USFR Weekly Recap - January 25-26, 2014

January 25, 2014 02:30 AM
 

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THIS WEEK ON U.S. FARM REPORT

EPISODE # 2111

JANUARY 25-26, 2014   

 

 

As always, we want to hear from you, send comments to mailbag@usfarmreport.com or leave us a voice mail at 800-792-4329.

 

 

 

JOHN’S OPEN:

HELLO AND WELCOME TO U-S FARM REPORT, I'M JOHN PHIPPS. IT'S A DOUBLE WHAMMY AS PRODUCERS IN THE CORNBELT CHECK GRAIN PRICES AND THEN PRICE INPUTS AT THEIR DEALERS. WITH SEED PRICES SPIRALING AND PESTICIDE PRICES STRONG, PROFIT MARGINS ARE QUICKLY DISAPPEARING.

HEADLINES:

WHAT CAN STOP THE CLIMBING BEEF PRICES?  LATELY, NOT MUCH. CASH CATTLE PRICES SOARED ACROSS FARM COUNTRY THIS WEEK AND BOXED BEEF ALSO HIT NEW HIGHS. IS THE DAIRY SUPPLY MANGEMENT PORTION OF THE FARM BILL REALLY DEAD? NOT TO ONE VERMONT SENATOR. DEMOCRATIC SEANTOR PATRICK LEAHY SAYS HE'S GARNERED ENOUGH VOTES IN THE SENATE TO GET KEEP SUPPLY MANAGEMENT ALIVE. CHINA IS GETTING QUITE THE POTASH DEAL. URALKALI, WHICH IS THE WORLD'S LARGEST POTASH PRODUCER, SAYS ITS AGREED TO SELL POTASH FOR 24 PERCENT LESS THAN IT DID BEFORE IT WITHDREW FROM A JOINT SUPPLY DEAL WITH BELARUS. THAT MEANS CHINESE CUSTOMERS WILL GET POTASH FOR 305 DOLLARS A TON FOR the FIRST HALF OF THIS YEAR. POTASH PRICES HAVE STEADILY FALLEN SINCE URALKALI PULLED OUT OF A TRADING VENTURE WITH BELARUS, WHICH CONTROLLED 40 PERCENT OF GLOBAL EXPORTS. URALKALI CLAIMED THE OTHER COMPANY BROKE THEIR DEAL BY SELLING POTASH OUTSIDE THE TWO COMPANIES AGREEMNT. URALKALI SAID INSTEAD, IT WILL JUST RAMP UP ITS OWN POTASH PRODUCTION. MEANWHILE, BARGE TRAFFIC IS DECREASING ON U-S WATERWAYS. THE U-S ARMY CORPS OF ENGINEERS SAYS IN 2013 BARGES SHIPPED THE FOURTH LOWEST LEVEL OF COMMODITIES SINCE 1975. PART OF THAT DROP IS DUE TO MORE CORN BEING SOURCED LOCALLY TO MAKE ETHANOL. A LARGER REASON IS THE HEAVY COST OF SHIPPING FREIGHT ON OCEANS. THE HIGHEST LEVEL OF BARGE TRAFFIC WAS RECORDED IN 1983 AND THE LOWEST IN 2008.

CROP WATCH:

IN CROP WATCH THIS WEEK, WE JUST CAN'T GET OUT OF THIS COLD RUT. CALEB HAMER OF BLACK HAWK COUNTY, IOWA KNOWS THAT ALL TOO WELL. AND THE TEMPERATURE GUAGE SAYS IT ALL. THE WIND CHILL MADE IT FEEL LIKE 33 BELOW ON THURSDAY. IT MAY BE COLD, BUT THE SUN LUMINATED THROUGH IT ALL THIS WEEK. STEVE VOLKERT CAPUTRED THIS SUNDOG IN NORTHWEST IOWA. HE SAYS WHEN HE SNAPPED THE PHOTO, IT WAS 11 BELOW OUTSIDE BUT FELT LIKE NEGATIVE 30 WITH THE WINDCHILL. AND IN CALIFORNIA, THE TEMPS MAY BE IN THE MID-70S, BUT THEY JUST CAN'T CATCH A RAIN. DINO GIACOMAZZI  SAYS BLOWING DUST ADVISORIES, LIKE THIS ONE, IS A COMMON OCCURANCE ON HIS PHONE. IT'S MAKING DAIRY FARMING IN CALIFONRIA QUITE DIFFICULT, ESPECIALLY CONSIDERING THE WATER SHORTAGES THEY ARE FACING THIS YEAR.

ROUNDTABLE:

TYNE RETURNS TO TALK MARKETS WITH ANDY SHISSLER AND CHIP NELLINGER.

