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USFR Weekly Recap - December 11-12, 2010

December 13, 2010

THIS WEEK ON U.S. FARM REPORT
EPISODE #1948
DECEMBER 11-12, 2010


JOHN’S OPEN:
HELLO AND WELCOME TO U.S. FARM REPORT, I'M JOHN PHIPPS. THE MILDLY ANTICIPATED USDA SUPPLY AND DEMAND REPORT TURNED OUT TO BE UNDERWHELMING. SO INSTEAD OF JUST THE BOTTOM LINES, I ACTUALLY READ THE WHOLE REPORT. BURIED IN THE DETAILS WAS THIS LITTLE FACTOID. MALTING BARLEY DEMAND IS DOWN BECAUSE DOMESTIC BEER CONSUMPTION CONTINUES TO DROP. THIS CAUGHT MY ATTENTION BECAUSE OF A PHENOMENON I HAVE NOTICED AT RECENT FARMER MEETINGS. WHILE YOU STILL SEE MANY PRODUCERS WITH A LIGHT BEER IN THEIR HAND DURING THE SOCIAL HOUR, MORE ARE HOLDING A GLASS OF RED WINE. THIS SUGGESTS TO ME WINE GROWERS HAVE SUCCESSFULLY POSITIONED THEIR PRODUCT AS A HEALTHIER ALTERNATIVE. FOR THOSE NUMBERS AND THE REST OF THE NEWS.....HERE'S AL PELL

S&D REPORT: THANK YOU JOHN. ALTHOUGH FEW DRAMATIC REVISIONS WERE EXPECTED IN FRIDAY'S SUPPLY DEMAND REPORT, USDA DECEMBER PROJECTIONS SHOWED ALMOST NO CHANGE FROM A MONTH AGO. FOR EXAMPLE, THE ONLY CORN FIGURE ALTERED WAS A 5 MILLION BUSHEL INCREASE IN IMPORTS FROM CANADA. EXPECTED TWEAKING OF FEED, ETHANOL, AND EXPORT NUMBERS WAS CONSPICUOUSLY MISSING. SOYBEAN CARRYOVER WAS DECREASED BUT LESS THAN MANY ANALYSTS EXPECTED. THE NEW FIGURE OF 165 MILLION BUSHELS IS STILL HISTORICALLY TIGHT AND SUPPORTS IDEAS OF CONTINUED STRONG PRICES. FOR WHEAT, THE PATTERN WAS CONTINUED WITH THE USDA PROJECTING A TINY 10 MILLION BUSHEL INCREASE IN CARRYOVER.

COTTON OUTLOOK: FOR COTTON, THE REPORT SHOWS PRODUCTION DIPPED A POINT FROM NOVEMBER. USDA PEGS ALL COTTON PRODUCTION AT 18.3 MILLION BALES. AND WHILE THAT'S DOWN A TICK FROM LAST MONTH, IT'S STILL 50% HIGHER THAN LAST YEAR. THE LOWER FORECAST IS DUE TO DECREASED YIELDS IN MISSISSIPPI, OKLAHOMA, TENNESSEE AND TEXAS.

AUSTRALIA WHEAT: AS U.S. WHEAT PRODUCERS WATCH PRICES INCH UP, AUSTRALIAN GROWERS ARE RAISING THEIR OWN EXPECTATIONS. PARTS OF THAT COUNTRY HAVE SEEN RECORD RAINFALL THIS GROWING SEASON. FORECASTERS EXPECT AUSSY WHEAT TO REACH NEARLY 27 MILLION TONS. THERE ARE CONCERNS HEAVY RAINS COULD EVENTUALLY STUNT GROWTH...BUT SO FAR, SO GOOD.

AG COMPETITION: THE DEPARTMENTS OF AGRICULTURE AND JUSTICE HAVE WRAPPED-UP A SERIES OF WORKSHOPS LOOKING AT COMPETITION IN AGRIBUSINESS. THEY'RE INVESTIGATING THE APPROPRIATE ROLE FOR ANTI-TRUST AND REGULATORY ENFORCEMENT IN U.S. AGRICULTURE. THE FIFTH AND FINAL HEARING WAS HELD WEDNESDAY IN WASHINGTON. THE FOCUS WAS ON MARGINS AT DIFFERENT LEVELS OF THE SUPPLY CHAIN. SINCE SPRING, THE HEARINGS HAVE COVERED COMPETITIVE ISSUES IN SEED AND CHEMICALS, ALONG WITH LIVESTOCK PRICING MECHANISMS.

