USFR Weekly Recap - January 13-14, 2018

January 13, 2018 03:30 AM
 
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TODAY ON U.S. FARM REPORT
JANUARY 13-14, 2018

HEADLINES

WELCOME TO U.S. FARM REPORT THIS WEEKEND. I'M  TYNE MORGAN, AND HERE'S WHAT'S IN STORE OVER  THE NEXT 60 MINUTES.  THE PRESIDENT BRINGING THE AMERICAN FARM  BUREAU CROWD TO THEIR FEET THIS WEEK..  <ON NAFTA, I AM WORKING VERY HARD TO GET A BETTER DEAL FOR OUR COUNTRY AND FOR OUR FARMERS AND FOR OUR MANUFACTUREERS.> BUT NOW MORE CONFUSION AS CONCERNS HEIGHTEN  OVER THE POSSIBILITY THE  PRESIDENT WITH ACTUALLY  WITHDRAW FROM THE DEAL.  UNCERTAINTY OVER TRADE EXITST, WHILE REALITY FOR  FARMERS TODAY IS A BLEAK FINANCIAL FORECAST. <WE'RE IN OUR FOURTH YEAR OF DOWNWARD ADJUSTMENT. > HOW LONG COULD THE DOWNTURN LAST? THAT'S OUR  FARM JOURNAL REPORT.  AND IN JOHN'S WORLD... <IT’S PLANNING SEASON.><U.S. FARM REPORT - BROUGHT TO YOU BY THE DEPENDABLE, LONG LASTING, CHEVY SILVERADO.>

USDA JANUARY REPORTS
NOW FOR THE NEWS, THE U-S DEPARTMENT OF  AGRICULTURE'S CROP REPORTS MAKING WAVES THIS CROP SEASON, WITH ANTICIPATION HIGH FOR ANOTHER  BIG MARKET MOVER WITH THE JANUARY REPORT JUST  RELEASED FRIDAY. BUT INITITALLY AFTER THE REPORT HIT, THERE WEREN'T ANY BIG MARKET MOVES EXPECT FOR WHEAT, WHICH FELL A DIME. BUT LOOKING AT USDA'S ANNUAL CROP PRODUCTION NUMBERS, USDA RAISED CORN YIELD OF AGAIN, WITH THE NATIONAL AVERAGE CORN YIELD  AT A RECORD 176 POINT 6 BUSHELS PER ACRE. THAT'S MORE THAN A BUSHEL ABOVE THE LAST REPORT. USDA DID TRIM THE NATIONAL SOYBEAN YIELD, TO 49 POINT 1 BUSHELS PER ACRE. LOOKING AT OVERALL PRODUCTION, WITH THE BUMP IN YIELD, USDA PEGS TOTAL PRODUCTION AT 14 POINT 6 BILLION BUSHELS. 

USDA TAKING A SMALL BITE OUT OF SOYBEAN PRODUCTION, NOW AT 4 POINT 39 BILLION BUSHELS. IT'S BEEN A DISAPOINTING START FOR U-S SOYBEAN EXPORTS, AND IT SHOWED UP IN USDA'S LATEST ENDING STOCKS. USDA PEGS SOYBEAN ENDING STOCKS TO REACH 470 MILLION BUSHELS. THAT'S UP FROM DECEMBER'S ESTATIMATE OF 445 MILLION, BUT IT WAS SLIGHTLY LOWER THAN THE AVERAGE TRADE GUESS. AND WINTER WHEAT SEEDINGS EXPECTED TO BE LOWER HEADING INTO THE REPORT. USDA SAYS FARMERS SOWED 32 POITN 6 MILLION ACRES. THAT'S SLIGHTLY LOWER THAN LAST YEAR BUT ABOVE WHAT THE TRADE EXPECTED. 

NAFTA AND TRADE
SPEAKING OF TRADE, PRESIDENT DONALD TRUMP  MENTIONING TRADE DURING HIS ADDRESS TO THE  AMERICAN FARM BUREAU ON MONDAY. <ON NAFTA, I AM WORKING VERY HARD TO GET A BETTER DEAL FOR OUR  COUNTRY AND FOR OUR FARMERS AND FOR OUR MANUFACTUREERS.> HOPES THAT HIS SPEECH WOULD PROVIDE MORE  CLAIRTY ON THE CURRENT STATE ON NAFTA FADED BY  THE END OFTHE WEEK.  THAT'S AS BLOOMBERG REPORTED CANADIAN  OFFICIALS SAY THERE'S NOW A  GROWING THREAT  THAT THE PRESIDENT IS GOING TO WITHDRAW FROM  NAFTA THOSE OFFICIALS, WHO WEREN'T NAMED, SAY THE  LIKILIHOOD THAT THE PRESIDENT WILL GIVE HIS 6- MONTHS NOTICE TO WITHDRAW FROM NAFTA NOW  EXCEEDS 50 PERCENT.  < WHEN MEXICO IS MAKING ALL OF THAT MONEY, WHEN CANADA IS  MAKING ALL OF THAT MONEY, IT'S NOT THE EASIEST NEGOTIATION. BUT  WE'RE GOING TO MAKE IT FAIR FOR YOU PEOPLE AGAIN, NOW WE WANT TO  SEE EVEN MORE VICTORIES FOR THE AMERICAN FARMER AND FOR THE  AMERICAN RANCHER > WHILE THE PRESIDENT DIDN'T SAY THIS WEEK THAT HE  PLANS TO WITHDRAW FROM THE DEAL, THE MOVE  WOULD BE SUPPORTED BY AN ESCALATING TRADE  DISPUTE BETWEEN CANADA AND THE U-S, WITH CANADA  FILDING A COMPLAINT WITH THE WORLD TRADE  ORGANIZATION OVER AMEIRICAN DUTIES AGAINST  CANADA AND OTHER COUNTRIES.  THAT'S JUST FUELING THE FIE WITH U-S TRADE  REPRESENTATIVE ROBERT LIGHTHIZER CALLING THE  MOVE AN ILL-ADVISED ATTACK. EVEN USDA UNDER SECRETEARY ON TRADE TED  MCKINNEY SAYS THE FATE OF NAFTA IS UP TO CANADA.  <"I CONTINUE TO BE BULLISH THAT WE'RE NOT GOING TO BLOW THIS UP. I  HOPE THAT'S NOT THE CASE. BUT YOU ASKED ABOUT THE PRESIDENT. I  WOULD LOOK NORTH TO OUR FRIENDS TO THE NORTH TO SAY HOW ARE THEY  DOING WITH NAFTA? WE'VE SURFACED OUR PROPOSALS. HAVEN'T  HEARD BACK.  > IN RESPONSE TO THE NEWS THE PRESIDENT WILL  LIKELY WITHDRAW FROM THE PACT,  BOTH THE  CANADIAN DOLLAR NAD HTE MEXICAN PESO FELL  NEARLY 1 PERCENT.  THE NEXT ROUND OF NEGOTIATIONS ARE SET TO KICK  OFF JANUARY 23RD IN MOTNREAL. 

