Wednesday 4 January 2017

AN EYE FOR NEW CROPS.


Keeping an eye out for new crops has helped Myron Blumhagen shape a management system that makes a good fit for his lifestyle and soil-conservation goals for his family’s farm near Drake, North Dakota.

While his wife, Mary, and their grown sons, Eric and Ryan, pursue work, businesses, and studies away from the farm, Blumhagen primarily works alone in the management of their 2,000-acre operation.

Fifteen years ago, he grew mainly wheat in a simplified tillage-based rotation. Between seeding and frequent tillage operations, the hours added up.
“I started looking for a different way of seeding that would be more efficient for a one-person operation,” Blumhagen says.

He evolved slowly into minimum-till nine years ago, and three years ago he began no-tilling. “I found out that minimum-till and no-till eliminated a lot of work,” he says.

He also observed early on that the key to making the reduced-till and no-till systems work effectively was crop diversity. So began his careful and staged adoption of a diverse cropping rotation now comprising spring wheat, yellow field peas, lentils, chickpeas, soybeans, flax, and canola.

While flax and wheat were, of course, old standbys for the farm, the pulse crops, soybeans, and canola were new to Blumhagen 15 years ago. He began experimenting first with the pulse crops of field peas, lentils, and chickpeas.

“I started with the field peas, planting just 50 acres,” he says. “It worked so well and I was so pleased with the results that I doubled the acreage every year until I maxed out. In my rotation, I only seed pulse crops once every four years.”

Blumhagen’s four-year crop sequence is wheat, pulse, wheat, and broadleaf (flax, soybeans, or canola).

When deciding which pulse crop to plant, Blumhagen considers market price and weather conditions. “In a wet year, I bypass lentils and chickpeas,” he says.

Most often, he chooses field peas. “I’ve had excellent success with field peas,” he says. “The peas are a good crop agronomically because they benefit soil health. The soil has become more mellow, and there are a lot more earthworms.”

Field peas have economic benefits, as well. A strong price and good yields typically result in profitability for the crop. By contrast, on Blumhagen’s farm, the chickpeas and lentils tend to yield less predictably than field peas and often have a lower price.

According to Blumhagen, the field peas tend to outperform chickpeas and lentils in synergistic benefits to the subsequent wheat crop. “In wheat following field peas, I get a boost in wheat yield of 5% to 10%,” he says.

The peas also result in a 20% to 25% decrease in his application of nitrogen to the subsequent wheat crop. “Because the peas fix nitrogen in the soil, they create a huge savings in fertilizer cost,” he says.
The pulse crops offer yet another benefit, because their inclusion in a rotation results in diversity of chemicals for weed control.

“Various chemicals kill weeds differently through differing modes of action,” says Blumhagen. “By using differing chemicals with differing modes of action across the rotation, I hope to avoid getting weeds that are resistant to herbicides.”

Another boon Blumhagen has found in field peas is a harvesting window that spreads out his labor and also makes an ideal fit for the rainfall patterns in his region.

“Peas can be planted early in the spring, and they’re done blooming by July 4,” he says. “After they’re done blooming, they just need to fill a little more, and I start combining the third week in July and finish harvesting them by August 1. That’s when hot and dry weather often comes, and the peas are already in the bin.”

Because of the timing of the dry conditions, Blumhagen includes soybeans cautiously in his rotation. “Soybeans need rain in July and August,” he says.

While pulse crops have brought benefits, they’ve also brought marketing challenges. Because Blumhagen’s local elevators don’t handle the pulse crops, they require hauling long distances to outlets.

“Because of the hauling that’s needed, I bought a semi, and I also put up more bins,” he says. “The extra storage space lets me haul the peas in winter when I have more time.”

An overarching benefit of crop diversity is economic resilience for the farm. “It makes good economic sense to me to not put all my eggs in one basket,” says Blumhagen. “The beauty of growing several different crops is that hopefully not all will have price drops at the same time.”
Soil conservation is an important spin-off of Blumhagen’s system. Because the crop diversity results in an effective no-till system, the sum effect is the sheltering of soil from wind and water erosion.

