USFR Weekly Recap - April 16-17, 2011

April 16, 2011 12:39 AM
 

THIS WEEK ON U.S. FARM REPORT
EPISODE #1966

APRIL 16-17, 2011

 

Today on U.S. Farm Report. It's not 2010, this year's corn crop is off to a fitful start.

 

Will milk prices off set higher costs.

 

Red meat exports continue to climb. Could it be the future for beef and pork?

 

United states farm report brought to you by Chevy and their award winning cars, trucks and crossovers. .

 

Hello and welcome to U.S Farm Report. It has been a curious beginning for its crop year. While planting has started in my area it's without much excitement. A lot of times chattering among neighbors to see what is correct right now. Cell phone minutes skyrocketing as we keep tabs on who is doing what and why he shouldn't be. The unusual weather patterns are fresh and painful and have us second guessing every decision. I think the most curious influence of all is the extreme lateness of Easter. There is just something about finishing before good Friday that doesn't feel quite right. Al is here with a crop progress and the rest of the headlines.

 

Thank you. And hello everybody. With the march kit looking for a big crop to keep pace with demand a lot of attention will be put on the weekly u.s.d.a. crop progress report to see if farmers are making headway or facing set backs. Now there are only a handful of reports including corn planting. The u.s.d.a. said 3% is in the ground which is the five-year average. Texas has 55% planted. Cotton planting is on pace with the five-year average, 7% seeded in texas, 11% --of course the big question is can the crop get enough water? Also in texas and other parts of the southern plains the drought is really taking a toll on the winter wheat. 66% of the Texas wheat crop is called poor to very poor. Oklahoma and the Kansas crops also in bad shape. Overall 36% of the nation's winter wheat crop is called poor to very poor. That's a four point decline from last week.

 

The USDA's latest forecast thinks milk prices $2 per hundred higher in 2011 but feed costs will eat into most of that. The report forecasts the all milk price would average between 18 black 15 and $18.65. It also called for slightly lower overall milk production. The report said higher feed costs are having a major impact on the industry. Only slight herd growth is expected in 2011.

 

Increasing amount of United States beef and pork is getting e ported. The meat federation said the improving picture continued in February. The trade group said a growing number of that is going to international customers, for February 27 interest of United States pork was exported, that's up two points from last year. South Korea is the growth leader. The monthly exports to that country jumped 150% in volume compared to a year ago. Korea continues to deal with a major outbreak of foot and mouth disease which devastated its pork industry.

 

Similar gains in the beef sector, about 13% of United States beef. Last year it was under 11%. That is it forehead lines. Back to john for crop watch. >>

 

Crop watch this week features a three state stop. In ward county North Carolina severe flooding continues to impact the area. One grower said the wheat planting probably won't happen there this year. He expects to switch to beans fields he can get to. He said many roads are under water. We have a few crop comments Minnesota as well. A grower said they have over an inch of rain last weekend. He said it's very wet and in Mccloud there is standing water everywhere with all the rivers and creaks out of their banks. York county Pennsylvania, a former said he started planting corn by this time last year but not this year. They are still weeks what a from it. ? When we come back its time to talk market. In just two minutes. Please stay with us.

 

United states farm report, brought to you by Capren. This season its man verses weed and man will emerge the victor. .

 

Bob, and Brian round table guest this is week. The markets up and down, what caused the market to move today?

 

It's a lot of profit taking by the big guy. This week big funds took money out of oil, out of corn and then we have had weather markets. The trade, you have a one group of people --you have people more bullish now than last summer. I think everybody is getting worried about the weather but we closed the week just profit taking. It's not a serious technical break. I think everybody wants to buy the corn and beans below the market.

 

We are lower than Friday and --people are surprised because they thought it was going up. Were you surprised ?

 

Not really. I think bob hit the nail with the move to all-time highs in corn futures here. There is just always a bit of jittery activity, over the weekend especially and that right now, i think it's easy to take profit and move head to next week. It'll be a volatile trade with the weather. The next 90 days i would say.