WEATHER
THOSE ARE THE HEADLINES...METEOROLOGIST MIKE  HOFFMAN JOINS US NOW WITH WEATHER...MIKE, A BIG  WARMUP THIS WEEK, THEN A SHOT OF COLD, WITH  CALIFORNIA EVEN SEEING MASSIVE RAINS.   THANKS. KIND OF DEPENDS ON WHERE YOU LIVE IT WILL BE A  WARM UP FOR A WHILE OUT WEST AND IT COOLS DOWN THERE. IT'S  ALREADY GOING TO BE COLD IN MOST OF THE EAST WHERE IT WARMS UP  LATER IN THE WEEK. SO KIND OF FLIP FLOPPING THINGS THERE'S A DROUGHT  MONITOR A MONTH AGO. YOU CAN SEE IT WAS VERY DRY IN THE  ARKANSAS AREA NOT SO MUCH WEST OR EAST OF THERE WHAT HAS  HAPPENED IS WE'VE SEEN THE COLOR ON THIS MAP EXPAND AS FAR AS  THE ORANGES CONCERNED WHICH MEANS MODERATE TO SEVERE  DROUGHT NOT QUITE AS MUCH SEVERE DROUGHT BUT NONETHELESS  WE'RE REALLY CONCERNED ABOUT THIS AREA ACROSS THE SOUTHERN  PLAINS INTO THE SOUTHWEST AND THE SOUTHEAST SO THOSE ARE AREAS  DURING LA NINA THAT YOU DO HAVE TO BE CONCERNED ABOUT. SO LET'S  CHECK OUT THE WEATHER MAPS. ON MONDAY WE'LL HAVE A SYSTEM  COMING THROUGH THE GREAT LAKES PUTTING DOWN A FEW INCHES OF  SNOW IN THAT AREA. EVEN LIGHT SNOW DOWN INTO PARTS OF ARKANSAS  A LITTLE BIT OF RAIN SOUTHWARD. NEXT STORM SYSTEM COMING INTO THE  PACIFIC NORTHWEST WITH A LITTLE BIT OF RAIN THERE. OTHERWISE IT'S JUST  KIND OF COLD EAST OF THE ROCKIES AS YOU CAN SEE ON WEDNESDAY  THEN THAT FIRST SYSTEM RIDING UP THE EASTERN SEABOARD SOME  DECENT SNOWS. PARTS OF THE NORTHEAST NEXT SYSTEM KIND OF  WEAKENING BUT COMING THROUGH THE NORTHERN PORTIONS OF THE  ROCKIES STILL COLD EAST OF THE ROCKIES BUT THEN AS WE HEAD  TOWARD FRIDAY IT STARTS TO WARM UP IN THE PLAINS A LITTLE BIT OF RAIN  WITH SNOW IN THE HIGHER ELEVATIONS THERE OF SOUTHWEST MISSOURI  NORTHWESTERN ARKANSAS.   AND THEN YOU CAN SEE MAINLY SNOW OUT WEST AS MUCH  COLDER AIR STARTS TO COME INTO THE WESTERN STATES. STILL LINGERING  SNOW IN THE NORTHEAST. WE'LL CHECK YOUR LONGER RANGE FORECAST IN  OUR NEXT HALF HOUR. 

TEASE
WE HAVE SO MUCH TO DISCUSS WITH THE LATEST USDA  REPORT. WE'LL DO THAT WITH BRIAN BASTING AND  KEVIN DULING AFTER THE BREAK. 

ROUNDTABLE 1
WELCOME BACK TO U.S. FARMERS FOR THIS WEEKEND AT THE TOP OF THE SHOW. WE TALKED ABOUT THE LATEST USDA REPORTS. NOW LET'S LET'S ANALYZE THIS LET'S CRUNCH THESE NUMBERS. FIGURE OUT WHAT IT MEANS MOVING FORWARD TO DO THAT. WE HAVE BRIAN BASTING AND KEVIN DULING. AND BRIAN WE'LL START OFF WITH YOU. LET'S JUST TALK ABOUT THIS HERE. I MEAN THIS SUMMER WHEN USDA CAME OUT WITH THAT BIG CORNEAL THAN WE THOUGHT THERE'S NO WAY THAT IT'S THAT BIG AND THEN WHO WOULD HAVE THOUGHT THAT IN THE JANUARY REPORT WE WOULD SEE USDA PEGGED AS NATIONAL CORN YIELD THAT ONE SEVENTY SIX POINT SIX BUSHELS PER ACRE. BIG CROPS ONLY GET BIGGER AND THAT IS THE CASE FOR THIS CROP. NOW

YOU HIT THE NAIL ON THE HEAD. BIG CROPS GOT BIGGER. EVERY SINGLE REPORT FROM THE AUGUST REPORT THROUGH THIS JANUARY FOR THE YIELD INCREASED WE DID BACK OFF THE HARVEST ACREAGE A BIT IN THIS REPORT BUT NOT NEAR ENOUGH TO MAKE ANY DIFFERENCE SO WE'RE LOOKING AT A SUPPLY NOW WHERE WE'RE LOOKING AT A TREMENDOUS AMOUNT OF CORN SUPPLY RELATIVE TO THE PREVIOUS YEAR AND THAT'S OFFSET OUR SMALLER ACREAGE THIS YEAR. WE'VE GOT A MOUNTAIN OF CORN OUT THERE AND A COUNTRY ON THE HEELS OF THIS BIGGER YIELD BUT IT DIDN'T REALLY HAVE THAT BIG OF AN IMPACT ON PLANTS RIGHT AFTER THE REPORT. WHAT I CAUTION YOUR VIEWERS TIME IS THAT THE MARKET IS GRINDING LOWER IS THE PHRASE WE LIKE TO USE. IT'S GRINDING LOWER YOU ALMOST DON'T DON'T FEEL IT BUT YOU GO OUT IN ONE WEEK THE MARKET'S DOWN 3 CENTS THE NEXT WEEK IT'S UP A PENNY AND HALF THE NEXT WEEK IT'S DOWN 3 CENTS AND YOU WAKE UP IN A MONTH LATER AND YOU'RE DOWN 12 CENTS FROM WHERE YOU WERE THE PREVIOUS MONTH AND THAT GRINDING LOWER ARE FACTORS CHARACTERISTIC OF A LARGE SUPPLY ROUTINE DEMAND YEAR.

THAT'S A GOOD POINT. LET'S MOVE OVER TO SOYBEANS. YOU KNOW THE USDA DID TRIM THAT SOYBEAN YIELD BUT WE ALSO HAVE THIS CARRY OUT NUMBER THAT WE NEED TO WATCH BECAUSE EXPORTS HAVE KIND OF HAD A DISAPPOINTING START. AND IS THAT STARTING TO SHOW UP IN THESE USDA NUMBERS. YEAH DEFINITELY DEFINITELY THE EXPORT PACE HAS BEEN OUR CONCERN THE BONUS AND I WOULD SAY THE THING TO BE CAREFUL WITH IS THE IN LAST YEAR'S SAME REPORT THE CARRY OUT WAS VERY SIMILAR 480 MILLION BUSHELS AND THEN BY THE END OF THE MARKETING YEAR IT WAS 300. SO WE COULD SEE A SIMILAR SITUATION. IF WE SEE THAT EXPORTS RETURN WE'VE HAD A GOOD WEEK OF EXPORTS THIS WEEK. YES A LOT OF SALES. NOT THE ONE RELEASED ON THURSDAY BUT THE OTHERS THINK IT WILL BE RELEASED NEXT WEEK. SO IF OUR EXPORTS CAN MOVE. THEN YOU KNOW WATCH THAT CARRY OUT NUMBER THAT CARRY A NUMBER IT CAN MOVE A LOT. I MEAN THEY'RE UP BY 38 PERCENT LAST YEAR. THIS YEAR WE'LL SEE. I KNOW WE HAD A GOOD WEEK WHEN WE GOT SOME ANNOUNCEMENTS FROM CHINA AND THINGS. BUT WHEN YOU LOOK AT THIS EXPORT NUMBER SO FAR AND YOU LOOK AT THIS PACE. DOES THAT CONCERN YOU I MEAN HOW MUCH GROUND DO WE REALLY HAVE TO MAKE UP JUST COMPARED TO LAST YEAR'S NUMBERS. WE DID AN ANALYSIS INTERNALLY TIME AND WE THINK THE EXPORT NUMBER IS STILL TOO HIGH FROM THE USDA GIVEN THAT THE SALES PACE WE'VE SEEN GIVEN THAT THE PROSPECTS NOW ARE LOOKING BETTER AND BETTER FOR ANOTHER LARGE DROP OUT OF BRAZIL. NOW THE ARGENTINA IS A WILDCARD AND KEVIN MAKES A GOOD POINT. THESE CROPS AREN'T IN THE BIN LOWERING THE BIN AND THAT COULD INFLUENCE THINGS. BUT EACH DAY WE'RE GETTING CLOSER TO MORE OF THE NUMBERS BEING IN CONCRETE AND WE THINK IF THESE CROPS IN BRITAIN SOUTH AMERICA BRAZIL AND BRAZIL AND ARGENTINA ARE WHERE THEY ARE TODAY WE THINK THAT NUMBER COULD COME DOWN MORE THE EXPORT NUMBER. BUT WHEN WE LOOK AT THE U.S. DOLLAR YOU KNOW THAT TAKES IT TAKES A WHILE FOR THAT TO HAVE AN IMPACT ON EXPORTS WHEN YOU LOOK AT THE DOLLAR HEADING AND I THINK IT'S A FOUR MONTH LOWS. YOU KNOW HOW MUCH TIME WILL THAT TAKE TO POSSIBLY SHOW UP WITH OUR EXPORT NUMBERS. I MEAN THAT HAS TO HELP US RIGHT. IT HELPS. IT ADDS I WOULD SAY EVERY DAY THE DOLLAR DROPS YOU KNOW OUR PRICE CAN BASICALLY IF WE STAY THE SAME AS GETTING CHEAPER SO THEREFORE YEAH WE CAN. I MEAN I'D SAY THREE WEEKS FOUR WEEKS WHEN YOU SEE A DROP LIKE YOU SEE IN THE DOLLAR TODAY YOU'RE GOING TO BE THREE WEEKS OUT BEFORE YOU START SEEING AN EFFECT DEPENDING ON WHICH OTHER CURRENCIES ARE MOVING. YOU KNOW WHAT YOU SAY THE BRAZILIAN CURRENCY IS ALSO VERY IMPORTANT AND IT CAN HOLD MORE WEIGHT ALSO ON CORN SIDE WHERE DO WE NEED TO SEE DEMAND PICK UP. I MEAN YOU KNOW CORN CROP NOT AS RELIANT UPON EXPORTS BUT YOU KNOW FEED USAGE REALLY WHERE DO WE SEE THOSE NOW TO SEE THOSE NUMBERS USED TO DRIVE THIS MASSIVE GROWTH THAT WE HAVE ON OUR HANDS TIME WE ONLY GET THE GRAIN STOCKS REPORT FOUR TIMES A YEAR.

