USFR Weekly Recap - September 1-2, 2018

September 1, 2018 03:30 AM
 

TODAY ON U.S. FARM REPORT
SEPTEMBER 1-2, 2018

HEADLINES

WELCOME TO U.S. FARM REPORT. I'M TYNE MORGAN, AND HERE'S WHAT'S IN STORE OVER THE NEXT 60  MINUTES. NAFTA MAY BE NIXED AS THE U-S SAYS IT STRUCK A   NEW BILATERAL DEAL WITH OUR PARTNERS TO THE  SOUTH.  TARIFF RELIEF AID PAYMENTS HITTING HEADLINES, BUT  WILL FARMERS REALLY SEE THE PAYMENTS USDA  RELEASED?   <IT ONLY COVERS ABOUT 2 BILLION BUSHELS OF BEANS AND WE'RE  ALREADY PRODUCING OVER 4 BILLION BUSHELS > IT'S A LABOR SHORTAGE CRIPPLING RURAL BUSINESS  ACROSS THE COUNTRY,  < IT'S A CHALLENGE AND HAS BEEN FOR SOME TIME> AND NOW IT'S AN ISSUE REACHING THE WHITE HOUSE.  AND IN JOHN'S WORLD.  

NEWS
NOW FOR THE NEWS THAT MOVED THE MARKETS THIS WEEK... USDA ROLLING OUT MORE DETAILS ABOUT  TARIFF RELIEF AID--  THE PROMISED TARIFF AID IS NOT SITTING WELL WITH ALL AG SECTORS - AS THERE WAS  CLEAR DISPARITY. AG SECRETARY SONNY PERDUE  DEFENDING THE AMOUNTS SAYING THE PACKAGE IS W-T- O COMPLIANT.  IT'S CALLED THE MARKET FACILITATION PROGRAM AND ORIGNIALLY ANNOUNCED IN JULY AND UNTIL THIS WEEK, THE 12-BILLION DOLLAR  PACKAGE INCLUDED A LOT OF QUESTION MARKETS, INCLUDING PAYMENT RATES. ON MONDAY, USDA ANNOUCNING  FOUR-POINT-SEVEN  BILLION WILL END-UP AS PAYMENTS TO FARMERS TO  OFF-SET LOSSES FROM TRADE DISPUTE WITH FOREIGN  BUYERS. . THE BIGGEST RECIPIENT - SOYBEANS - ACCOUNTING  FOR THREE-QUARTERS OF THE PAY-OUT. USDA SAYS SOYBEAN FARMERS WILL RECEIVE A DOLLAR-65 PER  BUSHEL. . THE PAYMENT IS BASED ON 50-PERCENT OF A FARMER'S  PRODUCTION THIS YEAR. AND THEY'LL NEED TO SHOW  ACTUAL PRODUCTION BEFORE THEY CAN SIGN-UP FOR  AID CHECKS. RABO AGRIFINANCE POINTING OUT THERE  ARE RESTRICTIONS AROUND THE PAYMENTS.  < YOUVE' GOT NET TAXABLE  INCOME OVER THE LAST 3 YEARS HAS TO BE BELOW 900,000 DOLLARS TO QUALIFY, SO THERE'S GOING TO BE A LOT OF PEOPLE NOT GOIGN TO GET  RELIEF BECAUS THEY DON'T FALL INTO THOSE PARTICULAR CATEGORIES. > THE NATIONAL CORN GROWERS ASSOCIATION ISN'T  HAPPY WITH CORN'S ALLOCATION. IT AMOUNTS TO A PENNY A BUSHEL. NCGA SAYS THE AID PACKAGE IS INSUFFICIENT TO EVEN BEGIN TO ADDRESS THE DAMAGE DONE TO THE CORN MARKET.  WE COMMISSIONED A STUDY WITH THE UNIVERSITY OF ILLINOIS  AND THEY WENT BACK TO BEFORE THE TARIFFS WERE ANNOUNCED AND TO  PRESENT TIME. THEY TOLD US IN THAT STUDY THAT THERE'S A 44 CENT  DECREASE IN THE PRICE OF CORN DURING THAT TIME. WE SENT THE STUDY TO USDA ALONG WITH SOME COMMENTS. THEY KNEW OUR POSITION  GOING IN AND WE'RE PRETTY DISAPPOINTED THAT THEY CAME UP WITH A  PENNY FOR CORN. 2:19:37> AGRICULTURE SECRETARY SONNY PERDUE DEFENDING  THE PAYMENTS DURING HIS TRIP TO THE FARM  PROGRESS SHOW THIS WEEK. HE SAYS THE PAYMENT  RATES ARE W-T-O COMPLIANT.  < 11:00 THAT'S WHAT THE CALCULATION CAME OUT. FROM THAT PUPOSES  I'D LOVE FOR IT TO BE MORE EVEN BUT THE NUMBERS ARE THE NUMBERS  AND THIS IS A PROVEN METHODOLOGY OF CALCULATING THIS TYPE OF THING  THAT YOU HAVE TO DEFEND IN COURT AND THAT'S THE ONE WE HAD TO GO  WITH. 11:20 . PORK PRODUCERS WILL ALSO RECEIVE PAYMENTS.  THAT MARKET HAS BEEN HIT BY HIGHER TARIFFS IN BOTH CHINA AND MEXICO. THEY'LL RECEIVE EIGHT DOLLARS A HEAD FOR 50- PERCENT OF THE PIGS THEY OWNED ON AUGUST FIRST. . THE NATIONAL PORK PRODUCERS COUNCIL SAYING THE  PAYMENT WON'T MAKE PRODUCERS WHOLE  - CALLING  IT A SHORT TERM FIX.  

 