JOHN’S WORLD:

ONE OF THE NEWS ITEMS THAT CAN MAKE YOUR HEAD HURT IS THE RAGING BATTLE OVER NET NEUTRALITY ALONG WITH THE RECENT COURT RULING THAT SUGGESTS THE CURRENT REGIME FOR BALANCING CONTENT SUPPLIERS AND CARRIERS IS GOING TO CHANGE. BRIEFLY WHAT THIS IS ABOUT IS THE REQUIREMENT FOR CARRIERS LIKE VERIZON, WHO WON AND OPERATE THE EQUIPMENT SUCH AS FIBER OPTIC LINES TO CHARGE THE SAME FOR EVERY PIECE OF DATA THAT FLOWS THROUGH THEIR SYSTEM. YOUR FACEBOOK POST GETS TREATED THE SAME WAY AS ME WATCHING DOWNTON ABBEY. ONLY VIDEO, ESPECIALLY SERVICES LIKE NETFLIX, IS PROVIDING THE OVERWHELMING BULK OF TRAFFIC, AND ALSO GROWING FASTER AS VIEWERS FIGHT BACK AGAINST BUNDLED CABLE CHARGES THAT INCLUDE EXPENSIVE CHANNELS THEY NEVER WATCH LIKE FOX OR ESPN. A FEDERAL COURT RECENTLY ISSUED A COMPLICATED RULING ON HOW CARRIERS CAN CHARGE DIFFERENT CUSTOMERS. THE FEAR IS CARRIERS WILL GIVE AMAZON A BREAK, FOR EXAMPLE, BECAUSE OF THEIR VOLUME, BUT NOT ME. MY UNDERSTANDING IS THJIS RULING IS, LIKE SO MANY, LIKELY TO HAVE MORE CONSEQUENCES FOR RURAL AMERICA BECAUSE WE DON'T HAVE MANY IF ANY INTERNET OPTIONS. COMPETITION IN URBAN AREAS SHOULD PREVENT UNFAIR PRICING. BUT A LARGER ISSUE FOR ALL AMERICANS IS WHO TO BELIEVE WHEN TAKING A POSITION ON THIS PROBLEM. WE HAVE BECOME CYNICAL CITIZENS WHO ARE ISOLATED BY OUR DISTRUST. DON'T EVER BELIEVE IT IS MONEY THAT MAKES AMERICA WORK. IT IS TRUST, AND WE NEED TO BE WORKING TO REBUILD IT IN EVERY SECTOR.

2nd HALF

JOHN’S OPEN:

HELLO AND WELCOME TO U-S FARM REPORT, I'M JOHN PHIPPS. I'D FORGOTTEN WHAT A REALLY COLD WINTER COULD BE LIKE..AND I'M GLAD I DID. ONE THING WE'VE NOTICED IS OUR LOCAL SCHOOL SYSTEM AHS ONLY MANAGED 7 SCHOOL DAYS TO DATE. I TOLD MY GRANDSON HE'D HAVE TO MAKE UP SO MANY SNOW DAYS THAT HIS EASTER VACATION WOULD ONLY BE LONG ENOUGH FOR HIM TO FIND ONE EGG.

HEADLINES:

THERE'S BEEN A DEBATE OVER OSHA'S ON-FARM GRAIN STORAGE REGULATIONS AND WHETHER THE AGENCY IS OVERSTEPPING ITS BOUNDARIES. THIS WEEK OSHA ANNOUNCED THEY WANT TO CLARIFY THEIR STANCE ON THE ISSUE. AS AMERICANS IN THE MIDWEST HUNKERED DOWN FOR PLUMMETING TEMPERATURES THIS WEEK, PROPANE PRICES CLIMBED. HERE'S A CHART TO SHOW THE SKYROCKETING FUTURES PRICES. THAT'S BECAUSE THE MIDWEST IS FACING A PROPANE SHORTAGE. BUT THE PROPANE EDUCATION AND RESEARCH COUNCIL SAYS THE SHORTAGE ISN'T NATIONWIDE. THEY SAY SINCE THE PRIVATE SECTOR CONTROLS THE SUPPLY, IT'S A LOGISTICAL CHALLENGE TO GET PROPANE REPLENISHED IN THE MIDWEST. THE MAJORITY OF THE PROPANE IS IN A LARGE STORAGE FACILITY IN TEXAS. CALIFORNIA FARMERS ARE PREPARING FOR A TOUGH GROWING SEASON ALREADY. AS DROUGHT PLAGUES THE STATE, MANY FARMERS ARE QUESTIONING HOW MUCH IRRIGATION WATER THEY'LL ACTUALLY RECEIVE.

SPIRIT OF THE HEARTLAND:

AS SOME AMERICANS ARE STILL TRYING TO DIG OUT FROM THIS WEEK'S SNOW, OTHERS ARE TRYING TO ICE THEIR BACK FROM SO MUCH SHOVELING. AN INDIANA MAN ISN'T TAKING THE EASY WAY OUT-- JUST THE SMART WAY. AS ROBERT BUMSTED FROM THE ASSOCIATED PRESS SHOWS US, THIS HOOSIER IS PLOWING HIS DRIVEWAY FROM THE COMFORT OF HIS LIVING ROOM.

