Beyond Agronomy News: July 29th, 2008

Agronomy

This Week in Scouting

• Continue scouting late-May seeded wheat for midge from late boot to early flowering.
• Continue scouting for lygus bugs, cabbage seedpod weevils and diamondback moths.
• Evaluate disease pressure in cereals and estimate yield loss from leaf disease. Should you have sprayed? Did your fungicide work as intended?

Think Compaction

Now is the perfect time to discover wheel track compaction from air drills and sprayers. Just look at your canola fields as they come out of flower and those of you with compaction trouble can plainly see the canola still blooming in the wheel tracks while the rest of the field has finished. I encourage you to think of strategies to alleviate compaction next year. SL

Fertilizer Commentary: Talk about price

Just when you thought purchasing canola seed in September was crazy, how about buying next year's fertilizer in July? This is a great deal to ask of a producer whose 2008 crop isn't in the bin yet. I know that commodity prices may have slumped temporarily, but the demand in the fertilizer market does not look like it will follow. Here's a quick example of where the marketplace is at:

Potential Returns for 2008
Wheat: 45 bu/ac × $7.94 bu = $357.30
Malt Barley: 65 bu/ac × $6.80 bu = $442.00
Canola: 30 bu/ac × $13.00 bu = $390.00

The average cost of production in for the 2008 crop will range from $180 an acre to $250 per acre. Even with average yields like the ones above, you know the corporate world is looking at producers netting a profit of $100 to $190 per acre this year. That's a potential 40-100% return on investment that leads to two things: a) the corporate world wants a bigger piece of the pie and, b) farmers will demand more fuel, fertilizer and machinery to farm more acres or buy more crop inputs to help maximize yield. Put this in a global perspective and the demand driven crop inputs market has risen exponentially- just like the demand driven commodities market we've been enjoying.

When to buy?

It's hard to report on fertilizer prices when the prices seem to change by the hour. but I've listed the latest quotes I've heard of from around the area. Also, I attended a Viterra tour last week that included a fertilizer update from Westco and the predictions for next springs pricing.

Today's Price Quotes:
46-0-0-0: $821, $850 and $930 MT
11-52-0-0: $1300, $1306, $1390 and $1400 MT
0-0-62: $650 and $750 MT
21-0-0-24: $550 MT

Projected Spring Prices:
46-0-0-0: $1100 MT
11-52-0-0: $1500 to $2000 MT
0-0-62: $1500 MT
21-0-0-24: $650 MT

Urea looks set to increase by $250 a tonne or 29% by next spring. Phosphate looks to increase by $100 to $500 a tonne or 25%. Potash, the most peculiar of them all looks set to rise by $850 a tonne or a 130%! Sulphur is said to be in short supply and could rise $100 a tonne or 15%. I've heard most of the independent dealers have been more flexible with payment terms than major line companies.

Steve's Quick Math:
Using an operating loan at 7% interest to secure a $90 per acre fertilizer blend would cost $2.09 per acre over 4 months. I use 4 months because we usually purchase our fertilizer around November or 4 months from now. If you can save just $100 a tonne by purchasing today, you could save yourself $9.07 an acre on a 200 lb/ac fertilizer rate. That's a 76.9% return on investment. SL

Valuing Yield Loss from Wheat Midge

I've heard talk that control of wheat midge is still warranted even when the main stems have begun flowering yet the tillers have not. I was a bit suspicious of the economical control at first but after running the numbers it makes sense. Wheat will typically have one main stem and two tillers. Fifty percent of the yield comes from the main stem and the other fifty percent comes from the tillers. The potential yield loss from wheat midge at 1 per 4 heads is 15%. Adding in a grade loss, the price difference between a No.1 13.5 and No. 2 13.5 is $6.00 a tonne.

Steve's Quick Math:
Yield potential: 60 bu/ac
Yield loss from tillers: 15% yield loss × 50% of yield from tillers = 7.5%
Yield loss potential: 60 bu/ac × 7.5% loss = 4.5 bu/ac
Yield loss = 4.5 bu/ac × $7.50 bu = $33.75
Revenue loss: $33.75 ac + ($6.00/tonne grade loss (60 bu/ac ÷ 36.744)) = $9.80 + $33.75 = $43.55
Cost of control = $8.00 for Lorsban and $8.00 for custom application = $16/ac
Total: $43.55/ac in losses - $16.00/ac to control = $27.55 an acre

In the end, the return on your $16.00 investment is $11.55 or 72%. Now, depending on the information you're receiving, the true economical loss can be hard to nail down. I've heard all sorts of yield loss potentials and thought this quick calculation was a good place to start. SL

Estimating Yield Loss from Crop Diseases

By now we've made the decision to spray or not to spray for leaf diseases in cereals. We are quickly approaching the point to which you can actually estimate whether your decisions were correct or, sadly, not.

