USFR Weekly Recap - April 7-8, 2018

April 7, 2018 03:30 AM
 
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TODAY ON U.S. FARM REPORT
APRIL 7-8, 2018

HEADLINES

WELCOME TO U.S. FARM REPORT. I'M TYNE MORGAN, AND HERE'S WHAT'S IN STORE OVER THE NEXT 60  MINUTES. THE TIT FOR TAT TRADE DISPUTE BETWEEN THE U-S  AND CHINA HEATS UP, WITH CHINA FIRING BACK IN THE  FORM OF AG GOODS. WHY ECONOMISTS SAY WE'RE STILL NOT IN A TRADE  WAR.  WE KICK OFF A FARM JOURNAL COLLEGE ROADSHOW,  MAKING A STOP AT PURDUE. WE NOT ONLY NAVIGATE  THE TRADE SCUFFLE, BUT WITH LOWER ACRES, LOOK  AT WHY HIGHER CORN PRICES COULD BE BREWING.... <THEN IF YOU PUT A WEATHER SCARE ON THERE YOU'VE GOT A REAL  REASON FOR A BULL MARKET.> WE TRAVEL THE COUNTRYSIDE WITH ANDRE MCCREA  TO ONE OF THE WORLD'S MOST AMAZING  STRUCTURES... STUDYING THE EARTH IN A SEALED SPACE.  <(PROBABLY THE MOST SIGNIFICANT LESSON IN MY OPINION IS HOW LITTLE WE TRULY UNDERSTAND ABOUT EARTH SYSTMS AND IN JOHN'S WORLD <LAND RENTS AND INTEREST RATES > <U.S. FARM REPORT - BROUGHT TO YOU BY THE DEPENDABLE, LONG  LASTING, CHEVY SILVERADO.> 

CHINA TARIFFS
NEWS THAT CHINA IS HITTING HTE U-S WITH ANOTHER ROUND OF TARIFFS SENT A JOLT THROUGH THE COMMODITY MAKRETS AND THE STOCK MARKET MID- WEEK. DESPITE THE U-S UPPING ITS ANTE AGAIN,  T  SOME ECONOMISTS SAY  WE STILL AREN'T IN A TRADE  WAR YET. THE LATEST ROUND OF PROPOSED TARIFFS BY THE U-S  IS 100 BILLION DOLLARS. AND PRESIDENT TRUMP SAYS  RATHER THAN REMEDY ITS MISCONDICUT, CHINA IS  CHOOSING TO HARM AMERICA'S FARMERS AND  MANUFACTUERS. THAT CLAIM IS REGARIDNG CHINA'S LATEST TARIFF PLAY,   PROPOSING TO SLAP TARIFFS ON 106 U-S  GOODS, TOTALLING 50 BILLION DOLLARS.  ON THE LIST ARE SOYBEANS, SORGHUM, COTTON, BEEF,  WHEAT AND A HOST OF OTHER AGRICURUAL  PRODUCTS.  THIS IS IN ADDITION TO CHINA RAISED IMPORT DUTIES  ON A 3 BILLION DOLLAR LIST OF U.S. GOODS IN AN  ESCALATING DISPUTE WITH WASHINGTON OVER TRADE  AND INDUSTRIAL POLICY. THAT MOVE BY CHINA WAS IN RESPONSE TO THE U-S  TARIFF HIKE ON STEEL AND ALUMINUM. U-S GRAINS COUNCIL SAYS IN 2017,  CHINA BECAME THE  TOP BUYER OF U-S AG EXPORTS.  < YOU CAN'T JUST SNAP YOUR FINGERS AND REPLACE A MARKET THE SIZE  OF CHINA.   I'VE ALWAYS SAID THIS RELATIONSHIP WITH THE U.S. AND CHINA IS THE  MOST IORTANT. WE HAVE TO GET IT RIGHT. > SLEIGHT SAYS HIS BIGGEST CONCERN IS WHAT  HAPPENS TO BASIS PRICES IF SUDDENTLY THE VOLUME  OF PRODUCT OUPLLED OUT OF HTE COUNTRY DROPS.  HE SAYS SORGHUM ALSO HAS A LOT AT RISK, AS THERE  AREN'T A LOT OF ADDITIONAL COUNTRIES TO PICK UP  THAT LOST DEMAND, MEANING PRICES COULD SINK. CHINA'S LIST OF TARIFFS CAME AS AGRICULTURE  

BACK TO OUR ROOTS TOUR
SECRETARY SONNY PERDUE WAS ON HIS THIRD BACK TO OUR ROOTS R-V TOUR.  LATE IN TEH WEEK, PRESIDENT TRUMP SAYS HE'S INSTURCTED PERDUE TO IMPLEMENT A PLAN TO PROTECT FARMERS AND AGRICULTURAL INTERSTEST  THROUGH ALL OF THIS.  AND IT'S THAT MESSAGE PERDUE TRIED TO CONVEY  THIS WEEK, GIVING ASSURANCE TO FARMERS THAT  THEY WON'T BE CASUALITIES IF THIS TRADE DISPUTE  ESCALATES. <WE'VE CERTAINLY SEEN SOME SITUATIONS WHETHER IT BE STEEL AND  ALUMINUM OR IP WHERE CHINA HAS NOT PLAYED BY THE RULES. AND THE  FACT IS THE PROBLEM IS, OUR AMERICN PRODUCERS ARE SO PRODUCTIVE , THEY'RE ALWAYS AT THE TIP OF THE SPEAR OVER ANY TYPE OF RETALIATORY  ACTION> 

AG ECONOMY BAROMETER RELEASED
IT'S TRADE CONCERNS AND FEARS WEIGHING ON PRODUCER SENTIMENTS.  THE LATEST AG ECONOMY BAROMETER OUT FROM  BOTH PURDUE AND CME SHOWS A 5 POINT SLIDE IN SENTIMENTS. AND IT'S BOTH CURRENT CONDITIONS AND  FUTURE EXPECTATIONS ADDING TO THE PRESSURE.  THE SURVEY OF 400 PRODUCERS FOUND NEARLY HALF  SAY IT'S SOMEWHAT LIKELY THAT A TRADE WAR WOULD  NEGATIVELY IMPACT AG EXPORTS. 28 PERCENT THOUGHT IT WAS UNLIKELY. BUT IT'S INTERESTING TO NOTE THAT THE SURVEY WAS  TAKEN BEFORE CHINA FIRED BACK WITH BOTH THE  TARIFF ON PORK, AND THE LATEST ROUND OF GOODS INCLUDING SOYBEANS.  

USMEF FEBRUARY NUMBERS
FEARS OF TRADE MAY BE WEIGHING ON AGRICULTURE, BUT PORK POSTED ANOTHER STRONG MONTH FOR EXPORTS. UNITED STATES MEAT EXPORT FEDERATION  SAYS PORK EXPORTS IN FEBUARY WERE UP 4 PERCENT  IN VOLUME AND 12 PERCENT IN VALUE.  AND BEEF EXPORTS SEEING DOUBLE DIGIT GAINS,K  JUMPING 111 PERCENT IN VOLUME AND UP 18 PERCENT  IN VALUE.  AND TO SHOW THE IMPORTANCE OF TRADE, U-S-M-E-F  SAYS PORK EXPORTS IN FEBUARY ACCOUNTED FOR  NEARLY 28 PERCENT OF PORK PRODUCTION, AND   NEARLY 14 PERCENT OF BEEF PRODUCTION  

WHEAT CONDITIONS
A DRY AND TOUGH WINTER IN THE PLAINS IS EATING INTO WHEAT CONDITIONS. IN USDA'S FIRST CROP  PROGRESS REPORT OF HTE YEAR, THE AGENCY SAYS  WINTER WHEAT IS IN THE WORST SHAPE IN A DECADE.  USDA SHOWS 32 PERCENT OF THE NATION'S WHEAT  CROP IN IS GOOD TO EXCELLENT CONDITION.  IN KANSAS NONE OF THE CROP IS EXCELLENT AND  ONLY TEN PERCENT IS GOOD. TEXAS ISN'T MUCH BETTER, WITH 15 PERCENT OF HTE  CROP RATED GOOD TO EXCELLENT. AND OKLAHOMA'S CROP IS RATED THE WORST-- ONLY 9  PERCENT IS IN GOOD SHAPE... NONE OF HTE CROP IS RATED EXCELLENT. OKLAHOMA STATE'S KIM ANDERSON SAYS THE CROP IS  AS BAD AS USDA IS PORTRAYING.  <I THINK THE GOOD NEWS IN THIS SAY POOR GROWING CONDITOINS AND  LOWER YIELDS, IT MEANS WE'VE GOT MORE NITROGEN AND THIS YEAR I THINK QUALITY IS MORE IMPORTANT THAN YIELD.AND A SHORTER CROP, I THINK INCREASES THE ODDS THAT WE  CAN HAVE PROTEIN> ANDERSON SAYS THERE ARE SOME AREAS IN  OKLAHOMA WHERE THE DROUGHT IS SO SEVERE, THAT  EVEN IF RAINS CAME TODAY, IT WOULDN'T BE ENOUGH  TO SAVE THE CROP.  

