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January 2012 Archive for From the Editor

RSS By: Brian Grete, Pro Farmer

Pro Farmer Editor Brian Grete takes time to talk with Pro Farmer Members about some of the key issues in each week's Pro Farmer newsletter.

USDA Releases Cattle Inventory

Jan 27, 2012

Chip Flory

From The Editor

Jan. 27, 2011

Hello Pro Farmer Members!

USDA released the twice-yearly Cattle Inventory Report this afternoon and it held a big surprise -- beef cow-calf producers are starting to rebuild the herd. Beef replacement heifers were saved back at a pace 1% quicker than year-ago. I'm surprised by this because the last time the herd cycle bottomed out, beef replacement heifer retention was steady with year-earlier for two or three years before numbers started to climb (a rounded bottom). This time, the rebuilding would make it look more like a "V" bottom in heifer retention.

Short-term, taking females out of the slaughter mix and putting them on pasture is bullish the fat cattle market. It tightens feeder cattle supplies and reduces beef supplies through 2012 and into early 2013 before total supplies start to very slowly creep higher into late 2013.

Also, the herd is moving. Expansion is in the Northern and Central Plains (Colorado, Nebraska, Wyoming, Montana), in the middle of the Corn Belt (Iowa, Missouri) and in the Southeast (Georgia, Florida, Alabama.)

Not surprisingly, beef replacement heifers numbers are down (and down big) in drought areas of Oklahoma and Texas, steady in Kansas.

An update to the Argentine shipping situation: We're hearing this afternoon that a second vessel has run aground in the Parana River as it made its way to the Port of Rosario in Argentina. Shipping problems will only make it more difficult for Argentina to stay in the export game. The country needs plenty of rain to help the bean crop and the latest-planted corn build yield... and to raise the draft in the river to get those boats to port. Until that happens, anything booked out of Rosario just increases the odds that Argentine export sales will be switched to U.S. origin.

That's it for this week... Pro Farmer Sr. Market Analyst Brian Grete will be at Tomorrow's Top Producer Seminar in Chicago next week; I'll be at the Top Producer Seminar to talk about China and to moderate a panel discussion about market volatility created by USDA reports. Should be fun!!!

Your link to January Crop Tour

Jan 23, 2012

Chip Flory

From The Editor

Jan. 20, 2011

Hello Pro Farmer Members!

It was another active week in the corn market, but it took until the final minutes of today's trade to get old-crop corn futures back above the limit-down close posted Jan. 12 following USDA's January reports. And it took a lot of spread action too -- old-crop corn demand is looking "firm" again, but Informa Economics' estimate that nearly 95 million acres will be planted to corn in 2012 pushed Dec. 12 futures lower. So... tight (and maybe getting tighter) old-crop supplies against the increasing promise of new-crop supplies. The result was a big move in the old-crop/new-crop spread.

Adding to support in old-crop corn is continuing concern over the South American corn crop. We've got plenty of insight into corn and soybean production in Argentina and Brazil in the January issue of our Crop Tour newsletter. The newsletter is plenty of extra reading for now -- so...

That's it for this week... We've got Profit Briefing Seminars in Sioux Falls, SD, on Jan. 24 and to Owatonna, MN, on Jan. 25. You can follow this link to get more information about the Profit Briefings, or give us a call at 1-800-772-0023.

From the Editor for Jan. 13

Jan 16, 2012

Chip Flory

From The Editor

Jan. 13, 2011

Hello Pro Farmer Members!

Friday the 13th... the first of three this year. So far... not a bad day, and the other two will come at a time that's just as critical for the corn market.

Friday, April 13: When we get to this Friday the 13th, we'll hopefully be sticking corn in the ground to get the 2012 corn crop off to a much needed "fast start." Before that, USDA will give us its first "best guess" of 2012 corn acres in the March 31 Prospective Planting Report. Trade expectations for corn plantings are probably getting a little "out of whack" -- at least in the current pricing environment. Some are looking for corn plantings to be "at least" 94 million acres this year... up 2.1 million acres from 2011. To get there, corn will have to capture some acres from soybeans and hold onto most of the corn-on-corn acres from last year. That's seeming increasingly unrealistic.

First, farmers in traditional corn-on-corn areas are getting more than a little tired of the yield drag. Weather conditions obviously are the biggest reason corn-on-corn in central Illinois has suffered the past two years. Too hot during pollination and kernel fill did more than take a bite out of yield. Last year was much worse than in 2010 with some Illinois PF Members telling us this last week that corn-on-corn yields were at least 35 bu. below corn-following-beans and as bad as 100 bu. below corn-following-beans. The biggest yield drag we heard... 140 bu. per acre. One of the best examples is an across-the-road yield comparison. The dirt was basically the same... the corn variety was the same... and both fields saw the same rain and temperatures. That was an 80-bu. yield drag for the corn-on-corn.

The question is, what's causing it? There is more and more talk about root feeding in supposedly rootworm-resistant corn varieties. Some are starting to talk about the need to band insecticide to help give the corn crop a better chance.