WHAT THIS REPORT TOLD US WAS IS THAT OUR FEED USAGE FOR CORN IN THAT SEPTEMBER OCTOBER NOVEMBER QUARTER WAS A BIT BELOW WHAT THE LEVELS NEEDED TO REACH THE PRIOR USDA FORECASTS. SO THEY BACKED OFF FEED USAGE TODAY IN THAT REPORT. SO THE BIAS IS THAT THE CORN FEED RESIDUAL USAGE IS GOOD BUT NOT STELLAR. EXPORTS ARE GOOD BUT NOT STELLAR DOMESTIC USE AS FAR AS ETHANOL IS STRONG BUT IT'S BACKING OFF A BIT NOW TOO. BUT WITH OIL PRICES DO YOU THINK THAT MAYBE WE CAN BUMP UP ETHANOL PRODUCTION. WE CAN USE MORE OF THIS CORN CROP FOR THAT OR WOULD THAT BE ENOUGH AT THIS POINT. NOW I MEAN I THINK YOU GOT TO WATCH YOU AND THE ONE THING THAT WE HAVE TO WATCH IS THE FUNNY MONEY JUST LIKE TALKING OIL PRICES YOU KNOW THAT COULD REALLY AFFECT OUR CORN BASIS ESPECIALLY WITH HOW MUCH IS IN PRODUCER HANDS. SO IF YOU GOT AN OPPORTUNITY TO DO A HEAD SHOT I'D BE CAREFUL BECAUSE YOU KNOW THE FUNNY MONEY COULD REALLY FOUL UP THE BASES. ALL RIGHT WELL WE NEED TO TAKE A QUICK BREAK. WE ALSO GOT A GLIMPSE OF A BETTER GLIMPSE OF WHEAT ACRES THIS YEAR SO WE'LL TALK TO KEVIN ABOUT THAT AS WELL AS TRADE HIM AND WE TALKED ABOUT TRADE AND THE THAT THE CHANGING STORY ON TRADE ARE WE GOING TO WITHDRAW FROM. AFTER ALL WE ARE NOT GOING TO WITHDRAW FROM NAFTA. WELL REALLY WHAT IMPACT COULD THAT HAVE ON OUR MARKETS. WHEN WE TALK ABOUT ALL OF THAT WHEN WE COME BACK FROM U.S. FARM REPORT.

ROUNDTABLE 2
WELCOME BACK TO US FARM REPORT THIS WEEKEND. BUILDING OFF OF OUR FIRST SEGMENT DIGEST THIS REPORT A LITTLE BIT MORE. THE USDA CAME OUT SAID WINTER WHEAT ACRES EXPECTED NOW AT THIRTY TWO POINT SIX MILLION ACRES SLIGHTLY LOWER THAN LAST YEAR BUT IT WAS ABOVE WHAT THE TRADE EXPECTED. YOU KNOW WHEN WE LOOK AT THIS ACREAGE PICTURE I MEAN WE KNEW IT WAS GOING TO BE LOW. WHAT IMPACT IS THAT HAVING ON OVERALL PRODUCTION CARRY OUT ALL OF THOSE NUMBERS THAT THE TREND REALLY KEEPS AN EYE ON. NOT A LOT. NOT A LOT OF DIFFERENCE IN MY OPINION. THE ACREAGE WE'RE LOOKING AT IS IS MINIMAL. THAT'S WHERE IT'S IF PRICES ARE DEPRESSED IN THE SITUATION WE ARE NOW. THAT'S WHERE YOU'RE GOING TO BE YOU'RE GOING TO BE I'M AT 31 TO 33 RANGE UNTIL SOMETHING CHANGES. YOU KNOW WE DID SEE A BIG SPIKE IN IN JUNE WHICH I THINK ENCOURAGED A LOT OF THE HARD RED SPRING BELT AND SO I THINK THOSE ACRES MAY ACTUALLY CLIMB. OK. AND BUT AS FAR AS THE WHOLE STRUCTURE WE REALLY NEED TO GET THE PRICE IN A SPOT THAT STARTS PULLING THREE OR FOUR MILLION ACRES OUT OF CORN AND BEANS IF WE WANT THIS WHOLE COMPLEX TO TURN. BUT AFTER THE REPORT WE DID SEE INITIALLY WHEN I CHECKED WE SAW WHEAT PRICES DOWN A DIME OR SO BUT CORN AND BEANS HAD MOVED MUCH. SO WHAT WAS IT IN THIS REPORT THAT DID CAUSE THAT NEGATIVE REACTION. IT JUST IT WAS UNIMPRESSED BY IT. I MEAN WE'D RALLIED ALL THE WAY UP INTO THE REPORT. ANY TIME WE DO THAT I MEAN YOU'RE SETTING YOURSELF UP FOR DISAPPOINTMENT AND THEN THE NUMBER CAME SLIGHTLY HIGHER THAN EXPECTATIONS AND SO DOWN DOWN A DIME AND WITH THE MINUS FOOD USAGE AS WELL. SO TO ME IT DOES IT'S NOT A GAME CHANGER. IT'S IT'S JUST YOU KNOW WATCH YOUR CASH BASIS WHICH HAS BEEN THE DRIVER OF THIS WHOLE YEAR. YES. SO IT DOES SEEM LIKE THERE'S A COUPLE OF DIFFERENT STORIES IN WHEAT RIGHT NOW AND PUTTING CASH. WHAT IS THAT STORY TELLING US. IT'S TELLING US THAT THE SUPPLY OF KNOWING QUALITY HIGH PROTEIN WHEAT IS VERY SMALL IT'S ALSO TELLING US THE SUPPLY OF WHITE WHEAT IS GETTING SMALL. SO IT'S DIFFERENT THAN WHAT WE'VE SEEN IN THE PAST FOR THE FIRST TIME IN PROBABLY THREE OR FOUR YEARS. WE HAVE THE DELIVERY SYSTEM WHERE ALL DELIVERY POINT CASH PRICES WERE HIGHER THAN THE FUTURES SO THERE WAS NO WHAT SHOULD I SAY THERE WAS NO INCENTIVE TO DELIVER WHEAT ON BOARD. OK. OK. SO NOW MOVING FORWARD THE NEXT BIG USDA REPORT WE HAVE THE MARCH ACREAGE REPORT BUT THAT'S THAT'S A LITTLE BIT DOWN THE ROAD. SO REALLY NOW THAT WE HAVE THESE USDA REPORTS BEHIND US WHAT IS THE TRADE WATCHING SOUTH AMERICA WHETHER IT'S FRONT AND CENTER. ANY TIME WE TALK ABOUT THE CORN POLLINATION PERIOD OR BEING SETTING PODS FILLING PODS WE REALLY GOT TO FOCUS IN THE THREE DAY WEEKEND COMING UP WITH MARTIN LUTHER KING. WE'LL HAVE A PERIOD THEN WE'LL WE'VE GOT ABOUT SIX WEEKS ALL THE WAY AND ABOUT THE FIRST OF MARCH WHERE THESE MARKETS ARE GOING TO BE WATCHING THAT SOUTH AMERICAN WEATHER LIKE A WHORE. WHAT IS WEATHER TELLING US DOWN THERE RIGHT NOW. WELL THE BRAZIL CROP ISRAEL SOYBEAN CROP LOOKS LIKE TO BE IN VERY GOOD SHAPE. USDA BUMPED IT UP A COUPLE MILLION TONS. AND THE REPORT HERE IN JANUARY THEY DID REDUCE THE ARGENTINE SOYBEAN BY ONE MILLION TONS THOUGH SO THEY'RE KIND OF GOING IN DIFFERENT DIRECTIONS AND THAT LA NIÑA WEATHER PATTERN SEEMS TO BE NEGATIVELY IMPACTING ARGENTINA. BUT GOING FORWARD AGAIN IT'S NOT A CATASTROPHIC SITUATION AT ANY POINT YET IN ARGENTINA. THE BIGGEST THING PROBABLY NOW WILL BE MOVING INTO FEBRUARY AND MARCH. WHAT THAT DOUBLE CROP ARE SET FREE IN CORN LOOKS LIKE IN BRAZIL AND OF COURSE THEY WON'T PLANT THAT UNTIL THE END OF FEBRUARY EARLY MARCH. SO WE'RE WATCHING WEATHER BUT ALSO RIGHT NOW WE HAVE THIS UNCERTAINTY AROUND TRADE ARE WE GOING TO WITHDRAW FROM NAFTA WHERE WE KEEP NAFTA ARE WE GOING TO JUST KIND OF KICK THE CAN DOWN THE ROAD AND DISCUSSIONS ARE GOING TO OCCUR LONGER. BUT WHAT IF WE DO WITHDRAW FROM NAFTA. AND THE REALITY IS YOU KNOW WE HEAR THESE THESE ECONOMISTS SAYING IT WILL THROW AGRICULTURE INTO AN EVEN BIGGER RECESSION. BUT LOOK AT WHERE PRICES SET TODAY WHAT DO YOU THINK HAPPENS IF WE IF WE ANNOUNCE OUR INTENTIONS TO WITHDRAW. I THINK IF THERE WAS AN IMMEDIATE ANNOUNCEMENT IT WOULD BE I THINK THERE WOULD BE A KNEE JERK REACTION LOWER AND EVERYTHING. BUT IN THE END THE CASH TRADE IS GOING TO FOLLOW THE MONEY. SO THE SUPPLY CHAIN THE YOU KNOW THE INFRASTRUCTURE EVERYTHING THAT USED TO BE THERE IS STILL GOING TO BE THERE. RELATIONSHIPS ARE GOING TO BE THERE AND EVERYTHING IS SO POLITICAL YET TO BE SO CAREFUL. DO YOU AGREE WITH THAT. I DO AGREE WITH HIM. I THINK THE KNEE JERK REACTION WOULD BE NEGATIVE. BUT IN TERMS OF WHERE THE LOWEST PRICE AVAILABLE FOR EXAMPLE IN MEXICO WHEN YOU'RE LOOKING AT BEING A MAJOR BUYER OF CORN BEING OUR NEXT DOOR NEIGHBOR IT STILL COMES FROM THE U.S.. BUT COULD WE POSSIBLY SEE LOWER PRICES CERTAINLY COULD POSSIBLY SEE LOWER PRICES. ARE THEY JUST THAT THAT ENVIRONMENT RIGHT NOW WITH AMPLE SUPPLIES ENOUGH TO WEIGH ON THE MARKET NOW WILL BE SOMETHING THAT WOULD ADD TO THEM. ALL RIGHT. WHEN WE TAKE A BREAK AND COME BACK WE'LL GET THEIR CLOSING THOUGHTS. DON'T GO ANYWHERE.

