9 Factors To Consider In Your 2023 Seed Selection Decisions

9 Factors To Consider In Your 2023 Seed Selection Decisions

Hopefully, 2023 won’t drastically change what we see as normal. No doubt, the price farmers pay for their 2023 seed selection will be higher again. Buying seeds during inflation can be challenging. Here are some tips to get you through.

Table of Content

1. Corn Looks Good
2. Don’t Forget Soybeans
3. You Get What You Pay For
4. Find and Use Discounts
5. Change It Up
6. Reject Recency Effect
7. Go Long With Soybean Varieties
8. Go Long For Hybrids, Too
9. Tar Spot

1. Corn Looks Good

Generally, people think of corn as sweet corn on the cob we eat directly, but it accounts for only 1% of the corn acreage in the U.S. The corn I am talking about is field corn, which is planted primarily all over the Midwest. Farmers like growing corn, corn, and more corn. April 2022 calculations by Gary Schnitkey, Krista Swanson, Nick Paulson, and Jim Baltz, U of I agricultural economists, and Carl Zulauf, an Ohio State University (OSU) agricultural economist, give corn the current nod. Farmer return per acre of corn is $365 per acre for highly productive central Illinois land, compared to $179 per acre for soybeans.

2. Don’t Forget Soybeans

According to the U of I and OSU economists, corn is more expensive and more prone to supply problems, as well as nitrogen fertilizer risks. “We’re also seeing a surge in double-crop soybeans, due to favorable economics for both soybeans and previously planted winter wheat,” says Stephanie Porter, Golden Harvest soybean product manager. “Farmers are also learning that they can gain yield by planting soybeans earlier in cooler weather.” The most important benefit from planting soybeans early is higher yields. Researchers at the University of Wisconsin found that soybean yields decrease by 0.4 of a bushel per acre per day when planting is delayed past the first week of May.

3. You Get What You Pay For

The U.S. Department of Agriculture (USDA) requires all seeds sold commercially to be tested and meet minimum germination standards. Most states also have their own seed laws setting minimum requirements, and most seed companies have minimum standards for seed they will market. However, the standard germination test tells only part of the story. A germination test conducted under ideal conditions doesn’t give a good indication of a seed’s performance under challenging field conditions. Running a vigor test provides a better estimate of field performance. Testing for seedling vigor includes accelerated aging, cold, electric conductivity, and vigor classification. Low vigor seeds may not grow well under adverse field conditions, even if they have an acceptable germination percentage. Vigor testing is particularly valuable for seed that has been held over, stored under unknown or unfavorable conditions, or will be planted under less-than-ideal soil or weather conditions.

4. Find and Use Discounts

It can be helpful to ease seed price concerns by ordering early. Take advantage of all the opportunities out there. Here are a few things could help:

Small and Mid-Sized Farmer Resources
Grainger Industrial Supply
Prime Day (It’s passed for this year)
Farmers Union Member Benefits
National Young Farmers Coalition
Billion Farmer Discount
Apply for farm grants and loans

5. Change It Up

Pests love predictability. A control measure can become resistant when it is used repeatedly.

Each crop uses different types and amounts of minerals from the soil. If the same crop is planted each and every year, over time the soil is depleted of the minerals essential for plant growth and health. In reverse, a different crop will sometimes return missing minerals to the soil as the plant dies and composts or is turned into the soil. Rootworm can also be demolished by changing up the crop as well. Because corn rootworm larvae must feed on corn roots to survive, switching crops from one year to the next effectively eliminates their chances of survival. Without corn roots to feed on, they starve to death.

6. Reject Recency Effect

It’s so easy to make big decisions based on your most recent experience. What you’re experiencing is called the recency effect or recency bias, which poorly predicts seed performance.

Next year will be different from 2022, just as 2022 was different from 2021. A good rule of thumb is to compile at least five years of yield and production data. Then, toss out the outliers. This will help you set realistic goals and choose seed options for broad success. More tips on making sure you don’t suffer from the Recency Effect.