To estimate yield loss from Net Blotch, Scald, Tan Spot or Septoria, examine crop at the milky dough stage. Assess at least 25 main stems two diagonals from one corner to the opposite corner of the field. Then assess the average percentage of the top two leaves affected. The calculation for percent yield loss is 0.66 × % area of flag leaf infected + ½ × % area of second leaf infected ÷ 2.

For example, you find disease present in wheat on 10% of the flag leaf and 20% on the leaf below. The percent of yield loss would be:

0.66 x 10 + ½ x 20 ÷ 2 = 6.66% + 5% ÷ 2 = 8.3%

Therefore, your calculated yield loss is 8.3%. At $7.90/bu wheat and a yield potential of 50 bu/ac, you have lost 4.15 bu/ac (50 x 8.3%). That loss translates to $32.79/ac (4.15 bu/ac x $7.90/bu). The cost of a fungicide is roughly $7.50/ac plus $8.00/ac for application for a total of $15.50/ac. So, the return on your fungicide investment is $32.79/ac - $15.50/ac = $17.29/ac or 111%.

Proper disease scouting pays dividends especially when conditions are mild and humid like we've experienced this year. At the same time, of the 18,000 acres of cereals I manage only 5,000 acres were sprayed with a fungicide. I believe the bottom line is crop rotation pays dividends and so does proper disease assessment and control. The economics of spraying crop protection products based solely on the high price of commodities is irresponsible. My growers saved $200,000 by not taking that approach. We have no regrets. SL

Summary of Yield Loss by Disease

Links to Canola Pests

Bertha Armyworm

Lygus Bug  

Diamondback Moth

Cabbage Seedpod Weevil

Market News

International Crop and Weather Highlights

United States: In the West, rainfall is confined to parts of the Four Corners region, where monsoon showers continue. Dry weather elsewhere favors fieldwork, although some pastures and small grains are in need of moisture. On the Plains, showers and thunderstorms are developing across central portions of the region. Rain is especially beneficial on the central High Plains, where drought has hurt pastures and non-irrigated crops. In the Corn Belt, locally heavy thunderstorms continue across the southern areas, maintaining pockets of excessive wetness. In the northern Corn Belt, mild, dry weather favors corn and soybean development.

Europe: In northeastern Europe, locally heavy showers boost soil moisture for filling spring wheat and vegetative summer crops. However, the rain slows winter wheat maturation and harvesting. In the Balkans, dry weather favors winter crop harvesting but increases stress on reproductive corn and sunflowers.

Former Soviet Union: In Russia, several days of hot, dry weather aid winter grain maturation and harvesting but stress reproductive spring wheat in the Urals District. In Ukraine, showers and thunderstorms boost soil moisture for immature spring grains and reproductive summer crops but cause some interruptions in winter grain harvesting. Widespread showers accompany a cooling trend in key spring wheat producing areas of north-central Kazakhstan, improving growing conditions for reproductive to filling crops.

East Asia: Widespread showers favor summer crops in Manchuria and across the North China Plain. Tropical Cyclone Kalmaegi makes landfall in southern China, bringing locally heavy showers to coastal areas.

Southeast Asia: Flooding in the northern Philippines from Tropical Cyclone Kalmaegi likely necessitates localized replanting of rice and corn. Monsoon showers maintain favorable moisture conditions for corn in Thailand.

South Asia: Locally heavy rain in northern India maintains abundant soil moisture for cotton, rice, and sugarcane. Dry weather in south-central India further reduces topsoil moisture for rain-fed cotton and sorghum.

Australia: Soaking rain provides a welcomed boost in soil moisture throughout the Western Australia wheat belt, helping winter wheat and barley establishment. Across the remainder of the Australia wheat belt, scattered showers aid vegetative winter grains.

South America: In Argentina, winter grain planting progresses, although rain is needed to ensure uniform germination, especially in Cordoba and other northern growing areas. Conditions favor harvesting of coffee, sugarcane, and citrus in central and southern Brazil.

Canada: Rain benefits vegetative to reproductive spring grains and oilseeds in most major growing areas.

Mexico: Scattered showers continue across the southern plateau corn belt and the northwestern monsoon areas, but rainfall is generally lighter than last week.

World Wheat Production Update
From all the news I've read, it looks like China, Europe and Russia are poised to harvest a bumper wheat crop in 2008. However, India, Kazakstan and Argentina are still under dry conditions reducing wheat and oilseed yield prospects. Australia is still five months away from harvest and the Canadian wheat crop is predicted to be around 5% below trend. SL

CWB PRO: July 24th, 2008
The CWB released its July 2008 Pool Return Outlook (PRO) for the 2007-08 crop year. Wheat values are down $3 per tonne from the May PRO, reflecting recent changes in world market factors. Milling durum is up $7 to $8 per tonne while designated barley is up $3 per tonne. Feed barley projections have increased $4 per tonne from the June PRO.

June PRO