Sep 20, 2014
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THIS WEEK ON U.S. FARM REPORT

EPISODE # 2127

MAY 17-18, 2014   

 

 

JOHN’S OPEN:

HELLO AND WELCOME TO U-S FARM REPORT, I'M JOHN PHIPPS. YOU THINK GROWING CORN AND SOY AND WHEAT HAS BEEN GOOD BUSINESS THE LAST FEW YEARS, YOU DON'T KNOW THE HALF OF IT. THANKS TO AMERICAN TONGUES FINALLY REALIZING LIGHT BEER TASTES LIKE DISHWATER, THE DEMAND FOR BEER WITH FLAVOR HAS MADE HOP FARMING ONE OF THE HOTTEST SECTORS OF OUR INDUSTRY. AS MORE BEER CONSUMERS OPT FOR CRAFT BEERS, ESPECIALLY INDIA PALE ALES, THE NUMBER OF HOP FARMS HAS MORE THAN DOUBLED FROM 68 IN 2007 TO 167 IN 2012. MEANWHILE THE PRICE HAS MORE THAN DOUBLED. UNFORTUNATELY, HOPS DON'T GROW WELL IN ILLINOIS.

HEADLINES:

WE HEARD WARNINGS LAST YEAR OF A LAND BUBBLE AND HOW THE HIGH PRICES COULDN'T LAST.  WELL, LAND REPORTS FROM THREE MAJOR REGIONS CAME OUT this WEEK SHOWING LAND VALUES BACKING OFF A LITTLE AND STABILIZING, BUT NOT CRASHING LIKE SOME EXPECTED. THE LATEST USDA CROP PROGRESS REPORT CONFIRMS WHAT JOHN TALKED ABOUT LAST WEEK-- FARMERS WERE BUSY IN THE FIELDS MAKING HUGE STRIDES IN PLANTING.  THE AGENCY SAYS 59 PERCENT OF THE CORN CROP IS NOW PLANTED. THAT'S A 30 POINT JUMP IN ONE WEEK, AND NOW AHEAD OF the 5-YEAR AVERAGE. SOYBEANS ARE 20 PERCENT PLANTED, UP 15 POINTS FROM THE PREVIOUS WEEK, AND ONLY 1 POINT BEHIND AVERAGE.  AND COTTON SITS AT 30 PERCENT COMPLETE. THAT'S 14 POINTS HIGHER THAN THE WEEK PRIOR AND ONLY 4 POINTS BEHIND AVERAGE. JOHN DEERE'S EARNING THIS WEEK SHOW A OUTLOOK FOR THE REMAINDER OF THE YEAR. THE COMPANY'S SECOND QUARTER REVENUE FELL 9 AND A HALF PERCENT, DUE TO SLOWING EQUIPMENT PURCHASES. THE MANUFACTUER SAYS AMONG THE BARRIERS FOR INCREASING SALES IS THE CRISIS IN UKRAINE. DEERE TOOK ANOTHER HIT IN TRACTOR AND HARVESTER SALES, DOWN 12 PERCENT ON THE QUARTER. MEANWHILE, SMITHFIELD FOODS' EARNINGS SHOWED A MUCH BRIGHTER PICTURE. THE COMPANY'S NET INCOME SKYROCKETED NEARLY 500 PERCENT HITTING A FIRST-QUARTER RECORD OF 105 MILLION DOLLARS. AND OPERATING PROFIT TRIPLED. THE COMPANY SAYS THE FEAR OF P-E-D-V HURTING MEAT SUPPLIES CAUSED PORK PRICES TO RISE. GOOD NEWS FOR SOYBEAN SHIPMENTS TO CHINA.  THE BIGGEST CHINESE SOYBEAN BUYER SANDONG SUNRISE GROUP SAYS IT WON'T DEFAULT ON SOYBEAN CONTRACTS. INSTEAD, IT WILL TAKE A LOSS. THE COMPANY SAYS THIS IS TO PROTECT ITS RELATIONSHIP WITH SUPPLIERS. SUNRISE ACCOUNTS FOR 12 PERCENT OF ALL SOY IMPORTS INTO CHINA.

