John's World
I smell another boondoggle...Those crafty guys in the Ag Committees of Congress are about to do it again. They are going to raid the Treasury in broad daylight (albeit in the fog of farm legislation - to torture the metaphor). Jim Weisemeyer outlines the increasingly questionable cost assumptions behind the Senate Farm Bill. One tiny little slice of his analysis:How will the apparent inclusion of an ever-ready ag disaster program impact a producer's attitude toward buying up crop insurance?
What if.. If as I suspect that the CBO assumes in their analysis that x-percent of producers would buy up insurance to a higher level, the savings resulting from that assumption may not be realized near to the degree that CBO might have predicted. [More by subscription - seriously, ya need to find room for this in your budget] I'll bet the idea of eliminating the LDP game won't survive conference either.
While not exactly the same, drafts of farm bill language in the Senate do contain a shift in when producers could claim the LDP to the day they lose beneficial interest in the crop. [More] However I am inclined to believe these are tempests in a legislative teapot. Looking at the trends in trade, biofuels, and biotech, a huge fuss about a few billion per year is going to mean less and less to more and more producers.Those commodities and communities who insist on government support as their primary business plan may discover they have not built a safety net, they've woven their own shroud.How very Halloweeny.Labels: farm bill, production
I want to see a field of this after a 60 mph wind...
In our search for plants to make biofuels from, an unlikely candidate has emerged: tropical maize.
 Early research results show that tropical maize, when grown in the Midwest, requires few crop inputs such as nitrogen fertilizer, chiefly because it does not produce any ears. It also is easier for farmers to integrate into their current operations than some other dedicated energy crops because it can be easily rotated with corn or soybeans, and can be planted, cultivated and harvested with the same equipment U.S. farmers already have. Finally, tropical maize stalks are believed to require less processing than corn grain, corn stover, switchgrass, Miscanthus giganteus and the scores of other plants now being studied for biofuel production. [More] We sometimes forget early corn had no ears. And when stalks are 25% sugar - who needs 'em? Still all these ethanol-wannabees will have a tough time buying acreage the first few years.Labels: ethanol, production
This is a big deal... Forget genes - we're working whole chromosomes now, baby. The world of biotech is just beginning to gather momentum, and we're one reason for it. It's been a brave new world for genetic crops for some time now but Chicago-based researchers say they have developed a method to take crop manipulation to a higher level: the chromosome.
Creating an artificial chromosome, into which several manipulated genes can be inserted, may speed efforts to produce fuels and medicines from plants as well as boosting crop nutrition and yield.
In a scientific paper set for publication Friday researchers from Chicago-based Chromatin Inc. and the Universities of Chicago and North Carolina reported success in creating an artificial chromosome for corn plants. Through four generations, the corn treated the man-made chromosomes as if they were natural and passed them along to offspring intact at a rate nearly as high as for chromosomes native to the plants.
"This appears to be the tool that agricultural scientists and farmers have long dreamed of," said Daphne Preuss, a University of Chicago professor of molecular genetics and Chromatin's president. [More] So, while you moan about seed costs, remember you are not stupid. If it didn't make you money, you wouldn't buy 'em. And because you buy them, more will come.Here is the real question: do you believe that biotech will reshape your yield curve? If so, what will you bet? Whle others are fixated on whether demand (read: ethanol) will falter, some producers are guessing biotech productivity gains can lower their cost per bushel to survive when competitors bleed red ink.
Those bets are being placed in cash rent and land prices as we speak.
Labels: biotech, production, technology
The cash rent lease conversion accelerator...Along with others, I have been trying to handicap the new twist the farm bill process (for lack of a better word) has taken. Shrugging what little pride I have aside, I can admit to not really grasping what the good Senators think they are trying to do for me with the revenue assurance option.So. Let's assume my degree in engineering and years of familiarity with the "times table" (do they still teach that?) have some worth, and my hours of frivolous surfing are not totally misspent. Now consider I really have no analytical or intuitive idea whether I should like this idea or not.Given these observvations, imagine what a landowner is going to make of this whole legislative puzzle. As we talked about earlier, many observers point out landowners are getting older. Which is a good thing, if you think about it.But it won't make them really excited about figuring out not merely a new farm program - but A CHOICE to be made. Making choices is not what geezers like to do or do best.Therefore, some outcomes could be:- Investing serious hours at the FSA and extension meetings learning the new program and getting the paperwork done.
- Employment of more farm managers to act on behalf of landowners and select the optimum route.
- Electing to reside total faith in the tenant via FSA power-of-attorney.
- Just take a large rent check on 1 March and lose the whole headache.
