- Is that Tillage Pass Profitable w/Gary Schnitkey
- Don Day, DayWeather.com
From the Lende Grant University, Urbana Champaign, Illinois, this is the closing market reported as the October 2025. I'm extension's Tut Gleason. Coming up, we'll talk about the commodity markets with Naomi Bloem. She's at totalfarmmarketing.com out of West Bend, Wisconsin. Gary Schnicki, ag economist, PharmDoc team member from the University of Illinois, will join us to talk about the number of tillage passes and the impact it has on profitability for both corn and soybeans, and then we'll turn our attention to the weather forecast with Dundane.
Todd Gleason: 00:33He's a day weather in Cheyenne, Wyoming. We'll do all of that on this Tuesday edition of the closing market report from Illinois Public Media. This public radio for the farming world online on demand anytime you'd like to listen at willag.0rg.
announce: 00:50Todd Gleason's services are made available to WILL by University of Illinois Extension.
Todd Gleason: 00:56Naomi Bloem from totalfarmmarketing.com out of West Bend, Wisconsin now joins us to take a look at the marketplace. Hi, Naomi. Thank you for being with us today.
Naomi Blohm: 01:04Yes. It's great to be with you.
Todd Gleason: 01:06Tell me about, what you've been hearing. And I know during harvest, you don't talk to a lot of producers because they're awfully busy. But what have you been hearing across the nation as it's related to their yields to this point?
Naomi Blohm: 01:18It has been extremely mixed and variable. That is the theme. And so here's for example, when I call throughout Illinois, clients in Illinois, just kinda dependent on where the rain fell or didn't fall. Some folks saying it's just average and some saying a little bit better than average disappointed and saying below average. And so it really depended on where the rain fell.
Naomi Blohm: 01:43But in Iowa, that's where the eye opening, variability truly lies. So here's an example. I have a client in Northwest Iowa who sprayed for fungicide three times, and because he did, his corn yield in his little pocket of Northwest Iowa is closer to two eighty five to two ninety on top of all of that perfect weather they had all summer. But then when I call a larger portion of my clients throughout Iowa, throughout the whole entire rest of the state, they sprayed once and the yield results are coming in closer to two twenty five to two thirty and normal for them would be closer to two fifty. So they're telling me that the yields are less than last year, definitely disappointing from what they could have been, and they treated the rust one time.
Naomi Blohm: 02:33That's just how much that, southern rust affected the crop this year. And then it still is a mixed bag like call throughout other portions of the country as well. So mixed yield results, and it's really gonna be hard to get a good handle on where final yield will end up. And so I feel like we're gonna have to start to watch basis levels, and that might tell us a little bit of a story as far as where the crop was a little bit smaller than anticipated or potentially where the crop was pretty darn good.
Todd Gleason: 03:02Do you see that developing already, or do we wait do we need to wait until we have more of the crop harvested?
Naomi Blohm: 03:09Well, in some places, it's starting to develop already with some slight basis improvements. And, you know, it could be that, guys are going fast and furious with harvest, and so they're filling bins at home and grain's not coming to town. And so some end users are trying to make sure that grain comes to town. So they're improving basis levels. It could be potentially that in some locations of the country, maybe some of those export sales are potentially picking up because with the government shutdown, the reported sales don't get announced to all of us.
Naomi Blohm: 03:44And so a lot of those potential end user countries could be flying under the radar and purchasing more grain than what we're anticipating, and that's why we're starting to see some basis levels improvement. But in Castleton, North Dakota, at a processing plant, a client up there today told me that in just two days time, basis had been a dollar 20 under. So again, remember North Dakota basis stinks right now because a lot of that soybean market goes out the PNW. And so with that lack of PNW business basis in general is wider. So basis had been a dollar 20 under, but now at this processing plant in Castleton, it had improved to 85¢ under because in that particular porch portion of North Dakota, the soybean yields are coming in also mixed and variable.
Naomi Blohm: 04:34So, it'll be interesting to see, you know, where this crop is gonna be. Of course, we we don't know for sure where these exports are with the government being shut down, but we did have decent export inspections that did come out yesterday. So that's a little bit supportive that we are moving some product. But, again, with the government shutdown, we don't get these USDA reports. We don't get the big weekly export sales.
Naomi Blohm: 04:58So I feel like the cash market and basis levels will help give us a glimmer of the truth of what is actually occurring out in the Midwest.