DAIRY FARMERS WILL GET 12 CENTS PER HUNDRED WEIGHT ON HALF OF THEIR MARGIN PRODUCTION  PROGRAM HISTORY... A PAYMENT IN WHICH SOME DAIRY  FARMERS SAY WON'T DO ENOUGH.  USDA ALSO ALLOCATING 84 POINT 9 MILLIONM DOLALRS  IN DAIRY FOOD PURCHASES. THAT BRINGS THE TOTAL FOR DAIRY TO 212 MILLION OUT OF HTE 12 BILLION DOLLARS PROMISED TO  FARMERS.   THE NATIONAL MILK PRODUCERS FEDERATION  ESTIMATES THE HIT TO DAIRY PRICES DUE TO EXPORT  LOSSES IS MORE IN THE $1.10 PER HUNDRED WEIGHT  RANGE. THAT WOULD PUT LOSSES AT 1 POINT 2 BILLION DOLLARS FOR DAIRY ALONE.  T  HE REST OF THE TOTAL 12 BILLION WILL BE DISPERSED  THROUGH THE OTHER TWO PROGRAMS - A FOOD  PURCHASE PROGRAM OF FRESH FRUITS AND NUTS....  AND TOWARDS DEVELOPING FOREIGN MARKETS.  A FRESH LOOK AT USDA'S NET FARM INCOME FORECAST  SHOWS WHILE INCOME IS FALLING FROM 2017 LEVELS, IT'S NOT AS LOW AS WHAT THE AGENCY FORECAST IN  FEBRUARY. ON THURSDAY, THE AGENCY PROJECTING NET FARM  INCOME TO DECREASE 13 PERCENT FROM 2017 TO 65  POINT 7 BILLION. THAT'S ACTUALLY 6.2 BILLION HIGHER  THAN THE 59 POINT 5 BILLION FORECAST IN FEBRUARY.  BUT USDA OPTING TO NOT INCLUDE THE MARKET  FACILITATION PROGRAM PAYMENTS IN TEH UDPATED  LOOK AT NET FARM INCOME.  THERE WERE NO  INDICATIONS OF HOW THOSE PAYOUTS MAY IMPACT  THE OVERALL AG ECONOMY.  THE TRUMP ADMINSTRATION SAYING NAFTA IS NIXED,  BUT THERE'S STILL SOME UNCERTAINTY AS TO  CANADA'S INVOLVEMENT IN A TRADE DEAL. THAT'S AS  THE THE TRUMP ADMINSTRATION IS CELEBRATING A  POTENTIAL BILATERAL DEAL WITH MEXICO.  ON MONDAY - THE U-S AND MEXICO REACHED AN  AGREEMENT. BUT IT EXCLUDED CANADA. . CANADA'S FOREIGN MINISTER CUT-SHORT A TRIP TO  EUROPE TO MEET WITH U-S TRADE REPRESENTATIVE  ROBERT LIGHTHIZER. . TALKS ON WEDNESDAY FOCUSED MOSTLY ON AG PRODUCTS, INCLUDING THE CONTENTIOUS DAIRY  ISSUE. . CANADA HAS A SUPPLY MANAGEMENT POLICY WHICH  PRESIDENT TRUMP CALLS UN-FAIR. AND THE NEGOTIATORS ACROSS THE TABLE SHOW  LITTLE WILLINGNESS TO BUDGE. USING A TECHNIQUE LIKE THE CLASS 7 MILK TO GET AROUND THE RULES OF  NAFTA AND BE ABLE TO MESS UP THE MARKET FOR THE REST OF THE WORLD  NEEDS TO BE APPROACHED AND THEY NEED TO FIX THAT PROBLEM. I THINK THEY NEED TO COME TO THE TABLE AND HAVE A GOOD  CONVERSATION ABOUT HOW WE DO THAT SO WE CAN BE FAIR TO OUR  CANADIAN NEIGHBORS TOO. WE JUST WANT TO MAKE SURE IT'S FAIR GOING BACK AND FORTH.  USDA ALSO UPDATING ITS AG EXPORTS FORECAST FOR FISCAL YEAR 2019. AND IT REFLECTS TRADE SQUABBLES. THE DEPARTMENT PROJECTING 144-AND HALF BILLION  DOLLARS OF FARM GOODS WILL BE SHIPPED OUT.  THAT'S AN INCREASE OF 500 MILLION DOLLARS FROM  REVISIONS MADE TO THE 2018 FORECAST. SOME OF THE FINER POINTS OF THE FORECAST – USDA EXPECTS ALL AG EXPORTS FROM THE U-S TO CHINA TO DROP SEVEN BILLION DOLLARS - FROM 19-BILLION TO 12- BILLION.  MOST OF THAT IN SOYBEANS BECAUSE OF  RETALIATORY TARIFFS. . U-S BEEF TRADE IS NOT EXPECTED TO BE IMPACTED BY  THE DISCOVERY OF A COW AFFECTED BY B-S-E. . USDA SAYS IT'S A SINGLE CASE OF A-TYPICAL B-S-E. THE DISEASE WAS DISCOVERED IN A SIX YEAR OLD BEEF COW IN FLORIDA. . USDA SAYS THE ANIMAL NEVER ENTERED SLAUGHTER  CHANNELS AND IS NO THREAT TO THE FOOD SUPPLY. . THE AG DEPARTMENT SAYS ATYPICAL BSE GENERALLY OCCURS IN OLDER CATTLE AND CAN ARISE SPONTANEOUSLY. 

TEASE
STTIL TO COME, MIKE HOFFMAN HAS A LONGER-RANGE LOOK AT YORU HARVEST WEATHER. PLUS, A NAFTA FRAMEWORK WASN'T ENOUGH TO BOOST CORN PRICES. WE'LL FIND OUT WHY AS OUR  MARKEITNG DISCUSSION KICKS OFF FROM TEH FARM  PROGRESS SHOW THIS WEEK.

WEATHER
MIKE- HARVEST IS QUICKLY PPRACHIGN FOR A LOT OF OUR VIEWRS. AND IT ALL HINGES ON HOW MUCH HEAT  HOVERS ACROSS THE U-S AS WE HEAD INTO  SEPTEMBER. YEAH I THINK WE'LL PROBABLY SEE NORMAL AMOUNTS OF HEAT  ACROSS MOST OF THE CORN BELT. WE'LL BE CHECKING OUT THAT  SEPTEMBER AND 90 DAY FORECAST COMING UP IN A FEW MINUTES. IN THE MEANTIME OBVIOUSLY THERE ARE SOME VERY DRY AREAS ACROSS  THE MIDWEST ESPECIALLY FROM NORTHERN MISSOURI INTO TEXAS  ALTHOUGH SOME OF THE MISSOURI VALLEY GET SOME DECENT RAINS  OVER THE PAST COUPLE OF DAYS AT LEAST LATE IN MIDDLE AND LATTER  PARTS OF THIS PAST WEEK. DROUGHT MONITOR SHOWS THAT WE GO BACK  A MONTH THAT REALLY HASN'T CHANGED A WHOLE LOT. WE'RE SEEING THINGS A LITTLE MORE SPOTTY THAN THEY WERE BUT SOME AREAS HAVE  GOTTEN WORSE SOME AREAS BETTER ACROSS THE MIDWEST IT HASTURNED A LITTLE BIT DRIER UP ALONG SOME OF THE NORTHERN INTERIOR  STATES AND OVER IN OREGON. NOW TAKE A LOOK AT THE JET STREAM AS  WE HEAD THROUGH THIS COMING WEEK. IT LOOKS LIKE WE'VE KIND OF FLIP  FLOPPED BACK A LITTLE BIT SO THE RIDGE IS GOING TO TRY TO HOLD ACROSS  THE EAST BY TUESDAY AND INTO WEDNESDAY WE'LL SEE THAT HEAT COMING BACK. I DON'T THINK QUITE AS HOTTER AS HUMID AS SOME OF  YOU FOLKS HAVE SEEN THIS PAST WEEK BUT NONETHELESS IT WILL START  TO WARM UP AGAIN LATER ON IN THE WEEK. A TROUGH COMING IN OUT  WEST WILL TRY TO KIND OF SHOVE THAT RIDGE OFF TO THE EAST. BUT THAT  MEANS SOME COOLER WEATHER COMING INTO THE EASTERN SECTIONS AS WE HEAD THROUGH THIS WEEK. SO HERE'S MY DAY BY DAY  FORECAST AS WE START OFF THE WEEK ON LABOR DAY ON MONDAY. WE  ARE LOOKING AT THE STATIONARY FRONT NORTHEAST INTO THE GREAT LAKES SCATTERED THUNDERSTORMS.  STORM SYSTEM THEN MOVING THROUGH THE NORTHERN PLAINS THESE WILL BE VERY HIT AND MISS ACTIVITY. SHOWERS AND  THUNDERSTORMS IN THE SOUTHEAST AND ALSO A FEW SPOTS IN THE  SOUTHWEST BY WEDNESDAY THEN THAT STORM SYSTEM MOVING INTO  THE NORTHWESTERN GREAT LAKES SHOWERS AND THUNDERSTORMS  ALONG THAT COLD FRONT HIT AND MISS IN THE SOUTHEAST AND  SOUTHWEST ONCE AGAIN. AND BY FRIDAY THAT FIRST SYSTEM IS  OFFSHORE MORE COOL AIR MOVING INTO THE GREAT LAKES IN THE  NORTHEAST IT LOOKS LIKE. AND THE NEXT SYSTEM COMING INTO EASTERN  MONTANA WESTERN DAKOTAS WITH SOME SHOWERS. THESE WILL BE A LITTLE MORE GENERAL SHOWERS AND THUNDERSTORMS ALONG THAT FRONT  IN THE SOUTHEAST AND ALSO A LITTLE BIT HIT AND MISS IN THE  SOUTHWEST. SO LET'S GO MONTH BY MONTH SEPTEMBER  TEMPERATURES ABOVE NORMAL IN THE NORTHEAST THE WEST. AND YOU CAN SEE MOST OF THE MIDDLE OF THE COUNTRY NEAR NORMAL ALTHOUGH  NEBRASKA DOWN OKLAHOMA AND GOING BELOW NORMAL THERE  OCTOBER TEMPERATURES I'M GOING TO GO ABOVE NORMAL MID-ATLANTIC  NORTHEAST GREAT LAKES NORTHERN PLAINS BACK INTO THE WEST. BELOW NORMAL EASTERN NEW MEXICO ALL THE WAY TO LOUISIANA  ACROSS TEXAS AND IN NOVEMBER TEMPERATURES BELOW NORMAL  ARKANSAS BACK INTO NORTHERN TEXAS ABOVE NORMAL NORTHERN  ROCKIES AND THE WEST AND THE NORTHEAST ONCE AGAIN PRECIPITATION OVER THE NEXT 90 DAYS. IT IS ALWAYS A TOUGH CALL BUT  I'M GOING ABOVE NORMAL FOR THE SOUTHERN MISSISSIPPI VALLEY  CENTRAL AREAS AS WELL. OHIO VALLEY TENNESSEE VALLEY TO THE EAST COAST AND BELOW NORMAL WESTERN MONTANA INTO THE PACIFIC  NORTHWEST TYNE.  THANKS, MIKE.  

