USFR Weekly Recap - January 22-23, 2011

January 24, 2011 04:42 AM
 

THIS WEEK ON U.S. FARM REPORT
EPISODE #1954
JANUARY 22-23, 2011

JOHN’S OPEN: HELLO AND WELCOME TO U.S. FARM REPORT, I'M JOHN PHIPPS. A LEADING FOOD ANALYST COMMENTED THIS WEEK THAT THE WORLD COULD BE JUST ONE POOR HARVEST FROM CHAOS. WHILE THIS STRIKES ME AS OVERWROUGHT, LOOKING AT RECORD WORLD FOOD PRICES AND OUR MY OWN GRAIN MARKETS IT IS HARD TO DENY THE REAL CONCERNS ABOUT MEETING FOOD DEMAND. TRY TO IMAGINE WHAT A SHORT CORN CROP IN THE U.S. WOULD MEAN, FOR EXAMPLE. AFTER LAST YEAR, THE IDEA OF A PRODUCTION MISFIRE IS A LITTLE EASIER TO BUY INTO. BUT WHAT THE MARKETS AND EXPERTS ARE SAYING IS WE NOW HAVE LITTLE ROOM FOR ERROR. AND AS MUCH AS I LOVE SELLING $6+ CORN, FAILING TO MEET MY PROMISE TO RELIABLY SUPPLY MY CUSTOMERS IS BECOMING A LARGER CONCERN. TIME NOW FOR THE HEADLINES.....HERE'S TRICIA SLOMA.

CHINA COTTON: THANK YOU JOHN AND HELLO EVERYONE. THIS WEEK'S VISIT TO THE U.S. BY CHINESE PRESIDENT HU JIN-TAO IS BEING CALLED BY SOME IN WASHINGTON AS THE MOST IMPORTANT U.S., CHINA SUMMIT IN 30 YEARS. MUCH OF THE FOCUS HAS BEEN ON TRADE. THE COUNTRY KICKED OFF THE MISSION BY SIGNING SIX NEW DEALS WORTH 600 HUNDRED MILLION DOLLARS. TWO OF THOSE DEALS WERE AGREEMENTS TO IMPORT COTTON. CHINA IS THE WORLD'S BIGGEST COTTON BUYER. NEW CUSTOM'S DATA SHOWS CHINESE COTTON IMPORTS HAVE MORE THAN DOUBLED IN THE LAST YEAR - - HITTING 462,000 METRIC TONS. TRENDS ARE LOOKING GOOD FOR STRONG PRICES FOR U.S. COTTON GROWERS. OTHER BIG EXPORTERS LIKE AUSTRALIA AND PAKISTAN HAVE STRUGGLED WITH NATURAL DISASTERS. IT ALL POINTS TO TIGHTER SUPPLIES. THE U.S. TRADE DEFICIT WITH CHINA IS EXPECTED TO HIT 270 BILLION DOLLARS THIS YEAR. MARKET ANALYSTS SAY WITHOUT AG-EXPORTS THE DEFICIT WOULD BE MUCH WORSE.

PORK BEEF EXPORTS: PORK EXPORTS IN NOVEMBER TOTALED 177,000 METRIC TONS. THAT'S A 5% GAIN FROM NOVEMBER 2009. IN BEEF THE STORY IS EVEN BETTER. NOVEMBER BEEF EXPORTS JUMPED 32% IN VOLUME COMPARED TO NOVEMBER 2009. THE MEAT EXPORT FEDERATION CALLS NOVEMBER ONE OF THE BEST ON RECORD.

EQUIPMENT SALES: IN OTHER NEWS...EQUIPMENT SALES CONTINUED TO BE ROBUST THROUGH THE END OF 2010. ACCORDING TO THE ASSOCIATION OF EQUIPMENT MANUFACTURERS' DECEMBER SALES OF ALL TRACTORS IN THE U.S. WERE UP MORE THAN 20% COMPARED TO THE SAME MONTH LAST YEAR. FOUR-WHEEL-DRIVE TRACTORS WERE THE BIG WINNER UP 40%. IN 2010 AS A WHOLE, FOUR-WHEEL-DRIVE TRACTORS JUMPED NEARLY 3O%.