Gee, I wonder what could happen...Labels: farm bill, land, production
A clue on the soybean market...My boss, Top Producer editor Greg Vincent, has absconded to Brazil from whence he is blogging his adventures. While we all think $10 beans will spur Brazilian producers to increase acres big-time - there is a good reason why that may not occur.So, now the strong prices coming from Chicago and the signals being flashed from the rest of the world will just have to wait. Acreages is expected to increase over last year by about 6 % to 7 %, but that will just get acreage back at 2005-06 levels. If the export market remains strong throughout the rest of this year, and expectations hold out that U.S. soybean acreage stays historically low in 2008 (even in light of the projections that acres will rebound next year, acreage will be lower than normal) the Brazilian market will be poised to make a dramatic comeback. It just won’t happen until the 2008-09 growing season. [More] Follow his exploits in the southern hemisphere here.
Am I the only guy who finds $10 beans irresistible for 2008?
Labels: international, production
Another risk transfer...I have been noticing the risk-aversion behavior that is now the standard for good farming practice. I think our profit margins will be squeezed relentlessly by these choices, despite record prices. Primarily because the return to labor is diminishing. Our physical work takes less skill (autosteer) and some entire jobs have disappeared (walking beans). This shows up in our economic decisions.We're not the only ones transferring risks. Consider this announcement from Monsanto:A new pilot program recently approved by the Federal Crop Insurance Corporation (FCIC) will provide farmers an opportunity to pay lower premiums if they plant a majority of their corn acres using hybrid seeds that feature YieldGard Plus® with Roundup Ready® Corn 2 or YieldGard VT Triple™ technology from Monsanto Company (NYSE: MON).
The insurance product will be offered as a pilot program in cooperation with Western Agricultural Insurance Company and will be called the Biotech Yield Endorsement (BYE). Western Agricultural Insurance will make the program available to all other approved insurance providers to offer to their farmer customers.
The pilot program will be initially available in four states: Illinois, Indiana, Iowa and Minnesota. Implementation of BYE has yet to be determined pending available resources and priorities for the deployment and administration of the program by the Risk Management Agency (RMA).
To be eligible for the program, a farmer must plant 75 to 80 percent of their corn acres with seeds featuring YieldGard Plus with Roundup Ready Corn 2 or YieldGard VT Triple technology. Refuge requirements must also be respected. Depending on the grower's production history, amount of coverage purchased and other criteria, the farmer may be able to reduce the yield component of their premium up to 24 percent. [More] I got word of this last week and saved my 6-hour commute to/from South Bend to tape US Farm Report to ponder the possible ramifications of this program. (Note: this strategy may or may not improve the quality of the pondering.) Some thoughts:- This is tacit actuarial proof of decreased production risks. We've all been seeing it in our fields. (Note the happy surprises in the AgWeb Crop Comments.) The number one yield threat - drought - threatens all corn growers less with this technology protection. So, if crop insurance has been a questionable benefit (example: I have only ever carried CAT coverage because of a FSA grain bin loan), it is a true loser now. I know many of you can't imagine farming without CI, but some of you probably could now, especially if you sock the saved premiums away for a "rainless day".
- Insurance companies are probably not thrilled (more on this in a later post). The farm bill drafts are squeezing their profits - which have been handsome lately - and now premiums will drop because of seed choice. Monsanto has unilaterally transferred a risk premium from crop insurers to seed - and can legitimately capture that value. If it doesn't support an actual price increase, it will justify current boosts. This is superb business practice, and Monsanto is displaying again why they currently have no match in the seed/technology marketplace.
- I bet rotary hoe sales jump and prices for old hoes increase sharply. Stay with me on this one. It seems to me the biggest risk now is having to replant. Even with a break on seed costs, you still pay the tech fees (now enormous) on replant seed. Slapping corn in the ground willy-nilly now carries one of the higher penalties even as the production boost to early planting may be decreasing. Free replant seed should be a big factor in hybrid seed choice. Ditto with waiting an extra day or not planting just ahead of a downpour.
- This trend is not over. The (in my opinion) over-hyped pipelines just might offer more production-stabilizing technology that should make crop insurance premiums less by reducing payouts.
This is how competition looks in our 21st Century economy. Each link in the production chain must constantly be on guard to protect the value they deliver, because other links want to capture that contribution themselves. For that matter they should be looking to predate values currently being delivered by others themselves. Producers are building bins like crazy, stealing the value traditionally delivered by elevators. Tractors are too complicated for most farmers to manage, and a repair becomes a value delivered increasingly by dealers. Now seed packs insurance in the bag. The tug of war for margin continues.The big and constant question for me is, "What value can only I deliver and claim for myself?" That list seems to be shrinking.