MARKETS NOW
ALL RIGHT. TIME NOW FOR CLOSING THOUGHTS. I THINK THE BIGGEST THING WE'VE LEARNED POST HARVEST TIME IS THERE'S A TREMENDOUS AMOUNT OF 2017 CORN UNPRICED REALLY ENCOURAGE YOUR VIEWERS TO GET CONTROL OF THOSE BUSHELS AN OPTION TO CONSIDER WOULD BE TO TO PURCHASE A PUT OPTION TO PUT A FLOOR UNDERNEATH THOSE BUSHELS. LEAVE THE UPSIDE OPEN OR SELL THOSE BUSHELS IF BASIS IS FAVORABLE AND PURCHASE A CALL OPTION BUT GET CONTROL THOSE BUSHELS BUY MEAN GET CONTROL ALLOW YOURSELF TO GET THOSE PRICES AND NOT WORRY ABOUT THE MARKET GOING LOWER. ALL RIGHT KEVIN I LIKE BRIAN'S IDEA AND I THOUGHT TO ADD A LITTLE BIT TO THAT WOULD SAY OK. CORN IS A MARKET THAT HAS TO BE POLLED. IT'S GOT TO BE EITHER PULLED BY SOY OR IT'S GOING TO BE PULLED BY WHEAT SOMETHING'S GOING TO HAPPEN. SO THEREFORE WHY NOT SELL THE CORN. SO SCARY AND LOOK AT BUYING SOMETHING ELSE THAT HAS A BETTER CHANCE OF MOVING HIGHER. ALL RIGHT SOME GOOD TO DO THAT FOR YOU TO TAKE A QUICK BREAK. THEN WE'LL HEAR FROM JOHN PHIPPS

JOHN’S WORLD
THERE ARE MANY FORECASTS FOR AGRICULTURE IN  2018, BUT MOST HAVE A SIMILAR PLOT TO WHAT  FARMERS JUST EXPERIENCED LAST YEAR. HERE'S JOHN  PHIPPS.  JANUARY HAS TRADITIONALLY MEANT A LOT OF TIME IN FRONT OF A  COMPUTER FOR ME AS I GET THE OLD YEAR WRAPPED UP AND  DOCUMENTED FOR THE IRS'S AMUSEMENT, AND I ROLL OUT MY PLAN FOR  THE NEW YEAR TO ENTERTAIN MY LENDER. IT'S HARD WORK AND MORE  THAN A LITTLE STRESSFUL. IT WOULD BE FAIR TO SAY, AND MY LENDER HAS UPON OCCASION, THAT  MY PROJECTIONS TEND TOWARD THE OPTIMISTIC. IN FACT, OVER THE  DECADES, WHEN I COMPARE MY RESULTS IN DECEMBER WITH THE PLAN  I MADE IN JANUARY IT IS ALMOST ALWAYS DOWNHILL. RATHER THAN  CHANGE TO MORE CONSERVATIVE NUMBERS, I DECIDED LONG AGO TO  SIMPLY RECOGNIZE MY PLAN IS 28 PAGES OF WHAT-COULD-POSSIBLY-GO- WRONG. I AM NEITHER SURPRISED NOR DISAPPOINTED WHEN RESULTS FALL  SHORT, AND SIMPLY BEGIN TO DEAL WITH THE CAUSES AND  CONSEQUENCES. I'VE BEEN TALKING ABOUT FORECASTING AND PREDICTIONS THE LAST TWO  WEEKS, AND WILL DROP THE TOPIC AFTER THIS WEEK, BUT THIS IS WHAT ALL  MY INVESTIGATION AND EXPERIENCE WITH MANAGING THE FUTURE HAS  TAUGHT ME. LIKE DWIGHT EISENHOWER, WHO FAMOUSLY SAID, "PLANS  ARE USELESS, BUT PLANNING IS INVALUABLE", I VALUE THE PROCESS FAR  MORE THAN THE RESULT. AFTER ALL, TWEAKING AND FUDGING SOME  NUMBERS CAN MAKE ALMOST ANY ANNUAL FORECAST BETTER OR WORSE  TO SUIT OUR MOOD. THE PROCESS OF SYSTEMATICALLY WRITING DOWN  WHAT COULD HAPPEN IN THE NEXT FEW MONTHS, HOWEVER, GENERATES  MEMORIES, ESTABLISHES ANCHOR POINTS AND CREATES TRIGGERS THAT  CAN WARN US WHEN WE HEAD OFF COURSE. THIS YEAR MAKING A FINANCIAL PLAN IS PRETTY SOBERING. YOU MAY  EVEN BE PUTTING IT OFF LONGER THAN USUAL. I'M NOT GOING TO NAG YOU.  BUT UNTIL YOU DO SERIOUSLY ATTEMPT TO CREATE A MAP TO THE FUTURE,  YOU ALLOW YOUR WORST FEARS TO GROW. OF ALL THE BENEFITS OF  PLANNING, TAKING OUR FEARS OUT OF THE DARK AND ONTO PAPER OR A  COMPUTER SCREEN IS THE BEST WAY TO LOOSEN THE HOLD THEY MAY  HAVE ON OUR MOOD AND OUTLOOK. GET THE PLAN MADE, UNDERSTAND  ITS LIMITS AND POSSIBILITIES, AND BEGIN PUTTING IT INTO ACTION. IN  SHORT, GET GOING - WE WILL NEED ALL THE MOMENTUM WE CAN GET THIS  YEAR. THANKS, JOHN.

