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Weak export demand continues to contribute to low corn prices

Published January 11, 2016

URBANA, Ill. – The high corn prices of late 2010 through mid-2014 were associated with a combination of strong demand resulting from growing ethanol production, high livestock prices, and reduced supply resulting from the small U.S. corn crops of 2010, 2011, and especially 2012. According to a University of Illinois agricultural economist, the lower prices of the past 17 months that continue today are the result of the large U.S. corn crops of the past three years, plateauing ethanol production, lower livestock prices, and expanding foreign coarse grain production.

Darrel Good reported that the monthly average price of corn received by U.S. farmers exceeded $4.00 per bushel for 46 consecutive months from September 2010 through July 2014. The simple average of those monthly prices was $5.85, in a range of $4.06 (July 2014) to $7.63 (August 2012). The average monthly price has been below $4.00 in each of the past 17 months. Those monthly prices averaged $3.67, in a very narrow range of $3.49 to $3.81.

Foreign coarse grain production increased from 769 million metric tons in 2010-11 to 918 million metric tons in 2014-15. Increasing foreign grain production, along with global economic weakness and a stronger U.S. dollar, has resulted in a substantial year-over-year reduction in corn exports during the first 18 weeks of the 2015-16 marketing year.

According to Good, cumulative marketing-year U.S. corn export inspections as of Jan. 7, 2016, totaled 395 million bushels. For the first three months of the marketing year, Census export estimates exceeded inspections by 27 million bushels.

“Assuming that margin has persisted, exports during the first 18 weeks totaled 422 million bushels, 125 million fewer bushels (23 percent) than exports during the same period in the previous year,” Good said. “Mexico was the largest importer of U.S corn in the early part of the 2014-15 marketing year and shipments so far this year are up 18 percent. However, shipments to other large importers early last year (Japan, South Korea, Egypt, Columbia, and Peru) are down 41 percent.

“In addition to the slow pace of corn export shipments so far this year, unshipped export sales are also much smaller than outstanding sales of a year ago,” Good said. “Those sales as of Dec. 31 were reported at 435 million bushels compared to 580 million bushels a year earlier. The magnitude of unshipped export sales follows the same pattern as export shipments to date—larger for Mexico, but smaller for other major buyers.  As a side note, two million bushels of U.S corn have been sold for shipment to Cuba, compared to none last year.”

With more than a third of the 2015-16 marketing year completed, corn export progress points to marketing-year exports being less than USDA’s December projection of 1.75 billion bushels, Good added. In the previous 20 years, exports during the first quarter of the marketing year averaged 25.3 percent of the marketing-year total exports. Exports during the first quarter of the 2015-16 marketing year totaled only 304 million bushels, the smallest since the extremely small crop of 2012 and the second smallest since 1974.

“The average seasonal export pattern points to marketing-year exports of only 1.2 billion bushels,” Good said. “However, the seasonal pattern of exports has varied considerably from year to year, particularly in the past three years. First quarter exports accounted for 21.5 percent of the marketing-year total in 2014-15, 18.2 percent in 2013-14, and 30.3 percent in 2012-13. The large proportion of first quarter exports in 2012-13 was not unusual for a short crop year.  The 18.2 percent of 2013-14 was the smallest first quarter export proportion since at least 1968-69. If first quarter exports this year are only 18.2 percent of the marketing-year total, exports would be projected at 1.67 billion bushels, 80 million fewer bushels than last month’s USDA projection. To reach the USDA projection of 1.75 billion bushels may require some combination of improved global economic conditions and a shortfall in South American production,” Good said.

The USDA will release updated projections of South American corn production and U.S. corn exports on Jan. 12. The final estimate of the size of the 2015 U.S. corn crop and the estimate of Dec. 1, 2015, corn stocks will be released on the same day.

