|
John's World
Monday, April 30, 2007
In a dry and thirsty land, where no water is...
It's half a globe away and far from our attention, but our colleagues in Australia are looking at the Mother of All Droughts. John Howard, Australia's prime minister, arrived here in February and urged the four states through which the Murray-Darling flows to hand their authority over the river to the federal government. After seven years of drought, and many more years of over-exploitation and pollution, he argued that the only hope of restoring the river to health lies in a complete overhaul of how it is managed. As the states weigh the merits of Mr Howard's scheme, the river is degenerating further. Every month hydrologists announce that its flow has fallen to a new record low (see chart). In April Mr Howard warned that farmers would not be allowed to irrigate their crops at all next year without unexpectedly heavy rain in the next few months. A region that accounts for 40% of Australia's agriculture, and 85% of its irrigation, is on the verge of ruin. [More]I suppose we could entertain a little shameful shadenfreude, especially if you grow wheat, but this disaster becoming almost biblical in scope. And in its wake, a new pattern of water allocation will likely emerge that could presage similar outcomes in other water-short areas. All water use from the Murray-Darling other than for domestic needs will be banned from July 1 and there will not be enough water for environmental flows or allocations to irrigation. The report recommends further battle plans to make sure towns do not run out of drinking water. These include the suspension of the usual water-sharing deals between the states and examining whether Snowy Hydro Ltd could release water from the Snowy River to help the Murray-Darling. [More]In the western US - not to mention other places - a similar situation could arise. My own thought is democracy will override the legal precedence of water law and deliver the fluid to the people. And the West is going to have the people. But the booming South and West regions show some of the most dramatic environmental stresses, according to the report. For example, the four fastest-growing states -- Nevada, Arizona, Colorado, and Utah -- all have areas of acute water shortages. [More]It may not be acres that places the final limit on ag production in the US. It could be water. Labels: environment, production Sunday, April 29, 2007
Saturday, April 28, 2007
Climate change update...
To refresh memories, I agree that humans are a significant cause of global warming via greenhouse gas emissions. This has been an evolving position, but my belief is grounded largely in the opinions of those I have come to trust. Two new developments reinforce my convictions. Bjorn Lomborg, whose weighty tome, The Skeptical Environmentalist, I almost made it through, offers his take on what we should be doing rather than debating: RAY SUAREZ: But you do accept the proposition that human activity is changing the climate of the planet?Meanwhile, science writer Carl Zimmer, points out the shortfalls in climate-change news coverage. Months ago a report came out suggesting plants were contributing enormous amounts of methane and thus greenhouse gases were a natural, not anthropogenic, problem. It later proved to be erroneous. Some pundits didn't heed the scientists, though. At Foxnews.com, columnist Steven Milloy declared that deforestation ought to reduce global warming. "Our understanding of global climate system is woefully insufficient to support the rush-to-judgment advocated by celebrity-backed global warming alarmists," he claimed. The folks from the Wall Street Journal editorial page declared that "this is causing big problems for the tree-huggers." Rush Limbaugh sarcastically said, "Well, hot damn. God is to blame for global warming."The intense politicization of climate change has hardened positions on both sides. Meanwhile the real debate seems to be: how can we make a buck out of this? Labels: environment, politics
I think we knew this all along...
Bottled water makes no sense, just money. "Bottled water is a classic example of the market ignoring the environmental cost of the product," Angel says. "Free trade is meant to be good because you're getting cheaper products from another country, but of course this never takes into account the environmental cost." Another argument for including external costs somehow into consumer prices. Labels: economics, environment
Another reason Brazilian title insurance is expensive...