As participants of a Conservation Cropping System, the Blumhagens have implemented additional resource-conserving crop practices. For this work, their soil conservation district presented them with an achievement award in 2013.

While the adoption of new crops has increased management needs and presented ongoing learning curves, the benefits have outweighed the challenges.

“Soil conservation has been the biggest benefit of crop diversity and reduced tillage,” says Blumhagen. “The no-till system has helped me build a cropping operation that one person can handle alone.”

The 2015 growing season was an exception when Blumhagen received help with fieldwork from friends and Farm Rescue volunteers after badly injuring his back. “Sometimes life throws you circumstances, causing you to do things differently from your ideals,” he says.

Aid New Crop Switch

Changes in equipment helped North Dakota farmer Myron Blumhagen work new crops into his rotation.

To fine-tune the planting of pulse crops, he purchased a land roller. The roller presses rocks into the surface of the soil, permitting the combine header to work closer to the ground with reduced danger of picking up stones.

He also fitted his combine with a flex header with drapers. “This type of header is very gentle on the crop as it feeds into the combine; there’s very little shattering,” he says. “Peas, lentils, and chickpeas are horrible for shattering if you take them dry.”

To further reduce shattering, Blumhagen harvests the pulse crops at 18% moisture and stores them in bins with natural airflow. He depends on warm daytime temperatures to bin-dry the crops to 13.5% moisture. BY RAYLENE NICKEL.

BUYING USED PRECISION AG EQUIPMENT.

Fascinated with the potential new use of the used precision agricultural gear she found in boxes sitting on the backroom shelves of the John Deere dealership where she works, Ashley Babl set about to resell the electronics to “provide operators with an old steering wheel guidance system. That’s one example of an affordable way to make an upgrade,” she explains.

Acting on instinct that this gear could be resold, she encouraged Green Line Equipment to begin marketing monitors, receivers, and related harnesses and cables to farmers looking to add precision ag to their equipment while still operating on a budget. “I was surprised, at first, to discover there are a lot of farmers as well as equipment jockeys who are looking for older precision ag gear,” Babl says.

That trend is confirmed by Jon Bickel of Used Precision Ag Solutions out of Fort Wayne, Indiana, who began reselling used precision electronics in 2003. “Back then, there were very few of us in the market,” Bickel recalls. “This market segment has really taken off in the last five to seven years.”
So much so, that Bickel and assistant Brian Palmer are kept busy year-round buying, selling, and consigning all brands and all varieties (including flow controls, lightbars, yield monitors, etc.) of used precision ag equipment.

Both Babl and Bickel report that lower commodity prices have certainly spurred interest in used electronics. “It provides an affordable alternative to new if you’re looking to upgrade a used tractor or sprayer with RTK guidance, for example,” Babl says. “If we (Green Line) can help you cut input costs by retrofitting a sprayer with a used section control system, we are doing you a service.”

sell your used gear

Bickel strongly urges you to get out those boxes of old electronics in storage and consider selling that equipment. “You would be surprised at how much it’s worth,” he adds. “Some monitors we sell are 15 to 20 years old. They don’t bring much money, but they’re still certainly useful for some jobs like steering wheel guidance or basic monitoring and control.”

advice for buying used electronics

Bickel also offers the following advice when shopping for used electronic displays, controls, and receivers.

