USFR Weekly Recap - January 1-2, 2011

January 3, 2011 03:03 AM
 

THIS WEEK ON U.S. FARM REPORT
EPISODE #1951
JANUARY 1-2, 2011

JOHN’S OPEN: HELLO AND WELCOME TO U.S. FARM REPORT, I'M JOHN PHIPPS. THE PROTEIN SECTOR OF U.S. AGRICULTURE IS WALKING AN ECONOMIC TIGHTROPE. AFTER TWO BRUTAL YEARS OF EQUITY-DRAINING LOSSES, SOME LIGHT HAS APPEARED AT THE END OF THE TUNNEL IN THE FORM OF ROBUST DEMAND ESPECIALLY FROM ABROAD. BUT BEFORE PRODUCERS COULD RELAX, FEED PRICES BEGAN A RELENTLESS CLIMB ONCE AGAIN. WITH THE HIGH LEVEL OF CONCENTRATION IN OUR ANIMAL AGRICULTURE, CONTINUED FINANCIAL STRESS COULD REVEAL WHETHER THE CURRENT BUSINESS MODELS WILL SURVIVE INTACT. I'M GUESSING FURTHER CONCENTRATION MAY BE THE ANSWER - NOT SIMPLY TO GAIN NEW EFFICIENCIES, BUT TO OCCUPY ENORMOUS MARKET SHARE. AFTER ALL, BECOMING TOO BIG TO FAIL WORKED FOR WALL STREET. LET'S GET STARTED WITH THE HEADLINES.

DAIRY PRICES: IF AG DEPARTMENT FORECASTERS ARE ON TARGET, FIRM DEMAND SHOULD KEEP 2011 MILK PRICES AT 2010 LEVELS. THE ECONOMIC RESEARCH SERVICE SAYS AN EXPECTED RISE IN DOMESTIC USE ALONG WITH GOOD EXPORT PROSPECTS BODE WELL FOR MILK PRICES IN THE YEAR AHEAD. AT THE SAME TIME, HIGHER FEED PRICES WILL LIKELY SQUEEZE PROFITS ON THE FARM. THE AG DEPARTMENT PREDICTS HERD SIZE, PRODUCTION AND EXPORTS WILL ALL GROW SLIGHTLY IN THE YEAR AHEAD. ADD IT ALL UP, THE ALL-MILK PRICE FOR 2011 IS EXPECTED TO AVERAGE RIGHT AROUND $16.00 PER HUNDRED-WEIGHT...ALMOST UNCHANGED FROM 2010.

QUARTERLY PIGS: FOR THE 9TH STRAIGHT QUARTER, THE NUMBER OF SWINE IN THE U.S. IS SHRINKING...ALTHOUGH THE PACE OF THE REDUCTION IS SLOWING. IN ITS QUARTERLY INVENTORY SURVEY RELEASED MONDAY, THE AG DEPARTMENT REPORTS THE TOTAL NUMBER OF HOGS AND PIGS IS DOWN 1% FROM A YEAR AGO. TOTAL POPULATION IS JUST OVER 64 MILLION HEAD, THE SMALLEST HERD IN FOUR YEARS. ANALYSTS NOTE THE BREEDING HERD HAS STABILIZED OVER THE PAST FOUR QUARTERS, A SITUATION THAT COULD CHANGE IN THE COMING MONTHS AS PRODUCERS WRESTLE WITH HIGH FEED COSTS.

USDA HORTICULTURE: THE NATION'S HORTICULTURE INDUSTRY IS GROWING - BUT NOT AS FAST AS OTHER SECTORS OF AMERICAN AGRICULTURE. BOB ELLISON EXPLAINS IN THIS REPORT PROVIDED BY THE USDA.

