Potential Effect of Weekend Freezes on Corn and Soybean
Chad Lee, Conner Raymond, and Carrie Knott; University of Kentucky
Freezing temperatures were recorded across Kentucky Monday morning, April 24, 2023. The coldest temperatures were mostly in central and eastern Kentucky, but freezing temperatures were as far west as Trigg and Webster counties. Temperatures fell to or slightly below freezing in the following counties from Sunday to Monday: Butler, Caldwell, Carroll, Christian, Crittenden, Graves, Grayson, Hardin, Logan, Meade, Ohio, Taylor, and Webster counties (Table 1, at the end of this article). Webster and McLean County were the coldest at 30°F. Frosts likely occurred west of these counties. The good news is that soil surface temperatures likely stayed in the low 50’s to mid-40’s. This is based on soil surface temperatures measured at UKREC in Princeton, KY.
About 36% of corn acres and 20% of soybean acres were planted as of April 23, 2023, according to the USDA-NASS.
Corn and Soybeans at Risk
Corn and soybeans are at more risk to death from the freeze events at specific growth stages and in certain conditions. The following scenarios go from greatest risk to least risk of plant death from the freeze events.
Soybeans at the “crook” stage where the stem is emerged and bent over like a shepherd’s crook were the most susceptible to the freeze (Figure 1). These plants were most likely to be killed by the freeze or frost. At crook stage, typical damage is along the stem with some yellowing of the cotyledon. This will be followed by plants snapping off where damage was observed (Figures 2 and 3).
Corn and soybean seeds and seedlings in furrows that were not fully closed are at risk of being killed by the freeze.
Corn or soybean seeds that were planted shallow had a slight risk of freeze damage, although plant death from the freeze is unlikely.
Corn plants emerged may have tissue above the soil surface die off from the freeze, but the growing points should have been insulated beneath the soil surface. Those corn plants should recover well. No yield loss is expected.
Soybean plants that have FULLY emerged and are at the VE growth stage (emergence) should survive the freeze event, based on observations during freeze events in late April 2021 and early May 2020. If the soybean cotyledons survive, the soybean plants will survive, and no yield loss will occur. If the cotyledons do not survive, the plant will not survive, either.
Corn and soybean seeds at proper planting depths are at very little risk from the freeze. Corn and soybean radicles (the shoots emerging from the seeds) that are still below the soil surface likely were insulated and will survive.
We need about 5 days of warm weather before symptoms are easy to see. Based on current forecasts, it may take six or seven actual days to get the 5 days of good growing conditions. Plants or plant parts that have turned black or brown and have lost turgor pressure are easy to identify.
Corn plants need to be examined from the seed upward. We are assuming that the roots are deep enough to not be a concern. Dig up some corn plants and look for any signs of brown/black areas from the seeds upward. If plants are white to yellow beneath the soil and turgor pressure is good, then the seedlings are likely to survive.
Maybe Just a Chill
Corn and soybean seeds that are in the process of germinating during the freeze are at risk of taking in cold water (imbibitional chilling) within the first 24 to 48 hours after planting. If the soil temperatures were below 50F for an extended period during those 24 to 48 hours, then the seeds are more likely to be damaged. There is some debate about how long the soils need to stay below 50F before severe damage is done from the imbibitional chilling. We can say those seeds are at risk. At this point, either the seeds were damaged, or they were not from imbibitional chilling. Emergence will be slower in these fields. The fields can be scouted in about five days or so to determine the health of germinating seeds and/or emerged plants.
Table 1: Low temperatures recorded across the state from 4/21/23 through 4/24/23. Freezing temperatures are highlighted in light blue. Weather data from the Kentucky Mesonet.
|Low Temperature °F||3 Day|
|KY Mesonet Site||4/21-22||4/22-23||4/23-24||Average Low|
Coulter, Jeff. 2021. Spring Freeze Injury in Corn. University of Minnesota Extension. https://extension.umn.edu/growing-corn/spring-freeze-injury-corn
KY Climate Center. 2023. Kentucky Mesonet. https://www.kymesonet.org/ accessed April 24, 2023.
