Server: Netscape-Enterprise/2.01 Date: Mon, 29 Dec 1997 18:08:03 GMT Content-type: text/html Ag Inputs May/April

 

Ag Inputs

April/May Volume 7 Issue 7


Our sincerest thoughts and concerns are extended to those who are victims of the flooding.


Contents

Marketing Service Now Provided to Customers

Planting Soybeans In May Increases Yields

Planting Conditions Make the Difference

Preemerged Vs. Postemerged Programs

HRC’s Play An Important Role in Weed Control

Know the Rules For Completing Acreage Reports

Product Return Service Provided

Managing Risk in a High-Volatility Market

Holiday Closing


Marketing Service Now Provided To Customers

The task of producing healthy crops is a challenging one. There are always decisions that need to be made to efficiently manage your farm. And, with the demands on your time, you may not have the opportunity to monitor the markets closely. This can be frustrating, especially when the grain needs to be sold.

To help relieve the stress of marketing, Ag Services and Professional Market Management have teamed up to bring you a new and exciting service — CashMaster. The CashMaster Program is a personalized cash marketing service for corn, soybeans, wheat and milo.

Under the CashMaster Program, you will have the Professional Market Management staff of full-time market analysts and marketing professionals working for you. Their job is to watch the markets and keep on top of the latest USDA Supply & Demand reports, weather forecasts from experts around the world and any other news that might affect your prices.

This program will allow you to devote all of your energies to the production side of farming. It will give you the opportunity to remove the second-guessing and indecision, and work under a disciplined marketing plan.

How Does It Work?

The way the program works is really quite simple. You can enroll up to 50% of your production on your MPCI certificate. Once you are enrolled, Professional Market Management (PPM) will market the crop based upon the recommendations contained within the Pro Farmer newsletter.

The contracts are placed at one elevator and all transactions are then conducted through one terminal. You may list as many grain terminals as desired, however, the terminal with the most competitive prices and service will be chosen.

What is the Fee for Enrolling?

The fees for enrolling in CashMaster are based on the number of bushels you enroll. The enrollment fees will be billed through Ag Services as part of your standard credit line. It will be billed like a normal product purchase. The rates are as follows.

Bushels committed to program
(in thousands of bushels)

 

First 25K

Next 20-50K

Next 50-100K

Next 100K

Corn

$ .05

$ .04

$ .03

$ .02

Wheat

$ .05

$ .04

$ .03

$ .02

Milo

$ .05

$ .04

$ .03

$ .02

Soybeans

$ .12

$ .10

$ .08

$ .05

 

Any enrollment fees less than $1,000 are due before the crops are contracted. With fees over $1,000, 50% of the fees are due before the crops are contracted, and the remainder when the additional bushels are contracted.

How Well Has PPM done in the markets?
3-year Avg. (1992-95)

Corn
USDA Average

$2.18

Pro Farmer Cash
Marketing Avg. Price

$2.41

Soybeans
USDA Average

$5.77

Pro Farmer Cash
Marketing Avg. Price

$6.06

Wheat
USDA Average

$3.23

Pro Farmer Cash
Marketing Avg. Price

$3.49

These figures for the prices Pro Farmer captured, take into account storage and interest costs on unsold inventory - so these numbers represent profit, not just price per bushel!

If you would like additional information on the CashMaster Program, or would like to enroll, please contact Mike Dillon at Ag Services.


Planting Soybeans In May Increases Yields

Early season freezes, hail storms, flooding and other situations can reduce crop stands to a point where late planting is necessary. When planting is not delayed by weather, the response of various crops to planting is useful information for deciding which crop to plant first.

When considering planting soybeans, soil temperature is an important aspect. Seed planted into soil that is 50° F germinates slowly, and emergence will probably be reduced. Planting into seedbeds that are in the low fifties is not advisable unless soil temperatures are rising rapidly. Sixty degrees Fahrenheit is a good target at which to begin planting.

Depending on your geographic location, soyDepending on your geographic location, soybeans planted in early to mid-May, may be the most productive, while yields were considerably lower after May 25th. This is because late-planted soybeans are also often subjected to extreme environmental stresses and a shorter growing season.


Planting Conditions Make the Difference

The planting season is upon us. You want to make sure your planting conditions are just right. Here are just a few tips for you to use:

  1. Make sure the planting depth is accurate.
  2. Ensure that row units are functioning properly for accurate seed placement.
  3. Drive at a consistent speed to ensure you have even plant populations.
  4. Have realistic crop populations for soil type, climate and rainfall.
  5. Carry a small notebook to record the planting date, crop, variety, weather conditions and soil conditions.
  6. Do not place excessive amounts of fertilizer too close to the row. Excessive amounts vary with each crop. Consult your product manager for more details.
  7. Avoid planting corn on the same day the anhydrous is applied to any particular field.

Preemerged Vs. Postemerged Programs

Herbicide injury can be a significant factor in crop production. Application timing and techniques have a great impact on the occurrence of herbicide injury. That is why it is important to know the differences in the effectiveness of preemerged and postemerged programs.

The effectiveness of preemergence programs is strongly dependent upon timely rainfalls. Herbicides applied at planting generally do not provide effective control if it does not rain within three to five days of the application. However, rotary hoeing can enhance preemerge herbicide performance under dry conditions.

Postemergence programs have become more popular with the introduction of several highly effective herbicides. Application timing plays a key role in the effectiveness of postemergence herbicide.

Since most fields are full of several weed species that exhibit different emergence patterns, using a postemergence program usually results in a compromise. For example, you may be able to control giant foxtail, but you may be too early to control lambsquarters or cocklebur.

Another problem in postemergence programs is the herbicide interactions when products are tank mixed. There are many differences in requirements for spray additives among the products used in tank-mixes. The additive required by one product for effective weed control may significantly reduce crop tolerance to the second product and result in serious crop injury.

