USFR Weekly Recap - August 27-28, 2011

August 29, 2011 04:51 AM
 

THIS WEEK ON U.S. FARM REPORT
EPISODE #1985
AUGUST 27-28, 2011

JOHN’S OPEN: HELLO AND WELCOME TO U.S. FARM REPORT, I'M JOHN PHIPPS. THIS YEAR'S PRO FARMER CROP TOUR WAS UNIQUE IN ONE ASPECT: THE PARTICIPANTS. FROM GLOBAL NEWS ORGANIZATIONS LIKE BLOOMBERG, DTN, AND WALL STREET JOURNAL TO FOREIGN INVESTORS TO FINANCIAL POWERHOUSES LIKE MORGAN STANLEY AND OPPENHEIMER, THIS WAS NOT THE USUAL GANG OF FARMERS. THE TOUR HAS DEVELOPED SOLID CREDIBILITY OVER THE YEARS THANKS TO THE METICULOUS EFFORT OF CHIP FLORY AND HIS COLLEAGUES. THIS YEAR'S GLOBAL PARTICIPATION VALIDATES THAT STANDING BUT ALSO INDICATES THE IMPORTANCE OF THIS CROP AND THE GROWING DISSATISFACTION WITH GOVERNMENT SURVEY RELIABILITY. WHICH IS PERHAPS WHY NASS SENT ALONG A FEW OF THEIR OWN. LET'S GET INTO THE TOUR REPORT DETAILS.....HERE'S AL PELL.

CROP TOUR NUMBERS: THANK YOU JOHN. THE 2011 PRO FARMER MIDWEST CROP TOUR IS NOW IN THE BOOKS. AND THE OUTCOMES ARE BEING CLOSELY WATCHED IN THE INDUSTRY. WITH USDA LOWERING ITS FORECAST OF THIS YEARS CORN CROP, PLUS WITH A WET SPRING AND DRY SUMMER, ANALYSTS ARE WONDERING HOW THE CROP WILL END-UP. THE TOUR STRETCHES FROM NEBRASKA TO OHIO, COVERING SEVEN MAJOR CORN AND SOYBEAN STATES. THE FIELD SCOUTS COLLECT MORE THAN A THOUSAND SAMPLES OF BOTH CROPS. THE PRO-FARMER CROP TOUR FORECAST WAS RELEASED FRIDAY AFTERNOON. FIRST WE'LL START WITH CORN ESTIMATES. OVERALL YIELD FOR THE COUNTRY IS A SHOCKING 147.9 BUSHELS, WITH A TOTAL PRODUCTION OF 12.5 BILLION BUSHELS. YIELDS IN THE WESTERN CORNBELT FAILED TO BALANCE THE EXPECTED POOR NUMBERS FROM THE EAST, WITH HEAVIER THAN EXPECTED LOSSES FROM DISEASE, WIND, HAIL, HEAT AND LACK OF RAIN.  SOYBEANS WERE LOWER THAN LAST YEAR BUT CLOSER TO THE AUGUST USDA NUMBER. PROFARMER CALLS YIELD AT 41.8 BUSHELS AN ACRE. RODUCTION IS PEGGED AT JUST UNDER 3.1 BILLION BUSHELS. THE SCOUTS SAW LITTLE DISEASE PRESSURE. THEY SAID A GOOD RAIN IN THE MIDWEST WOULD HELP.

STATE BY STATE: PROBLEMS IN THE EASTERN CORNBELT WERE ABUNDANT. THE SCOUTS SAY THE CROP WAS VARIABLE. INDIANA AND ILLINOIS CROPS SUFFERED FROM THE LACK OF RAIN DURING POLLINATION AND TOO MUCH HEAT. HERE'S A STATE BY STATE BREAKDOWN. IN ILLINOIS, FOR EXAMPLE, THE CORN YIELD AVERAGE IS 155 BUSHELS. IN INDIANA, IT'S 146 BUSHELS AN ACRE. LESS DRAMATIC ARE IOWA AT 164, MINNESOTA AT 169; NEBRASKA - 165; OHIO - 160; AND SOUTH DAKOTA AT 141.