ROUNDTABLE: FOR THE SECOND WEEK IN A ROW WE ARE BRINGING YOU HIGHLIGHTS FROM OUR BIGGEST TAPING OF THE YEAR...THE 2010 MARKETING RALLY. THIS WEEKEND WE FEATURE WORDS OF MARKETING WISDOM FROM ALL FIFTEEN ANALYSTS WHO WERE ON STAGE...EIGHT MORE TO GO FROM MARKETING RALLY 2010...WE'LL BE RIGHT BACK.

JOHN’S WORLD: AT RECENT FARMER MEETINGS, I HAVE NOTED A RECURRENT UNEASINESS AMONG PRODUCERS THAT WAS ALSO REFLECTED AT THE MARKETING RALLY. MANY OF US ARE WORRIED THAT THINGS ARE LOOKING A LITTLE TOO GOOD. ONE PRODUCER PHRASED IT THIS WAY. "I GET NERVOUS WHEN EVERYBODY YOU TALK TO IS BULLISH". ANOTHER ASPECT OF THIS ANXIETY IS THE KARMA-LIKE NOTION OF GOOD TIMES RIGHT NOW SURELY MEANS BAD TIMES TO COME. I THINK WE MAY BE WRINGING MUCH OF THE SATISFACTION OUT OF THE CURRENT FARM ECONOMIC SITUATION FOR NO GOOD REASON. IF WE ARE CONCERNED THIS COULD GET WORSE, THAT NECESSARILY MEANS LIFE IS PRETTY GOOD RIGHT NOW. SHOULDN'T WE BE CELEBRATING THAT AT LEAST? FURTHERMORE, THOSE LOOKING FOR WHAT COULD GO WRONG MAY BE OVERLOOKING A SUBTLE SHIFT THAT HAS ALREADY DEVELOPED. UNLIKE PAST YEARS OUR INPUT PRICES, ESPECIALLY FERTILIZER, WERE LINKED TO THE COST OF PRODUCING THEM. TODAY THOSE PRICES MOVE IN CLOSER LINKAGE WITH GRAIN PRICES. FOR EXAMPLE, NATURAL GAS PRICES - THE BIGGEST PRODUCTION COST FOR ANHYDROUS AMMONIA FERTILIZER - ARE RELATIVELY LOW. BUT PRICES FOR NH3 ARE ZOOMING UPWARD SINCE THE CORN RALLY IN OCTOBER. LITTLE COMPETITION MEANS OTHER INPUT SUPPLIERS ARE LIKEWISE TESTING TO SEE WHAT FARMERS CAN PAY, NOT JUST HOW MUCH THEY NEED TO MAKE A PROFIT. SO WHEN SCANNING THE HORIZON FOR ECONOMIC THREATS, DON'T FORGET TO CHECK UNDER YOUR NOSE. LET US KNOW WHAT YOU THINK.... SEND EMAILS TO INFO@USFARMREPORT.COM OR CALL AND LEAVE US A VOICE MAIL.

2ND HALF:
JOHN’S OPEN:
HELLO AND WELCOME TO U.S. FARM REPORT, I'M JOHN PHIPPS. WHILE THERE ARE SIGNS OUR ECONOMY IS IMPROVING, ONE SOBERING FACT IS TOO MANY PEOPLE IN THE U.S. STILL STRUGGLE TO GET ENOUGH TO EAT. IT IS THE JOB OF THE MARKETPLACE TO TRANSLATE CONSUMER NEEDS INTO COMMODITY PRICES THAT TELL FARMERS WHAT THEY NEED TO GROW. FOR THE MOST PART OUR CURRENT SYSTEM HANDLES THAT WELL. BUT NOT PERFECTLY. FOOD STAMPS HELP MITIGATE THAT SHORTCOMING, AND EVEN WITH ITS WARTS IS A REMARKABLY EFFECTIVE PROGRAM. LET'S GET STARTED WITH THE HEADLINES AND AL PELL....