“These estimates and projections will provide direction for corn prices in the near term,” Good said. “The market appears to be expecting a lower corn export projection and a final 2015 U.S production estimate very near the November forecast of 13.654 billion bushels. There is more variation in the expectations for the Dec.1 stocks estimate because it will reflect any change in the production estimate as well as reveal feed and residual use of corn during the first quarter of the marketing year. Estimates will have to deviate substantially from market expectations in order to move prices very much in either direction.”

According to Good, a return of U.S. average corn prices above $4.00 per bushel is not expected in the near term.

“Prices at that level will likely require some crop production concerns during the upcoming U.S. growing season,” he said. “Periods of production concerns may well develop this summer as the demise of the current strong El Niño event points to an elevated risk of the 2016 U.S. average corn yield falling below trend value.”

 

Consumer perception of organic foods affected by food type and where they’re sold

Published January 11, 2016
Graphic of mock organic cookie branding
  • Foods with the USDA organic label are not perceived uniformly across food types or retail outlets, though the requirements for carrying the label are the same across products and stores.
  • Organic “virtue” products, such as strawberries, are more likely purchased based on taste.
  • Organic “vice” products, such as cookies, are more likely purchased based on nutrition.
  • Retailers like Walmart may benefit more from promoting organic virtue foods.
  • Retailers like Target may be better for promoting organic vice products.

URBANA, Ill. – The organic food industry has grown from fresh produce and grains to snack foods and condiments—from farmers markets to supercenters. Has this new variety in organic products, and the availability of them, affected consumers’ perceptions?  A University of Illinois researcher and her team designed an experiment to provide insight on some of the variables that may influence opinions about organic foods.

“Past research has often asked how much someone is willing to pay for an organic product, but has rarely considered the context in which that purchase takes place,” says U of I food economist Brenna Ellison. “In this study, we look at how the organic label interacts with the product type as well as the retail purchase context.”

Ellison and her team conducted an experiment with 605 people who evaluated a food product’s expected taste, nutrition, safety, and likelihood of purchase. The products were strawberries and chocolate sandwich cookies sold by a fictitious brand called Cam’s. In the experiment, the products were either organic or non-organic and sold in one of two supercenters, Walmart or Target. Each participant only evaluated one of the eight potential combinations.

“We chose strawberries and cookies because they represent a ‘virtue’ and a ‘vice’ product, respectively, and both are currently available in the marketplace in organic and non-organic forms,” Ellison says. “We chose Target and Walmart because the two stores have similar prices but very different brand images. Target has positioned itself in the marketplace as a store that emphasizes style, design, and aspiration. Walmart, conversely, promotes a low price image.”

Results of the study showed that context indeed matters. While organic products were generally rated more highly than non-organic, the researchers found an interesting interaction between the organic label and product type.

“Organic strawberries had higher expected taste ratings than non-organic strawberries, but cookie taste ratings did not differ,” Ellison says. “However, the opposite was true with nutrition ratings. Organic cookies were rated as more nutritious – almost twice as healthy – as non-organic cookies, but no difference was observed for strawberry ratings.

“These results suggest that the purchase of organic virtue foods like strawberries may be based more on taste considerations, but organic vice foods like cookies may be purchased based on nutrition considerations,” Ellison says.

Another finding from the research was that where the food item was purchased mattered. The researchers concluded that retailers like Target may be better outlets for promoting organic vice products while retailers like Walmart may only be good outlets for promoting organic virtue products.

The study also revealed that participants seemed misinformed about organic standards.

“Even though products carrying the USDA Organic label must contain at least 95 percent organic ingredients by definition, our participants believed organic cookies only contained 62 percent organic ingredients,” Ellison says. “This suggests more education may be needed to ensure consumers understand what the organic label means and that this definition does not change across products or stores.”

“Putting the organic label in context: Examining the interactions between the organic label, product type, and retail outlet” is published in Food Quality and Preference. It was written by Illinois researchers Brenna Ellison, Brittany Duff, and Tiffany Barnett White and Ph.D. student Zongyuan Wang. The authors note that this research did not receive funding support from any food retailer or manufacturer.