Lee, C.D. Evaluating early season frost damage to corn. AGR-192. Univ. of Kentucky Cooperative Extension Service. http://www2.ca.uky.edu/agcomm/pubs/agr/agr192/agr192.pdf
Nielsen, R.L. 2020. Assessing Frost/Cold Temperature Injury to Young Corn. Corny News Network. http://www.kingcorn.org/news/timeless/FrostedCorn.html
Nielsen, R.L. 2020. Cold Soils & Risk of Imbibitional Chilling Injury in Corn. Corny News Network. Purdue Univ. https://www.agry.purdue.edu/ext/corn/news/timeless/ImbibitionalChilling.html
Staton, Michael. 2021. Assessing frost/freeze damage to emerged soybeans. Michigan State University Extension. https://www.canr.msu.edu/news/assessing-low-temperature-injury-to-soybeans
Taylor, M., A. Nygren, J. Rees., J. Specht and A. Timmerman. 2020. Evaluating freeze and chilling injury in corn and soybeans. Nebraska Cropwatch. https://cropwatch.unl.edu/2020/evaluating-freeze-and-chilling-injury-corn-and-soybeans
USDA-NASS. 2023. USDA-NASS. Crop Progress and Condition. https://www.nass.usda.gov/Statistics_by_State/Kentucky/Publications/Crop_Progress_&_Condition/cw23/CW042423.pdf
Important Time to Sample for Alfalfa Weevil
Ric Bessin, UK Extension Entomologist
The UK Ag Weather Center’s degree day model for alfalfa weevil indicates that many counties in Kentucky have exceed 190 DD used as a starting point to begin scouting by the third week of March. In fact alfalfa weevil damage has appeared in some fields. Once temperature accumulations reach 190 DD, growers are advised to look at their alfalfa fields and conduct weekly alfalfa weevil larval counts and compare those to the economic thresholds listed below.
Figure 1. When degree-day totals reach 190 Degree Days, it is time to begin scouting for alfalfa weevil larvae. Scouting continues on at least on at least a weekly schedule until regrowth after the first cutting. Treat the DD totals for the counties as estimates.
Fall laid alfalfa weevil eggs are the first to hatch in the spring. These eggs hatch earlier than those laid in the spring and 190 DD approximate when first leaf feeding damage becomes noticeable. Temperatures extremes during the winter help to limit the survival of alfalfa weevil eggs that were laid in stems in the fall. Damage by the young larvae will first appear as tiny pin holes in the leaves.
To scout for alfalfa weevil, we use the stem sampling method. While walking in a “U” or “Z” pattern through a field, collect 30 alfalfa stems, carefully cup the top of each stem in one hand and break it off the crown with your other hand and place it bud end downward in a plastic bucket. Be sure your samples are at least 20 feet from the edge of a field so that they are representative of the entire interior of a field. Knock the stems groups of 4 or 5 stems at a time against the inside of the bucket to dislodge the larvae. Count the number of larvae. Measure the length of 10 random alfalfa stems. If the field is close to harvest, harvest can be an alternative to spraying, but producers need to watch for damage to the regrowth, there are similar scouting tables for regrowth after the first cutting.
Alfalfa Weevil Larvae Thresholds for Spraying 190 to 225 Degree Days (Check your degree days)
|Average stem height (inches)||Number of alfalfa weevil larvae on 30 stems|
- Apply a long residual insecticide if the number of larvae is greater than the number in the table for the average height of alfalfa sampled.
- Sample again in 2 days if the number is above 15 but less than the number in the table.
- Sample in 7 days if the number is less than 15 in your sample of 30 stems.
Alfalfa Weevil Larvae Thresholds for Spraying 226 to 275 Degree Days
|Average stem height (inches)||Number of alfalfa weevil larvae on 30 stems|
- Apply a long residual insecticide if the larval number per 30 stems is greater than the number in the table above for the height of alfalfa sampled.
- Sample again in 7 days if you find less than the number of larvae for the appropriate alfalfa height.
For degree day accumulations above 275, use the economic threshold tables in ENTFACT 127 or ENT-17 to determine the need to spray the field for alfalfa weevil.
If you de need to treat for alfalfa weevil larvae, keep in mind that insecticide resistance has been an issue in some areas. The best strategy to manage resistance is to use an insecticide only when necessary and to rotate modes of action each year. For many other pests we would rotate more often, but alfalfa weevil has only one generation per years. To rotate modes of action, select insecticides that have a different IRAC group number on the label.
