Purdue ANR Extension Weekly Update: Keeping Clinton County Informed

Transcription

1 Reese, Brittiney N From: Sent: To: Subject: Importance: Reese, Brittiney N Wednesday, May 04, :58 AM Reese, Brittiney N Purdue ANR Extension Weekly Update: Keeping Clinton County Informed High May 5th, 2016 Welcome to the Agriculture and Natural Resources Weekly Update: Keeping Clinton County Informed. In this addition, you will find: 1. Save the Date: What is Happening in Modern Agriculture 2. Beginning Farmer Tours and Workshops Silverthorn Farm, Rossville June 25th 3. Indiana Corn Marketing Council (ICMC) Board of Directors Candidate Petitions 4. Sensitivity Analysis of New Corn and Soybean Pricing Models 5. The Farm Safety Net: The Good and Not So Good 6. Rootworms Likely Unaffected by Mild Winter 7. Managing Fusarium Head Blight (Scab) in Wheat 8. Average Temperature Departure from Mean and Soil Temperature 9. Accumulated Precipitation April 26 th May 2nd Pesticide Applicator Training CORE and Category Schedule Weekly Updates will be distributed each week. To request an event to be distributed in the Weekly Update, please submit the request to brittreese@purdue.edu by the Friday before the Update. 1. Save the Date: What is Happening in Modern Agriculture Save the date for June 21 st for What is Happening in Modern Agriculture. Topics include: Browns Wonder Sugar Creek Watershed Planning Project Overview, Environmental Policy and Ag. Economics, Drone Use in Nutrient Management, and more. More information to come. PARP credit pending. 2. Beginning Farmer Tours and Workshops Silverthorn Farm, Rossville June 25th Join us Saturday, June 25, near Rossville, Indiana, for a tour of Silverthorn Farm. The farm uses organic practices to produce a wide variety of fruits and vegetables and pastured pork. The tour will include a session on working with restaurants. 1

2 The panel discussion will begin at 1 p.m. (all times Eastern), and the tour will conclude around 5 p.m. Dinner and conversation will follow the tour. Register here: Purdue's Beginning Farmer and Rancher program is offering new and aspiring farmers an opportunity to visit 10 Indiana agribusinesses and learn from Purdue Extension educators, producers and other experts about topics ranging from organic produce to aquaponics. The series of tours runs from May through October and includes stops throughout the state. For more tours visit: offers 10 beginning farmer toursstatewide.html 3. Indiana Corn Marketing Council (ICMC) Board of Directors Candidate Petitions Opportunities for You to Serve. The Indiana Corn Marketing Council (ICMC) is seeking Indiana corn producers interested in serving on its board of directors. The ICMC manages corn checkoff investments and determines promotional, educational and research activities that can strengthen Indiana s corn industry. The ICMC board includes 17 voting farmer directors. Five seats in Districts 1, 4, 7 and two At Large will be filled through the ICMC s Annual Elections in August District 1. The counties of Lake, Porter, LaPorte, Starke, Pulaski, Jasper, White, Benton, and Newton. District 4. The counties include Warren, Tippecanoe, Montgomery, Putnam, Owen, Clay, Vigo, Parke, Vermillion, and Fountain. District 7. The counties of Sullivan, Greene, Daviess, Martin, Knox, Dubois, Pike, Gibson, Warrick, Spencer, Vanderburgh, and Posey. At Large. The two open At Large seats represent the entire state of Indiana. Candidates for the ICMC board of directors are required to be registered voters, at least 18 years of age, and corn producers in Indiana. To be a candidate, you need to fill out and sign a petition form. It is available at County Extension offices, at or by calling the Indiana Corn office at Petitions must be returned to the ICMC office and postmarked before June 30, This is an exciting time to become more involved with a dynamic organization as the Indiana Corn Marketing Council continues to move forward to responsibly invest state checkoff in programs that will improve the bottom line for Indiana corn producers. The focus for our organization going forward will be on Grain Marketing, Ethanol, Production and Environment Research, Public Affairs, Livestock, and New Uses. Please call the corn office for additional information,

