Aug 21, 2014
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THIS WEEK ON U.S. FARM REPORT

EPISODE # 2114

FEBRUARY 15-16, 2014   

 

 

 

 

JOHN’S OPEN:

HELLO AND WELCOME TO U-S FARM REPORT, I'M JOHN PHIPPS. BARELY HOURS AFTER BEING SIGNED INTO LAW, NEW PRICE OUTLOOK NUMBERS FOR THE FARM BILL HAVE CAST SERIOUS DOUBT ON WHETHER NEW COMMODITY PROGRAMS WILL SAVE ANY MONEY AT ALL. JUST AS HAD BEEN WARNED BY SEVERAL CONSERVATIVE GROUPS LIKE THE AMERICAN ENTERPRISE INSTITUTE, CORN PRICES ALONE COULD DROP TO LEVELS REQUIRING MUCH GREATER FEDERAL SUBSIDY PAYOUTS. HERE'S WHERE THE IRONY REALLY SETTLES IN: THE BRUTAL CONGRESSIONAL BATTLE TO LOWER FOOD STAMP EXPENDITURES RESULTED IN A SMALL REDUCTION WHICH WAS ALSO ROUNDLY DERIDED BY THE SAME GROUPS. NOW IT LOOKS LIKE THOSE COULD BE THE ONLY SAVINGS THAT ACTUALLY COME TO PASS.

HEADLINES:

DUE TO A SHARP DROP IN CORN AND SOYBEAN PRICES, NET FARM INCOME IN THE U-S COULD SEE A BIG DROP-OFF AS WELL. WHILE OVERALL NET FARM INCOME IS EXPECTED TO BE LOWER, THE LIVESTOCK SIDE OF THE BUSINESS MAY TELL A DIFFERENT STORY. LIVESTOCK RECEIPTS AND THE VALUE OF INVENTORY IS FORECAST 3 POINT 5 BILLION DOLLARS HIGHER...MUCH OF THAT ON THE DAIRY SIDE. LOWER FEED COSTS PLAYS A ROLE. USDA EXPECTS FEED EXPENSES TO FALL ELEVEN PERCENT. USDA UPPED ITS EXPORT FORECASTS FOR CORN, SOYBEANS AND WHEAT IN THE GOVERNMENT'S LATEST SUPPLY AND DEMAND REPORT. MEANWHILE, COTTON ACREAGE IS PROJECTED TO GET A BOOST THIS YEAR. THAT'S ACCORDING TO THE NATIONAL COTTON COUNCIL'S EARLY SEASON PLANTING INTENTIONS SURVEY. THE COUNCIL ESTIMATES 11.25 MILLION ACRES WILL BE PLANTED IN COTTON. THAT'S UP 8 PERCENT FROM LAST YEAR.

CROP WATCH:

CROP WATCH THIS WEEK.

ROUNDTABLE:

WE'RE OFF TO LOUISVILLE AS OUR ANALYSTS GATHER AT THE FARM MACHINERY SHOW.

JOHN’S WORLD:

WELL, AMERICA, WE HAVE A FARM BILL. IN FACT, THE RELATIVE SILENCE IN THE FARM MEDIA SHOWS JUST HOW DEPENDENT WE HAD BECOME ON FARM BILL FRUSTRATION FOR STORIES. NOW THAT THIS BABY HAS ARRIVED IT LOOKS LIKE OUR FARMS HAVE SOME HOMEWORK TO DO. FOR EXAMPLE, IF YOU HAVEN'T STARTED WADING THROUGH THE DECISION TREES FOR WHICH TYPE OF REVENUE PROGRAM OR INSURANCE WILL FIT YOUR OPERATION BEST, YOU WILL NEED TO START SOON. DON'T EXPECT IT TO BE AN EASY OR ANXIETY-FREE CALL EITHER. BEST OF ALL MANY OF US WILL HAVE TO HELP LANDOWNERS WALK THROUGH THE COMPLICATED CHOICES AS WELL. WHICH LEADS ME TO SUSPECT THERE COULD BE THE UNINTENDED CONSEQUENCE OF INFLUENCING MANY SHARE RENT LANDLORDS TO SIMPLY OPT FOR CASH RENT INSTEAD THE HEADACHE. BY WORKING TO GET THE GOVERNMENT TO SHIELD US FROM RISK, MANY TENANTS COULD END UP WITH A DOUBLE LOAD.  THE COMPARISONS WITH THE INTRICACIES OF THE LOAN DEFICIENCY PROGRAM - LDP'S - IS HARD FOR ME TO IGNORE. THERE IS ONCE AGAIN A PREMIUM TO BE CAPTURED BY GAMING THE FARM PROGRAM. FOR ALL THEIR FAULTS, STRAIGHTFORWARD FIXED DEFICIENCY PAYMENTS CERTAINLY DECREASED HASSLE FOR THE FSA AND FARMERS. IT'S EARLY INNINGS, OF COURSE, AND PRICES AND CROP PROSPECTS COULD MAKE THESE CHOICES MORE OBVIOUS, BUT WHEN A PROGRAM LASTS FIVE YEARS, IT TAKES A TRUE PROPHET TO MAKE THE PERFECT ONE-TIME CALL. WHAT HISTORY ALSO TELLS US IS THE MARKET WILL SOON FIGURE OUT HOW THE FARM BILL IS AFFECTING OUR PRODUCTION PLANS AND FOLD THAT KNOWLEDGE INTO PRICES.