Use Winter to for Preventive Maintenance
on Your Sprayers
Ric Bessin, UK Extension Entomologist
As winter begins to wind down, we need to get our equipment ready for the coming growing season. When it is time to begin spraying and planting, we don’t want to spend precious time to fix and repair equipment. It is during this down time when we should do some routine maintenance on our sprayers. Spray equipment in poor repair can lead to poor application which will cost you money.
Look for Leaks
Before your start, put on a pair of gloves to protect yourself from pesticide residues. Begin by filling your sprayer with clean water, but before you engage the pump, look for leaks from around the pump, hoses, strainers, and nozzles. Pay particular attention to the hoses, as these often show signs of wear sooner than other more durable parts. Besides obvious leaks from hoses, inspect hoses for cracking and signs of dry rot as these can burst when pressurized. Places where hoses might crimp with folding booms are prone to cracking as hoses age. Engage the pump and look again for leaks. Check the pressure gauge and test the cutoff valves to be sure they are working.
The job of strainers is to keep gunk from reaching and plugging nozzles. With just routine use there can be significant debris buildup with the inline strainer from the tank or the individual strainers in front of each nozzle. Sometimes these can be cleaned with a soft brush, other times they need to be replaced.
Next, the Nozzles All nozzles wear over time. This leads to increasing and irregular flow rate from nozzles and poor spray patterns. In place of uniform applications across a field, there may be streaks due to places of over and under applications. While some nozzles materials, such as ceramics and stainless steel, may be more resistant to wear, all nozzles will show signs of wear eventually. Sprays containing abrasive materials such as wettable powders and flowables cause more wear to nozzles. Before conducting a catch test, be sure each of the nozzles are of the exact same type and are not mismatched. Start your sprayer with the clean water and observe the pattern from each of the nozzles, look for streaks and clogs. The pattern from each nozzle should be the same. Run a 30-second or 1-minute catch test for each nozzle, output from each nozzle should be within 5% of the average output from all nozzles. Nozzles that are worn or cannot be unclogged need to be replaced and the catch test repeated.
Now that your sprayer is working properly, it needs to be recalibrated. As new strainers and nozzles can change the spray output. Calibration should be done at a minimum once a year, but for those that use a sprayer more frequent or after changing to different nozzles (going from flat fan to hollow cone for example) recalibration must be done more often. For instructions for calibrating a sprayer are in the Recordkeeping Manual for Private Pesticide Applicators.
Some Early Thoughts On This Fall’s Soil Fertility Management
UK College of Agriculture, Food & Environment Corn & Soybean News (August 2022)Dr. John Grove, Professor of Agronomy/Soils Research & Extension
SOIL TESTING for the next crop is important this fall. The summer season’s drought, after spring wetness (with compaction issues), is causing lower, more variable, corn and soybean yields. Lower grain yield means lower nutrient removal, but this is not perfectly predictable from a yield monitor. Drought affected grain is usually nutrient rich compared to rainy season grain. More corn acres will be harvested for silage rather than grain and nutrient removal is greater with silage. Soil test ‘problem’ fields/areas identified earlier this season. If you don’t do your own soil sampling, you might want to book sampling services early – this year there are more questions that need samples to inform deci-sion-making.
SOIL ACIDITY hurts root activity – a bigger problem in droughty seasons. Once soil test results are in, take a close look at soil pH. If needed, and if weather permits, lime should always be applied in the fall. Good quality lime takes time to dissolve and cause the carbonates to neutralize soil acidity.
DECIDING WHETHER TO APPLY fall nutrients, especially for corn and soybean, is more difficult this year. The decision generally depends on the target crop (wheat/forages vs. corn/soy); economics/value of fertilizer, time, and equipment; and the soil test value (low values mean higher recommended rates – better nutrient use efficiency when needy soils are fertilized to better match crop demand = spring for summer crops like corn and soybean). Fertilizer prices are lower (except for potash) now, but still high relative to prior years.
WHEAT follows corn in many areas. This year, most wheat will not need fall nitrogen (N). Lower corn yield causes less N removal. Tissue N will be higher in corn residues, giving greater N availability as residues decompose. Many grain producers have fields in forage production. Likely under fertilized this year, these crops/fields may really need some fall fertility to improve stand health, winterhardi-ness, and both forage quality and stand competitiveness with weeds next spring.
