’s website.

News Source:

Adam Davis, 217-333-9654

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