Our formidable competitor to the south struggles to cope with wide income inequality and the all too familiar reaction - land reform. Conflict in the countryside has ebbed but hardly stopped (see chart). For the MST, the demand for land reform is nearly bottomless and the conflict with industrial farming irresolvable. Mr de Oliveira reckons that 5m families—around an eighth of the population—are candidates for land redistribution. “Monocultures” like eucalyptus for paper, sugar cane for ethanol and soya degrade the environment, reduce the food supply in Brazil and drive labourers and small farmers off the land, he claims. [More]Does this suggest a Zimbabwe-like meltdown of a powerful ag production system? Perhaps to be soon echoed by South Africa? In Zimbabwe, forced and often violent takeovers of white farms led to a disastrous collapse of farm production. In South Africa a legal process of takeover under a democracy might lead to less disastrous results, but would still replace high-productivity white farming with the lower productivity of black farming. At best, the Government of South Africa would have a hard struggle to limit the damage done by its own land policy.The analogy may not apply in Brazil. In the first place, Brazil has plenty of land still to deal out. No other country has this luxury, but the government could effectively albeit heavy-handedly create small plots by simply moving bigger landowners with generous grants farther into the frontier. Brazil, and to a lesser extent Argentina, still enjoys tremendous potential toSecond, like all real estate, it appears the issues are focussed on location. Landless peasants usually prefer acres close to population centers and markets, not a farm in the middle of a cerrado hundreds of miles from civilization, like many soya plantations are. There is a similarity to land use arguments here in the US. Much of the dispute is centered on places like Lancaster County or the Eastern Shore. Few care about 15,000 acre farms in NW IA, by contrast. Agrarian farms are a good solution where they are close to the markets they need. But people have not distributed themselves smoothly across any country. Thus efforts like Brazil's likely will never threaten the enormous majority of soya or cane production. It will be interesting to see if small farms contribute seriously to pork production. My hunch is they may be a popular source for domestic supply, while the large and growing Brazilian pork industry focuses on exports. This is one reason some of us pay scant attention to land distribution/use issues, and some of us lay awake at nights. It is also a reason why national rules to decide these matters are unworkable. Land markets - which is how people tell us what they think land should be used for - are truly local. Still, the power of agrarian movements in the response to perceptions of unfair incomes will likely bleed over to other issues, especially in South America, where socialist voices are getting a new hearing. This is the real reason trends toward inequality are problematic - not that they don't make economic sense (all the boats, yadda yadda) but that the inherent human bias toward fairness overrides carefully drawn charts and economic models. Friday, April 27, 2007
Keeping it together...
Kevin Spafford, our Farm Journal columnist on family business matters, has written an excellent article for the Purdue Top Farmer Crop Workshop folks. Pithy extract: Comprehensive succession planning may be the most critical issue facing the American economy over the next few decades. The creators/controllers of this wealth must decide how to best pass their ownership interests to subsequent generations while still trying to perpetuate these entities. Equity may easily constitute more than 90% of a family’s financial security, retirement nest egg, and potential legacy. Yet past statistics demonstrate that only about 30% will pass to a second generation, less than 10% will pass to a third, and about 4% will go to a fourth. I used to blow off articles like this. But then I didn't used to be 58 either. And while making reasonable plans seems to wring the spontaneity out of life for me, it does seem to calm Jan down. Labels: finance, future, production Thursday, April 26, 2007
You'd think the "paws" would be a giveaway...
I guess I believe this. Japanese dog-lovers were bamboozled into buying sheep thinking they were poodles. Thousands of people have been 'fleeced' into buying neatly coiffured lambs they thought were poodles. That must have been some haircut... Wait - they're paying $2400 for poodles in Japan?? Update: Color me gullible - I should have gone with my initial reaction. It was indeed a hoax. Labels: fun
I'm farming on top of a forest...
An underground coal mine near me became the focus of paleontologists recently after miners complained about bumping their heads on tree stumps. A major earthquake 300 million years ago caused the forest to drop below sea level, burying the entire ecosystem in mud almost immediately, Elrick explained. [More]Cool! This mud is probably why I have so many wets spots.
Nobody else to blame...
Virginia Postrel, whose blog I enjoy and writing I envy, touches a nerve for this writer-waanabee concerning ghost writing. This about Katie Couric's supposed blog. This double standard is an old bugaboo of mine. I don't care when actors, athletes, and CEOs hire ghostwriters, though I do think they should give their ghosts credit, but people who pretend to be journalists and public intellectuals should do their own damn work. [More]Amen. As blogs start to proliferate on ag websites - not to mention thinly disguised advertorials - the urge to front them with the authenticity of a "real farmer" is strong. The problem is we have very little in the way of a literary tradition in agriculture outside the agrarian sector (which occasionally produce writers of brilliance such as Wendell Berry). Most of us simply survived English classes. At Farm Journal, our publishers and editors strongly reject the concept of deceptive authorship, but the tide is coming in on this one. The success of blogs as eyeball attractors has increased the pressure for content onto which to hang ads. Thank goodness the quality of my prose screams: amateur. Labels: blog Wednesday, April 25, 2007
If you build subsidies, they will come...