[Thanks, Darren]
Labels: economics, insurance, production
There is good news and, umm....Inappropriate news, in the parlance of today. Remember those weird frogs with congenital deformities that scientists suspected as victims of pesticides? They were wrong. The cause now appears to be an involved cycle of parasites and nutrient (N, P) runoff. The study showed increased levels of nitrogen and phosphorus cause sharp hikes in the abundance and reproduction of a snail species that hosts microscopic parasites known as trematodes, said Assistant Professor Pieter Johnson of CU-Boulder's ecology and evolutionary biology department.
The nutrients stimulate algae growth, increasing snail populations and the number of infectious parasites released by snails into ponds and lakes. The parasites subsequently form cysts in the developing limbs of tadpoles causing missing limbs, extra limbs and other severe malformations, Johnson said.
"This is the first study to show that nutrient enrichment drives the abundance of these parasites, increasing levels of amphibian infection and subsequent malformations," said Johnson. "The research has implications for both worldwide amphibian declines and for a wide array of diseases potentially linked to nutrient pollution, including cholera, malaria, West Nile virus and diseases affecting coral reefs." [More] Keeping nutrients in place is largely a matter of keeping dirt in place, and the ethanol-spurred demand for corn does not bode well for better conservation measures. No-tillers are already reluctantly ripping fields to accommodate continuous corn.My guess is we'll see nutrient limits and/or fertilizer taxes in our future that will limit fertilizer application. Of course, prices are already causing many of us to reflect on how much we need. It's one more thing we can look to Europe and see the future possibility.Labels: environment, production
Bad news in old terminology...To add to Great Britain's farm miseries, a new disease with the charming common name of "bluetongue" has appeared along with a sixth case of foot-and-mouth.Britain's deputy chief veterinarian Fred Landeg told British television stations on Saturday that a cow on a cattle and sheep farm near Ipswich, Suffolk, northeast of London, tested positive for bluetongue.
The cow was to be slaughtered, other animals on the farm tested to see if they were also infected, and restrictions put in place at the site, Landeg and the Department for Environment, Food and Rural Affairs (Defra) said.
National Farmers Union (NFU) President Peter Kendall told BBC television that bluetongue "is definitely not as serious as foot-and-mouth but it is of major concern to us," as it is one more disease to deal with.
He said the disease is carried by insects like midges and is not transferred from animal to animal. [More] Although this story is unfolding painfully slower than the 2001 FMD epidemic, the stubborn reappearance will likely further decimate British beef trade. It is hard not to wonder if there is some systemic reason why the "sceptred isle" seems the be the lightning rod for these animal diseases. At the very least, we can say charming small producers in idyllic agrarian settings are not better protected against contagious outbreaks. In fact, it would seem insistence on past methods of animal husbandry sets up producers for persistent ancient disease scourges.Labels: beef, production
Do we have an ag news cycle now?...Just like political news, any announcement that could be misconstrued by ag audiences may be now slated for release on Friday - so the media will have to take a breath or two before opining. For your consideration, this announcement today.Dow AgroSciences LLC, and Monsanto today announced a cross- licensing agreement that breaks new ground in the commercialization of gene stack technology. The agreement is aimed at launching SmartStax(TM), featuring eight different Dow AgroSciences and Monsanto herbicide tolerance and insect-protection genes. This technology is expected to be available to corn growers by the end of the decade. [More] I'm still wrapping my mind around this. My knee-jerk reactions:- Traits will soon be standardized in one humongous package - try buying something without all 8 traits.
- Unless there is a battle for market share, pricing power will extract the maximum marginal revenue from seed corn buyers.
- Monsanto and Dow must be remarkably confident about US energy policy. With ethanol profits slipping and soybean prices climbing, what would an RFS expansion failure mean to corn prices and seed profits? Then again, owning the market means never having to say you're sorry.
- Is there no sense of panic at Pioneeer/DuPont? I realize they have been and are deeply invested in research, but can those products hit retail fast enough to make a difference? Where was management as Monsanto built the wall around them?
- Forget refuge. Given the current lackadaisical industry attitude to the supposedly serious problem of Bt resistance, I had guessed (wildly, I admit) that products were at hand that would make refuge unnecessary. This now seems to be the case. Consequently, I will be listening skeptically to bug scientists who tell me 2-3 years of "refugeless" corn growing will select for a rootworm beetle that will baffle SmartStax.