FOOD STAMPS: THANK YOU JOHN. WITH THE NATION'S UNEMPLOYMENT HOVERING NEAR TEN PERCENT, IT APPEARS MANY AMERICAN'S ARE STILL STRUGGLING TO FEED THEMSELVES. NEW FIGURES SHOW MORE THAN 40 MILLION PEOPLE ARE USING THE SUPPLEMENTAL NUTRITION PROGRAM - OR SNAP...UP MORE THAN HALF A MILLION FROM THE MONTH BEFORE. IN ALL, THE NUMBER OF PEOPLE NEEDING FEDERAL FOOD ASSISTANCE IS UP MORE THAN 5 MILLION THIS YEAR...A 15% SPIKE. THE RISING PRICE OF FOOD AND HIGH UNEMPLOYMENT IS FUELING DEMAND FOR FEDERAL AID. ACCORDING TO THE DEPARTMENT OF AGRICULTURE, WHICH OVERSEES THE FOOD STAMP PROGRAM, THE NUMBER OF PEOPLE GETTING THE ASSISTANCE HAS SET NEW RECORDS FOR 22 STRAIGHT MONTHS. TO QUALIFY, INCOME FOR A FAMILY OF FOUR MUST BE ABOUT $29,000.

EATING HEALTHY: NEW REPORTS SHOW AMERICAN'S KNOW WHAT IT MEANS TO EAT HEALTHY...YET MOST PEOPLE DON'T. IN FACT, NEW DATA SHOWS FOUR OUT OF FIVE ADULTS HAVE A DIET THAT NEEDS IMPROVEMENT. A NEW STUDY BY THE NPD GROUP SHOWS EATING BEHAVIORS VARY BY GENERATION. THE MARKET RESEARCH FIRM REPORTS ADULTS FROM THE AGE OF 21 TO 54 HAVE THE LEAST HEALTHFUL DIETS. OLDER CONSUMERS...54 AND UP, HAVE THE BEST HABITS AND THE GREATEST NEED...MOSTLY FOR HEALTH REASONS. ALL GROUPS DON'T EAT ENOUGH FRUITS, VEGETABLES, OR DAIRY PRODUCTS AND EAT TOO MANY FATTY FOODS.

FLORIDA WEATHER: IN FLORIDA, AG OFFICIALS ARE ASSESSING THE FREEZE DAMAGE TO CROPS AFTER A WINTRY BLAST BLANKETED MUCH OF THE STATE. THE UNSEASONABLY FRIGID TEMPS, LED TO THREE HELICOPTER CRASHES IN ONE MORNING AS PRODUCERS TRIED TO SAVE THEIR CROPS. ALL OF THE CRASHES HAPPENED NEAR LAKE OKEECHOBEE...A REGION IN SOUTH-EAST FLORIDA THAT GROWS MUCH OF THE NATION'S VEGETABLES DURING THE WINTER MONTHS. ACCORDING TO WPTV, THE CHOPPERS WERE IN THE AREA TO CIRCULATE AIR AND KEEP CROPS WARM. FORTUNATELY, ALL PILOTS INVOLVED SURVIVED WITH ONLY MINOR INJURIES. INVESTIGATORS ARE TRYING TO PIECE TOGETHER HOW THREE DIFFERENT CRASHES HAPPENED ON THE SAME DAY IN THE SAME GENERAL AREA.  CHRISTMAS TREE CHECKOFF: MANY FARMERS WHO GROW CHRISTMAS TREES MAY BE ASKED TO PAY INTO A FUND TO HELP PROMOTE THEIR CROP. FOR YOU NON-FARMERS, IT'S KNOWN AS A CHECKOFF PROGRAM. CORN, SOYBEAN, BEEF AND DAIRY PRODUCERS ARE WELL AWARE OF THESE PROGRAMS. THE IDEA IS TO GET MORE PEOPLE TO BUY FREE-CUT TREES, INSTEAD OF ARTIFICIAL ONES. CHRISTMAS TREE GROWERS WHO HANDLE MORE THAN 500 TREES A YEAR WOULD BE ASKED TO PAY 15-CENTS PER TREE. THAT MONEY WOULD THEN BUY ADVERTISING. THEY HOPE IT WOULD HAVE THE SAME AFFECT AS THE PORK CAMPAIGN "THE OTHER WHITE MEAT". RIGHT NOW, THE AG DEPARTMENT IS SEEKING COMMENTS ON THE PROPOSAL. AT DULL'S TREE FARM NEAR INDIANAPOLIS, THEY SUPPORT THE CHECKOFF. ACCORDING TO THE NATIONAL CHRISTMAS TREE ASSOCIATION, CONSUMERS BOUGHT 28-MILLION FARM-GROWN CHRISTMAS TREES LAST YEAR. NEARLY A THIRD WERE FROM "YOU CUT" FARMS.