CROP WATCH:

WELL, TYNE, CROPWATCH LOOKS A LITTLE DIFFERENT THAN LAST WEEK, WITH NOT MUCH PLANTING GOING ON.

ROUNDTABLE:

BRIAN BASTING AND ANOTHER NEWBIE, DON ROOSE, JOIN US.

JOHN’S WORLD:

I CAN'T REMEMBER AN ISSUE OF ANY FARM MAGAZINE I READ THIS WINTER THAT DID NOT HAVE AN ARTICLE ABOUT THE LOOMING DECLINE IN FARMLAND PRICES. CERTAINLY OUR COLLEGUE MIKE WALSTEN AT FARMOWNER NEWSLETTER HAS BEEN SIFTING THROUGH SALES DATA TO SPOT THE FIRST HINT OF A DOWNTREND. THE REASONING IS OBVIOUS. GRAIN PRICES ARE SAGGING AND SURELY, INTEREST RATES JUST HAVE TO BE ZOOMING UP SOON. BUT TO OUR MILD SURPRISE CORN HASN'T DROPPED TO THREE DOLLARS AND INTEREST RATES ARE…UMMM, FALLING BACK AFTER SKYROCKETING ALMOST A WHOLE PERCENT FROM HISTORICALLY LOW RATES. BUT HERE'S THE REAL CONFOUNDING FACTOR FOR FARMLAND - THE OUTSIDE INVESTOR APPEARS TO BE BACK. MUCH AS HAPPENED IN THE EIGHTIES, BIG MONEY IS REDISCOVERING FARMLAND, NOT SO MUCH AS AN INFLATION HEDGE, BUT AS A WAY TO EARN SOME INCOME WITH RELATIVE SAFETY. THE WALL STREET JOURNAL REPORTED BREATHLESSLY THAT BIG MONEY IS POISED TO POUR INTO FARMLAND. WHICH LEADS ME TO SUGGEST THE ALMOST ONE HUNDRED PERCENT CERTAIN FARMLAND PRICE COLLAPSE, WHICH HAS BEEN PROPHESIZED FOR OVER A DECADE NOW, IS PROBABLY STILL IN THE DISTANT FUTURE. OR IT MAY NEVER HAPPEN. THAT'S MY BET. WE ARE BEFUDDLED BY THE UNPRECEDENTED AMOUNTS OF GLOBAL WEALTH THAT EXIST TODAY. THERE IS SIMPLY TOO MUCH MONEY LOOKING FOR A SOLID ASSETS LIKE FARMLAND, IN MY OPINION. BUT IF YOU DON'T PREDICT THE CRASH, YOU CAN'T TAKE CREDIT FOR IT. SO I THINK WE'LL BE READING ABOUT THIS IMPENDING DISASTER FOR SOME YEARS TO COME.

2ND HALF

JOHN’S OPEN:

HELLO AND WELCOME TO U-S FARM REPORT, I'M JOHN PHIPPS. DEVASTATING NEWS ON THE HEALTH FRONT THIS WEEK: IT TURNS OUT THAT RED WINE AND CHOCOLATE WON'T HELP YOU LIVE LONGER AFTER ALL. THE SECRET INGREDIENT ONCE THOUGHT BENEFICIAL - RESVERATROL - WAS DEBUNKED IN A LARGE-SCALE, LONG TERM STUDY OF OLDER ITALIANS. CMON, WE KNEW IT WAS TOO GOOD TO BE TRUE. BUT THE LAST FEW YEARS HAVE BEEN REMARKABLY EASY ON OUR CONSCIENCES. JAN ISN'T THROWING IN THE TOWEL ON CHOCOLATE HOWEVER. HER THEORY IS MAYBE THE ITALIANS WEREN'T EATING ENOUGH.
HEADLINES:

NOAA RELEASED IT'S THREE MONTH DROUGHT OUTLOOK THIS WEEK, AND IT PAINTS THE SAME DREARY PICTURE FOR MUCH OF THE WEST, ALONG WITH TEXAS. MEANWHILE, THE DUSTBOWL LIKE CONDITIONS IN THE TEXAS PANHANDLE SPARKED THIS WILDFIRE LAST WEEKEND.  IT HAPPENED NEAR THE TOWN OF FRITCH WHICH IS ABOUT 30 MILES NORTHEAST OF AMARILLO, TEXAS. THE TEXAS A&M FOREST SERVICE TOLD ME MORE THAN 200 HOMES WERE DAMAGED, EVEN KILLING ONE MAN. BECAUSE OF THE LOCATION, NO CATTLE WERE HURT OR DISPLACED. AS OF THURSDAY, THE FIRE HAD BEEN 90 PERCENT CONTAINED, WITH SEVERAL HOT SPOTS BEING MONITORED CLOSELY. FARMERS COULD BE CLOSER TO USING UNMANNED AERIAL VEHICLES ON THE FARM, WITHOUT THE FEAR OF FINES FROM THE F-A-A.
 U-S AVIATION REGULATORS SAY THEY ARE NOW CONSIDERING SPEEDING UP THE APPROVAL PROCESS FOR DRONES USED ON LOW-RISK OPERATIONS, SUCH AS FARMING AND UTILITY INSPECTIONS.  THE F-A-A SAYS THE DECISION ON APPROVING COMMERICAL DRONE FLIGHTS IS STILL AT LEAST A YEAR AWAY.
WAL-MART HAS AGREED TO SETTLE AN ONGOING CASE FROM THE 2011 LISTERIA OUTBREAK IN CANTALOUPE THAT KILLED 33 PEOPLE. THE COMPANY SAYS IT WILL PAY 23 FAMILIES, BUT EXACT TERMS AND AMOUNTS WERE NOT RELEASED. THIS IS THE CASE INVOVLING the JENSEN BROTHERS, TWO COLORADO FARMERS, WHO ALREADY PLEADED GUILTY TO TO MISDEMEANOR CHARGES AND FACED FINES, HOME DETENTION AND PROPSATION. THE DECLINE OF HONEYBEES AND OTHER POLLINATORS SLOWED THIS PAST WINTER. THAT'S ACCORDING TO AN ANNUAL SURVEY RELEASED THIS WEEK BY THE U-S-D-A. WHILE FEWER COLONIES WERE LOST, BEE KEEPERS SAY THOSE LOSSES ARE STILL HIGHER THAN WHAT THEY SEE TO BE SUSTAINABLE. THE REASON BEE KEEPERS LOST FEWER BEES LAST YEAR IS UNKNOWN.

PLANTING UPDATE:

LAST WEEK I MENTIONED WE FINSIHED PLANTING.  IT'S AMAZING WHAT A FEW NICE DAYS, AND MULTIPLE PLANTERS CAN ACCOMPLISH. THIS WEEK'S CROP PROGRESS REPORT SHOWED OUR FARM WASN'T ALONE IN THE RACE TO FINISH. NATIONAL REPORTER TYNE MORGAN TAKES US TO IOWA WHERE THEY MADE BIG GAINS IN CLOSING THE DOOR ON PLANTING 2014.

TRACTOR TALES:

AL, LET'S CARRY ON THE LEGACY THEME WITH THIS WEEK'S TRACTOR TALES.  <mos><itemID>7</itemID><mosID>OverDriveBase</mosID><mosAbstract>820 - OMNEON VO AgDay - Ross Video - OMNEON Clip=us739 - Transition dissolve11 - Audio afv=default</mosAbstract><mosPlugInID>Ross.ENPS</mosPlugInID><objID>486fcd3506ac1</objID><objDur>1</objDur><objTB>60</objTB><abstract>820 - OMNEON VO AgDay - Ross Video - OMNEON Clip=us739 - Transition dissolve11 - Audio afv=default</abstract><mosExternalMetadata><mosScope>PLAYLIST</mosScope><mosSchema>http:'rossvideo.com/schemas/MOS/external/1.0</mosSchema><mosPayload><rossVersion>1000</rossVersion><odID>820</odID><devicePattern></devicePattern><program>TYPE=Video Server;Clip=us739</program><transition>TYPE=Transition;dissolve11</transition><audio>TYPE=Audio;afv=default;Channels=Channel 8;Levels=Default;FixedChannelOverrides=Channel ON;FadeRate=0</audio></mosPayload></mosExternalMetadata><itemSlug>TRACTOR TALES-MON-7</itemSlug></mos>TO DO THAT, JOHN, WE'RE HEADED TO SOUTHEASTERN MINNESOTA FOR A CLASSIC '49 ALLIS-CHALMERS B.