7. Go Long With Soybean Varieties

Producers are looking for ways to improve soybean yields and profitability and many are planting longer maturing soybean varieties as a way to reach these goals. The theory behind this strategy is that later maturing varieties will have a longer reproductive period and take full advantage of the growing season. However, planting later maturing varieties carries some risk. The most obvious risk is that the crop could be damaged by frost or freeze events, reducing yield and quality and increasing harvest delays.

8. Go Long For Hybrids, Too

“There’s still a trend to higher yields with fuller season maturities,” says Justin Welch, Syngenta digital product manager.

That’s why many northern Illinois farmers have shifted from corn with relative maturities of 105 days to 110 days, adds Judd Maxwell, Syngenta corn product placement manager.

“They’re now planting 110-day corn because they can harvest more yield in the same period of time,” Maxwell says.

However, this move increases the risk of an early fall frost spurring wet and immature corn, adds Maxwell. Thus, the move toward longer corn maturities hinges upon the drying capacity a farmer has, he adds.

9. Tar Spot

The Corn Belt is experiencing an increase in tar spot, a fungus that attacks corn. Tar spot pressure in corn is fueled by cool (60-70 degrees F), humid conditions (>75% relative humidity) and prolonged leaf wetness (>7 hours). Therefore, tar spot pressure is typically higher in areas such as those closer in proximity to the great lakes (e.g., Northwest Indiana), river bottoms, and irrigated corn acres. Furthermore, it is also important to note that previous research has found that the pathogen that causes tar spot can overwinter on infested corn residue on the soil surface, thus causing crop infection risks in the following year(s).

To manage tar spots, it is important to start with a healthy hybrid, apply fungicides on time, and improve the overall health of the plant. The tar spot typically attacks plants in conjunction with other diseases, so hybrids with better plant health can withstand tar spot pressure better.

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Managing Apple Maggots with Insecticides

Managing Apple Maggots with Insecticides

There is probably no other pest as damaging to home fruit production as the apple maggot, a.k.a. railroad worm. The plant is native to this region of the world and is found throughout the state. The fruit infestation typically occurs during the summer when many families are taking vacations. Even a brief lack of attention can lead to substantial fruit damage.

Table of Contents

1. Biology of Apple Maggots
2. Devastation of Apple Maggots
3. Apple Maggot Prevention
4. Controlling Apple Maggots
5. Insecticide Chart

Biology of Apple Maggots

Apple maggot spends winter in the soil as a pupa. Adults emerge from the soil in late June or early July. Apple maggot flies continue to emerge from the soil throughout the summer and can be active until October. In the first seven to ten days following its emergence, the adult apple maggot feeds until it has reached sexual maturity. After mating females lay eggs just under the skin of the host fruit. A single female can lay between 300 and 500 eggs over her lifetime, which can last 30 or more days. Eggs hatch in 3 to 10 days depending on temperatures. The larvae (maggots) feed while tunneling through the fruit flesh. Typically larvae complete development in about 30 days. Temperatures and fruit hardness influence the rate of development and survivorship of larvae. Full-grown larvae leave the fruit and enter the soil to pupate. Most apple maggot pupae remain in the soil for one winter, though a few may remain there for two or more years. In warm years some flies can complete development and emerge as a partial second generation.

There are several factors that affect your ability to control these pests, such as how many apple maggots are present in an area and how many unmanaged apple trees surround your garden. You may have trouble keeping apple maggots under control if others in your area plant trees and don’t maintain them.

Devastation of Apple Maggots

Apple maggots are able to damage apples on two different levels. The first damage occurs when they lay eggs on the apples. The apple flesh stops growing at that site, which results in a weird, dimpled or sunken area on the apple—but it doesn’t stop there! When the maggots hatch, they tunnel through the flesh of the apple, causing it to decay and rot. Even so, a bit of prevention can help you defeat the destructive apple maggot.

There are several factors that affect your ability to control these pests, such as how many apple maggots are present in an area and how many unmanaged apple trees surround your garden. You may have trouble keeping apple maggots under control if others in your area plant trees and don’t maintain them.

Apple Maggot Prevention

Sanitation is the first issue to address. Pick up and dispose of apples within a few days after they’ve fallen. The best way to dispose of them is to trench compost them—just be sure that your trench or hole is at least a foot deep. If you still want to use these fallen apples, you can trim off the bad parts and turn the remainder into cider or applesauce.