2ND HALF

JOHN’S OPEN:

HELLO AND WELCOME TO U-S FARM REPORT, I'M JOHN PHIPPS. SEEING THE PROPANE PROBLEM CLOSE UP IS HEART-RENDING FOR ALL INVOLVED IN THE MIDWEST. SHORTAGES FORCED TO PRICES TO DOUBLE AND MORE, AND FRIGID TEMPERATURES HAVE KEPT DEMAND WAY AHEAD OF NORMAL. SO NOT ONLY ARE TIGHT FAMILY BUDGETS SHREDDED BY AN EXPECTED PRICE INCREASE, BUT FOLKS NEED MORE JUST TO KEEP THEIR HOUSES LIVABLE. MEANWHILE. PROPANE SUPPLIERS ARE ANXIOUSLY TRYING TO AVOID THE HOT POTATO PROBLEM OF ENDING UP WITH EXPENSIVE INVENTORY JUST AS WARM WEATHER FINALLY ARRIVES. WHEN DEMAND EBBS, THIS SUPPLY DRIVEN SPIKE COULD EVAPORATE AND LOWER PRICES. THIS BRAUTAL WINTER HAS EXPOSED SOME GLARING ENERGY INFRASTRUCTURE PROBLEMS.

HEADLINES:

THE PROPANE SHORTAGE CAUSING ISSUES FOR MANY FOLKS IN THE U-S FINALLY CAUGHT THE EYE OF THOSE IN WASHINGTON.THE NORTHERN HALF OF CALIFORNIA DID RECEIVE SOME MOISTURE RELIEF LAST WEEK, BUT IT'S NOT ENOUGH TO FREE RESIDENTS FROM THE DROUGHT. AND NOW MORE FEDERAL HELP COULD BE ON THE WAY.  PRESIDENT OBAMA VISITED THE GOLDEN STATE FRIDAY. WHILE THERE, HE ANNOUNCED 160 MILLION DOLLARS IN FEDERAL AID. 100 MILLION OF THAT IS INCLUDED IN THE FARM BILL RESTORING LAPSED PROGRAMS LIKE LIVESTOCK DISASTER AID. THE OTHER PROGRAMS ANNOUNCED SET ASIDE 5 MILLION DOLLARS IN CONSERVATION ASSITANCE AND 3 MILLION DOLLARS TO HELP COMMUNITIES FACING WATER SHORTAGES. NEW RESEARCH OUT OF CANADA SHOWS PORCINE EPIDIMIC DIAHREA VIRUS, OR P-E-D-V, IS BEING SPREAD THROUGH FEED. BUT HERE IN THE U-S, THE CAUSE OF the RAPIDLY EXPANDING VIRUS IS STILL UNKNOWN. THIS WEEK ZOETIS ANNOUNCED ITS TEAMING UP WITH IOWA STATE UNIVERSITY TO COME UP WITH A VACCINE. THE TWO GROUPS WILL IDENTIFY AND TEST A VACCINE CANDIDATE THAT WILL HOPEFULLY HELP CONTROL P-E-D-V. JUST SINCE DECEMBER, MORE THAN 100 NEW CASES HAVE BEEN REPORTED. IT'S NOW IN 23 STATES. IF YOU ARE LOOKING FOR NEW FARM EQUIPMENT, THERE WAS ONLY ONE PLACE TO BE THIS WEEK - THE NATIONAL FARM MACHINERY SHOW IN LOUISVILLE, KENTUCKY. WHILE MANY OF US IN THE EASTERN CORNBELT ARE TIRED OF THE SNOW, A NEW MAP PROVES A QUICK WARM UP WOULDN'T BE GOOD. STATES SUCH AS ILLINOIS, INDIANA AND OHIO ARE ALREADY AT 300 TO 400 PERCENT OF ANNUAL SNOWFALL. BUT LOOK AT IOWA. THE WESTERN HALF IS DRY, WITH SOME AREAS ONLY A QUARTER TO THREE QUARTERS OF ITS NORMAL SNOWFALL AMOUNTS.

