Estimated ACRE Payments in 2009 and 2010

My recent Illinois Farm Economics: Facts and Opinions estimated state ACRE payments for Illinois.  For 2009, state ACRE payments are estimated at $27 per acre for corn, $0 for soybeans, and $90 for wheat. For 2010, corn has an expected payment of $41 per acre and a 51% chance of making a payment, soybeans have an expected payment of $14 per acre and a 35% chance of making a payment, and wheat has an expected payment of $33 per acre and a 66% chance of making a payment.

Spring 2010 Fertilizer Prices

The Agricultural Marketing Service’s Illinois Production Cost Report for April 15, 2010 indicated that the average prices in Illinois for anhydrous ammonia was $532 per ton, DAP was $263 per ton, and potash was $492 per ton.  These prices have been fairly stable since January 2010 (see Figure below).

There were concerns that fertilizer prices could rise this spring due to poor weather last fall.  This poor weather will lead to more fertilization application in the spring of 2010, potentially leading to higher fertilizer prices due to bottlenecks in fertilizer production and distribution.  At this point, this does not appear to be occurring. 

Moreover, concerns that 2010 could be a late planting year do not appear to be materializing.  As of this date, spring fieldwork appears to be off to a good start, with an extended period of dry weather forecasted.

NRC Biotech Report

The National Research Council (NRC) released a report entitled Impact of Genetically Engineered Crops on Farm Sustainability in the United States. Overall press coverage of this report is positive on the impacts of bitechnology.

A National Public Radio (NPR) article quoted David Ervin chair of the committee producing the report: "What we found is that the farmers who adopted these genetically engineered crops have received both environmental and economic benefits. Although genetically engineered seeds often cost more, the farmers more than make up for the discrepancy by using less labor and fewer chemicals to product their crops."

One quibble I have with the above statement is the "less labor" aspect.  The report is likely using this in an "economic sense".  It is doubtful that use of biotech crops have a measurable impact on labor per acre of crop.  What  biotech crops do is make management more streamline in that certain pest and herbicide problems are more easy to deal with.

The Corn & Soybean Digest also had an article on the NRC report.  To some extent the Corn & Soybean Digest article was less positive than the NPR article, emphasizing weed problems that may arise because of resistance to glyphosate.

2009 County Cash Rents

The National Agricultural Statistical Service recently released 2009 cash rents for counties across the United States.  A map showing Illinois cash rents is avaialb on the NASS website.  A map also is available in a recent Illinois Farm Economics: Facts and Opinions (FEF0).  This article also compares 2009 cash rents to 2008 levels.

NASS data presents a mixed picture.  Some counties had cash rent increases while other counties had cash rent decreases.  There does seem to be some geographical dispersion in cash rent changes in that counties with dcreaes apper to be adjacent to one another (see figure).  After several years of large increases in cash rents, 2009 presented more of a stabilizing year in cash rents. 

Another item to note is that some counties had large changes in cash rents between 2008 and 2009.  In the FEFO article, I suggest that this is likely due to 1) local factors impacting cash rents and 2) sample variability when attempting to determine the average cash rent. 

Expected 2010 Corn and Soybean Yields

In a recent Illinois Farm Economics: Facts and Opinions article, actual 2009 corn and soybean yields for Illinois counties were compared to trend yields.  Overall, corn yields were slightly above average and soybean yields were slightly below average, with maps in the article illustrating the variability across counties.

Not included in that article were maps showing expected 2010 yields.  Figure 1 shows expected corn yields based on linear regression models fitted through data from 1972 to 2009.  As expected, the central part of the state has the highest expected corn yields, with Macon County having the highest expected yield of 186 bushels per acre.  There are twelve counties with expected yields over 180 bushels.  Of those twelve counties, all but Whiteside County is located in central Illinois.  The lowest expected yields are in southern Illinois, with Perry County having the lowest expected yield of 108 bushels per acre.

The same geographical pattern exists for expected soybean yields (see Figure 2).  Piatt county has the highest expected yield of 55 bushels per acre.  Central and northern Illinois have the highest expected yields while southern Illinois have the lowest expected yields.  Thirty-six countiies have expected yields above 50 bushels per acre.  Six counties have expected yields below 30 bushels per acre.

Expected yields provide a good estimate of yield for the coming year.  If 2010 could be repeated 20 times, the average of the 20 yields would be close to the expected 2010 yield.  

Yields tend to be skewed.  There are more observations above the trend than below the trend.  This may be why some believe that trend yields understate the true yields.  Given that more observations are above the trend, observation below the trend tend to be further away from the trend yield than those yields above the trend yield.