Todd Gleason: 05:06For those who don't know, Castleton is about 20 miles due west of Fargo on the interstate, and it would be I think it's still in the same county. So it would be the largest soybean producing county in the state on also by, also, as it happens in the nation as well. So some important information there. Let's turn your attention to the corn market. I'm wondering technically what you see in that marketplace at this point.
Todd Gleason: 05:37We're in at a space where, it's trading around some moving averages.
Naomi Blohm: 05:40Yes. Very much so. So on daily charts, December corn futures seem to be consolidating now in more of a sideways fashion. The market, over the previous three weeks had broken that uptrend line that had been established since August. But now over the past couple weeks, we start to trade sideways.
Naomi Blohm: 05:59And, of course, last week, president Trump's tweet was enough to put in another short term low on the marketplace, keeping the December corn price above $4.15. And that's where there's two important moving averages that come together, the forty and fifty day moving average. But we are gonna struggle right now to get above four and a quarter, which is two different things. It's a hundred day moving average and also at, the top of a very short term downtrend line that had been established essentially since January. So my guess right now is that December corn futures, because we're just in a lack of fresh news with this government shutdown, kinda wondering if we might just see some sideways trading in a 10¢ range where December corn would have support at $4.15, but resistance at 4 and a quarter.
Naomi Blohm: 06:46So, we're, again, waiting for some fresh news, and in the meantime, sideways trade seems likely. And as I recall, the last two times the government shut down that the approximate three weeks that they were shut down, corn and bean prices traded in a very lackluster range as there wasn't a lot of fresh news to trade on. So I'm kind of anticipating that that might be the factor and a potential reality that we're dealing with now as this government shutdown continues.
Todd Gleason: 07:16It could be a good thing and a bad thing depending on what farmers need to do with, cash grain sales to garner some money for payments that are due before the end of the year. Do you have any advice?
Naomi Blohm: 07:29Well, the one thing I am encouraging producers to just be mindful of is that if you are making sales at harvest now for whatever reason, because these yields are coming in so mixed and variable, it's a very different story than what we were talking about back in early to mid July when we were assuming it was going to be this record crop. Now we've got a little bit of uncertainty. So if you're selling some of that cash grain here at harvest, consider some reownership strategies, potentially with some call option strategies out to March or May to give yourself some time because it may take a couple months to really understand what is or isn't out there in the fields. And, of course, we're still trying to get through all the trade negotiations, but it just makes me think that all of a sudden, if all these little stars start to align to where we have lower supply, still strong demand, the funds start to exit those short positions, you could see a reason why the corn market could have a technical push higher of about 25 to 30¢ real quick. So don't be complacent.
Naomi Blohm: 08:33Consider reownership strategies, and we've got a lot ahead of us here yet as we continue to peel the onion as far as what the corn fundamentals and soybean fundamentals are.
Todd Gleason: 08:45That's Naomi Bloem. She is with totalfarmmarketing.com. This morning, I hosted another in the PharmDoc Daily webinar series. Today, we were talking about tillage passes and the cost in particular. Gary Schnitke now joins us to go through some of those numbers and how no till compares to two pass and two pass light and strip till.
Todd Gleason: 09:14Thank you, Gary, for being with us. Are there some larger takeaways from the studies that you've been doing on tillage passes within the PCM or Precision Conservation Management area? This is something that the Illinois Corn Growers Association hasn't been involved with, and it's not a small number of acres. This is not, research acres. These are farms.
Todd Gleason: 09:37Yeah. More than half a million acres, if I remember correctly,
Gary Schnitkey: 09:40these days. That that's correct. So overall, when we're looking at tillage passes, one thing to keep in mind is the economics of those tillage passes actually changed somewhere between 2021 and '3. 20 cost of everything went up and so did the tillage pass. We saw increases are of about 30%.
Gary Schnitkey: 10:03So that that's a big number, and I don't think those numbers are gonna come down. So that steers us more recently, in recent years, to lower amounts of tillage, and so that's something that we have to keep in mind as we're looking at the economics of it.
Todd Gleason: 10:22In the webinar that you, began with a slide on combines and other, I think, costs, that benchmarked 2010 or 11 at 100% and showed the increase in cost. I think for a combine, was 39 to 2025, just just in cost. I assume that those machinery costs are eating up a lot of of the tillage pass issues, because it just costs so much to run and to purchase.