TEASE
WHEN WE COME BACK, IF A POTENTIA TRADE DEAL WITH  MEXICO ISN'T ENOUGH TO RALLY CORN PRICES, WHAT  WILL IT TAKE? ELAINE KUB, ALAN BRUGLER AND BOB  UTTERBACK JOIN ME FROM THE FARM PROGRES SHOW  IN IOWA AFTER THE BREAK.  

ROUNDTABLE 1
ELL WELCOME BACK TO US FARM REPORT HERE FROM THE FARM  PROGRESS SHOW THE MUDDY FARM PROGRESS SHOW. THIS YEAR WE  WANT TO GIVE A SHOUT OUT TO MATT BENNETT. SUPPOSED TO BE ON THE PANEL WITH US TODAY BUT DUE TO AN UNFORTUNATE ILLNESS IN THE  FAMILY HE'S WITH HIS DAUGHTER WHERE HE SHOULD BE SO WANT TO GIVE  A SHOUT OUT TO MATT. BUT I AM EXCITED ABOUT THE PANEL THAT WE HAVE A BOB UTTERBACK ELAINE COBBE ALAN BRUEGEL'S TO TALK ABOUT  THESE MARKETS. BOB WE HEARD MAYBE A POTENTIALLY AN AGREEMENT  THAT THEU.S. HAS IN PLACE WITH MEXICO. MAYBE YOU WERE DOING AWAY WITH NAFTA. WE'RE JUST GOING TO HAVE A BILATERAL  AGREEMENT. SOMETHING I THOUGHT WOULD SPARK SOME TYPE OF  REACTION IN THE CORN MARKET BUT THAT'S NOT WHAT WE SAW THIS WEEK.  WELL YOU KNOW WE STABILIZE THE WEEK AND WE'RE DOWN WELL  BELOW 351. I THINK THE BOARD IS NOW COMFORTABLE WE'RE DOWN TO A  LEVEL WHERE CORN IS NOT GOING TO BE MORE BEARISH WITH TRADE AND  CHINA SITUATION BUT NOW IT'S ALL GOING TO BE ABOUT THE CASH MARKET. HOW DO WE GET THIS CROP PUT AWAY. SO WE'RE GOING TO  HAVE TO DEAL WITH THE NEXT FOUR TO FIVE WEEKS A YEAR OF A CASH  FLOW RATHER THAN THE BOARD.   SO YOU'RE SAYING WE'VE PUT IT IN THE LOW END CORN.  I THINK I WOULD NOT WANT TO GO NEAR SHORE RIGHT NOW AND PUT A NEW SHORT POSITION IN PLACE IF YOU'RE SHORT SHOULD MANAGE YOUR  SHORT POSITION BUT IT'S TIME TO PUT THE BEAR TO BED FOR A WHILE BUT  MANAGE THE CANCELLATIONS WERE WORTH THE RISK REALLY DOES.  YOU KNOW IT IS FRUSTRATING WHEN WHEN TRADE IT SEEMS LIKE  CHINA JUST SNEEZES AND SOYBEANS GO UP 30 CENTS. YET WE  POTENTIALLY HAVE A DEAL WITH NAFTA AND IT DOESN'T HAVE ANY  IMPACT ON CORN. WHAT IS CORN NEED TO DO. DOES IT NEED TO DIVORCE ITSELF FROM CORN AND WHEAT. WHAT HAS TO HAPPEN TO  ENTICE HIGHER CORN PRICES.   I THINK FROM DAY TO DAY IT IS SOMEWHAT DIVORCED FROM THE  SOYBEAN SCENARIO AND I THINK THAT MAKES A CERTAIN AMOUNT OF  SENSE. THE CORN AND DOMESTIC SCENARIO WAS NEVER AS DRAMATIC  AS THE TRADE ISSUE WITH CHINA. SO A POTENTIAL DEAL OF NAFTA  SHOULDN'T HAVE JUSTIFIED ANY SORT OF BIG MOVE. AND FURTHERMORE THAT DEAL ISN'T A DONE DEAL YET THAT HAS TO GO THROUGH CONGRESS.  SO I FEEL THE CORN MARKET IS JUST REFLECTING THE FACT THAT THE  BUSINESS WITH MEXICO NEVER REALLY FELL APART. THE ACTUAL IMPORTS KIND OF KEPT MOVING HERE THESE PAST FEW WEEKS. SO I WASN'T TOO  SURPRISED THAT THEY DIDN'T BUMP UP ON THAT LITTLE PIECE OF NEWS.   WELL YOU KNOW WE'RE WATCHING FOR THE NEXT USDA REPORT AN UPDATE ON YIELDS AND WE KNOW THERE'S SOME BIG CROPS OUT  THERE THERE ARE SOME BUMPS IN THE ROAD AND MAYBE SOME OF  THOSE CROPS AREN'T AS BIG AS WHAT SOME FOLKS THOUGHT. DO YOU  THINK USDA MAKES AN ADJUSTMENT AND IF THEY DO DO YOU THINK  THE CORN PRICE CARES.   I THINK THE THE MARKET CARES WHAT USDA DOES WITH YOU. IF  THEY DROPPED IT TWO OR THREE BUSHELS WE DEFINITELY WOULD GET A REACTION. BUT WE DON'T THE PRIVATE SURVEYS DON'T SUGGEST THAT A  MAJOR ADJUSTMENT IS COMING IN SEPTEMBER. WHAT WOULD CHANGE  WITH AN EARLY FREEZE OF SOME KIND BUT OF COURSE THE CROPS 10 DAYS TO TWO WEEKS AHEAD OF NORMAL. RIGHT. THAT'S A LOW WATCH  PLAY. I THINK THE BIG ISSUE AS BOB SAID IS YOU'VE GOT TO FIND A  HOME FOR IT. I WOULD POINT OUT THAT THE WORLD STOCKS USAGE RATIO  FOR CORN IS THE TIGHTEST SINCE 2000. BASED ON USA'S AUGUST  NUMBERS THAT SAYS PRICES OUGHT TO BE HIGHER THAN LAST YEAR.  THEY'RE CURRENTLY ESTIMATING 20 CENTS A BUSHEL ON THE CASH  AVERAGE PRICE. BUT YOU'RE STILL GOING TO HAVE THAT TRADING RANGE  THAT IN YOUR RANGE OF A DOLLAR 15 BUSH. SO WE CAN GO DOWN TO HARVEST LOW HAVE A SNAP BACK WHICH I THINK WILL BE BIGGER  BECAUSE OF THAT TIGHT WORLD STOCKS THAT WE KEEP TALKING ABOUT  THESE TIGHT WORLD STOCKS.  BUT THE CORN PRICES JUST AREN'T RESPONDING TO THAT I MEAN  WE'VE BEEN TALKING ABOUT THE POSSIBILITY OF IT. DO YOU THINK THE  MARKET DOES RESPOND THIS FALL OR IS IT GOING TO TAKE SOME MORE  TIME.  I THINK IF A LITTLE MORE TIME BUT REALIZE BACK IN 19 OVER 35  CENT PREMIUM TO THE FRONT END SO THE MARKET ALREADY HAS SOME OF THAT DEMAND FACTORED IN. AND I WORK WITH A LOT OF FARMERS  DOING BUDGETS AND GOING THROUGH THE BUDGETS RIGHT NOW FOR FIVE  TO FOUR 15 DAYS 19 GORN DOES COVER ALL THE COSTS BUT BEANS WHERE IT IS WAY UNDERWATER. SO I FEAR A BIG ACREAGE DECREASE IN  CORN NEXT YEAR AND THAT MEANS NEXT YEAR MARCH BY MARCH 1  YOU'VE GOT TO HAVE YOUR PLANT INTACT. HOW ARE YOU GOING TO TAKE ADVANTAGE IF YOU GET FOUR OR FIVE BEFORE GOING OFF OFFER TO YOU.  YOU'RE TALKING ABOUT 2019 BUT THERE'S A LOT OF FOLKS IN HERE  THAT DON'T EVEN WANT TO THINK ABOUT 2019 YET BECAUSE WE STILL HAVE 2018 MAYBE 2017 CROP YET LEFT TO MOVE.  HOW IS THE BASIS IN CORNEY LANE AND YOU KNOW ARE WE  SEEING SOME FAVORABLE BASIS IN SOME AREAS THE CORN BASIS IS  FAIRLY NORMAL BUT THE LAST HALF OF 2019 IS INTERESTING EVEN IN THE  SOYBEAN MARKET. THE SOYBEANS SPREAD EXPRESSED JUST AS MUCH  BEARISHNESS AS THE FUTURES MARKETS THEMSELVES IN THE FIRST HALF  OF 2019. BUT ONCE YOU GET PAST JULY THERE'S REALLY ONLY ABOUT A  PENNY PER BUSHEL PER MONTH TO CARRY THE SOYBEANS PAST JULY  WHICH SUGGESTS TO ME THAT THE COMMERCIAL MARKET IS EXPECTING THOSE SOYBEANS TO MOVE EVENTUALLY BUT IN THE MEANTIME OH BOY  BASIS IS REALLY UGLY. THERE ARE CASH PRICES LIKE 6 60 IN THE  NORTHWESTERN CORN BELT RIGHT NOW WHICH OBVIOUSLY DOES NOT WORK IN A BUDGET. YES 40 BASIS IS UGLY AND WE JUST STARTED TALKING  ABOUT IT.  WE NEED TO TAKE A QUICK BREAK. SO ALLAN WHEN WE COME  BACK WITH OUR ROUND TWO OF OUR MARKETING DISCUSSION THAT'S WHAT  I WANT TO ASK YOU ABOUT IS SOYBEAN BASES AS WE HEAD TO MORE OF US FARM REPORT IN JUST A MOMENT.  

