Focus on Soybean Oil

The sharp increase in soybean prices that began in June 2012 and peaked in early September 2012 was carried more by soybean meal prices than by soybean oil prices. From the June low to the September peak, January 2013 soybean futures increased by 43 percent, January soybean meal futures increased by 51 percent, and January soybean oil futures gained 20 percent. Soybean oil futures are now back to the level of early June, while soybean futures are 13 percent above the early June level and soybean meal futures are 21 percent higher.

For the 2012-13 marketing year, the USDA expects soybean oil prices to remain weak relative to soybean meal prices. The price of crude oil at Decatur, Illinois is expected to average 2.26 times the price (per pound) of 48 percent protein meal at Decatur. The ratio of average prices was 3.08 during the 2010-11 marketing year and 2.64 last year. In nominal terms, the average price of soybean oil is projected in a range of $0.51 to $0.55 per pound, compared to an average of $0.519 last year and $0.532 during the 2010-11 marketing year. On the other hand, the average prices of soybeans and soybean meal are projected to be substantially above the averages of the previous two years.  <Read More>

Upcoming Event - Feeding Sheep and Goats Webinar Series

Purdue Extension will present a webinar sereis to educate goat and sheep farmers on feeding practices following the drought, managing forage shortages and the production of commercial versus show goats.

The webinars will run 6:00-8:00 PM (CST) on Nov. 28 and Dec. 5 at various Extension county offices in Indiana, Ohio and Kentucky.

Goats and sheep are small ruminants, so they rely on forage-heavy diets. Indiana's extreme heat and drought this spring and summer greatly reduced forage supplies. Those challenges, combined with a growing interest in sheep and goat production, are the impetus behind the webinars.

"We'll be talking about what this year's drought did to pastures and the lack of feed for farmers," said Mark Kepler, Purdue Extension educator in Fulton County and webinar organizer. "More and more farmers are starting to raise goats and sheep because they require less space and maintenance than larger farm animals. We're gearing this program toward those who are novice or beginners, but the information is really important to all sheep and goat producers."

The Nov. 28 session will cover dealing with forage shortages and feeding sheep and goats following drought.  

The Dec. 5 session will cover pasture management for 2013 and differences between raising show goats and commercial goats. 

Current Purdue Extension county offices signed up to host the webinars are Brown, Dubois, Elkhart, Fulton, Hancock, Harrison, Hendricks, Huntington, Jasper, Jefferson, Kosciusko, LaPorte, Montgomery, Morgan, Owen, Spencer, Switzerland, Vermillion and Warrick.

The Spencer County location will be held at the Spencer County 4-H Fairgrounds in Chrisney, IN. The series is free-of-charge but pre-registration is requested by November 26. To register, contact Purdue Extension-Spencer County at (812) 649-6022 or nheld@purdue.edu. 

More information about the webinar series is available on the Purdue Extension-Spencer County website at www.extension.purdue.edu/spencer.

Upcoming Event - Ohio Valley Precision Ag Conference

Purdue Extension and University of Kentucky Extension will jointly host a Nov. 29 conference to teach farmers more about how precision agriculture systems could improve their bottom lines.

The Ohio Valley Precision Ag Conference will run from 9 a.m. to 2:30 p.m. (CST) at the Vanderburgh County 4-H Fairgrounds, 201 E. Boonville-New Harmony Road, Evansville. It will cover data management, implement systems technologies, and systems calibration and setup. It also will feature local precision agriculture companies and projects.

 

"The variety of technologies that farmers and industry representatives have to evaluate for on-farm use is staggering," said Kenneth Eck, Purdue Extension educator in Dubois County. "This conference will give folks a better understanding of what systems are available, how emerging technologies might mesh with producers' current systems, and how both farmers and agribusinesses can manage farm data for improved economic and environmental results."

 

The conference will start with a presentation titled "Data Utilization and Management with Precision Tools" by Betsy Bower and Troy Walker of Ceres Solutions.

 

Morning breakout sessions are:

• "RTK Accuracy" by Tim Stombaugh, associate professor of biosystems and agricultural engineering at the University of Kentucky.
• "Calibration Basics - John Deere" by Ben Carlisle, Wright-Stemle John Deere.
• "Variable Rate Seeding - Can You Do It and Do You Need To?" by Bob Nielsen, Purdue     Extension agronomist.

Afternoon breakout sessions are:

• A repeat of Stombaugh's "RTK Accuracy."
• "Calibration Basics – Trimble/Case IH" by Kevin Roy and Kristina Nadin, Hopf Equipment Case IH.
• "Economics of Investing or Upgrading: Old vs. New" by Greg Halich, associate Extension professor of agricultural economics at the University of Kentucky.

The conference also will feature a farmer panel discussion titled "What Do We Do With the Data and How is It Managed?" The keynote presentation will be "Precision Planting" by Gregg Sauder of Precision Planting Inc.

 

"This is the first time we've pulled together a program with so much of our expertise in one place," Eck said.