 

We have had a lot of unusual thing that have happened to us. Three weeks ago we said where is the next big black bird that will come down, seemed like they all came at once.

 

It's important for farmers, there is a lot of sell, not a lot of crop. If you have the o crop situation it could be very motivated, crash could go premium, also for a cash contract. If you are short futures -- guys have hedges in place i would encourage you to get out of that futures contract into a cash contract where you know the cash flow because we are moving in the same environment as 2008, 1988, where emotions taking over and you dot wrong thing at the right time.

 

The wrong thing at the right time. I'm trying to --you can explain that?

 

I will leave that to bob. Have you to have a disciplined marketing strategy. We like using options in this environment. There are pluses and minuses to every strategy. Cost is associated options but they let you be disciplined, roll up and down without having a make a decision every day, and let the market dot work for you.

 

A lot say i will wait for eight, and they didn't do anything. What should they do right now?

 

Old crop corn, a lot has been moved. I would suggest the o crop corn --the real fuss is when do you do sell new crop corn? I want to talk about the comment the wrong thing at the right time, we plan to cash flow. Being short the futures right now you can get blown out before you are --the market turns and because the marching call and this is where the opposition is --this where options are --i think you need to be in a long put, short put, some strategy where have you a floor but as the old crop goes up and the new crop closes well, you gain in the cash market. I wouldn't want to sell futures or calls or any marginal risk position probably until June or July and that's a departure for me.

 

Talking about pretty good prices in the fall crop or -- we don't know what that will be. It could even go up.

 

Certainly. I mean you know new crop cash corn in a lot of areas over six dollars a bushel off the combine. We are hearing more at least starting with sales. Maybe attaching a call, open up the --there is no question these are the most attractive prices we have seen for fall delivery but you want to maintain the flexibility.

 

The warning i have is that the public now is not more bullish at $7.50 corn. We are not there yet. We are probably --bullish for the summer but the emotions getting to a point where --i think the high will be put in the cash market but everybody will buy the board and they expect --that's when we will catch them. I think there is cash things you need to base this and start focusing on how you are going to participate in this market if we get it.

 

When we come back i want you to give me ideas on where we think we might be going. We will be back in just a moment.

 

Round table guests, i told you i want you to think about where we might go in the future and that sort of thing. I will --you were saying something i thought was interesting. What was that?

 

At this point in time most of the major users, despite the fact that corn is seven dollars cash are still making a profit whether it's ethanol plant, cattle producer, or hard producer. It's not a lot of profit but they are still making a profit even though prices this high. That's delayed the rationing process to this point any way in corn.

 

Where can we go?

 

I think the trade right now, thinking nine dollar corn.

 

Really?

 

Thinking seven dollar, $7.50 new crop corn and the thing that scares me is if we --i think we will get 92 million acres plus. We get a ten to 15 day window i think $93 million acres. I think beans in July and August. You can see 20-dollar beans in august and could see or --or could see ten. Violence is huge out here. The thing that we are all scared is nobody is -- everybody is making money now but nobody is buying the processer doesn't want to buy august, September, he doesn't want that buy that. Very guys in Michigan buying speciality crops. They aren't going to buy them the --they say we aren't going to lock ourselves into loss. When does the end use irsay i will wait and questions --do i go this or this and then drop off a cliff and everybody is worried when is the rationing going to start and how aggressive?

 

That's what the ration starts and that's what i want to talk act. What are some of the other things we need to look at that can limit that or use -- omened crude.

 

Middle East gets worse and corn will go higher, if the dollar continues to drop that's bullish. Right now it’s very supportive and with the weather the corn bulls in control of this market for the short term. Right now i would say it has two to three more months of very strong, success, then by mid-June he will have to start scratching his head.

 

Make a point, you mentioned nine dollar corn and 20-dollar beans, you didn't mention wheat.

 

Well, you definitely here in the midwest the wheat crop look good in most cases. That's not the case out west.

 

Dry.

