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October 2010 Archive for John Block Reports from Washington

RSS By: John Block, AgWeb.com

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

Get The Work Done

Oct 29, 2010

I was on the farm in Illinois last week as we wrapped up our corn and soybean harvest. We finished at about the same time as we started last year. I don’t think we have ever finished this early and I know we have never finished as late as we did last year. Christmas. 

Like most farms in the corn belt, our corn was disappointing, but our soybeans were surprisingly good. And now, the challenge is to focus on next year – get the fall plowing done, apply the nitrogen, and try to decide when to sell and when not to sell.
 
The volatility of grain prices makes the decision process more critical than ever. All the while, we take care of our pigs, finally able to enjoy some good prices this year after 2 bad years.
 
At least we are on top of our work. We got the job done. That’s more than I can say for the federal government.
 
We don’t even have a budget for this new fiscal year. Congress didn’t pass one appropriations bill – not one. Our government operations are being funded by a continuing resolution until the Congress comes back after the mid-term elections. Probably as many as 50 or 60 of the Members of the Congress will be lame ducks. Some will be defeated next Tuesday. Some aren’t running anyway. The new Congress will not be seated until next year. So, these lame ducks will be asked to make serious policy. I don’t think they are going to have much of an appetite for doing a lot of controversial work.
 
What will they do with the Bush tax cuts? They’re due to expire at the end of this year. The estate tax is supposed to rocket up to 55% January 1.
 
President Obama wants the Congress to pass a new Start Treaty that has been negotiated with Russia. I would remind the President and Congress that we have 3 trade agreements that were negotiated 4 years ago – still no action on them.
 
I don’t expect this lame duck session of Congress to get very much done. If they couldn’t do their job all year long, why would we expect anything different?
 
The mid-term election is next Tuesday – time to clean house. We got our work done on the farm this year. They didn’t do theirs.
 
Halloween is this Sunday. Come Tuesday, we’ll find out if we are going to get a trick or a treat.
 
In closing, I would encourage you to access my website which archives my radio commentaries dating back 10 years and will go back 20 years when complete. Check on what I said back then. Go to www.johnblockreports.com.

GM Sugar Beets

Oct 21, 2010

There is no limit to the mischief that the environmental whackos can cause. You never know where they will strike. They have found a judge in the U.S. District Court of Northern California to reverse the USDA approval of genetically modified sugar beet seeds. The judge said USDA had not done enough research into the environmental impact.

Our sugar beet farmers have been using genetically modified seeds for five years now. Sugar from sugar beets represents 60% of our domestic supply of sugar. We don’t have the seeds to plant next year’s crop with traditional seeds. It will take two years to produce enough traditional seed to grow next year’s crop. Global supplies of sugar are already very tight. Prices have doubled since last spring.
 
We have been using genetic engineering in the production of crops for nearly 20 years – corn, soybeans, cotton. The production efficiency delivered by genetic engineering is nothing short of a modern-day miracle. Now, we have a judge from California (should we be surprised?) – from Northern California, probably San Francisco. And the judge requires more research.
 
USDA estimates that it will take two years to do the additional research.
 
The Department of Agriculture is trying to find a way around the judge’s ruling in hopes that GM seeds could be used for planting next March – only four months away.
 
Environmental groups are just waiting for USDA to make a move to allow planting of GM seeds. They will sue again. Paige Tomaselli, a lawyer for the Center for Food Safety, has this to say: “As the law stands, they can’t plant GM seeds.”
 
There you have it. The forces out there that oppose commercial agriculture are relentless. We never know where they will strike next. We cannot feed this hungry world without using modern technology. Food prices will skyrocket. Millions will starve. Have they thought about that? Do they care?
 
In closing, I would encourage you to access my website which archives my radio commentaries dating back 10 years and will go back 20 years when complete. Check on what I said back then. Go to www.johnblockreports.com.
 
Until next week, I am John Block in Washington.