TEASE
ALRIGHT, THAT'S IT FOR THE NEWS. WHEN WE COME BACK, WE'LL CHECK IN WITH MIKE HOFFMAN FOR A  LOOK OF WEATHER. AND THEN LATER, U-S FARM  REPORT IS GOING TO COLLEGE. OUR COLLEGE  ROADSHOW HEADS TO PURDUE UNIVERSITY, WHERE LEADING AG ECONOMISTS HELP US NAVIGATE THE  UNCERTAINTY AROUND TRADE AND WHAT THAT MEANS  FOR PRICES.  

WEATHER
METEOROLOGIST MIKE  HOFFMAN JOINS US NOW WITH WEATHER. MIKE, THIS  WINTER WEATHER WON'T BUDGE FOR MOST OF THE  COUNTRY RIGHT NOW.  WELL THAT'S RIGHT TYNE ESPECIALLY THE MIDWEST GREAT LAKES  OHIO VALLEY NORTHEAST. I DO SEE SOME CRACKS IN THAT WINTRY WEATHER AS WE HEAD THROUGH THE END OF THIS COMING WEEK. BUT I  DON'T SEE ANY PROLONGED WARMTH QUITE YET. HERE'S THE DROUGHT  MONITOR. BOY HAS IT GOTTEN BAD. PANHANDLE OF TEXAS PANHANDLE OF OKLAHOMA SOUTHWESTERN KANSAS ALL THE WAY BACK INTO THE FOUR  CORNERS REGION ALSO GETTING A LITTLE BIT DRIER THERE. SOUTHEASTERN  GEORGIA INTO SOUTHERN SOUTH CAROLINA. GOING BACK A MONTH THERE. AND YOU CAN SEE WE ARE ALREADY GETTING VERY BAD IN THESE  AREAS AND IT HASN'T IMPROVED AT ALL. AS WE GO WEEK BY WEEK OVER  THE PAST FOUR WEEKS YOU CAN SEE THAT EXCEPTIONAL DROUGHT AREA HAS EXPANDED IN THAT AREA OF THE WESTERN OKLAHOMA PANHANDLE  AND ALL THOSE SURROUNDING AREAS AS WELL. SO LET'S CHECK OUT THE  WEATHER AS WE HEAD THROUGH THIS WEEK THE JET STREAM. WE'VE HAD THIS BIG CUTOFF LOW NEAR HUDSON BAY FOR THE PAST COUPLE OF  WEEKS. JUST KEEP SENDING SHOTS OF COLD AIR SOUTHWARD INTO THE  UPPER MIDWEST AND THEN SOUTHEAST AND FROM THERE SO OCCASIONALLY THIS CHILLY AIR GOES INTO THE SOUTHEAST. BUT EVERY  TIME YOU KNOW THAT TROUGH KIND OF GOES AWAY THEN YOU WARM UP  A LITTLE BIT IN THE SOUTHEAST BUT IT'S REMAINED COLD THROUGH THE NORTHERN TIER OF STATES. THERE'S WEDNESDAY STILL PRETTY COLD FOR  THE GREAT LAKES INTO THE NORTHEAST BUT THERE'S MILDER AIR FLOWING  FROM THE WEST ALL ACROSS MUCH OF THE COUNTRY INCLUDING MANY PARTS OF THE PLAINS AS WE HEAD THROUGH THE MIDDLE OF THE WEEK.   AND THAT MILD AIR WILL TRY TO COME EASTWARD ESPECIALLY  WHEN YOU GET A LITTLE BIT OF A RIDGE COME IN THROUGH. AS WE HEAD THROUGH FRIDAY LET'S SAY IN THE LOWER GREAT LAKES THE SOUTHEAST  SHOULD BE NICE AND WARM AT THAT TIME. BUT THERE IS STILL ANOTHER  TROUGH KIND OF COMING THROUGH THE SYSTEM THERE AND THAT BRINGS ANOTHER STORM SYSTEM FOR THE WEEKEND INTO THE GREAT LAKES AND  MIDDLE MISSISSIPPI VALLEY. THAT'S ONE WE'LL HAVE TO WATCH WITH  THAT PATTERN. THERE IS NOT AS COLD AS WE'VE SEEN AS THE CUTOFF LOW IS RETREATING A LITTLE BIT. SO THERE'S HOPE. DOWN THE ROAD I JUST  DON'T SEE PROLONGED WARMTH FOR THE MIDWEST GREAT LAKES OR  NORTHEAST QUITE YET. SO AS WE GO THROUGH MONDAY A LITTLE BIT OF SNOW THERE. GREAT LAKES INTO PARTS OF PENNSYLVANIA OTHERWISE  SHOWERS AND THUNDERSTORMS SOUTHWARD TOWARD THE GULF COAST.  STATIONARY FRONT PRODUCING A LITTLE RAIN AND SNOW ON THE LEEWARD SIDE OF THE ROCKIES. CHECK IT OUT WEDNESDAY THEN ANOTHER COLD  FRONT COMING INTO THE UPPER MIDWEST BITTER RAIN OR SNOW ALONG  THAT MAINLY THOUGH IT'S DRY THROUGH A GOOD CHUNK OF THE COUNTRY. NEXT STORM SYSTEM PRETTY POWERFUL WHEN AGAIN WITH SOME RAIN  AND MOUNTAIN SNOW THAT MOVES INTO THE WESTERN PLAINS BY  FRIDAY. SNOW IN THE MOUNTAINS. BUT SHOWERS AND THUNDERSTORMS  OUT AHEAD OF THAT IN THE WARMER AIR. LITTLE BIT OF SNOW OR RAIN I  SHOULD SAY ALONG THAT FRONT. OFF TO THE EAST. ALL RIGHT HERE'S MY 30  DAY OUTLOOK FOR TEMPERATURES BELOW NORMAL FROM THE OHIO RIVER NORTHWARD ALL THE WAY THROUGH THE NORTHERN PLAINS.   MOST OF THE NORTHEAST ABOVE NORMAL FOR SOUTH FLORIDA AND  MUCH OF THE SOUTHWEST PRECIPITATION OVER THE NEXT 30 DAYS MID- ATLANTIC SOUTHERN APPALACHIANS TO THE NORTHEAST AND ALSO THE  NORTHWEST ABOVE NORMAL BELOW NORMAL FOR THE FOUR CORNERS REGION. TEXAS AND MOST OF FLORIDA TYNE. THANKS, MIKE. WELL, AS COLLEGE SENIORS PREPARE  FOR GRADUATION ONLY WEEKS AWAY,  WE'RE TAKING TEH SHOW ON TEH ROAD...AND HEADING BACK TO  COLLEGE TO PURDUE UNIVERSITY. THIS WEEK WE  SIT  DOWN WITH SOME OF HTE MOST RESPECTED AG  ECONOMITS IN THE COUNTRY. FROM THE ESCALATING  TRADE FEARS TO A POSSIBLE BULL MARKET BREWING  IN CORN, WE'LL COVER IT ALL WHEN WE COME BACK.  

