THIS WEEK ON U.S. FARM REPORT
APRIL 14-15, 2012
JOHN’S OPEN: Hello and welcome to U.S. Farm Report, I’m John Phipps. I've had some queries about our problems getting our planter going. As I shared three weeks ago a combination of tractor, planter, and technology of mixed breeds was proving to be troublesome. Several of you shared your irritating machinery stories. The good news is we did get started thanks to some brilliant troubleshooting by Aaron. The bad news is we did get started. Tyne has some photos later in the news that look familiar. I'm not whining. I knew the odds of a late frost, and knowing our machinery is finally working is a comfort. Still weather whiplash messing with farmer heads in much of the Corn Belt. Let's get started with Tyne Morgan and the headlines.
COLD WEATHER: Thank you John and hello everyone. After shattering weather records last month with un-seasonably warm temperatures, farmers in much of the eastern half of the country got a brutal reminder that it's still early April. One of the most susceptible crops was grapes. Thermometers dipped into the upper 20's in much of the upper Midwest at mid-week. From Iowa to Ohio, vineyards are reporting some damage from the cold. Like fruit trees, grapevines were weeks ahead in progress. And some early-planted corn was damaged as well. This photo was taken in Champaign County, Illinois where corn planting started three weeks ago. It shows corn at five-leaf stage that was burned by temps in the upper 20's.
PLANTING PROGRESS: Despite the peril of a spring frost, many farmers are planting corn almost a month earlier than the usual mid-April planting dates. In its weekly crop progress report this week, USDA said 7% of the nation's corn is now planted. The five year average is just 2%. In Illinois, 17% is planted. It's normally just 1% at this point.
GRAIN STOX: USDA says there's no change in domestic corn stocks but it dropped world bean production. In its monthly supply-demand report, USDA kept corn-ending stocks steady at 801 million bushels. Most analysts expected a sizeable decline. Soybean ending stocks were cut 25 million bushels to 250 million bushels and the wheat carryover is 32 million bushels less than last month.
SOUTH AM CROPS: Meanwhile the South American drought is cutting into some of Brazil and Argentina's crop production. USDA further cut Brazil's soybean crop at 66 million metric tons, a decrease of 2.5 million from March. Argentina's soy crop came in at 45 million metric tons, down 1.5 million.
2-4D: The EPA ruled in favor of farmers who use a popular herbicide ingredient called 2-4D. The National Resources defense council had asked EPA to ban the product saying it can hurt the genetic make-up of wildlife. 2-4D has been around since the 1940's. It's used on millions of acres of farmland to control broadleaf weeds. It's also used in lawn care treatments.
ROUND TABLE: Our round table guests today Tom Grisafi and Greg Milkovoch. Though you deal with the markets are you dealing a different point of view or is it the same? We cross paths a lot. I always appreciate the farmers input. As my trading style has changed the farmers have become the most important thing in farming and agriculture, helping me speculate. Sometimes the farmer makes like we talked about this morning makes poor decisions in marketing their crop. Correct. If I see corn at $5.80 and then it goes to $5.40 and now the farmer decides to sell I may think there is a short term bottom because they waited too long. Understanding that helps me speculate better. Are you --your goal is to get your own money. Yes. And I only lose my own money. When you only deal with farmers you try to protect. So what is a kind of thing -- he told us a bit the kind of things he thinks in order to speculate. I appreciate the speculators because they provide us with liquidity. A lot of them are looking at the technicalities which play a big part in the markets, you can't base your decisions --purely on fundamentals. It's very important to watch -- be well rounded. I think that's kind of one of the things I like to talk about. Seems like what's happening outside of our planting and supply demand is actually affecting our markets a good bit at this point in time. Is that correct? Absolutely. The upside market, I trade a lot off them because I'm trading on a global, 22, 23 trade cycle. Today is a good example. Last night when GDP came out and disappointed some the markets starting to take a negative tone and never looked back. A lot of them are down today. Markets I like to watch as far as good outside are copper and the stock market. I like watching the German tax. They are stable and are supposed to be bailing everybody out so --it was high as 7200 and today it's 6500. It's lost that in the last few weeks. Have you to watch that. If you like it or not there is a constant risk on risk off strayed, obviously if it was that easy watching one thing and speculating something else. Today the grain markets took off one to 2% across the board and that was up after being up all