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USFR Weekly Recap - December 4-5, 2010

December 6, 2010

THIS WEEK ON U.S. FARM REPORT
EPISODE #1947
DECEMBER 04-05, 2010


JOHN’S OPEN:
HELLO AND WELCOME TO U.S. FARM REPORT, I'M JOHN PHIPPS. ON MY 3-HOUR COMMUTE TO AND FROM SOUTH BEND FROM OUR FARM EACH WEEK, I HAVE TRIED TO FIND WAYS TO BOTH STAY ALERT AND MAKE SOME USE OF THE TIME. ONE ANSWER HAS BEEN RECORDED LECTURES. AS AN ENGINEER, I DIDN'T HAVE THE OPPORTUNITY IN COLLEGE TO STRAY OFTEN INTO HUMANITIES, SO COURSES IN THESE DISCIPLINES HAVE BEEN REVELATORY. AFTER SEVERAL HISTORY COURSES, ONE CONCLUSION EMERGES. THE MOST PIVOTAL POINTS IN WESTERN CIVILIZATION WERE MARKED BY CONFUSION, STRONG EMOTIONS, AND SURPRISING CONSEQUENCES FROM INDIVIDUAL ACTIONS. I THINK THE SAME STARS ARE ALIGNED RIGHT NOW, AND SOMEDAY OUR CHOICES WILL BE FODDER FOR SCHOLARS. TIME NOW FOR THE HEADLINES.....SITTING IN FOR AL IS TRISHA SLOMA

AG EXPORTS: THANK YOU JOHN. AGRICULTURE SECRETARY TOM VILSACK SAYS AGRICULTURE IS "LEADING THE COUNTRY'S RECOVERY". HIS REMARKS CAME AS USDA RELEASED THE AG EXPORTS FORECAST FOR FISCAL YEAR 2011. EXPORTS ARE NOW VALUED AT MORE THAN 126-BILLION DOLLARS. THAT'S 13-BILLION DOLLARS HIGHER THAN THE AUGUST FORECAST. ONE REASON BEHIND THE INCREASE, CHINA'S STRONG DEMAND FOR U.S. SOYBEANS. ACCORDING TO USDA, SOYBEAN EXPORTS ARE EXPECTED TO BE FIVE BILLION DOLLARS HIGHER IN THE NEXT FISCAL YEAR. USDA SAYS AG EXPORTS WILL SHOW A 41-BILLION DOLLAR TRADE SURPLUS.

ETHANOL TARRIFS: AS WE MOVE THROUGH THE LAST FEW WEEKS OF THE 111TH CONGRESS, RIGOROUS DEBATE CONTINUES OVER THE FUTURE OF ETHANOL INCENTIVES. AT ISSUE IS A 45-CENT PER GALLON BLENDING CREDIT AND A 54-CENT PER GALLON IMPORT TARIFF. THIS WEEK A GROUP OF SENATORS SENT A LETTER URGING SENATE LEADERSHIP TO ALLOW THE INCENTIVES TO EXPIRE ON DECEMBER 31ST. LIVESTOCK GROUPS AND FOOD MAKERS SAY THE SUBSIDIES HAVE KEPT CORN PRICES HIGH, WHICH KEEPS FEED-COSTS HIGH. OF COURSE, THE ETHANOL INDUSTRY HAS SUPPORTERS IN THE SENATE. ON FRIDAY, MONTANA SENATOR MAX BAUCUS PROPOSED EXTENDING THE TAX CREDIT FOR ONE YEAR, BUT AT THE LOWER RATE OF 36-CENTS A GALLON.

MM TIRE PRICES: A LEADING TIRE MAKER FOR AGRICULTURE SAYS PRICES ARE HEADED HIGHER. CGS SAYS IT'S BOOSTING PRICES AS MUCH AS 10% BECAUSE OF INCREASES IN RAW MATERIALS. CGS PRODUCES FARM EQUIPMENT TIRES UNDER THE MITAS AND CONTINENTAL BRANDS. AT THE SAME TIME, TITAN TIRE SAYS IT WILL BOOST PRICES UP TO 8% ON BOTH ITS TITAN BRANDED AND GOODYEAR-BRANDED PRODUCTS. THAT'S IT FOR THE HEADLINES...NOW BACK TO JOHN FOR CROP WATCH.