Controlling Apple Maggots

Controlling apple maggots has been traditionally achieved with organophosphate insecticides, like Imidan. Synthetic pyrethroid compounds, like Asana, Warrior, Danitol, Battalion, Mustang Max and Baythroid, are also toxic to adult fruit flies but are generally viewed to be moderately effective because they have a shorter field residual.

  • Red Sphere Traps will greatly reduce damage and work well to capture and reduce the number of egg-laying adults. Traps should be placed within the canopy just as trees are finished blooming. Hang spheres high in the brightest areas of the tree, 6-7 feet from the ground. Set out one trap for every 150 apples (2 traps per dwarf tree).
  • Beneficial nematodes are microscopic, worm-like parasites that actively hunt, penetrate and destroy the pupal stage of this pest. For best results, apply in the early spring or fall around the base of trees, out to the drip line. One application will continue working for 18 months.
  • Surround WP — made from kaolin clay — will suppress a broad range of insects and has shown over 90% control of apple pests. It also has a positive effect on fungal diseases like fire blight, sooty blotch and flyspeck.
  • Apple maggot is listed on the labels of several reduced-risk and organophosphate-replacement insecticides:
    • The neonicotinoids Belay and Assail are labeled for apple maggot control. Despite their limited lethal action on adult apple maggots, they provide strong curative action on eggs and larvae.
    • Spinosyn compounds Delegate and Entrust are active against apple maggots when consumed, but have shown only fair control in field trials with high pest pressure, thus are marketed only to suppress apple maggots.
    • OMRI-approved Venerate is a biopesticide used to control apple maggots.
    • Pre-mix compounds such as Voliam Flexi, is labeled for apple maggot control.

Insecticide Chart

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Beneficial Insects That Help Your Crop Production

Beneficial Insects That Help Your Crop Production

When you think of bugs on your crops, you probably think about those pesky little insects that feast on your produce and crops. This is understandable since they can reduce yields, blemish produce, and transmit diseases. But, what about the other 95% of insects out there that don’t cause trouble? You might be surprised to find out how much they can actually help you!

Table of Content

Intro
Five Soil Health Principles
Creating Habitat for Insects
Most Insects Benefits Farmers

The conservation of beneficial insects on his farm is a critical part of Bryan Jorgensen’s management plan, an agronomist for his family’s operation, Jorgensen Land and Cattle near Ideal, South Dakota.

“Insects are a primary part of the biome; it wouldn’t function without insects,” he says. “Their activity contributes to the building of soil organic matter, for instance. Beneficial predatory insects eat pest insects. Some insects are pollinators. Others are herbivores that regulate weed populations by eating weed seeds.”

Farm profitability is enhanced by the cooperative efforts of beneficial insects, he says. The economic benefits spin from multiple services performed by helpful insects. Boosting yields is one benefit of insect pollination of flowering crops. Another benefit, insecticides and fungicides may be reduced by beneficial insects consuming pests.

An uncertain science is assessing the extent of beneficial insect populations in fields and whether they are growing. Jorgensen evaluates insect activity by examining the soil itself and its ability to absorb moisture.

“I watch how the soil reacts to water infiltration,” he says. “Insects create macropores and micropores in the soil, and these facilitate rapid water infiltration.”

While it’s not a way to measure existing insect populations, Jorgensen says leaving residue on the soil’s surface will help to build insect populations.

“If you have a healthy soil system — with residue on the surface — you’re going to have tons of insects, and if you look beneath the residue, you’ll see them,” he says.

Jorgensen remembers a time when his family’s farming system was an unhealthy one. “I started farming in the mid-1980s, and at the time we used lots of tillage,” he says. “We had summer fallow, and we kept it tilled black. There was little opportunity for insects to thrive, and certainly the tillage prevented any chance for insects to build micropores and macropores in the soil.”

Five Soil Health Principles

With time, the Jorgensen’s developed their present farming system, which incorporates no-till, diverse crop rotations, and livestock grazing.

“We practice the five principles of soil health, which are all important to maintaining a healthy soil system, including a healthy population of insects,” says Jorgensen. “We keep the soil surface covered with residue. We disturb the soil as little as possible, and we try to keep living roots in the soil for as long as possible. Living roots create a host environment for a living biology.