The [lamentable] bulletproof nature of farm subsidies has attracted the interest of more than a few very bright minds lately. Since our quintennial chance to alter this flow of entitlement is at hand, the $20B or so of federal moolah has sparked some innovative thinking. Citigroup proposes to provide subsidy recipients an alternative to the fixed DPs, CCPs and marketing loans (see Existing Programs, p. 12). The choice will be voluntary. Recipients would receive a fixed settlement amount to forego future payments. Recipients and U.S. taxpayers will benefitCitigroup has devised an idea they are already marketing in the EU (more on that later). Basically put, it seems to me like a structured settlement similar to lottery winners and lawsuit beneficiaries. After the tobacco buyout I was struck by the possibilities for buying out feedgrain/cotton/oilseed subsidies. But as the Citigroup author pointed out, the problem with the tobacco settlement as a prototype for other buyouts was, lacking a separate source of funding like the tobacco trust many would consider it too generous. Obviously, he was not thinking from the farmer perspective. (We have no words that mean "too generous") That is why, despite calculations showing how the US government will save money with a scheme like this, it won't get past too many rural Senators UNLESS fiscal constraints actually become a factor. No, seriously, it could happen. And Sanjaya could win a Grammy. The farm lobby has consistently shown the ability to override any government funding constraints. We learned that from Freedom to Farm. Regrettably, in order to hold back efforts to reverse the hard-won agriculture program reforms, both sides--Republicans as well as Democrats--wound up in a bidding war. Although the actual economic loss due to 1998 weather-related disasters was less than $1.5 billion, the Republicans proposed $4.2 billion in "emergency disaster relief." Ostensibly, part of the reason for this generosity was to make up for lost export markets. Eventually, to fend off Democrats' efforts to reopen the farm law and return to the old supply-control policies, Republicans upped the ante to nearly $7 billion. [More]My conversation with the author also contained an interesting moment when he pointed out how many landowners are well, old. He offered a statistic something like 73% of all landowners are over "60" (70, 55, ? - my note-taking is not great). There followed a significant pause - I think the implication was that older people would be likely to opt for up-front money versus variable subsidies. (Never underestimate the size of the industry building to deal with Boomer-geezers and wealth.) Well, as someone within spitting range of 60, I think they overestimate both the flexibility and motivation for farm landowners. My experience is landowners like the predictability and simplicity of farm ownership, as opposed to any other asset -even money. My estimate is land is flowing into increasingly stronger hands, especially as it appreciates in value. In short, there aren't that many clueless, declining prime farmland owners. Consider this point (page 3):
And as for helping young farmers, this proposal will do little. That phrase is routinely included to add glamor. To be sure there are fewer young farmers, but the more logical reason is: we don't need them. The fact that younger people are backed up looking for an entry opportunity illustrates we don't have a recruiting problem, we have a technology addiction. This solution will do little to alter our demographic profile, IMHO. Other questions leap to mind:
I'm betting my farm's future on that assumption. And the fact that, as far as I know, only 6-7 (you never know about Larry) farmers agree with my opposition to subsidies. Does Citigroup have a good idea? Absolutely. Buying out subsidy recipients is what passes for political courage these days. Does it have a prayer? Absolutely not. Updated 4/28 - Thanks for the corrections. Labels: economics, farm bill, farm program
Nets for all...
Farm Bureau pushes for "safety nets" for some. I offer a different concept. Labels: farm bill Tuesday, April 24, 2007
Where is Charlton Heston when you need him?...
Call me squeamish, but something about fungus-food that creeps me out.  All Quorn™ products contain mycoprotein. Mycoprotein (“myco” is Greek for “fungi”) is a nutritious member of the fungi family, as are mushrooms, truffles, and morels. The fungus used in all Quorn™ products is Fusarium Venenatum. There are lots of great things about mycoprotein which very few people know, so here are just a few:Look, I strongly advocate the right of consumers to choose what foods they want to eat, regardless of where they come from. But fungus? Somehow the recommendation that it tastes "just like McNuggets" is not reassuring either. Maybe we are shaped by the media we experience, but I immediately thought of Soylent Green.