JOHN’S WORLD
AS WE REPORTED, THE PAYMENT RATES OF THE TARIFF AID RELIEF PACKAGE WERE ROLLED OUT EARLEIR THIS  WEEK. BUT THERE ARE SOME DETAILS THAT COULD  IMPACT FARMERS WHO NEED THE FINANCIAL RELIEF.  HERE'S JOHN PHIPPS.  LAST MONDAY, THE USDA RELEASED DETAILS OF RUMORED PAYMENTS  TO FARMERS TO OFFSET MARKET LOSSES FROM THE VARIOUS TRADE WARS  CURRENTLY UNDERWAY. THE PAYMENT RATES HAD BEEN LEAKED A FEW  DAYS EARLIER, BUT THE RUMORS DID NOT INCLUDE ONE SMALL FACT: THE PAYMENTS WOULD INDEED BE BASED ON ACTUAL 2018 PRODUCTION,  BUT ONLY HALF, 50%. MAYBE I'M THE ONLY FAMER WHO HAD ALREADY INSERTED A FULL $1.65 PER SOYBEAN BUSHEL ON MY BUDGET SPREADSHEET, BUT THE RESULT OF  SUCH PRE-HATCH CHICKEN COUNTING IS A FAINT FEELING OF GETTING  CHEATED SOMEHOW. IT IS ILLOGICAL TO FEEL THE LOSS OF SOMETHING YOU NEVER HAD, BUT THAT'S HOW OUR BRAIN WORKS. IN FACT, MONEY THAT FALLS OUT OF THE SKY - UNEARNED WEALTH -  MESSES WITH OUR JUDGMENT AND EMOTIONS. IT IS WHY INHERITANCES  ARE SO REMARKABLY DIFFICULT TO DISTRIBUTE WITHOUT HARD FEELINGS.  BEHAVIORAL ECONOMICS HAS DEMONSTRATED THAT UNEARNED WEALTH IS VALUED DIFFERENTLY THAN EARNINGS EVEN THOUGH ONCE WE OWN  THEM ONE DOLLAR IS WORTH THE SAME AS ANY OTHER. STUDIES ALSO  SHOW THAT HELICOPTER MONEY, AS SUCH GOVERNMENT PAYOUTS ARE LABELED - ARE ALMOST NEVER SEEN AS FAIR BY THE PEOPLE RECEIVING  THEM. LOOK AT THE STATEMENTS FROM VARIOUS COMMODITY GROUPS  AND THEY COULD ALL BE SUMMED UP AS "NOT ENOUGH". PART OF THIS  PROBLEM IS THE SENSE THE THE US GOVERNMENT HAS TRILLIONS OF  DOLLARS TO HAND OUT, SO WHY NOT MORE TO ME? THE OTHER FACTOR IS WE SEE OUR INJURY AS WORSE THAN OTHERS, SO OUR PIECE OF THE PIE  ALWAYS LOOKS TOO SMALL. FINALLY, IF YOU TRY TO CREATE SCHEMES TO MAKE PAYMENTS SEEM MORE EQUITABLE, THEY BECOME MORE COMPLICATED. AS  STRAIGHTFORWARD AS THIS HANDOUT - AND IT IS A HANDOUT - SEEMS,  THERE WILL UNDOUBTEDLY BE ARGUMENTS OVER HOW TO COUNT OUR 2018 PRODUCTION. FOR EXAMPLE, MY GUESS IS THERE ARE SUDDENLY A LOT  FEWER 2017 BUSHELS STORED ON FARMS THAN LAST WEEK. I HAVE MANY PROBLEMS WITH SUBSIDIES AND HAVE MENTIONED THIS  ON OCCASION. THIS PAYOUT IS ONE MORE EXAMPLE OF ONE REASON:  THEY INCREASE DISSATISFACTION FOR THE RECIPIENTS, WHILE FAILING TO  SOLVE THE UNDERLYING PROBLEM.  THANKS, JOHN.

TEASE
THE  TARIFF AID PACKAGE WAS ALSO THE TOPIC OF  OUR MARKETS NOW SEGMENT THIS WEEK. YOU CAN  CHECK THAT OUT THAT COMPLETE DISCUSSION WITH  OUR ANLSYTS ON ON AGWEB.COM.  STAY WITH US-- TRACTOR TALES IS NEXT.  

TRACTOR TALES
WELCOME BACK TO TRACTOR TALES FOLKS! THIS WEEK'S CLASSIC IS A  FARMALL A FROM MINNESOTA, AND IT COMES WITH A HINT OF GREEN.   JAKE TREBESCH (TREB-ISH) ENJOYED RESTORING THIS '59 A WITH HIS  DAD STEVE AND ASSURED US THE GREEN YOU'LL SEE ON THIS TRACTOR HAS NOTHING TO DO WITH JOHN DEERE.  AS A 1949 SUPER A FARMALL  HAS A 12 VOLT THAN CONVERT 12 VOLT. WITH AN ALTERNATOR. HAS AN  INDUSTRIAL FRONT END. WHEEL WEIGHTS ALL AROUND AND IT'S OFFSET SO YOU CAN WHEN YOU'RE IN THE FIELD YOU CAN SEE WHERE YOU'RE GOING  DOWN THE ROAD. SO I MEAN MY DAD WORKED ON IT AND IT WAS A  WINTER PROJECT FOR US KIND OF SO I HELPED HIM OUT QUITE A BIT ON IT. I CAME FROM HALMARK CALIFORNIA IN A BOX SHIPPED OUT HERE. WE  WERE ALL TOGETHER TOOK ABOUT A YEAR. AND WE HAD TO BRING IT OUT  AND GET IT PAINTED. JUST GOOD. JUST A GOOD PROJECT. WE DIDN'T HAVE WE DON'T HAVE AN A SO WE DIDN'T HAVE THE B AT THAT TIME  EITHER. SO WE DIDN'T REALLY HAVE A SMALL TRACTOR YET. SO JUST A  SHOW TRACKER YOU DON'T DON'T USUALLY AND NOTHING WITH THAT OR ANYTHING JUST DRIVE THROUGH THE PARADE. RIGHT. AND IT HAS A GREEN  STEP ON THE OTHER SIDE PROBABLY EIGHT OR 10 AT THE TIME AND I  DIDN'T LIKE RED PAINT SO I HAD TO HAVE SOMETHING GREEN ON IT. JOHN DEERE THIS IS THE COLOR. STAY HERE FOR A WHILE. 

