From The Editor
Dec. 2, 2011
Hello Pro Farmer Members!
I would have liked to have spent more time in this week's newsletter talking about what Senator Pat Roberts (R-Kan.) said on two very critical issues for the year ahead: The farm bill and the Ag Committees' hearings on the bankruptcy of brokerage house MF Global. Obviously, these are two issues that will be with us for a while, so I just touched on the highlights and will let you read the conversation PF Washington consultant Jim Wiesemeyer had with Roberts last week in Inside Washington Today to get all the details.
And I will add this perspective: We warned immediately the MF Global issue would be a "big" issue for a while... unfortunately it will be an issue for months. Roberts, however, showed his experience and level-headedness on the issue by saying he hopes the bankruptcy doesn't result in a round of new regulations. Reason: there are plenty of regulations in place already. It's just that those involved in the futures industry must abide by the laws to make those regulations work. When individuals don't abide by the laws, things like the MF Global bankruptcy are the result. It's another case of enforcing the laws already in the books.
The "theme" of this week's front page is clear: It's a "macro-" versus "micro-economic" factor page. Eventually -- and sooner rather than later -- we see the micro-economic factors of the grain markets taking control of day-to-day price action rather than the current macro-economic focus in place. When that happens, some grain traders assume the corn market will be ready to march higher through the first half of the year. That's possible, but the front page should point out that conditions are almost constantly changing... and corn has plenty of competition (although uncertain) in the global feed markets.
One of the stories we didn't cover in this week's newsletter that I wished I'd had room for in the 2012 crop budget story is about direct payments. We know -- and so do you -- that Direct Payments will disappear. There is an assumption in farm country, however, that these payments have already been eliminated and that there will be no Direct Payment on 2012 program crops. The way things stand today (and there's no guarantee this will stick with the current Congress), you will receive a payment on 2012 program crop production as long as you've signed up for the farm program. So don't forget to include the $20- to $25-per-acre payment in your 2012 crop budgets. That payment, however, will very likely be eliminated for the 2013 crop year.
And finally... I'm leaving next week's Pro Farmer newsletter in the very capable hands of Pro Farmer Managing Editor Brian Grete... which means Pro Farmer Markets Editor Julianne Johnston will slide into the job of writing next week's Analysis pages for the newsletter. I will be on my annual vacation and wandering around the timber and CRP fields of east-central Iowa chasing whitetails!
That's it for this week...
Have a great weekend!!