- How close to monopoly does the trait/seed market have to get before attracting government attention? Are two choices sufficient? Have we arrived at Microsoft (corn) and Apple (corn)?
Finally, if corn prices keep rising, will anybody care?Labels: biotech, production, technology
Oh yeah, well I'm more inefficient than you!...An interesting dialog caught my attention, if only for its perverse ramifications. In order to justify our negotiating position for rents farmers are arguing how long it takes them to grow a crop.
Let's do the engineer thing and throw a few real numbers at this discussion as opposed to words. This is a crude spreadsheet I used to calculate how many minutes of in-the-tractor-seat time I spent to grow stuff. (Sorry, this formats weird when I post it)
| Field Labor Requirements 2007 |
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| | Day length | 10 | hrs. |
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| | | | Corn | | | Beans | | | | | A/Day | Min/A | | A/Day | Min/A | | NH4 Application | 150 | 4.00 |
| Burndown | 400 | 1.50 | | Finisher | 160 | 3.75 |
| Planting | 200 | 3.00 | | Planting | 180 | 3.33 |
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| | Spraying | 300 | 2.00 |
| Spraying | 320 | 1.88 |
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| | Cultivating | 200 | 3.00 |
| Harvesting (2 op.) | 100 | 12.00 | | Harvesting (2 operators) | 60 | 20.00 |
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| | Chiseling (50% of ground) | 80 | 3.75 |
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| | Corn Total | | 39.83 | Minutes | Beans total | 18.38 | | Corn acres |
| 980 |
| Bean acres | 740 | | Corn time |
| 650.6 | hrs. | Bean time |
| 226.6 |
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| | Farm totals |
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| | Corn |
| 650.6 |
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| | Beans |
| 226.6 |
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| | Misc (mowing etc.) |
| 40.0 |
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| | Total |
| 917.2 | hrs. |
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| | Total operators |
| 1.60 |
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| | Hours /operator/yr |
| 573 |
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| If it wasn't obvious, the totals are about 40 minutes for corn and 18 for beans. Your results - as they say - may vary. The purpose of this spreadsheet is to help me make the numbers smaller.
Now this accounting does not include support operations - accounting, marketing, maintenance, etc., but I don't think that is what guys were talking about.My point is when we brag about how much time it takes us to do our job, we have slipped to the wrong side of the "what's the point" decision.Labels: economics, production
The way of things...I have seen some curiously disingenuous justifications for the barrage of input cost increases now being aimed at producers - especially corn farmers. I recently received an impressively glossy and doubtless expensive sales packet from Beck's Seed outlining how research costs, increased demand, new technology, yadda yadda were making price increases "necessary".The implication was clear - we just have to raise prices.Unsurprisingly, the fertilizer industry is singing from the same public relations hymnal.High prices of natural gas have curtailed ammonia production, reducing the supply and increasing the cost of nitrogen fertilizer. The Caribbean is a potential source for increased imports, but with increasing dependency on imported nitrogen comes a chance for a volatile supply and a volatile price. [More] While I agree there is a relationship to supplier input costs (research, natural gas) and farm input (seed, fertilizer) prices, it is minor compared to pricing power.Input prices are going up because suppliers can raise prices and increase their profits secure in the knowledge that farmers can afford to and will pay higher prices, and hence demand will not drop. The pricing power also is strengthened by virtual monopolies or at least oligopolies in these industries.I do not mean to imply gouging or unfair practices, just a sense of embarrassment that our suppliers think we will swallow these transparently misleading excuses when the same companies are reassuring investors how wide their margins are.
"Agrium's record second-quarter earnings were due to excellent results from all three of our strategic business units," said Wilson. "Results from our retail operations reflect the synergies we captured from our 2006 Royster-Clark acquisition, as well as the strong agricultural fundamentals." The company said wholesale operations had its best-ever quarter, with record or near record margins across all product lines. Advanced technologies results doubled on the strength of sales of "environmentally smart nitrogen," combined with recent growth initiatives. [More]
I mean, how dumb do they think we are?
(Don't actually want to know the answer to that one) Input prices will skyrocket up until a) competitive pressure forces companies to shrink margins to compete for market share (watch the Monsanto/Syngenta/Pioneer strategies in 2008 and beyond) or b) corn becomes less profitable than soybeans/wheat/cotton/retirement. It is easy to get your BVD's in a bind when you have little leverage in the market, but farmers need to remember this is exactly the mindset - price as high as the market will bear - we have for our own marketing plans. Just because you know your production costs doesn't mean that is where you sell - you shoot for as much profit as possible.The doubled gross margins "out-of-the-field" that I am seeing today will undoubtedly be invested first in inputs (variable costs) and residually in land (rent/purchase). All the players know this and with few choices (something poultry growers are loudly pointing out) customers pay until they can't.Better order seed and NH3 today.
