Hogs and Corn Price Recovery

Chris Hurt has published an article in the University of Illinois' Farm Doc Daily discussing the prospects for future hog expansion in response to the reduced corn prices which I found very interesting. There are some negatives which may impact the industry's ability to increase the breeding herd, particularly whether porcine epidemic diarrhea virus (PEDv) becomes widespread. In virgin herds this disease has been devastating to young pigs and could result in a delay in national swine herd growth. However the article is positive for long-term corn price recovery.

The same market factors which will influence swine numbers should result in an increase in the cattle herd though it will take longer for this to have an impact on corn prices. A link to Chris's article is below.

Hogs Provide Near $7 per Bushel Corn Value

Land Lease Program II

A little while back I posted about a Land Lease program, "Farmland Leases: Finding Balance in Farmland Lease Contracts." If you couldn't make the September 9 program held in Logansport, this will be held again on Thursday, December 5 in Danville, Indiana.

I attended the September program and it had very good coverage of basic principles. For additional information, see this Ag Answers Story.

Sheep and Goat Webinar

The Purdue University Cooperative Extension Service will be offering a two-part webinar program, "Forages and Health for Sheep and Goats." The program will be held on Tuesday evenings, December 3 and 10 from 7-9 p.m. at various locations in Indiana. A link to a program flyer with additional information, including how to register, is included below.

Featured speakers include:

• Terry Hutchens, University of Kentucky Goat Specialist
• Greg Brann, Tennessee NRCS Grazing and Soil health Specialist
• Patty Scharko, Clemson University Veterinarian
• David Notter, Virginia Tech University Professor

Sheep and Goat Program Flyer

Cover Crops and Corn Stover Removal

There isn't a lot of corn stover taken off Clinton County fields but there is some. Today I was on a conference call that included Purdue Ag Economist Wally Tyner. Wally has been doing some work looking at corn stover markets and economics and I thought I'd share a bit of this with you.

Dr. Tyner has been evaluating the economics of baling and selling corn stover. I could make a long post out of this but instead I'll hit the highlights and provide a link which you can look over for additional information. The first key point is that in his research he found that around $60 a ton is where it seems to make sense for most producers to sell stover from off the field. Now there are some variables with this and one of the most significant is the distance to market as this substantially impacts profitability. In his research Dr. Tyner is using a removal rate of 33% of all stover produced, about 1.5 tons/acre.

Stover bale. Photo: Greg Roth, Penn State University.

Where things get interesting is when cover crops are factored into the equation. By using cover crops, an additional 1.8 tons/acre of stover can be removed without negative impacts on areas such as soil productivity and erosion. As the cost to plant cover crops is around $40/acre for most mixes, including cover crops with stover removal appears to pay off significantly.

These figures are general and each farmer should run his or her own numbers but it is interesting. If you would like additional information, Purdue Extension Publication RE-7-W, Synergies Between Cover Crops and Corn Stover Removal has much more information including details on assessments of agronomic benefits of various systems as well as the economics. I've included a link to it below.

Synergies Between Cover Crops and Corn Stover Removal

2014 Purdue Crop Cost and Return Guide Now Available

The Purdue Center for Commercial Agriculture has released the 2014 Purdue Crop Cost and Return Guide, based on September price and cost estimates. This document typically is updated from time to time through the fall but this is a first look at what they expect. The most significant numbers from these are that Purdue is projecting a substantial reduction in the profitability of growing corn next year. For example, rotational corn return has dropped from $660 in 2013 to $491 in 2014 on high productivity soils and from $483 to $345 on average productivity ground. Soybean returns have also dropped but less drastically.

This is important information both as you start planning what to plant next year and in case any of you are involved in renegotiating leases. Keep in mind as you look at these that these are not overall farm budgets, just projected numbers for one aspect of a farm operation; getting a crop planted, harvested and sold. There are substantial ownership and overhead costs not accounted for. In this guide, you will not have paid yourself or included family living expenses. Land costs are not included. Costs of machinery ownership are not included.