“We also try to mimic nature by growing a diverse population of crops, and we integrate livestock grazing into the system,” he says. “Through their manure and urine, grazing cattle, sheep, or goats spread nutrients from the crop residues back onto the soil surface. The insects then move these nutrients back into the soil system.”

The diverse crops the Jorgensen’s grow include winter wheat, corn, grain sorghum, soybeans, oats, spring wheat, field peas, alfalfa, forage sorghums, and tame grasses.

“On some of our poorer ground we establish tame grasses for 10 to 15 years to build soil health,” says Jorgensen. They feed their livestock most of the crops they grow.

They grow a multi-species cover crop behind winter wheat. “We harvest the wheat in mid-July, and behind that we plant a cover crop mix including eight to 12 species of both warm-season and cool-season plants,” he says. “We graze cattle on the cover crops in November, December, and January.”

By grazing cover crops and mechanically harvesting crops, they monitor the amount of residue being removed from fields. “We have to replace that residue with some other kind of residue or nutrient, otherwise the system will go backward and organic matter will decline,” says Jorgensen.

Since soybeans leave little residue after harvest, the Jorgensen farm typically plants winter wheat, a crop with high residue, after soybeans, if the weather allows.

“If we don’t plant winter wheat behind the soybeans, we’ll plant oats or spring wheat on that field in the spring,” he says.

They have found that grazing cattle on cover crops is the most effective way to maintain surface residue and build soil organic matter. “Across the farm in 2021, the average organic matter content of our soil was 4.3%,” he says. “Some fields tested as high as 8.5%. Those were fields that had a history of very little removal of crop residue and a lot of cattle activity,” he says.

The organic matter in their soil was typically around 1% before they adopted regenerative management.

Creating Habitat for Insects

As an insect researcher, Jonathan Lundgren has dedicated his life to exploring the role of insects in agricultural production systems. After working as a research entomologist for the USDA-Agricultural Research Service, he founded Blue Dasher Farm, Estelline, South Dakota, as a research and demonstration farm in regenerative agriculture.

“There are hundreds of species of insects, and many of them are extremely important in reducing a farmer’s dependence on insecticides,” he says. “Lady beetles, lacewings, ants — those are just a few common examples of beneficial insects.

”Research data suggests that diversity of insect populations on farms correlates with profitability, says Lundgren. “We know that farms that have more insect life have fewer pests and don’t have to spend much money on inputs; thus, they tend to be profitable,” he says.

Insect populations are best built by eliminating tillage and agrochemicals, and by increasing farm biological diversity. “Grow lots and lots of plants,” he advises farmers. “Never leave soil bare, and get animals out on the landscape to regulate those plants.

According to Lundgren’s research, farmers who adopt such regenerative practices can benefit as early as one year from the services of beneficial insects that prey on crop pests. One study shows that predation on pest caterpillars doubled in the first year of the transition and nearly tripled in the second year.

Pesticides and fungicides damage beneficial insect populations, but even herbicides can harm them. “Herbicides can harm some insects,” says Lundgren. “But as a rule, herbicides are less harmful to insects than tillage.

”To compensate for the damage done to insect populations by the application of herbicides to crops, he suggests continued seeding of diverse plants in the field to keep living roots in the ground. “You might also leave strips in the field that are unsprayed, to create ‘islands’ where the insects can live.

”The most important way to ensure the diversity of life on a farm — including insects — is to become intimately familiar with your soil and plants and the life that attends them.

“Every day, walk out into a field and see something — some form of life — that you’ve never seen before,” says Lundgren. “If you can do that, you’re on the right path to building biological diversity on your farm.”

Most Insects Benefits Farmers

Beneficial insects have increased in numbers as a result of regenerative management practices. These insects help maintain healthy crops and soil systems. Jorgensen does everything he can to protect their well-being.

“I don’t use any insecticides, with the exception of controlling alfalfa weevils every five or six years,” he says. “I also use no fungicides. In a healthy system, plants can typically defend themselves against viral infections.

“Unfortunately, many of us have been taught that insects are bad, and we have to spray them,” says Jorgensen. “In truth, most insects are beneficial. It’s only a handful that cause problems. Healthy soil and cropping systems need insects to thrive.”