PA FARM SHOW: WE'RE TAKING A BREAK THIS WEEK FROM OUR NORMAL MARKETING ROUNDTABLE TO TAKE A TRIP TO PENNSYLVANIA. ALONG WITH BEING HOME TO FARM JOURNAL - OUR PARENT COMPANY WAS FOUNDED IN PHILADELPHIA IN 1877 - THE KEYSTONE STATE ALSO HOSTS THE NATION'S LARGEST INDOOR FARM SHOW. WES MILLS BEGINS OUR COVERAGE. PENNSYLVANIA DOES NOT HOLD A STATE FAIR DURING THE SUMMER. INSTEAD, EACH JANUARY THE COMMONWEALTH HOLDS A MASSIVE INDOOR FARM SHOW -- COVERING 24 ACRES IN 11 BUILDINGS AND 3 ARENAS. DURING THE 8 DAY SHOW, NEARLY A HALF MILLION PEOPLE PASS THRU THE GATES. THERE ARE 63,000 FARMS IN THE STATE. 7,500 ARE DAIRY PRODUCERS. NATIONALLY, THE STATE RANKS FOURTH IN THE COUNTRY IN MILK PRODUCTION. THE STATE ALSO RANKS 4TH IN THE NATION IN APPLE PRODUCTION -- ABOUT 12 MILLION BUSHELS A YEAR. AND IF YOU WANT HARDWOOD FOR YOUR HOUSE, PA IS THE PLACE. IF YOU LIKE MUSHROOMS ON YOUR PIZZA, CHANCES ARE THEY CAME FROM PA. THE STATE PRODUCES 60% OF THE NATION'S MUSHROOMS...AND IT'S THE STATE'S NUMBER ONE CASH CROP.

ROUNDTABLE: TODAY'S ROUND-TABLE DISCUSSION HELPS SHOWCASE THE DIVERSITY OF FARMING IN THE KEYSTONE STATE. OUR PANEL INCLUDES BRUCE MCPHERON, WHO'S THE DEAN OF THE COLLEGE OF AG SCIENCES AT PENN STATE UNIVERSITY, ROB BARLEY - A DAIRY AND GRAINS PRODUCER, KAY HOLLABAUGH WHO IS AN APPLE GROWER AND RUSSELL REDDING. HE'S THE SECRETARY OF AGRICULTURE FOR THE STATE. AGRIBUSINESS DIRECTOR AL PELL PICKS UP THE CONVERSATION.

BARLEY REAX: THANKS AL. WE ALSO TALKED WITH PENNSYLVANIA PRODUCER ROB BARLEY. ROB IS ONE OF THE OWNERS OF STAR ROCK DAIRY, AN OPERATION THAT MILKS 1,200 COWS DAILY. THEY ALSO FARM SEVERAL THOUSAND ACRES OF ROW CROPS. WITH CORN APPROACHING SEVEN DOLLARS, HE SAYS IT'S DIFFICULT FOR DAIRYMEN TO MANAGE THAT RISK. ROB SAYS ANOTHER CHALLENGE FACING FARMERS IN PENNSYLVANIA IS THE RECENTLY ANNOUNCED NUTRIENT DIET FOR THE CHESAPEAKE BAY. HE SAYS EPA HAS SET GUIDELINES THAT IMPACT FARMERS, BUT DIDN'T TAKE INTO ACCOUNT THE STEPS PRODUCERS ALREADY TAKE TO PREVENT RUNOFF. WHEN WE COME BACK - MORE FROM THE 2011 PENNSYLVANIA FARM SHOW...

