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Tuesday, September 30, 2014

Grain Profitability 2014 and Beyond: How Bad Does it Look?

By Greg Halich, University of Kentucky Department of Agricultural Economics
Economic & Policy Update

The grain markets have dropped dramatically in the last 12 months, and the resulting effect on profitability may not be fully understood by farmers, landowners, and lenders. Figure 1 shows the December 2014 Futures contract from 2011 to 2014. Note that before early fall of 2013, this contract was trading mostly between $5-6/bu. This was the expected price for corn that most farmers were banking on during this time period. The current price for this contract is around $3.30/bu, or about $2/bu lower than the average contract price in 2011-2013. The price drop for soybeans (not shown) has been similar, coming down about $3/bu from its average in 2011-2013.The cash price for fall delivery has fallen under important psychological barriers in a number of locations: $3/bu for corn and $10/bu for soybeans.

Schwenke on Corn Prices, Food Prices and Opportunities

Russel Schwenke, KyCorn President
As the corn supply continues to grow, prices continue to drop. According to an AgriVisor analyst, the price of corn has dropped so much that an ounce of gold can now buy more than 370 bushels of corn, the most since 1975. So it goes with the laws of supply and demand. While many of us in grain production obviously see below breakeven prices as a detriment to our farm enterprises, this may provide us an opportunity to build our customer base. First, however, we must set the record straight about food vs. fuel.

Just two years ago, the corn industry was taking a real lashing from Mother Nature, corn buyers, and food retailers. The U.S. was suffering from one of the worst droughts in history. Corn prices rose dramatically, which is only beneficial if you have a crop to sell, and all fingers pointed toward ethanol as the culprit. Food processors and everyone else down the marketing chain pumped up their prices to follow suit and lobbied tirelessly, even still, to overturn the Renewable Fuels Standard.

Monday, September 29, 2014

Kentucky Corn Crop Update

According to the September 28 USDA-NASS report, 47% of the Kentucky corn crop has been harvested, compared to 12% nationally. Corn condition in Kentucky has also improved, with 66% reporting good to excellent. Average crop condition for the top 18 corn producing states is 74% good to excellent. 

Friday, September 26, 2014

USDA Releases Details on New Risk Management Programs

Corn growers this week thanked U.S. Agriculture Secretary Tom Vilsack for rolling out regulations related to the new revenue-based Agriculture Risk Coverage program and other risk management options designed to help growers facing sharp declines in commodity prices or significant production losses.

Vilsack announced the online tools which will help farmers select whether ARC or PLC coverage provides the best risk management option for their operations under future scenarios. USDA helped create online tools that allow farmers to enter information about their operation and see projections about what each program will mean for them under possible future scenarios. The new tools are now available at www.fsa.usda.gov/arc-plc.

Monday, September 22, 2014

Precision Technology Workshop & Conference in November

KyCorn/KySGGA Precision Ag Technology Data Management Seminars
November 19-20, 2014
Daviess County Extension Office, Owensboro, KY


Day one will focus on developing skills for typical data management (yield data, soil sampling data, prescription map development) throughout the growing season for those who are beginning to work with these data sets.

Day two will be geared more towards experienced users who are looking to get more knowledge out of their data including profitability analysis, crop performance within different zones (soil, terrain, etc.) within their fields.

Interested individuals may choose to attend the day best suited to their needs or both. To register, or for more information, contact Adam Andrews at adam@kycorn.org or 502-742-2036.


Ohio Valley Precision Agriculture Conference
November 21, 2014
Vanderburgh County 4-H Center, Evansville, IN


The University of Kentucky and Purdue University have coordinated a Precision Agriculture Conference for farmers and agri-business professionals on November 21 at the Vanderburgh County 4-H Center in Evansville, Indiana.

Topics include an overview of precision agriculture technologies, a data management hands-on software demonstration, strip verification, agriculture apps, site-specific input management, high-speed planters and multi-variety planting, utilizing data generated from specific management, telematics, and a drone demonstration. A panel discussion featuring Dr. Joe Luck, Dr. John Fulton, Jason Webster, Brian Arnall, and Davie Stephens is also on the agenda.

For more information or to pre-register, call the Daviess County Extension office at 270-685-8480.

View the agenda.

Thursday, September 18, 2014

Enter the Kentucky Extension Corn Yield Contest - Deadline November 14


Any Kentucky corn farmer is welcome to enter the Kentucky Corn Yield Contest, administered by University of Kentucky Extension and sponsored by KyCorn.


Submissions must be received be postmarked by November 14, 2014.

Winners will be recognized at the Kentucky Commodity Conference in Bowling Green, on January 16, 2015.

Harvest Forms Available for National Corn Yield Contest

With harvest underway, the National Corn Growers Association announced that online harvest forms for the 2014 National Corn Yield Contest are now available. Entrants are asked to report within seven days of their final yield check or by Nov. 21, whichever comes first.