ULTIMATE FARM QUEST: IMAGINE IF YOU HAD A TEAM OF EXPERTS TO GUIDE YOU IN FARMING DECISIONS. TWO PRODUCERS IN THE EASTERN CORNBELT HAD THAT OPPORTUNITY THIS YEAR. OUR REGULAR VIEWERS ARE FAMILIAR WITH MICHIGAN FARMER LEON KNIRK AND OHIO FARMER DOUG RUPP. THEY TOOK PART IN THE ULTIMATE FARM QUEST THIS GROWING SEASON. BOTH PRODUCERS GOT ADVICE FROM A PANEL OF FARM JOURNAL EXPERTS. THEY WORKED ON AGRONOMIC, MARKETING AND MANAGEMENT PRACTICES. WE'LL RECAP THEIR SEASON NEXT WEEKEND. WE HOPE YOU JOIN US.

HEARTLAND: IF IS ASKED YOU TO TOUCH A QUARTER AND THEN SPLIT CIRCULATE, WOULD YOU KNOW WHAT TO DO? A GOOD SQUARE DANCER MIGHT...AND VETERAN CALLERS KNOW HOW TO SAY IT JUST RIGHT. GALEN CULVER FROM AFFILIATE KFOR-TV IN OKLAHOMA CITY INTRODUCES US TO A MAN WHO HAS SPENT DECADES PERFECTING HIS CRAFT. GALEN TELLS US GERALD STILL CALLS FOR A NUMBER OF SQUARE DANCE CLUBS IN OKLAHOMA CITY.

COTTON PRICES: THE AMOUNT OF COTTON PRODUCED IN THIS COUNTRY IS A BIT SMALLER THAN WHAT WAS PROJECTED LAST MONTH, BUT IT'S STILL A HUGE INCREASE OVER LAST YEAR. THE AG DEPARTMENT PEGS PRODUCTION AT 18.3 MILLION BALES, DOWN 1% BECAUSE OF WEATHER PROBLEMS. BUT IT'S 50% MORE THAN A YEAR AGO. EVEN AS PRODUCTION CLIMBS, PRICES CONTINUE TO SURGE HIGHER THANKS TO ROBUST EXPORT DEMAND. ON FRIDAY, COTTON OPENED AT $1.38 A POUND. JUST A MONTH AGO, PRICES HIT $1.50. THESE ARE SOME OF THE HIGHEST PRICES IN NEARLY FOUR DECADES. CHINA IS THE BIGGEST BUYER OF U.S. COTTON.

TEXAS COTTON: IN THE FIELDS, THE 2010 GROWING SEASON IS WRAPPING UP ACROSS MUCH OF THE COTTON BELT. REGIONAL REPORTER ERICA GOSS TAKES US FOR A HARVEST TOUR IN THE GREAT STATE OF TEXAS.

TRACTOR TALES: WITH COLD WEATHER COVERING MUCH OF FARM COUNTRY, WE FELT IT WOULD BE BEST TO GO GREEN FOR THIS WEEK'S TRACTOR TALES. RONNIE WEDGEWORTH TELLS US ALL ABOUT HIS 1937 JOHN DEERE.