TEASE
BUILDING OFF THAT, ONE ECONOMNIST HAS A  SOBERING OUTLOOK FOR THE FARM ECONOMY,  PROJECTING WE JUST FINSHED YEAR FOUR A OF A 7- YEAR DOWNTURN. WE'LL HAVE THAT STORY AFTER THE  BREAK.

HEADLINES
WELCOME BACK TO U-S FARM REPORT THIS WEEKEND.  WE HAVE MUCH MORE AHEAD.  THE PRESIDENT'S PROMISE TO BRING BETTER  BROADBAND TO RURAL AMERICA.  AGRICULTURE COULD BE IN A 7-YEAR DOWNCYCLE.  THAT'S OUR FARM JOURNAL REPORT. PLUS, WHAT DOES IT TAKE TO BE A SUPER FORECASTER? JOHN WRAPS UP HIS MULTIWEEK  AGSPLAINER IN CUSTOMER SUPPORT. 

RURAL BROADBAND
NOW FOR THE HEADLINES...THE RURAL PROSPERITY  TASK FORCE SAYS ONLY 39-PERCENT OF THE RURAL  POPULATION HAS ACCESS TO ADEQUATE BROADBAND.  THIS WEEK THE PRESIDENT TAKING STEPS TO CHANGE  THAT.  <I'M SIGNING TWO PRESIDETNAL ORDERS TO PROVIDE BROADER AND  FASTER AND BETTER RURAL INTENET COVERAGE> THE PRESIDENTIAL ORDERS ARE INITIAL STEPS  TOWARDS EXPANSION OF BROADBAND INTERNET IN  RURAL PARTS OF THE COUNTRY. THE 'RURAL PROSPERITY TASK FORCE" IDENTIFIED  POOR INTERNET AS A MAJOR ROADBLOCK FOR  PRODUCERS. . THE ORDER CALLS FOR EXPEDITING THE FEDERAL  PERMITTING PROCESS.  THE SECOND ORDER MAKES IT  EASIER TO PLACE CELL TOWERS ON FEDERAL LANDS. WE CAUGHT UP WITH THE PRESIDENT'S SPECIAL  ASSISTANT ON AGRICULTURE RAY STERLING. HE SAYS  IT'S IMPERATIVE THAT RURAL AMERICA DOESN'T GET  LEFT BEHIND  WHEN IT COMES TO CONNECTIVITY.  < "THIS MAY BE AS SIMPLE AS PUTTING AN ANTENNA ON A BUILDING.  THIS MAY BE AS SIMPLE AS PUTTING A TRANSMITTER ON TOP OF A TOWER  THAT ALREADY EXISTS :20 BUT THIS IS A RELATIVELY EASY STEP TO TAKE A  GOVERNMENT ASSET THAT'S ALREADY IN A RURAL PLACE, THAT DOESN'T PUT  US IN ANY SORT OF RISK TO OFFER TO THE PUBLIC AND PRIVATE SECTOR TO  SAY - HEY, IF YOU'RE GOING TO USE RURAL BROADBAND IN THIS AREA, WE  ARE WILLING TO GIVE YOU SPACE TO DO THAT IN THE DEPARTMENT OF  INTERIOR FACILITIES."> THERE'S NO TIMELINE SET FOR WHEN SOME OF THESE  STEPS WILL BE TAKEN TO EXPAND ACCESS TO RURAL  BROADBAND. 

TAX REFORM
THE TRUMP ADMINSTRATION ALSO TOUTING ITS  MASSIVE TAX OVERHUAL DURING HIS TALK THIS WEEK.  BUT IT'S ONE ITEM WITH THE NEW LAW THAT'S  CREATING CONFUSION IN AGRICULTURE.  THE PROVISION GIVES FARMERS A TAX DEDUCTION TO  SELL TO FARMER-OWNED COOPERATIVES, NOT PRIVATE  ELEVATORS.  AND NOW COMPANIES LIKE ADM, BUNGE AND CARGILL  FEAR THEY WILL HAVE TROUBLE SOURCING ENOUGH  GRAIN.  SENATORS JOHN THUNE OF SOUTH DAKOTA AND JOHN  HOEVEN OF NORTH DAKOTA CHAMPIONED THE  PROVISION AND SAY THEY  ARE WORKING TO REVISE  THE LEGILSATION TO ADDRESS  THOSE COMPLAINTS.  BUT FARM CPA PAUL NEIFFER SAYS THERE'S A LOT OF  MISCONCEPTION ABOUT WHAT THE LINE ITEM IN THE  NEW TAX CODE  REALLY MEANS.  <I DON'T KNWO IF IT'S COOPERATIVES OR WHOVER IT IS OUT THERE, THEY'RE  TELLING FARMES THIS IS THE EQUIVALENT OF A 20 OR 30 CENT PER BUSHEL BENEFIT TO THE FARMER AND THE REALITY IS IN ORDER TO TO GET THIS  BENEFIT, THE FARMER HAS TO HAVE TAXABLE INCOME. AND UNDER THE  CODE, FARMERS THAT INVEST MONEHY IN EQUIPMENT AND SO ON LIKELY ARE NOT GOING TO HAVE TAXABLE INCOME. SO THIS PERCEIVED 30 CENT  DEDUCTION OR BENEFIT IS ACTUALLY GOING TO BE 0 B/C THIS IS SORT OF A  USE IT OR LOSE IT> NEIFFER SAYS THE INDUSTRY IS STILL WAITING ON THE  IRS TO ISSUE REGULATIONS AROUND THIS PROVISION.  MASSIVE MUDSLIDES RIPPED THROUGH CALIFORNIA  THIS WEEK. AND THE LATEST NUMBERS PUT THE DEATH TOLL AT 8  PEOPLE. TORRENTIAL RAINS CAUSING MASSIVE MUDSLIDES IN  SOUTHERN CALIFORNIA AFTER WILDFIRES RIPPED  AWAY THE VEGETATION THAT HOLDS THE SOIL IN  PLACE.  HOMES HAVE BEEN DESTROYED AND MANY PEOPLE  INJURED AS THE CEMENT LIKE MUD FLOWED SHOULDER  HIGH SOME PLACES.