ROUNDTABLE: MARK GOLD AND JIM BOWER

JOHN’S WORLD: IT HAPPENED AGAIN IN OUR COMMUNITY - A LONG CAREER ENDED ABRUPTLY AFTER A PRODUCER LOST THE LEASE ON A SIGNIFICANT CHUNK OF RENTED GROUND. WHILE EACH OF THESE EVENTS IS UNIQUE, THERE IS ONE COMMON FACTOR THAT SHOULD SERVE AS WARNING SIGNS FOR PRODUCERS. FIRST, IF YOU THINK WEATHER AND PRICE VOLATILITY ARE YOUR BIGGEST HEADACHES, YOU ARE OVERLOOKING YOUR LARGEST RISK: LAND TENURE. AS FARMLAND RENTAL BECOMES MORE TRANSPARENT AND MORE OFTEN BY CASH LEASES, HOLDING ONTO LAND IS MY BIGGEST HEADACHE AND HIGHEST PRIORITY. TOO MANY PRODUCERS, IN MY OPINION, HAVE BEEN LULLED INTO COMPLACENCY BY VERY GOOD DEALS LEFT OVER FROM DECADES AGO - EITHER A TRADITIONAL SHARE LEASE WHOSE TERMS HAVEN'T CHANGED FOR YEARS OR A CASH RENT SET LONG AGO WITH AN OUT-OF-TOUCH LANDOWNER. WHILE KEEPING YOUR MOUTH SHUT IS ONE WAY OF NOT ROCKING THE BOAT, IT ALSO MEANS THE DAY OF RECKONING WHEN THE SWEET DEAL IS REVEALED CAN BE TRAUMATIC, ESPECIALLY WITHIN A FAMILY. IF YOU ARE BASING YOUR BUSINESS PLAN ON THE IGNORANCE OF YOUR LANDOWNERS, YOU ARE ONLY A SURPRISING DIVORCE, DEATH OR PHONE CALL AWAY FROM A FINANCIAL FIASCO. FARMERS ARE ALL FOR BEING PROACTIVE ON EVERYTHING EXCEPT LANDOWNER RELATIONSHIPS. BUT INFORMATION FLOWS MORE FREELY NOW, AND IF YOUR HEART SKIPS A BEAT WHEN YOU HEAR UNEXPECTEDLY FROM YOUR LANDOWNER, MAYBE IT'S TRYING TO TELL YOU SOMETHING.

2ND HALF:
JOHN’S OPEN:
HELLO AND WELCOME TO U.S. FARM REPORT, I'M JOHN PHIPPS. THE UNEXPECTED OUTPUT FROM THE LAME DUCK CONGRESS WILL HAVE SEVERAL RAMIFICATIONS FOR AGRICULTURE IN THE NEXT FEW YEARS. FINANCIAL REGULATIONS, FOOD SAFETY RULES, NUTRITION FUNDING, TAX ISSUES AND A MYRIAD OF SUBTERRANEAN LEGAL CHANGES WILL NUDGE HOW WE OPERATE AS WE FIGURE OUT THE MANY NEW GUIDELINES. ECONOMIST TYLER COWEN HAS IDENTIFIED A BUSINESS SKILL THAT COULD BE APPLICABLE IN THIS ENVIRONMENT: MOVING FIRST. THERE IS A DISPROPORTIONATE ECONOMIC REWARD TO THOSE WHO TAKE ACTION JUST SLIGHTLY BEFORE OTHERS. COMBINING THESE TWO IDEAS AND SETTLING DOWN TO DO SOME SERIOUS HOMEWORK COULD THEREFORE YIELD SIGNIFICANT BENEFITS FOR PRODUCERS. BUT FIRST, LET'S GET STARTED WITH THE HEADLINES...

FOOD SAFETY: ONCE BACK FROM THE HOLIDAY BREAK, PRESIDENT OBAMA IS EXPECTED TO SIGN A NEW SET OF FOOD SAFETY RULES ALREADY APPROVED BY CONGRESS. IN THE MEANTIME, FOOD PRODUCERS AND MANUFACTURERS ARE TRYING TO FIGURE OUT JUST HOW IT COULD IMPACT THEIR OPERATIONS. THE NEW REGULATIONS WILL GIVE THE FDA MORE AUTHORITY TO ORDER MANDATORY RECALLS AND SET NATIONWIDE STANDARDS FOR THE PRODUCTION AND HARVESTING OF PRODUCE. MEAT AND POULTRY PRODUCTS WILL REMAIN UNDER THE REGULATION OF THE USDA. THE LAW INCLUDES EXEMPTIONS FOR SMALL PRODUCERS WHO SELL DIRECT TO CONSUMERS WITHIN THEIR OWN STATE OR WITHIN 275 MILES OF WHERE THE CROP WAS PRODUCED. PRO FARMER WASHINGTON EDITOR ROGER BERNARD HAS MORE ON THE POLITICS BEHIND THIS LEGISLATION.