night. Grain market dear sir start up all night and then sell off quickly based on the outside. So, now do you watch what he is talking about in order to be able to figure out the kind of positions you need to take for the producer? Yes. You need to. When Europe right now you need to watch that, all the concern about the economy thereof some of the Portugal, Ireland. Spain --the yields were high and that reflected badly on the markets the next day. Today, you know with China, GDP --coming and moving the markets I think we are geared a little more to the fundamentals today, the brake can be --to seeing rain that we saw coming across the very dry areas in an anticipation of the coverage being good. Corn took it on the chin. Most are getting used to look at what happens in South America and other place around the world but we are in a world grain market? Absolutely. Have you to pay attention to South America, China is another good example. They are a big corn area, it's very cold and dry right now. Russia the drought affecting the wheat crop in France and Germany and Poland. You just can't look in your own backyard. When we come back, one of the things I want to do is look in our one backyard and predict what the prices will be this summer, what we need to watch for. When we return in just a moment. I think we are getting near a top in the bean market. Leaning one way, open interest at record levels, we have had production concerns, which are real in South America, demand has been great. I just talked to another analyst and he said we will probably touch 15-dollar beans, 5-dollar corns. Who will buy at these levels? I think we will see it blow off a little and come June or July. I think --we are near top. How about corn? The corn will go lower. It'll be volatile. I'm not saying sell up to your insurance guarantee but you do want to start pricing it out there. If we have a weather scare we have good rains, we will see how much the coverage was there. Is a chance pretty good chance we will see a weather scare at some point. We will all watch the weather. We will be back with more in just a moment.
JOHN’S WORLD: An old friend and neighbor passed away this week. He was a contemporary of my late father, and his passing prompted some reflections on what the slow loss of this generation means. My father's cohort was the last to remember what purely muscle-powered agriculture was all about. Mechanization began early in his career and was eagerly welcomed, according to him. "Nobody cried when horses left the farm" he often told me. One mental legacy of that era is still with us. When human and animal effort was the only way to get anything done, the largest single determinant of success was how hard and long you worked. That value is still a controlling ethic for our industry. It is therefore unsettling for many to see capital and technology overwhelm hard work as the key to success. It still matters, of course, but labor is not even close to our largest input for much of agriculture. Worse still, the nature of hard work itself is constantly evolving. Is it hard work if you are not sweating? Sure feels like it to me. While dad didn't do much desk work, I struggle to get outside, and Aaron pretty much carries his desk with him. I sometimes wonder if the growth of very large farms is a relic of this work ethic. Perhaps one reason we keep expanding is simply because we don't feel like we're working hard enough. Maybe our definition of hard work will eventually expand to more than muscle effort. I hope so. But it takes a long time to outgrow your father's values. Let us know what you think.... Send emails to email@example.com or call and leave us a voice mail.
JOHN’S OPEN: Hello and welcome to U.S. Farm Report, I'm John Phipps. Everybody talks about the weather...and then talks about it some more, it seems. The desire for "normal" weather is a constant theme wherever farmers gather, I know. The problem is a growing uneasiness that normal itself may be changing. While memory is poor evidence, our recollections of the past few years seem cluttered with extreme examples of temperature and precipitation. Last month is just the latest exhibit. I think it's beginning to affect how producers prepare as well as our expectations. The margin of error for our yield estimates keeps getting wider in our spreadsheets and our minds. Let's get started with the headlines and Tyne Morgan...
FDA ANTIBIOTICS: thank you john and hello everyone. The food and drug administration took action this week to limit antibiotic use - and it extends beyond the farm. FDA says it wants to reduce the potential problem of drug-resistant bacteria that may be passed to humans through food. In the guidance guidelines, FDA says antibiotics should only be used for therapeutic purposes, such as treating diseases, and only under the supervision of a licensed veterinarian. The agency says it will work with animal health companies to encourage them to stop selling antibiotics to livestock and poultry producers who use them for nutritional purposes.