People, people! Think what you're saying...
OK, as I have frequently mentioned, subsidized commodity prices have negligible impact on food prices. It seems the NCGA agrees. NCGA’s analysis of the monthly Consumer Price Index (CPI) reports show almost no relationship between the corn prices and food prices. “The food index rose 0.3% in March, following larger increases earlier this year. Grocery store foods also rose less in March, largely reflecting a downturn in the index for fruits and vegetables.” [More] [My emphasis] Tell me again. How does our alleged "cheap food policy" work again? Labels: farm program, food
How to unbuild a smokestack...
 They are erecting a new power plant addition close to me. It has been fun watching the stack go up, so.... [via Arbroath] Labels: fun Monday, April 23, 2007
For debate lovers...
I received several thoughtful remarks on my various posts about anthropogenic climate change. As I said in the comments, this engineer has taken a position and is moving on to other work. To those who like the back-and-forth of Internet debate, I offer this website to link you to any number of information sources. Ordinarily I'm not a big fan of the Gristmill, but this effort seems well done, IMHO. Labels: environment
Always on my mind...
When we are in the field Jan fixes lunches for us, usually in small coolers that fit in the tractor cab. I have discovered that by oh, about 9:45, my thoughts and gaze rest often on that small red cube, and by 11:15 it's usually gone - including the afternoon snack. It turns out I am not merely weak-willed. I am being historically accurate. Today many people find it strange that the biggest meal of the day once centered around noon, but it made great sense at the time. Artificial lighting such as oil lamps and candles were expensive, and provided weak illumination at best. So people went to sleep at sundown, because it's difficult to work and eat in the dark. The last meal of the day was a rushed affair, a quick snack before the lights (the sun) went out. The only exceptions were those who had to work at night, and the extremely wealthy and powerful people at royal courts. The wealthiest courts, like those of France and Burgundy might stay up after sunset, their grandly decorated halls illuminated by thousands of candles or torches. But they were unusual; most medieval people never witnessed such spectacles. A couple of years ago, our power went out from storm and we discovered how powerful the diurnal schedule is. The sun goes down, and without light, you go to bed. As for the eating part, even patrons of the Hungry Heifer couldn't keep up with the prodigious meals of the Edwardian upper class. Consider this one day: Breakfast: Porridge, sardines, curried eggs, grilled cutlets, coffee, hot chocolate, bread, butter, honey. Remember, you are what you eat. Is it me, or is it hungry in here? Sunday, April 22, 2007
To every thing...
There is a season. Jan and I are in the field planting. Posts will be sparse, I expect. Thanks for reading. Labels: blog
As for me, I believe
Finally, proof positive of alien cow abductions.
How we die...
The tragedy at Virginia Tech prompted a eye-opening look at gun deaths in America by Bill Marsh at the NYT. Two things struck me.
Yeah I know, when the apocalypse comes and the big meltdown happens you can come over here and shoot me and take all my power tools, but I've calculated the odds, and I'll stand pat on this one. Besides, I am not alone. Labels: culture Friday, April 20, 2007
Signs of the Agpocalypse...
Dell Computer - who sold me my latest model - actually paid attention to some of us Vista guinea pigs and decided enough blood had been shed. Dell's plan to reintroduce Windows XP as an option on its consumer and home-office PCs, as reported midday Friday on our site by Paul McDougall, adds a powerful counterbalance to the tale of unimpeded Vista uptake.I have finally corrected the worst of my issues and Microsoft has promulgated enough updates to handle some more, but I am still convinced it was a mistake to buy Vista this early. "Carlos" - my Indian (I think) tech support guy, agreed that Vista had been berra, berra good for business. Maybe next year. (New drivers for legacy hardware are arriving daily, which really helps.) Or maybe Linux. Or (gasp!) - a Mac. Labels: computer
Are milk prices headed up?...