ROUNDTABLE 1
WELCOME BACK TO US FARM REPORT. WELL WE'RE KICKING OFF  OUR MINI COLLEGE TOUR RIGHT HERE FROM PURDUE UNIVERSITY AND I  HAVE A GREAT GROUP OF ECONOMISTS HERE JUST SO HAPPENS THIS WEEK THAT THE LATEST AG ECONOMY BAROMETER CAME OUT PURDUE  UNIVERSITY TEAMS UP WITH THE CME GROUP TO RELEASE THAT  BAROMETER. AND WE ACTUALLY SAW JIM A SLIDE IN PRODUCER  SENTIMENTS. WHAT IS EATING INTO PRODUCERS OUTLOOKS RIGHT NOW.  WELL AS YOU POINTED OUT THE BAROMETER DID DIP JUST A BIT I THINK  ABOUT A FIVE POINT DROP COMPARED TO FEBRUARY. AND IF YOU LOOK AT T PEOPLE ARE A LITTLE MORE CONCERNED ABOUT CURRENT CONDITIONS.  THEY'RE A LITTLE MORE CONCERNED ABOUT FUTURE EXPECTATIONS. AND  WE HAVE SOME ADDITIONAL QUESTIONS ABOUT TRADE AND IT LOOKS LIKE  CONCERNS ABOUT AG TRADE ARE ONE OF THE BIG DRIVERS. I THINK ALMOST 50 PERCENT OF THE PEOPLE IN THE SURVEY INDICATED THEY  THOUGHT A POSSIBILITY OF A TRADE WAR WAS AT LEAST SOMEWHAT LIKELY.  THAT'S PRETTY NEGATIVE AND REALLY KIND OF A SHIFT FROM WHAT WE WERE LOOKING AT LAST YEAR. AND THAT SURVEY WAS TAKEN BEFORE THE  MOST RECENT ANNOUNCEMENT BY CHINA RIGHT TO TALK ABOUT WHEN  THIS WAS TAKEN. SO THE SURVEY WAS DONE IN THE THIRD WEEK OF MARCH. SO IT IS AFTER PRESIDENT TRUMP ANNOUNCED THAT THE U.S.  WAS GOING TO IMPOSE TARIFFS ON THE IMPORTS OF STEEL AND  ALUMINUM FROM CHINA. BUT IT WAS BEFORE CHINA'S ANNOUNCEMENT  ABOUT IMPOSING TARIFFS ON SOME KEY U.S. PRODUCTS INCLUDING  SOME PRODUCTS. YEAH A LOT OF AG PRODUCTS CHRIS WHEN YOU LOOK  AT THE STEEPEST TARIFFS IT'S ON U.S. PORK PRODUCTS A 25 PERCENT TARIFF. WHO EATS THAT COST.   WHEN YOU LOOK AT A TARIFF LIKE THAT. WELL OBVIOUSLY IT'S GOING  TO BE U.S. PORK PRODUCERS AND THE PORK INDUSTRY ARE THE ONES  THAT ARE REALLY GOING TO BE THE FOCUS OF THE LOSSES THAT WE SEE AGAIN WHAT HAPPENS IS CHINA'S GOING TO INCREASE THE COST OF  U.S. PORK OR THE PRICE OF U.S. PORK ESSENTIALLY 25 PERCENT IF IT  ENTERS INTO CHINA WHAT THAT MEANS IS OUR COMPETITORS LIKE THE  EUROPEANS AS WELL AS THE CANADIANS DON'T HAVE THAT TARIFF ON  THEM AND IT'S GOING TO MAKE US PORK TOO EXPENSIVE. SO PROBABLY WE'RE GOING TO LOSE ALMOST ALL OF THAT EXPORT BUSINESS TO CHINA.  AND WE'VE SEEN SOME OF THAT EXPORT BUSINESS GROW. WE KNOW  THAT CHINA PRODUCES A LOT OF THEIR OWN PORK PRODUCTS. WE LOOK AT PORT PRODUCTION CONTINUE TO CLIMB THERE BUT PERCENTAGE WISE HOW  BIG OF AN IMPACT WILL THAT HAVE JUST ON THE U.S. PORK INDUSTRY.  YOU THINK WELL OBVIOUSLY IT HAS AN IMPACT IN CHINA BUT IT ALSO HAS  A BIGGER AND MORE FOCUSED IMPACT HERE ON THE UNITED STATES. IT  TURNS OUT THAT CHINA THE IMPORTS FROM THE UNITED STATES ON PORK IS ONLY 1 PERCENT OF THEIR CONSUMPTION. SO THEY CAN EASILY  REPLACE THAT FROM OTHER SOURCES IN THE WORLD. AND WE MAY TALK  SOYBEANS LATER SOYBEANS ARE DIFFERENT. BUT ON PORK CHINA  DOESN'T HAVE STRONG IMPLICATIONS FROM LOSS OF U.S. PORK BACK IN  THE UNITED STATES. HOW DOES THAT AFFECT WE'D SAY IF WE LOST ALL  THAT BUSINESS IT'S ABOUT 2 PERCENT OF ALL THE PORK WE PRODUCED IN THE UNITED STATES. NOW IF WE LOST ALL THAT BUSINESS WE THINK THAT  WOULD LOWER HOME PRICES ABOUT SIX DOLLARS A HEAD.   NOW THERE'S A LITTLE BIT OF GOOD NEWS WE WANT TO FOLLOW UP  ON. AND THAT IS THAT THAT BY LOWERING PRICES IN THE UNITED STATES  WE'RE GOING TO BE ABLE TO SELL SOME MORE PORK HERE DOMESTICALLY.  AND IF EUROPE AND CANADA SHIPPED MORE TO CHINA WE MAY PICK UP SOME OF THAT EXPORT BUSINESS THAT DOESN'T COME FROM EUROPE  AND CANADA. SO THE BOTTOM LINE IS MAYBE THREE TO SIX DOLLARS A  HEAD. WHEN YOU MULTIPLY THAT ACROSS THE PORK INDUSTRY MAYBE  350 MILLION UP TO ABOUT DOUBLE THAT 700 MILLION DOLLARS. AND  THAT'S AN ANNUAL NUMBER. SO IT IS MEASURABLE. IT IS DOES HAVE AN  IMPACT AND IT REALLY HITS THE CENTRAL PART OF THE COUNTRY. WELL WE'LL  TALK A LITTLE BIT MORE ABOUT THAT THAT THE PROTEIN SECTOR BECAUSE  WE HAVE THIS PROTEIN OVERLOAD IN A LITTLE BIT BUT BEFORE WE DO THAT  MICHAEL YOU KNOW WHEN YOU LOOK AT THIS AG ECONOMY BAROMETER  WE SAW PRODUCER SENTIMENTS KIND OF TICK HIGHER AND THEN THIS PAST MONTH WE SAW IT RETRACT A LITTLE BIT. WHEN WAS THIS. THIS  SURVEY STARTED KIND WHAT ARE WE BASING THESE NUMBERS ON. THE  SURVEY STARTED IN OCTOBER 2015 AND THE BASE FOR THE ECONOMY BAROMETER IS OCTOBER 2015 THROUGH MARCH 2016. AND SO WHEN  YOU SEE AN INDEX ØRESUND INDEX WAS 135 THAT'S THAT'S 135  COMPARED TO A BASE NUMBER OF 100 AN INDEX 100 FROM OCTOBER  2015 TO MARCH 2016. WHAT DID THE SURVEY INDICATE THIS LATEST  SURVEY INDICATED ABOUT LARGE FARM INVESTMENTS.   WE ASK A QUESTION RELATED TO IS THIS A GOOD TIME TO INVEST  IN MACHINERY AND BUILDINGS THAT HAD BEEN RUNNING RIGHT AT ABOUT  60 PERCENT TO 62 PERCENT THOUGHT THIS WAS A BAD TIME TO INVEST IN  MACHINERY AND BUILDINGS THAT TICKED UP TO 68 PERCENT IN MARCH AND IN A LOT OF IT BECAUSE OF THIS UNCERTAINTY REGARDING TRADE.   WE NEED TO TAKE A QUICK BREAK BUT WHEN WE COME BACK  WHAT ELSE NEEDS TO HAPPEN FOR PRODUCER SENTIMENT'S TO TICK  HIGHER WELL WE COULD USE HIGHER PRICES RIGHT.  AND SO WHEN YOU LOOK AT THE ACREAGE WHEN YOU LOOK AT THE STOCKS YOU CHRIS WE'RE GOING TO ASK YOU ABOUT REALLY WHAT IS  THE LIKELIHOOD THAT WE COULD SEE HIGHER PRICES IN THE MONTHS TO  COME. SO WE NEED TO TAKE A QUICK BREAK. WE'LL HEAR FROM JOHN PHIPPS NEXT BUT WE'LL CONTINUE OUR MARKETING DISCUSSION LATER ON  U.S. FARM REPORT.  

