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August 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.

Mexican Trade War

Aug 27, 2010

We have a weak national economy with unemployment approaching ten percent but we don’t seem to take the obvious steps to improve the situation. In fact, we do the opposite. We have unnecessarily sparked a trade war with our neighbor to the south, Mexico.

Mexico has imposed a 20 percent tariff on 26 previously duty-free products, including ketchup, cheese, fruits, vegetables, chocolate, and pork – yes, pork. Mexico is our biggest pork market. Experience tells us that we will lose 80 percent of those markets to other countries now. There go the jobs.
 
It is our fault. We asked for this retaliation because we have refused to live up to the terms of the North American Free Trade Agreement. The Agreement specifies that Mexican trucking companies are allowed to haul freight into the U.S. But, for 15 years, we have not allowed their trucks in. Why, you ask? I give all the credit to the Teamsters and James Hoffa and a powerful list of Members of Congress that are “bought and paid for” by the Union. And the Congress wonders why they are held in such low esteem. President Bush began to implement the Free Trade Agreement in 2007 only to have President Obama slam the door when he came to town. If we aren’t going to live up to the trade agreements that we negotiate, who is going to want to deal with us?
 
President Calderon put the issue on the table when he met with President Obama in May. Did we do anything? No – and now, the dispute escalates.
 
President Obama said he wanted to double our trade exports in five years. Well, where is the plan to do that? We aren’t doing anything and other countries are taking our markets away from us.
 
We are just not fixing our trade problems and seeking opportunities as we should. Earlier this year, instead of fixing a cotton program dispute with Brazil, we just bought them off by giving them 147 million dollars to not retaliate against us.
 
I hope that with the obvious need to create jobs the President will become much more proactive in dealing with our trade issues.
 
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.

Germany

Aug 20, 2010

My family and I just got back from Germany. We bicycled along raging rivers and streams on well-kept bike paths that are very common in much of Europe. On one side would be fields of wheat and corn stretching into the distance with grape arbors on the other side. The views were just magnificent. The weather contrast was hard to imagine. With Illinois temperatures back on the farm in the 90’s, we biked in cool, comfortable 60’s and 70’s. When you look to the East towards Ukraine and Russia, they have been burning up. Their drought has cut their wheat crop by an estimated 20 percent. The German wheat crop looks terrific – that is if they can ever get it harvested – too much rain.

The Russians embargoed exports of their wheat because of the short crop. That brings to mind the Carter grain embargo of our grain to the Soviet Union. Embargoes are not a good idea. The Financial Times newspaper in Germany headlined, “The embargo has sparked a surge in prices and raised doubts about Russia as a reliable supplier.”
 
As we peddled over rolling hills, I could not help but try to compare my own corn with the German corn. I have to conclude that their corn may be a little better. You could see that they had not had the intensive rains to leach their nitrogen.
 
On one occasion, I rode up to a farmer on a tractor. He stopped and turned off his engine and we talked (the best we could) about farming. He had a beautiful herd of Limousin cattle, about 50 head, right beside the road. He acknowledged that German farmers were frustrated because periodic rains, although good for the corn, were keeping them from wheat harvest. And some of the heavy wheat was going down. The Germans could not believe that we do not slaughter horses and process the meat. How ridiculous.
 
I noted that in the part of Germany where we were – the southern half – they were using solar panels to generate energy but very few windmills.
 
Every indicator suggests that the German economy is booming – propelling the Euro zone through the global financial crisis.
 
To see another country, meet and talk to the people, and think about their history is an educational experience to always remember. My great, great grandfather came to the U.S. from Germany. Farms, medieval towns, and castles will be in my mind for a long time.
 
And yet – it’s good to be home.
 
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.

Farming Transformed

Aug 13, 2010

Last week I was down on the farm in Illinois. I still can’t get out of my mind how different the farming business is today compared with when I was a little boy. At the same time, in some respects, it’s the same.

As a boy, after milking our cows by hand, we bottled the milk in the basement of our farm house and then sold it in my Grandfather’s little store. My Dad planted our corn with two old horses pulling a two-row planter. I had to feed the chickens and gather the eggs each day. We would butcher a hog, and my Mom would can. Can you relate to that?
And now today –
 
The milk cows are gone. The chickens are gone. We don’t butcher any of our own hogs. Our two horses, named Burt and Bill, are gone along with the two-row planter. And, of course, we don’t pick any corn by hand.
 
Farming is more specialized with a big 32-row John Deere planter. We still raise hogs, corn, and soybeans.
 
Our improvement in efficiency and productivity has been amazing. Corn yields have tripled. We raised 200 head of hogs in those days. Now we raise 8,000 with double the efficiency.
How did this happen?
 
It happened because of:
  1. Selective plant and animal breeding – better plants and animals.
  2. Genetic engineering – herbicides, fungicides, and insecticides – our plants are protected against pests and weeds that suck the yield potential.
  3. Finally, today we feed the crops and animals exactly what they need to maximize their productivity.
 
Corn as an example: Soil tests give us the guidance. We put on lime if the fields are too acid. Enough nitrogen phosphate and potash to maximize yield. There is a science to raising a big crop or good hogs. You can’t feed the hogs molasses as I saw in Cuba 10 years ago. They won’t gain weight.
 
The new technology that we have available today has made all the different in the world. Think about the improvement in efficiency:
  • Less labor needed
  • Less fuel needed
  • Less land to produce more
  • And for livestock – less time to market
  • With all the changes in this farming business over the decades, there is one constant.
 
It is still exciting to grow a crop or raise a hog or calf. You can see the transformation right before your eyes. You are producing something of value. What an impressive sense of accomplishment.
 
Harvest time is just around the corner. It’s going to be fun.
 
Next week I will talk to you from Germany.
 
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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