  • Determine how old the monitor is. If this information is not listed at the auction or online, then obtain the serial number on the device. With this information, you can contact the manufacturer and determine how old the display is. “This is crucial when it comes to touch screens,” Bickel explains. “Screens often last only five to six years, and then they tend to wear out. If the display is older than that, you may have to replace the touch screen, which adds further expense to the purchase decision.”
  • Check to see what comes with the display. “A display’s value varies greatly if it’s sold alone or complete with all cards, activations, cabling, mounts, and receiver dome,” Bickel says. “A complete unit is more valuable.” (See story below for a price comparison.) 
  • Try to power up the monitor to determine what firmware is activated. “You really can’t tell what is activated on a monitor unless it can be turned on,” Bickel explains. “You may end up buying a monitor for, let’s say, $4,000 to $5,000. Purchasing the activations could cost you an additional $10,000 or more.”
  • Don’t expect the display or receiver to be covered by a warranty. “Typically, warranties on a monitor extend only one to two years. If the display is still under warranty, then most manufacturers will transfer that coverage over to you after the purchase.”
  • Purchase a display in its original box and with an owner’s manual, if possible. “Often, you can download the manual at the manufacturer website, or we have copies,” Bickel adds. “As for a display being sold in its original packaging, that shows effort was made to take care of it.” 
See the Pocket Price Guide for asking prices on precision ag displays.

electronics values vary greatly by how they are equipped

As Jon Bickel said in the story above, the value of precision ag equipment varies greatly depending on what is included in the sale. Below are auction price differences for John Deere GS2 2600 displays with and without various activations and ancillary gear.

  • $14,000 - $17,000: 2011-2012 GS2 2600 displays, SF2-ready with Starfire ITC receiver, Autotrac SF2 and Pivot Pro activations, and with all mounts, cabling, and harnesses.
  • $8,250 - $9,500: 2010-2012 GS2 2600 display only with AutoTrac SF2, Swath Control Pro or Pivot Pro activations, and without receiver, mounts, and cabling.
  • $2,500 to $3,750: 2011 to 2013 GS2 2600 display only. BY DAVE MOWITZ.

END OF MARKETS BEARISH NEWS NEAR, ANALYST SAYS

The farm markets have been relatively quiet the past few weeks, as the holidays made trade relatively light as is typical this time of year. As we look forward to a new year, hope springs eternal for grain prices to recover and give us a chance to actually turn a profit. Farmers are still waiting for that opportunity to sell the grains produced in 2016 and those yet to be produced in 2017.


We are really in a neutral area for prices, as we saw bottoms in many grains in August for crop year 2016. Corn price lows hit the week of August 12, about 40¢ below where we are currently trading on the continuous charts.  Soybeans and wheat made similar lows (with wheat a bit later the week of September 2). But soybeans are almost in a different world than corn and wheat in that soybeans never got close to the 2014 lows, while wheat is lower and corn basically ran only about 6¢ below those 2014 lows. 


Soybeans, however, made lows of $8.44 in 2014, and the lows in 2016 were closer to $9.40 or just below it.  So, soybeans are still the bright spot in grain prices today, if we have a bright spot, as corn and wheat prices are well below break-even levels for many producers.

Today, Chicago Board of Trade wheat is still within 20¢ of its 2016 lows, and KC wheat is within 30¢ of its lows.  Minneapolis wheat is about 50¢ above its lows as the HRS variety has a bit more demand for it than the winter wheat brands, which have plentiful supplies at this point.


Corn is within 40¢ or so of its lows, and soybeans after recent price weakness is within about 50¢ of its 2016 lows. So, while prices have improved since August, they still are languishing around at price levels that are not worth getting excited about.


We still have the January final USDA report to deal with, too, and typically, large crops get larger. Since both corn and soybeans had record-large crops inprevious estimates by USDA, expectations are for perhaps a small increase from the November numbers. That would be a bit negative grains, and while that might already be built into the market for the most part, it still will be another set of negative news the market must trade.


The good news is that once the January report is out, all the bad/negative news regarding the large U.S. crops will be in the market. Finally, perhaps the market can get some good news to trade after January!


USDA will also update South American crop estimates, and although there have been recent periods where rainfall was less than normal in both Argentina (especially southern Argentina) and central Brazil, for the most part the rains returned to these areas and solved those temporary problems.
So, if anything, the crops might get a bit bigger or stay the same for South America in this report.  Northern Brazil is getting close to harvest, too, so the time for crop problems to develop there is running out.