TEASE
WHEN WE COME BACK, IT'S A LABOR SHORTAGE CRIPPLING BUSINESS ACROSS RURAL AMERICA... THIS  LABOR DAY WEEKEND, WE'LL SHOW YOU WHY THE  WHITE HOUSE IS PUTTING MORE FOCUS BACK ON  TECHNICAL CAREERS. OUR FARM JOURNAL REPORT IS  NEXT.  

FARM JOURNAL REPORT
LABOR DAY IS A WEEKEND DEDICATED TO TEH SOCIAL AND ECONOMIC ACHIEVEMENTS OF AMERICAN WORKERS. AND IT'S A NATIONAL TRIBUTE TO THE  HARDWORK OF MEN AND WOMEN WHO ARE THE FABRIC  OF THIS COUNTRY.  BUT IT'S LABOR, AND OFTEN THE SKILLED LABOR, THAT  ARE LOSING LUSTER, AS MORE HIGH SCHOOL  GRADUATES YEARN FOR A 4-YAR COLLEGE DEGREE.  AND IT'S THE LABOR SHORTAGE FOR MORE THAN JUST  SEASON LABOR-  ON THE MINDS OF EVERYONE FROM  RURAL BUSINESSES TO THE WHITE HOSUE.  

THERE'S A LABOR SHORTAGE PLAGUING RURAL  AMERICA. AND IT'S IMPACTING BUSINESS THAT ARE A MAINSTAIN IN RURAL AREAS. .   IT'S A CHALLENGE AND HAS BEEN FOR SOME TIME. I  THINK THE CHALLENGES THAT THE LABOR POOL. GETS SHALLOWER AND  SHALLOWER.  GREG CHRISTIANSON IS THE CEO OF FRONTIER AG &  TURF, A JOHN DEERE DEALERSHIP WITH A FOOTPRINT IN  WISCONSIN AND MINNESOTA.  WE'VE SEEN IT FOR A WHILE BUT I THINK IT'S  DEFINITELY GETTING WORSE IT'S GETTING MORE DIFFICULT. BUT AT THE SAME TIME THERE'S SOME OPPORTUNITY BUT THAT. PARTICULARLY AS  TECHNOLOGY CONTINUES TO BE A BIGGER AND BIGGER PART OF WHAT WE  DO. IT'S A IT'S A RECRUITING OPPORTUNITY THAT WE HAVE TO BRING IN PEOPLE FROM OUTSIDE OF A TRADITIONAL LABOR POOL.  SEARCHING BEYOND THE TRADITIONAL LABOR POOL IS  NOW REACHING A CRITICAL POINT. JUST THIS SUMMER, THE LABOR DEPARTMENT REVEALING NEW NUMBERS THAT SHOW FOR THE FIRST  TIME IN HISTORY, THERE ARE MORE JOB OPENINGS  THAN THERE ARE ELIGIBLE WORKERS TO FILL THEM.  THERE ARE MORE JOBS AVAILABLE THAN PEOPLE THAT  ARE LOOKING FOR JOBS AND THAT'S NEVER HAPPENED BEFORE. A STATISTIC LABOR SECRETARY ACOSTA CREDITS TO  THE ROARING ECONOMY.   OUR ECONOMY IS IN CREDIBLY STRONG. WE HAVEN'T  SEEN UNEMPLOYMENT RATES THIS LOW IN DECADES.  BUT AS THE ECONOMY GAINS STEAM, IT'S CREATING A  GRIM REALITY FOR EMPLOYERS WHO JUST CAN'T FIND  ENOUGH WORKERS TO FILL THE JOBS THEY NEED.  THE BIGGEST OBSTACLE WE HAVE RIGHT NOW IS AROUND SKILLS EDUCATION. OUR EDUCATIONAL INSTITUTIONS NEED TO FOCUS ON  DEMAND DRIVEN EDUCATION EDUCATION THAT ANSWERS THE DEMANDS  OF THE WORKPLACE. SO WE WANT LIFELONG LEARNERS.  IT'S HIGH-PAYING TRADE JOBS THAT SIT VACANT. THAT'S AS MORE HIGH SCHOOL GRADUATES ARE CHOOSING  THE COLLEGE ROUTE VERSUS OPTING FOR THE SKILLED  TRADE FIELDS.   WHAT'S SO IMPORTANT ARE SKILLS AND EDUCATION. SO WE HAVE  SIX POINT SEVEN MILLION OPEN JOBS.    JOBS THAT BOAST HIGH WAGES,  WITH SOME ONLY  REQUIRING A TWO YEAR DEGREE. A TWO-YEAR TECH DEGREE IS IS GIVES A LOT OF OUR EMPLOYEES A FANTASTIC OPPORTUNITY TO MAKE A GOOD LIVING WITH US  WE HAVE A LOT OF JOBS THAT DON'T REQUIRE A FOUR YEAR DEGREE AND  QUITE FRANKLY THAT'S HOW WE CAN RECRUIT SOME PEOPLE IN ON THE TECHNICAL SIDE OF THINGS.  CHRISTESON SEES THE VALUE IN FINDING KIDS WILLING TO GO THE TWO YEAR TECH ROUTE, WHILE SOME HIGH  SCHOOLS CONTINUE TO PUSH A 4-YEAR COLLEGE  EDUCATION ON STUDENTS LOOKING FOR GUIDANCE ON  WHAT THEIR NEXT STEPS SHOULD BE.    SOME INDIVIDUALS MAY WANT TO GO TO COLLEGE AND  THEY MIGHT WANT TO BECOME A PHYSICIAN. OTHERS MAY WANT TO SAY I WANT TO BE A MEDICAL ASSISTANT AND OTHERS MAY WANT TO SAY I  WANT TO BE A CARPENTER OR A WELDER. AND OUR SCHOOLS NEED TO  FOCUS ON EVERYONE AND PROVIDE OPPORTUNITY TO EVERYONE.  ACOSTA SAYS THE QUESTION TODAY SURROUNDS IF HIGH SCHOOL AND COMMUNITY COLLEGES ARE PROVIDING THE EDUCATION NEEDED FOR THESE SKILLED JOBS.  I WORRY SOMETIMES THAT OUR SCHOOLS ARE A LITTLE  ELITIST THAT THEY SAY OUR JOB IS TO SEND EVERYONE TO COLLEGE RATHER  THAN TO GET EVERYONE A FAMILY SUSTAINING JOB AND THAT NEEDS TO  CHANGE.  THE TRUMP ADMINTRATION SIGNED AN  APPRENTICESHIP EXECUTIVE ORDER IN JUNE. IT  DOUBLES THE AMOUNT THE GOVERNMENT SPENDS ON  APPRENTICHIP PROGRAMS AND BOOSTS THE 500  THOUSAND APPRENTICESHIPS CURRENTLY AVAILABLE  TODAY.   IF YOU LOOK AT THE DATA, APPRENTICES ACTUALLY MAKE  MORE MONEY IN CRAFTS THAN COLLEGE GRADUATES DO. AND A LOT OF  FOLKS DON'T HEAR THAT DATA. BUT YOU KNOW THAT'S WHAT THE DATA  SHOWS. WE NEED TO EMPOWER YOUNG AMERICANS WITH THIS  INFORMATION SO THEY CAN CHOOSE WHAT THEY WANT TO DO.  THE ADMINSTRATION ISN'T JUST PUSHING FOR MORE APPRENTICSHIPS, BUT ALSO WORKING TO MAKE MORE  FUNDING AVAILBLE FOR THOSE WHO DECIDE TO GO THE  SKILLED-LABOR ROUTE.   THIS ADMINISTRATION PRESIDENT TRUMP HAS MADE A  VERY IMPORTANT PROPOSAL. HE HAS PROPOSED EXTENDING PELL GRANTS  FROM DEGREE PROGRAMS TO CERTIFICATE PROGRAMS. AND SO IF YOU  WANT TO GET A CODING CERTIFICATE. IF YOU WANT TO LEARN TO BE A  WELDER WHY SHOULD YOU NOT HAVE FEDERAL FINANCIAL AID AVAILABLE TO YOU AS WELL.  FOR EMPLOYERS ON THE HUNT TO FIND ENOUGH  EMPLOYEES, IT'S BECOME A FULL-TIME JOB TO FIND THE  LABOR THEY NEED.   CHRISTENSEN SAYS HE WAS FORCED TO START THE  RECURITMENT PROCESS EARLIER   WE ALSO ARE INVOLVED AGAIN AT THE JUNIOR HIGH AND  HIGH SCHOOL LEVEL WITH WITH THE VOCATIONAL ARTS INSTRUCTORS. SO WE'RE DOING A LOT OF THAT KIND OF WORK. TO TO START EARLY. WE'VE GOT  TO GET THEM WHEN THEY'RE IN SEVENTH OR EIGHTH GRADE AND ON  THROUGH HIGH SCHOOL TO HELP THEM MAKE THOSE DECISIONS FROM A  CAREER PATH STANDPOINT.  HE SAYS EVEN WITH HIS COMPANY, THE LABOR  SHORTAGE IS HAVING AN IMPACT ON HIS SHOP AND  BOTTOMLINE.   WE'RE CONSTANTLY RECRUITING TECHNICIANS AND WE  WE BELIEVE THERE'S GROWTH OPPORTUNITY FOR OUR SERVICE  DEPARTMENTS. WE KNOW THERE IS AND WHAT HOLDS US BACK IS IS MAKING SURE WE HAVE ENOUGH QUALIFIED TECHNICIANS WE HAVE  RIGHT AROUND 55 TECHNICIANS COMPANY WIDE AND WE REALLY BELIEVE  TODAY WE CAN HIRE 10 MORE.  A SHORTAGE OF LABOR CRIPPLING BUSINESS ACROSS  THE COUNTRY THAT ARE HUNGRY TO FIND ENOUGH  WORKERS TO GET THE JOB DONE.  THE LATEST JOBS REPORT FROM TEH LABOR  DEPARTMENT SHOWED UNEMPLOYEMENT RATE FADED  O 3 POINT 9 PERCENT. AND EMPLOYEMENT INCREASED  IN EERYTHING FROM PROFESSIONAL AND BUSINESS  SERVICES MANUFACTURING.  