 

Very dry, Texas reports of abandonment in Texas. Western third of Kansas is tough right now. Western half of Oklahoma. There is more talk of abandonment but the soft wheat crop looks good in the Midwest and --i would encourage folks if they are growing wheat to get price protection lock in on this crop and look forward to next year, 2012.

 

And even though i had the very big price i could give you I'm 50% --I'm short cash, long calls, calls a lot last fall. I hope the market --or long a put, and long cash. I'm hoping the market rallies to raise my floor. I'm not unpriced --even though i think is some availability, hoping for the home run because I'm in the market and i haven't met the farmer that had the market up and then crash the next day and he gets short big crop. You just can't sell on hard down action.

 

That sounds like a message for farmerthat haven't done anything, you need to get yourself protected. You say that every time.

 

I think just having that floor and the flexibility. Or the example with box a cash sell and a call with that, giving that flexibility to the upside is something you want to embrace at this time. We are in the middle of April and have time but each time the market moves higher the more risk there is eventually to the downside.

 

And 2012, i would still argue you have to make the market pay, guys still making those sales and i think china is bullish. You need premiums and i would delay on selling --make the market pay because you will have another weather scare market next spring.

 

2011 but not to far out.

 

Unless i get that summer weather and you have to have a game plan. Your banker, wife and partners, you can't just wake you and say i will sell two years, have you to plan for it now.

 

Thank you for being here. We will be right back.

 

It's time to for weather U.S. farm report brought you brought to you by nationwide agro business.

 

The man with the moment. Mike Hoffman joins me. We have been noticing we are planting rolling but we aren't getting the storm to pick up the gulf moisture and bring in a lot of rain. They seem to be float along up here.

 

Most has been moving through the Ohio Tennessee valley. By the time it gets farther east its been helping some of the southeast. Unfortunately and as we go through the season many times all of these systems move farther north because of the warmer air coming in. That's not necessarily good news for the southern plains. We may not come out of that drought this season. That's just something we have to watch. Into this week you will notice mainly a zonal flow, still the remnants of the trough into New England as you can see there. As we head through this week the computer models drop a bit of a trough and move it eastward but you will notice it doesn't get into the southern areas. Once again a lot of that tracks across the northern tier of states. Chillier by later next week and into next weekend back in to the northern plains just to keep it on the cool side. The way it looks, as we go day by day and you will notice the front stretching west to east across the country. With that zonal flow that normally happens. High pressure in the southeast keeping dry. These are scattered showers and storms in eastern Texas and Louisiana. Anything will help. More substantial rain, more widespread along the frontal system and that will stretch back into the central portions of the rockies. Bit of snow in the higher elevations though we are getting warmer. That snow level kind of tends to rise this time of the year. By Wednesday then the middle of the week bit of a storm system coming through like we talked about with that trough. That will spread showers and storms from east Texas on into the Tennessee valley. These will be more scattered rather than widespread. Widespread rain across the central Mississippi and into parts of the lower lake and Ohio valley. Dryer weather coming in for the most part out west. By Friday that changes and a couple more systems in to the western states, pretty good rain in the high plains. Again most of that will be rain in the rockies. Rain and snow in New England through the end of next week .

 

One much the most frustrating thing things is factors over which we have no control and which are essentially random mess with our carefully built road maps. The big question mark is like this year the weather. We have already altered our strategy for planting and even though we knew this would happen a sense of futility lingers. Marte of the reason is our reluctance to admit much of our success is dictated by the role of the dice. The influence of randomness has been shown to be a much larger factor than we want it to be. You know those wall street finance wizard whose make billions? Well, economists can demonstrate with mind wrenching math they are essentially on a very long lucky streak. We are fooled by the survivor bias, looking only at the winners. In truth there are many more equally good people who just guessed wrong once. What we struggle to grasp is in a group of millions the laws of probablyible can mean a handful can experience flipping 20 heads in a row. This offends hour sense of control but it shouldn't. Acknowledging the role of luck encouraging humility and makes gratitude greater. We are not helpless in the face of randomness but all benefit from a string of good fortune. Please let us know what you think. Send e-mails to mailbag at U.S. Farm Report.com or call and leave us a voicemail. Coming up in the next half hour, a tiny oil seed that could have a big future as a bio fuel. Stay with us. The second half is coming right up. .