JOHN’S WORLD
ACCORDING TO PURDUE UNIVERSITY, THE AVERAGE BREAK EVEN CROP PRICE FOR FARMERS HAS DROPPED  SLIGHTY THE PAST COUPLE YEARS. SOME OF THAT CAN  BE ATTRIBUTED TO SOFTENING FARMLAND RENTAL  RATES.  BUT WHAT'S A FAIR PRICE WHEN RENTING GROUND?  LET'S HEAD NOW TO JOHN PHIPPS' FARM.  IN A HELPFUL ARTICLE ON FARMDOCS, BRUCE SHERRICK AND GARY  SCHNITKEY PROVIDE SOME INTERESTING BACKGROUND FOR THE ETERNAL  ARGUMENT ABOUT FAIR RENTS FOR FARMLAND. THE INHERENT DIFFERENCES  IN OPINION BETWEEN OWNERS AND RENTERS WILL BE SPURRING ARTICLES LIKE THIS FOR THE FORESEEABLE FUTURE, BUT THE TRENDS IN RENTAL RATES  ARE GOOD GUIDELINES FOR BOTH TO PLAN THEIR FUTURES. DURING MY CAREER, CASH RENT, AS OPPOSED TO SHARE RENT, LIKE  50/50, HAS GRADUALLY BECOME THE ARRANGEMENT OF CHOICE FOR  FARMLAND. THIS HAS DISTINCT ADVANTAGES FOR OWNERS, LESS FOR RENTERS. CASH RENTS ARE TRANSPARENT AND EASILY COMPARED. THE  RENT DOES NOT DEPEND ON YIELDS AND PRICES EITHER, SO RISK IS  SHIFTED ALMOST ENTIRELY TO RENTERS. EVEN MORE UNSETTLING PERHAPS  FOR OPERATORS IS THE LOSS OF TENURE SECURITY THAT GENERALLY  ACCOMPANIED SHARE RENTS. EVERY RENTAL PERIOD, WHETHER ANNUALLY  OR MULTI-YEAR, THERE WAS A SIGNIFICANT CHANCE YOU COULD BE OUTBID  BY A COMPETITOR AND LOSE THE LAND. DECIDING WHAT NUMBER IS FAIR FOR BOTH PARTIES IS A FREE MARKET  EXERCISE, WHERE WILLING OWNERS AND RENTERS TRY TO FIND COMMON  GROUND. TO AID THIS PROCESS RULES OF THUMB SPRANG UP WHICH VARIED BY LOCATION AND CROP, BUT STILL SEEMED TO BE POPULAR WITH  PARTICIPANTS. FOR EXAMPLE, ONE FARMER TOLD ME A FAIR CASH RENT  WAS 40% OF GROSS INCOME. FOR A LONG TIME AROUND HERE, A RENT OF 4% OF THE LAND VALUE WAS HELD TO BE REASONABLE. BUT PERHAPS  THE BEST IS TO COMPARE RENTS TO YIELDS ON OTHER INVESTMENTS  CATEGORIZED AS SAFE. PRIME AMONG THESE IS FEDERAL DEBT LIKE THE 10-YEAR US TREASURY NOTE.  THE AUTHORS SHOWED THIS COMPARISON SINCE 1971. INDEED, RENTS  HAVE TRACKED BOND YIELDS PRETTY CLOSELY, EXCEPT FOR THE INTEREST  RATE SPIKE IN THE 80S. BUT IT LOOKS TO ME LIKE THE BENCHMARK NOW  IS NOT 4% BUT BARELY 3%. UNFORTUNATELY, IT DOESN'T MATTER WHAT  RULE OF THUMB OR TARGET YOU THINK IS CORRECT. WHAT MATTERS IS THE  ECONOMIC ENVIRONMENT IN WHICH YOU OPERATE. IF YOU HAVE  COMPETITORS WILLING TO PAY, SAY 5%, YOU HAVE A DIFFICULT SITUATION.  ONE THING I ALWAYS PONDER WHEN I SEE GRAPHS LIKE THIS IS, TO  REMEMBER THESE ARE STATE AVERAGES. IF I KNOW OF FARMERS PAYING  WAY MORE FOR RENT - AND I DO - IT MEANS THERE MUST BE ACRES OUT THERE GOING FOR A BARGAIN, FROM THE RENTER POINT OF VIEW. YOU WILL  NEVER READ OR HEAR ABOUT THOSE CONTRACTS, HOWEVER.  REGARDLESS, AS SIGNS POINT TOWARD HIGHER INTEREST RATES AHEAD  MORE THAN A FEW OF US WILL BE WATCHING RENTS NERVOUSLY. THANKS, JOHN. WHEN WE COME BACK, MACHINERY PETE SHOWS OFF A JOHN DEERE FROM THE 1950S. DON'T GO ANYWHERE.  

TRACTOR TALES
WELCOME BACK TO TRACTOR TALES FOLKS! WE'RE OFF TO THE EAST  COAST THIS WEEK FOR A CLASSIC JOHN DEERE D.  BUILT IN 1952, THIS D  CAME WITH PTO AND BREAKS, WRAPPING UP ONE OF THE LONGEST JOHN DEERE TRACTOR SERIES PRODUCED. WE'VE GOT A JOHN DEERE D AND THIS ONE IS 1952 D. IT'S ONE OF  THE LAST ONES THAT WAS BUILT BECAUSE IT'S GOT PTO AND BRAKES ON  THIS. I BOUGHT US A TRACTOR FROM A GENTLEMAN IN FRANKLIN KENTUCKY. THIS ONE COULD PASS TO BE A TRACTOR TO GO INTO THE TWO  CYLINDER CLUB SHOW THAT THEY HAD NOW WHERE EVERY YEAR HE HAD  AN A AND HE HAD THIS ONE AND HE DECIDED TO TAKE THE A TO THE SHOW AND LEAVE THIS ONE. AND I LOOKED AT THEM BOTH AND THEY  WERE RESTORED JUST LIKE THEIR GOOD TRACTORS. I BOUGHT HIS TRACTOR  BECAUSE OF THE CONDITION IT WAS AND HAVE NOT DONE ANY WORK TO IT  OTHER THAN RUN IT AND HAD BEEN RUNNING FOR A FEW YEARS. AS I SAID  BEFORE BECAUSE OF MY HEALTH JUST HAVEN'T HAVEN'T HAD AN OPPORTUNITY TO RUN IT BUT WITH A SHORT PERIOD OF TIME IT COULD BE  RUNNING. JAMES RIVER CAME BY HERE ABOUT TWO YEARS AGO AND I  GOT THIS TRACTOR STARTED AND DIDN'T TAKING ANYTHING TO START IT. NOTHING NEEDS TO BE DONE TO THIS TRACTOR MIGHT CLEAN THE POOINTS  AND THE PLUGS. BUT OTHER THAN THAT IT SHOULD START RUN ALRIGHT. IT WAS BOUGHT OFF OF A TRACTOR. THE TRACTOR SHED SITE. I REALLY DIDN'T  INQUIRE ABOUT A HISTORY ON THE TRACTOR WHEN I BOUGHT IT. LET IT STAY HERE IN A MUSEUM LET PEOPLE COME AND ASK QUESTIONS ABOUT IT  AND THEN IT'LL STAY HERE UNTIL EITHER MY SONS OR WHOEVER SELLS IT  BECAUSE I'M NOT PLANNING ON SELLING IT. MOST INTERESTING THING WHEN PEOPLE COME IN THEY ALWAYS  COMMENT THAT JOHN DEEFE, THIS WAS A LONGEST SERIES OF TRACTORS  THAT JOHN DEERE EVER BUILT IT WAS A D JOHN DEERE. THANKS SO MUCH, STILL  TO COME, TIT FOR TAT TRADE  DISPUTE WITH CHINA SEEMS TO BE GAINING GROUND.  BUT ECONOMISTS SAY WE AREN'T IN A TRADE WAR YET. THTA'S OUR FARM JOURNAL REPORT AFTER THE BREAK.  

