THIS WEEK ON U.S. FARM REPORT
APRIL 9-10, 2011
While less anticipated than last week's "acreage projections" this weeks supply-demand report had a few surprises. Most notable was no change in the anticipated corn carryout. The trade was leaning toward a reduction due to relentless demand. While ethanol usage was increased 50 million bushels, it was offset by lower feed and residual consumption. Here are the estimated numbers for the current year carryout:
Corn remains at 675 million bushels, unchanged from March
Soybeans are at 140 million bushels, also unchanged and wheat 839 million bushels, down 4 million that's lower than what the trade expected if only slightly. World carryout numbers were also little changed from March.
In order to keep up with global demand, planted acreage will have to hit new highs in the U.S. this year. To get supplies to necessary levels, researchers at Rabobank say American growers will need to plant 237 million acres to the four major crops - corn, soybeans, cotton and wheat. If that happens, it would be 7 million acres more than a year ago and three million above the old record set back in 2008. Because prices for all four crops are up, analysts say the battle for acreage will be more intense than ever.
With record crops hopefully on the horizon, freight and barge operators are ramping up to meet demand. New figures show the u-s inland barge fleet grew about two percent last year, the first such increase since 1998. In fact, the Ag department reports grain barge traffic around St. Louis is up 126-percent over last year. As always, increased demand equals increased costs. Shippers expect fuel budgets will increase sharply as fuel costs remain high.
Even though the high cost of feed continues to suppress profits for dairymen, milk prices are at their highest levels in nearly three years. Rabobank economists expect supplies to remain tight thru the second quarter of this year, backed by improving demand. They say the recent rally could have been even stronger had it not been for the earthquake and tsunami in Japan.
We're checking in with growers in three states for crop watch this week. In Michigan - mother nature puts a break on any planting plans. A grower in baycity reports a mix of snow, sleet and rain will keep him from getting any field work done for at least another two weeks. In Michigan - mother nature puts a break on any planting plans. A grower in bay city reports a mix of snow, sleet and rain will keep him from getting any field work done for at least another two weeks. It's a similar story in South Dakota where a grower in brown county reports acres of flooded farmland. He says a large portion of the drenched acreage will not be planted again this year - and the corn acres that do get in the ground will be late. He's predicting a big switch to beans. To find dry fields, just head to Texas. A grower in Gonzales county says his corn and grain sorghum is all planted - what he needs now is a good soaking rain.
The USDA has been tracking what Americans eat to determine how many and where their calories come from. I found a very helpful graphic to display this information which we will link to on our website. First is the overall consumption trend, which is alarming. In 1970 we consumed 2168 calories per day, in 1980 - 2195, a small jump. In 1990 we were up to 2405, up almost 10 percent in a decade. By 2000 we had jumped almost 15 percent to 2717 calories. But by 2008, we had actually dropped slightly to 2673. More interesting for farmers is watching where the calories came from. In general the added calories came from added fats, sugar and grains, while calories from fruit, meats, and dairy were fairly constant. As our nation heatedly and reluctantly confronts paying our health care bill, the problem of obesity will loom large as a factor that must be managed to control costs. From the numbers i just gave, it seems to me that eating outside the home more often has helped us to increase consumption as much as any other factor. The prospect of a nation where half the citizens suffer from diabetes is sadly alarming, but i am encouraged by the apparent slowdown in overall calories. While there is no good evidence calorie information changes eating habits, maybe it simply takes more time than we expect. I flipped over my placemat at McDonalds to find out what that shamrock shake contained. I still get one occasionally, but I'm getting the small size now.
Free trade agreements are easier to negotiate when many goods are in demand, especially farm commodities. And it appears another deal may be in the final stages of approval in Washington. But free trade is not universally understood as a good thing because while economists can make a solid case for how it increases the wealth of all, what it also does is dislocate some workers from inefficient industries to other occupations. Telling a middle-aged steel worker we need more home care nurses is not welcome news, for example. Free trade never seems to happen fast enough for Ag, but maybe we need to allow some time for other lives to adjust.
Let's get started with the headlines and Al Pell....
