USFR Weekly Recap - January 4-5, 2014

January 4, 2014 02:30 AM
 

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THIS WEEK ON U.S. FARM REPORT

EPISODE # 2108

JANUARY 4-5, 2014   

 

 

 

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

JOHN’S OPEN:

HELLO AND WELCOME TO U-S FARM REPORT, I'M JOHN PHIPPS. OUR LOCAL SCHOOL SYSTEM DECIDED TO MAXIMIZE THE CHRISTMAS VACATION SO IN MY AREA, THERE ARE PARENTS READY TO GET THEIR KIDS TO SCHOOL BY DOGSLED IF NECESSARY AFTER OVER THREE WEEKS OF BOUNCING OFF THE WALLS AT HOME. STRANGELY ENOUGH, JAN AND I HAD NO PROBLEM WITH HOLING UP IN THE HOUSE AND EXPERIENCING THE WEATHER BY REMOTE SENSORS. IT COULD THE WINTER OF OUR DISCONTENT, HOWEVER, IF WE SPEND TOO MUCH TIME LOOKING BACK AT WHAT WE REALIZED AT THE TIME WAS AN HISTORICALLY PROFITABLE PERIOD FOR GRAIN PRODUCERS. IN TIME, WE'LL ADJUST TO NEW ECONOMIC CONDITIONS, BUT THE NOSTALGIA FOR 2013 IS ALREADY BEGINNING. TYNE MORGAN IS HERE WITH OUR HEADLINES.

HEADLINES:

CONGRESS GETS BACK TO WORK MONDAY. AND UNDER THE NEW EXTENSION, LEGISLATORS HAVE UNTIL THE END OF THE MONTH TO EITHER COME UP WITH A NEW FARM BILL OR AGREE TO AN EXTENSION. WHILE FARMERS SAID GOOD BYE TO HIGH SECTION 179 LEVELS AND BONUS DEPRECIATION AS OF JANUARY FIRST, NEW HEALTH CARE LAWS WENT INTO AFFECT. FARM CPA PAUL NEIFFER SAYS THERE ARE STILL MANY UNKNOWNS WHEN IT COMES TO THE NEW LAW AND TAX IMPLICATIONS. A TRAIN CARRYING CRUDE OIL DERAILED IN NORTH DAKOTA EARLIER THIS WEEK. AND NOW IT'S RAISING EVEN MORE QUESTIONS ABOUT THE SAFETY OF SHIPPING CRUDE VIA RAIL.

CROP WATCH:

CROP WATCH THIS WEEK.

ROUNDTABLE:

IT'S TIME TO TALK MARKETS...JIM BOWER AND TOMMY GRISAFI JOIN US.

JOHN’S WORLD:

WITH 2013 IN THE BOOKS, ALL EYES ARE ON THE HORIZON, SCANNING FOR WHAT 2014 MAY BRING. LIKE EVERY OTHER AMATEUR PROPHET I HAVE A TERRIBLE TRACK RECORD, SO I THOUGHT TODAY I WOULD SHARE SOME THINGS THAT I REALLY MEANT TO PREDICT LAST JANUARY. FIRST, ELECTRICITY USAGE. DESPITE SERIOUS ENERGY CONSERVATION LEGISLATION, THE IDEA THAT THEY WOULD WORK SEEMS TO HAVE CAUGHT US OFF GUARD. HOWEVER, TOTAL U-S ELECTRICITY CONSUMPTION HAS FALLEN 4 OUT OF THE LAST 5 YEARS. THIS IS A MAJOR PROBLEM FOR UTILITY COMPANIES AS THIS TREND SHOWS NO SIGN OF STOPPING. MUCH OF THE DEMAND REDUCTION IS ATTRIBUTED TO MORE EFFICIENT ELECTRICAL DEVICES, SUCH AS THE OFTEN MALIGNED NEW LIGHT BULBS. AS OF THIS YEAR, WE'RE DONE WITH OLD-FASHIONED TUNGSTEN BULBS, ALTHOUGH IF YOU JUST CAN'T STAND THE CHANGE TO CFLS OR LEDS, A LOOPHOLE ALLOWS SALES OF OLD BULBS AS "ROUGH USE" BULBS. THE SUBSIDY ON WIND TURBINES EXPIRED THIS YEAR AND CONSTRUCTION OF WIND FARMS WILL PROBABLY GRIND TO A NEAR HALT. CHRISTMAS CARDS MAY BE ABOUT OVER. THE DECLINE WAS PARTICULARLY SHARP IN 2013 AND COUPLED WITH STAMP PRICE INCREASES, MASSIVE LAYOFFS AT CARD PUBLISHERS CAN BE EXPECTED. THERE COULD BE A NEW TOP BEEF EXPORTING NATION THIS YEAR, AND YOU CAN WIN A LOT OF BAR BETS IF YOU KNOW THE CORRECT ANSWER: INDIA. DESPITE FUROR FROM MANY HINDUS, DEMAND FROM CHINA IS SENDING MORE BEEF, WELL, BUFFALO MEAT, OUT OF THAT COUNTRY. THE FUTURE IS NOT ONLY STRANGER THAN WE IMAGINE, IT'S STRANGER THAN WE CAN IMAGINE.

