Shell-shocked! — That was Jim Bower’s reaction to Friday’s USDA Prospective Plantings Report. USDA is projecting corn acreage at 78 million acres, down five percent from last year. "From a corn standpoint, this is a landmark report," said Bower, "It is certainly far, far below what the trade thought; from an acreage aspect, it is 2.5 million acres below the trade estimate." Bower, who is the president of Bower Trading, says this report had the largest decline from industry expectations in the history of the market. Soybean growers intend to take up the slack. Soybean acreage is estimated at 76.9 million acreas, up seven percent from last year. The largest acreage increase is in North Dakota.

State by State — North Dakota had the most dramatic increase in soybean acreage; up 41 percent from last year. Minnesota was up four percent; South Dakota was up three percent. North Dakota corn acreage is expected to increase 17 percent, while Minnesota plantings are on par with last year and South Dakota is down one percent. Spring wheat acreage is one of the casualties of the increase in soybean plantings. Minnesota spring wheat seedings are predicted to be 14 percent below one year ago; North Dakota is down four percent and South Dakota drops three percent. Durum takes a bigger hit with North Dakota acreage expected to decline nearly 40 percent from last year.

Wet Weather May Offer Market Consequences — The Prospective Plantings number surprised the trade, sending soybeans south and corn and wheat prices higher. Christian Mayer of North Star Commodities says the wet weather could amplify these trends. "There has been a pretty good amount of rain that moved through Minnesota and other Cornbelt states; if you get late plantings, you can throw a weather premium on this market." Soybean acreage is already expected to increase and a wet spring could result in more acres switching to soybeans.

La Nina — Meteorologist Gail Martell says a cold and wet spring is in the forecast for the Dakotas and Minnesota. A La Nina weather pattern is shouldering the blame. "A La Nina usually produces drought in the Southern Plains and that certainly has been true," said Martell, "The flip side of La Nina is that it produces a lot of wetness across the northern states." Martell presides over www.martellcropprojections.com.

Weather Scare or Weather Problem — There is renewed talk of dry weather problems in the Southern Plains and wet weather worries in the Northern Plains. "Do not get sucked into a weather scare; let the speculators deal with things going up and down and its our job to take advantage of it," said Betsy Jensen of Northland Community and Technical College, "The more volatility in the market, the better it is for farmers; we can sell on the highs and take LDP’s on the lows." Jensen spoke at marketing seminars sponsored by the Minnesota Wheat Growers Association last week.

Most of the Nation Seeing Expanded Basis Levels — University of Minnesota Regional Extension Educator Bret Oelke says the basis issue is more pronounced in Minnesota and the Dakotas. "In our area, we are seeing anywhere from 75 (cents) to a dollar under on the nearby soybeans, corn is in that 65 to75 under range," said Oelke, "We are taking an opportunity to lock some of that July basis on corn in the southern Valley and normally we would expect 30 to 40 under, at the very worst, and the best offer we can get right now is 55 to 60 under." Why is the basis level at such a disadvantage? One factor is the fuel price. "It costs more money to rail corn to the West Coast." Oelke spoke at the Minnesota Association of Wheat Growers Marketing Seminars in Warren, Erskine, Moorhead and Fergus Falls.

Disaster Assistance — North Dakota Senator Kent Conrad has introduced agriculture disaster assistance legislation. Conrad says the bill will help producers affected by weather-related crop and livestock losses. It also compensates growers for high energy costs. "This is a matter of economic life or death." North Dakota Senator Byron Dorgan says weather-related disasters are one issue. "The second is a hose; a big old vacuum hose that sucks money from the pockets of American farmers and deposits it in two places; one in the treasury of the OPEC countries and the second (is) in the bank accounts of the largest oil companies in this country." Minnesota Senators Dayton and Coleman and South Dakota Senators Thune and Johnson are co-sponsoring this legislation.

Stalling? — Agriculture Secretary Mike Johanns says it is time for Japan to reopen its market to US beef. Progress was made during this past week’s negotiations, but not enough to resolve the dispute. Johanns was asked if Japan’s process could be considered a temporary trade barrier. "My hope is that it is not a stalling tactic because the investigation was very complete." USDA Acting Undersecretary Chuck Lambert calls Japan’s decision to suspend US beef trade "excessive." Speaking to Japanese media outlets, Lambert said it would have made more sense to de-list the one plant that exported bone-in veal, rather than shut off all trade. President Bush and Japanese Prime Minister Koizumi will meet in late June and the beef ban is expected to be on the agenda.

Need More Info — South Korea does not expect to resume US beef imports until May. A South Korean government official says his country is still waiting for more information on the latest BSE case. USDA says the infected cow was at least ten years old, but South Korea is not confident in the accuracy of that report.

Canadian Cattlemen’s Association Wants Full Border Opening — At this point, Canadian imports are limited to cattle under 30 months of age. CCA President Stan Eby says his country would benefit from a competitive cull cow market, which he says can be found in the United States. The CCA is actively lobbying to normalize trade.

Farm Bill Forums — During the past year, Agriculture Secretary Mike Johanns hosted Farm Bill listening forums nationwide. USDA has now completed a summary of the public comments submitted during those events. More than 4,000 comments are made. "We will glean from these summary documents a number of ideas that require further analysis," said Ag Secretary Mike Johanns, "I will ask our economists to perform the analysis in a straight forward unbiased fashion." The Administration won’t release its Farm Bill proposals until this process is complete. The USDA Farm Bill Listening Sessions included stops in Minot, North Dakota, and Redwood Falls, Minnesota.

No Big Surprises in H & P Report — Nationwide, swine inventory numbers are up one percent from March of last year. The breeding herd and market hog inventory is also one percent larger. "The number that continues to surprise me is that we’ve had a tremendously disiciplined industry for 18 months or more," said Iowa State Economist John Lawrence, "We had a profitable time in 2004 and 2005; based on our estimate return series, we’ve had 26 months of consecutive black ink." In Minnesota and South Dakota, the hog inventory was down three percent from December.

Class III Milk Price — At $11.11 per hundredweight, the March Class III milk price is down $1.09 from February and $2.97 from March of 2005. Class III prices haven’t been this low since June of 2003.

Swap Milk — To cut rising energy costs, dairy processors are swapping milk. The milk buyers cooperate–picking up the milk closest to their plants. "There’s a lot of issues with it, as you can imagine, as soon as you start going into each others plants and there’s a lot of extra accounting, but it has got to be done because the cost of those extra miles is just huge," said Associated Milk Producers Incorporated General Manager Mark Furth. Furth feels the milk swap is the answer to the rising fuel costs and will help keep Midwestern dairies competitive.

Check the Tires — As spring approaches, producers are giving their machinery a once over. Michelin Ag Sales and Development Manager Michael Vandel says farmers shouldn’t ignore their tires. Check the wear on the tire to make "sure they get through some of those muddy fields to get their spring work done." Tire size can make a tractor more efficient and deliver less compaction on the soil."

SD BIO Formed — An organization, known as the South Dakota Biotechnology Association, has been created. The new group is affiliated with the Biotechnology Industry Organization. The association is designed to serve as a resource for South Dakota’s growing biotech industry. A kickoff event is planned for this afternoon in Sioux Falls.

New Inoculant — Pioneer Hi-Bred International has releasing a new inoculant for use on high-moisture corn. The inoculant uses two proprietary strains of bacteria to enhance fermentation.

SD Dairy Princess Crowned — Jenna Mueller of Big Stone City is the new South Dakota Dairy Princess. Mueller is a student at South Dakota State University. Kathryn Norling of Beresford was the runner up.


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