TEASE
WHEN WE COME BACK, SOYBEAN BASIS  IS  STRUGGLIGN. OUR MARKETING ANALYSTS EXPLORE  THE BASIS SITUATION AFTER THE BREAK. 

ROUNDTABLE 2
WELL WELCOME BACK TO THE 2018 FARM PROGRESS SHOWROUND TWO OF OUR MARKETING DISCUSSION WE TALKED BRIEFLY ABOUT  SOY BASIS AND I'VE HEARD THE SAME AS ELAINE MENTIONED THERE'S  SOME UGLY SO BASES OUT THERE SOME ELEVATORS THAT JUST DON'T  EVEN HAVE ANY ROOM TO TAKE ANY CROP RIGHT NOW WHAT CAN A PRODUCER DO AT THIS POINT.  WELL I THINK YOU HAVE TO FIND A TEMPORARY STORAGE. THE MARKET STONE DOES NOT WANT TO CAGE BEANS RIGHT NOW A LOT OF THAT  REALLY BAD BASINS OF COURSE IS IN THE PNW IT'S THE AREA THAT FEEDS  THAT. THE MINNESOTA DAKOTAS THAT ARE FEEDING THE CHINA MARKET  WHICH OF COURSE WE'RE NOT SHIPPING TO RIGHT NOW YOU'RE GOING TO  GET SOME MOVEMENT TO TAIWAN JAPAN OUT OF THAT MARKET. BUT THERE'S JUST TOO MANY BEANS. I THINK BAGS ARE NOT THE ANSWER FOR  TEMPORARY STORAGE. OBVIOUSLY YOU HAVE TO MANAGE THAT PLASTIC  PRETTY PRETTY AGGRESSIVELY. BUT THE MARKET IS FLAT OUT SAY AND  DON'T SELL THESE BEANS RIGHT NOW. I WOULD POINT OUT THAT BRAZIL HAS  GOT SOME ISSUES. EVERYBODY'S LIKE OH THEY'RE GOING TO HAVE A BIG  CROP NEXT YEAR. BUT THEY'VE ALSO INCREASED THEIR FREIGHT RATES TREMENDOUSLY TO THE POINT WHERE THE PRODUCERS OF THE EXTERIOR  PART OF THE COUNTRY CAN'T AFFORD TO SHIP IT. THEY'VE ALSO GOT A WEAKNESS IN THE CURRENCY THAT'S CAUSING INPUT COSTS TO GO UP. I  THINK WE NEED TO BE CAREFUL ABOUT ASSUMING THAT THEY'RE GOING TO  FLOOD THE MARKET WITH BEANS NEXT SPRING. BOB YOU AGREE WITH THAT.   I THINK SOUTH AMERICA IS GOING TO BE UP 5 PERCENT PLUS  ACREAGE. BUT I AGREE THAT THERE'S A LOGISTICS PROBLEM BUT I  PERSONALLY BELIEVE CHINA KIND OF LIKES THIS CONFLICT BECAUSE THEY  WANT TO DIVERSIFY THEIR SUPPLY CHAIN AND THEY WANT TO PUT MORE EMPHASIS IN SOUTH AMERICA AND IN SOUTH AFRICA. AND SO THIS IS  KIND OF WORKING IN THE LONG TERM GAME PLAN AND OUR LONG TERM  BIGGEST FEAR IS WE MOTIVATE SOUTH AMERICA TO BRING ALL THOSE ACRES COME INTO PRODUCTION IF THEY BRING INFRASTRUCTURE.  THAT'S THE LONG TERM PROBLEM THAT I DON'T WANT GIVE ME  MORE INCENTIVE THAN I ABSOLUTELY HAVE TO LONG TERM BUT SHORT  TERM YOU KNOW I WAS TALKING TO AMERICAN FARM BUREAU PRESIDENT  ZIPPY DUVALL THIS WEEK ELAINE AND HE SAID YOU KNOW THAT THAT  RUNWAY'S GETTING SHORTER. IT'S ABOUT TIME FOR OUR EXPORTS THAT WOULD NORMALLY START PICKING UP PACE AND WE NEED TO SEE THOSE  EXPORT BUYS COME TO THE TABLE. WHAT TIME ARE YOU TALKING HERE.   YEAH THAT'S US SEPTEMBER OCTOBER SORT OF STORY AND THAT TIMELINE PLAYS OUT IN THE BRAZILIAN DECISION THAT ALAN WAS TALKING  ABOUT TOO RIGHT NOW THAT WEAKNESS IN THE BRAZILIAN CURRENCY IS  NOT GREAT FOR THEIR INPUT COSTS. BUT IF IT CONTINUES PAST THEIR  OCTOBER ELECTION THAT'S ACTUALLY A BEARISH FACTOR WHEN THE  BRAZILIAN REALE GOES DOWN THAT TENDS TO BE BEARISH FOR GLOBAL SOYBEAN PRICES. AND THAT'S THE ONE FACTOR THAT I THINK MIGHT  JUSTIFY THEU.S. SOYBEAN PRICES THAT BENCHMARK CHICAGO PRICE TO  POTENTIALLY TAKE OUT THE PREVIOUS JULY LOWS. YOU AGREE WITH THAT ALLAN.   MY BENCHMARK ON SOYBEANS IS WHAT PRICE NULLIFIES THE  CHINESE TARIFF THE 25 PERCENT TARIFF. WE ARE TRADING TEN DOLLARS  FLUSH THIS SUMMER. YOU COULD ARGUE YOU SHOULDN'T APPLY TO THE  HIGH BUT A 25 PERCENT TARIFF IS BASICALLY 750 OR 760 BEANS. AND  THEN THE CHINESE SHOULD BUY THEM THEMSELVES RIGHT AT THAT POINT  THE TARIFF IS A TAX. AT THAT POINT THEU.S. FARMERS PAY ALL THE TAX RIGHT. BUT WE SHOULD MOVE THE BEANS. SO THAT'S THE MINIMUM  PRICE WE SEE. I DON'T THINK WE NEED TO GO THERE BECAUSE I THINK  SOUTH AMERICA WILL RUN OUT OF SUPPLIES BEFORE THAT WILL HAVE TO SHIP SOME BEANS. BUT AGAIN THAT'S MY THAT'S MY WORST CASE  SCENARIO.  SWITCHING GEARS WE TALK ABOUT 29000 ACRES. YOU KNOW  THERE'S A LOT OF PRODUCERS RIGHT NOW LOOKING AT WINTER WHEAT AS AN  OPTION. DO YOU EXPECT WINTER WHEAT ACRES TO SEE A SIGNIFICANT CHOP AND IN TURN HOW WILL THAT IMPACT PRICES.  I THINK ANYBODY'S SOUTH OF INDIANAPOLIS INDIANA TERRE  HAUTE PLEURA THE MISSOURI ARE OUT THERE HIGH AND GOING SOUTH AS FAR AS I CAN GO. WE'VE BEEN DOUBLE CROP WILL BE VERY INTENSE  BECAUSE IT COMPETES EFFECTIVELY. I'VE HEARD IN OUR AREA THAT YOU  CAN'T FIND GOOD QUALITY WHEAT SEED. SO WE'RE WE'RE GETTING TIGHT.  AND SO I THINK THE ACREAGE WILL BE UP. IT'S HARD TO QUANTIFY HOW  MANY ACRES. I THINK IT WOULD BE A POSITIVE NUMBER BUT I THINK IT WOULD TAKE AWAY FROM SOME OF THE ALTERNATIVE CORN ACRES IN THAT  AREA.  ELAINE REAL QUICK AFRICAN SWINE FEVER WE'VE BEEN TALKING  ABOUT THAT THE IMPACT THAT IT'S HAVING ON THE PORK MARKET. YOU  KNOW WE SAW AGAIN A POSSIBLE DEAL WITH MEXICO THIS WEEK. YOU WOULD THINK THAT WOULD BE POSITIVE FOR PORK PRICES WHEN YOU LOOK  AT THAT CUSTOMER. WHAT ELSE DO WE NEED REALLY TO ENCOURAGE  HIGHER PORK PRICES AT THIS POINT. I   THINK THERE'S JUST TOO MUCH SLACK IN THEU.S. SUPPLY AND  DEMAND SCENARIO FOR ANY HEADLINE BASED BOOST ON AFRICAN  SWINE FEVER. BUT YOU KNOW THESE GUYS CAN ADDRESS THAT TOO AS  TO WHAT YEAH HOW MUCH SLACK NEEDS TO GET TAKEN OUT IN THE NEAR TERM BEFORE THAT OCTOBER FUTURES CONTRACT STARTS TO SEE ANY SORT  OF UPWARD MOVEMENT. I THINK WE MIGHT JUST BOUNCE ALONG. BOB  ANY OPTIMISM IN THAT.   I THINK THE PACKERS ARE SHORT TERM POLICY FOR THE NEXT WEEK  AND A HALF TWO WEEKS BUT AFTER THAT THERE'S VERY VERY SHORT.  REMEMBER BACK IN THE SUMMER MONTHS WE HAD THESE AMATORY  NUMBERS FORECASTED FOR THIS FALL UP 2 MILLION HIT A HOG'S AND WE STILL GOT TO GET THROUGH ALL THESE JOBS AND WE DON'T HAVE AN  EXPORT SO LONG TERM YOU CAN SAY WE'RE DOING GOOD THINGS FOR  HOGS BECAUSE WE'RE NOT INCENTIVIZING. SO I'D SAY 18 24 MONTHS DOWN HERE. WE COULD HAVE VERY LONG TERM. RIGHT. BUT FOR NOW  THAT'S A LONG WAYS OUT. IT'S A LONG WAYS OUT. WE'RE MAKING A  CYCLE LOW RIGHT NOW.   ALL RIGHT. THANK YOU ALL FOR JOINING US HERE FOR FOREIGN  PROGRESS. WE APPRECIATE IT. LET'S TAKE A QUICK BREAK AND WE'LL  HAVE MUCH MORE RIGHT HERE ONU.S. FARM RECORD. 