A WINTER COVER CROP can contribute. In addition to protecting against soil erosion (especially with less full-season soy residues this year), cover crops cause greater nutrient retention against fall-winter losses. One ton of rye dry matter (good stand, 12 to 18 inches tall) contains about 35 lb N, 45 lb K2O, and 10 lb P2O5. These nutrients won’t all be immediately available with rye termination next spring, but $32(N) + $33(K2O) + $7(P2O5) = $72 worth of nutrients, considering the most recent aver-age retail fertilizer price levels (https://www.dtnpf.com/agriculture/web/ag/crops/article/2022/08/02/summer-slump-retail-fertilizer), are retained.
FALL NUTRIENT SOURCE DECISIONS might also be difficult. This fall, the need for fertilizer N will be significantly lower. Fall application of N, regardless the nutrient source, will be less economical and losses are more likely, given likely greater fall background soil N levels. Nutrient sources containing N and other important nutrients (DAP, 18-46-0; MAP, 11-52-0; poultry litter) are usually priced consid-ering their N content, making them less desirable for fall application to wheat, corn, and soy acres this fall. DAP, 18-46-0, is a popular fertilizer P source and the most recent DTN survey average retail price (the URL just above) was $1005/ton. Urea, 46-0-0, was $836/ton ($0.909/lb N). This means that the 360 lb N in one ton of DAP was worth about $327, and the phosphate value was $678/ton DAP ($0.737/lb P2O5). About a third of the price of DAP is in the value of N it contains – N that is less likely to be needed this fall. You might ask your fertilizer retailer to bring in triple super phosphate (0-46-0) so that you can meet your fall phosphate needs without losing money on unnecessary N.
FERTILIZER PLACEMENT (banding) improves fertilizer P and K use efficiency, relative to broadcast fertilizer. AGR 1 (http://www2.ca.uky.edu/agcomm/pubs/agr/agr1/agr1.pdf) indicates that in spring, if soil test P and/or K are very low or low, one-third to one-half the recommended rates of P2O5 and/or K2O for corn can be used if it is banded 2 to 4 inches from the row. Relevant research for Kentucky soils is not available, but I’d estimate that precision (GPS guided) banding fall applied P and K would similarly improve their use efficiency relative to fall broadcast P and K. Precision fall banding would likely be superior to spring broadcasting, though not as good as spring banding, as long as corn is planted 2 to 4 inches from the banded P and K. Precision fall placement anticipates precision spring planting.
Feeding of Japanese Beetles on Soybean also Cause Injuries to Blooms
UK College of Agriculture, Food & Environment Corn & Soybean News (August 2022)
Dr. Raul Villanueva, Extension Entomologist
Japanese beetles, Popillia japonica (Coleoptera: Scarabaeidae) are native to Asia. This species was first detected in the early 1900s in New Jersey, but now occurs throughout many areas of the United States. This is a well-established pest in Kentucky.
Japanese beetles have only one generation per year. Its larval stage lives underground feeding on roots, with adults emerging in early-July through mid-September. The larval form of this carabid is called white grub.
Adult beetles are considered destructive pests of many ornamentals, turf, and landscape plants. In soy-bean fields, it has been observed feeding on leaf tissue between leaf veins; in many cases this feeding leaves a lace-like, skeletonized appearance. Figures 1A and 1B show initial feeding and advanced skele-tonized leaf, respectively. Leaf damage in soybeans can appear severe as leaves can be completely skel-etonized, and many beetles may be found aggregating on plants in a patchy distribution of the field. However, this injury seldom requires control measures.
At this time, I am reporting a not as well-known feeding habit of Japanese beetles in soybeans. I had heard that this insect was causing some damage to soybean blooms in the North Central region of the U.S. While conducting tallies for insects in soybeans, I observed that a couple of beetles were aggregat-ed under the foliage, and they were feeding on the blooms (Figure 2). Injury to soybean blooms may reduce pod development; however, studies to evaluate the impact of this feeding behavior have not yet been conducted. Feeding on flowers or fruit by Japanese beetles is typical for fruits or ornamental plants.