FARM JOURNAL REPORT
THE ESCALTING TRADE DISPUTE STEALING HEADLINES ACROSS MAINSTREAM MEDIA THIS WEEK. WITH SOME  OUTLETS QUESTIONING IF ITS CAUSING WANING  SUPPORT FOR THE PRESIDENT IN RURAL AMERICA.  BUT DURING THE PRESIDENT'S BOLD MOVE FRIDAY TO  PROPOSE AN ADDITIONAL 100 BILLION DOLLARS WORTH  OF TARIFFS ON CHINA, HE SAID HE'S DOING SO TO  PROTECT FARMERS. THE PRESIDENT EVEN  INSTRUCTING AG SECRETARY SONNY PERDUE TO  CREATE A PLAN TO HELP HIM DO THAT. DEPSITE THE TENSION AND GROWING CONCERNS,  SOME ECONOMSITS SAY THIS STILL ISN'T A TRADE WAR.  AN ESCALATING TRADE DISPUTE BETWEEN THE U-S AND  CHINA IS TESTING THE NERVIES OF FARMERS AND  RANCHERS <I'M SCARED TO DEATH.... THEY'VE BEEN BUYING A LOT OF BEANS AND  THAT HELPS, SO I'M VERY CONCERNED ABOUT THAT. > < "WE'RE PRETTY CONCERNED BECAUSE WE'RE SUCH TREMENDOU  PRODUCERS IN TEH UNITED STATES. THE AMERICAN FARMER AND RANCHER  HAS DONE SUCH AN UNBELIEVEABLE JOB AT PRODUCING FOOD FOR NOT ONLY US BUT THE WORLD, THAT WE REALLY COUNT ON EXPORTS AND THE  BEEF INDUSTRY> JUST THIS WEEK, THE SCUFFLE BETWEEN TEH TWO  COUNTRIES HEATED UP.  IN RESPONSE TO PRESIDEN'T TRUMP'S LATEST LIST OF  50 BILLION DOLLARS WORTH OF CHINESE IMPROTS THE  ADMINSTRATION PLAN TO TARGET, CHINA FIRING BACK  AT THE U-S WITH A NEW ROUND OF PROPOSED TARIFFS, TOTALING 50-BILLION DOLLARS.IN TEH CROSS FIRE ARE  106 PRODUCTS IN TOTAL. THAT INCLUDES MAJOR AG COMMODITIES LIKE  SOYBEANS, SORGHUM, CORN, COTTON, WHEAT, BEEF  AND BEEF PRODUCTS, CRABNERRIES, ORANGE JUICE  AND TOBACCO. AMERICAN FARM BUREAU PRESIDENT ZIPPY DUVALL RELEASING A STATEMENT THIS WEEK SAYING , QUOTE,  THIS HAS TO STOP.  THE SHEER VOLUME OF PRODUCT EXPORTED TO CHINA  EACH YEAR IS ADDING TO THE TENSION, AS CHINA  BECAME THE TOP BUYER OF U-S AG EXPORTS LAST  YEAR.  CHINA RANKS FIRST IN BUYING BOTH U-S SOYBEANS  AND SORGHUM,  HTE NUMBER 2 BUYER OF U-S COTTON.  AND RANKS NUMBER 4 FOR WHEAT EXPORTS.  DURING AG SECRETARY SUNNY PERDUE'S "BACK TO  OUR ROOTS' R-V TOUR THIS WEEK, HE TRIED TO EASE  AG'S CONCERNS, WHILE STANDING BY THE PRESIDEN'T  FAIR TRADE MANTRA.  < "WELL I THINK THERE'S CAUSE FOR ANXIETY OBVIOUSLY ADMINISTRATION IS GOING TO CONTINUE TO TRY AND NEGOTIATE WITH CHINA TO RELIEVE US  OF THEIR UNFAIR TRADE PRACTICES. I'VE HAD A PERSONAL CONVERSATION  WITH THE PRESIDENT AND HE'S CONVINCED NOT TO LET AGRICULTURE BEAR THE BRUNT OF ANY KIND OF RETALIATORY MEASURES. ">   TRYING TO TAME FEARS ON WALL STREET, THE  PRESIDENT'S BRAND NEW NATIONAL ECONOMIC  COUNCIL DIRECTOR LARRY KUDLOW SAID DURING AN  INTERVIEW ON "FOX BUSINESS" THAT "U-S PROPOSED TARIFFS ON CHINESE IMPORTS MIGHT NOT EVEN GO  INTO EFFECT." AND IT'S THAT KIND OF RHETORIC EASING SOME FEARS  OF A POSSIBLE TRADE WAR.  <I DON'T HINK WE CAN CALL IT A TRADE WAR YET B/C ALL THE TARIFFS THAT ARE ON THE TABLE, THE BIG ONES, THE 301 TARIFFS. THEY'RE STILL IN THE  PROPOSAL PHASE.WE'RE NOT IN A TRADE WAR, WE'RE AS CLOSE AS WE'VE  BEEN IN A LONGTIME, BUT WE'RE NOT IN A TRADE WAR> ECONOMIST MATT ROBERTS SAYS THE PORK TARIFF  WAS IN RESPONE TO STEEL AND ALUMNINUM TARIFFS,  THAT ALREADY WENT INTO AFFECT. HOWEVER, THIS  LATEST ROUND OF PROPOSED TAXES WON'T BE PUT  INTO PLACE IMMEDIATELY < "THOSE SETS OF TARIFFS THAT THE UNITED STATES HAS IMPOSED OF 50  BILLION DOLLARS, THOSE CAN'T GO INTO EFFECT BEORE MID-MAY AT THE EARLIERST, AT LEAST 6 WEEKS OUT. . IN OTHERWORDS, THIS IS A MUTUAL  ASSURED DESTRUCTION KIND OF MOVE."> <IF WE GET TO THE MIDDLE OF MAY, AND WE'VE GOT NO RESOLUTION ON  THIS, THEN WE'RE GOING TO BE CALLING IT A TRADE WARBUT WE HAVE  TIME . POINT. AND IF THAT'S THE CASE, COMMODITIES LIKE SOYBEANS HAVE ROOM TO RECOVER FROM THE STEEP  PRICE LOSSES COMMODITIES SAW THIS WEEK. . <WE COULD SEE A REBOUDN THAT ACTUALLY ENDS UP AT A HIGHER  AND TEH REASON IS A LOT OF THESE TRADE TENSION S WERE ALREADY PRICED  IN TO THE SOYBEAN MARKET. WE'VE SEEN WORRIES IN THE  MARKET AND  SO THAT'S ALREADY WEIGHED ON PRICES> BUT IT'S THE POSSIBLE DAMAGE THAT CAN BE DONE IN THE INTERIM THAT'S SPARKING SOME FEARS. <"TRADE BENEFITS PEOPLE. GAINS FROM TRADE IS THE BASIS FOR MOST  ECONOMIC PROCESS. WE'LL FIGURE IT OUT EVENTUALLY AND GO BACK. THE  QUESTION REALLY IS HOW LONG DOES IT LAST AND HOW MUCH COLLATERAL  DAMAGE IS THERE ALONG THE WAY?"> AND ECONOMISTS SAY IT CAN TAKE YEARS TO REBUILD ANY DAMAGE DONE. <WE LEARNED THAT FROM THE CASE OF MAD COW DISEASE WHICH IN  THE MID 2000S 2008 LED TO JAPAN CUTTING ITS IMPORTS OF BEFORE  AUSTRALIA STEPPED IN AND TOOK A LOT OF MARKET SHARE AWAY FROM  US AND I THINK THAT'S SOMETHING THAT WE WOULD NEED TO BE  CONCERNED ABOUT0> THE TARIFFS ARE JUST A PROPOSAL AT THIS POINT.  AND NOW THE QUESTION IS, CAN CHINA SOURCE  ENOUGH SOYBEANS WITHOUT COMING TO THE US? <THEY'RE POISED TO BUY 100 MILLION METRIC TONS THIS NEXT  MARKETING YEAR. IF THEY GO WITH THAT NUMBER, THE ONLY WAY IN MY  OPINION THEY CAN GET THAT NUMBER OUT OF SOUTH AMERICA IS FOR SOUTH AMERICA TO IMPORT BEANS FROM THE U.S.,"> 34 BRAILIAN SOYBEAN PRICES ARE SPIKING ON THE NEWS, MAKING U-S PRICES THE CHEAPEST IN TEH WORLD. AND  PAYNE SAYS THAT COULD INCENTIVISE OTHER COUNTRIES TO BUY FROM THE U.S.  THERE ISN'T ENOUGH BUSINESS OUT THERE. EUROPE AND MEXICO  AND MEXICO COMBINED WOULDN'T EVEN HAVE WHAT CHINA HAS TO  OFFER SOME ANALYSTS SAY THIS COULD BE A PLOY FOR  FARMERS TO BUY CHEAPER BEANS. AFTER TEH  ANNOUNCED TARIFFS, USDA REPORTED A PRIVATE  SALE OF 129 THOUSAND METRIC TONS. AS WELL AS A SALE OF 325 THOUSAND METRIC TONS TO AN UNKNOWN  DESTINATION, WHICH FLORY SAYS IS MORE THAN  LIKELY CHINA.  ROBERTS SAYS IT'S THAT STATEGY TO BUY CHEAP  BEANS AND FEED THAT U-S FEED BUYERS SHOULD BE  USING TOO.  <IF I'M A FEEDER I'M GOING TO USE THIS AS A PRICING OPPORTNITY. IF  THESE DO GO INTO EFFECT, RPICES WILL GO DOWN, BUT I DON'T THINK THEY  WILL, I DON'T THINK THEY WILL GO INTO EFFECT, SO SEE THIS AS AN GREAT  OPPPORUTNITY TO CATCH UP ON YOUR FEED PURCHASES, WE KNOW YOUR MARGINS HAV EBENE AWFUL, NOW YOU'VE GOT THIS LITTLE SALE. WE ARE  SEEING CHINA USING HTIS TO PURCHASE, THERE'S NO REASON YOU  SHOULND'T DO THE SAME> CHERRY FARMERS ARE ALSO ON EDGE AS THAT SECTOR WAS HIT BY TARIFFS AT THE SAME TIME PORK  WAS. THAT'S BECAUSE CHINA IS THE TOP EXPORT MARKET  FOR WASHINGTON CHERRIES, BUYING NEARLY THREE  MILLION CASES EACH YEAR. THAT'S A 127 MILLION  DOLLAR PRICE TAG. DEPENDING ON THE SEASON, CHINESE CONSUMERS PAY BETWEEN SEVEN-TO-TEN DOLLARS A POUND.  WITH THE INCREASED DUTY, NORTHWEST CHERRY  GROWERS SAY  THE TARIFFS COULD HIKE THOSE  PRICES TO TWELVE DOLLARS A POUND. AND THEY FEAR THAT WILL FORCE CHINESE  CUSTOMERS MAY LOOK FOR OTHER OPTIONS. 