And hold for $4.50.
Labels: economics, production
How to ruin a good day...Got this message from my friend Steve. This afternoon I spoke with Illinois Natural History Survey Scientist and Aphid Expert, David Voetglin. He told me that there has been a very sharp increase in the abundance of aphids in suction traps placed in east-central Illinois (populations have been high in N. Illinois for some time and the populations have been moving south). He also reported that he was in an Iroquois County field on Monday that had over threshold (threshold is 250 per plant with 80% or more of plants infested) numbers of soybean aphid on every plant. He mentioned the oft-stated wisdom that the hot weather is supposed to slow the aphid reproduction down does not appear to be holding now, it has been hot and the suction trap numbers keep going up so he doesn't know what to expect. I had just visited with a neighbor who was looking at his soybeans and we decided it was too hot for an aphid explosion.Wrong.
Labels: production
This could be the biggest farm story today...Hats off to the hog industry in North Carolina. Legislation there will phase-out open hog manure lagoons. While this will be expensive, by sitting down together, hog producers will be able to get up to 90% of the cost picked up by government, and one of the biggest impediments to maintaining our hog industry will be diminished.In 2000, pork butchers Smithfield Foods Inc. and Premium Standard Farms Inc. agreed to pay $17.3 million for research on new ways to handle the waste. Last year, researchers at North Carolina State University offered five alternatives that did reduce ammonia and pathogen emissions but were up to five times more expensive than a lagoon system.
The new legislation creates a cost-sharing program for farms that agree to convert to the new technologies. For the next five years, the state will cover 90 percent of the cost, or up to $500,000 for each applicant. The state share drops to 80 percent in 2012 and to 75 percent in 2017.
The hope is that the cost will drop as the systems are improved and demand for them grows.
Justice said she has fielded numerous calls already from farmers interested in the program and companies that believe they can develop still more systems that will meet the new standards.
"The market is wide open," she said. "(Farmers) are ready to go." [More] If other states don't use this as a template, I will be very surprised. Well done, indeed. Our current methods of manure handling border on indefensible.Labels: environment, pork, production
The new Farmer Market...I used to get upset when I read articles like this one from sober university professors about how I should analyze risk in the cash rent market.Farm Management Specialist Gary Schnitkey at the University of Illinois has completed a thorough study of how to quantify those market risks, to guide farmers and landowners toward the type of lease that will be fair to both owner and operator and allow both sides to share in the premium prices offered by the market. In his latest newsletter Schnitkey says today’s high commodity prices will be offset by higher production costs and lower government support payments. As a result, farmers will have to find a way to retain a larger share of the revenue stream to protect against the risks of the marketplace and the higher cash rent agreements that will have to be paid out. [More] Now I simply chuckle. Take a look at the spreadsheet. Note there are no entries for factors like:- the farm is also your home
- Moody Farms is bidding on it
- you farm on 2 (or 3 or 4) sides of the property, making one larger efficient tract
- it represents 18% of your farm income
- without it you will have to leave farming
- you have farmed it for 40 years
- your mailbox sits on it
- you compete by blind sealed bid without negotiation
- your operating time frame is generations, not years
- landowners who don't know or care what is "fair"
While thoughtful and certainly well-meaning, dispassionate academic number crunching by disinterested economists only goes so far. Economists might be surprised by how much of this type of work many of us already do. We know we are adding risk and pushing the envelope, but unlike advisers we also know first-hand the consequences of winning - and especially losing - the land.
The analysis is also constrained by the data source. FBFM data may not be representative of industrial ag, since very few large operations use the service and share their numbers. In short, economists could be pooling their ignorance.
In some sense, these types of models are therefore simply incomplete - dealing data that is easily accessible and manipulable. Truly useful economic analyses would find ways to quantify the above factors, and indeed that is where cutting edge economic work is going.I have an idea that might help. Let's eliminate tenure and pay ag economists by the classroom hour or research paper. They would bid for their classes every 2-3 years against all comers, including foreign grad students willing to work for much less and competitors from other colleges.Then let's see how much risk they accept as reasonable. While this seems caustic, what all these clever spreadsheets ignore is how our brain reacts to risks. Research indicates it is not simply controlled by our rational prefrontal cortex. In fact, we decide it with our emotions and justify it later. And unless the risk is actually real for you, it is unlikely you will understand how such decisions are really made - and more importantly, made to work.Such analyses are not useless of course, but they only represent the first step in deciding. It has also been my experience that those who focus on the current numbers don't hang around long in the cash rent market. They may have been correct in economists' eyes, but they aren't farming.Industrial agriculture is outgrowing many ag economics texts, I believe, for the same reason it is commanding the bulk of farm assets and outputs. The practitioners have devised ways to address factors like these and blow careful conventional thinkers out of the water.