Late Season Weed Escapes
UK College of Agriculture, Food & Environment Corn & Soybean News (August 2022)
Dr. Travis Legleiter, Assistant Extension Professor & Jonathan Green, Extension Professor
Herbicide applications on full season soybean have been wrapped up on most acres for several
weeks now, and double crop applications will be wrapping up soon. Despite most herbicide application
being concluded, there are scattered fields with weeds such as waterhemp and Palmer amaranth poking
through the soybean canopy. Unfortunately, even with the most robust herbicide program a few escapes can occur, especially around field edges, planting skips, wheel tracks, and spots with underdeveloped soybean canopy. The questions that often occur is how to control these late escapes and what efforts are worth the cost to control these escapes.
What can I spray on escapes?
There is often the temptation to spray late season escapes in soybean, especially if escapes occur at
high densities. Although, the majority of postemergence soybean herbicides are not labeled for application either during or past the reproductive stages. Those without a reproductive stage restriction often have a restriction based on timing to harvest, most of which are labeled to be applied
no later than 45 to 70 days prior to harvest. We have already surpassed that date or are quickly approaching that time in most soybean fields. So, to answer the question, in most cases we unfortunately do not have products labeled for applications of herbicides this late in the season in soybean.
A few selected herbicide products that we often receive questions about for late season escapes are
listed in Table 1 along with the growth stage or pre-harvest applications restriction. A complete list
of soybean herbicide application timings can be found on page 100 of the 2022 Weed Control Guide
for Kentucky Grain Crops (AGR-6).
Outside of fact that most herbicide are not labeled to be applied this late in the season, the size of the
weed escapes is the other limiting factor. If you are seeing escapes in soybean at this time of year,
these plants are much too large to effectively control with postemergence herbicides. At best you
may stunt or suppress the escapes, but these plants are very likely to survive applications and potentially produce seed, if they have not already begun seed production. Additionally, within the list of
herbicides in Table 1 that you may still be able to be apply, many are PPO-inhibiting herbicides (i.e.
Cobra, Flexstar, Ultra Blazer, Phoenix). While it may be tempting to try to apply one of these herbicides to control late escapes of Palmer amaranth and waterhemp, it must be noted that many of our
pigweed populations are also resistant to the PPO-herbicides. Even if you do have a PPO-susceptible
population of Palmer amaranth or waterhemp, the plants are too large or mature at this time in the
season to be controlled by these herbicides. These PPO-inhibiting herbicides are only effective on
small pigweeds. Furthermore, some late season applications of PPO type herbicides such as Cobra
and Phoenix can cause severe leaf burn which could slow soybean growth and development as it recovers.
So what can be done on late season escapes of waterhemp and Palmer amaranth?
A primary goal for management of these two troublesome weeds is to reduce or eliminate new seed
production within infested fields. While this does not eliminate the current seed bank or keep seed
from moving into the field in the future, it is a large step in reducing the build of an unmanageable
If only a few escapes are occurring within scattered spots of the field or along the field edges, a few
hours of mechanically pulling plants and removing them from the field can go a long way. If you
choose to pull plants, you must remove the plants from the field as both waterhemp and Palmer
plants can re-root when simply laid back on the ground. Removal of even a couple of plants from a
field can go a long way considering a single plant can produce up to half a million seeds. This applies to plants that are growing just adjacent to your field as well, as these plants are also likely to
contribute to the seed bank within the field. The cooler temperatures that are forecast and ample
soil moisture in most of the state over the coming weeks will make for easier pulling of these plants.
In some cases, though, the number of escapes is too great to justify the labor to pull all the plants. In
these cases, your options really are limited. If the escapes happen to be a few dense pockets across
the field (too many weeds overall to hand pull, but only exist in a couple of areas or clumps within
the field), you may be wise to simple harvest around those pockets in the fall and sacrifice the soybean crop within those areas. Combines are a great source for spreading waterhemp and Palmer
seed. Any time you harvest through a patch of waterhemp or Palmer plants all of the biomass including seed is widely dispersed out the back end of the combine with the chaff, and is likely to be
transported to other fields. Harvesting around those pockets does not prevent the waterhemp and
Palmer seed from entering the seed bank, but it does help keep the weed seed localized to that spot;
whereas, a combine would spread that seed over the remainder of the field and onto others. If you
choose the option of harvesting around these pockets, make sure to note the locations for the coming years to possibly implement a more aggressive weed management program in those areas specifically.