Thanks John. A deal is in place that could bust open a new export market for American agriculture. On Wednesday the white house announced a free trade pact had been reached with Colombia. In total, the Obama administration says the deal could boost annual U.S. exports to Colombia by more than a billion dollars. For agriculture, the agreement would make more than half of all American Ag exports duty free...and it would end almost all tariffs within 15 years. Colombia is the third-largest economy in central and South America. The agreement has to be ratified by congress before it can take effect.
USDA FOOD TESTING
Also this week, the Ag department moves forward with plans to add a critical layer to its food safety efforts. Each year inspectors conduct thousands of random tests at packing and processing plants across the country. On Tuesday, the Ag department unveiled a proposal that would require companies to delay shipments of beef, pork and poultry until those test results are in. The "test and hold" mandate has strong support in the meat industry. In fact, many already have the policy in place. Had this rule already been in effect, the USDA estimates dozens of earlier recalls could have been prevented.
In an effort to help consumers make healthier choices at the dinner table, the FDA is looking to extend its calorie counting initiatives. A proposal is in the works that would require labels on foods sold from vending machines. In addition, chain restaurants with more than 20 locations would be required to have calorie counts listed on their menus. The FDA says American's now consume about a third of their total calories away from home.
Out west, a late season freeze has crippled peach production in New Mexico. Crop watchers say the hard freeze sent temperatures plummeting as low as 18 degrees below zero. While there are only 250 acres of peach trees in the state, just about every tree fell victim to the bitter snap.
It hasn't been around long, but a new 4-h program in the bluegrass state is sure sure off to a flying start. The goal is to rehabilitate injured birds and return them to the wild. Jeff Franklin shows us how it works in this report from the University of Kentucky. 4-H leaders are hoping to build a permanent rehab center at the Letcher County Extension office.
Are you a farmer...or are you a rancher? Is there a difference? I can tell you there is. Here's Baxter Black with his take on the question. Baxter joins us again in two weeks...until then, check out his work online at baxter-black-dot-com."
In 1929 Minneapolis Moline formed an implement company and started making tractors. This week on tractor tales, we check out a Moline model "r" that came off the line in 1951. Next week on tractor tales, learn how one man transformed his 1957 ford high clearance to its original beauty.
Today on country church salute we are reminded how important canals were in opening up our vast nation. In Paulding county, Ohio was the only place in the u-s where two canals junctioned - the Wabash and the Miami-erie crossed a miles north of Melrose.
As a result, it was a booming town and about 1870, the Melrose Methodist church was begun. After groundwork by circuit riders services began in the disciples church.
The congregation bought the church from the disciples in 1926, and a major renovation and addition was completed in 1964. The church ministers specially to families moving in and out of the community. The church is growing with an active attendance of 50.
The pastor is Eileen Kochensparger, and she sent us the photo and history. As always we want to learn about your home church as well... Salutes can be sent to the address on the screen. Stay with us - the mailbag is next.
Time now for our weekly look inside the farm report mailbag....
Unsurprisingly, nobody seemed to agree with my call for more government oversight to improve our farm safety record. Most responses contained a now-familiar anger about regulation and bureaucracies.
"Tell me when has more government in our lives made things better???? Bumbling bureaucrats on my farm telling me what my common sense already knows??? I think not!!! - Linda Urich: Laredo, Mo"
Fair question, Linda. Here are three examples off the top of my head.
One - the national traffic safety administration has improved the safety of our cars immensely since 1970.
Two - the mine safety and health administration forced what was by far our most dangerous industry to a safety record better than agriculture.
Three - the much despised EPA. Although farmers can't find much good about its work, i remember acid rain, California smog and the night the Cuyahoga river caught fire.
My observation is farmers despise agencies that force them to change their actions but don't mind when the EPA forces others to buy ethanol or the USDA makes consumers pay through the nose for sugar, for examples.
But the underlying issue that we see differently is what safety costs. Like almost all other industries i think workplace safety is an asset more than an expense, but my guess is a majority of farmers don't consider our casualty rate a big deal. In fact, one anonymous caller sees an upside for children in our record:
"OSHA takes the children out of it. I know we need to keep the children safe, but they learn from other accidents."
On that note, I will simply say I disagree.