3 4. Sensitivity Analysis of New Corn and Soybean Pricing Models Scott Irwin and Darrel Good University of Illinois In the farmdoc daily article of April 6, 2016 we offered a new specification for the relationship between the marketing year ending stocks to use ratio and the marketing year average farm price for corn and soybeans. We used the models in a farmdoc daily article of April 13, 2016 to make price forecasts for the marketing year based on alternative corn and soybean balance sheet projections. We also used the models in a farmdoc daily article of April 22, 2016 to make projections of "new era" average prices and found that these were very consistent with earlier projections based on a simpler methodology. Because the new stocks and price models are based on a stronger economic foundation, we were more confident in these results. One issue we have not investigated is the sensitivity of the new models and forecasting results to alternative functional forms. Since the relationship between price and the stocks to use ratio is presumed to be inherently non linear, it is important to determine the degree of sensitivity to alternative ways of modeling this non linearity. In this article, we first review our benchmark reciprocal regression models for corn and soybeans and then estimate linear logarithmic and logarithmic logarithmic ("double log") specifications for comparison. Finally, we compare price forecasts and new era average price projections for the three alternative specifications to quantify the degree of sensitivity. Review of New Ending Stocks and Price Models The marketing year ending stocks to use ratio is a widely used indicator of the supply and demand "tightness" of corn and soybean market conditions and is very commonly used to project prices. Tomek and Kaiser (2014, p. 378) classify price and ending stocks to use regression models as "price determination equations" rather than formal structural models of supply and demand. They point out the complexity of realistic structural models that have separate equations for supply and the various demand categories. As a result, analysts often turn to, "...graphs, tables, and simple regression models of price determination to summarize information." They also helpfully observe that, "The research objective may be to provide a forecasting tool, but more generally, the analysis helps the researcher depict current economic conditions relative to the historical evidence." The bottom line is that these types of models, while useful in forecasting, cannot be directly derived (at least easily) from underlying structural and mathematical models of supply and demand. In a recent article (farmdoc daily, April 6, 2016), we estimated a base reciprocal regression model of the U.S farm price of corn and soybeans and the ending stocks to use ratio for the period through , skipped as a transition year, and then estimated relationships after that are exactly parallel to the base period model. We selected the reciprocal functional form because it is simple and imposes the presumed non linear relationship between price and the stocks to use ratio. As Tomek and Kaiser (2014, p. 379) note, "This accommodates the idea that, as current stocks approach zero (but cannot be less than zero), price must necessarily rise sharply to ration these stocks among competing demands." In our new model, we assumed the slope is unchanged between the base period and relationships after , but the intercept varies in the latter period to reflect demand shifts that occurred after We further grouped the years after into four demand scenarios for corn (weak, moderate 1, moderate 2, and strong) and three demand scenarios for soybeans (weak, moderate, and strong). Read More at: analysis of new corn soybean pricingmodels.html 3

4 5. The Farm Safety Net: The Good and Not So Good Michael Boehlje and Michael Langemeier Purdue University USDA recently announced that they project net farm income to decline for a third straight year in 2016, and is expected to be the lowest since 2002 (USDA ERS, 2016). Government payments are to rise to $13.9 billion which if realized would represent approximately 25 percent of net farm income. U.S. net farm income has declined 56 percent from its recent peak of $123.3 billion in Turning to crop income in Indiana, projections of earnings per acre for 2016 (assuming fully loaded costs) are $135 for corn and $88 for soybeans assuming yields of 165 for corn and 50 for soybeans and expected prices of $3.60 for corn and $8.90 for soybeans, respectively (Dobbins et al., 2016). These projections include farm program payments and participation in the crop insurance program. A few years ago, the crop insurance guarantees were high enough to cover most, and in some years, all total costs, effectively mitigating downside risk. As shown by Schnitkey (2016), in 2016, crop insurance guarantees are considerably below total costs of production for corn and soybeans. Though important to revenue in 2016, farm program payments are unlikely to make up the shortfall represented by the decline of the crop insurance guarantee. This article will illustrate the ability of the farm safety net in the form of crop insurance and farm program payments to buffer downside risk. The Public Sector Safety Net The public sector safety net that is now in place to buffer crop farmers from the economic downturn has two dominant components (not including disaster assistance and other programs such as low interest emergency loans) payments received under the farm program (ARC CO, ARC I, or PLC), and subsidized crop insurance. The majority of Midwest corn and soybean farmers chose the Agricultural Revenue Coverage County Option (ARC CO) farm program option which in essence provides a payment per base acre of corn and soybeans that depends on the level of yields and prices details of the computations are provided in Keeney (2014). The crop insurance program provides an indemnity payment to farmers if prices and/or yields decline, depending on the program and coverage level chosen. The most common program choice is revenue protection (RP) which buffers gross revenue from price and/or yield reductions coverage level choices range from 50 to 85 percent of market revenue. When the crop insurance and farm programs were initiated, it was anticipated that they would provide an effective safety net for farmers who might encounter significant price and/or yield reductions due to changing market conditions or weather/disease events. But crop insurance indemnities adjust to market conditions over time. If prices systematically decline, the potential indemnity also declines. Farm program payments under the ARC CO program are capped, and they decline as market prices increase. So in contrast to the most recent direct payment program that resulted in a pre specified amount of income and cash irrespective of market prices, under the current program higher prices may result in more income from the market and less from the government in many circumstances (a "dead zone"). Also, it is important to note that cash payments from the ARC CO program are not received until approximately a year after the crop is harvested, so they are not available to meet cash flow requirements in the year of actual production. Given these characteristics of the safety net, how effective will it be in buffering the financial stress that crop farmers are currently facing? The numerical analyses below provide insight into the answer to that question. To Read More Visit: farm safety net the good and not sogood.html 6. Rootworms Likely Unaffected by Mild Winter 4