Agriculture Roller Coaster

Oct 15, 2010

Riding the agriculture economy roller coaster can be exciting, hopeful, and sometimes scary. Prices are up. Prices are down and then back up. The weather is completely out of our control. Too hot. Too cold. Too wet. Too dry. The level of uncertainty exceeds most any other business.

However, right now the situation looks good. The farm economy is on a roll. Net farm income is projected to surge 24% this year to $77 billion, the fourth highest on record.
 
The global demand for what we produce is strong. The Asian economies are growing 3 times as fast as our own, and they want our pork, poultry, corn, cattle, and cotton.
 
The farm and rural economy is stronger than much of the rest of the country. The farm debt to asset ratio is an enviable 13%.
 
I was in a luncheon this week where Dan Glickman, former Secretary of Agriculture for President Bill Clinton, spoke. He reinforced the position for agriculture. “We need to double food production in the next 40 years, and we need to do it without any big increase in acres.” That’s our challenge.
 
To further increase demand for our production and acres, the EPA is opening the door to allow 15% ethanol in our fuel for cars sold after 2006. On top of that, the USDA cut this year’s corn yield projection for the second time, which is inflating corn prices. The rising price of corn and other grains presents a challenge as well as an opportunity:
 
  1. The “corn versus fuel” conflict may become an issue like it was in 2008. In fact, you can expect to hear from livestock producers and food processors about this added cost.
  2. Food price inflation could become a concern. However, few economists expect us to experience the 5% jump in food prices we experienced in 2008. Most are expecting a modest 1% or 2%.
 
This year’s crop is worth more than we had expected, and if the weather will cooperate, we are in a position to produce a big crop next year. And it is going to be worth a lot of money. The farm economy and rural economy that go hand in hand are positioned to “let the good times roll.”
 
We ride this roller coaster year after year. We go up. We go down. Hold on because now we are ready to go up.
 
In closing, I would encourage you to access my website which archives my radio commentaries dating back 10 years and will go back 20 years when complete. Check on what I said back then. Go to www.johnblockreports.com.
 
Until next week, I am John Block in Washington.

Regulations

Oct 01, 2010

Governments at all levels, including city, state, and federal, just have this urge to regulate. They think they know what is best for all of us. Okay, we all know that as individuals, families, and business, we have shortcomings. We aren’t perfect. Sometimes we just can’t find the discipline to do the right thing. Sometimes, we can’t resist that second helping of potatoes. We want a donut with our coffee. We really crave that Big Mac.

Thank God the government is coming to the rescue. San Francisco is leading the way. We have an obesity problem and government-imposed taxes and restrictions can slim us down. No more “Happy Meals” for the kids at McDonald’s. Those toys with meals encourage the kids to eat too much. The San Francisco healthy meal legislation doesn’t stop there. It goes on to prohibit meals that get more than 35 percent of their total calories from fat, or more than 10 percent of their total calories from saturated fat, “except for fat contained in nuts, seeds, peanut butter, eggs, or cheese.
 
Total meal sodium must be limited to 640 milligrams, all qualified meals must contain ½ cup of fruit and ¾ cup of vegetables (whether you want them or not). A soda tax will be imposed to discourage customers from drinking Coca-Cola.
 
Do they really think this is going to fix our obesity problem? If this kind of micro-management was just coming out of San Francisco, it wouldn’t matter; we could just say, “well that’s San Francisco.” But it’s much broader. New York City, Chicago, and other cities want to tell us what to eat. Even the federal government is in the act of considering taxes on sodas and so-called junk food.
 
Where do we draw the line? The “nanny state” knows best. We are simply just incapable of managing our own lives.
 
Fortunately, I think the national anger at government regulation and taxes should put the brakes on this kind of action.
 
On a happy note, the Congress has gone home to campaign.
 
That brings to mind what Mark Twin once said: “No man’s life nor liberty are safe while the United States Congress is in session.”
 
I guess we are safe for awhile.
 
In closing, I would encourage you to access my website which archives my radio commentaries dating back 10 years and will go back 20 years when complete. Check on what I said back then. Go to www.johnblockreports.com.
 
Until next week, I am John Block in Washington.
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