ROUNDTABLE: OUR ROUNDTABLE DISCUSSION TAKES US TO THE 2010 MARKETING RALLY HELD THIS WEEK OUTSIDE CHICAGO. WE ASSEMBLED AN IMPRESSIVE PANEL OF SOME OF THE BEST GRAIN ANALYSTS IN THE COUNTRY, MANY OF THEM YOU SEE HERE EACH WEEK. THE FIRST TOPIC IS THE PRICE OF CORN. PANEL HOST AND PRO FARMER EDITOR CHIP FLORY ASKED IF THERE'S ROOM TO THE UPSIDE. WHEN US FARM REPORT CONTINUES, WE CONTINUE OUR CONVERSATION AT THE 2010 MARKETING RALLY WITH A LOOK AT THE ROLE OF VOLATILITY IN YOUR MARKETING STRATEGY. WELCOME BACK TO U.S. FARM REPORT. A COMMON THEME AT THIS YEAR'S MARKETING RALLY WAS "VOLATILITY". FOR MANY, IT'S A SCARY TERM...BUT FOR OTHERS, IT EQUALS OPPORTUNITY.

JOHN’S WORLD: IT IS HARD TO KEEP YOUR EYES OFF THE GRAIN MARKETS THESE DAYS. IN FACT, IT IS A SURPRISE WHEN PRICES DON'T MOVE DRAMATICALLY. AND WHEN THEY DO, WE GO LOOKING FOR THE "STORY". PART OF THE HARD-WIRING OF OUR BRAINS IS TO LOOK FOR PATTERNS IN EVENTS THAT WILL HELP US PREDICT OUTCOMES. ADDING A NARRATIVE TO TIE OBSERVATIONS TOGETHER IN A CAUSE-AND-EFFECT LINKAGE ALSO HELPS TO STORE THOSE LIFE LESSONS. BUT LIFE WAS MUCH SIMPLER WHEN THOSE ABILITIES DEVELOPED. TO EXPLAIN EVEN MUNDANE MARKETS TODAY DEFIES NEAT PACKAGING. FOR EXAMPLE, SOME OF THE FACTORS IN THE GRAIN MARKETS CURRENTLY ARE CHINESE INFLATION FIGHTING EFFORTS, EUROPEAN CURRENCY WOES, AUSTRALIAN WEATHER, SOUTH AMERICAN PRODUCTION QUESTIONS, CONGRESSIONAL DEFICIT BATTLES, HARD-PRESSED LIVESTOCK FEEDERS, U.S. PRODUCTION COSTS, ABUNDANT FREE-RANGE INVESTMENT DOLLARS, AND CHANGING FOOD TASTES. THIS LIST IS BY NO MEANS EXHAUSTIVE - I'VE ONLY GOT 90 SECONDS HERE. MY POINT IS PRACTICALLY ANYONE COULD MIX THOSE INGREDIENTS INTO A MILDLY PLAUSIBLE STORY TO EXPLAIN WHY CORN IS UP 20, AND THAT IS EXACTLY WHAT IS HAPPENING. BUT THE HUNGER FOR REASONS OFTEN DISTRACTS US FROM OUR REAL TASK: TO REACT TO MARKET SIGNALS. THRIVING AS A FARMER DOES NOT REQUIRE BEING ABLE TO EXPLAIN YOUR MARKETS. REMEMBER, FEW OF US TRULY UNDERSTAND WOMEN, BUT MANY OF US STILL HAVE BEEN SUCCESSFULLY MARRIED FOR DECADES. 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. AH, THE CHRISTMAS SEASON. IN BETWEEN STRINGING LIGHTS AND SHOPPING FOR PRESENTS, MANY OF US ON THE FARM ARE OBSERVING ANOTHER DECEMBER TRADITION: CLOSING THE BOOKS AND BUILDING A BUDGET FOR NEXT YEAR. THIS HAS NEVER BEEN AT THE TOP OF OUR FAVORITE ACTIVITIES LIST, BUT THIS YEAR BRINGS NEW WRINKLES. THE ECONOMIC VARIABLES IN OUR PROFESSION HAVE BECOME ECONOMIC UNPREDICTABLES. WHILE BUDGETS HAVE ALWAYS BEEN A STAB IN THE DARK, MANY OF US FEEL LIKE SOMEBODY JUST SWITCHED OUR KNIFE FOR A PILLOW. SO I'VE DECIDED TO HAVE SEVERAL DIFFERENT VERSIONS HANDY WHEN I HAVE MY ANNUAL PLANNING MEETING WITH MY BANKER. SHE CAN PICK ONE SHE LIKES. LET'S GET STARTED WITH THE HEADLINES WITH TRICIA SLOMA....