[via Farmgate]
Labels: economics, production
Honeybee update...When last we left our plucky pollinators, the situation was grim. CCD (colony collapse disorder) was decimating honeybee populations and furrowing the brows of agricultural officials. What happens if honeybees lose this battle?Maybe not much.But is CCD such a tragedy? The honeybee may be the only insect ever extended charismatic megafauna status, but it's already gone from the wild (and it wasn't even native to North America to begin with). Sure, it makes honey, but we already get most of that from overseas. What about the $14.6 billion in "free labor"? It's more expensive than ever: In the last three years, the cost to rent a hive during the California almond bloom has tripled, from $50 to $150.
Good thing the honeybee isn't the only insect that can pollinate our crops. In the last decade, research labs have gotten serious about cultivating other insects for mass pollination. They aren't at the point yet where they can provide all of the country's pollination needs, but they're getting there. This year the California Almond Board two-timed the honeybee with osmia ligneria—the blue-orchard bee: Despite CCD, they had a record harvest. [More] This entire episode has caused me to rethink what I think I know about this corner of food production. Like many, I found myself sucked in by some pretty wild predictions, when most consumers may not notice much more than higher prices on specific foods. Which right now can get lost in the general food inflation.Still, this mysterious malady (current most likely cause: miticide buildup in the comb) is crippling an important ag industry, and deserves serious efforts by the government to correct. Maybe beekeepers should get an LDP. That's how we solve things in ag.Labels: policy, production
Up until now...I thought I knew how to grow corn. I spent this morning in a corn field with FJ agronomist Ken Ferrie taping segments for our upcoming "Corn Navigator" series. To my astonishment he kept casually mentioning things I had never heard about growing corn- - especially corn-after-corn (after-corn-after-corn, etc.)Either I need to read more than my own articles in Farm Journal, or this business has changed while I've been stuck in my professional rut. Anyhoo, I'm changing how I will be doing some things on my farm.I'd calculate a probability of 78% you will find something you don't know in this new series. Even if you went to Purdue.Labels: production
Oh, this is going to be good...Responding, I believe, to the growing concerns by consumers and our own livestock sector that ethanol is forcing corn prices a tad too high, legislators who think they can now mandate economics, are devising ways to shift to the "cold fusion" of agriculture: cellulosic ethanol."When I talk about energy and I talk about cellulose, you know, switch grass can be a commodity," Harkin said. "It may not be a commodity now, but in the next five to 10 years it could be a very big commodity ... Why are commodities just limited to what we've done in the last ... 50 years? Maybe there are new commodities out there we should be investing in."
To support future cellulosic ethanol sources, Harkin said, Congress should consider shifting some funds away from the billions of dollars slated to go to traditional crop farmers through direct government payments over the next five years. [More]
Meanwhile, corn growers have deployed a full-court press to deny the idea that corn prices affect food, and I don't think they will stand idly by as farm subsidies start flowing to switchgrass. Nor will ethanol producers.I don't think we know what high corn prices are yet. But a few more ethanol startups and a teensy production hiccup will show us.Labels: policy, production
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
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.