JOHN’S WORLD: THIS WEEK'S VISIT BY CHINA'S HEAD OF STATE WAS A SUBJECT OF INTEREST TO FARMERS. CHINA HAS BEEN A SURPRISINGLY LUCRATIVE CUSTOMER FOR ALL TYPES OF FARM OUTPUT IN THE PAST YEAR. BUT FOR OTHER INDUSTRIES, CHINA HAS BEEN QUITE SIMPLY A CHEATER, EVEN A THIEF. NOWHERE IS THAT MORE BALDLY APPARENT THAN INTELLECTUAL PROPERTY. LEST YOU THINK THIS IS JUST A HEADACHE FOR SOFTWARE MOGULS, I HAVE A STORY MUCH CLOSER TO THE FARM. IN THE TINY TOWN OF CLAY CITY, INDIANA, THE CLAY CITY POTTERY COMPANY PRODUCES MARVELOUS HANDMADE POTTERY. WE TOURED THEIR PLANT IN DECEMBER WITH FRIENDS - AND CARRIED HOME A TON OF STUFF, TOO. A FEW YEARS AGO THEIR UNIQUE PIECES WERE FEATURED IN UPSCALE RETAILERS LIKE EDDIE BAUER. THE PLANT EMPLOYED OVER 25 LOCAL RESIDENTS. ONE SPRING THEIR ORDERS DRIED UP, ALTHOUGH EXACT DUPLICATES OF THEIR DESIGNS WERE STILL BEING SOLD. CHINESE POTTERY MAKERS COPIED THE FAMILY'S SET OF PATTERNS AND UNDERSOLD THE INDIANA FIRM. THE RESULT IS NOW JUST THE SIXTH GENERATION OF THE FAMILY WORKS AT THE POTTERY. THERE ARE HUNDREDS OF OTHER STORIES FROM CONSTRUCTION CRANES TO MACHINE TOOLS TO SOFTWARE. CHINESE MANUFACTURERS SIMPLY IGNORE THE RULES OF OWNERSHIP FOR INTELLECTUAL PROPERTY. FARMERS WILL BE WATCHING TO MAKE SURE AG TRADE WITH CHINA GROWS. BUT WE NEED TO GRASP THE WIDER PICTURE AND WEIGH CAREFULLY AT WHAT COST TO OUR FELLOW AMERICANS. LET US KNOW WHAT YOU THINK.... SEND EMAILS TO INFO@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. OUR NATION'S RELATIONSHIP WITH CHINA WAS IN THE SPOTLIGHT THIS WEEK EVEN AS CHINESE TRADE STIRRED UP AG MARKETS. WHILE THERE HAS BEEN PLENTY OF ATTENTION ON THE EMERGING SUPERPOWER, THEIR RAPID ASCENT HAS CLEARLY LEFT SOME EXAGGERATED FEARS AND HOPES HERE IN THE U.S. CHINA'S REMARKABLE ECONOMIC GROWTH IS TO BE ADMIRED, BUT MORE SIGNS ARE APPEARING THAT THE STRAINS OF SUCH CHANGE ARE CHALLENGING THEIR POLITICAL AND SOCIAL INFRASTRUCTURE. AS A RESULT, CHINA WILL LIKELY REMAIN A FRUSTRATING AND SELF-CONTRADICTORY TRADE PARTNER. SO EXPECT MORE CONFUSION ABOUT CHINA, AND MUCH OF IT WILL BE INSIDE THEIR BORDERS, TOO. LET'S GET STARTED WITH THE HEADLINES AND TRICIA SLOMA.

HONEY LAUNDERING: THANK YOU JOHN. IT'S CALLED HONEY LAUNDERING. MOVING HONEY FROM A HIGHLY TARIFFED COUNTRY TO A COUNTRY WITH LOWER IMPORT DUTIES SO IT CAN BE SHIPPED TO THE U.S. FOR MORE PROFIT. THIS IS A MAJOR PROBLEM FOR U.S. HONEY PRODUCERS AS THEY SEEK TO SURVIVE GLOBAL COMPETITION. HONEY PRODUCERS SAY ONE OF THE BIGGEST OFFENDERS IS CHINA. THAT COUNTRYS' HONEY IS SUBJECT TO ANTI-DUMPING DUTIES IN ORDER TO KEEP AND PROTECT U.S. PRODUCTION. BUT AMERICAN BEE KEEPERS ARE AFRAID CHINESE HONEY IS SIMPLY BEING MOVED OR RE-LABLED WITH ANOTHER COUNTRY'S NAME. SOME ESTIMATES SAY THE U.S. LOST MORE THAN 100 MILLION DOLLARS TO ILLEGAL HONEY IMPORTS LAST YEAR. ALSO, REPORTS CONTINUE TO COME IN ABOUT HONEY BEING COMBINED WITH PRODUCTS LIKE CORN SYRUP. A GROUP OF US HONEY COMPANIES HAVE FORMED, TRUE SOURCE HONEY, AND APPOINTED A THIRD PARTY TO PERFORM AUDITS AND VERIFY COUNTRY-OF-ORIGIN.

WHOLE GRAINS: A NEW SURVEY SAYS MOST AMERICAN'S THINK THEY'RE GETTING ENOUGH WHOLE GRAINS...YET ONLY 5% ACTUALLY HIT THE DIETARY TARGET. THIS COMES FROM GENERAL MILLS AND A SURVEY OF MORE THAN 1,000 ADULTS. 2005 DIETARY GUIDELINES SAY EVERYONE OVER AGE NINE SHOULD GET THREE SERVINGS OF WHOLE GRAINS PER DAY. THE RESEARCH FINDS CONSUMERS ARE CONFUSED BY WHAT CONSTITUTES WHOLE GRAIN...TERMS LIKE ENRICHED FLOUR OR MULTIGRAIN DOES NOT ALWAYS MEAN WHOLE GRAIN. THERE IS A WHOLE GRAIN STAMP TO HELP MARK MANY OF THOSE PRODUCTS.