2ND HALF

JOHN’S OPEN:

HELLO AND WELCOME TO U-S FARM REPORT, I'M JOHN PHIPPS. DURING THE HOLIDAYS WE ALL HAD REASONS TO IGNORE THE MARKETS, BUT EVEN FROM THE CORNER OF OUR EYE, WE KNEW THE TRENDS WEREN'T TIDINGS OF JOY.  WHAT IS MOST STARTLING TO ME IS TO REALIZE WE JUST SAW A 40 PERCENT DROP IN CORN PRICE...AND IT'S STILL ABOVE $4! CLEARLY WE HAVE A COST PROBLEM, AND MY GUESS IS THIS IS IS GOING TO BE THE TARGET OF FARMER OUTRAGE. AFTER ALL, IT WAS LESS THAN A DECADE AGO WE DREAMED OF $4 CORN. PRICE CHANGES THIS DRASTIC CHALLENGE OUR ENTIRE PRODUCTION CHAIN, AND THOSE WHO CAN RESPOND MORE RAPIDLY COULD BE THE NEW WINNERS. LET'S GET STARTED WITH THE HEADLINES AND TYNE MORGAN.

HEADLINES:

SEVERAL BIG CHANGES ARE IN STORE FOR FARMERS IN 2014, INCLUDING LOWER NET FARM INCOMES. BUT ONE ECONOMIST AT THE UNIVERSITY OF ILLINOIS DOESN'T SEE FARMLAND PRICES SHIFTING MUCH. WHILE FARMLAND PRICES MAY NOT BE SHIFTING, THERE IS A MOVE AWAY FROM LETTING GROUND SIT IN C-R-P. AND JUST BEFORE THE NEW YEAR, THE RAPIDLY GROWING VIRUS AFFECTING THE NATION'S SWINE HERD HIT A WEEKLY RECORD. THIS COULD IMPACT FEED DEMAND GOING INTO 2014. USDA SAYS IT WILL MAKE ITS RULE OF ALLOWING SCHOOLS TO SERVE LARGER PORTIONS OF PROTEIN AND WHOLE GRAINS PERMANENT. THE DEPARTMENT MADE THE COMMITTMENT EARLIER IN THE SCHOOL YEAR AND SAYS IT'S JUST FOLLOWING UP ON THAT PROMISE. THE TRANSITION TO HEALTHIER SCHOOL LUNCHES WAS ANNOUNCED LAST SCHOOL YEAR.AFTER SEVERAL COMPLAINTS, USDA WAS FORCED TO MAKE A FEW CHANGES TO THEIR RULES.  ALLOWING LARGER PORTION SIZES IS ONE OF THOSE ADJUSTMENTS.

SPIRIT OF THE HEARTLAND:

AMERICAN LEADERS CONTINUE TO LOOK FOR NEW OPPORTUNITIES TO MARKET U-S GRAIN AND OILSEED. ONE WAY TO DO THAT IS THROUGH FREE TRADE AGREEMENTS.  THE COLOMBIA FREE TRADE AGREEMENT IS ONE THAT THE UNITED SOYBEAN BOARD SEES AS ENCOURAGING A GROWING FEED USER. AS TYNE MORGAN SHOWS US, WITH A BOOMING POPULATION AND MEAT CONSUMPTION ON THE RISE, COLOMBIA'S APPETITE FOR GRAIN IS GROWING.