The three leading causes of failure to transition to the next generation are:
1) Inadequate estate planning
2) Insufficient capitalization
3) Failure to prepare the next generation
All of this leads to a growing demand for better planning, integrated training systems, more carefully administered business issues, and the responsibility to think, act, and operate in a more formal business-like fashion. From the threats distressing farmers and agribusiness owners alike, there is no escaping the passage of progress. Threats from outside, shrinking pools of skilled employees, administrative pressures brought by legislation, and constant consolidation did not happen overnight. 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
OK- this is getting seriously weird now...I have mentioned the bee problem before. Perhaps it's the instant attention (to which I contribute) provided by the Internet, but it seems any small issue can become fair game for strange ideas. They are putting forward the theory that radiation given off by mobile phones and other hi-tech gadgets is a possible answer to one of the more bizarre mysteries ever to happen in the natural world - the abrupt disappearance of the bees that pollinate crops. Late last week, some bee-keepers claimed that the phenomenon - which started in the US, then spread to continental Europe - was beginning to hit Britain as well. The theory is that radiation from mobile phones interferes with bees' navigation systems, preventing the famously homeloving species from finding their way back to their hives. Improbable as it may seem, there is now evidence to back this up. [More]
Still, between the Freeze of '07 (will we say "aught-seven" in our dotage?) and CCD, I'm going to enjoy every blueberry I can get this year. There are some skeptics on this subject.Some of the most hilarious congressional testimony of the past thirty years has come from the lobbying organizations associated with American beekeepers. If the quinennial farm bill is the Olympics of Pork, then these boys are the gold medal winners. Every five years, we get to hear how the honey subsidy is the only thing preventing the complete die-off of all agriculture in America, as the domesticated bee population is responsible for most crop pollination, and gosh darn it, the lil’ buggers can’t make it on their own. I’m not exaggerating; the bee lobby’s rhetoric, particularly in the mid-1980s, really has included apocalyptic claims of this sort. The University of Kansas debate team achieved significant competitive success during that time period using positions built around the wilder claims of honey-subsidy enthusiasts. [More]
Man - that' s the real problem with subsidies. You end up having to defend them even when they don't make sense and look like a doofus.The real problem here is this could be a real problem.Labels: environment, production, science
Time to go long corn?...
Suppose we did get a serious environmental kickback from all the Bt corn we're planting. And suppose it showed up in honeybees?
The study in question is a small research project conducted at the University of Jena from 2001 to 2004. The researchers examined the effects of pollen from a genetically modified maize variant called "Bt corn" on bees. A gene from a soil bacterium had been inserted into the corn that enabled the plant to produce an agent that is toxic to insect pests. The study concluded that there was no evidence of a "toxic effect of Bt corn on healthy honeybee populations." But when, by sheer chance, the bees used in the experiments were infested with a parasite, something eerie happened. According to the Jena study, a "significantly stronger decline in the number of bees" occurred among the insects that had been fed a highly concentrated Bt poison feed.
According to Hans-Hinrich Kaatz, a professor at the University of Halle in eastern Germany and the director of the study, the bacterial toxin in the genetically modified corn may have "altered the surface of the bee's intestines, sufficiently weakening the bees to allow the parasites to gain entry -- or perhaps it was the other way around. We don't know."
Of course, the concentration of the toxin was ten times higher in the experiments than in normal Bt corn pollen. In addition, the bee feed was administered over a relatively lengthy six-week period. [More]
Our corn industry and more than a few corporate careers are built on the efficacy and safety of using Bt expression to defend plant from insects. Lord knows we've covered all the bases we could in checking this technology out. To begin with, bees don't feed on corn pollen. But still, the problem is real.
As an example of what honeybees face, Hayes says to make a fist and place it next to your body.
“That’s how large a Varroa mite is to a honeybee. And these mites suck a bee’s blood. Obviously, that debilitates and weakens their immune systems. The mites also vector viruses that affect honeybee health.”
Normally, honeybees forage within a 2.5-mile radius of their colony. They visit flowers to collect pollen and nectar to make honey to feed themselves and their young. That means they’re exposed to whatever is in the environment.
“Of course, honeybees are exposed to agricultural chemicals sprayed on crops or used systemically to control pests,” says Hayes. “Those pests are mostly insects, but so are honeybees. Even at sub-lethal levels, some of the chemicals can find their way through plant nectar and pollen to the bees.”
Researchers are also looking into any possibility that GMO crops could be playing a role in the bees’ behavior. “There are some concerns about GMO crops that can produce a toxin used to battle harmful insects. Those traits are also in nectar and pollen.” [More]
But if no other answer for the Colony Collapse Syndrome arises soon, the scrutiny on GM plants will intensify. While I do not consider the "precautionary principle" a reasonable approach, if something like this honeybee link gets proven - and it looks very unlikely - we're headed straight back to 1990 on our farms. This would put a stake in the heart of GM seeds.
This honeybee thing is getting freaky, and it's worth following.
Labels: GM, production, science, technology
Respecting the segments...Even agribusiness behemoths like Cargill have figured out how to segment the farm market. Check the cute video about selling feed in Poland. (It's the one with the farmer and animals.)I like to think of farming in three sectors: industrial, agrarian, and recreational. Calling myself and other like me industrial is upsetting to some, but it's the best adjective I could find. The problem for many is abandoning the agrarian image, because they are not comfortable in their own minds with their "industrial" actions. And of course, they rightly fear loss of government support if they do not claim to be agrarian.Meanwhile, the market not only has figured it out, it's taking advantage of our split personality by selling industrial tools and coaxing industrial output with soothing agrarian images and words.Labels: culture, marketing, production
Big news, big news cycle...The crop report made all the papers. And I mean all of 'em.I wonder if that kind of publicity is all that good for us? It sure wasn't Friday.But on the other hand, a few more ethanol plants may get built now, and livestock feeders have a purchasing window.Labels: ethanol, production
Really bad timing...I have been posting about the animal rights movement and its possible impact on livestock production in the US. We have also been reporting on the ongoing pet-food contamination uproar (see this week's USFR).What if the two issues began to overlap?If you think of dogs and cats as members of the family, you might figure you could collect damages for pain and suffering if they were to die because of wrongdoing.