TEASE
UP NEXT, WE HEAD BACK TO PURDUE UNIVERSITY WHERE WE NOT ONLY TALK TRADE, BUT WHY EVEN THE  SLIGHTEST WEATHER SCARE THIS SUMMER COULD  CREATE A BULL MARKET. THAT'S NEXT.  

ROUNDTABLE 2
WELCOME BACK TO U.S. FARM REPORT OR ON THE ROAD AT THIS  TIME FROM PURDUE UNIVERSITY A GREAT GROUP OF ECONOMISTS. WE  SPENT THE LAST MARKETING ROUNDTABLE TALKING A LOT ABOUT THE AG ECONOMY BAROMETER. AND WE KNOW THAT TRADE IS REALLY WEIGHING  ON PRODUCERS MINDS RIGHT NOW CHRIS. BUT YOU KNOW LAST WEEK WE  SAW USDA COME OUT WITH THEIR ACREAGE ESTIMATE LOWER ACRES ON BOTH CORN AND SOYBEANS THAT REALLY CAUGHT THE MARKET BY  SURPRISE AND IN RESPONSE WE SAW HIGHER PRICES. BUT HOW LONG  CAN SOMETHING LIKE THAT LAST HOW LONG CAN THAT DRIVE PRICES HIGHER DO YOU THINK. WELL I THINK THERE COULD BE SOME SUSTAINING  POWER. AND AGAIN WHEN WE LOOKED AT THAT ACREAGE NUMBER HOW  DID YOU GET BOTH CORN AND SOYBEANS TO GO DOWN. THE ANSWER  WAS THERE WERE SOME MORE PROFITABLE CROPS COTTON WAS MORE  PROFITABLE IN THE SOUTH. WE SHIFTED ACREAGE OUT OF CORN AND  BEANS AND RICE WAS MORE PROFITABLE. RICE ISN'T A BIG ACREAGE CROP BUT WE DID SEE SHIFTING THERE. AND THEN WHEN YOU LOOK AT  THE WEATHER PROBLEMS IN THE CENTRAL AND SOUTHERN PLAINS  OBVIOUSLY WHEAT PRICES HAVE COME UP BEEN MORE ATTRACTIVE AND  ACREAGE IN THE UPPER GREAT PLAINS SHIFTED OUT OF CORN AND  SOYBEANS INTO SPRING WHEAT. SO THAT'S ENCOURAGING. IT'S BEEN  YEARS SINCE WE'VE SEEN CROPS THAT WERE DRAWING DUE TO PROFITABILITY. WELL AND WHEN YOU LOOK AT THAT LARGE SHIFT IN CORN WE  COULD SEE AS MUCH AS 2 MILLION ACRES LESS OF CORN THIS YEAR. IT  JUST SEEMS LIKE WITH THE DEMAND THAT'S BEEN AMAZING. I MEAN IT  HAS BEEN SO IMPRESSIVE YOU'VE GOT THAT STRONG DEMAND.   YOU HAVE A LOWER ACREAGE THAT ANY LITTLE BIT OF WEATHER  SCARE ANY TYPE OF SCARE COULD REALLY EXPLODE EXPLODE THIS MARKET. WELL THAT'S RIGHT. AND AGAIN AS WE LOOK AT THE BALANCE  SHEET WE LOOK AT THE SUPPLY AND THE USAGE OF GRAIN. WHAT WE'RE  SEEING ON CORN IS ACTUALLY DRAWING DOWN THOSE CARRYOVERSS. TWO POINT TWO BILLION CERTAINLY IS SURPLUS NUMBER BUT WE'RE LOOKING AT  MAYBE AS MUCH AS 600 MILLION LESS BUSHELS OF PRODUCTION LOWER  ACREAGE AND MORE NORMAL YIELDS. IN 2018 WE COULD DROP THAT  CARRY OUT DOWN TO ONE POINT FIVE ONE POINT SIX WITH NORMAL  WEATHER. THEN IF YOU PUT A WEATHER SCARE ON THERE YOU'VE GOT A REAL  REASON FOR A BULL MARKET. SO WE COULD SEE HIGHER PRICES EVEN  WITH NORMAL YIELDS AND WE'RE EXPECTING HIGHER PRICES EVEN WITH NORMAL YIELDS. SO WHEN YOU LOOK AT THIS UNCERTAINTY AROUND TRADE  YOU LOOK AT THE UNCERTAINTY AROUND PRICES MICHAEL. I MEAN YOU  KNOW IT IS NOW A GOOD TIME TO GROW RIGHT NOW WE'RE STILL FACED SOME TIGHT MARGINS AND SO THAT'S CERTAINLY A FACTOR WHEN YOU'RE  LOOKING AT GROWTH BUT MARGINS AREN'T AS TIGHT AS THEY'VE BEEN  SINCE 2014 2014 TO 2017 OR EVEN TIGHTER MARGIN THAN WHAT WE'RE EXPECTING IN 2018. SO AND SO WE LOOK AT 2018 THE PROSPECTS FOR  NET RETURNS THEN YOU LOOK FURTHER OUT IT LOOKS LIKE THIS MIGHT BE A  TIME TO THINK ABOUT GROWING OPERATION AND WE'VE DONE SOME AND WE'VE DONE SOME QUESTIONS RELATED TO FORUM GROWTH IN THE AG  ECONOMY BAROMETER SURVEY AND WHAT WE FOUND IS IT'S ALL OVER  THE BOARD.  THERE WAS A BOMB WE DID WE DID A QUESTION IN FEBRUARY  ON FORUM GROWTH AND ABOUT 40 PERCENT OF THE FARMS WERE NOT  EXPECTING TO GROW OR THEY WERE EXPECTING RETIRE. THE OTHER 60  PERCENT WERE GOING TO GROW AT A FAIRLY SMALL RATE OR FAIRLY LARGE  RATE DEPENDING ON THEIR CONDITIONS AND SO WHEN FORMERS ARE LOOKING AT FORAM GROWTH OR LOOKING AT THINGS LIKE GARNERING  ECONOMIES OF SCALE CAN REDUCE MY PER UNIT COST PARTICULARLY ON  MACHINERY AND EQUIPMENT. THEY'RE ALSO LOOKING AT BRINGING A FAMILY MEMBER BACK THAT'S A VERY COMMON COMMON REASON FOR  GROWING AND SO THERE'S JUST A LOT OF GOOD REASONS WHY FARMERS  MIGHT BE THINKING ABOUT GROWING IN 2018. JIM WHEN YOU DO THE KIND OF YOUR BAROMETER I KNOW YOU TAKE A LOOK AT CURRENT  CONDITIONS AND FUTURE CONDITIONS HAVE YOU SEEN THAT SHIFT MUCH I  MEAN WE'VE BEEN IN THIS RECESSION FOR SO LONG. YOU WOULD THINK THAT YOU WOULD SAY THAT THE FUTURE OUTLOOKS WOULD START TO TICK  HIGHER. HAVE YOU SEEN MUCH SHIFT IN THAT WE'VE REALLY SEEN A  COUPLE OF SHIFTS SO FOLLOWING THE 2016 ELECTION. WE SAW A BIG JUMP IN THE BAROMETER AND A LOT OF THAT WAS DRIVEN BY AN  IMPROVEMENT IN FUTURE EXPECTATIONS. BUT THEN WHEN YOU LOOK AT IT  FROM MORE OF A LONG TERM PERSPECTIVE WE REALLY SAW WAS THAT CURRENT CONDITION INDEX BOTTOMED OUT BEFORE THE ELECTION REALLY  ABOUT MIDSUMMER OF 16 AND A PRETTY STEADY IMPROVEMENT IN THAT  CURRENT CONDITION INDEX EVER SINCE THEN. DOES IT GO UP EVERY SINGLE MONTH. BUT IT'S BEEN A PRETTY STRONG UPTREND AND I THINK  THAT ALLUDES A LITTLE BIT TO WHAT MICHAEL IS TALKING ABOUT WITH  RESPECT TO GROWTH. THERE IS AN OPPORTUNITY OUT THERE FOR SOME PEOPLE THAT HAVE MADE SOME ADJUSTMENTS IN THEIR PRODUCTION  COST. THEY'VE MADE SOME ADJUSTMENTS IN THEIR OPERATION AND A  VARIETY OF DIFFERENT WAYS AND THEY'VE REALLY BEEN ABLE TO  ACCOMMODATE THE PRICE LEVELS. WE'RE LOOKING AT AND ACTUALLY OPERATE PROFITABLY. CHRIS RACLETTE TALKING ABOUT PROFITABILITY. YOU  KNOW YOU LOOK AT THE PROTEIN OVERLOAD RIGHT NOW WE JUST HAVE SO  MUCH PROTEIN ON OUR HANDS AND WHEN YOU LOOK AT POSSIBLE TRADE WAR WITH CHINA THE IMPACT ON ON ON PORK EXPORTS. DOES THAT  WORRY YOU IN 2018. WELL THERE'S NO QUESTION WE'RE GOING TO  BASICALLY BE BACK TO FULL PRODUCTION AFTER THOSE HIGH GRAIN PRICES FIVE 6 YEARS AGO REALLY REDUCED OUR OVERALL PER CAPITA SUPPLIES OF  MEATS. WE'RE BACK TO FULL PRODUCTION. THAT NUMBER IS VERY HIGH  FOR THIS YEAR AND WE'VE HAD STRONG DEMAND. AND SO WE THOUGHT IT WAS GOING TO BE A BALANCE THIS YEAR IS STRONG DEMAND GOING TO  KEEP PRICES UP. WE'RE ALL BIG SUPPLIES PULLING DOWN THIS TRADE  ISSUE MOST RECENTLY AND SAID WE'RE GOING TO GO DOWN. ALL RIGHT.  THANK YOU ALL FOR JOINING ME THIS WEEKEND. WE APPRECIATE IT. YOU  CAN HEAR MUCH MORE OF THE DISCUSSION ON AG WEB.COM AS WE  GET INTO MORE AND MARKETS NOW. BUT WE NEED TO TAKE A QUICK  BREAK AND THEN WE'LL BE BACK WITH MORE U.S. FARM REPORT.  