Tornado Relief Fund
KCARD is working with the Kentucky Farm Bureau Education Foundation and the Kentucky Department of Agriculture to develop the Kentucky Agriculture Disaster Relief Program. This program will help farmers in Kentucky access needed farm supplies from local farm retailers following the disasters experienced in many areas of Kentucky on December 10 and 11, and on January 1. Farm retailers in the program will receive funds to offset the costs of such supplies for farmers.
How does the program work? The participating retailer will set up an account in their sales system to record sales of eligible supplies to eligible farmers up to $1,500 per farmer. They will provide records of those sales to the program and receive reimbursement (up to $30,000/store, subject to change) for those sales.
What supplies are eligible under the program?
- Fencing supplies- wire, staples, fence chargers, testers, etc.
- T-posts and wooden posts
- Tools, such as hammers, rakes, and shovels
- Rope and bungee cords
- Livestock mineral and mineral feeders
- Hay and livestock feed
- Work gloves
- Chain saws, bar oil, and sharpeners
- Hay rings
What farmers are eligible? Farmers will have to certify that they have farm property in one of the following counties and experienced farm damage from the storms on December 10 and 11, 2021, and on January 1, 2022: Barren, Caldwell, Calloway, Christian, Fulton, Graves, Hart, Hickman, Hopkins, Logan, Lyon, Marion, Marshall, Muhlenberg, Ohio, Taylor, and Warren. Farmers will sign a form at the retailer and provide their contact information. How do I become a Participating Retailer? Participating retailers must be located in or near the affected area, be locally owned and operated, have the necessary inventory on hand or be able to secure it, and agree to maintain the necessary records for the program. If you meet these criteria and are interested in the program, you can contact KCARD staff member, Mattea Mitchell at 270-681-0163 or by email at email@example.com. Our first priority is to get at least one store in or near affected counties. Additional stores will be added as funds are available.
What Retailers are currently participating?
Akridge Farm Supply & Ace Hardware
55 Wyatt Street, Fredonia, KY 42411
Falder’s Farm Home and Industry Supply
1428 Cuba Road, Mayfield, KY 42066
1406 Hedgepeth Road, Canmer, KY 42722
Calhoun Feed Service/Southern States
515 Nebo Road, Madisonville, KY 42431
Southern States – Russellville Cooperative
209 North Bethel Street, Russellville, KY 42276
836 West Main Street, Lebanon, KY 40033
501 Popular Street, Benton, KY 42025
599 Arnold Road, Campbellsville, KY 42718
Southern States – Bowling Green Cooperative
640 Plum Springs Loop, Bowling Green, KY 42101
Nuisance Weed Spraying Program
The KY Dept. of Agriculture will provide the sprayer and enough chemical for the treatment of 10 acres. KDA representative will demonstrate proper mixing and application techniques. A number of nuisance weeds can be treated under this program. This program is limited to broadleaf weeds. If additional chemical is provided by the participant, an additional 10 acres can be treated. The participant must provide water source, tractor and operator. All chemical products must be labeled and product label will be followed. A maximum of 7 participants per county. This program is designed to target weeds that have a negative impact on agriculture.
If you are interested in participating in this program you will need to complete the online application found at http://www.kyagr.com/consumer/nuisance-weed-spraying-program-application.aspx. Applications can be completed from February 1 to February 28. You can NOT have participated in the last 3 years!
2017-2018 Kentucky Agricultural Economic Situation & Outlook
Contributors: Kenny Burdine, Todd Davis, Jerry Pierce, Will Snell, Tim Woods, (Ag Economics), Jeff Stringer, Bobby Ammerman, Chad Niman, and Billy Thomas (Forestry)
U.S. Agricultural Economy
The U.S. agricultural economy entered 2017 following three straight years of declining income and prices, after an unprecedented/record breaking period of growth during the 2007-2013 period. USDA is projecting 2017 net farm income to total $63.2 billion, up $1.7 billion (+2.7%) relative to 2016, but still off nearly 50% from the record high established in 2013. U.S. ag cash receipts are forecast to be 2.4% higher in 2017 in response to improved livestock sales (+7.6%) versus slightly lower crop receipts (-2%). Production expenses were up slightly (+1.5%) with higher labor, fuel, livestock, and interest costs, but lower feed, seed, fertilizer and chemical expenses. Government farm payments fell to $11.2 billion (-$1.8 billion) as large declines in Agricultural Risk Coverage (ARC) payments offset higher Price Loss Coverage (PLC) payments. These direct government payments (excludes crop insurance indemnities) accounted for 17.6% of the U.S. net farm income in 2017 vs 21.1% in 2016.