More about Soil Health

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Emergency Relief

Emergency Relief

As a means of helping agricultural producers cope with natural disasters in 2020 and 2021, Congress included emergency relief funding in the Extending Government Funding and Delivering Emergency Assistance Act (P.L. 117-43). A minimum of 750 million dollars will be allocated to livestock producers impacted by droughts and wildfires.

In the past two years, the USDA has worked diligently to develop programs, policies, and provisions that will equitably distribute these much-needed payments to producers hard-hit by catastrophes. As program details become available, USDA will keep producers and stakeholders informed through proactive communication and outreach.

There will be two phases of distribution: Emergency Livestock Relief Program (ELRP) and Emergency Relief Program (ERP).

Emergency Livestock Relief Program (ELRP) – Phase 1

In the first phase of the ELRP program, producers will be compensated for the cost of supplemental feed as a result of forage losses in calendar year 2021 due to droughts or wildfires, using the data already submitted to FSA through the Livestock Forage Disaster Program (LFP).

ELRP Phase 1 only includes 2021 LFP participants.

Livestock producers who have losses due to drought are eligible for assistance if:

  • Any area within the county in which the loss occurred was rated by the U.S. Drought Monitor as having a D2 (severe drought) for eight consecutive weeks, or a D3 (extreme drought) or higher level of drought intensity during the applicable year.
  • Producers whose permitted grazing on federally managed lands was disallowed due to wildfire are also eligible for ELRP payments.

All grazing animals that meet their majority of nutritional needs by grazing forage grasses or legumes are eligible, including alpacas, beef cattle, buffalo/ bison, beefalo, dairy cattle, deer, elk, emus, equine, goats, llamas, reindeer, and sheep.

How to Apply

For ELRP Phase 1, eligible livestock producers are not required to submit an application for ELRP phase 1; however, they must have the following forms on file determined by FSA’s Deputy Administrator for Farm Programs:

  • CCC-853, Livestock Forage Disaster Program Application
  • Form AD-2047, Customer Data Worksheet;
  • Form CCC-902, Farm Operating Plan for an individual or legal entity as provided in 7 CFR part 1400;
  • Form CCC-901, Member Information for Legal Entities (if applicable); and
  • Form AD-1026 Highly Erodible Land Conservation (HELC) and Wetland Conservation (WC)
  • Certification for the ELRP producer and applicable affiliates.

Payments

Payments under Phase 1 of the ELRP will be calculated by multiplying an eligible livestock producer’s gross LFP payment for 2021 by the applicable ELRP payment factor.

The ELRP payment factor will be 90 percent for beginning, limited resource, socially disadvantaged, and veteran farmers and ranchers, and 75 percent for all other producers.

Form CCC-860, Socially Disadvantaged, Limited Resource, Beginning and Veteran Farmer or Rancher Certification, must be on file with FSA with a certification applicable for the 2021 program year to receive a payment based on the higher payment factor.
Payment Limitation and Adjusted Gross Income

Adjusted Gross Income (AGI) limitations do not apply to ELRP, however the payment limitation for ELRP is determined by the person’s or legal entity’s average adjusted gross farm income (income derived from farming, ranching, and forestry operations). Specifically, a person or legal entity, other than a joint venture or general partnership, cannot receive, directly or indirectly, more than $125,000 in payments under ELRP if their average adjusted gross farm income is less than 75 percent of their average AGI for tax years 2017, 2018, and 2019.

If at least 75 percent of the person or legal entity’s average AGI is derived from farming, ranching, or forestry related activities and the participant provides the required certification and documentation, as discussed below, the person or legal entity, other than a joint venture or general partnership, is eligible to receive, directly or indirectly, up to $250,000 in ELRP payments. To request the increased payment limitation, participants must file form FSA-510 complete with participant’s certification their average adjusted gross farm income is at least 75 percent of their average AGI and a certification from a Licensed Certified Public Accountant (CPA) or Attorney that the participant meets the requirements.

Attribution of payments apply to ELRP and payments to a legal entity are tracked through four levels of ownership, attributed, and limited to persons or legal entities that hold an ownership interest in the legal entity. For more information, see the Direct Attribution information on the Payment Limitations webpage.