AMERICAN COUNTRYSIDE
IT'S A LARGE-SCALE EXPERIMENT THAT TRIES TO REPLICATE THE EARTH.  AND AS ANDREW MCCREA TELLS US, IT'S PROVING TO SCIENTISTS THAT WE MAY JUST BE AT THE TIP OF THE  ICEBERG WHEN IT COMES TO OUR KNOWLEDGE ABOUT  THE WORLD.  OUR FOCUS HAS BEEN THE FATE OF WATER IN SEMI ARID ENVIRONMENTS  AND LOOK AT THAT MORE SPECIFICALLY  PERHAPS YOU KNOW IT FROM PICTURES, OR EVEN A PERSONAL VISIT. OR  THERE WAS THAT INFAMOUS MOVIE INVOLVING POLLY SHORE A COUPLE OF DECADES AGO.  IT'S CALLED BIOSPHERE 2 AND IT REMAINS ONE OF THE WORLD'S MOST AMAZING STRUCTURES. (SO BIOSPHERE 2 COVERS A LITTLE OVER THREE ACRES, 7.2 MILLION CUBIC  FEET, IT HAS 6500 PANES OF GLASS HERE YOU CAN FIND THE RAINFORESTS…THE OCEANS…AND OTHER  ENVIRONMENTS.  THE ORIGINAL IDEA WAS TO STUDY EARTH'S BIOMES IN  THIS SEALED SPACE.  PEOPLE WOULD BE PLACED INSIDE TO TEST THEIR  ABILITY TO GROW FOOD AND SURVIVE FOR A LONG PERIOD OF TIME WITHOUT RESOURCES FROM THE OUTSIDE WORLD. (EIGHT PEOPLE WERE SEALED INSIDE IN SEPTEMBER OF 1991.  THEY SUCCESSFULLY STAYED INSIDE FOR THAT TWO YEARS.  NOW THEY HAD SOME CHALLENGES AND I THINK MANY OF US HEARD ABOUT THOSE  CHALLENGES AND ONE OF THE BIG ONES WAS DEALING WITH SOILS.  SO  THEY CREATED VERY RICH SOILS TO SUPPORT THE INTENSIVE GROWTH IN  THEIR AGRICULTURAL SPACE BUT ALSO THEIR RAINFOREST THE RESPIRATION OF MICROORGANISMS IN THE SOIL OUTPACED PLANT  PHOTOSYNTHESIS, CREATING A DECLINE IN THE AMOUNT OF OXYGEN  WITHIN BIOSPHERE, REQUIRING OXYGEN TO BE PUMPED INSIDE   BUT THE EXPERIMENT SHOULD NOT BE VIEWED AS A FAILURE SAYS ADAMS. (PROBABLY THE MOST SIGNIFICANT LESSON IN MY OPINION IS HOW LITTLE  WE TRULY UNDERSTAND ABOUT EARTH SYSTMS AND HOW THEY  INTERRELATED AND HOW THEY INTERACT…IT IS SO TIGHTLY BUILT THAT IT LOSES LESS AIR THAN THE INTERNATIONAL  SPACE STATION.  SUCH A FACILITY HAD GREAT VALUE TO THE SCIENTIFIC  COMMUNITY EVEN IF PEOPLE WOULD NO LONGER BE LIVING INSIDE FOR LONG PERIODS OF TIME.  ONE MAJOR, LONG-TERM EXPERIMENT NOW  BEING CONDUCTED IS THE LANDSCAPE EVOLUTION OBSERVATORY, OR LEO.  IT IS COMPRISED OF THREE MASSIVE SLOPES OF VOLCANIC  MATERIAL.  THE RAISED BEDS ARE ON SLOPING PLATFORMS.  THE  AMOUNT OF WATER APPLIED TO THE SURFACE CAN BE MEASURED AS WELL  AS THE VOLUME OF WATER THAT PENETRATES THE SURFACE.  (NOW WE ARE LOOKING AT HOW THAT SYSTEM CHANGES AND ANSWERING  THAT FUNDAMENTAL QUESTION, 'WHEN IT RAINS IN THE MOUNTAINS HOW  MUCH ENDS UP DOWNSTREAM FOR YOU AND I TO USE AND HOW IS THAT QUALITY IMPACTED   TODAY BIOSPHERE 2 IS OWNED AND OPERATED BY THE UNIVERSITY OF ARIZONA. A NUMBER OF EXPERIMENTS ARE TAKING PLACE HERE AT ANY  ONE TIME AND UNLIKE MANY SCIENTIFIC LABORATORIES, THIS ONE IS  OPEN FOR PEOPLE TO SEE. (FOR MANY OF US WE NEVER HAVE THAT OPPORTUNITY TO WALK DOWN  THE HALLWAYS OF A UNIVERSITY OR AN AGRICULTURAL RESEARCH CENTER  HERE YOU CAN DO THAT AND YOU CAN SEE FIRSTHAND WHAT WE'RE  DOING, THE RELEVANCY TO YOUR EVERYDAY LIFE ONE OF THE MOST OFTEN ASKED QUESTIONS BY VISITORS HERE TO  BIOSPHERE 2 IS, WHAT HAPPENED TO BIOSPHERE 1? WELL BIOSPHERE  1 IS THE EARTH ITSELF AND THE RESEARCH TAKING PLACE INSIDE HERE IS HELPING US BETTER UNDERSTAND HOW TO CONSERVE RESOURCES AND  GROW FOOD FOR YEARS TO COME. TRAVELING THE COUNTRYSIDE NEAR  ORICAL ARIZONA I'M ANDREW MCCREA .  CAN YOU IMAGINE LIVING THERE FOR A YEAR? THANKS, ANDREW. YOU CAN HEAR AND SEE MROE OF ANDREW'S TRAVELS  BY VISITING AMERICAN COUNTRYSIDE DOT COM.  WHEN WE COME BACK, JOHN PHIPPS CONTINUES OUR  CONVERSATION ABOUT TRADE.