AMERICAN COUNTRYSIDE
REVIVING A ONCE BOOMING SMALL TOWN IS A MAJOR FEAT. . ANDREW MCCREA SHOWS US THE REVITILZATION OF THE RURAL COMMUNITY CALICO  ROCK AS HE TRAVELS THE AMERICAN COUNRYSIDE THIS  LABOR DAY WEEKEND.  THERE'S ONLY ONE TOWN NAMED CALICO ROCK IN THE WORLD AND IT'S  HERE ALONG THE WHITE RIVER IN THE STATE OF ARKANSAS.  STEAMBOATS ONCE CAME HERE, THE FARTHEST POINT THEY COULD TRAVEL  DURING THE SUMMER.  IT BECAME THE LARGEST TOWN IN THE COUNTY…A  PLACE TO DO YOUR SHOPPING AND MUCH MORE.(SO IN THE 1940 CALICO ROCK WAS A BOOMTOWN.  IT WAS A RACOUS PLACE ON A STAURDYA NIGHT.  PEOPLE WOULD MAKE MOONSHINE AND  THEY WOULD CALL IT PEPPERSAUCE AND THEY WOULD DRINK IT IN THE  ALLEY BACK BEHIND MAIN STREET BUT AS THE DECADES PASSED, THE TOWN WAS SLOWLY PASSING AS  WELL. THE POPULATION DIPPED TO ABOUT 600. THE SCHOOL SYSTEM  SUFFERED.  A WALK ALONG THESE STREETS WAS A STROLL PAST CLOSED  STOREFRONTS.  IT WAS MAIN STREET IN NAME ONLY.  STEVEN MITCHELL  SAW HIS HOME TOWN VANISHING RIGHT BEFORE HIS EYES. (WELL WE GOT DOWN TO WHERE WE ONLY HAD ONE BUSINESS IN TOWN  AND IT WAS THE LITTLE SODA FOUNTAIN THAT OPERATED AND HAD A LITTLE  LUNCH COUNTER :08) :06  WALK AND TALK INTERVIEW IF STEVEN AND OTHER CITIZENS DID NOT STEP FORWARD, CALICO ROCK, IT  WAS FEARED, MAY VERY WELL VANISH, TAKING THE SCHOOL WITH IT.  BUT  HOW DO YOU ATTRACT BUSINESSES AND PEOPLE TO A TOWN THAT'S DOWN  TO ITS LAST STORE?  INTERESTINGLY, THE LOCAL MUSEUM BOARD REALIZED  THE STORE FRONTS WERE HISTORIC AND DECIDED THEY SHOULD BUY A  BUILDING AND MAKE REVITALIZATION HAPPEN THEMSELVES. (AN OPPORTUNITY CAME TO BUY A BUILDING.  WE HAD NO MONEY -  ABSOLUTELY NOTHING IN THE BANK.  AND THEY WANTED $30,000 FOR  TH BUILDING AND WE HAD TO RAISE MONEY A LOCAL BANK BELIEVED IN THE EFFORT AND LOANED THEM THE MONEY.   FUNDRAISER, CONCERTS, INDIVIDUAL GIFTS…THEY ALL HELPED PAY FOR THE  BUILDING AND A SMALL MUSEUM ON THE UPPER FLOOR.  BUT WHAT TO DO  WITH THE DOWNSTAIRS AND THE GOAL OF REVITALIZING THE TOWN? (SO OUR IDEA WAS TO CONTACT LOCAL ARTISANS IN THE AREA AND GET  THEM TO COME IN AND PUT BOOTH SPACE.  IT WORKED IN FLEA MARKETS  SO WHY COULDN'T IT WORK FOR ARTISANS AND COOPERATIVES?THEY CHARGED THE LOCAL ARTISTS NO RENT, JUST A COMMISSION ON  SALES. TODAY THERE ARE ABOUT 30 SUCH VENDORS. IT PAID FOR THE  BUILDING AND ENOUGH MONEY TO BOOT TO BUY ANOTHER BUILDING.  THE MUSEUM BOARD BEGAN THE PRINTING PRESS CAFÉ.  BEAUTIFULLY RESTORED IT NOW PROVIDES A PLACE FOR PEOPLE TO EAT.  AND WHEN THAT BUSINESS GENERATED A PROFIT…WELL OF COURSE, THERE WAS ONLY  ONE THING TO DO…BUY YET ANOTHER BUILDING. (WE CREATED THE ART CENTER.  IT'S A COMPLETE ART CENTER THAT HAS  SOME OF THE GREATEST WORKS OF ART BOTH NOT ONLY IN OUR AREA BUT SOME FAMOUS ARTISTS IN ARKANSAS AND FAMOUS AMERICAN ARTISTS.   THEY GET WORKS ON LOAN FOR LARGER GALLERIES AND IN THE BASEMENT  OF THAT BUILDING THEY CREATED A SCIENCE CENTER.  NOW THE  MUSEUM, ART AND SCIENCE CENTERS CREATED A DRAW FOR SCHOOL  GROUPS THAT VISIT FROM HOURS AWAY.  IN ALL, THE MUSEUM BOARD  NOW OWNS SEVEN BUILDINGS.  THE TAX REVENUE FROM THOSE  BUSINESSES IS ABOUT $5000 PER MONTH MORE THAN BEFORE THEY  PURCHASED THEIR FIRST BUILDING.   (TODAY THERE ARE SIX NEW BUSINESSES ON MAIN STREET.  SO IN  ADDITION TO THE ONES THE MUSEUM OWNS AND OPERATES WE HAVE  SIX PRIVATELY OWNED INDEPENDENTLY OPERATED BUSINESSES.  AND A MAIN STREET THAT ONCE HAD ONLY ONE STORE OPERATING NOW  HAS ALL BUT TWO STOREFRONTS NOW OCCUPIED.  IT'S A PLACE THAT IS  COMING BACK TO LIFE ALONG THIS BEAUTIFUL RIVER IN NORTHERN  ARKANSAS ATTRACTING A WIDE RANGE OF AGES AND LOCATIONS BOTH LOCAL AND EVEN FROM OUTSIDE THE NATION. (THIS IS JUST A SMALL TOWN BUT IT COULD HAVE BEEN A TOWN THAT  WOULD HAVE VANISHED IF NOT FOR THE WORK OF STEVEN AND OTHER  VOLUNTEERS AND THANKS TO THEIR EFFORTS IT'S ATTRACTING MORE PEOPLE  THAN HAS BEEN SEEN IN DECADES.  TRAVELING THE COUNTRYSIDE…IN  CALICO ROCK, AR…I'M AM. ) THAKS, ANDREW. YOU CAN HEAR MORE OF ANDREW'S TRAVELS BY VISITING AMERICAN COUNRYSIDE DOT  COM. WHEN WE COME BACK, MORE TARIFF TALK IN CUSTOMER SUPPORT 

