Hello and welcome to U.S. Farm Report, I’m John Phipps. The drama of the drought has just about exceeded the attention span for much of America, even as many producers are still experiencing ongoing damage. For my part of the world, the anticipation of this year's harvest is closer to what you might expect for an upcoming root canal than an annual payday. In fact, the gallows humor is popping up to combat this tension. One neighbor said he was going to harvest 24 hours a day this year. When asked why on earth he would do that, he said he wanted to make sure he got one truckload a day. Ba-dump-bump. It doesn't help much, but you've got to admire the spirit.
Farmland values still remain strong despite the drought. Both the Federal Reserve Bank of Chicago and Kansas City issued the results of its most recent survey of bankers this week. With all eyes on drought-ravaged fields in the heart of the corn belt, ProFarmer's annual Midwest crop tour will be one to watch closely. While corn production is down, peanut production is having a big year. USDA pegs the crop at 5.3 billion pounds, up 46% from last year. 69% of the U.S. peanut crop is rated in good to excellent condition. USDA says record high yields are expected in Georgia and Florida
Crop watch this week takes us to an Illinois farm where this year's corn crop is turning into an ugly one.
Al is here to talk markets with Richard Brock and Darren Frye.
The phrase perfect storm has been way overused, so I won't go there today, but the political weather potential brewing over the next Farm Bill comes close. The last Farm Bills have not been slam dunks, with serious opposition mounted from subsidy opponents. This year they can demonstrate how well agriculture as a whole has been doing: record farm profit, record land prices, above average household income. Things have been good down on the farm. But wait - what about the drought? Even that may not provoke much sympathy, as the vast majority of crop farmers, at least, have heavily subsidized insurance that in some cases will actually mean higher income than they expected this spring. After these huge losses, an insurance based program cost projections will undergo increased scrutiny. As for the hapless livestock sector, well, Farm Bills never really worried about them anyway. There is a money problem, or lack of it. Budget hawks are more numerous and determined. The old method of reaching compromise by sweetening the pot is simply not an option. And besides compromise is for sissies these days. Even our own political leanings are counterproductive. Farmers overwhelmingly oppose our so-called socialist President, but the administration is their best hope of passing the truly socialist Farm Bill. So we have a really bad, awful, not-good-at all storm approaching. Next week I’ll explain why we shouldn't worry about it.
JOHN’S 2ND OPEN:
Hello and welcome to U.S. Farm Report, I’m John Phipps. The food versus fuel debate is escalating to intense levels. No longer limited to oil-state politicians, the livestock sector has decided to fight back against what they perceive as unfair market manipulation. Corn farmers are bracing to defend the ethanol mandate. We'll be covering this ongoing conflict in upcoming weeks, but the outcome is anything but clear. However, one overall consequence seems to be stronger affiliations up and down the AG value chain than across agriculture. In other words, we're dividing into subsectors depending on our products. This is not necessarily bad, but it is one step closer to a nasty family feud.
Consumers are starting to pay more for their favorite cuts of meat. Higher cattle prices across the country are translating to higher prices at the meat counter. The USDA announced it will purchase 170 million dollars of pork, lamb, chicken and catfish from U.S. farmers and ranchers struggling with the drought. The food will be used for federal nutrition assistance programs including food banks. The USDA tells U.S. Farm Report this is part of the emergency surplus removal program which allows USDA to purchase meat and poultry products to help farmers and ranchers during natural disasters. USDA says this purchase is on top of what it normally buys each year. The growing appetite for Greek yogurt is spurring New York State to step up and help dairy farmers meet that demand. Efforts were discussed during the first New York State Yogurt Summit this week. During the summit, New York Governor Andrew Cuomo said the state is taking new steps to help dairy farmers increase herd sizes, including changing the current state CAFO cap from 200 head to 300. Since 2000, the number of yogurt processing plants in New York has doubled. Over the past six years, the amount of milk used to make yogurt has gone from 150 million pounds to 1.2 billion. Much of that increase has come from the growing Greek Yogurt trend. It's been a mild hurricane season so far in the U.S., but 'NOAA' thinks it could change. The weather agency has now raised its predictions of the 2012 hurricane season for the Atlantic. The annual Farm Progress Show is just around the corner - and once again we invite you to join us as we take our show on the road to Boone, Iowa.
SPIRIT OF THE HEARTLAND:
According to the UN's latest Food and Agriculture Organization report, agricultural production needs to increase by 60% in the next 40 years to meet the rising demand for food. That's a tall order. And one that has some Denver city dwellers pitching in. Photojournalist Anne Herbst of the Denver Post introduces us to these urban farmers. Next week...we'll head to the Missouri Ozarks where copper stills are 'still' cooking corn-mash for moonshine. But it's all legal. That's next week on Spirit of the Heartland.
Topping our drought-watch - the impact on the dairy industry. USDA reduced its milk production forecasts for 2012 and 2013. The AG Department says the forecast for higher feed prices is expected to put pressure on producer returns. It will also encourage a more rapid decline in the cow herd.
The latest drought monitor shows a slight reduction in the area of the U.S. in all categories of drought. However the regions in the most intense level got even worse. In Missouri - for example - the area in exceptional drought increased to 35%, up from 14% the previous week. 63% of Kansas is under exceptional drought, a 25 point jump. While much of the cornbelt is in severe drought, one Midwestern state has escaped most of the drought this summer. And that's Minnesota - the number four state in corn production. Michelle Rook surveys the one bright spot in the cornbelt.
Al Pell rejoins us now. We're off to the Pacific Northwest for Tractor Tales.
Today's country church salute goes to Nazareth Lutheran Church in Trail, Minnesota. The small town is east of Grand Forks. Founded in 1906, the church was made-up primarily of Norwegian settlers. Two years later they moved into a log church. It served them well until 1924 when a new church was built. Nazareth and neighboring "Little Oak" Lutheran joined congregations in the 1950's. Since then, other small congregations joined them as well. Our thanks to church organist Mary Lou Wolden. She's been playing organ in church for about 50 years.
Time now for our weekly look inside the Farm Report mailbag. Roger Pierce thinks I am wimping out when the subject of climate change comes up: