Chris Hurt Drought and Contracts Article

When I talked to Chris Hurt yesterday he told me he'd be coming out with an article on contract strategies during a short crop year. I had no idea it would be this fast or I might have held off on the post I put up yesterday. The link to his article is below.

Chris Hurt Drought & Contracts Article

Drought, Weather and Contracts

A couple of issues have started being talked about related to the drought which I want to mention. First is crop prices, particularly corn. While prices have rallied a bit over the past few days, the problem is that in this week's crop progress report, Iowa's corn crop is still rated 68% good to excellent, Minnesota's is 83% good to excellent and Nebraska's is 60% good to excellent. While Indiana and Illinois are reporting much worse conditions, you can see that across a good chunk of the corn belt things still look pretty good. I was going to wait until after Friday's grain stocks report to say anything because that could have a substantial impact but based purely on the crop conditions report a radical price increase in corn looks unlikely in the short term.

And those three states I mentioned have been getting rain. Below is a screenshot of today's (June 27, 2012) 7-day precipitation analysis from the National Weather service. You can see where the greens and yellows are.

Another issue that is starting to be talked about is filling contracts if there's a radical yield reduction, which is looking more likely every day. I am not a marketing guru so I'll refer you to this 2010 publication from the University of Maryland. An article on grain contracts starts on page 11.

Link to 2010 University of Maryland Drought Handbook for Grain/Crop Producers

I don't have a lot to add to this publication. Chris Hurt from Purdue is working on developing some articles on this and other drought-related issues and I'll get that information out once it's available. There are two things I want to emphasize from this publication. First is that the most important thing is to talk your buyer about what options are available. Second, the stronger your position, the less expensive it will probably be for you to make changes or buy out of your contract. The article illustrates this fairly well with the tables on pages 12 and 13. While it may be a bit early to start changing contracts, I don't think it's too early to start thinking about your options if this becomes necessary.

Drought Update 2

This isn't so much an update as a suggestion that folks take a look at a recent article by Bob Nielsen regarding current crop conditions. With temperatures forecast for over a hundred degrees on Thursday, I think we all know that the impact on corn that's received almost no rain and has just started tasselling could be devastating. At least the markets are starting to respond.

There was a second drought conference call this morning I wasn't able to participate in. If I hear anything new from this I'll make another post.

Bob Nielsen article.

Purdue Agronomy Drought Information Page

Bob Nielsen has recently updated a page which has links to drought-related information. The initial page looks pretty plain but once, for example, you click on the "Drought & row crops" link you'll find a lot of information.

Purdue Drought Information Page

Indiana Pesticide Clean Sweep Project

I just received notification of the dates and locations for the 2012 Indiana State Chemist's Clean Sweep Project. These are as follows:

• August 7: Vigo County Fairgrounds, Terre Haute, IN
• August 9, 2012: Dubois County Fairgrounds, Huntingburg, IN
• August 14: White County Fairgrounds, Reynolds, IN
• August 16: Henry County Fairgrounds, New Castle, IN

Times for all locations will be from 9 a.m. to 3 p.m.

The Clean Sweep Project is designed for public and private schools, golf courses, nurseries, farmers, ag dealers, municipalities and county government. Private individuals should work with their local Solid Waste District to dispose of unwanted pesticides.

Each participant may dispose of up to 250 lbs of pesticides free of charge. Amounts in excess of this will be charged a $2.00/lb fee. All participants should complete a Pesticide Clean Sweep Planning Form to the best of their ability and send it to Kevin Neal at the Indiana State Chemist's Office by July 30, 2012.

I'll leave Kevin's contact information out of this blog post as it is on the form. For the form and additional information you can go to the following link: Indiana Clean Sweep Project.

This is an excellent opportunity to dispose of excess, unwanted pesticides. If you can't access the planning form online, stop by the Extension Office for a copy.

Drought Update 1

I just finished listening in on a Purdue conference call addressing the dry conditions we've been having over the last month. To offer a summary:

Corn: According to Bob Nielsen while corn has been hurt some, this isn't critical in most fields yet. He believes that with good rains beginning in the next few days and continuing through the growing season we could still achieve trend yields. As a general statement covering the whole state he thinks the critical period this year will be during pollination from late June through the third week in July, a week or so earlier than usual. In Clinton County I think we're looking at the first two weeks in July. The afternoon leaf rolling we're seeing right now, while a symptom of stress, doesn't indicate a critical yield loss at this time.