CUSTOMER SUPPORT
THIS WEEK JOHN KICKS OFF AN AGSPLAINER ABOTU A HOT BUTTON TOPIC FOR AGRICULTURE RIGHT NOW.  JOHN. LOOKING OVER THE FEEDBACK I'VE GOTTEN FROM MY COMMENTS ABOUT  THE TRADE SITUATION, I'VE DISCOVERED THERE IS SOME CONFUSION  ABOUT HOW TARIFFS WORK. SO THIS WEEK AND NEXT, I WILL OUTLINE THE FUNDAMENTALS OF TARIFFS AND HOW THEY AFFECT INTERNATIONAL TRADE. THE FIRST POINT IS SIMPLE: TARIFFS ARE TAXES. PERIOD. HERE'S WHY. A FACTORY IN THE US MAKES FARMING MACHINERY, TO PICK AN EXAMPLE COMPLETELY AT RANDOM. IT GOES TO BUY STEEL, BUT HAS A  BUDGET OF $100. A STEELMAKER IN THE US SAYS, WE HAVE STEEL BUT  IT'S $110. A FACTORY IN CHINA SAYS, WE'VE GOT STEEL AND WE WILL SELL IT FOR $100. AND THE DEAL GETS DONE. THE US STEELMAKER COMPLAINS TO OUR GOVERNMENT THE CHINESE  ARE CHEATING WITH SUBSIDIES, CHEAP LABOR, OR OTHER UNFAIR PRACTICES. AND TO THE HORROR OF VIRTUALLY EVERY ECONOMIST ON  EARTH, THE US GOVERNMENT SAYS WE'LL PUNISH CHINA WITH A TARIFF.  ONLY WATCH WHAT ACTUALLY HAPPENS. THE NEXT TIME THE FARM MACHINERY MAKER BUYS STEEL FROM CHINA,  HE PAYS A 25% TARIFF. THAT'S RIGHT, THE US BUYER PAYS THE TARIFF TO OUR TREASURY. THIS IS IDENTICAL TO A HOW A SALES TAX WORKS, FOLKS.  THE OBVIOUS QUESTION IS WHY DIDN'T HE BUY THE US STEEL FOR  $110? THE ANSWER IS BECAUSE US STEELMAKERS ARE NOT STUPID.  THEY NOW CAN INCREASE THEIR PROFITS WITHOUT DOING ANYTHING OTHER  THAN CHANGING THE STICKER PRICE. THEY RAISED THEIR PRICES TO  MATCH THE TARIFF. HERE IS A CHART OF STEEL PRICES AROUND THE WORLD ECONOMISTS PREDICTED THIS, AND IT'S EXACTLY WHAT HAPPENED. SEE  IF YOU CAN PINPOJNT WHEN THE STEEL TARIFFS WENT INTO EFFECT. NOTE  THIS TWEET BY THE COALITION OF METAL MANUFACTURERS - DOMESTIC STEEL USERS: THE US IS NOW AN "ISLAND OF HIGH STEEL PRICES".  THE BIG POINT, WHICH I DON'T THINK OUR ADMINISTRATION UNDERSTANDS IS THE CHINESE SELLER DID NOT PAY ANY TARIFF, THE AMERICAN BUYER  DID. THIS IS WHY THE #1 AMERICAN TAX HATER, GROVER NORQUIST,  PRESIDENT OF THE AMERICANS FOR TAX REFORM TWEETED THIS. I CAN'T REMEMBER WHEN IF EVER, I HAVE AGREED SO COMPLETELY WITH MR.  NORQUIST. NEXT WEEK, WE GO ON THE SHOW HOW TARIFFS DON'T ACCOMPLISH THE  PREDICTED ECONOMIC AND POLICY GOALS, AND HOW THEY ARBITRARILY  MAKE WINNERS AND LOSERS HERE IN THE US. OR PERHAPS MORE  ACCURATELY LOSERS AND BIGGER LOSERS. THANKS, JOHN.  IF YOU HAVE QUESTIONS OR COMMENTS FOR JOHN  JUST EMAIL HIM AT MAILBAG AT U-S FARM REPORT DOT COM.  

TEASE
WHEN WE COME BACK, SOME FARM PHOTOS TO SHARE THIS LABOR DAY WEEKEND. THAT'S NEXT. 

FROM THE FARM
IT'S HARD TO BELIEVE HARVEST IS ALREADY HERE. KENT WAS CUTTING DRYLAND CORN IN BYERS KANSAS  THIS WEEK. HE SAID YIELDS  FOR DRYLAND ARE DECENT. IT WAS THE DYRNESS AND  STRESS BEFORE TASSEL THAT HE THINKS CRIPPLED  YIELDS THIS YEAR. THAT FIELD WAS RUNNING IN THE 75 TO 95 BUSHEL PER ACRE RANGE.  AND STAYING IN KANSAS, JAZLYN WAS SHOWING OFF SOME NICE CORN EARS IN KANSAS. HER DAD JONATHAN  SAID IT SHOULD YIELD REALLY NICE THIS YEAR! IF YOU HAVE A PICTURE OF VIDEO YOU'D LIKE TO SEND  IN, SEND THOSE TO MAILBAG-AT-U-S-FARM-REPORT-DOT- COM OR CHECK US OUT ON FACEBOOK AND TWITTER. 

CLOSE
FROM ALL OF US AT U.S. FARM REPORT,AND I'M TYNE MORGAN.  THANK YOU FOR WATCHING U-S FARM REPORT.  BE SURE TO JOIN US RIGHT HERE AGAIN NEXT WEEK, AS  WE WORK TO BUILD ON OUR TRADITION. HAVE A GREAT  WEEKEND, EVERYONE.  

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