Gary Schnitkey: 10:59No. That's exactly right. And so, yeah, we saw almost a 30 increase in new equipment cost between 2020 and 2023. And repairs also went up during that period as well as, the price of, replacement parts. So everything went up during that period, and you can describe that to a lot of different things, but those going up.
Gary Schnitkey: 11:25And now we have prices of corn, $4 corn, which is roughly a little bit higher than from 2015 to 2019, but much higher cost and lower price. And, you know, economics would say at those environments, you lose less of it rather than more of it.
Todd Gleason: 11:44When you look at the datasets, let's start with just corn. What jumps out at you?
Gary Schnitkey: 11:49So corn, somewhat surprising, like no till corn actually does reasonably well. We do see a a bump in yields from a tillage pass. And that's anywhere from four to five bushels per acre. No till, however, does pretty well, particularly in more recent years when you build into the fact that those tillage costs have gone up. So in corn, somewhat surprisingly, we see no till and one till passes systems is doing pretty well.
Gary Schnitkey: 12:28You have to remember that our data when we're looking at it, that's if you're planting corn, it's probably coming off of soybeans so that soybean crop has gotten rid of some of that corn residue from two years ago now. But we see those one no till, strip till, and one pass systems as being more economical. Strip till would come in there pretty well if we had some farmers in our data set that didn't put on a lot of other fertilizer and other costs. Yeah, those lower tillage pass systems do pretty well in corn, particularly since 2021.
Todd Gleason: 13:13And when you say do very well, this is on actual profit.
Gary Schnitkey: 13:18Yep. No, actual profit. So tillage generally gives us a bit of a yield bump. However, at the same time, most of these tillage passes are now, our estimates of them, be over $15 per acre. So just take $20 per acre of a tillage pass, you need five bushels just to cover that increase, to cover one tillage pass.
Gary Schnitkey: 13:48That's just the economics of where we're at now.
Todd Gleason: 13:51That's bragging rights at the breakfast table or at the lunch table when you're at the diner, that five bushel sometimes. But really, it's about profitability, not necessarily about total bushels per acre.
Gary Schnitkey: 14:08That's correct. And again, remember what we've just went through and where we're at. We are not $4 corn, and we can we could be here for a while, two, three years. You look out in the future and you don't see much changing that until, you know, maybe a drought or a yield shortfall someplace or something else. But $4 corn, maybe a little bit higher, maybe a little bit lower, which is a bit higher than we were from 2015 to 2019.
Gary Schnitkey: 14:40But now we have much higher cost. And so those higher costs are really causing us or should cause us to look at each item in that budget and making sure that it's returning something. And if anything, those lower prices and higher cost really put more of an emphasis on profitability and not yield maximization. So we've always should have been being more profit oriented than yield oriented, but now with those lower corn and soybean prices and much higher cost, there's much higher premium on profit maximization rather than yield maximization.
Todd Gleason: 15:28You made note for corn that it was coming after soybeans in the rotation, so there wasn't nearly as much trash. That's playing a part I think in what you're seeing on the soybean side as it's related to which is the most profitable tillage methods.
Gary Schnitkey: 15:45Yeah, we see is we do see a profit advantage to some tillage. So we're seeing that there's a yield advantage to some tillage on soybeans and that then translates into a higher profit. Again, we don't see direct cost going up much with tillage or you know, direct cost fertilizer, seed, chemicals and those items. But getting rid of or breaking down that corn material going into soybeans does appear to have a yield advantage which then translates into profit advantage. It's somewhat counterintuitive because we see more of our soybean fields as no till compared to our corn fields.
Todd Gleason: 16:37A question I have that was not addressed during the webinar. Again, you can find these webinars at youtube.com/pharmdoc or on the PharmDoc Daily website under the webinar section, look for the archives. What was not addressed was the difference between the two as it's related to if you're doing tillage passes, you probably have a larger machine, a larger tractor, I assume, than if you do a no till, and you consequently may not if you're no till, you may not have that tractor in place. Does that make a difference? I mean, in in total, if you sum the two Yeah.
Todd Gleason: 17:18What comes out better?
Gary Schnitkey: 17:20Yeah. So so you really have to look at it. Remember, the way we're coming up with these costs is per tillage pass. So we don't really keep track of the number of tractors on a farm. So if you can use no till to reduce the number of tractors on a farm, there's a large advantage to that, which we may or may not capture in our data set because we don't count the number of tractors in PCM.
Gary Schnitkey: 17:53Having said that, a lot of people use a pretty large tractor on on the grain cart when they're pulling, or combining corn and soybeans. So I'm I'm not sure what we would find as far as tractors and total no till systems.