Now turn those lost bushels into lost revenue. Perhaps it's more important to compare corn-on-corn revenue (with the lost bushels) to potential soybean revenue. Right now, revenue from better-yielding corn-following-soybeans is much better than potential soybean revenue. But, knock 50 bu. off the corn-on-corn yield and net revenue potential from soybeans is much more competitive.

We'll continue to talk with farmers about 2012 planting decisions... but based on what we've heard so far on the seminar trial, it's going to be tough to push total corn plantings up to 94 million acres in the year ahead.

Friday, July 13: The importance of this Friday the 13th is obvious. Depending on planting date, this could be when a chunk of the crop is pollinating or it might even be just starting the kernel-fill period. Either way, weather on this Friday the 13th will undoubtedly be trend-setting for corn prices.

That's it for this week... We hope to see many of you in Independence, IA, on Jan. 17 or in Ankeny, IA, on Jan. 18 for our Profit Briefing Seminars sponsored by Pioneer and Agrotain. The following week, Profit Briefings travel to Sioux Falls, SD, on Jan. 24 and to Owatonna, MN, on Jan. 25. You can follow this link to get more information about the Profit Briefings, or give us a call at 1-800-772-0023.

From the Editor for Dec. 30

Jan 02, 2012

Chip Flory

From The Editor

Dec. 30, 2011

Hello Pro Farmer Members!

Happy New Year!

We really enjoyed putting together this week's newsletter. The look back at a turbulent year around the world and in agriculture really helps to put things in perspective! But this blog post is all about celebration! We selected our 2011 Ag Person of the Year and even had a "Special Mention" for strong contender in our selection process.

Here's what we said about these two excellent representatives of agriculture in this week's newsletter:

Long climb for 2011 Pro Farmer Ag Person of the Year

Sometimes it’s a single event that propels a person to our selection of Ag Person of the Year; for others it’s a long climb of achievement, contribution and leadership that makes them the obvious choice. This year’s Pro Farmer Ag Person of the Year has made the long climb.

Darrin Ihnen, Hurley, South Dakota

We first got to know Darrin years ago — just as he was starting his long climb up the ranks of the South Dakota and National Corn Growers Associations. He showed up at the orientation meeting for the western leg of the Midwest Crop Tour in Sioux Falls to learn more about the Tour and to welcome his fellow Pro Farmer Members to South Dakota. It’s tough to recall the date, but it was shortly after we started the western Tour, which would put that first meeting in 1999 or 2000. At that time, Darrin was raising corn, soybeans, wheat, cattle and hogs on his family farm in Hurley... and that’s what he’s still doing today.

Along the way Darrin has worked tirelessly to promote U.S. grain consumption and to promote U.S. agriculture in general. The groundwork for the ethanol facility in Chancellor, S. Dakota, was laid by Darrin; he has led the state’s Corn Growers Association; and he is a Past President of the National Corn Growers Association. That’s all very impressive, but why does he get the person-of-the-year nod in 2011?

Ahead of our 2011 Midwest Crop Tour, U.S. Feed Grains Council CEO Tom Dorr asked Pro Farmer to host a group of agri-professionals from China for a day on the Tour. With our time committed exclusively to the Tour, we asked Darrin to step in to represent Pro Farmer and our Members as host to this Chinese delegation. He readily accepted because it was an important job that needed to be done. And that’s what Darrin has been doing for more than a decade as a farm leader at the state and national levels. After serving a year as NCGA Chairman, he’s now back working at the state level as a member of the South Dakota Corn Utilization Council.

American agriculture is in the middle of its most profitable time in a glorious (and sometimes conflicted) history. No one person or process can take credit for ag’s current success, but Darrin’s fingers have touched many pieces of this complicated puzzle. In our opinion, he’s the example to follow for promoting farming in the U.S. and to advance U.S. agriculture around the world.

All that, and Darrin is still "just" an ethanol-supporting, livestock-producing, grain-and-soybean-growing Pro Farmer Member from Hurley, South Dakota. Congratulations, Darrin, on being named the 2011 Pro Farmer Ag Person of the Year.

This PF Member nearly caught the ‘single-event’ wave —

Immediately following the 2011 Midwest Crop Tour, President Obama roadtripped through the Midwest. At a stop in Atkinson, Illinois, he ran into Pro Farmer Member Rock Katschnig. After lecturing voters in attendance about the "evils of politics" and the need for "shared sacrifice," Obama asked for questions. Just like at many Pro Farmer seminars, Rock was first up. Only it wasn’t a question... it was a request: "Please don’t challenge us with more rules and regulations from Washington, D.C., that hinder us."

Rock is a smart, fun-loving, hard-working, God-fearing, family-loving Illinois farmer and PF Member... and he had no idea what fire he had just sparked. Columnists around the nation said Rock "spoke for millions of small business owners" with that request. And President Obama’s you-don’t-know-what-you’re-talking-about response to Rock helped accelerate a government-wide review of rules and regulations. House Speaker John Boehner (R-Ohio) asked Rock to help represent "job-creators" at President Obama’s Sept. 8 address to a joint session of Congress. Well done, Rock!

That's it for this week...I wish you all a happy, blessed and prosperous 2012! It's a special year at Pro Farmer as we celebrate our 40th Anniversary of serving the Members of Professional Farmers of America!

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