Soybeans: Soybean specialist Shaun Casteel says that beans are mostly in a holding pattern right now but should be able to compensate if rains come. We all know that beans can recover fairly well from drought stress, so long as it rains at some point. If plants are severely stressed they may even begin to flower very early but even with flowering beans, if rain comes they will drop those flowers and resumed vegetative growth. Obviously, if they get all the way to setting pods due to this things change. For double crop beans Shaun recommends holding off seeding after wheat in hopes of receiving some moisture but if for some reason you absolutely have to get in the field and it's still dry, you should look at raising your seeding rate to account for some emergence problems which are likely to occur.

Pests: Christian Krupke from the Purdue Entomology Department discussed spider mites in soybeans. Spider mites are a pest we usually don't worry much about as a healthy plant outgrows damage but they can devastate plants which are basically holding as they are now. So far there haven't been many reports of this (I haven't heard of any here) but if the dry weather continues it's hard to believe this won't be a problem before long. Look for bronzing of leaves, beginning at field borders and think about doing some scouting. He has posted a Youtube video which shows how to scout for mites.

Also, if you have Soybean Cyst Nematode issues, this sort of year really brings these out. There's nothing to be done about it for this growing season but if you identify areas where you may have a problem, you can make some decisions about addressing it for next year. Look for plants that aren't growing well (nothing's growing well right now but these would be even worse) and are turning yellow. Damaged areas in a field are typically oval or circular in shape.

Meeting on Changes to IDEM Confined Feeding Rules

Indiana Farm Bureau, Indiana Ag Commodity groups and Purdue Extension are organizing a series of meetings to update producers on the changes to the Indiana Department of Environmental Management's (IDEM) Confined Feeding Rule. The programs will be held on June 19 in Decatur County, June 26 in Wells County and June 28 at the Southern Indiana Purdue Ag Center (SIPAC) in Dubois County.

I will be hosting a live videoconference of the Tuesday, June 26 meeting from 1-4 p.m. at the Clinton County Extension Office, 1111 South Jackson Street in Frankfort. I don't have a lot of details at this time however I'm sure I'll have copies of program materials to hand out so I'd appreciate you letting me know if you're planning to attend. You can call our office at 765-659-6380 or 765-296-3511 or you can e-mail me.

The complete program agenda is listed below:

CFO and CAFO NPDES Compliance Education Meetings

Welcome – Greg Slipher

Fact sheets & Comparison document

Rule Development Process – Andy Tauer

·         Timeline

·         Ag workgroup, member input, submission of comments

·         Negotiated compromise where possible but some issues unable to change

o   Groundwater monitoring requirements

o   Phosphorus soil test limits

o   Restrictions on application to frozen or snow covered ground

CAFO NPDES Rule Requirements – Josh Trenary

·         Only actual discharges require an NPDES permit

o   Ongoing discharges, such as non-contact cooling water from dairies 

o   Operations with a history of accidental discharges may also be required to maintain their NPDES permit if they can’t show that the cause of the discharge has been remedied

·         Transition to CFO

·         General permits going away

·         Nutrient Management Plans requirements

o   Public notice and comment

o   Substantial changes

·         No application to frozen or snow covered ground unless allowed under permit

·         Steps must be taken to prevent contamination to stormwater

·         Digesters, etc

CFO Rule Requirements – Justin Schneider

·         Alternative design or compliance approach

·         Manure application will be based upon both phosphorus and nitrogen limits

o   Applications to fields over 200 ppm of P is prohibited for most large CAFOs and all newly constructed operations

o   Existing CFOs and large CAFOs constructed prior to February 13, 2003 have seven years to phase-in application restrictions to 200 ppm of P

o   Some allowances made for nitrogen loss estimates

·         Application to frozen or snow covered ground is restricted

o   Large CAFOs may not apply to frozen or snow covered ground

o   Emergency applications with prior approval allowed for CFOs

o   CFOs with one-hundred twenty days or less approved storage can seek approval to apply

·         Ground water monitoring may be required

·         Storm water management must be implemented – Josh Trenary

·         A professional engineer must certify the construction of all liquid manure storage structures – Mike Dunn

·         Construction standards and technical resources – Mike Dunn

·         How to use forms – Record keeping – Tamilee Nennich/Mike Dunn

Lawsuit Related Issues – Justin Schneider

·         Permit appeals

·         Nuisance suits

Outreach prior to decision to construct or expand – Greg Slipher

Q & A - Presenters