5 Christian Krupke Purdue University Rootworm eggs are extremely cold tolerant. Indiana winters are generally not severe enough to cause significant mortality. Don t change your rootworm management plan in view of mild winter! After every mild or harsh winter, we are asked to speculate on what it means for insect pests. For many pests, winter temperatures are an important predictor of populations the following year. But the western corn rootworm is not one of them. The eggs are exceptionally hardy, and can withstand prolonged (10 days straight) exposure to soil temps well below freezing (14 o F) before significant mortality occurs. This very rarely happens in Indiana. As a result, winter kills are not a factor in rootworm populations. By the same logic, warm winters are not of great benefit to the populations. In fact, there may be a benefit to warm winters in rootworm control. A key source of egg mortality is predation by other insects in the soil, including ground beetles, many of which are far less tolerant of cold temperatures. One weather factor that does have a large potential to affect populations is spring rainfall. See the graph below rootworm emergence times vary slightly and are driven by spring heat unit accumulations, but generally occur in late May and early June. The larvae must find corn roots within 24 h of emergence, or they will starve to death. A spring rain that results in saturated soils during this time, although not desired for crops, does have the silver lining in that it drowns many young larvae and prevents many more from finding host plants the larvae can t smell their way to corn roots without air pockets in the soil. And they subsequently starve to death. Although it s not the headliner it used to be, the western corn rootworm is still the key insect pest of corn most everywhere, including here in Indiana. Bt corn hybrids targeting this pest have been highly effective in allowing producers to manage rootworms effectively and without need for insecticide boxes or liquid application systems. The changes in planting equipment have reflected these trends. In fact, according to the USDA, 81% of all corn planted in the US last year was Bt corn ( with the percentage likely being closer to 100% in Indiana. This approach is still effective, and no additional insecticides are required or recommended. Most producers have used Bt corn effectively for over a decade of rootworm control, and can safely continue to do so. Planting the refuge remains as important as ever, however, given that reports of confirmed resistance in states to the west continue to trickle in. However, Indiana has not joined that group likely because of our extensive crop rotation with soybeans, which remains an effective tool for population reduction. 5

6 7. Managing Fusarium Head Blight (Scab) in Wheat Kiersten Wise Purdue University Wheat growth stages vary greatly across the state, but as wheat approaches flowering in southern Indiana it is important to consider the risk for Fusarium head blight (FHB), or scab, development. The fungus that causes FHB, Fusarium graminearium, infects wheat during flowering, beginning at FGS Symptoms appear later in the season and include bleached spikelets on the head, and small or shriveled grain kernels, commonly called tombstones. The fungus also produces mycotoxins, such as deoxynivalenol, or DON, which can accumulate in the infected grain. Rainy, warm, and humid weather conditions favor disease development. It will be critical to watch the FHB risk assessment tool to assess the risk of Fusarium head blight in Indiana as wheat enters flowering over the next few weeks across the state. This model can be accessed through the following link: This model uses weather information including temperature, rainfall, and relative humidity to calculate risk levels for FHB. The model has been updated and improved for 2016, and now also includes an option to predict risk based on variety susceptibility to FHB. Keep in mind that the model does not provide a guaranteed prediction for whether or not FHB will occur in individual fields, and additional factors such as the local weather forecast, crop conditions, and Extension commentary should be considered when assessing the level of risk. Farmers and crop advisors can sign up for alerts courtesy of the U.S. Wheat and Barley Scab Initiative. Alerts can be sent to a cell phone or , and will be sent out as the risk map updates risk of scab in Indiana. To sign up for alerts, visit: If varieties susceptible to FHB have been planted, or farmers are worried about the risk of FHB development, they may want to consider a fungicide application at early flowering for suppression of FHB. Indiana research indicates that applications of the fungicides Prosaro and Caramba are most effective at managing FHB if they are applied at early flowering. Other products are available, but may not be as effective. Fungicides that have a strobilurin mode of action are not labeled for Fusarium head blight suppression. To accurately growth stage wheat and determine when wheat is beginning to flower, please see Purdue Extension publication ID 422 Managing Wheat by Growth Stage. The foliar disease stripe rust has been observed in fields throughout the state, but is still at relatively low levels in most of Indiana. Fungicides applied at flowering for FHB suppression will also provide some level of protection from foliar disease on the flag leaf. If farmers are considering a foliar fungicide application for stripe rust through boot stage, they should keep in mind that applications made prior to flowering will NOT suppress FHB or the associated mycotoxin deoxynivalenol, or DON. If the risk for FHB increases after foliar fungicide applications occur, it may be necessary to make another application at flowering for FHB suppression. 6

7 8. Average Temperature Departure from Mean and Soil Temperature 9. Accumulated Precipitation April 26 th May 2nd 7

8 Pesticide Applicator Training CORE and Category Schedule To register visit (CW 2016 C) May 4, 2016 CORE William Daniel Turf Center (CW 2016 C) June 8, 2016 CORE William Daniel Turf Center (CW 2016 C) July 7, 2016 CORE William Daniel Turf Center (CW 2016 C) September 15, 2016 CORE William Daniel Turf Center (CW ) September 21, 2016 Category 12 William Daniel Turf Center WDI (CW 2016 C) October 4, 2016 CORE William Daniel Turf Center (CW 2016 C) November 9, 2016 CORE William Daniel Turf Center Britt Reese Agriculture and Natural Resource Educator Purdue Extension Clinton County, Indiana 1111 S. Jackson St. Frankfort, IN

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