 

Today on U.S. Farm Report.

 

California races the bar for renewable energy.

 

And EPA decision triggers a million headlines about spilled milk.

 

And the latest bio fuel crop candidate. U.S. Farm Report brought to you by Chevy and their award winning cars, trucks and crossovers. .

 

Welcome to U.S Farm Report. All of us have been attracted to the wrong person we can be fascinated with wrong ideas as well. Such is the case with wind power. A recent study louis cold water on this energy source. Not only were they bringing less energy than hope bud were nearly useless during peak demand president it's also been noted in Texas where the biggest wind energy state gets trivial amounts during high demand days. They are best at generating payments to owners and builder, not power but we decided to ignore that. Al has that story and the rest of the news.

 

Thank you. And hello. When it come doss renewable power the state of California is trying to lead the way. This week the governor signed into law a measure that sets standards on electricity. The law requires that 33% of the electricity generated in California must come from renewable resources by 2020 like wind farms. Electricity standard includes targets, the utilities must meet a 20% target by the end of 2013, 25% by the end of 2016. United States DA is taking steps to increase the use of renewable fuel in your car. The agriculture secretary said his department will provide funding for service stations toen stall flex fuel pumps. Now USDA issued a rule to clarify that, what sort of fuel systems would belling up for the funding. They say that includes a blender pump. It's to provide incentives to fuel station owners so they install pumps that offer e85 fuel. He said the white house wants to instale ten thousand pumps in five-years.

 

When it comes to spilled milk the epa said that all it is spilled milk. This week EPA removed milk and milk containers on dairy farms the same rules that apply to fuel spills. The first intent of the regulation was to stop oil spills from getting in to United States warways. An Iowa center was a cosponsor. He said to think that milk would be treated the same as oil defies common sense.

 

That's it for news. Time for the national forecast from Mike Hoffman.

 

Weather on U.S. Farm Report is brought to you by nationwide agro business, the number one farm insurer in the united states.

 

Doesn't look like any big storms to start this week but we are looking at a zonal flow that will fracture from west to east across the middle of the country. There will be areas of showers from coast to coast there. These are generally just widely scattered showers and thunderstorms i know you can use a lot more. Whatever you can get will be helpful. Some of the higher elevations in the rockies. Toward Wednesday we do see that jet stream buckle a little bit. A storm system developing in the central and eastern plain states, probably around the st. Louis area where the low pressure system is. A good chance of rain mainly north. Scattered showers and storms and from the Tennessee valley into eastern Texas. Dryer air for a couple days out west and into Friday it looks like another system, good trough into the western state and that will cause more rain in many parts of the rockies, snow in the highest elevations, this time of year that snow level tends to rise obviously as the warmer air comes in. Scattered showers and thunderstorms throughout the gulf coast area. The keyword is scattered. I don't sew it --rain up and down the eastern seaboard to end the week with a bit of snow. There is the precipitation, the temperatures expected for next week. This would take us through the end of April, the 24th through the 30th. Above normal temperatures from the midatlantic through the southeast, Texas into the southwest. From the great lakes across the northern plains, i know this isn't good news. A lot of you are way behind, but cold temperatures back into Montana, precipitation for next week basically the eastern half of the country looks to be wetter than normal. Most of this stays to the northeast of the bad drought areas, probably below normal for much of western and southern Texas, back into the four corner area. Four corners through Texas into the southeast, below normal for the southern tier. Precipitation over the next 90 days below normal precipitation from the four corner area. Those are the drought areas n to the southeast above normal, only for the great lakes and the far northeast plain states. The --that just doesn't look good.

 

Right. Unless i missed something more of the same.

 

Looks that way.