 

Conference registration is free, but reservations are required by Nov. 19. Participants can register online at http://tinyurl.com/pukyregister or by contacting any of the sponsoring Purdue Extension or University of Kentucky Extension county offices. Those counties in Indiana are Daviess, Dubois, Knox, Perry, Pike, Posey, Spencer, Vanderburgh and Warrick. In Kentucky they are Daviess, Henderson, McLean, Ohio, Union and Webster.

 

A flyer for the program is available here.

Weekly Outlook - Corn and Soybean Prices Following Short-crop Pattern

The USDA’s November forecasts of the size of the 2012 U.S. corn and soybean crops were larger than expected, particularly for soybeans. As a result, the general downtrend in soybean prices since mid-September has accelerated, with January futures now at the lowest level since June 29. Corn prices have moved into the lower half of the trading range that has been in place since mid-September and December futures are at the lowest level since September 28. So far, prices seem to be following the classic pattern associated with small crops –peaking early in the marketing year and then declining as the year progresses.

The futures market reflects expectations that prices will continue to decline, especially into the 2013-14 marketing year. The expected rebound in South American soybean production, Argentine corn production, and U.S. corn and soybean production in 2013 all contribute to the expectation of lower prices. If those crops are as large as generally expected, prices will be even lower than currently reflected in the futures market. The USDA is forecasting record South American production of both crops. If planted acreage of corn in the U.S. in 2013 is at the same level as in 2012 and the U.S. average yield is near a trend value of 162.5 bushels, the crop would total 14.6 billion bushels, about 1.5 billion larger than the record crop and record consumption of the 2009-10 marketing year. <Read More> 

Consider Legalities when Terminating, Renegotiating Farmland Leases

Jennifer Stewart, Purdue Agricultural Communications

 

As the end of grain harvest draws near, many landlords and tenants will be renegotiating or terminating farmland lease agreements - a process full of legal requirements, a Purdue Extension agricultural economist warns.

 

First and foremost, lease agreements and terminations should be in writing. While oral farmland lease agreements are as legal as written leases in Indiana, Gerry Harrison said some details of the oral agreement might be disputed.

 

"Oral leases should be avoided," he said. "There are many problems with oral leases, including what is or was the actual agreement."

 

Earlier this year, the Indiana Court of Appeals ruled that a lease termination is required to be in writing, which protects both landlord and tenant.

 

"It could be very risky to rely on an oral notice to terminate a lease," Harrison said. "Further, if a new leasing arrangement is needed with the existing tenant and a lease agreement does not come, the tenant, without a proper notice to quit, likely has the land for the coming year at the same rent or arrangement as the current year."

 

Indiana law also requires that a notice to quit, or terminate, a lease needs to be delivered by a landlord or tenant in a timely manner. For a lease of at least a year, law requires notice to be delivered three months before the end of the lease year.

 

If a lease doesn't specify the lease-year end, Harrison said it's customary in Indiana to consider the end of February of the coming crop year as the lease-year end.

 

"Farming is a continuous process. If there is to be a new tenant, the current tenant needs to plan for the transition, and the new tenant would likely want to start preparations for the coming crop year during the late summer or the fall of a current crop year," he said.

 

For landlords and tenants who are renegotiating lease agreements, Harrison said it's important for both parties to have an understanding of the farmland's rental value.

 

"Landlords must recognize the difference in the rental value of varying farmland parcels as to size in acres and quality of the land," he said. "While crop farming has been quite profitable in recent years, an oddly shaped 30 acres is not likely to be as desirable to a tenant as a very fertile 300-acre parcel."

Some lease renegotiations might require professional help to draft an appropriate rental agreement.

Harrison prepared an in-depth look at farmland lease renegotiations and terminations titled "Indiana Farmland Leases - Key Considerations and Laws." It's available by emailing him at harrisog@purdue.edu.

 

More information about farmland leases also is available in Harrison's free Purdue ExtensionPublication, "Legal Aspects of Indiana Farmland Leases and Federal Tax Considerations," which is available for download at http://www.extension.purdue.edu/extmedia/EC/EC-713.pdf

Weekly Outlook - Monitoring Corn Consumption

The price of corn, like the price of other commodities, is influenced by a wide array of factors that reflect a combination of current and expected supply and consumption. The market continually judges whether the price of corn is adequate to ration the available supply. While expectations about demand over the course of the marketing year influence that judgment, the on-going pace of consumption reveals the adjustments that are being made to accommodate the available supply. A pace of consumption that cannot be supported implies the need for higher prices, while a slower pace than required implies the need for lower prices.

In the current marketing year, the small U.S. crop requires a substantial reduction from the level of consumption in the 2011-12 marketing year. Based on the current forecast of the crop size, imports of 75 million bushels, and the assumption that year-ending stocks cannot be reduced below about five percent of consumption, corn consumption during the current marketing year will be limited to about 11.2 billion bushels. That is 1.326 billion bushels (10.6) percent less than consumed in the previous marketing year. The USDA has forecast a decline in consumption of 1.376 billion bushels and year-ending stocks slightly above five percent of consumption. By category, the USDA has forecast that exports will decline by 393 million bushels (25.5 percent), corn for ethanol and by-products will decline by 500 million bushels (10 percent), other processing uses will decline by 71 million bushels (5 percent), and feed and residual use will decline by 412 million bushels (9 percent).  <Read More>