CHURCH SALUTE:

TODAY'S COUNTRY CHURCH SALUTE GOES TO THE IMMANUAL LUTHERAN CHURCH IN COURTLAND, MINNESOTA. BUT THIS SALUTE IS A LITTLE SPECIAL, AS WE'RE PAYING TRIBUTE TO THE LUTHERAN SCHOOL, TIED TO THE CHURCH, WHICH IS CELEBRATING 150 YEARS IN JUST TWO WEEKS.  PROVIDING A SOLID FOUNDATION IN CHRISTIAN EDUCATION IS WHAT THIS RURAL SCHOOL PRIDES ITSELF ON. THEIR THEME FOR THE ANNIVERSARY IS BUILT ON THE ROCK, 150 YEARS GROWING FAITHFUL DISCIPLES.  LOOKING BACK AT THE HISTRY, AT ONE TIME, THE SCHOOL EVEN HAD 3 DIFFERENT LOCATIONS TO ACCOMODATE CHILDREN MAKING THE LONG TREK TO SCHOOL DURING THE HARSH WINTER MONTHS. THE CURRENT SCHOOL BUILDING WAS BUILT IN 1949, AND SINCE HAS SEEN GROWTH BOTH IN NUMBERS AND IN BUILDING SPACE. OUR THANKS TO MICHELE SCHROEDER FOR SHARING THEIR STORY, AND CONGRATULATIONS ON 150 YEARS.

MAILBAG:

TIME NOW FOR OUR WEEKLY LOOK INSIDE THE FARM REPORT MAILBAG. MY COMMENTS ABOUT THE UNIVERSITY OF ILLINOIS AND RURAL STUDENTS TRIGGERED SOME FEEDBACK FROM FAMILIES WHO ARE GOING THROUGH THE COLLEGE PHASE OF LIFE. LARS LEE FROM POPLAR GROVE, ILLINOIS HAD A DAUGHTER WHO WANTED TO TEACH AG. "SHE WAS ACCEPTED TO THE U OF I, BUT THEN THEY STARTED ADDING TO THE STICKER PRICE. ANY AG RELATED MAJOR ADDED THOUSANDS TO THE COST OF ATTENDING." I'M IN THAT IN-BETWEEN PERIOD WITH NO CHILDREN OR GRANDCHILDREN IN COLLEGE SO I CONFESS I HAVE NOT FOLLOWED CURRENT ISSUES IN HIGHER EDUCATION AT THE STUDENT-PARENT LEVEL. LEE'S EXPERIENCE WAS NEWS TO ME. THE U OF I, LIKE MANY SCHOOLS, HAS HIGHER TUITION FOR BUSINESS, AG, ENGINEERING, FINE ARTS, AND MANY OTHER FIELDS OF STUDY. IN ONE WAY THIS IS A TESTAMENT TO THE USEFULNESS OF AN AG DEGREE IN THE JOB MARKET, BUT IT IS STILL A SHOCK FOR PARENTS WHO WENT TO SCHOOL WHEN AN AG DEGREE WAS NOT A VALUE-ADDED PRODUCT. TO BE FAIR, THE MISSION OF THE U OF I, LIKE MUCH OF ILLINOIS CULTURE AND ECONOMICS, IS DOMINATED BY THE ENORMOUS POPULATION AND WEALTH OF THE GREATER CHICAGO AREA. OUR FLAGSHIP UNIVERSITY REFLECTS THE FACT THAT EVEN WHEN COVERED BY FARMS, AGRICULTURE CONTRIBUTES A WHOPPING 1 PERCENT TO THE ILLINOIS GDP. FOCUSSING ON SERVING THE THOUSANDS OF SUBURBAN AND CITY STUDENTS WHO MAKE UP THE VAST MAJORITY IS NOT UNREASONABLE, AND LUCKILY OTHER ILLINOIS STATE COLLEGES ARE TAKING UP THE SLACK IN AG EDUCATION.

 

 

As always, we want to hear from you, send comments to mailbag@usfarmreport.com.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

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