Emergency Livestock Relief Program (ELRP) – Phase 2

In order to ensure that much-needed emergency relief program benefits are distributed evenly and equally, the FSA will continue evaluating and identifying the impacts of 2021 drought and wildfire on livestock producers.

All ELRP information and resources will be updated as Phase 2 policies and provisions are available.

Emergency Relief Program (ERP) – Phase 1

The first phase of ERP assistance will provide payments to producers who were impacted by wildfires, droughts, hurricanes, winter storms, and other eligible disasters experienced during the calendar years 2020 and 2021 using the existing Federal Crop Insurance or Noninsured Crop Disaster Assistance Program (NAP) data already submitted to FSA.

Fact Sheet

Who is Eligible?

For ERP eligibility, “related conditions” are damaging weather and adverse natural occurrences that occurred concurrently with and as a direct result of a specified qualifying disaster event. They include:

As part of ERP eligibility, “related conditions” are weather events and adverse natural occurrences that occurred concurrently with or directly resulting from a qualifying disaster event. They include:

  • Excessive wind that occurred as a direct result of a derecho;
  • Silt and debris that occurred as a direct result of flooding;
  • Excessive wind, storm surges, tornados, tropical storms, and tropical depressions that occurred as a direct result of a hurricane; and
  • Excessive wind and blizzards that occurred as a direct result of a winter storm.

For drought, ERP assistance is available if any area within the county in which the loss occurred was rated by the U.S. Drought Monitor as having a D2 (severe drought) for eight consecutive weeks or D3 (extreme drought) or a higher level of drought intensity.

2020 drought counties eligible for ERP
2021 drought counties eligible for ERP

How to Apply

For ERP Phase 1, FSA will send pre-filled application forms to producers whose crop insurance and NAP data are already on file because they received a crop insurance indemnity or NAP payment. This form includes eligibility requirements, outlines the application process, and provides ERP payment information. Producers will receive a separate application form for each program year. Receipt of a pre-filled application is not confirmation that a producer is eligible to receive an ERP Phase 1 payment.

Producers must also have the following forms on file determined by FSA’s Deputy Administrator for Farm Programs:

  • Form AD-2047, Customer Data Worksheet;
  • Form CCC-902, Farm Operating Plan for an individual or legal entity;
  • Form CCC-901, Member Information for Legal Entities (if applicable); and
  • Form AD-1026 Highly Erodible Land Conservation (HELC) and Wetland Conservation (WC)
  • Certification for the ELRP producer and applicable affiliates

Most producers, especially those who have previously participated in FSA programs will likely have these required forms on file. However, those who are uncertain or want to confirm should contact their local FSA county office.

In addition to the forms listed above, certain producers will also need to submit the following forms to qualify for an increased payment rate or payment limitation.

  • Form CCC-860, Socially Disadvantaged, Limited Resource, Beginning and Veteran Farmer or Rancher Certification, if applicable, for the 2021 program year.
  • Form FSA-510, Request for an Exception to the $125,000 Payment Limitation for Certain Programs (if applicable).

In addition to the forms listed above, certain producers will also need to submit the following forms to qualify for an increased payment rate or payment limitation.

  • Form CCC-860, Socially Disadvantaged, Limited Resource, Beginning and Veteran Farmer or Rancher Certification, if applicable, for the 2021 program year.
  • Form FSA-510, Request for an Exception to the $125,000 Payment Limitation for Certain Programs (if applicable).

Payments

For crops covered by crop insurance, the ERP Phase 1 payment calculation for a crop and unit will depend on the type and level of coverage obtained by the producer. Based on the producer’s level of crop insurance or NAP coverage, each calculation uses the following ERP factor.

Crop Insurance – the ERP factor is 75% to 95% depending on the level of coverage ranging from catastrophic to at least 80% coverage.
NAP – the ERP factor is 75% to 95% depending on the level of coverage ranging from catastrophic to 65% coverage. FSA will perform a conventional NAP payment calculation with an adjusted guarantee equal to the ERP Factor.

ERP factors tables can be found on the ERP Fact Sheet.