MARCH WEATHER: There's a new weather entry into the record books. The lower 48-states experienced its warmest march on record. The average temperature was 51 degrees, nearly nine degrees above the average. "NOAA" says there were 15,000 records broken nationwide - either as record daytime highs or record nighttime highs. Monthly temperatures averaged at least 15 degrees above normal at numerous Midwestern locations
RIPPEY ON WEATHER: Meanwhile, as we saw across the Midwest this week cold snaps were rough on fruit crops and orchards in the great lakes region. Many of the apple and peach crops are three-to-four weeks ahead of pace.
EL NINO RETURN: Some blame la Nina for the unusually warm temps, but it looks like that is on its way out. According to the U.S. climate prediction center, la Nina has been fading since February and is expected to disappear by this summer. Now the CPC predicts once la Nina passes, there's a chance El Nino could return. El Niño typically brings more rainfall, which means we could be in for a wet fall that could potentially disrupt fall harvest.
HEARTLAND: We've talked a lot about the early arrival of spring to many parts of the country. Coming with that warm weather, are migratory flocks....birds making their way to spend spring and summer in the north. In Colorado our good friend Anne Herbst of the Denver Post caught up with a group of sand hill cranes as these majestic fliers make their way north. Thanks Anne. That's quite a sight. Sand hill cranes typically travel two-to-three hundred miles a day.
LFTB HYVEE: While most national grocery chains have taken a position against lean finely textured beef - or LFTB - one Midwest grocer recently decided to give consumers a choice. Hy-Vee Supermarkets is an Iowa-based chain with 235 stores in eight states. National reporter Tyne Morgan spoke with grocery chain about its recent decision. Comer says this shows there is a need for transparency... From producers to retailers. She says the era of the food industry thinking people will trust and believe them, just because, is over. John, now the next topic the industry is tackling is labeling of this product. In fact, Tyson Foods announced it's exploring the option of labeling ground beef containing LFTB. Do you think this is a good idea, John?
TRACTOR TALES: Al's back with this week's tractor tales...where we headed? We're off to northern Washington State for a classic John Deere 50. Don't forget, you can find tractor tales online at u-s farm report-dot-com or on Facebook. The segments can also be downloaded as podcasts from iTunes.
CHURCH SALUTE: Today's country church salute goes to Rehoboth Church in the tiny town of Union, West Virginia. It was started before the U.S. Constitution was signed. Pioneers in that area of southern West Virginia started a Methodist church in 1784. They built a log-church which was dedicated in 1786. Last year, supporters of the church celebrated its 225th anniversary. Regular services are no longer held there. It's now considered a national shrine by the Methodist church. It's also listed on the National Register of Historic Places. Our thanks to Eldridge Hundley for sharing the history. And a special thanks to Dewayne Lowther who is with the United Methodist Church commission on archives for the photos. 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....The LFTB controversy was the subject of a very thoughtful e-mail - worth reading in full on our website - from Cindy Wilsey in Minneapolis: "Consumers are not going to accept reassurances that this product is 'safe & wholesome' when the entities putting it in their food do not disclose its presence and fight to continue to not disclose its presence." As we discussed in our earlier news story, I think Cindy highlights one key element in this debate. The days of less than full disclosure are perhaps over. None of us likes unpleasant surprises in our life, and on the subject of food, we are perhaps even more sensitive. Mechanically separated meat is clearly safe and adds considerable efficiency to the slaughtering process, but the lack of transparency about the process triggers an instinctive backlash once brought to the public's attention. Just as the vaunted apple corporation discovered with the Foxconn Chinese worker flap, how things are made seems to be of more interest than before. What clearly does not work is telling consumers how they should feel. Nor is economics an automatic trump card it seems. Every level of the food chain is now open for scrutiny, from the farm to the grocery aisle or restaurant plate. If you can't do business in broad daylight with everyone watching, you are not automatically doomed, but you have added an enormous risk to your business plan. As always, we want to hear from you, send comments to firstname.lastname@example.org or leave us a voice mail at 800-792-4329.