CHINESE TOUR: HOW IMPORTANT IS THIS CROP TOUR? THERE'S ENOUGH INTEREST TO DRAW GRAIN BUYERS AND RESEARCHERS FROM CHINA. THE U-S GRAINS COUNCIL IS HOSTING THE CHINESE DELEGATION. ON THE FIRST DAY OF THE CROP TOUR, THE VISITORS VISITED THE SOUTH DAKOTA FARM OF NCGA PRESIDENT DARRIN IHNEN. THE UNDERLYING MESSAGE IS FULFILLING CHINA'S DEMAND FOR U.S. GRAIN.

CROP WATCH: CROP WATCH TAKES US TO HUNTINGTON COUNTY INDIANA, ABOUT SIX TENTHS. THAT BRINGS RAINFALL TOTALS TO LATE JUNE JUST UNDER 3 INCHES. THE CORN IS SO SHORT THAT HE COULD SEE OVER IT. AND FROM CENTRAL KANSAS, GORE SAID HE JUST FINISHED HARVESTING 1200 ACRES OF DRY LAND CORN THAT AVERAGED 8 BUSHELS AN ACRE. WHEN WE COME BACK WE ARE OFF TO MINNESOTA TO WRAP UP THE 2011 PRO-FARMER MIDWEST CROP TOUR.