FSA will mail application forms for policyholders with 2021 crop year coverage under Stacked Income Protection (STAX), Supplemental Coverage Option (SCO), Enhanced Coverage Option (ECO), Margin Protection (MP), and Area Risk Protection Insurance (ARPI) when data becomes available.

Payment Limitation and Adjusted Gross Income

The payment limitation for ERP Phase 1 is determined by the person’s or legal entity’s average adjusted gross farm income (income from activities related to farming, ranching, or forestry).

Specifically, a person or legal entity, other than a joint venture or general partnership, cannot receive, directly or indirectly, more than $125,000 in payments for specialty and high-value crops and $125,000 in payment for all other crops under ERP (for Phase 1 and Phase 2 combined) for a program year if their average adjusted gross (AGI) farm income is less than 75 percent of their average AGI the three taxable years preceding the most immediately preceding complete tax year.

If at least 75 percent of the person or legal entity’s average AGI is derived from farming, ranching, or forestry-related activities and the participant provides the required certification and documentation, as discussed below, the person or legal entity, other than a joint venture or general partnership, is eligible to receive, directly or indirectly, up to:

  • $900,000 for each program year for specialty crops; and
  • $250,000 for each program year for all other crops.

The relevant tax years for establishing a producer’s AGI and percentage derived from farming, ranching, and forestry-related activities are:

  • 2016, 2017, and 2018 for program year 2020;
  • 2017, 2018, and 2019 for program year 2021; and
  • 2018, 2019, and 2020 for program year 2022.

To request the increased payment limitation, participants must file form FSA-510 complete with the participant’s certification their average adjusted gross farm income is at least 75 percent of their average AGI and certification from a licensed Certified Public Accountant (CPA) or Attorney that the participant meets the requirements. To learn more, visit the Payment Eligibility and Payment Limitations fact sheet.

The Requirement to Purchase Crop Insurance or NAP Coverage

Producers who receive ERP Phase 1 payments must purchase crop insurance, or NAP coverage if crop insurance is not available, in the next two crop years to be determined by the Secretary. Purchased coverage must be at 60/100 level of coverage or higher for insured crops, or at the catastrophic coverage level or higher for NAP crops.

 

Emergency Relief Program (ERP) – Phase 2

Updates will be made once program details are finalized.

All ELRP information and resources will be updated as Phase 2 policies and provisions are available.

La Niña is Back! Could Disrupt Already Heated Market

La Niña is Back! Could Disrupt Already Heated Market

La Niñas weather event which came in October 2020 has returned for a second cycle. By 2021 Pacific Ocean waters along with the central and east-central equatorial band had returned to remarkably below normal temperatures. In simple words, temperatures in most of the Americas pacific region were below normal. Meanwhile, Atlantic Sea surface temperatures were above normal.

Table of Contents

1. Intro Paragraph
2. Effects on Markets
3. La Niña Biggest Impact

La Niñas weather events are generally related to cooler and wetter winters in the Northern Regions of America and Canada, along with the warmer and dryer weather conditions in the southern part of the U.S. This weather event can also disturb the weather conditions in South America, correlating with droughts in many areas of the continent and wetter than normal weather in other regions. Uruguay, Argentina, Brazil, and Paraguay have been affected by record-high temperatures in December when their summer seasons began.

Effects on Markets

The last two La Niña’s have different effects on the market. At the beginning of the August 2010 La Niña, spot prices for corn and soy rose significantly. On the other hand, wheat prices fell slightly. In the 12 months after the beginning of October 2020 La Niña, corn, wheat, and soybean prices rose.

The most recent events of La Niña came when commodity prices are rising swiftly, despite Federal revenue and other major central banks amid periods of quantitative easing. During the period of Arab spring in 2010 and early 2011, oil prices rose significantly and caused major disruption in the supply chain. From October 2020, crude oil and commodity prices start rising once again due to the COVID pandemic and global supply chain disruption. Oil and agriculture markets suffer a lot due to co-movement in the prices, as in some countries, corn and wheat is being used in making biofuels.

In addition to these macroeconomics factors, another reason for increasing crop prices during the events of La Niña might be correlated with increased production of soybean and corn in South American regions. In 2000, the US suppressed South American countries like Argentina and Brazil in terms of corn and soybean production. However, now these South American countries suppress the US exports in terms of net Corn exports.

