USDA released its “Supply and Demand Report” on December 11. Corn carry-over estimates were lowered by 50 million bushels, compared to November estimates, due to a projected increase in estimated 2003-2004 corn exports of 50 million bushels. The USDA estimated range for average corn prices at the farm level was raised $.10 per bushel above November levels to a range of $2$2.40/bu. USDA left the projected 2003-2004 soybean carryover virtually the same as the November estimate, which was 125 million bu. Interestingly, even though USDA left the projected carryover the same, they did increase the estimated farm level price range for soybeans by 10-20¢/bu. compared to November, with a a current estimated range of $6.85-$7.65/bu. This could be an indication that USDA is expecting soybean carryover stocks to get even tighter in future months.
COUNTER-CYCLICAL PAYMENTS
USDA has already made an advance counter-cyclical payment of 7.7¢/bu. on the 2003 corn crop. This was based on a projected 12 month “national average price for corn of $2.10/bu. and a total estimated counter-cyclical payment of 22¢/bu. for the 2003 corn crop, which was made by USDA in mid-October. Now, based on the December 11 USDA Report, USDA is estimating a 12 month national average price of $2.20/bu. for corn, and a total 2003 counter-cyclical payment of 12¢/bu. If the 12 month national average price for 2003 corn is below $2.32/bu., a counter-cyclical payment is earned. The maximum counter-cyclical payment on the 2003 corn crop is 34¢/bu. For the 2004 corn crop the maximum counter-cyclical payment will be 40¢/bu., and counter-cyclical payments will be initiated at a 12 month national average price for corn of $2.35/bu.
The next scheduled potential advance counter-cyclical payment on the 2003 corn and soybean crop would be in February, 2004, with any remaining 2003 counter-cyclical payment to be made in October, 2004. Based on current USDA estimates, the total remaining 2003 counter-cyclical payment on corn would be slightly over 4 cents per bushel to be paid in 2004.
The current USDA national average price estimate for the 2003 soybean crop is $7.25/bu., which is well above price levels needed to earn a counter-cyclical payment on the 2003 soybean crop. The 12 month national average price needs to be lower than $5.36/bu. to earn a counter-cyclical payment on the 2003 soybean crop. So, it does not appear likely that there will be a counter-cyclical payment on the 2003 soybean crop. The maximum counter-cyclical payment for soybeans is 36¢/bu. The 12 month national average price threshold of $5.36/bu. and the maximum counter-cyclical payment of 36¢/bu. will remain the same for the 2004 soybean crop.
Counter-Cyclical payments for corn and soybeans are based on the national average price for that commodity from September 1 in the year of harvest through August 31 the following year (“Crop Marketing Year”). The crop marketing year for wheat and other small grains is June 1 in the year of harvest through May 31 the following year. The monthly average grain prices for each commodity are weighted for the volume sold each month to determine the final 12 month National average price for a commodity.
WINTER CROPS DAY
The University of Minnesota Winter Crops Day will be held Wednesday, Jan. 7, at the American Legion in Lake Crystal and at FarmAmerica, west of Waseca. Registration at both sites starts at 8:30 a.m., and the program is from 9 a.m. to 3 p.m. The program is sponsored by the University of Minnesota Southern Research and Outreach Center (SROC) and the U of M Extension Service. Topics at the 2004 Crops Day include Zone/ Deep Tillage, Strategies for High Corn Yields; Managing Soybean Aphid and Cyst Nematode, and a Weed Control Update. There will also be special presentations on Third Crop Alternatives, Analysis of Crop Production Systems, and Ag Health Risks. The registration fee for Winter Crops Day is $20 per person, which includes the noon meal, refreshments, and printed materials. There is no advance registration. For more information call Gyles Randall at the SROC in Waseca at 507-837-5616.
MASTER MARKETER PROGRAM
The University of Minnesota Center For Farm Financial Management (CFFM) is again offering the Master Marketer Program in 2004. The program will feature six days of intensive hands-on training to help grain producers develop needed marketing skills and confidence in making grain marketing decisions. Presenters will include some of the top grain marketing experts in the country. Topics include understanding various marketing tools, fundamental and technical analysis, climate trends and impact, developing and implementing a grain marketing plan, crop insurance strategies in marketing, and other grain marketing strategies. Approximately 300 grain producers have completed this program in the past five years.
The program will be offered on January 14, 15, 28, 29, February 11, and 12, at Shoreland Country Club, near St. Peter, MN. Pre-registration is required for the Master Marketer program. The registration fee is $350 per person, which includes all meeting expenses and course materials. A spouse can register for an additional $200. For registration information, please call the CFFM at 1-800-234-1111 or contact the CFFM by e-mail at: cffm@umn.eduv.
Editors note: Kent Thiesse is a former University of Minnesota Extension educator and now is Vice President of MinnStar Bank, Lake Crystal, MN. You can contact him at 507-726-2137 or via e-mail at kent.thiesse@minnstarbank.com.