WEATHER
THAT'S IT FOR NEWS...METEOROLOGIST MIKE  HOFFMAN JOINS US NOW WITH THE NATIONAL  FORECAST. MIKE, WE'VE BEEN TALKING ABOUT THE  WEST NEEDING RAIN AND SNOW, BUT AS TEH SAYING  GOES, WHEN IT RAINS IT POURS.   THANKS TYNE ABSOLUTELY RIGHT. WE DO GET A REPRIEVE IN  THE WEST BUT YOU'RE GOING TO SEE ANOTHER DECENT SYSTEM COMING  IN LATER THIS WEEK. THAT'S BECAUSE THE RIDGES THERE FOR NOW REALLY WARMED IT UP BIG COOL DOWN AGAIN FOR THE EASTERN PARTS OF THE  COUNTRY AS WE PUT THE MAPS INTO MOTION. WE STAYED COLD EAST OF  THE MISSISSIPPI ANYWAY RIGHT ON THROUGH WEDNESDAY AND  THURSDAY CONTINUES TO BE MILD OUT WEST BUT THEN WE SEE THINGS  FLIP FLOP AGAIN. STORM SYSTEM MOVING AWAY IN THE NORTHEAST.  PRETTY GOOD SYSTEM COMING IN OUT WEST WE WARM UP THEN ACROSS  THE CENTER OF THE COUNTRY AS WE HEAD THROUGH THE END OF THE  WEEK AND NEXT WEEKEND. AND AS YOU CAN SEE IN THE MODELS A  PRETTY DECENT STORM COMING INTO THE PLAINS. BUT WARM AREA FROM  THE OHIO VALLEY TOWARD THE SOUTHEAST AS WE HEAD THROUGH THE  END OF NEXT WEEKEND. HERE'S MY 30 THE OUTLOOK FOR TEMPERATURES  I'M STILL GOING BELOW NORMAL FROM THE PANHANDLE OF FLORIDA ALL THE  WAY UP TO THE CANADIAN BORDER NOT NEARLY AS COLD THOUGH AS  WE'VE SEEN SO FAR THIS WINTER ABOVE NORMAL OUT WEST.  PRECIPITATION NEXT 30 DAYS ABOVE NORMAL OHIO VALLEY GREAT  LAKES AND THE PACIFIC NORTHWEST NORTHERN ROCKIES AND THEN  BELOW NORMAL SOUTH FLORIDA SOUTH TEXAS AND MUCH OF THE  SOUTHWEST. TYNE

FARM JOURNAL REPORT
THANKS, MIKE. MOODS IN RURAL AMERICA ARE  DROPPING THE LATEST AG ECONOMY BAROMETER SHOWS  FARMER SENTIMENTS DRIFTED LOWER AS WE CLOSED  OUT THE YEAR.  THE MONTHLY SURVEY FROM PURDUE  UNIVERSITY HAD A READING OF ONE-26 IN DECEMBER,  THE SECOND MONTH IN A ROW THAT THE BAROMETER  WENT DOWN.. ON ONE HAND AG PRODUCERS HAVE BECOME MORE  OPTIMISTIC REGARDING CURRENT ECONOMIC  CONDITIONSS, BUT THEY ALSO HAVE BECOME MORE  PESSIMISTIC ABOUT FUTURE PROSPECTS FOR THE  AGRICULTURAL ECONOMY.  WHILE THE FUTURE IS UNWRITTEN, ONE ECONOMIST  THINKS  AGRICULTURE MAY HAVE TO WITHSTAND 3  MORE YEARS OF THIS DOWNTURN.AND THAT'S THIS  WEEK'S FARM JOURNAL REPORT. FARMERS LIKE JOE SHIRBORN ARE FACING A REALITY  THAT'S GRIPPING THE MAJORITY OF AGRICULTURE  TODAY.   YOU KNOW CORN THE PRICE OF CORN SEEMS TO BE STILL IN  THAT DOWNWARD TREND LOWER PRICES THAT JUST DON'T SEEM TO BUDGE. IT'S  SOMETHING AG ECONOMISTS LIKE JACKSON TAKACH  ARE WATCHING CLOSELY, AS 2018 MAY BE MORE OF THE  SAME.   I THINK WE'RE GOING TO HAVE TO SUSTAIN A FEW MORE  YEARS OF THE CURRENT ECONOMICS. I THINK THIS YEAR AND '19 THERE'S  PROBABLY NOT ENOUGH TO MOVE THE NEEDLE. THERE'S NOT GOING TO  BE ENOUGH DEMAND OVER THE NEXT TWO YEARS TO EAT UP ALL THE  SUPPLIES. WE HAVE RECORD STOCKS FOR BOTH CORN SOYBEANS AND  WHEAT. SO IT'S GOING TO TAKE A FEW MORE YEARS TO CHURN THAT OUT.  THE PURDUE AND CME AG ECONOMY BAROMETER  SHOWS THE SLUMP IN FARMERS' MOODS. AFTER  PEAKING AT 153 TO KICK OFF 2017, FARMERS  SENTIMENTS SLID NEARLY 30 POINTS LOWER,  REMAINING IN THAT RANGE TO FINISH OUT THE YEAR.   AS WE WRAP UP THE YEAR 2017 AND LOOK BACK IN  AGRICULTURE IT WAS A YEAR OF CONTINUED ADJUSTMENT. AND WHEN WE  TALK ABOUT CONTINUED ADJUSTMENT I THINK EVERYBODY IN U.S.  AGRICULTURE KNOWS THAT WE'VE BEEN THROUGH A BOOM CYCLE  FOLLOWED BY A MODERATION CYCLE. > CHRIS HURT SAYS DESPITE NET FARM INCOME  PROJECTED TO SEE A SLIGHT IMPROVEMENT IN 2017,  OVERALL NET FARM INCOME HAS DROPPED 40 PERCENT  FROM THE HIGHS FARMERS SAW BETWEEN 2011 AND  2014.  AS WE GO BACK THE TOP OF THE BOOM AND LOOK AT THE  2004 TO 2010 YEARS THOSE AVERAGED ABOUT 75 BILLION. SO EVEN  TODAY THE LOW 60S IS ABOUT 15 PERCENT LOWER THAN THE INCOMES  WE HAD FOR FARM FAMILIES BACK IN THE EARLY PART OF THE BOOM  PHASE. > HE SAYS 2017 HAS BEEN A YEAR OF ADJUSTMENT, WITH  FARMERS TRYING TO REALIGN THEIR OPERATIONS TO  FACE THE REALITIES OF LOWER PRICES.  WE'VE ALSO SEEN ADJUSTMENTS IN 2017 IN THE ANIMAL  INDUSTRY ONCE WE BROUGHT FEED PRICES DOWN IN 2014. AT LEAST THE  2014 CROP WE'VE SEEN VERY STRONG PROFITABILITY FOR THE ANIMAL  SECTOR. AND OF COURSE THAT PROFITABILITY HAS MEANT EXPANSION OF  THE LIVESTOCK SECTOR AND ACTUALLY REBUILDING THE REDUCED  PRODUCTION WE HAD FROM ABOUT 2007 TO 2014.  EVEN WITH A BETTER PICTURE FOR LIVESTOCK,  OVERALL CASH FLOWS ARE TIGHT.   SO FARM FAMILIES HAVE TURNED TO THEIR LENDERS AND THEY  CONTINUE TO DO THAT IN 2017 TO HELP BRIDGE THE CASH FLOW AND  INCOME GAP THAT WE'RE SEEING AT THIS POINT.   NOW OBVIOUSLY WE'RE LOOKING FORWARD TO 2018. WHAT  DOES IT LOOK LIKE. WELL I THINK WE'RE GOING TO SEE A CONTINUATION OF  THE ADJUSTMENTS THAT WE HAVE BEEN SEEING.  HURT SAYS IN ORDER TO LOOK FORWARD,  AGRICULTURE NEEDS TO TAKE A HARD LOOK AT THE  PAST.  AS WE LOOK BACK TO HISTORICAL BOOM AND MODERATION  CYCLES WE SEE HAVE SOME SENSE THAT MAYBE A FIVE TO SEVEN YEAR TIME PERIOD IS REQUIRED TO WORK THROUGH THESE DOWNWARD  ADJUSTMENTS.  HE SAYS THE LAST MAJOR BOOM AND BUSY CYCLE WAS  THE 1970S AND 1980S, A TIME MANY IN AGRICULTURE  ARE TRYING TO EVALUATE, TO HELP UNDERSTAND THE  SITUATION TODAY.  IT'S REALLY ABOUT THE DEBT LEVELS AND THE INTEREST  EXPNSE ON THAT DEBT. SO BACK IN THE 80S YOU HAD RISING DEBT  LEVELS BUT ALSO RISING INTEREST RATES AND IT WAS A DEADLY  COMBINATION. TODAY YOU MIGHT HAVE RISING DEBT LEVELS CERTAINLY,  FARMERS HAVE NEEDED THAT ADDITIONAL LEVERAGE TO TRY TO OFFSET  SOME OF THE LOWER INCOMES. WELL YOU HAVEN'T SEEN THE INTEREST  LEVELS RISE AT ALL. SO IN 1983 THE FARMER WAS SPENDING ABOUT 35  CENTS FOR EVERY DOLLAR THAT THEY EARN. TODAY THAT NUMBER IS 15  CENTS AND IT'S GOING TO TAKE A LOT TO GET THAT NUMBER BACK UP TO A  DEADLY LEVEL LIKE WE SAW IN THE MID 80S. 3:11 PURDUE SAYS  DURING THE 1980S, IT TOOK ABOUT 6  YEARS FOR PRICES AND OVERALL AGRICULTURE TO  RECOVER.   HOW LONG HAVE WE BEEN IN THIS MODERATION CYCLE?  WELL IT SEEMS LIKE FOREVER TO MANY FARM FAMILIES BUT ACTUALLY FOR  CROPS IT WAS THE 2014 CROP WHERE WE REALLY SAW PRICES OF GRAINS  DROPPED SHARPLY BELOW COST AND PRODUCTION. SO WE'RE NOW THE  14 CROP THE 15 CROP THE 16 CROP. AND OF COURSE NOW WE'RE  THROUGH HARVEST OF THE 17 CROP AND MARKETING THAT PARTICULARLY FOR  CORN SOYBEANS AND OTHER FALL PRODUCED CROPS, WE'RE IN OUR  FOURTH YEAR OF DOWNWARD ADJUSTMENT.  HE SAYS IT'S POSSIBLE AGRICULTURE IS IN YEAR 4 OF A  SEVEN YEAR CYCLE, MEANING 2018 COULD HELP  AGRIUCLTURE START TO TURN A CORNER.   SO AS WE ROLL OUT TO 2018, LET'S THINK ABOUT WHAT WE  HAVE IN STORE FOR AGRICULTURE. WE EXPECT TO SEE CONTINUED  ADJUSTMENTS TRYING TO DRIVE DOWN COST OF PRODUCTION ON THE  CROPPING SIDE. EXPECT FOLLOW THROUGH TO EXPANSION OF THE  LIVESTOCK NUMBERS AND GETTING ENOUGH EXPANSION FOR FARMERS, PRICES MAY BE OUT OF THEIR  CONTROL, BUT CHANGING ASPECTS OF THE OPERATION  THEY CAN CONTROL IS NOW BECOMING TOP OF MIND.    THE BUSINESS SIDE. WE KNOW THAT'S VERY DIFFICULT SOME  DAYS BUT WE JUST CONTINUE TO LOOK AHEAD LIKE OUR OUR POTENTIAL OR  OPPORTUNITIES IN THE MARKET MAKE SURE WE CONTINUE TO REWARD.  YEAH WE MISS OUR OPPORTUNITIES AT TIMES WHERE WE'VE GOT TO  CONTINUE TO REMIND OURSELVES TO TAKE ADVANTAGE OF THEM AND JUST  CONTINUE TO WORK ON COSTS> IT'S MANAGING COSTS WHILE WORKING TO BECOME  EVEN MORE EFFICIENT ON EVERY ACRE, THAT COULD  HELP FARMERS SURVIVE ANOTHER  YEAR.