 

 

Four Seasons Gardening webinar series

Published January 7, 2016
Terrarium

URBANA, Ill. – University of Illinois Extension’s Four Seasons Gardening Program will offer a winter webinar series for gardening enthusiasts beginning in February. The Four Seasons Gardening Program focuses on environmental stewardship, home gardening, and backyard food production.

Gardeners who are itching for something “green” to do indoors will learn about caring for landscape trees, building terrariums, and living with poisonous and irritating plants.

The three webinars will be presented live on the dates listed below.

  • How to Kill Your Tree: A Guide of What NOT to Do, Chris Enroth, U of I Extension horticulture educator. Feb. 23 at 1:30 p.m. or Feb. 25 at 6:30 p.m.
  • Unique Terrariums for Indoor Spaces, Candice Miller, U of I Extension horticulture educator. March 8 at 1:30 p.m. or March 10 at 6:30 p.m.
  • Naughty, Nasty, and Simply Annoying Plants, Rhonda Ferree, U of I Extension horticulture educator. March 22 at 1:30 p.m. or March 24 at 6:30 p.m.

All sessions are free and open to the public, but participants must register in advance at http://go.illinois.edu/4seasons_webinars. Registration to attend online webinars opens Jan. 22. Recorded webinars can be viewed following the program at http://go.illinois.edu/fourseasonsrecordings. For more information, contact U of I Extension’s Miki White at 309-342-5108 or miki7047@illinois.edu.

News Source:

Miki White , 309-342-5108

Soil and water management webinar planned for Feb. 25

Published January 6, 2016

URBANA, Ill. – University of Illinois Extension will present a web conference on soil and water management at several Extension offices throughout the state on Thurs., February 25.

Web conferencing and Power Point presentations will be offered at several host locations. Certified crop advisors can receive 4.5 hours of credit for participating, though the event is open to all producers, farm managers, or agronomists.

Host units include:

  • Jo Daviess, Stephenson, Winnebago
  • Ogle, Dekalb, Boone
  • Carroll, Whiteside, Lee
  • Rock Island, Henry, Mercer
  • Bureau, Putnam, LaSalle, Marshall
  • Livingston, Woodford, McLean
  • Fulton, Mason, Tazewell, Peoria
  • Henderson, Warren, Knox, McDonough
  • Hancock, Adams, Schuyler, Brown, Pike
  • Cass, Calhoun, Greene, Morgan, Scott
  • Piatt, Macon, Dewitt
  • Iroquois, Ford, Champaign, Vermilion, Ford
  • Menard, Logan, Sangamon
  • Douglas, Moultrie, Shelby, Cumberland, Coles
  • Christian, Montgomery, Macoupin, Jersey
  • Fayette, Effingham, Jasper, Clay
  • Madison, St. Clair, Monroe
  • Bond, Clinton, Marion, Washington, Jefferson

Topics and speakers include:

  • Harnessing plant-microbe interactions to improve soil health - Anthony Yannarell, U of I
  • Using Drones for Water Management - Dennis Bowman, U of I Extension
  • Getting Water to Where Roots Need It - Kevin Erb, UW Extension
  • The 3 Fates of Nitrates: 1 is GREAT; 1 we HATE; and 1 we TOLERATE - Laura Gentry, Illinois Corn Growers Association and U of I
  • Using LIDAR and other Remote Sensing for Soil and Water Management - Ron Collman, Illinois NRCS state soil scientist
  • Extreme Precipitation, Extreme Erosion? - Jim Angel, Illinois state climatologist

Registration cost is $45 per person and includes materials and lunch. To register, participants should contact their local Extension host site. Registration deadline for most sites is Feb. 18.

For more information, contact Duane Friend at 217-243-7424 or friend@illinois.edu.