ROUND TABLE: LET'S GET RIGHT TO OUR ROUNDTABLE FROM THE PRO FARMER CROP TOUR. PLEASE NOTE HOWEVER THAT THIS WAS TAPED PRIOR TO THE RELEASE OF THE FINAL NUMBERS ON FRIDAY. WE ARE IN AUSTIN MINNESOTA OF THE PRO-FARMER MIDWEST CROP TOUR, WHERE WE ARE GOING TO GET SOME REAL IMPORTANT INFORMATION. INFORMATION WILL START OUT RIGHT NOW, AND THAT WILL START WITH MARC BERNARD AND, MARK, I WANT YOU TO TELL ME AND NOT IN DETAIL WHETHER THERE WERE ANY INSECTS AND ANY DISEASE PROBLEMS, WE GOT INTO IOWA AND WE RAN INTO ANY NEW DISEASE, BACTERIAL BLIGHT IN CORN, AND IT LOOKS LIKE IT HAD BEEN SPRAYED WITH ROUNDUP FOR PARASITES. OKAY, YOU’RE NEXT MR. GRADY, AND YOU WERE ON THE EASTERN TOUR, TELL ME ABOUT THE EASTERN PART OF THE UNITED STATES. WELL WE HAD REDUCTION IN YOUR ACCOUNTS FROM THE YEAR AGO, COME UP WITH A LOT OF BROWN AND YELLOW AND NOT A LOT OF GREEN. GOD'S COUNTRY FOR GRAYNESS YEAR, IS THAT TRUE? THAT'S THE QUESTION WE’RE TRYING TO ANSWER. IF THE WESTERN BELT IS GOING TO BE GOOD ENOUGH TO MAKE UP FOR SOME OF THE SHORTFALLS OF THE EASTERN THOUGH IT STARTED OUT IN SOUTH DAKOTA AND DOWN 1.7% ON YIELD, WE MOVED INTO NEBRASKA. WE WERE, AND YIELDS COMPARED TO YEAR AGO AND, THAT SHOULD NOT HAPPEN. NOT IN NEBRASKA, NOT WHEN THEY ARE JUST FIGURING OUT THAT THEY CAN START TO PUSH THE POPULATION. SO THAT LOWER TIER ACCOUNT CERTAINLY SUGGESTS THAT THERE WERE SOME PROBLEMS OUT THERE AND IT ALL LOOKS BACK TO HOW THAT CROP WAS PLANTED. THEY GOT IN THE HURRY AND PLANTED ACROSS THE FIELD. ONE SEED MIGHT GERMINATE AND GET THAT STOCK COMING UP OUT OF THE GROUND ABOUT THAT LATER THAN THE REST WELL. THE NEIGHBORS BEAT UP ON THE GUY AND ALL OF A SUDDEN YOU HAVE UP LIKE STOCK. WE WERE DOWN ABOUT 2% OR 3%. WE HAVE ALLURING YIELD. THEY ARE DOWN 8% ON YIELD FROM THE YEAR AGO. WE WERE HOPING TO MAKE IT UP WHEN THEY GOT INTO THE WEST CENTRAL AND NORTHWEST PART OF THE STATE. WE DID SEE BETTER THAN YEARS AND YIELD COMING OUT OF THAT LAST PART OF THE STATE BUT IT WASN'T GOOD ENOUGH BECAUSE WE TOOK ALL THE SAMPLES AND WE WERE STILL DOWN ABOUT 3% IN WESTERN IOWA ON TOTAL YIELDS OF CORN. ONE THING ABOUT SOYBEANS ACROSS THE WESTERN TOUR IS THAT THEY ARE DISEASE FREE, BUG FREE, ALL WE REALLY NEED IS ANOTHER DRINK OF WATER AND IT WILL FINISH THIRD. OKAY. LET'S BRING US UP-TO-DATE. IN OHIO WE WERE DOWN ON OUR YIELD ABOUT 5.6% FROM THE YEAR AGO. THAT'S WHAT WE FOUND ON THE TOUR. LOWER YOUR ACCOUNTS AND GREAT LINKS IN THE CROP IS FAIRLY IMMATURE, MOSTLY IN THE MIDDLE STAGE. THEN IN INDIANA THE MATURITY WAS PUSHED BY HEAT AND DRYNESS AND IT TOOK THE YIELD CALCULATION DOWN 14.3% FROM THE YEAR AGO. IT'S PRETTY STARK WHEN YOU GET OVER THERE AND SEE IT, FIELD AFTER FIELD OF YELLOW AND BROWN. THERE WASN'T A LOT OF CROP THAT WE SAW THAT THE RAIN COULD HELP, IF WE GOT ANY LATE-SEASON RAIN. WE WERE IN FIELDS THAT HAVE 100% OF THEIR FIELDS ALREADY DROPPING. IT'S PRETTY SIGNIFICANT AT THIS POINT IN TIME. SO THE CROPS REALLY AREN'T THAT GOOD ON EITHER SIDE. YES. LIKE I SAID, WE WERE HOPING THAT THE TOUR WOULD HELP LIFT UP AND REPLACE SOME OF THE BUSHELS THAT WERE LOST IN THE EAST, BUT WE DIDN'T FIND OUT. DON'T THINK THAT'S GOING TO HAPPEN NEXT. NO. AND THE DAMAGE YOU SAW THE SMOKE WAS WORSE THAN WE ANTICIPATED. ESPECIALLY IN INDIANA AND ILLINOIS FOR THAT MATTER. THE OLD SAYING IS, PLANTED IN THE MUD AND CROP IN THE DUST. THAT IS ESSENTIALLY THE CASE. WTH SLOTS OPEN, THEY SAW THE TRACK WERE 32% HAVE BEEN OPENED UP, LIKE THAT, AND THAT CROP STRUGGLED ALL SEASON LONG. SO BASED ON WHAT YOU GUYS SAW, THE YIELD IS NOT OUT IN THE FIELD, EVEN TO BE HARVESTED EVERY ACRES HARVESTED YET. IS THAT TRUE? I THINK THAT'S PROBABLY TRUE. PARTS OF THE ACRES ARE SOMETHING WE NEED TO TALK ABOUT. WE WILL DO THAT WHEN WE COME BACK WITH MORE U.S. FARM REPORT IN JUST A MOMENT. HERE IN MINNESOTA AT THE PRO- FARMER MIDWEST CROP TOUR WE HAVE THESE GENTLEMEN, AND YOU JUST EXPLAINED IN THE FIRST SEGMENT HOW POOR CROP CONDITIONS ARE OUT THERE AND WHAT COMES TO MY MIND AT THIS POINT IN TIME WITH THE EXCEEDING STRONG DEMAND, WE HAVE CORN AND SOYBEANS PARTICULARLY AROUND THE WORLD AND IN THIS UNITED STATES, WHERE ARE OUR PRICES GOING TO GO? UP STILL? WHERE DO YOU THINK OUR PRICES WILL BE? WHILE THE ANSWER IS NEITHER DUMB NOR EASY, THE ANSWER IS HIGHER BUT TO QUANTIFY HOW MUCH IS REALLY DIFFICULT. THE THING I THINK IT IS FROM THE FUNDAMENTAL STANDPOINT WE ARE BULLISH. BUT WHAT WE HAVE SEEN ABOUT 725 AT 750 IN THE FUTURE IS WE GET DEMAND DESTRUCTION. AND THEN IT COMES BACK RIGHT AWAY IN PRICE AND YOU GET THE END-USERS BECAUSE YOU GET DISCOUNTED PRICE AND THEY BUY IT, THEN YOU GO BACK UP. SO YOU KIND OF FEEL. YOU MAY SIDESTEP THE LITTLE BIT OF SOME OF THOSE PROGNOSTICATORS OUT THERE SAYING 14-16 CORN AND STUFF LIKE THAT IS PROBABLY NOT LIKELY. SO HOW HIGH IS TOO HIGH? I THINK WE ARE THERE. I AGREE WITH WHAT BRIAN IS SAYING. THE CASH MARKET IS WHAT WE'RE TALKING ABOUT. IF THAT 725-750 RANGE, 1895 AND 1996, THROUGH 2008 IN THIS YEAR THE CUSTOMER STOPPED AT BETWEEN SEVEN AND THE QUARTER IN 750. FOR THE LAST FEW YEARS WE HAVE BEEN ABLE TO GET ABOVE THAT IN THE CASH MARKET. TO ME THAT JUST MEANS THAT WE ARE ALL READY TO THE POINT WHERE WE ARE DESTROYING DEMAND. NOW, THE QUESTION BECOMES, IS THIS CROP POOR ENOUGH THAT WE ARE GOING TO BRING BACK THE MONEY, AND ARE WE GOING TO PANIC THE END-USERS OUT THERE IN DECIDING. 7.50, TO ME THAT LOOKS LIKE THEY VALUE BUY. I DON'T THINK THAT WILL HAPPEN. BUT AS SHE PICKED ON THE LINE, THEN IT'S PERHAPS SOME OF THESE OTHER COUNTRIES WHO DON'T GROW MUCH CORN WILL BE GROWING CORN AND COMPETE WITH THE UNITED STATES, ETC.? THAT'S RIGHT TO SOME DEGREE, CHINA IS THE WILDCARD. THEY HAVE A LOT OF MOUTHS TO FEED. AND THEY BUY MORE CORN. FOR THE FIRST 18 YEARS THEY STARTED TO BUY U.S. CORN BUT WE WILL SEE HOW FAR THAT GOES. CHINA WILL GET THEIR CORN, BUT EVERYONE ELSE HAS TO FIGHT FOR IT. WE HAVE CHANGED TRADE,CHINESE TRADE DELEGATION WITHOUT THE PROCEEDINGS OF THE TOUR. THEY WERE HERE TO SEE THE PRODUCTION CAPACITY OF THE UNITED STATES AND IT'S NOT BECAUSE THEY ARE WORRIED ABOUT THE PRICE, THEY WERE WORRIED ABOUT THE SOURCE. AND WE HAVE BEEN OUT THERE ON THE WESTERN EDGE OF THE CORN BELT AND WILL BE SHOWING THEM SOME OF THE PRODUCTION OUT THERE. SO, DEMAND LIKE YOU SAID, HOW COME IT IS VERY STRONG. IT'S JUST THE QUESTION OF WHAT PRICES GOING TO SHUT IT OFF AND WHERE DOES THAT EXPECT TO TAKE THE FUTURES MARKET? WELL, THE USER PRICE WOULD GO UP IN ORDER TO BUY IT AT THIS PRICE? NO. JOHNSON MADE THE GREAT POINT TODAY HE SAID, FARMERS CANNOT AFFORD TO HIRE, HIGHER CORN. WHEN YOU LOOK FURTHER DOWN THE LINE, BUT IT DOES TO INPUT COSTS --IF WE TALK ABOUT AVERAGE IN $6 OF SOCIAL FOR THE NEXT TWO OR THREE YEARS, WHAT WILL IT COST TO GROW CORN TO HIS THREE YEARS FROM NOW AT $6 OF SOCIAL. WE NEED TO FIND THAT EQUILIBRIUM IN PRICE THAT GIVES FARMERS AN ADEQUATE RETURN FOR THE JOB THEY ARE DOING OUT THERE, BUT NOT TAKING PRICES TOO HIGH TO THE END-USERS CAN CONTINUE TO USE CORN AT THE PACE THEY ARE USING IT TODAY AND INCREASE IT. 20 SECONDS. YES, I WOULD SAY FORGET THE EQUILIBRIUM PRICE. YOU THINK SO? I WOULD HAVE SAID THAT FOUR YEARS AGO IF I DID BELIEVE THAT.