TEASE
UP NEXT, WHAT'S IN STORE FOR 2018 IS JUST A  PREDICTION OR A FORECAST AT THIS POINT. AND JOHN  PHIPPS WRAPS UP HIS TALK ON FORECASTING NEXT. 

CUSTOMER SUPPORT
WE JUST TALKED ABOUT THE FORECAST FOR 2018. BUT  WHAT DOES IT TAKE TO MASTER THE ART OF  FORECASTING? HERE'S JOHN PHIPPS.  LAST WEEK, I OFFERED SOME EXERCISES THAT MIGHT HELP IMPROVE  YOUR FORECASTING SKILLS. TODAY LET'S LOOK AT WHAT THE RESEARCH TO  DATE SHOWS US ABOUT MAKING BETTER PREDICTIONS. THE GOOD JUDGMENT PROJECT HAS BEEN TESTING THOUSANDS OF  VOLUNTEERS OVER THE PAST YEARS BY ASKING SPECIFIC QUESTIONS LIKE  "WILL NORTH KOREA DETONATE A NUCLEAR DEVICE THIS YEAR?" AND  RECORDING THE OUTCOMES. AFTER HUNDREDS OF QUESTION COVING ALL  KINDS OF TOPICS RESEARCHERS IDENTIFIED A FEW SUPERFORECASTERS  AND WHAT MADE THEM SO CONSISTENTLY SUCCESSFUL. THIS CHART  SHOWS HOW THEY THINK WE CAN IMPROVE FORECASTS. FIRST, SOME PEOPLE ARE JUST REALLY GOOD AT FORECASTING. FULL  DISCLOSURE: I PARTICIPATED IN THE GOOD JUDGMENT CONTEST FOR FEW  MONTHS AND DISCOVERED I AM NOT ONE. AND THAT IT TAKES A LOT OF  WORK TO BE A SUPERFORECASTER.  TRAINING IN AVOIDING BIASES AND GATHERING INFORMATION ADDS  ANOTHER BOOST TO ACCURACY, AS DOES JOINING WITH OTHERS IN  FORECASTING TEAMS, AND THEN ADDING SOPHISTICATED COMPUTER  AGGREGATION ALGORITHMS, LIKE THEY DO WITH WEATHER MODELS. THE BOTTOM LINE IS BETTER FORECASTING IS POSSIBLE, DIFFICULT, AND  MORE LIKE WRITING A TERM PAPER THAN HAVING PROPHETIC VISIONS. WE  SHOULD ALSO KEEP IN MIND THAT MANY LARGE COMPANIES ARE  INVESTING TIME AND MONEY IN THIS TYPE OF RESEARCH AND TRAINING,  SO EVEN IF WE ARE SKEPTICAL, OTHER ECONOMIC PLAYERS ARE NOT. WHICH LEADS TO THIS EMAIL FROM TOM CHILDRESS IN RUGBY, NORTH  DAKOTA. "IMAGINE IF WE AS A SOCIETY COULD FORECAST THINGS [LIKE] THE WEATHER  THAT SO MANY HAD LAST SUMMER!  HOW MANY GROWERS WOULD HAVE  LITERALLY CHANGED THEIR CROP STRATEGIES?  YET THE REALITY LAST YEAR  WAS THAT THE CORN CROP, FOR INSTANCE, IN MOST AREAS HARD HIT BY  DROUGHT, EXCEEDED EVERYONE'S EXPECTATIONS! SO, WOULD  "FORECASTING" HAVE HELPED FARMERS LAST YEAR? OR HURT THEM, OR  JUST SOME OF THEM?  SOMETIMES I WONDER IF WE JUST LEAVE WELL- ENOUGH ALONE!" GREAT POINT, TOM, AND ONE THAT SCIENCE FICTION WRITERS AND  PHILOSOPHERS HAVE LONG DEBATED. I THINK THE COUNTERING  ARGUMENT IS IT DOESN'T TAKE PERFECT KNOWLEDGE OF THE FUTURE TO  HELP US NUDGE OUR DECISIONS TOWARD BETTER RESULTS, ESPECIALLY  WHEN MAKING LONG TERM PLANS. IN FACT, JUST PREVENTING REPEATED  AND AVOIDABLE MISTAKES IN PREDICTING WOULD SATISFY ME. FINALLY, I DON'T THINK THIS IS ORIGINAL, BUT I HAVE ALWAYS SAID IF WE  COULD KNOW THE FUTURE, IT WOULD ONLY BREAK OUR HEARTS.