EGG ADS: AND IF YOU ENJOY EGGS FOR BREAKFAST...THE AMERICAN EGG BOARD IS TRYING TO GET YOU AND YOURS TO EAT MORE OF THEM. IT JUST LAUNCHED A NEW NATIONAL ADVERTISING CAMPAIGN FOR THE INCREDIBLE EDIBLE EGG. IT'S CALLED..."YOU DO EVERYTHING." THE FOCUS IS ON PARENTS WILLINGNESS TO DO WHATEVER IT TAKES TO HELP THEIR CHILDREN SUCCEED. THE ADS SEEK TO REMIND THEM ABOUT THE HIGH PROTEIN EGG AS A STARTING POINT FOR HEALTH AND NUTRITION.

CALIFORNIA WATER: IN A STATE THAT OFTEN STRUGGLES WITH DROUGHT AND ITS WATER SUPPLY, CALIFORNIA GROWERS GOT SOME GOOD NEWS THIS WEEK. THE HEAVY RAIN AND SNOW IN DECEMBER HAS ENHANCED IRRIGATION WATER SUPPLIES FOR CALIFORNIA FARMERS. THE FEDERAL CENTRAL VALLEY PROJECT SAYS IT EXPECTS TO DELIVER FULL SUPPLIES TO FARMERS NORTH OF THE SACRAMENTO-SAN JOAQUIN DELTA, AND 45% OF CONTRACT SUPPLIES TO FARMERS SOUTH OF THE DELTA. EVEN AT 45%, THE SOUTH-OF-DELTA ALLOCATION WOULD BE LARGER THAN THE 40% THOSE FARMERS HAD IN 2010.

HEARTLAND: CUT FLOWERS ARE A GREAT WAY TO BRIGHTEN UP THE BLEAKNESS OF WINTER. MANY COME FROM CALIFORNIA WHERE THE CROP IS A MAJOR AGRICULTURAL COMMODITY. AS DENNIS NEWHALL OF CALIFORNIA COUNTRY TV REPORTS, IT’S AN INDUSTRY WITH A LONG-STEM HISTORY. ACCORDING TO THE CALIFORNIA CUT FLOWER COMMISSION, THE GOLDEN STATE SUPPLIES 25% OF ALL CUT FLOWERS SOLD IN THE UNITED STATES, OR ABOUT 500 MILLION STEMS EACH YEAR. THE BALANCE IS IMPORTED FROM SOUTH AMERICA.

CASE IH SURVEY: EQUIPMENT MAKER CASE I-H SAYS MANY AMERICAN FARMERS ARE WORRIED ABOUT GOVERNMENT ISSUED MANDATES AND REGULATIONS. THAT WAS THE NUMBER ONE RESPONSE TO A SURVEY CONDUCTED AT THE AG-CONNECT EXPO IN ATLANTA. FARMERS WERE ASKED TO RANK THE TOP ISSUES THAT WOULD IMPACT THEIR BUSINESS, BOTH IN THE NEXT YEAR AND FIVE YEARS OUT. 30% SAID GOVERNMENT REGULATION IS THE NUMBER ONE ISSUE. AVAILABILITY AND PRICE OF LAND FOR EXPANSION TIED WITH STABILITY, DEVELOPMENT AND FLUCTUATIONS IN GLOBAL FINANCIAL MARKETS AS THE SECOND MOST PRESSING ISSUES WITH 24% OF THE VOTE. ANOTHER KEY FINDING WAS THAT 89% OF THOSE SURVEYED ANTICIPATE OPERATIONAL GROWTH IN THE NEXT FIVE YEARS.

ROOK EQUIPMENT OUTLOOK: WHILE AG PRODUCERS FILLED THE EXHIBITION HALLS AT AG-CONNECT, IT WAS OPTIMISM THAT PERMEATED THE ATMOSPHERE. VISITORS ARE EXPECTING SOLID FARM INCOMES IN 2011 DUE TO HEALTHY PRICES FOR GRAINS AND MOST LIVESTOCK. THOSE POSITIVE NUMBERS HAD FARMERS DOING MORE THAN JUST KICKING TIRES. REGIONAL REPORT MICHELLE ROOK TELLS US WHY SHOW-TIME DECISIONS MAY TRANSLATE INTO IMPROVED EQUIPMENT SALES IN 2011. WHEN IT COMES TO EXPORTS, THE INDUSTRY SEES STRONG GROWTH POTENTIAL THIS YEAR FROM BRAZIL, RUSSIA AND EVEN EUROPE. UP NEXT - TRACTOR TALES AND OUR COUNTRY CHURCH SALUTE...