JOHN’S WORLD: THIS WEEK SAW EARTHQUAKES, A HURRICANE, DROUGHT, AND A BLOCKBUSTER CROP TOUR REPORT, BUT ODDLY ENOUGH I THINK THE NEWS WITH THE BIGGEST CHANCE FOR LONG TERM IMPACT FOR FARMERS CAME FROM AFRICA, WHERE THE LOONY DICTATOR MUAMMAR GHADDIFI HAS APPARENTLY BEEN OUSTED. THINK BACK TO JANUARY. YOU COULD HAVE MADE SOME SERIOUS MONEY BETTING THAT STRONG-MEN GOVERNMENTS IN EGYPT, TUNISIA, AND LIBYA WOULD BE OUT OF BUSINESS BY MID-YEAR. IT SIMPLY WAS UNTHINKABLE THAT LONG-STANDING DICTATORSHIP COULD BE TOPPLED BY YOUNG PEOPLE WITH CELLPHONES, AS HAPPENED IN EGYPT. BUT THE IMPLICATIONS OF THIS TRUE REVOLUTION IN AFRICAN POLITICS ARE JUST BEGINNING TO DAWN ON THOSE INHABITANTS AND THE WORLD. LEADERS IN SAUDI ARABIA AND THEIR OIL CUSTOMERS ARE CERTAINLY REVISING PLANS. TYRANTS IN SYRIA AND YEMEN ARE PREPARING ESCAPE ROUTES, AND ALL ACROSS THE GLOBE THE IDEA OF DEMOCRACY AS INEVITABLE IS SPREADING. THIS CHANGE DOES NOT MEAN INSTANTLY BETTER GOVERNMENT FOR THOSE NATIONS, OF COURSE. BUT ADDING HUNDREDS OF MILLIONS OF VOICES TO THE GLOBAL DECISION-MAKING PROCESS WILL AFFECT ALL OUR LIVES. IT IS NOW CLEAR, THAT JUST AS TERRORISTS PRESENT AN ASYMMETRICAL CHALLENGE TO NATIONAL SECURITY, TECHNOLOGY AND INFORMATION CONSTITUTE AN EQUAL THREAT TO DESPOTISM. AFRICA WILL, I BELIEVE WILL BE THE SURPRISE OF THIS CENTURY, SIMPLY BECAUSE IT IS SO POORLY UNDERSTOOD TODAY. FROM ITS IMMENSE SIZE TO SURPRISINGLY UPBEAT ECONOMIC PICTURE, WHAT HAPPENS THERE WILL TOUCH MY FARM AND YOUR LIFE. LET US KNOW WHAT YOU THINK.... SEND EMAILS TO MAILBAG@USFARMREPORT.COM OR CALL AND LEAVE US A VOICE MAIL.