 

Hopefully we will get a couple systems. . And below normal temperatures, those are really cold.

 

I know.

 

We will watch for change. Here to the heart land is next.

 

United states farm report bought to you by new post emergenca herbicide for corn. Count on it for weed fighting force. .

 

You talk about renewable fuel and you normally hear about ethanol but other crops may be capable as well. One is called camollina. Clinton has the story.

 

Steve and his family have been farming in Washington State for decades.

 

I'm a 5th generation. Here on this particular piece of ground I'm the third generation.

 

Today he hopes to keep that going in his combines cutting by growing his own fuel.

 

This particular point I'm going on a venture to be 100% sustainable by growing my own oil seed crop and making my own bio diesel.

 

His crop of choice is this tiny oil seed, it may have a big future as a bio fuel. It's a member of the mustard family and a distant relevant different to ca no, la. With a 40% oil content it can squeeze nearly 100 gallons of oil out of every acre and it's suited for dryer climates with the ability to grow on ten inches of rainfall a year. It's caught the eye of researchers across the country including in New Mexico.

 

We pump water for crops, we know that the water supply is going down and we were looking at this as an alternative to decrease the water use and be able to be a cash crop for local producers.

 

That cash crop includes more than just oil. The leftover meal makes a high protein edition for livestock feed.

 

Left with a high protein fiber byproduct that we can put in protein supplements.

 

It's a slow emerging and growing crop for about the first 45 days you kind of want to just remember that you planted it but go fishing or do something different. It's there, the second 45 days, it takes right off. It starts growing, it'll bolt head out and in 90 days total growing time you should have yourself a harvestable crop.

 

It works well in a rotation and even the United States air force is rotating into the mix. A raptor just broke the sound barrier at 1.5mac on a 50/50 blend of jet few and the oil. It's more cold tolerant making ideal for flying. A study out of Michigan tech showed the jet fuel could reduce emissions by 75%. Steve hope itself can reduce his costs on the farm.

 

I think we really need to look at more than just the bottom dollar. It has to pay, yes, but even if if broke even, even if you didn't make a dollar off it you would be able to guarantee yourself your own fuel every year by handling my own product i'm my own middle man, end user, producer, so i get to take all of the pluses that come from that crop belong to me. I don't pay anybody else to do it. If we can make the structure work, it is set to run.

 

 

Our thank you to Washington State, New Mexico State and the sustainable oils company for their help on that. It's contracting with farmers in the northern plains to grow the seed.

 

Next week, meet a Texas rancher who doesn't mince word when's it comes to her angus herd. She will tell us what the land, animals and the people mean to 9 country. That's next week.

 

Still to come meet the sciencists bat a farmer's enemy, weeds. We will be right back. >> this program brought to you by DOW Agro Sciences. .

 

Animal agriculture has been under attack some lately, particularly domestically. If the animal agriculture industry and that doesn't matter if it's domestic or international doesn't do well we don't have the good markets we have today in soybeans, that are giving us the good return we are getting now. The overall goal is to make soybean farmer as ware of how important animal agriculture is for them. .

 

Weed warriors is brought to you by post herbicide.

 

They are a huge threat to agriculture and in many cases farmers are losing the battle against weeds. That's one reason our partners at form journal launched a weed warriors campaign. We want to arm producer was ammunition. You also need soldiers, Wes Mills reports.

 

Brett work was a green house full of weeds, the grad student at the university of Missouri is looking for the best combination of herbicide is to kill weeds.

 

It's always a war on weeds. Plant as adapt.

 

It's a battle being waged in labs across the country. Larry is allowing rye grass to thrive in this wheat crop. One part was treated, the other was not. He seeing how this weed can choke a field.

 

Rye grass is a real issue and one of the big reasons is its resistant.

 

It's a cool season annual that grows best in southern states and that's bad news for wheat growers. Kentucky is about the most northern but just far enough south where it still grows and once it spreads growers can have a hard time getting rid of it.