BAXTER BLACK:

IT'S A NEW YEAR AND AS AN ANNUAL TRADITION, MANY OF US MAKE NEW YEAR'S RESOLUTIONS. FOR SOME, IT MAY BE TO DO A BETTER JOB OF REMEMBERING PEOPLE'S NAMES  FOR BAXTER BLACK, TRAVELS CAN CAUSE HIS MEMORY TO BE A BIT SKEWED. IT'S EVEN CAUSED A FEW MISTAKEN IDENTITIES.

TRACTOR TALES:

WE'RE OFF TO THE GRAND CANYON STATE. FOR THIS COLLECTOR, IT'S A CLASSIC INTERNATIONAL HARVESTER THAT HE SEES AS A TRUE GEM.

CHURCH SALUTE:

TODAY'S COUNTRY CHURCH SALUTE GOES TO THE ATKINSON CONGREGATIONAL CHURCH LOCATED IN ATKINSON, ILLINOIS. THIS CHURCH IS IN A RURAL COMMUNITY, WITH ONLY ABOUT 1 THOUSAND RESIDENTS. BUT IT'S RICH IN HISTORY. THE CHURCH STARTED 150 YEARS AGO IN APRIL OF 1863. BACK THEN, THEY DIDN'T HAVE A BUILDING. INSTEAD, THE MEMBERS MET IN ONE OF THE FOUNDING MEMBERS' HOMES. THE FIRST CHURCH BUILDING WAS CONSTRUCTED A YEAR LATER. AND THAT SAME FOUNDATION IS WHERE THE UPDATED CHURCH BUILDING SITS TODAY. ATKINSON CONGREGATIONAL CHURCH HAS WEATHERED WARS, THE GREAT DEPRESSION, SMALLPOX AND EVEN A FIRE IN 2011. OUR THANKS TO JANIS SMITH FOR SHARING THEIR CHURCH WITH US.

MAILBAG:

TIME NOW FOR OUR WEEKLY LOOK INSIDE THE FARM REPORT MAILBAG. MANY RESPONDED TO MY POSITION ON DRAINING POTHOLES IN THE NORTHERN PLAINS  "FURTHER DRAINAGE OF SURFACE WATER COLLECTION POINTS WILL ONLY EXACERBATE GROUNDWATER SHORTAGE. IT WILL CONTINUE THE ESCALATION OF PLACING AGRICULTURAL CHEMICAL AND TOPSOIL CONTAMINATION OF THE FRAGILE GULF OF MEXICO AT, AND ADJACENT TO, THE MOUTH OF THE MISSISSIPPI RIVER." GRAYSON OSTERAAS SARTELL MN GRAYSON PUTS FORWARD A STRONG ARGUMENT, BUT AFTER CONSIDERABLE RESEARCH, I CANNOT FIND EVIDENCE OF HOW BIG THIS FACTOR IS. THE LINKAGE OF POTHOLES TO GROUNDWATER IS TENUOUS AND, AS I WILL SPEAK ABOUT SOON, WE ARE DISCOVERING IN IOWA WE DON'T KNOW WHAT WILL WORK TO ADDRESS THE GULF OF MEXICO PROBLEM. I AM NOT DISAGREEING, BUT SEE NO COMPELLING DATA TO SUGGEST POTHOLES ARE CRITICAL FACTORS. WE ALSO HEARD FOR A FARMER DEALING WITH THIS ISSUE FIRSTHAND: "THESE "POT HOLES" AREN'T WET LANDS WITH STANDING WATER AND CATTAILS GROWING IN THEM. THEY ARE A LOW SPOT IN A FIELD THAT WE FARM THROUGH 95% OF THE TIME. THESE POT HOLES ARE NOT A WILDLIFE FILLED HAVEN THAT WE ARE TRYING TO RUIN. THEY ARE MERELY A WEED PATCH THAT WE WOULD LIKE TO BE ABLE TO GROW SOMETHING IN." SCOTT LARSEN LARSEN FARMS, VIBORG, SD. WHILE I AM WILLING TO BE PERSUADED TO ANOTHER POSITION, GIVEN ALL WE DON'T KNOW ABOUT THE ENVIRONMENTAL VALUE OF POTHOLES, I AM RELUCTANT TO OVERRIDE THE RIGHTS OF LANDOWNERS FOR A DUBIOUS ECOLOGICAL BENEFIT.

 

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