CUSTOMER SUPPORT
WITH ALL THE TRADE AND TARIFF NEWS THIS WEEK, IT'S  ONLY FITTING JOHN ANSWERS A VIEWER'S QUESTION  REGARDING THOSE SAME TOPICS. AND THAT'S THIS  WEEK'S CUSTOMER SUPPORT.  I'VE RECEIVED SEVERAL STRONG RESPONSES TO MY COMMENTARY ON  TRADE AND TARIFFS. MANY ARE LENGTHY SO I WILL APPEND THEM ON OUR  WEBSITE. FROM ROGER WHITE IN ARGYLE, TX: "AFTER YEARS, EVEN DECADES, OF THE U.S. BEING RIPPED OFF BY ITS  TRADING PARTNERS, WE FINALLY HAVE A PRESIDENT WHO HAS THE GUTS TO  DO SOMETHING ABOUT THE PROBLEM.  ADDRESSING THE PROBLEM MAY  CAUSE SOME TEMPORARY DISCOMFORT, BUT I THINK MOST, IF NOT ALL, OF  THE U.S. WILL BE FAR BETTER OFF AT THE END OF THE PROCESS." FROM LONGTIME VIEWER GREGORY CLIFFORD IN ST. FRANCIS, MN: "YEAH, I GET THAT YOU'D JUMP UP AND DOWN LIKE RUMPELSTILTSKIN TO  PRESERVE THE INSTITUTION OF COMMODITY GRAIN FARMING ON YOUR SHOW. THAT'S YOUR AUDIENCE AND FAMILY. AND YOU DON'T GIVE A COB  ABOUT TENT CITY "HOOVERVILLES" AND PARK BENCH RESIDENTS, OR  INDUSTRIAL FAILURE. BUT I DO. UNLESS THE WORLD STOPS EATING TOFU  AND SWITCHES TO KELP, YOU'VE GOT NOTHING BUT YOUR OWN INDUSTRY  'PARTNERS' TO WORRY ABOUT. THE SAME NUMBER OF PEOPLE WILL EAT, NO MATTER WHERE IT'S PRODUCED. THE POINT REMAINS, AMERICANS  HAVE TO BUILD AND BUY OUR OWN STUFF. PERIOD. " AND THIS FROM ROBERT PENDERGRASS IN WEST PLAINS, MISSOURI: "THE SHOW TODAY AS WELL AS OTHER SHOWS THAT YOU BRING UP THE  TOPIC OF NAFTA YOU TAKE A STANCE AGAINST THE REPEAL OF SUCH  AND ANNOUNCE HOW BAD IT WOULD BE AND THE SKY IS FALLING. I KNOW FIRST HAND WHAT NAFTA DID FOR ME AND MY HOME TOWN. [MY] FACTORY  USE TO EMPLOY AROUND 700 PEOPLE AND NOW BARELY 200. JOBS  WENT TO MEXICO LITERALLY ACROSS THE BORDER. WHEN NAFTA WAS UP FOR A VOTE I THOUGHT THERE IS NO WAY IT WILL PASS. IT HAS DONE  EXACTLY WHAT I THOUGHT IT WOULD, HELP THOSE IN CHARGE AND HURT  THE ONES ON THE BOTTOM." I WILL CONTINUE TO TRY TO ANSWER THESE CRITICISMS ON FUTURE SHOWS,  BUT IS IMPORTANT FOR FARMERS WHO HAVE BENEFITED FROM WIDER TRADE  TO UNDERSTAND SUPPORTING NAFTA AND OTHER TRADE AGREEMENTS IS  NOT ENOUGH. WE NEED TO BE ABLE TO ANSWER COMPLAINTS LIKE THESE  FROM AMERICANS WHOSE LIVES WERE IMPACTED NEGATIVELY. IT'S LIKE SOMEONE SAID ABOUT THE FLOOD OF 1993: ONE PERCENT OF THE  FARMERS WERE AFFECTED BUT THEY WERE AFFECTED 100%. IT IS THIS PARTICULAR ASPECT OF THE TRADE THAT WE HAVE NEGLECTED:  WIDESPREAD BENEFITS WITH CONCENTRATED INJURIES. I WILL SUGGEST  WAYS OUR ECONOMIC POLICY CAN MANAGE SUCH DISLOCATIONS BETTER.  BUT FARMERS AND FARM ORGANIZATIONS WHO ARE NOW DEPENDENT ON  TRADE NEED TO STOP LOOKING AT THE FLOOR WHEN FELLOW CITIZENS CONFRONT US WITH THE PRICE THEY PAID FOR OUR ECONOMIC GAINS.  WHAT WOULD YOU SAY TO THEM? THANKS, JOHN.  IF YOU HAVE QUESTIONS OR COMMNETS, EMAIL JOHN  AT MAILBAG AT U-S FARM REPORT DOT COM. 

TEASE
WHEN WE COME BACK, WE HAVE SOME VIEWER PHOTOS... AND MORE SNOW... THAT'S NEXT. 

FROM THE FARM
WELCOME BACK. TIME NOW FOR SOME VIEWER PHOTOS. WELL  DAVE SLUNG CAPTURED THIS PRETTY PICTURE AND BENTON COUNTY  INDIANA. HE SAYS THAT'S BOTH OLD AND NEW WIND ENERGY. IN ONE PHOTO. I LOVE THAT. AND THAT'S CLOSE TO WHERE YOU WENT. I IN FACT  PLAYED BEST MOMENT IN CALGARY AGAINST BENTON CENTRAL BUT NONE OF THOSE BIG WINGE WINDMILLS WERE THERE AT THAT TIME. BUT THE OLD  ONE WAS RIGHT. YES ABSOLUTELY. GREG AND KIM SCHOOK SAYS IT'S  TIME FOR MOTHER NATURE TO WARM THINGS UP. AMEN. YES THEY ARE LOOKING FORWARD TO SPRING. SHE TOOK THIS DURING A SPRING STORM  NEAR THEIR HOME IN VERMONTVILLE MICHIGAN. SHE SAYS THEY ARE  DEFINITELY LOOKING FORWARD TO WARMER WEATHER AS MOST OF US  AREANY BIG WEATHER MAKERS THIS WEEK YOU'RE KEEPING AN EYE ON  A BIG STORM COMING OUT OF THE WEST OVER THIS WEEKEND.  SO WE'LL SEE HOW THAT TRANSLATES MORE SNOW EAST PROBABLY  FOR PLACES YES. ALL RIGHT YOU DON'T HAVE TO DO A QUICK CHECK OF THE  WEATHER UNTIL WE HAVE NO MORE SNOW. ALL RIGHT IF YOU HAVE A  PICTURE OF VIDEO YOU WOULD LIKE TO SEND AND YOU CAN DO THAT TO  THE ADDRESS ON THE SCREEN. 

CLOSE
AND FROM ALL OF US US FARM REPORTER  MIKE HOFFMAN AND I'M TIME WORKING THANK YOU FOR WATCHING. BE  SURE TO JOIN US AGAIN RIGHT HERE NEXT WEEK AS WE WORK TO BUILD ON  OUR TRADITION. HAVE A GREAT WEEKEND EVERYONE.   

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