FARMING IN THE ZONE:

AS PLANTERS AND COMBINES BECOME MORE ADVANCED, THE ABILITY TO PLANT DIFFERENT SEEDS IN THE SAME FIELD BECOMES MORE FEASIBLE.  NATIONAL REPORTER TYNE MORGAN INTRODUCES US TO TWO FARMERS WHO SAY NOT LETTING VALUABLE INPUTS GO TO WASTE IS PAYING OFF.  AND IT'S ALL BECAUSE THEY FARM IN THE ZONE.

BAXTER BLACK:

I DON'T KNOW ABOUT YOU, BUT THIS WINTER HAS BEEN A BEAR. BETWEEN THE BONE-CHILLING TEMPERATURES AND DAILY SNOWSTORMS, I'M READY FOR SPRING. BUT AS BAXTER BLACK TELLS US, NO MATTER WHAT THE SITUATION, IT COULD BE WORSE.

TRACTOR TALES:

TRACTOR TALES THIS WEEK TAKES US TO CENTRAL KANSAS FOR AN INTERESTING JOHN DEERE H-R.

CHURCH SALUTE:

TODAY'S COUNTRY CHURCH SALUTE GOES TO A CHURCH THAT CELEBRATED 125 YEARS THIS PAST SUMMER.  BRIGHTON CHAPEL CHURCH OF BRIGHTON, INDIANA HAS BEEN AT ITS CURRENT LOCATION SINCE 1908.  BUT IT'S GROWN AND EXPANDED OVER THE YEARS  TODAY THE CONGREGATION IS YOUNGER, WITH AN AVERAGE AGE OF 35. BUT THE BIGGEST GROUP IS NEWBORNS TO 10 YEARS OLD AND 31 TO 40 YEAR OLDS. THE SERVICES HAVE CHANGED WITH THE TIMES. AND TODAY, WORSHIP IS CONTEMPORARY AND LIVELY, ATTRACTING THAT YOUNGER GENERATION. OUR THANKS TO ELIZABETH OAKLEY FOR SHARING THEIR STORY.

MAILBAG:

TIME NOW FOR OUR WEEKLY LOOK INSIDE THE FARM REPORT MAILBAG.WE HAVE A QUESTION ABOUT SOLAR ENERGY THIS WEEK. "I AM CURIOUS WHY FARMERS DON'T CONVERT TO SOLAR. WITH THE LONG TERM BENEFITS I WOULD THINK MORE WOULD BE DOING IT." LAWRENCE SCHUCHART LAWRENCE, THE SMART-ALEC ANSWER IS WE HAVE ALWAYS BEEN ABOUT SOLAR - HARVESTING THE ENERGY OF THE SUN WITH PLANTS IS WHAT WE DO BEST. BUT I KNOW YOU'RE TALKING ABOUT POWERING OUR EQUIPMENT AND FARMS.
FARMERS HAVE FLIRTED WITH USING SOLAR POWER FOR MY ENTIRE CAREER. WE BUILT SOLAR COLLECTORS ON OUR MACHINE SHEDS BACK IN THE 70'S TO HEAT AIR FOR CROP DRYERS, FOR EXAMPLE. BUT SOLAR ENERGY HAS TWO BIG DISAVANTAGES FOR FARMERS: IT'S INTERMITTENT AND WHILE PLENTIFUL, ONLY ARRIVES SLOWLY, DILUTED OVER LARGE AREAS. BUT THE BIG NEWS IS PHOTOVOLTAIC SOLAR - GOING FROM SUNLIGHT DIRECTLY TO ELECTRICITY - IS MAKING HUGE STRIDES TOWARD ECONOMIC FEASIBILITY. I RAN INTO AN OLD FRIEND FROM UPPER NEW YORK STATE WHO IS NEGOTIATING WITH A COMPANY FOR A LARGE PV INSTALLATION ON HIS FARM. THE COST OF PV IS DROPPING RAPIDLY AND THIS YEAR WILL COMPETE WITH COAL AND NATURAL GAS-FIRED ELECTRIC PLANTS AROUND 10 CENTS PER KILOWATT-HOUR. THE NEXT BIG STEP WILL BE A SMARTER GRID WHICH WILL HELP BALANCE THE SUPPLIES FROM SOLAR AND WIND WITH ROLLING CAPACITY SO THAT FARMS CAN SELL EXTRA ENERGY. THE REAL BREAKTHROUGH WILL COME WHEN BATTERY TECHNOLOGY HELPS STORE COLLECTED ENERGY FOR PEAK-TIME OR LARGE DEMANDS. THAT STEP IS FARTHER OFF, UNFORTUNATELY.

As always, we want to hear from you, send comments to mailbag@usfarmreport.com or leave us a voice mail at 800-792-4329.


 

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