2ND HALF:
JOHN’S OPEN:
HELLO AND WELCOME TO U.S. FARM REPORT, I'M JOHN PHIPPS. THE U.S. IS A BIG COUNTRY. IN FACT IT IS THE FOURTH LARGEST BEHIND RUSSIA, CANADA AND CHINA. ITS SIZE AND GEOGRAPHY MEANS WE CAN HAVE RADICALLY DIFFERENT CLIMACTIC CONDITIONS SIMULTANEOUSLY IN DIFFERENT REGIONS. AS WE SPEAK THE EAST COAST IS COPING WITH TORRENTIAL RAINS FROM IRENE AND A FEW HUNDRED MILES WEST, A RECORD DROUGHT TIGHTENS ITS GRIP. IT IS HARD FOR US AS HUMANS TO GET VERY EMOTIONAL ABOUT WEATHER THAT WE ARE NOT EXPERIENCING, WHICH IS WHY WE TIRE OF STORIES ABOUT SEVERE CONDITIONS ELSEWHERE. BUT OUR INTEGRATED ECONOMY AND ESPECIALLY FOOD SYSTEM WILL BRING HOME THE COSTS OF SUCH NATURAL DISASTERS IN A HURRY. LET'S GET STARTED WITH THE HEADLINES AND AL PELL...