LEGACY:

IF YOU THINK YOU FARM IN THE MIDDLE OF NOWHERE, TRY FARMING IN MONTANA.  TO ONE BIG SKY FARMER, THE OPEN FIELDS ARE WHAT MAKES HIS JOB SO ENJOYABLE. IN THIS LEAVE A LEGACY REPORT, TYNE MORGAN INTRODUCES US TO A MONTANA MAN WHO WEARS MANY HATS, BUT IT'S ALL TO ENSURE HIS KIDS HAVE THE OPTION TO COME BACK AND FARM ON HIS FERTILE LAND.

TRACTOR TALES:

AL, THAT PUT PUT IS MUSIC TO MANY JOHN DEERE ENTHUSIASTS. WHAT ARE WE LOOKING AT TODAY?  THAT'S RIGHT, JOHN. IT'S A TRIBUTE TO ALL OUR GREEN FANS OUT THERE.

CHURCH SALUTE:

TODAY'S COUNTRY CHURCH SALUTE GOES TO ST MARY'S CATHOLIC CHURCH IN ST BENEDICT, KANSAS. THE CHURCH WAS ORGINALLY ESTABLISHED IN 1859. BUT THE CURRENT CHURCH STRUCTURE BUILT IN THE LATE 1800'S. THE BEAUTIFUL STRUCTURE IS MADE OF LIMESTONE, WHICH WAS QUARRIED FROM TWO FARMS THREE MILES AWAY. THEY SAY THE BUILDING PROCESS WAS QUITE THE SIGHT. THE STREETS WERE PILED HIGH WITH LIMESTONE ROCK, LEAVING ONLY ROOM FOR the HORSES AND WAGONS TO PASS THROUGH. BUT INSIDE THE CHURCH IS JUST AS EXTRAVAGANT, PAINTED IN 1901. OUR THANKS TO ARLENE HALTHAUS  OF SENECA, KANSAS FOR SHARING THE GREAT DETAILS OF THE CHURCH.

MAILBAG:

TIME NOW FOR OUR WEEKLY LOOK INSIDE THE FARM REPORT MAILBAG. MY COMMENTS ABOUT THE REFORM EFFORTS IN CHINA PROMPTED THIS UPDATE FROM PETER GADWA. "THERE IS A NEW PLAN TO EXPERIMENT WITH CONVERTING FROM COLLECTIVE OWNERSHIP. FARMERS COULD THEN AGGREGATE ENOUGH LAND TO JUSTIFY THE PURCHASE OF THE SAME FARM EQUIPMENT AS OURS INCREASING YIELDS." PETER, I HAVE HEARD ABOUT THE IDEA OF MOVING TOWARD INDUSTRIAL AGRICULTURE IN CHINA, BUT WHEN YOU DO THE MATH THIS LOOKS UNLIKELY FOR THE VAST MAJORITY OF CHINES AGRICULTURE. CONSIDER THAT THE AVERAGE CHINES FARM IS ABOUT 1.5 ACRES. WE WOULD CALL THAT A HOUSE LOT. WITH ONLY 15% OF THEIR LAND USABLE FOR CROPS, AND 300 MILLION FARMERS, YOU SEE THE PROBLEM. IF THEY WERE TO REDUCE FARMER NUMBERS BY 99% THE FARM SIZE WOULD ONLY GROW TO ABOUT A QUARTER SECTION - 160 ACRES. I SEE NO POSSIBILITY CHINESE FARMS COULD LOOK LIKE SMALL US FARMS, LET ALONE MIDWESTERN INDUSTRIALIZED OPERATIONS. THE BIGGER PROBLEM IS WHAT ECONOMISTS CALL DE-INDUSTRIALIZATION. CHINESE MANUFACTURING EMPLOYMENT PEAKED IN 1996 AT 17 PERCENT OF ALL JOBS. SO THE IDEA OF GOOD PAYING FACTORY JOBS ISN'T THAT ACCURATE. THEIR ECONOMY LIKE OURS IS GROWING MOSTLY LOWER-PAYING SERVICE JOBS. THERE IS LITTLE ALTERNATIVE EMPLOYMENT FOR MILLIONS OF DISPLACED FARMERS. CHINESE FARMS WILL CONSOLIDATE RELATIVELY SLOWLY I THINK, SIMPLY BECAUSE OF THE ENORMOUS NUMBER AND LACK OF OPTIONS. AND EVEN WHEN THEY DO, IT WILL BE A LONG TIME BEFORE THEY NEED A 16-ROW COMBINE.

 

 

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