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July 2012 Archive for John Block Reports from Washington

RSS By: John Block, AgWeb.com

John Block has dedicated his professional career to the fields of agriculture, food and health.

Drought Fall Out

Jul 26, 2012

Here we go again – a short grain crop which means higher prices for wheat, corn, soy beans and on down the line. The fall out will be felt far and wide. The pain will not be shared equally.

The drought is going to seriously hurt some farmers, even though their crop prices are high. They just won’t have much to sell. Livestock producers will be crying too. They thought $5 corn was too expensive. How about $8 corn? We can expect some culling of livestock herds in the short run increasing the supply of meat and thus pushing down the price. But that will be short-lived. Pork, beef, and especially dairy prices will go up.

Now the question is – what kind of shock will the consumer experience? Some numbers from USDA might shed some light on this question.

1. A 50% increase in the price of corn could increase your grocery bill by 1%. That’s all. Out of that grocery cart of food, only 15% of the money you spent goes to the farmer. The rest goes for labor, packaging, transportation, and advertising. All foods are different. Cereal – 7% of cost goes to the farmer; but milk, 46% and pork, 34%.

Right now, USDA projects food prices to rise this year by about 3% -- not much more than the average over the years. Now, the drought could push this up to 4% or more next year, depending on the extent of crop loss. Beyond a food price increase, there will be other fall-out.

2. The volume of our exports will suffer because the high prices will discourage demand. Markets do work.

3. There will be a new ground swell of voices asking the government to lift the renewable fuels standard. They will be shouting – "We shouldn’t be making corn into fuel."

4. I think a better idea would be to release some of our Conservation Reserve acres for crop production. We have more than 30 million acres in the Conservation Reserve, and I would estimate that half of those acres could be safely farmed. 15 million acres could produce a lot of grain.

5. On the positive side, the critics of modern agriculture and genetic engineering are going to lose their case; because we need all the advanced technology to produce enough food.

It’s too soon to say how all of this will shake out. So – stay tuned.

In closing, I would encourage you to access my website which archives my radio commentaries dating back 10 years and will go back 20 years when complete. Check on what I said back then. Go to www.johnblockreports.com.

 

4th of July

Jul 05, 2012


Throughout this political campaign, there has been a lot of talk about the Constitution. The Supreme Court just ruled on the constitutionality of Obamacare. Speakers are quoting Thomas Jefferson to make their case. Timing for all of this could not be better because we just celebrated the 4th of July with flags waving and patriotic songs. We do have a lot to celebrate.

We can and should always ask the question – is our country on the right course? Are we doing the right thing? Why do we have so much disagreement? Why can’t the Congress and President sit down and chart the perfect course for our nation?

The answer is simple. Different people have different opinions. Finding middle ground is not always as easy as it sounds. Read the history of our country and you realize that we have always had a vigorous debate and conflict. We’ve made some mistakes, but most of the time we have gotten it right.

As I looked at our flag on the 4th of July, I said thank you to the fathers of our country and the Constitution that they wrote. It’s been more than 200 years and "Old Glory" still waves.

We live in the most powerful and most influential country in the world. Look back 100 years. Consider Argentina. Argentina was on an equal par with the U.S. then. Where are they today? We left them in the dust years and years ago. Turn to Europe. We are the country that rescued their people from WWII.

Now, they have a debt problem and government overreach that is about to strangle what prosperity they have.

We don’t want to wake up some morning and realize we are in the same boat. Europe is a welfare state; they can’t afford it. Neither can we.

We need to look back to those wise leaders who fathered our nation. They would be shocked at the level of debt we have today, and the government regulation choking our country. What happened to personal responsibility? Think about it.

Hope you had a great 4th of July. God bless America.

In closing, I would encourage you to access my website which archives my radio commentaries dating back 10 years and will go back 20 years when complete. Check on what I said back then. Go to www.johnblockreports.com.
 

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