OBAMA NO SMOKING: APPEARS THE "NO SMOKING" SIGN IS UP AT THE WHITE HOUSE. IN AN INTERVIEW WITH CNN, PRESS SECRETARY ROBERT GIBBS SAYS IT'S BEEN ABOUT NINE MONTHS SINCE PRESIDENT OBAMA LAST SMOKED A CIGARETTE. LIKE MANY SMOKERS, THE PRESIDENT HAS QUIT BEFORE...BUT RESEARCH SHOWS THOSE WHO STOP SMOKING FOR THREE MONTHS TYPICALLY BREAK THE HABIT FOR GOOD. GIBBS SAYS A COMBINATION OF NICORETTE GUM AND WILL POWER HELPED THE PRESIDENT KICK THE HABIT.

TEENAGE SMOKERS: A SURVEY DONE BY THE UNIVERSITY OF MICHIGAN SHOWS A NEARLY DECADE-LONG DECLINE IN TEEN SMOKING HAS COME TO AN ABRUPT HALT. MORE THAN 13% OF 10TH GRADERS SURVEYED SAID THEY HAD SMOKED IN THE PAST MONTH...UP A POINT FROM THE YEAR BEFORE. THIS NUMBER PEAKED AT MORE THAN 30% IN 1996.

HEARTLAND: BACK IN THE EARLIER PART OF THE 1900'S, MANY TOWNS HAD A THEATER THAT SHOWCASED STAGE PERFORMERS AND EVENTUALLY THOSE NEW-FANGLED PICTURE SHOWS. SADLY, MANY OF THOSE BUILDINGS ARE NOW GONE. BUT IN WATSEKA, ILLINOIS, THE THEATER IS ENJOYING A RE-BIRTH. AS WES MILLS TELLS US, AMERICAN FARMERS PLAY A STARRING ROLE IN THIS SUCCESS STORY. CHUCK ALSO HEATS THE ATTACHED CAFE AND BANQUET ROOM WITH THE SAME KIND OF CORN STOVES. WE'LL POST LINKS TO BOTH ILLINOIS CORN STOVE AND THE WATSEKA THEATER ON OUR HOME PAGE. NEXT WEEK, WE VISIT WITH A RENOWNED CATTLE HANDLING EXPERT WHO CAN NOW ADD AN EMMY TO HER LIST OF ACCOMPLISHMENTS. WE'LL CATCH UP WITH TEMPLE GRANDIN NEXT WEEK ON "SPIRIT OF THE HEARTLAND".

CALIFORNIA WINE GRAPES: A SEASON OF WEATHER CHALLENGES DAMPENED THE OUTPUT BUT NOT THE QUALITY OF WINE GRAPES IN THE GOLDEN STATE. ACCORDING TO THE CALIFORNIA WINE ADVISORY, THE 2010 HARVEST WAS DOWN 10% STATE-WIDE, WITH SOME VINEYARDS DOWN MORE THAN 50% FROM A YEAR AGO. FROST IN THE SPRING FOLLOWED BY HIGH TEMPERATURES DURING BLOOM ARE TO BLAME. IN ADDITION, A RASH OF WILDFIRES HAD SOME GROWERS WORRIED ABOUT SMOKE TAINT.

TEXAS WINE: IF RESEARCHERS HAVE THEIR WAY, WINE GRAPES THAT FLOURISH IN CERTAIN PARTS OF EUROPE MIGHT SOON FIND A HOME IN WEST TEXAS. IN THIS REPORT FROM TEXAS TECH, LESLIE CRANFORD TAKES US TO A RESEARCH VINEYARD NEAR LUBBOCK. EVEN THOUGH THE RESEARCH PROJECT IS LONG TERM, THE YOUNG VINES PRODUCED THEIR FIRST CROP IN 2010. WHEN U.S. FARM REPORT RETURNS, IT'S TIME FOR TRACTOR TALES AND OUR COUNTRY CHURCH SALUTE...PLEASE STAY WITH US.

TRACTOR TALES: WELCOME BACK...TRACTOR TALES THIS WEEK FEATURES AN OLD FARMALL CUB THAT STICKS OUT IN THE CROWD THANKS TO ITS UNIQUE PAINT JOB.