Monday, September 15, 2014

Send Comments to EPA on WOTUS before October 20

Dear Kentucky corn growers,

As grain prices continue to trend downward, it is more important than ever to ask the EPA to provide clarity on their proposed definition of "Waters of the U.S." We simply cannot afford this regulatory uncertainty that drives up costs.

To begin to understand how far this proposed rule would extend, take a look at the map below. There won't be a farmer in Kentucky who isn't impacted. It's time to let EPA know just how seriously we are taking this regulatory overreach.

Agriculture has been and will continue to be EPA's best ally in responsible care for our environment. The proposal they have laid out fails to recognize that and creates a negative dynamic. It's time for EPA to stop talking about working with us and actually prove that's what they want to happen.

Producers must speak up. Use the NCGA's suggested letter or write your own. And while you are at it, let your congressman and senators know your concerns as well.

The House of Representatives have already passed legislation to stop implementation of the proposed rule. EPA needs to recognize that they must take a different approach. Working together does not mean regulating everything and saying, "don't worry, many ag practices will be exempt." We aren't buying it, and the lawsuits will fly over such ambiguous language.

Laura Knoth
Executive Director




Click here for a larger image.


Friday, September 12, 2014

Corn Forecast Grows, Prices Shrink

With the USDA Sept. 11 report estimating a record corn supply of 15.5 billion bushels this coming year, the National Corn Growers Association is closely tracking corn prices and fighting back against efforts that will reduce demand for the bountiful supply.

"With a record crop on the way and prices continually sinking, it is critical our federal policymakers do not cut into the ethanol standard, impose undue regulations or go slow on trade agreements," said NCGA President Martin Barbre. "America's farmers are doing our part, working hard and smart on their farms to bring in a good crop. It is critical for Washington to remove obstacles and clear a path now so we can sell America's biggest and most versatile crop at a good and fair price."

Wednesday, September 3, 2014

UK research explores irrigation questions

BY KATIE PRATT, UK Agricultural Communications

Interest in irrigation is gaining momentum among Kentucky grain farmers. This is especially true after another prolonged dry spell during a crucial corn growth stage in Western Kentucky squashed many hopes for a bin-busting year. Agronomists with the University of Kentucky continue to research ways to provide added moisture for the soil.

Chad Lee, agronomist with the UK College of Agriculture, Food and Environment, is in the second year of an irrigation study with farmers across the state. While the initial research in 2013 took place around Owensboro and Henderson, the study moved east this year with cooperating farmers in Hardin and Boone counties and with a plot at UK’s Spindletop Research Farm in Lexington.

Chad Lee, right, shows Bob Wade, left, and Richard Colvin the result of irrigation on the corn crop thus far.
PHOTO: Katie Pratt, UK Agricultural Communications
Glendale, Ky.
Irrigated acres have doubled in the past five years in Kentucky but still remain under 10 percent of the state’s total acreage. Lee’s 2014 study, funded by the Kentucky Corn Promotion Council and industry, focuses on corn’s response to irrigation, high seeding rates and different nitrogen rates. The ultimate goal is to find the most efficient and cost effective way for the state’s farmers to achieve better yields. UK graduate student Julie Baniszewski and undergraduate Lauren Settles are working with Lee on this study.

“One of our biggest limitations when it comes to higher (corn) populations is water,” Lee said. “If we have water to put on a field, then we can push corn populations higher and possibly get better yields.”

Hardin County farmer Bob Wade Jr. saw the value in irrigation and installed his first center pivots in fall 2011, right before the disastrous growing season of 2012. About 25 percent of his corn and soybeans are irrigated.

“The decision to invest in irrigation came about because of the high corn prices and the increase in land values and cash rental rates,” he said. “We were trying to figure out a way to add value to our existing ground versus buying or renting more land.”

While higher seeding rates seem like a logical way to boost yields, they may not always work in the farmers’ favor. Higher populations create a denser plant canopy, which favors disease development. It can also result in smaller stalks that are more prone to lodging.

Irrigation is not an option for every Kentucky farmer, as many lack water sources near their farmland. Those who do have access to water, however, may see the benefits of it, especially during hot, dry summers.

David Brannon is a crop scout for Wade and other farmers in the county. He’s noticed a big difference between irrigated and non-irrigated crops this year.

“You see such a tremendous response with irrigation,” he said. “A lot of times when Bob is making decisions about applying a fungicide or adding more units of nitrogen, he hopes to see a response from his investment that’s greater than the cost. With irrigation, especially in a year like this or in 2012, the responses are phenomenal.”

While this research is aimed at helping Kentucky farmers improve their efficiency and bottom lines, it could have worldwide impacts.

“If we look 10 to 20 years down the road, we will have to figure out how we can continue to feed the world on our existing acreage,” Lee said. “Irrigation is going to become more important in that overall concept of feeding people more efficiently and more sustainably.”