TEASE
THANKS, JOHN. AND IF YOU HAVE QUESTIONS OR  COMMENTS, EMAIL JOHN AT MAILBAG AT U-S FARM  REPORT DOT COM. WHEN WE COME BACK, WE VISIT BAXTER BLAK

BAXTER BLACK
IT'S TIME NOW TO HEAD OUT WEST AND VISIT BAXTER  BLACK.  THERE ARE SOME SKILLED PEOPLE THAT I ADMIRE GOOD ROPERS IN FLAT TOP GUITAR PICKER FOR INSTANCE, AND I'VE ALWAYS PRIDED MYSELF ON MY ABILITY TO BUILD A GOOD FENCE. BUT WHEN I'M RIDING THE FENCE LINE WITH THE MAJOR DOMO WIRE WRANGER AND SEE HIM USE FINCING PLIERS WITH THE DEXTERITY OF A SURGEONI REALIZE MY OWN SHORTCOMINGS AND THE SAME GOES FOR FARMERS PULLING THEIR IMPLEMENTS OVER FIELDS THAT SWEEP AND CURVE AND DIP AND CLIMB THROUGH THE KULIS THE CREEKS IN THE CAR BODIES AND LAY A LINE AS STRAIGHT AS A SOLDIERS BACKBONE. BUT I GUESS THE ONE TALENT THAT ALLUDES ME MOST IS MY HORSESHOEING SKILLS. UNLIKE A LOT OF COWBOYS WHO NEVER TOOK A SHOEING LESSONS I LEARNED BY THE YES AND BY GOLLY I ACTUALLY ENJOY SHOEING MY HORSES I DON'T YOU OTHER PEOPLE. MOST PEOPLE CAN'T AFFORD TO HAVE THEM LAME THAT LONG AT SHAAN 'S DAD AND GRANDPA WERE HORSE SHOERS. SO HE PICKED IT UP. NATURALLY.  HE SAID WHEN HE WAS THIRTEEN HIS DAD TOLD HIM TO GO OUT AND SHOE SKEETER WELL TO SEAN 'S SURPRISE TURNED OUT TO BE EASY AND SO HE WAS LURED INTO COMPLACENCY.   AND BY THE TIME HE WAS SIXTEEN HE HAD SHOD SKEETER MANY TIMES. SO WHEN HE SET ABOUT TRIMMING HIM ON THAT FATEFUL DAY SEAN WAS COOL AND COLLECTED. HE PULLED THE OLD SHOE OFF, PICKED UP HIS NIPPERS AND WENT TO WORK. I CAN ALMOST HEAR HIM HUMMING A TUNE HMM, HMM, HMM HMM WHEN HE WOKE UP THE HIS SHOE AND CHAPS WERE WRAPPED AROUND HIS NECK HIS EWING BOX WAS BROKEN AND THE FOOT REST OVERTURNED AND HE HAD A NOT ON HIS HEAD THE SIZE SO LAMB 'S KIDNEY SKEETER WAS WATCHING THIS ALL WARILY WITH HIS HOLTER SHANK DANGLING OFF HIS CHIN.  SALVO, THE BARN CAT WAS SITTING ON THE WALL LICKING HIS PAW SEAN SAT UP AND LOOKED AROUND.  AS HIS VISION IMPROVED HE NOTICED SKEETERS HIND QUARTER.  TWO SETS OF CLAW MARKS COARSED FROM HIS RUMP TO THE LIFT OFF LIKE THE SKI TRAILS DOWN THE MOUNTAIN SIDE SEAN STUDIED SALVO WHO CONTINUED LICKING HIS PAW DON'T ASK ME HE MEWED I DIDN'T SEE A THING THIS IS BAXTER BLACK FROM OUT THERETHANKS, BAXTER. YOU CAN HEAR MORE FROM HIM  ONLINE AT BAXTER BLACK DOT COM.

TEASE
WHEN WE COME BACK, MACHINERY PETE HAS A RARE  PONY FROM THE 1940S TO SHOWCASE. TRACTOR TALES  IS NEXT.

TRACTOR TALES
TRACTOR TALES BROUGHT TO YOU BY THE MOST  TRUSTED NAME IN FARM EQUIPMENT, MACHINERY  PETE!. WELCOME BACK TO TRACTOR TALES FOLKS!  WE'VE GOT A 1949 PONY TO  SHARE WITH YOU TODAY.  THIS GARDEN TRACTOR WAS A FAMILY FAVORITE.   GAIL GOODELL DECIDED THIS CLASSIC WAS MADE FOR TRACTOR RIDES AND  PARADES.  THIS TRACTOR WAS I COULD TAKE NO CREDIT FOR THAT WAY THIS LOOKS. IT  BELONGED TO MY BROTHER IN LAW. AND HERE HE WAS A PRETTY GOOD  SIZED MASSEY COLLECTOR AND HE HAD THIS ONE. AND WHEN HE  BOUGHT IT IT WAS. NOT A REAL GREAT RESTORATION JOB AND. HE DID MOST OF IT. WE HAVE A NEIGHBOR JIM KING WHO HAS A REAL  GOOD TRACTOR RESTORE AND HE'S DONE A GOOD LOT OF MY TRACTORS AND  HE HE AND MY BROTHER IN LAW GOT THIS FROM LOOKING AS THE WAY IT  IS. IT'S. NOT MUCH USE ON HERE ON THE FARM IT'S A PARADE TRACTOR. IT  GIVES RIDES AROUND THE FARM. NOT BIG ENOUGH TO DO ANYTHING AND  IT DOESN'T GO FAST ENOUGH SO WELL IT WOULD HAVE BEEN USED FOR  GARDEN WORK AND PROBABLY IN THE SOUTH OH THEY USED THESE KIND IN TOBACCO AND VEGETABLES. MY BROTHER- IN-LAW DID QUITE A BIT OF WORK ON IT BUT I HAVEN'T DONE ANYTHING TO  IT JUST CHANGE THE OIL AND JUST NORMAL SERVICE WORK. OH THIS ONE  WILL GO ABOUT EIGHT I BELIEVE. YEAH. NOT FAST ENOUGH FOR TRACTOR  DRIVE. IT DOES RIDE AROUND FARMER PULLING HAY RACK WITH PEOPLE ON IT. I'VE  GOT SOME GRANDKIDS AND I THINK COULD BE VERY INTERESTED IN IT.  YEAH THEY SHOWS I'M INTERESTED IN IT SO. IT'S GOING TO BE AROUND  AS LONG AS THEY WANT IT. THANKS, SO MUCH, AND WE'D LIKE TO RECOGNIZE  LINDENWOOD UNION CHURCH , THE OLDEST NON  DENOMINATIONAL CHURCH IN TEH STATE OF ILLINOIS.  THEY ARE CELEBRATING THEIR 150TH ANNIVERSARY  THIS MAY. THANK YOU JEAN EHMEN FOR SHARING THAT  WITH US. 

TEASE
STAY WITH US, WE HAVE SOME MORE VIEWER PHOTOS  TO SHARE WITH YOU NEXT.

FROM THE FARM
WELCOME BACK TO TALKS ABOUT THAT MASSIVE STORM ON THE EAST COAST LAST WEEKEND AND OUR FRIENDS IN NORTH CAROLINA SAW EIGHT INCHES OF SNOW FROM THE WINTER STORM MATT PERRY SENT US THESE PICTURES. HE SAID HE HAD TO GET THE TRACTOR OUT AS THE AREA IS USED TO HANDLING THAT MUCH SNOW. AND I KNOW EIGHT INCHES TO US. NOT A BIG DEAL FOR THEM. IT'S A BIG DEAL. GET THINGS DOWN AND COTTON PRICES WERE ON AN IMPRESSIVE RUN EARLIER THIS WEEK. BUT THE COTTON CROP HAS HAD A ROUGH SEASON WITH THE WEATHER. BRAD SMITH OF SOMAS SNAPPED THIS PICTURE OF COTTON HARVEST. IT'S THE DIFFERENCE BETWEEN CROP DAMAGE VERSUS UNDAMAGED IN THE FIELD. YEAH AND MIKE WE MENTIONED THE BLIZZARD YOU KNOW WE HAD THE MUDSLIDES IN CALIFORNIA THIS WEEK. NOW FREEZING CONDITIONS FOR MUCH OF THE EASTERN PART OF THE COUNTRY. WHAT ARE YOU WATCHING INTO NEXT WEEK. I'M SEEING A JANUARY THAW FOR MOST AREAS USED TO THE EAST OF THE ROCKIES FOR THE LAST WEEK AND A HALF OR SO OF JANUARY AND THEN WE GO BACK TO COLD AGAIN. THA'S KIND OF WHAT I'M LOOKING AT GOING FORWARD EXTENDED PERIOD OF COLD OR PROBABLY PROBABLY THROUGH MOST OF FEBRUARY. THAT'S WHAT I'M THINKING I MEAN IT IS WINTER. SO RIGHT. ALL RIGHT. THANKS MIKE.

CLOSE
AND FROM ALL OF US AT U.S. FARM REPORT I'M MIKE HOFFMAN AND I'M SAM MORTON AND 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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