DRY PLAINS: THANKS JOHN. AS WE'VE SEEN THIS SUMMER, DROUGHTS HAVE A DEVASTATING EFFECT ON AGRICULTURE. IN TEXAS ALONE, ECONOMISTS ESTIMATE AG LOSSES AT WELL OVER FIVE BILLION DOLLARS THIS YEAR. THE CURRENT DROUGHT IN THIS COUNTRY COVERS NEARLY ALL OF TEXAS, OKLAHOMA AND NEW MEXICO. OTHER STATES LIKE KANSAS AND LOUISIANA HAVE SIGNIFICANT DAMAGE AS WELL. IT'S NOT ONLY GRAIN CROPS THAT STRUGGLE, BUT COTTON FIELDS AND GRAZING LANDS. AND WHEN PASTURES ARE PARCHED, CATTLE CAN'T GRAZE.

DROUGHT MACHINE: ON A GLOBAL SCALE, DROUGHT CAN CAUSE FAMINE IN UNDER-DEVELOPED COUNTRIES. IT CAN ALSO CAUSE SPIKES IN FOOD PRICES. IN THIS REPORT FROM THE UNIVERSITY OF MISSOURI, KENT FADDIS TELLS US ABOUT A NEW DROUGHT SIMULATOR THAT MAY PROVIDE SOME SOLUTIONS. KENT SAYS ADDITIONAL DROUGHT SIMULATORS ARE PLANNED THROUGH-OUT THE SHOW-ME STATE.

COLLEGE FRUITS AND VEGES: IT'S THAT TIME OF YEAR - COLLEGE KIDS ARE HEADED BACK TO SCHOOL. AS ALWAYS, PARENTS MAY BE WONDERING IF THEY'RE EATING A BALANCED DIET. NEW RESEARCH DONE AT OREGON STATE UNIVERSITY SHOWS WHEN IT COMES TO EATING FRUITS AND VEGETABLES, MALES WERE GETTING ABOUT FIVE SERVINGS A WEEK AND FEMALES WERE AVERAGING ABOUT FOUR A WEEK. THAT MEANS SOME DAYS THESE COLLEGE KIDS WEREN'T EATING FRUITS OR VEGETABLES AT ALL. AUTHORS OF THE STUDY SAY THIS SHOWS MANY KIDS HAVEN'T LEARNED HOW TO BE SELF-SUSTAINING.

HEARTLAND FAN FANATIC: IF YOU LOOK-UP THE WORD "FANATIC" ON DICTIONARY-DOT-COM, IT DESCRIBES THIS PERSON AS SOMEONE WITH AN "EXTREME AND UNCRITICAL ENTHUSIASM OR ZEAL, AS IN RELIGION OR POLITICS." SO WHAT DO YOU CALL THIS PERSON WHEN HE'S FANATICAL ABOUT, WELL, FANS. ANTIQUE FANS, TO BE PRECISE. STEVE GRANT FROM AFFILIATE KYTV FOUND SUCH A "FAN"-TASTIC COLLECTOR IN NORTHWEST ARKANSAS. MORE THAN THREE-THOUSAND FANS...IMAGINE THAT ELECTRIC BILL!

BAXTER BLACK: IT'S TIME NOW FOR OUR BI-WEEKLY VISIT FROM BAXTER BLACK. THIS WEEKEND, THE STORY OF ONE TOUGH COWBOY. WHEN WE COME BACK, TRACTOR TALES AND OUR COUNTRY CHURCH SALUTE...PLEASE STAY WITH US.