Looks like it. Nonetheless, my guess is the milk program will be the most impregnable to any meaningful change, given the power of the participants. (Thinking about it, a payment cap change might have significant impact.) Hein Hettinga, who owns a small Arizona dairy farm, took on big business and lost. Hettinga was competing for retail sales against Arizona's largest milk company, Shamrock Foods. Hettinga chose not to participate in the federal government program and the United Dairymen of Arizona (UDA) complained that he was affecting the USDA price-setting formula causing lower returns for other dairies. The UDA cooperative handles 85% of the state's milk. Powerful lobbyists paid off some politicians to have a law passed, which in effect, required Hettinga's Sarah Farms to participate in the program. He now has to pay his competitors $400,000 a year to stay in business - a sum that cripples his operation. According to some activists who claim sarcastically, this is why we need socialism - to keep big companies big and keep the little guy down. Hettinga has filed a federal lawsuit, alleging that the so-called Milk Regulatory Equity Act of 2005 is unconstitutional. [More]Which is why I am not optimistic about the future for small producers, except perhaps agrarian/organic/raw farmers who can connect directly to the consumer. The tricky thing there is we really don't know how large or wealthy that sector of milk buyers is. Or whether that nascent supply chain will be shut down by nervous conventional milk producers. Labels: dairy, farm program Thursday, April 19, 2007
A puzzling chair...
 What are the odds of getting this thing back together at the end of a party? [via Metafilter] Labels: fun Wednesday, April 18, 2007
The affordable food undertow...
As farmers loudly proclaim the "affordability" of food (hoping to imply cheap), we have suddenly come face to face with the logical consequence of this statistic. First off, we use "affordable" because it allows us to breeze past the actual cost of food and talk instead about how much of the consumer's disposable income gets spent on food. Consider these questions:
While it's true we spend less of our income than almost any other economy, it's because our incomes are so high. Families spent just 9.9 percent of their 2005 disposable personal income on food—As disposable personal income continues to climb, the share spent on food declines. [And this is the USDA, folks - our PR agency.]If you compare people with similar incomes, we spend more than some and less than some. There are good reasons geezers retire to Mexico, for example. Cheap margaritas is one, but cheaper food is another. According to a friend of mine, tourists in places like Cabo San Lucas are happy campers, eating very well for $15 at a restaurant. But "affordability" also creates another option for consumers - discretion. We can afford to choose our food based on any whim or conviction that appeals to us. This is why the upper-end market is moving past affordable food to ethical food. That is beginning to change. Over the past several years, as America’s obesity epidemic has become a growing concern, a number of investigative journalists have turned their attention to the industrial food system and its alternatives in an attempt to make sense of what we eat and whether it’s good for us. Eric Schlosser jump-started the genre in 2001 with Fast Food Nation, a portrait of drive-through cuisine and culture that shocked and repulsed readers much as Upton Sinclair’s meatpackingindustry exposé The Jungle did at the turn of the previous century. Michael Pollan’s pieces for The New York Times Magazine and his newly published book, The Omnivore’s Dilemma, push in a slightly different direction, often probing the way government policy influences our diets. Corn subsidies, for example, are so massive that the crop sells for less than it costs to produce, and unhealthy corn derivatives often find their way into inexpensive but not very nutritious processed foods. In a twist of economic irony, the artificially cheap calories in these foods are particularly attractive to poor consumers— who, not coincidentally, have higher rates of diabetes and obesity-related diseases than their wealthier compatriots. [More]In one sense, our food industry should be nervous about the seemingly bullet-proof American economy. As we create more wealthy people, we create more finicky eaters. * About $3500 per head. Tuesday, April 17, 2007
Just 34 more generations to go...
We natter on about multi-generation farms. What about a 1400-year old business? The world's oldest continuously operating family business ended its impressive run last year. Japanese temple builder Kongo Gumi, in operation under the founders' descendants since 578, succumbed to excess debt and an unfavorable business climate in 2006.Since I have been writing about succession issues on my own farm, others have chimed in as well. Kongo Gumi offers some interesting ideas we might be able to use to keep our farms going. Another factor that contributed to Kongo Gumi's extended existence was the practice of sons-in-law taking the family name when they joined the family firm. This common Japanese practice allowed the company to continue under the same name, even when there were no sons in a given generation.Still, I have recently realized there is something inherently self-serving about multi-generational pride. It borders on the "came over on the Mayflower" elitism that has proven variably useful in American society. There is also the beyond-the-grave control aspect of long-lived family businesses. All told, it's a mixed bag and definitely not one to sacrifice happiness for.
