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July 2008 Archive for Chip's Chore Time

RSS By: Chip Flory, Pro Farmer

Chore time for me isn't what it used to be when I was growing up on our eastern Iowa farm. In fact... I don't even have horse chores to do any more!

Pick a Plot

Jul 21, 2008

Chore time for me isn't what it used to be when I was growing up on our eastern Iowa farm, but taking care of two horses in the morning before I head in for work gives me a little time to think about the day ahead. Each morning, stop at this spot to get a feeling for the "tone of the day" - and some attitude about agriculture and the markets.

I was thinking…

... it's time to start getting ready for this year's Pro Farmer Midwest Crop Tour!

First... some "housekeeping:" The Tour has two new sponsors this year, Pioneer and John Deere Risk Protection. We'll be making great use of our sponsors' agronomic and crop-assessment skills on both the eastern and western legs of the Tour in 2008 and we're very much looking forward to building new relationships with our new Tour sponsors!

Friday, I posted some pictures of a July 15 "fly-over" tour of central Iowa. After the last photo, I asked, "How is USDA going to assess the damage?"

A Chore Time reader rightfully asked how Pro Farmer is going to accurately estimate yields on this year's crops that are obviously full of holes. Well... we'll work as hard as possible to get the best read we can get on this year's corn and soybean crops. And, we won't change a thing in how we run the Tour. It will happen on the scheduled week and we'll determine plot location the same way we always have.

We always run the Tour the third full week of August. Yes, that means there's some movement on the starting date, but by doing it the third full week of August every year, we can make meaningful comparisons from one year to the next. It's part of the year-to-year consistency we strive for in the Pro Farmer Midwest Crop Tour.

Another part of that consistency is in the data we collect and the way we collect it. We build individual yield estimates from: Average ear population in two 30-foot rows; average grain length (average of three ears in inches); average number of kernel rows around the ear (average of three ears); and the row width in the field. The yield calculation is very simple: (Average ear population X average grain length X average kernel rows) / row width.

Example: 46 (average number of ears in two 30-foot rows) X 6.25 (average grain length in inches) X 15.3 (average kernel rows) / 30 (row width) = 146.625 bu. per acre.

How do we pick the sample ears? It's always the 5th, 8th, and the 11th ears from one of the rows in the 2-row plot. That means the three ears we use as samples could be the three best ears in the row, could be the three worst ears in the row, or could be three very representative ears from that row -- or any combination of good, bad and average. By pulling the 5th, 8th and 11th ears from the row, it removes any bias a crop scout might have when they're pulling the sample ears.

How do we pick the field we sample? Crop scouts travel in teams of three or four on a predetermined route. On the eastern leg of the Tour, we'll probably run 12 routes each day of the Tour. On the western leg, we'll probably run 8 routes a day. Each route is (obviously) different, although some routes will cross during the day. That allows the Tour to "spider web" from location to location, covering as much ground as possible. Each route stops every 15 to 25 miles (determined by how many total miles the route travels that day -- longer routes stretch out the stops to make sure they get everything covered, but they all take at least one sample from every county they travel through). So... when drivers get close to their "mile marker" that says it's time to take another sample, they start looking for the first available corn and soybean field. Where they stop along the field is up to the driver.

How do we pick where we sample in the field? First we get past the end-rows. That should get us outside of the higher-traffic areas around the head-rows and away from gate holes. In some cases, that means we go in 48 rows against the rows (you guys with 24-row planters that plant double head-rows are killing me!). Once we get past the end-rows, we go another 35 paces down the row. At that point, we hook our 30-foot ropes to a stalk and measure off our two 30-foot rows that make up our ear-counting plots.

As you can imagine, when we're standing at the edge of a corn field, it's very difficult to predict what kind of conditions we'll find 35 paces on the otherside of the end-rows. When we get there, it could be the absolute best spot in that field, or it could be bare dirt, or it could be a spot where the giant ragweed stands two foot taller than the tassels, or it could be the absolute average spot in that field.

No matter what we find at that location in the field, we pull the sample. If we come out with the three best ears in the field, that's what we use for the yield calculation. If we end up in a spot that has been drowned out and there are no ears to count (even if it's the only "dead" spot in the field), we write down a "zero yield" and go on to the next "scheduled" stop. Even if we climb through 48 rows of excellent corn, march 35 paces through 200-bu. corn and end up in the only 30-foot long, two-row wide drowned out spot in the field, we write down "zero yield."

Obviously, the field isn't a "zero yield" field, but spot from which we're collecting the sample is a zero yield. But, that's okay... we're not trying to peg the yield in each individual field.

I know -- then why take the sample, right. Well -- wrong. If we were trying to peg the yield of one individual yield, you wouldn't pull one sample. You'd do your best to randomly select, say, 10 spots in the one field, pull those 10 samples and average the results into one yield sample for the entire field.