TRACTOR TALES: LAST WEEK WE WERE IN THE KEYSTONE STATE FOR THE 95TH ANNUAL PENNSYLVANIA FARM SHOW. DURING OUR VISIT TO HARRISBURG, WE MET A YOUNG COLLECTOR AND HIS BRONCO! THE WATERLOO MANUFACTURING COMPANY BEGAN IN THE EARLY 1850'S, MANUFACTURING PIONEER TOOLS AND IMPLEMENTS.

CHURCH SALUTE: TODAY'S FIRST COUNTRY CHURCH SALUTE GOES TO THE ST JOHN LUTHERAN CHURCH IN KENSINGTON, KANSAS. FOUNDED IN 1885 BY GERMAN IMMIGRANTS THE CONGREGATION HAS PROGRESSED FROM A HUMBLE WOODEN SCHOOLHOUSE TO THE CURRENT SANCTUARY AND PARISH HALL. OVER THAT TIME THERE HAVE BEEN OVER 1000 BAPTISMS AND 350 WEDDINGS. THEY MARKED THEIR 125TH ANNIVERSARY LAST YEAR. EULONDA HAGMAN SENT US THE INFORMATION. WE TRAVEL NOW TO CLOVER, SOUTH CAROLINA AND HISTORIC BETHEL PRESBYTERIAN CHURCH. ORGANIZED IN 1764 BY SCOT-IRISH IMMIGRANTS THE CHURCH WAS LOCATED TWELVE MILES FROM THE REVOLUTIONARY WAR BATTLE OF KING'S MOUNTAIN. AFTER THE BATTLE THE CHURCH WAS USED AS A HOSPITAL AND THE WOMEN OF THE CHURCH CARED FOR THE WOUNDED. THE BATTLE WAS A TURNING POINT IN THE WAR FOR INDEPENDENCE. THE CHURCH IS NOW IN ITS FOURTH BUILDING WHICH WAS ERECTED IN 1873. THE CHURCH IS A MEMBER OF THE PRESBYTERIAN CHURCH IN AMERICA. THE PASTOR IS REV. JOHN ANDREW GESS, THEIR 18TH. OUR THANKS TO CARY GRANT. 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....WE CERTAINLY HEARD FROM VIEWERS AFTER THE E-MAILS AND MY COMMENTS LAST WEEK ABOUT BAXTER BLACK. SO MUCH SO THAT THIS WEEK, I WILL TRY TO CLARIFY ANY CONFUSION REMAINING.
AFTER READING THE DOZENS OF E-MAILS AND LISTENING TO EVEN MORE PHONE CALLS, IT IS OBVIOUS THERE ARE LOTS OF BAXTER BLACK FANS OUT THERE. THE IMPRESSION I LEFT LAST WEEK MUST HAVE BEEN ONE OF UNCERTAINTY ABOUT HIS SPOT ON OUR SHOW. LET ME BE CLEAR. OUR PLAN IS TO CONTINUE TO FEATURE BAXTER EVERY OTHER WEEK AS WE HAVE DONE FOR THE PAST FEW MONTHS. AND WE ARE GLAD THAT SO MANY OF YOU ENJOY THAT SEGMENT. BUT THIS EXPERIENCE HAS ALSO HIGHLIGHTED A TREND IN AGRICULTURE ACROSS OUR COUNTRY AND THE GLOBE: NAMELY, SPECIALIZATION. HERE AT U.S. FARM REPORT WE ARE FACED WITH AN AUDIENCE OF PRODUCERS THAT INCREASINGLY FOCUS ON ONE OR TWO PRODUCTS LIKE CORN OR DAIRY, AND AT THE SAME TIME A GROWING AUDIENCE OF SMALLER PRODUCERS WITH VERY DIVERSE INTERESTS. NOW ADD IN FOLKS WHO ARE NOT WORKING IN AG, BUT ENJOY HEARING ABOUT FARMS. WE SHOULD NOT HAVE BEEN SURPRISED AT THE DIFFERENCE IN APPRECIATION FOR BAXTER'S WORK, BUT IN MANY WAYS HE SERVES A LARGE PORTION OF OUR VIEWERS WITH HIS INSIGHTS AND HUMOR. AND LONG AFTER FACTS ARE FORGOTTEN, STORIES LIVE ON. THE AMERICAN COWBOY OCCUPIES A SPECIAL CORNER OF OUR NATIONAL IMAGE, AND EVEN WHILE THE REALITY OF THAT WORK EVOLVES, BAXTER'S STORIES HELP RENEW OUR LINK WITH THAT HERITAGE. AS ALWAYS, WE WANT TO HEAR FROM YOU. SEND EMAILS TO INFO@U.S.FARMREPORT.COM OR LEAVE US A VOICE MAIL AT 800-792-4329.


 

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