Doing the math...
Jim Wiesemeyer at ProFarmer has been doing yeomen's work at his column (sorry - subscription required) covering the development of the new farm bill. He often includes lengthy polemics from former Congressperson-turned-lobbyist Larry Combest. In his his latest chapter, Combest includes this familiar sounding "statistic" U.S. agriculture creates 17% of U.S. GDP, $3.5 trillion in economic activity, and 25 million American jobs. As the December 17, 2003 Wall Street Journal article (Farm Belt Becomes Driver for the Overall Economy as Prices Rise, Spending Spreads to Tractors, Trucks), notes, “The present boom is proving that agriculture still matters in the U.S. Rising farm incomes are helping ease the blow of the loss of manufacturing jobs in the Midwest States.” The article then quotes the chief economist of a major U.S. bank who states, “The farm sector is a significant source of strength in the U.S. economy.” With such an important U.S. economic sector and jobs creator facing such unfair foreign trade conditions, why would anyone propose to tie the hands behind the backs of hard working U.S. farm and ranch families, all of whom are injured by these trading practices? [More - subscription] [My emphasis] Wow! $3,500,000,000,000 from little ol' us out here on the farm. And we "created" it! Presumably by waving our magic economic wand. I asked them where this number came from and received no reply, so here is what I came up with myself. I don't think that's how the authorized economic referees at the Department of Commerce see it. Or any real economists. Consider these facts from the latest GDP (2005) statistics. Total GDP $12,456BHmm, we seem to be a few trillion short. Even if we look at Gross Output we are only a tiny fraction of the national picture: $253B out of $22.9T Look the numbers up for yourself and feel free to show me where the staggering number comes from. I once asked a Farm Bureau spokesman where a similar number came from. It seems what we in ag do in order to seem larger than life is add in stuff like:
My point is this is a pretend number we use to enlarge our egos, not unlike mating birds fluffing their feathers out. We don't begin to create $3.5T of wealth. If we do, we are remarkably poor at hanging onto any of it. I have been told that questioning such inflated numbers is disrespectful to farmers. Yeah - right. Telling us fairy tales is treating us like adults. Agriculture is a important part of a huge food industry. Our economy is not about us and this constant, overwrought chest-beating is not helpful as we become more integrated with the other sectors. BTW - I wasn't the only guy who questioned Combest's numbers (look, just buy a membership, OK? You'll thank me later). Labels: economics Monday, April 16, 2007
Everybody loves a subsidy...
ConocoPhillips and Tyson's announced plans to make biodiesel from animal fats. Sounds great, right? Oil major ConocoPhillips and Tyson Foods Inc., the world's largest meat producer, said Monday they're teaming up to produce and market diesel fuel for U.S. vehicles using beef, pork and poultry fat.But wait, it's not just about patriotic energy independence-stuff. It's about tax breaks. The decision to expand the break, which Blunt opposed, may be worth hundreds of millions of dollars to ConocoPhillips and other refiners, while increasing demand for products from Tyson, the nation's largest meat packer and second-largest poultry processor.So when farmers complain about Big Oil getting tax breaks, they need to remember it is really hard to keep a subsidy to yourself. Especially with this administration.
I dunno, maybe they play pro basketball...
Some pigs in China.  Owned by a strange, strange farmer. [More photos] Labels: fun Sunday, April 15, 2007
The tortilla problem... For those of us who eat Mexican just for a change of pace, the story of tortilla prices may seem mildly annoying. But to Latin America, it is not. The NCGA wandered off the Logic Reservation with their spin-laden response: Rising tortilla prices in Mexico are due to a supply issue in that country – not increased U.S. ethanol production or U.S. corn prices. The U.S. Grains Council (USGC) and the National Corn Growers Association (NCGA) report that lower corn production in Mexico and the lack of import licenses have caused white corn shortages there. [More]Umm - guys, you can't |