Todd Gleason: 18:09Yeah. What what do you think? I mean, if you were designing a farm for 3,000 acres, what what's the power equipment need to look like, you suppose?
Gary Schnitkey: 18:20Yeah. So for a 3,000 acre farm, you would want a combine, right? One combine and we're finding that combine cost really are lower when we get up to 3,000 acres and then two sort of tractors. We don't want three, two. So that's the equipment complement that you would look at?
Gary Schnitkey: 18:49If you could cut it to one, that'd be really great, but two.
Todd Gleason: 18:53Okay. So then the final thing and, you did talk about this a little bit, but I want to know where to find it if you were looking for, the cost to run these individuals, operations, you update update those with Dale Lats every two years. What are the custom costs?
Gary Schnitkey: 19:14So we machinery cost of operation, they are in management section of PharmDoc. So go into the management section of PharmDoc, look for machinery and it's there's a bar that goes crop budgets, machinery, land cost, hit machinery, and you'll see all machinery publications.
Todd Gleason: 19:32Thank you much, Gary. Thanks for having me, Todd. Gary Schnitke is an agricultural economist, a member of the PharmDoc team here on the Urbana Champaign campus at the University of Illinois. Don't forget to visit our website at willag.org. And soon enough, the PharmDoc Daily website, pharmdocdaily.illinois.edu.
Todd Gleason: 19:51Sometime this week, probably on both of them, you will see the upcoming PharmAssets Conference. That's December 12. Gary Schnitke and his colleague that presented this morning for the webinar, Laura Gentry, will also be making a similar presentation during the Farm Assets Conference along with John Jones, agronomist here on campus, soil fertility specialist, talking about MRTN, nitrogen rates. You won't want to miss that. I've got a really good lineup for you.
Todd Gleason: 20:22Check it out, at willag.org or at farmdocdaily.illinois.edu. And if you're signed up for an email the PharmDoc site, you probably will see that farm assets conference come up, in the next five days or so. The cost will be $80. Make sure you get signed up today. Let's turn our attention to the weather forecast now.
Todd Gleason: 20:54Don Day is here. He's with Day Weather in Cheyenne, Wyoming. Hello, Don. Thanks for being with us. Tell me about this little storm that came through parts of the Midwest.
Todd Gleason: 21:05How much rainfall did we really get? Man, I don't think it'll slow harvest down. I'd be pretty certain that's the case, but you've been watching it in greater detail, I'm sure, than I have.
Don Day: 21:15Yeah. The dry ground from the lack of really, really widespread rainfall over the last several weeks was able to soak a lot of that rain up. So rainfall amounts did vary. They usually do, but rainfall amounts that, we're seeing is anywhere from three quarters to an inch. Some areas over two inches of rain in some areas.
Don Day: 21:33That was the exception, not the rule.
Todd Gleason: 21:36When you look forward, what do you see over the next five to ten days?
Don Day: 21:40Well, it's gonna be kind of an up and down pattern. We're now going to see milder air come in from the West, and we're gonna see a warming trend, and we're gonna see also a drier trend. But we're going to see sort of the recycle repeat itself. As we get into the latter portions of the weekend into early next week, we're going to see another system come out of the Northern Plains, out of Western Canada, and take a very similar path to this last system. So we don't see a lot happening over the next four to five day period.
Don Day: 22:12The next precipitation event really looks to be about a week from today.
Todd Gleason: 22:16We have been warm through the fall. Will that continue to the end of the month of October, do you suppose?
Don Day: 22:22I don't getting to the October is gonna be hard. But but for next ten to twelve days or so, we're gonna continue to be warmer than average.
Todd Gleason: 22:30Anything else that you've been looking at longer term?
Don Day: 22:33Well, longer term, to your point about temperatures being fairly warm. While we've had pockets of frost, freeze conditions across parts of the Northern Plains, parts of the Northern Rockies, we so far have avoided that big surge of Canadian air. And as we just mentioned, we don't see that here for the next ten or twelve days, but we certainly need to watch for that last week of October for maybe that.
Todd Gleason: 22:55Thank you much. I appreciate it. We'll talk with you again next week.
Don Day: 22:58See you then.
Todd Gleason: 22:58That's Don Day. He's with Day Weather in Cheyenne, Wyoming, joined us on this Tuesday edition of the closing market report that came to you from Illinois public media at will ag dot o r g.