Despite a lot of political discussion and ag-related concerns about trade this past year, U.S. agricultural exports rebound to $140.5 billion (+8%), in FY 2017, benefiting from a weaker U.S. dollar, an improving global economy, and abundant U.S. supplies. The U.S. exports agricultural commodities/products to nearly 200 nations, but our top three foreign customers – China, Mexico, and Canada, account for nearly one-half of the U.S. ag export value. Undoubtedly the strong export market helped support ag prices in 2017 in the midst of abundant global supplies. Any future disruption in trade could put additional downward pressure on prices.
Ag lenders remain cautious in the midst of a prolonged downturn in the farm economy. Relatively low interest rates (along with cash purchases) have constrained growth in farm debt levels and also provided support to land values in the midst of the sharp-downturn in the ag. Despite the slumping farm economy, the overall balance sheet for U.S. agriculture as a whole remains relatively strong compared to the farm crisis days of the early 1980s. However, available cash flow/working capital for lower-tiered managers and some highly leveraged/young producers remains a concern for bankers, especially if the current economic conditions lingers.
Without a major supply shock, prices for most ag commodities will likely remain relatively low in 2018 (compared to levels observed during the 2011-2014 period) in response to abundant global grain supplies, growing meat supplies, and potentially a stronger U.S. dollar.
Politically, agriculture will continue to monitor changes in trade policy, tax, health care, and immigration reform, along with debate over the 2018 farm bill and the increasing concentration among agricultural input suppliers and processors. Food price inflation remained benign in 2017 and is expected to remain below historical levels in 2018 as consumers benefit from intense competition in the grocery sector, abundant ag/food supplies, and continued food marketing efficiencies and innovations.
Kentucky’s Agricultural Economy
The University of Kentucky’s Department of Agricultural Economics is forecasting that Kentucky ag cash receipts will rebound in 2017 to $5.6 billion, 3.5% higher than last year, but well below the record $6.5 billion in 2014. Improved prices will enable sales growth for most Kentucky livestock enterprises –poultry (+10%), horses (+10%), cattle (+5%), dairy (+12%), and hogs (+11%). Poultry also benefitted from a rebound from avian influenza outbreaks, which constrained growth the past two years. Increased soybean acres and record yields are expected to elevate soybean production to record levels. Potentially record corn yields will help offset lower acres and depressed prices. Kentucky’s tobacco sector rebounded from a poor crop in 2016, with sales expected to once again exceed $300 million.
Poultry remained Kentucky’s number one ag enterprise, accounting for 20% of projected 2017 sales, followed by equine (18%), soybeans (15%), cattle (14%) and corn (13%). For 2018, Kentucky ag cash receipts are expected to be relatively flat ($5.7 billion) with modest gains in poultry, horses, and soybeans, offsetting expected losses in tobacco, corn, and cattle. Look for continued growing demand for local produce/meats, nursery items, and value-added agriculture.
Kentucky net farm income has followed national trends, falling to $1 billion in 2016 compared to averaging $2.1 billion over the 2013-2015 period. Average net farmincome for farms participating in Kentucky’s Farm Business Management (KFBM) program declined to around $100,000 in 2015 and 2016, down from record highs exceeding $400,000 during 2011-2013, and compared to a ten year average of $283,000. Preliminary indications reveal that KFBM average net farm income will improve modestly in 2017 due primarily to higher crop yields, improved livestock prices, and stable input prices.
Commodity Spotlights (2017-2018)
- Calf prices rallied from fall 2016 levels and are roughly $30 per cwt higher than one year
- Growth in the beef cow herd still ongoing, but has likely
- Increases in production for all major meats will pressure beef (and cattle) prices in
- Backgrounding/stocker operations should be opportunistic on placement and aggressive with price risk management.