FOOD SAFETY BILL: THANK YOU JOHN. A COMPREHENSIVE FOOD SAFETY BILL TOOK A BIG STEP FORWARD ON TUESDAY, BUT THEN IT STUMBLED AFTER THAT. THE SENATE PASSED LEGISLATION THAT GIVES THE FDA MORE AUTHORITY TO INCREASE INSPECTIONS OF FOOD PROCESSING FACILITIES. BUT A PROCEDURAL SNAFU MAY HOLD-UP THE MEASURE. THE 1.4 BILLION DOLLAR BILL PASSED THE SENATE 73-25. THE MEASURE WOULD PLACE STRICTER STANDARDS ON IMPORTED FOODS AND GIVE FDA MORE POWER TO FORCE COMPANIES TO RECALL TAINTED FOOD. PRO FARMER WASHINGTON EDITOR ROGER BERNARD EXPLAINS WHY THE SENATE WILL NEED TO VOTE...AGAIN.

WRIGHT EGG: IN OTHER FOOD SAFETY ISSUES, THE FOOD AND DRUG ADMINISTRATION SAYS IT WILL ALLOW AN IOWA EGG FARM LINKED TO A WIDESPREAD SALMONELLA OUTBREAK TO RESUME SELLING ITS SHELL EGGS TO CONSUMERS. WRIGHT COUNTY EGG RECALLED 380 MILLION EGGS EARLIER THIS YEAR AFTER THE FARM WAS LINKED TO HUNDREDS OF SALMONELLA CASES. THE COMPANY HAS NOT BEEN ALLOWED TO SELL SHELL EGGS SINCE THEN, EXCEPT TO BREAKER FACILITIES THAT PASTEURIZE THE EGGS. FDA HAS NOW GIVEN WRIGHT THE GO-AHEAD TO SELL EGGS FROM ONE OF ITS SIX FARMS.

ULTIMATE FARM QUEST: WITH THE GROWING SEASON NOW IN THE BOOKS FOR MIDWEST FARMERS, WE'RE ALSO WRAPPING-UP OUR EFFORTS IN THE ULTIMATE FARM QUEST. ALL SEASON WE MONITORED DEVELOPMENTS ON THE RUPP FARMER IN STRYKER OHIO AND THE KNIRK FARM IN QUINCY, MICHIGAN. AS PARTICIPANTS IN THE ULTIMATE FARM QUEST, THEY RECEIVED ADVICE FROM A PANEL OF FARM JOURNAL EXPERTS. WHAT DID THEY LEARN ABOUT THEIR FIELDS? DID THEY MAKE ANY CHANGES TO MARKETING PLANS? COMING UP IN TWO WEEKS, WE'LL TAKE AN IN-DEPTH LOOK AT THEIR SEASON. WE HOPE YOU JOIN US.

HEARTLAND: FOR YEARS COUNTY EXTENSION AGENCIES ACROSS THE COUNTRY HAVE WORKED TO EDUCATE KIDS ABOUT WHERE THEIR FOOD COMES FROM. WITH MORE AND MORE PEOPLE INTERESTED IN SUSTAINABILITY AND LOCALLY-GROWN FOOD, THE MESSAGE IS GAINING TRACTION. IN THIS REPORT FROM THE UNIVERSITY OF KENTUCKY, JEFF FRANKLIN HEADS TO THE FARM WITH A GROUP OF FACT-FINDING FOURTH GRADERS. FOR MORE INFORMATION - INCLUDING DIRECTIONS TO THE FARM - WE'LL POST A LINK ON OUR HOME PAGE.

BAXTER BLACK: IN THIS WEEK'S VISIT, BAXTER BLACK GETS REFLECTIVE AS HE BRINGS US "THE BIG ONE THAT GOT AWAY" BLUES...BAXTER IS BACK IN TWO WEEKS TO TELL US WHY HE LOVES WOMEN WHO WEAR CHAPS. UNTIL THEN, CHECK OUT HIS WORK ONLINE AT WWW.BAXTERBLACK.COM .