Redirected flood waters lead to unintended consequences

Published January 6, 2016
Floodwall in Cape Girardeau
Floodwall in Cape Girardeau
  • 1.2 million acres of farmland are protected from Ozark Plateau runoff by the Headwaters Diversion in Missouri.
  • Climate scientists predict a continued pattern of extreme rainfall events in the upper Mississippi River region.
  • When levees fail under pressure from heavy flooding, farmland and livelihoods are at risk. Preventative policies are needed.

URBANA, Ill. – An intricate system of basins, channels, and levees called the Headwaters Diversion carries water from the eastern Missouri Ozark Plateau to the Mississippi River south of Cape Girardeau. The system protects 1.2 million acres of agricultural lands in southeast Missouri from both overflow from the Mississippi River during flooding events and from Ozark Plateau runoff. Historical and more recent extensive rainfall and subsequent flooding prompted University of Illinois researcher Ken Olson to look more closely at where the excess or diverted water goes.

“There is a need for additional floodwater storage in the confluence area of the greater Ohio-Mississippi Rivers,” says Olson. “A regional effort on both sides of the Ohio and Mississippi Rivers is needed to strategically identify floodplain areas that could provide temporary water storage and policy incentives for landowners of low-lying lands to profitably invest in crops and income alternatives.”

Olson and his colleagues are studying the levees, diversions, and floodways, which for the past 200 years have allowed land conversion from wetlands to agriculture. “It has substantively altered the hydrologic cycle of the region,” he says. “The Little River levee and Little River Drainage District Headwaters Diversion channel built in the 1910s successfully permitted the drainage of the 1.2 million acres Big Swamp in southeast Missouri. However, it also had the unintended consequence of increasing the peak flow of Mississippi River water south of Cape Girardeau through the Thebes gap and south to Helena, Arkansas, a distance of approximately 360 river miles.

“When the Ozark uplands and Francois Mountains experience above-average rainfall for extended periods of time, the additional runoff transported by the diversion channel increases the chances of Mississippi River levee breaches south of Commerce, Missouri, and adds to the peak river height at the confluence of the Ohio and Mississippi rivers.”

Olson says the increase in Mississippi River peak flow placed additional river pressure on levees and led to increased flooding, especially during the floods of 1927, 1937, 2011, and 2015-2016.

 “The Kentucky, Illinois, and Missouri farmers’ and land owners’ response to the additional volume and height of the Mississippi River from the diversion channel valley and the prevention of the Mississippi River floodwaters from flowing into the ancient Mississippi River valley and Big Swamp was to build floodwalls and levees,” Olson says.

After the 1915 flood, Cape Girardeau built a floodwall to protect the city. Likewise, after the Great Flood of 1927, Cairo built a floodwall, strengthened levees, and created the Birds Point-New Madrid floodway. Missouri farmers built the Commerce Farmer levee that failed in 2011. Kentucky farmers built the Hickman levee—strengthened later by USACE—and did not fail.

“Illinois farmers built the Fayville-Len Small levee that breached in 1993 and 2011,” Olson says. “It breached a third time on Jan. 2, 2016, when the Thebes river gage reached a record 47.7 feet –14.7 feet above flood stage. As of Jan. 5, the farmland, homes, and roads were still under floodwaters.”

Olson says climate scientists predict a continued pattern of extreme rainfall events in the upper Mississippi River region. “This suggests that unexpected above average rainfall events in the Ohio and Mississippi River basins will continue to increase the frequency of extreme flooding events on these Great Rivers.”

“Missouri Ozark Plateau Headwaters Diversion engineering feat” was written by Kenneth R. Olson, Lois Wright Morton, and David Speidel. It is published in the Journal of Soil and Water Conservation. Olson is a researcher in the Department of Natural Resources and Environmental Sciences in the College of Agricultural, Consumer and Environmental Sciences at the University of Illinois.

The full text of the paper is available at http://www.jswconline.org/content/71/1/13A.full.pdf+html.

Funding was provided by the North-Central Regional Project No. NCERA-3 Soil Survey, the University of Illinois College of Agricultural, Consumer, and Environmental Sciences, Iowa State University, and the National Great River Research and Education Center.

 

 

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