The law in California and many other states sees things differently. Pets are treated as personal property, like cars and computers.
But that could be changing, as contaminated pet food is believed to be responsible for the deaths of dozens of dogs and cats nationwide.
"You'll see a lot of pressure on legislators to remove liability barriers, to not see these animals as property but as entities like humans," said Jon Katz, the author of several books on the changing relationship between dogs and people. [More]
Once companion animals achieve "family" status, it could conceivably raise all animals' legal position, just by comparison. Not necessarily to companion status, but some vague slightly less non-human category. I don't want to seem Cassandra-like, but if we see hundreds of thousands of lawsuits over the pet food, those attorneys won't have to look far for their next targets.
To date, we have somehow managed to differentiate between companion animals and food animals.
The twentieth century has most certainly borne witness to the exploitation of animal resources upon a scale far grander than ever before. The most striking development - as animal rights activists are keen to point out - is the way in which the cleft between ourselves and agricultural animals has grown as these animals have been increasingly accorded the status of `machines', through the development of the intensive farming methods deemed necessary to meet ever-growing human food demands. Yet whilst the divide between ourselves and food-producing animals has continued to expand, our identification with and dependence upon the smaller, more cuddly species that we keep as pets has also grown. We increasingly keep pets to satisfy our emotional, rather than material, needs and seem to gain tactile comfort and trust from them which might not be found elsewhere in our modern lives. This development has led the birth of small animal medicine and the pet food industry, both of which have done increasingly booming business since 1945. However, even the seemingly innocuous family pet that lurks in our homes, gardens and public parks can be potentially detrimental to our health. For example, pet animal excrement is not only an environmental nuisance, but can also harbour unpleasant infections, such as toxoplasmosis and toxocara, which can seriously threaten human health. Pets can also expose people to a variety of bacterial infections and cause severe allergies. Rigorous animal management and veterinary controls greatly minimise the risks that pet animals pose to human health. Yet again providing evidence of the efficacy of the modern veterinary regime in reducing the potential risks posed by our intimacy with and exploitation of other species. [More]
I'm not sure that separation can persist. And this further convinces me that petting zoos are a really, really, bad idea for animal agriculture.
It may also be useful to speculate where this greater attachment to animals arises. Is it because we have fewer children? More money? A new perspective on how religion applies? An all-living-things-together attitude? A response to the trauma of our lives? A lack of human contact?
My uneasy guess: All of the above.
Labels: culture, food, law, production
Not America's first choice...I stumbled across this throughly charming blog by chance, and before I'd noticed had read several months of entries. The narrative struck me as well voiced and written, certainly more than adequate to describe a way of life that would strike many as irresistible. (BTW, for another great rural writer of similar vein only funnier, check out Brent Olson) His farm is in a beautiful rural location, his family is adorable, and he has a mixture of cute animals to provide pictures and endless amounts of copy.Another week has come and gone here on the farm. Madison has had me out digging flowers. Now that the truck is fixed and it’s warmer, we’ve been driving down to the creek a couple miles past the farm so the kids can skip rocks and that’s where Madison found her flowers. There are old home places along the banks of the creek and lots of them have flowers growing abundantly. The kids call it Lilly Valley. That means Dad gets the shovel those that we need at our house. Garett doesn’t get too into the flowers, so he browses around for other treasures or picks up trash. Kind of strange to pick up trash, but he does. He says people are littering and destroying the earth. Hard to argue with that. So usually we come home with flowers and trash. It’s good for the kids to get out in the woods. It’s time for garden tilling to get busy. I tilled 3 on Friday afternoon. Don’t make a lot of money at it, but at least it helps buy fuel. At $2.60 a gallon I can use the help. I thought I would have some trouble starting the 6000 after running it out of fuel, but all I had to do was loosen the fuel prime pump and pump a few times and it took right off.
Notice two things:- The unapologetic product plugs for his sponsor. This is how the web is going to deliver bucks, I think. It is also how much of what you will read will be infused with marketing.
- The pure attraction of the agrarian lifestyl
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