La Niña’s Biggest Impact

La Niña’s worst impact on the North American region tends to come in during the winter seasons. The good news is that it is far away from crucial crop growing and harvesting seasons. To the Extent, La Niña affects North American summers, it seems to be related to relatively good growing conditions.

On the other hand, La Niña tends to thump South American regions during their summer season and is capable of doing more damage to crops. This may be the core reason for higher crop prices during the last two episodes of La Niña. As we know, the South American region leads in terms of corn and soybean exports, what happens there is very critical to Global Agri Markets.

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Livestock Market Shakeups You Need to Know About

Livestock Market Shakeups You Need to Know About

Livestock has always been a tricky business because there are hundreds of variables that affect price and demand, but recent shakeups in the U.S. and around the world have made it even more unpredictable. New laws and geopolitical factors have a huge impact on these markets, and changes for one type of livestock can affect prices for another.

Table of Contents

 

Prices could tank or they could go up at any time. No one can say for sure, but you can keep yourself informed and protected to make sure you come out on top no matter what happens. I’m here to help you understand the issues and the different strategies available for protecting your hard work and income.

California’s Animal Treatment Law

The state of California recently passed a new animal welfare law designed to improve conditions on the farm for calves, chickens, and pigs. The new law calls for an increase in cage sizes for livestock, not just for producers in California, but also those who sell livestock produce to California. While most cattle and chicken producers haven’t complained, the hog producers are not happy.

Hog producers in Iowa who supply over a third of our country’s bacon are suing the state, saying it will take tens of millions of dollars to meet the new requirements and that the people who drafted the law don’t understand the implications it could have on the market.

Michael Formica of The National Pork Producers Council said, “To make the physical changes because it’s going to require either tearing down farms or building brand new farms, with all the supply chain disruptions, we keep seeing figures in the $15-17 million range for a family farmer so if you’re a family farmer already struggling with everything else going on in the economy now if you want to continue in the business, you have to go to your banker and ask for a $15-17 million loan to build a barn. It’s going to drive family farmers out of business and lead to eventually far more consolidation and integration.”

Despite their obsession with the plant-based diet, somehow California accounts for over 50% of pork sales in the US. And if producers in Iowa and other states can no longer sell there, that will make it near impossible to get there and drive up the prices of pork in all 50 states.

Other Global Factors at Play

India has recently approved the importation of pork from the U.S. Pork sales are going to skyrocket because India is a huge market of almost 1.3 billion people. Will that offset the price increase due to the drop in demand from California?

Just like nearly every other industry in the world, livestock producers are running into major challenges due to supply chain issues stemming from the Covid pandemic. The price of beef and all livestock produce is going up because the price of feed has gone up. The price of feed has gone up because the price of growing the feed has gone up. And the price of growing the feed has gone up because the price of gas, fertilizers, chemicals and seed has gone up.

When President Trump was in office, he was trying to level the playing field throughout the world, putting tariffs on other countries, especially China. In the short term, it was painful, which made it hard for people to understand and accept, but long term, it could have provided more stability for the whole market.

Now with President Biden in office, where will the administration place its priorities? How will changes in climate policy affect farmers and ranchers? Will the focus be on growing exports to India, China? Will changes be made with typical trading partners Mexico, Canada, and the EU? Will the trade agreements be workable long term or will they be short term solutions? I personally know several ranchers who started selling beef directly to consumers due to the pressures on the supply chain issues during the past 2 years. Will that continue? Will the recently passed livestock market transparency bill relieve some of the pressure on the livestock producers?

No One Knows–So, Be Ready For Anything

Regardless of who’s in office, there are a thousand geopolitical factors that can affect the livestock industry. The experts don’t know what will happen, farmers don’t know what will happen, and the government certainly doesn’t know what will happen. If the prices tank, what will happen to your business?

You can get puts and calls on your beef prices, but what if the price goes up? You’re going to lose out on all that additional margin. But if you have Livestock Risk Protection, then you’re covered if the price goes down and your extra gains more than cover the policy. It’s the best of both worlds.

No one can predict the future, which is why insurance is so smart. Call us today to talk about your livestock insurance options.

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