 

It is by far the most competitive weed that we deal with in wheat. It's one plant per square foot can limit yield business as much as 4%.

 

Resistance is a common problem. Weeds have adapted overtime. The herbicide that used to be the main ammunition now hardy phases it. In low scienctists lose images to show our quickly it's spread. Daniel Stevenson confirmed the first case of resistance in Johnson grass in the state.

 

We were able to see what happened in other states and we started three or four years ago educating growers as to the problems they were seeing how we might try to prevent that problem from happening in the state.

 

Palmer is more common in southern states and it surprised Michigan State researchers when it showed up there.

 

This is one of the southern weeds that growers have been dealing with. We have collected seed from that and have done some initial screens.

 

The first resistant weed was found in the 60s. Four decades later the list was grown but so have the tools and knowledge to fight back. In Oklahoma some producers use canola as a rotational crop. That helps improve pest management.

 

Then it was a broad leaf problem and that would let us use a new group of herbicides that we didn't have available and its been very successful crop here.

 

Rotating crops keeps weeds off balance and combats resistance. Farmers must not wait until, herbicides stop working or rely on new technologies only.

 

We will fail if we don't use it as a tool in the toolbox.

 

Basically it boils down to having a diverse weed control program, diverse crop rotation where you can use multiple methods for weed control in each of the crops.

 

This is Wes Mills reporting.

 

Farm journal has a host of information, we will put a link on our website to help you get there.

 

When we come back tractor tale tales and our country church salute. Please stay with us. .

 

Tractor tales this week takes us to the sunshine state where our subject helped bring in an important crop. Its been through quite a restoration process. Robert smith joins us now to show off this ford work master here we have a 1957, another ford, high clearance, a 950 --4 which tells you that it's high clearance tractor. Not a whole lot of this particular one made. They are a little on the rare side. They are available but in the high clearance there aren't as many as the utility tractors that were made. This one is --it's a late model you can tell by the power master emblem on the tractor, makes it a late 57. This was more than likely used in the cane field territory in south Florida where they raised corn, cane, more than likely used in that area of the state. The nine tells you that it's a --172cubic inch and the five tells you it's a five speed transmission, zero shows you 55 through 57 and the work master says it's a 134cubic inch engine and the power master says it's a 172cubic inches. Everything else is the same. The sheet met 58, fenders, only difference is your higher spindles and the wheels. That gives you your high clearance. It's different, not to many of them made. It's just a rare tractor. I get it out and drive it around sometimes but it doesn't do any work, it's retired.

 

For country church salute we are off to the west coast to honor the United Presbyterian Church. It's located between Fresno and Bakersfield. The present building was created to replace a building damaged in a quake. The church clerk sent us the photograph and history. As always we want to learn about your home church. Salutes can be sent to the address on the screen. Please stay with us. The mailbag is next. .

 

Country church salute is brought to i by farmers feeding the world. Agriculture leading the way and feeding a hungry planet. Learn more, give, dream huge with us. .

 

Time for the mailbag. Bernard from Denmark Wisconsin thinks we got hysterical, water in the field to hot, toed could, i had to go out to make sure the sky wasn't falling. We say things like this every year but at the risk of saying it's different, things are different this time. While weather issues are always a problem consider the factors we now see in the crop markets. Most are in short supply, cotton at a record low and corn is close. We don't have a lot of acres lie around to throw into production, no set aside. Third, because of the ethanol mandate we have a demand factor that's close to bullet proof while so demand isn't back off. 4th something we have been talking about has come to pass a i growing global population with money to spend and a cheap dollar that makes us look like a discount grocery and finally, can you say seven dollar corn? All this leaves you with little margin for error. A short fall of just 500- bushels of corn is a bigger deal than before. Are you right, the sky isn't falling for crop producers, but for some customers a short crop could have a similar effect. As always we want to hear from you. Send comments to www.mailbag.com or voicemail. For all of us, thank you for watching U.S. Farm report. Be sure to join us again next week. Will work to do even better.

 

 

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