Well... that's basically what we're doing on Crop Tour. The individual field results aren't that important. But, our goal is to pull more than 1,000 samples from "one" corn field that stretches from Ohio to Nebraska and Minnesota to southern Illinois. That's why pulling as many samples as possible in four days is absolutely critical to the accuracy of the yield calculations on a state-by-state basis. During the August 17-21 Tour, we'll release results on a state-by-state basis. The more samples we pull from the "one" corn field in each state, the better the odds of getting close to USDA's final yield estimate for that state. And, if we can get close on a state-by-state, we'll get close to the national average yield.

For more information or to register for the 2008 Pro Farmer Midwest Crop Tour sponsored by Pioneer and John Deere Risk Protection, drop me a note (click here), or give Shelley a call at 1-800-772-0023. Who can come on the Tour? ANYBODY. Seriously... until the scout count gets to the point that we don't feel comfortable in managing the crowd, anybody and everybody is invited to attend. We cover the $75 registration fee for Pro Farmer Members and everybody gets fed a meal during each evening meeting.

This is just the first "installment" of what will be several Chore Time updates discussing the Crop Tour before we hit the road in about a month. By the time we start the Tour, I'll have shared as many "secrets" as possible about the event.


Another fly-over crop tour

Jul 21, 2008

Chore time for me isn't what it used to be when I was growing up on our eastern Iowa farm, but taking care of two horses in the morning before I head in for work gives me a little time to think about the day ahead. Each morning, stop at this spot to get a feeling for the "tone of the day" - and some attitude about agriculture and the markets.

I was thinking…

... about what's happening to the grain markets. In reality, everyone probably should have expected the steep declines being posted in corn and soybean futures. In 2006 and in 2007, the markets experienced similar declines. And think about it -- the crops are looking better day to day and week to week.

That does NOT mean the corn and soybean crops are "good" -- it just means they are both looking better on a regular basis. That may have reversed overnight in some areas that got 3-plus inches of rain on already saturated soils, refilling field ponds and sending creeks out of their banks... again. And this time, we're out of time to replant any freshly-drowned crops. What we lose this time will be gone for good.

Still... what is up and growing does look better than it did one week ago.

And this was quite a week at Pro Farmer! We started with our annual Leading Edge Conference in Des Moines, Iowa. We had 200-plus operations gathered to discuss economic conditions, farm policy and markets to and just "cuss" input costs. This week's issue of Pro Farmer newsletter features highlights of the LEC and sets the stage for upcoming coverage of all these critical issues.

AgDay and U.S. Farm Report AgriBusiness Director Al Pell flew himself to Des Moines to tape the business segment for this weekend's shows. Since Al was available, Pro Farmer Sr. VP Chuck Roth made a fly-over of the crops in central Iowa. If you'll remember, this is the same area I flew over with Al about a month ago. The pictures I snapped showed extreme field ponding around central Iowa -- ponding that looked very similar to what the region saw in 1993.

When Chuck got back to the conference, he had a disk full of pictures from the same area. Here's how the conversation between me and Chuck went down:

Chuck: "It looks really bad from up there!"
Chip: "I figured it did... I've been telling you how bad this crop is -- and I've been talking about how the damage is hidden from the road."
Chuck: "Yeah... but I didn't think it would be this bad!"
Chip: "I'm telling you... you need to pay more attention to what I tell you!"
(Open the file and take a look at the pictures...)
Chip: "Whoa... this is even worse than I thought it was!"
Chuck: "I know. I'm telling you... you need to pay more attention to what I tell you!"

The following pictures were taken July 15 along I-35 in central Iowa between Ames and Webster City (between Hiway 30 on the south and Hiway 20 on the north end).

Those lines in the bare ground near the middle of the picture are fresh tile scars. If you look close at the left-center portion of the picture, you can also make out tile scars leading into the head tile that connects to the center "spot" of dry dirt. Obviously, crops that sat under water for too long didn't recover -- and won't grow any crops this year.

While this shot shows a lot of bare dirt, it's not the worst of these conditions Chuck observed while flying with Al Pell on July 15. This shot has some crops that could be considered excellent, but areas of late development and thin stands obviously outnumber the "good" areas. And on the right edge of this picture, you can see that some of the deepest field ponds were still holding some water. Since this picture was taken, another 2-4 inches of rain fell July 17. Very likely... all of these bare spots are holding water again.

This is a shot of some of the "prettiest" crops Chuck saw. Obviously, there are some crops in this picture that are probably considered "excellent." But, there are also some bare areas, late crops and thin stands that can be pinpointed.

Those light-green shaded ponds in the middle of these corn fields could be one of two things. 1) Weeds. 2) Most likely, those are soybeans growing in one-time dry field ponds. Driving through an area just south of this area on I-35, we saw several examples of soybeans planted into drowned-out spots in corn fields. In the lower right of this picture, the strips are probably alternating corn and wheat (maybe oats?) Since there's a huge bare spot at the top of the strips, I can only assume this grower is looking to take advantage of discounted summer-tile fees and to lay some pipe in the ground after the wheat (or oats) is harvested.