This guide is handy for looking at trends and projections but to really assess your operation, you should have a budget for your farm using your numbers.

I'm including three links; to the article discussing the 2014 guide, to the 2014 guide, and to the 2013 guide if you want to use it for comparison.

Purdue Article on 2014 Guide

2014 Guide

2013 Guide

Input Costs Down for 2014?

I want to share a news release from the Purdue Ag Economics Department. In it, Alan Miller discusses the prospect for reduced input costs for the 2014 crop year. As has been the trend, with lower commodity prices comes some reduction of inputs. In particular fertilizer costs are down and Miller believes these may continue to drop. Fuel costs should also be down so long as the Middle East is relatively calm.

Of course this isn't true for everything. Pesticide and seed costs look to stay flat or slightly increase and the latest Purdue Cash Rent and Land Values Survey shows no sign of a reduction in the cost of land in the short term.

See the following link for the complete article: 2013 A Transition Year for Grain Farmers

Forage Supply Strategies

This year looks to be better from a forage supply standpoint than last year. Conditions were good for first and second cuttings of hay and there's been some decent third cuttings out there. Still, the late season dryness on top of last year's season-long drought may cause some shortages.

Last year Purdue Extension Agronomist Keith Johnson and Beef Specialist Ron Lemenager put together a paper, "Beef Management Practices When Forages are in Short Supply." It's fairly lengthy and detailed and those of you who raise other livestock or graze horses can adapt it for your species. Here's the link: 2012 Forage Supply Publication

I'm not going to go through this point-by-point but want to stress a couple of things I feel are particularly important, effective, and relatively simple to implement for most livestock producers. At least these are the ones I would have found simplest back when I raised cattle. I'm not going to talk about some of the more obvious ones such as taking a forage inventory, finding other forage sources such as grazing harvested corn fields, or reducing livestock numbers.

Do not leave livestock on pasture beyond the normal date when you would remove them. Point number 2 in the publication touches on the reasons for this. You may be desperately short of forage; even so, one of the worst management practices you can engage in is grazing animals through the fall and taking off all of the forage then. The reason is based on the life cycle of forages in pasture. One of the main reasons we take livestock off forage for the last couple of months of the growing season is to allow growing foliage to recharge or restore the root system of the pasture. If livestock are allowed to graze during this period the root system will be significantly weakened resulting in poorer pasture next year, and in subsequent years. If you absolutely feel you need to get a couple of extra months on pasture in order to make your forage supplies last, pull your animals off it in the fall, wait for it to go dormant(usually late November to early December) and then put animals back on. This still isn't good but at least the root system has had a chance to restore itself and it won't be damaged by trying to grow additional forage. If you do this you should also be careful to pull animals from it if it's wet to minimize physical damage. Keep in mind that this is far from a recommended practice and will likely require some additional management in following years - it's just less bad than leaving livestock on pasture through the fall. If possible, only leave animals on until they graze it down to about 4" in height. And obviously, don't even think about doing this if you have sorghum or sudangrass due to the Prussic Acid/cyanide poisoning risk.

Restrict access to forage. Point number 11 in the linked publication discusses this in more detail. Basically, cattle get all the forage they need to maintain themselves by having access to hay or silage for 6-8 hours in a day, particularly once they become accustomed to the schedule. Most of the rest of the time they spend trampling it into the ground or just chewing on it/playing with it because they're bored. Restricting access can reduce forage use by up to 20%.

Early weaning of calves. When we look at calf growth, it is less efficient for a cow to convert feed to milk and the calf to then convert milk to growth/gain, than for calves to directly convert feed to growth. If forage supplies are short, weaning calves early can save as much as 30% on forage supplies. Point number 4 in the publication discusses this in much more detail. The same principle applies to creep feeding calves, discussed in point 3. If cows did not breed back, this also gives you the chance to cull open cows earlier.