CHURCH SALUTE: TODAY'S FIRST COUNTRY CHURCH SALUTE GOES TO THE ZION LUTHERAN CHURCH IN MUSCATINE, IOWA. 2010 MARKED THEIR 125TH ANNIVERSARY AS A CONGREGATION. THE ORIGINAL BUILDING IS STILL IN USE, AND HAS BEEN CAREFULLY MAINTAINED AND IMPROVED. A GRADE SCHOOL WAS OPERATED BY THE CHURCH FROM 1913 TO 1961. ADHERING TO THEIR MOTTO OF "IN THE CITY FOR GOOD" THE MEMBERSHIP HAS OPTED TO STAY AT THEIR CURRENT LOCATION IN DOWNTOWN MUSCATINE. A MAJOR PART OF THEIR MINISTRY IS SUPPORT FOR LUTHERAN HOMES WHICH CARES FOR THE ELDERLY. ELAINE HEITMAN SHARED THE INFORMATION. OUR SECOND CHURCH IS THE MAYFIELD CONGREGATIONAL UNITED CHURCH OF CHRIST IN SYCAMORE, ILLINOIS. BEGUN AS A METHODIST CONGREGATION 150 YEARS AGO, THE MEMBERS CHANGED AFFILIATION IN 1906 TO ACCESS PULPIT SUPPLY FROM NEARBY WHEATON COLLEGE. A FURTHER MERGER IN 1961 RESULTED IN THE CURRENT CHURCH NAME. THE CHURCH IS YOKED WITH THE MALTA CONGREGATIONAL CHURCH. 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 TO SEE WHAT VIEWERS ARE THINKING VIA THE MAILBAG...WE RECEIVED AN INTERESTING COMPARISON FROM A SELF-DESCRIBED HOBBY FARMER, DOUG FATTIG IN HARMONY, “MINNESNOWTA". "A REAL FARMER WEARS THE HAT HE GOT FOR FREE FROM THE SEED OR IMPLEMENT DEALER. A HOBBY FARMER WEARS A $40 STETSON OR FEDORA. A REAL FARMER WEARS BIB OVERALLS OR CARHARTS. A HOBBY FARMER WEARS DOCKERS AND OLD NAVY. A REAL FARMER WEARS 5 BUCKLE OVERSHOES IN THE BARN. A HOBBY FARMER WEARS DOC MARTINS OR NIKES IN THE BARN. A HOBBY FARMER HAS AN OUT SIDE JOB AT AN OFFICE. FOR A REAL FARMER THE OUTSIDE IS HIS OFFICE." DOUG, YOUR DESCRIPTIONS MATCH UP WITH POPULAR SENTIMENT, BUT I HAVE NOTICED SOME SURPRISING CONVERGENCE DURING MY CAREER. FOR EXAMPLE, MANY OF MY FRIENDS AND I OFTEN WEAR NIKES AT WORK. IN FACT, MUCH OF OUR TRADITIONAL APPAREL WAS DICTATED BY DEALING WITH MANURE AND MUD, AND WITH THE SPECIALIZATION INTO GRAIN FARMING, WE'VE GONE FOR COMFORT. SIMILARLY I AM ABANDONING FREE SEED CAPS AS WELL. DURING THE WINTER THEY ARE TOO COLD, AND ONE MELANOMA SCARE IS ENOUGH TO SWITCH YOU TO AN "OUTBACK" STYLE FULL-BRIM HAT FOR THE SUMMER. LIKEWISE, THE IDEA THAT REAL FARMERS DON'T SPEND TIME IN AN OFFICE IS RAPIDLY CHANGING. I NOW SPEND OVER 80% OF MY TIME DOING KINDS OF WORK MY FATHER NEVER DID, AND MOST OF THAT IS IN FRONT OF A COMPUTER. FINALLY, I HAVE STOPPED SEPARATING OUR PROFESSION INTO "REAL" AND LESSER CATEGORIES. WE ARE ALL FARMERS. WE SERVE SPECIFIC MARKETS AND DEVELOP LIFESTYLES THAT SUIT OUR FAMILIES AND GOALS. AS ALWAYS, WE WANT TO HEAR FROM YOU, SEND COMMENTS TO INFO@USFARMREPORT.COM OR LEAVE US A VOICE MAIL AT 800-792-4329.
 

 

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