TRACTOR TALES: AL REJOINS US NOW. I UNDERSTAND WE HAVE A JOHN DEERE THAT'S MISSING ITS STRIPES? THAT'S RIGHT. THE OWNER DIDN'T WANT TO PAINT HIS TREASURE. THE JOHN DEERE "B" MIGHT NOT CARRY THE CLASSIC COLORS, BUT THE OWNER SAYS IT RUNS JUST FINE.
THIS UNIQUE CASE TRACTOR WAS USED BY THE CANADIAN AIR FORCE DURING AND AFTER WORLD WAR TWO. FIND OUT HOW THE OWNER CAME ACROSS THIS RARE PIECE OF HISTORY NEXT WEEK ON TRACTOR TALES.

CHURCH SALUTE: TODAY'S COUNTRY CHURCH SALUTE GOES TO ST. JOSEPH'S CHURCH IN CAMPBELL, NEW YORK. THE CHURCH WILL CELEBRATE 140 YEARS OF MINISTRY THIS WEEKEND. THE CHURCH WAS BUILT IN 1871, WHEN ULYSSES GRANT WAS PRESIDENT. BEFORE THAT, PARISHONERS - MANY OF THEM FARMERS AND TANNERY WORKERS - HELD SERVICES IN THEIR HOMES. THE EARLIEST KNOWN PHOTO WAS TAKEN IN 1898. CHURCH MEMBER NANCY BAKER SAYS THE OUTWARD APPEARANCE OF THE CHURCH HASN'T CHANGED MUCH OVER THE YEARS, OTHER THAN ENHANCEMENTS TO THE FRONT ENTRANCE. CONGRATULATIONS TO ST. JOSEPH'S CHURCH OF CAMPBELL, NEW YORK.  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.

MAILBAG: TIME NOW FOR OUR WEEKLY LOOK INSIDE THE FARM REPORT MAILBAG....I HAD BEEN WONDERING WHEN AN E-MAIL LIKE THIS ONE WOULD ARRIVE: "CORN OPTIONS AT $1.00 OUT OF THE MONEY ARE TOO EXPENSIVE, PUT, OR CALL, NEEDS MEDIA ATTENTION." CHUCK GENSLER, SHULLSBURG WISCONSIN. CHUCK, AS SOMEONE WHO USED TO USE OPTIONS AS PART OF MY MARKETING PLAN I HEAR YA TALKING. I DO NOT DISPUTE THAT THESE DERIVATIVES CAN OFFSET RISK FOR PRODUCERS, BUT AS MANY WILL DISCOVER, THE COST WILL NOT MAKE THEM SURE-FIRE PROFIT BOOSTERS. IN RECENT YEARS, I HAVE NOTICED HOW ADVISORS HAVE SWITCHED ALMOST COMPLETELY FROM USING FUTURES TO OPTIONS. THERE ARE GOOD REASONS. THE HIGHER PRICES AND VOLATILITY MADE MARGIN CALLS A HUGE FINANCIAL EXPOSURE FOR PRODUCERS. AND WHILE IT IS ONE THING TO BE ABLE TO EXPLAIN THIS TO YOUR BANKER, IT IS FAR MORE DIFFICULT FOR BANKERS TO MAKE THIS CASE TO INCREASINGLY VIGILANT BANK EXAMINERS. SO WE ALL DECIDED TO SWITCH OPTIONS, ALONG WITH SPECULATORS AND USERS. THIS MUCH HIGHER DEMAND FOR PRICE INSURANCE, ALONG WITH HIGHER VOLATILITY MEANS OPTION SELLERS OR INSURANCE PROVIDERS CAN RECEIVE HIGHER PREMIUMS. AS WE ARE ABOUT TO FIND OUT IN EVERY AREA WHERE CONSUMERS ARE TRYING TO AVOID RISK, NONE OF THE SOLUTIONS WILL BE CHEAP. THIS APPLIES TO HEALTH, HOME, LIABILITY, AND CROP INSURANCE. IN FACT, IF PRODUCERS ARE FORCED BY BUDGET CONSTRAINTS TO PAY THE TRUE COST OF CROP INSURANCE, MANY WILL QUESTION HAVE THE SAME COMPLAINT AS THEY DO FOR OPTIONS. AS ALWAYS, WE WANT TO HEAR FROM YOU, SEND COMMENTS TO MAILBAG@USFARMREPORT.COM OR LEAVE US A VOICE MAIL AT 800-792-4329.
 

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