I love this picture. Let me ask you this... how much hog manure (nitrogen) was put on that corn field either last fall or this spring? Still, the yellow corn near the "top" of the field perfectly outlines where water was standing a month ago and the bare spot shows where water stood too long. Now... there are also some what appear to be very good crops shown in this picture, but the yellow spots undoubtedly hold yield-damaged corn.

More evidence of ponding and nitrogen loss in the "yellowed" areas.

This is really sad... just look at all that bare ground and lost bushels of corn and soybeans!

This shots got something for everybody. There are undoubtedly some "excellent" spots in this picture, but the late-developing crop near the center of the picture is strong evidence of how late some corn and soybean crops were planted this spring. The bare spots, yellow spots were common across the area.

Couldn't resist putting this one in there... look at how big that bar spot is!

Okay... last shot. I'll end it with a question: "How in the world is USDA going to account for all the different conditions (ranging from excellent to "zero" crop shown in this ONE picture) for the August Crop Production Report!?!"


Bears Grab Momentum in the Grains

Jul 07, 2008

Chore time for me isn't what it used to be when I was growing up on our eastern Iowa farm, but taking care of two horses in the morning before I head in for work gives me a little time to think about the day ahead. Each morning, stop at this spot to get a feeling for the "tone of the day" - and some attitude about agriculture and the markets.

I was thinking…

... well -- it's certainly been an interesting week in the grain markets. We're limit down this morning on the promise of some rain in the Midwest after we saw prices run up last week on the threat of hot and dry conditions. Sounds like a pretty typical July Fourth holiday weekend, doesn't it?

And speaking of the Fourth... I trust everybody had a safe and happy celebration. I know I did -- even slipped in a major family reunion over the weekend in my home town of Oxford Junction, Iowa. Like many river towns in Iowa (the "Oxford" part of the name is there because this is where ox-drawn wagons could ford the Wapsipinicon River), "OJ" didn't escape the flood damage. The south-side of the railroad tracks (that's where the "Junction" part comes in) got hammered and the highway leading south out of town got washed out. Literally... and the closest detour to the south side of the river also got washed out. Some of my cousins in OJ that live just south of town made a "long trip" to get to the Legionnaire Ballroom at the park for the reunion.

Here's a shot (taken by my mom) of what the road heading south out of OJ looks like. They hope to have it fixed by the end of September. What happened was the water from the Wapsi River ran over the road for so long that it undercut the pavement on the down-current side of the road.

So... why make such a big deal out of this one road? Well... it's not just "one road." There are many roads like this across Iowa that farmers use to move product around the state to ethanol facilities, feed mills, corn processors, soybean crushers and to export facilities along the Mississippi. There are ways around these roads and all the end-users are getting what they need... but it takes "extra miles" to get corn and soybean stocks moved around the country -- and all those extra miles are being covered with high-priced diesel.

And these road washouts are making it tough (more expensive) to get product back into flood areas, too. So... more expense to get product to market and more expense to get inputs into position are both taking another bite out of profit potential.

Okay... back to the market. I know we're limit down today and that's "hard to take" with so much of the Midwest corn and soybean crops struggling to regain as much of their yield potential as they can. But, keep in mind that new-crop corn and soybeans still haven't tested support at last week's lows. That will probably happen -- probably tomorrow -- on the promise of some rain moving back into the Midwest.

Oh... and there are plenty of other factors "grain bears" and banking on this week. Crude oil is lower this morning and the dollar is higher. If crude oil recovers and the dollar retreats, both would bring support back into corn and soybean prices just as fast as a "weather scare."

And don't forget about the pressure Washington could bring to the corn and soybean markets this week. We've got two -- NO, THREE! -- potential "major" happenings we've got to watch this week. First, we expect USDA to announce a penalty-free early out from SOME Conservation Reserve Program (CRP) contracts "soon." The announcement will probably come this week -- but USDA may decide to wait until after Friday's Supply & Demand updates before making the final decision. We fully expect USDA to "open up" the CRP, but to a limited "universe" of acres. Just how big that universe is will determine if the market gives the move a bullish or bearish read.

The second thing we're watching is the Texas request for a 50% waiver of the Renewable Fuels Standard (RFS). The decision isn't due until July 27, but the EPA could sneak a decision out early. That's not likely to happen, but we're keeping an eye on it.

Finally, Legislators will be getting back into town this week and some Senators and Representatives want to push "trading legislation" through as quickly as possible. They'll force this onto the market's radar screen -- and any momentum behind the push to limit activity of speculators will be viewed as a negative for prices.

This all means one thing -- corn and soybean markets are facing a lot of price-negative "stuff" this week. It'll take some time to get this all factored into the market and to "clear the slate" so traders can once again focus on corn and soybean production potential. Once the focus moves back to the crops, I still think there's potential for prices to at least retest resistance at contract (and all-time) highs.

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