TRACTOR TALES: WE'RE OFF TO THE WOLVERINE STATE FOR THIS WEEK'S TRACTOR TALES. DAN DYSINGER SHOWS OFF HIS 1944 CASE THAT'S BEEN THE FAMILY FOR YEARS.

CHURCH SALUTE: OUR FIRST COUNTRY CHURCH SALUTE GOES TO THE ZION EVANGELICAL CHURCH IN ADELINE, ILLINOIS. THIS OCTOBER MARKED THEIR 150TH ANNIVERSARY. BEGUN AS THE UNITED CHURCH OF CHRIST IN 1860 BY GERMAN IMMIGRANTS, THE NAME WAS CHANGED TO ZION EVANGELICAL IN 1871. THE ORIGINAL CHURCH WAS DESTROYED BY TORNADO IN 1878. THE CURRENT BUILDING WAS BUILT THE SAME YEAR. THEY HAVE JOINED WITH A SISTER CHURCH IN FORRESTON TO FORM A SINGLE CHARGE. OUR THANKS TO MARJORIE GENANDT FOR THE INFORMATION. OUR SECOND CHURCH IS THE CONCORDIA LUTHERAN CHURCH IN CONCORD, NEBRASKA. CONCORD IS A TOWN OF 160 IN THE NORTHEAST CORNER OF THE STATE. THEY CELEBRATED 125 YEARS OF MINISTRY THIS SEPTEMBER. SWEDISH SETTLERS BEGAN THE CHURCH AND HELD THE FIRST SERVICES IN THE RAILROAD DEPOT - A TESTAMENT TO THE IMPORTANCE OF RAIL SERVICE TO SETTLING MUCH OF THE WEST.  THE FIRST CHURCH WAS REPLACED IN 1915 WITH THE CURRENT STRUCTURE. PETER AND CRYSTAL BRUMMELS SUBMITTED THEIR CHURCH. 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 TO CHECK THE FEEDBACK FROM VIEWERS IN THE FARM REPORT MAILBAG....A FELLOW SUBMARINE VETERAN, JAMES ROGER JONES, DISPUTES MY RECENT REFERENCE TO THE LOWEST CONSUMER INFLATION IN OVER 50 YEARS: "YOU SAID THIS MORNING THAT THE CONSUMER HAS SEEN NO INFLATION IN SOME TIME. YOU OBVIOUSLY DON'T SHOP FOR GROCERIES. IN THE PAST YEAR SOME ITEMS HAVE GONE UP FROM 20% TO 70 %. OUR MONTHLY SPENDING FOR FOOD HAS GONE UP OVER DOUBLED." JAMES THANKS FOR WRITING. THE MOST POPULAR MEASURE OF INFLATION IS THE CPI - CONSUMER PRICE INDEX. IT IS CALCULATED EACH MONTH AFTER CHECKING THE PRICES OF THOUSANDS OF GOODS AND SERVICES, ADJUSTING FOR DIFFERENCES IN VALUE, AND THEN WEIGHING THE ITEMS TO ASSEMBLE A BASKET OF PRICES THAT SIMULATES WHAT ALL AMERICANS ARE BUYING. FOR EXAMPLE THE FOOD COMPRISES ABOUT 17%, HOUSING 41%, TRANSPORTATION 17% AND SO ON. FURTHERMORE THE FOOD COMPONENT IS WEIGHTED BETWEEN MEAT, DAIRY, PRODUCE, AND OTHER FOODS PROPORTIONATE TO THEIR SALES. BUT EACH OF US HAS OUR OWN PERSONAL INFLATION RATE, SO TO SPEAK. IF YOUR HOME IS PAID FOR, OTHER ITEMS MAKE UP A MUCH LARGER PART OF YOUR CPI. IN FACT, PRICE DROPS IN HOUSING AND SERVICES ARE NEGATING PRICE GAINS IN OTHER COMPONENTS LIKE FOOD. AND DEPENDING ON WHICH ITEMS ARE IN YOUR GROCERY BASKET, YOUR PERSONAL INFLATION EXPERIENCE CAN BE MUCH HIGHER OF LOWER THAN THE CPI. NONETHELESS, IN OCTOBER, YEAR TO YEAR COMPARISONS SHOWED AN INCREASE OF ONLY .6%, THE LOWEST ANNUAL INFLATION RATE SINCE 1957. 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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