Since herbicides are selected for their ability to kill plants, they typically have a greater potential to cause damage than other materials that might be applied directly to the crop. In most situations, a crop is able to tolerate a herbicide because of its ability to metabolize the herbicide to non-toxic compounds. This is before the herbicide accumulates at toxic concentrations at the site of action. Any factor which increases the rate at which a herbicide is absorbed, or decreases the ability of the crop to metabolize the herbicide, will increase the potential for crop injury.

Developing a successful weed management program requires the ability to recognize the limitations of specific programs, and determine the best way to incorporate additional practices to fit the needs of your operation.


HRC’s Play An Important Role in Weed Control

Herbicide Resistant Crops (HRC) have provided a means of reducing risks associated with herbicide injury. While most HRC’s are not totally immune to the specific herbicide for which they have resistance, they frequently have a larger margin of safety than typically found with selective herbicides used in corn and soybeans.

While HRC’s play an important role in weed management, you must recognize that HRC technologies represent components of a weed management program. It is not a cure-all.

With HRC’s come several risks associated with this type of weed management. For example, the use of nonselective herbicides in HRC corn hybrids and soybean varieties seems to be an extremely simple system. However, this simplicity comes with a catch. You must be able to understand the relationship between your crops and weeds in order to identify the proper timing of the application. This requires decisions based on the ability of mixed weed population and an assessment of environmental conditions. It also includes proper identification of the weed species, section of herbicide rate based on weed species and size, and the ability to apply the herbicide in a timely fashion.

In most situations, a crop is able to tolerate a herbicide because of its ability to metabolize the herbicide to non-toxic compounds. This is before the herbicide accumulates at toxic concentrations at the site of action. Any factor which increases the rate at which a herbicide is absorbed, or decreases the ability of the crop to metabolize the herbicide, will increase the potential for crop injury.

Developing a successful weed management program requires the ability to recognize the limitations of specific programs, and determine the best way to incorporate additional practices to fit the needs of your operation.


Know the Rules For Completing Acreage Reports

It will soon be time to complete acreage reports for insurance coverage. This is your most important responsibility regarding crop insurance, because an error in reporting could cause you to have less coverage. Following are some very important reminders.

Please read your insurance policy. It is written in very plain English, and you will actually find it very informative. Knowing your policy can’t be stressed enough, because the insured has more responsibilities with crop insurance than with any other insurance.

Product Return Service Provided

As you plan for your crop inputs for the season, we know how difficult it is to estimate the amount of inputs you may need. That is why we provide a chemical return service to our customers. We ask that you assist us in the process by using the following guidelines:


Managing Risk in a High-Volatility Market

You’ve heard the threat all winter. Now, it’s time to deal with it.

"It" is high volatility in the grain markets. Volatility is a strange measurement - and when talking about futures and options trade, it has two separate, but similar applications.

Volatility in call and put options is a calculated value measured as a percentage. That percentage figure is then part of a larger calculation that eventually determines the premium applied to a specific option strike price. In this case, volatility is clearly defined. And the higher the volatility, the higher the premium for calls and puts.

Volatility in futures, however, is not clearly defined. In futures, volatility is something you see, hear and even feel. You see it when futures post extremely wide daily price swings with little or no change in overall market fundamentals. You could easily hear volatility by visiting the trading floor in Chicago when seemingly quiet trade suddenly erupts into a flurry of activity. And it’s easy to feel volatility when a market goes against your position for no "apparent" reason.

Understanding where market volatility comes form will help you manage cash-commodity risk. The biggest contributor to market volatility is uncertainty. How many acres will be planted? What will the weather be like? Are prices high enough to slow the demand pace? When will Brazil run out of beans? Unanswered questions are the key ingredient to volatility. They are also why the Chicago Board of Trade claims it is a "price-discovery" exchange and not a "price-setting" exchange.

Managing risk in high-volatility markets means taking your marketing skills to a higher level. Here are some guidelines designed to help make marketing decisions in high-volatility markets.

1. Discipline is a must.

Having a marketing plan, and stick to it. However, a marketing plan doesn’t need to be as stiff as a board. It needs some "wiggle room." For example, if your plan follows Pro Farmer’s trap strategy, you’ll notice we let market momentum determine how much we’ll advise selling when a trap is tripped. However, if a trap is tripped, we make a sale.

2. To ignore or not to ignore.

Highly volatile markets are excellent rumor mills, churning out falsehoods on a near daily basis. These rumors have driven beans limit down, only to see the losses erased the next day when the rumor was cleared. So some rumors you should believe - others you should ignore.

3. Find someone you trust to keep you up-to-date on news and price action.

There’s no way you’ve got the time to read everything that needs to be read or to figure out why a market did what it did on a daily basis. A market information service is one solution. Another option is finding someone within your operation that has the time and skills necessary to wade through all the news and to recognize the urgency of price action.

4. Make use of all the tools.

Using a price-triggering plan for your marketing means you’re likely to get sucker-punched at some point. Simply put, a level of support might be penetrated, triggering cash sales, only to see futures recover the next day. By having futures and options in your marketing toolbox, you’ll be able to recover from this marketing move quickly by reowning some cash sales "on paper."

5. Questions will be answered.

As the marketing year advances, unanswered questions will start to be answered. That takes uncertainly out of the market, lowering market volatility. As those answers become available, your marketing plan must become more aggressive.

This article was submitted by Professional Farmers of America, (ProFarmer) who offer a host of new alerts, marketing counsel and even managed farm marketing for producers who want to focus exclusively on production. For ProFarmer newsletter information, call 1-800-221-4352.


Holiday Closing

Our offices will be closed on Monday, May 26, 1997 in observance of Memorial Day.


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