- Wholesale broiler prices are up from 2016
- Sector largely back on track following avian influenza outbreaks in recent
- Production likely to increase another 2% nationally in 2018, with continued growth in Kentucky.
- Kentucky inventory continues to grow, breeding herd up 7% in 2017.
- Eastern Corn belt hog prices to average $7 per cwt carcass basis higher in 2017.
- Sizeable production increase likely at national level for 2018, prices unlikely to hold at 2017 levels.
- Equine market has generally been steady since recovering from the global recession.
- Signs point to strength in 2017 –Keeneland yearling sale up 13%, Fasig Tipton yearling and breeding sale up as well.
- Equine likely to gross nearly $1 billion in Kentucky farm receipts for 2017, with modest growth in 2018.
- Farm level milk prices increased by more than $1 per cwt in 2017, with lower feed and hay prices leading to improved margins.
- 2017 was a better year than 2016, but certainly not a good year for dairy producers.
- Kentucky dairy cow numbers continue to decline.
- Increase in S. cow numbers and milk per cow suggest another production increase and consequently lower farm prices in 2018.
- U.S. corn harvested area reduced by 3.6 million acres in 2017 to 83.1 million acres. A record U.S. yield of 175.4 bu./acre produced the 2nd largest crop of 14.6 billion bushels.
- Carryout expected to increase to 5 billion bushels, which is the largest quantity since 1987. The stocks-use ratio in 1987 was 55% but is 17% in 2017 because of strong use.
- The 2017 S. Marketing Year Average Farm Price projected at $3.20/bushel, which is only 5% above the 2006 U.S. MYA price.
- U.S. soybean planted area increased by 6.8 million acres in 2017 to 90.2 million acres. The 2nd largest U.S. yield of 52.5 bu./acre produced a record crop of 4.4 billion bushels.
- Carryout expected to increase to 425 million bushels, which is the largest quantity since The stocks-use ratio in 2006 was 19% but is 9.8% in 2017 because of strong use.
- The 2017 S. Marketing Year Average Farm Price projected at $9.30/bushel which is 45% above the 2006 U.S. MYA price.
- Wheat harvested area reduced by 3 million acres in 2017 to 37.6 million acres. The 2017 yield was also reduced 6.4 bu./acre from last year to 46.3 bu./acre. The 2017 wheat crop is 568 million bushels smaller than last year to 1.7 billion bushels.
- Carryout expected to decrease by 246 million bushels to 936 million The stocks-use ratio in 2017 is 43.8%, and is below 50% for the first time since 2014.
- War of attrition on supply side is reducing stocks – not strong growth in
- The 2017 S. Marketing Year Average Farm Price projected at $4.60/bushel, which is $0.71/bu. higher than last year. However, the 2017 U.S. MYA price is only 8% above the 2006 U.S. MYA price.
- Global burley supply and demand appears more balanced entering the 2017 marketing season, primarily in response to a 30% reduction in world burley production over the past three years.
- S. burley demand remains soft with exports down nearly 30% since 2015, domestic cigarette production down 8% so far this year, and imports currently accounting for nearly 2/3 of use by domestic manufacturers.
- A better quality crop and improved supply/demand balances should result in leaf prices being stable to slightly higher, boosting the value of Kentucky’s tobacco crop to around $350 million in 2017 compared to a post-buyout low of $283 million in 2016.
- Anticipated ample burley supplies and softening demand will likely reduce U.S. burley contracts in 2018, with modest growth in snuff consumption enabling dark contracts to remain relatively stable.
Fruits, Vegetables and Greenhouse
- Markets were generally stronger for produce in Kentucky in 2017 as hurricane effects substantially elevated prices for late summer and fall crops.
- Market signals typically tied to nursery production and services (home improvement market, housing starts) have indicated steady recovery from the most recent recession.
- Accelerating local food movement and demand for value added products provides additional opportunities for growth, but labor uncertainties remain a major concern potentially constraining future growth.
- Overall forestry sector increased to an estimated $14.5 billion in total economic contribution to Kentucky in 2017 with primary industries including sawmilling showing the largest increase of over 14% from 2016.
- Exports and high domestic demand for white oak and tie logs will remain strong in 2018 pushing overall timber prices up.
- Pulpwood markets still sluggish but potential re-opening of Wickliffe pulp and paper plant may positively affect markets in Western Kentucky.