CHURCH SALUTE: FOR OUR COUNTRY CHURCH SALUTE THIS WEEK, WE TRAVEL FIRST TO DANVILLE, IOWA AND THE LOG CREEK UNITED METHODIST CHURCH. DATING BACK TO 1835, THE EARLY CONGREGANTS ERECTED THEIR FIRST CHURCH HOME IN 1847 JUST WEST OF THE CURRENT BUILDING. THAT STRUCTURE WAS DEDICATED IN 1875, AND AFTER MANY UPGRADES STILL SERVES THE MEMBERS. THE MANY ACTIVITIES OF THE CONGREGATION ARE LED BY A VERY ACTIVE WOMEN'S GROUP. THE MINISTRIES INCLUDE THE HEIFER PROJECT, FOOD MINISTRIES, AN ANNUAL BAZAAR, AND A CARD MINISTRY. OUR THANKS TO DENNY CROSS FOR SENDING US THE INFORMATION. OUR SECOND CHURCH TODAY IS COX'S CREEK BAPTIST IN COX'S CREEK, KENTUCKY. IT IS THE THIRD OLDEST CHURCH IN KENTUCKY, AND MARKED THEIR 225TH ANNIVERSARY THIS YEAR WITH SPECIAL SERVICES AND EVENTS. THE FIRST PASTOR WAS WILLIAM TAYLOR. THE PRESENT BUILDING IS THEIR FOURTH CHURCH HOME AND WAS CONSTRUCTED IN 1943 AFTER A TORNADO DESTROYED THE PREVIOUS BUILDING. WE THANK LORAINE STUMPH FOR HER SUBMISSION. AS ALWAYS WE WANT TO LEARN ABOUT YOUR HOME CHURCH AS WELL... SALUTES CAN BE SENT TO THE ADDRESS ON THE SCREEN. STAY WITH US - THE MAILBAG IS NEXT.

MAILBAG: TIME NOW FOR OUR WEEKLY LOOK INSIDE THE FARM REPORT MAILBAG....DAVID MAHAN FROM FLINT MICHIGAN SUGGESTS HE WOULD LIKE A FEW MORE DETAILS IN OUR COVERAGE. "FOR EXAMPLE, TODAY YOU TALKED ABOUT GIPSA. I DON'T EVEN KNOW WHAT THAT STANDS FOR. ALSO, SOME TOPICS I WOULD LIKE TO HEAR MORE ABOUT ESPECIALLY THE "WHY" OF THE SITUATION." YOU GOT ME THERE, DAVID. IN ORDER TO GET AS MUCH INFORMATION AS WE CAN ACROSS IN LIMITED TIME, WE DO RESORT TO INSIDER JARGON AND ACRONYMS. THE ONE YOU MENTIONED - GIPSA - IS SHORT FOR THE GRAIN INSPECTION, PACKERS AND STOCKYARD ADMINISTRATION. THIS MOUTHFUL OF AN AGENCY OVERSEES MUCH OF OUR LIVESTOCK AND GRAIN TRADE. I SHOULD HAVE TRIED TO CRAM THAT INTO MY COMMENTARY. YOUR OTHER COMMENT ABOUT WHY THE EVENTS WE REPORT OCCUR IS A LITTLE TRICKIER. WE'LL TRY TO MAKE SURE IN THE FUTURE WE DON'T ASSUME ALL OF OUR VIEWERS CAN CONNECT THE DOTS OF CAUSE AND EFFECT, BUT ONE THING COMPLICATING OUR JOB IS "WHY" IS INCREASINGLY HARD TO NAIL DOWN. LAST WEEK FOR EXAMPLE I TALKED CORN PRICES, AND CONCLUDED IT IS NEARLY IMPOSSIBLE FOR US TO SAY DEFINITIVELY WHY THE CORN MARKET IS ACTING AS IT IS. THIS IS THE CASE FOR OTHER COMMODITY MARKETS, AG POLITICS, WEATHER, CONSUMER ATTITUDES, AND JUST ABOUT ANYTHING ELSE IMPORTANT TO FARMERS. STUFF WE THOUGHT WE UNDERSTOOD NOW ROUTINELY MYSTIFIES US. I THINK IT IS RELATED TO THE EXPLOSION OF INFORMATION AND WEALTH, AND THE ADDITION OF BILLIONS OF NEW ACTORS TO THE GLOBAL ECONOMY. BUT I'M NOT EVEN SURE ABOUT THAT. AS ALWAYS, WE WANT TO HEAR FROM YOU, SEND COMMENTS TO INFO@USFARMREPORT.COM OR LEAVE US A VOICE MAIL AT 800-792-4329.
 

 

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