For the time being, things look a bit on the negative side for grains for the next week. With the January 12 report likely to be neutral or bearish, there isn't much to get excited about. However, those sitting on short positions should be put on notice that after January 12, there may not be any more negative news to push markets lower.  So, it might not be a bad idea to consider covering short positions, especially if we get close to the bottoms we made for 2016 in August for corn and soybeans.  And quite honestly, if either wheat, corn, or soybeans get near their 2016 lows, it probably will be time to cover any short positions and start preparing for better prices for the 2017 season.


Can we rally like we did in 2016 in the spring of the year 2017? It’s possible, and even likely to see some kind of rally as prices of grains are currently low.  But a huge $3 rally or more in soybeans may not be in the cards, especially since U.S. farmers are likely to dramatically increase soybean acreage at the expense of corn.  Who knows, maybe corn and wheat will rally more relative to soybeans this spring. BY RAY GRABANSKI.

CORN CLOSES SLIGHTLY HIGHER TUESDAY.

DES MOINES, Iowa -- On Tuesday, the corn market ended higher, while wheat and soybeans dropped.


At the close, the March corn futures finished 3¾¢ higher at $3.55¾, and new-crop December 2017 futures closed 3½¢ higher at $3.83½ per bushel.


March soybean futures finished 9¢ lower at $9.95, while November 2017 soybean futures ended 6¢ lower at $9.83¼.


March wheat futures closed 1½¢ lower at $4.06½.
March soy meal futures settled $4.50 a short ton lower at $312.10. March soy oil futures ended 0.15¢ higher at 34.81¢ per pound.


In the outside markets, the Brent crude oil market is $1.34 per barrel lower, the U.S. dollar is higher, and the Dow Jones Industrials are 31 points higher at 19,803 points.


Dustin Johnson, EHedger LLC, says that the recent rainfall in the South American forecast is set to alleviate some of the dryness concerns.


“Overall, the impact of the current dry conditions is confined to an area that would still suggest +100 million MT crop is possible out of Brazil. The focus is shifting to the Index Fund rebalancing, which is supposed to shift toward corn. Also the corn-bean ratio is ultra-high leading into the January reports, so some steam could come out of them as traders position for that release,” Johnson says.
Bob Linneman, Kluis Commodities broker, says it’s worth watching the South American crop weather and outside money flow to get a handle on grain market direction.


“Areas of South America remain dry, while other areas are experiencing flooding. We may not see any major allocation of money based on the current weather as everyone awaits the upcoming USDA report,” says Linneman in a daily note to customers. BY MIKE MCGINNIS.

TRUMP LEANING TOWARD GEORGIA EX GOV FOR AGRICULTURE HEAD.

WASHINGTON, Jan 2 (Reuters) - Former Georgia Governor Sonny Perdue is U.S. Republican President-elect Donald Trump’s leading candidate to run the U.S. Department of Agriculture, a senior Trump transition team official said on Monday.


Perdue, a Democrat-turned-Republican who founded a grain and fertilizer business, served on Trump’s agricultural advisory committee during his presidential campaign.


The official gave no other details about Trump’s choice for agriculture secretary, one of the few remaining posts Trump has to fill as he assumes the White House on January 20.


The appointment must be approved by the Republican-led U.S. Senate.
Perdue, 70, led the southern U.S. state for two terms as governor from 2003 to 2011 after previously representing a rural swath of central Georgia about 100 miles south of Atlanta in the state senate.
Elected in 2002, he became the state’s first Republican governor since 1871, according to the National Governors Association.


After finishing his second term as governor, Perdue founded Perdue Partners, a global trading firm that consults and provides services for companies looking to export products.


Trump had been meeting with a number of other possible candidates for U.S. agriculture secretary, including Elsa Murano, undersecretary of agriculture for food safety under President George W. Bush, and Chuck Conner, head of the National Council of Farmer Cooperatives. BY STEVE HOLLAND.


He has also met with Abel Maldonado, former lieutenant governor of California and co-owner of Runway Vineyards; Tim Huelskamp, Republican U.S. representative from Kansas; and Sid Miller, Texas agriculture commissioner.