USFR Weekly Recap - June 30 - July 1, 2012

June 30, 2012 09:43 AM



EPISODE # 2029
JUNE 30-July 1, 2012



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John’s Open:

Hello and welcome to US Farm Report. Much of the hype over Friday’s USDA reports has fizzled. As it become abundantly clear that we have bigger issues facing us. We will have those numbers shortly but clearly we will be talking about weather for the foreseeable future. I've already alerted my colleagues here to edit my writing carefully and brace for unusual behaviors. I also know this drought will complicate all the other processes going on in agriculture from the Farm Bill debate to efforts to connect with consumers on a variety of issues. Just because our work got a little bit harder doesn't mean we can't get it done.



The much-anticipated inventory and acreage reports were mostly in line with analyst expectations. Starting with acreage, soybean plantings were upped 2 million acres due to poor planting conditions. Corn acres were increased a little over one-half million acres, within estimates. Cotton acres may have been the biggest surprise with plantings dropping below all estimates of 12.6 million acres. Wheat came in at 56 million acres up slightly from the previous number and at the low end of market expectations. As for the stocks, USDA confirmed what many would be corn buyers already suspected the lowest June stocks number since 1998, just over 3 billion bushels. Soy stocks were nudged higher but remain very tight at 667 million bushels and wheat was in the mid-range as well at 743 million bushels. The markets were trading during the release so initial response was bullish across the board. The drought monitor continues to paint a scary picture across much of the US. The Midwest, South and West look to be suffering the most. The US drought monitor shows more than 31% of Arkansas is now under extreme drought. Last week less than 1% of the state was in that category. And Indiana has been deemed as ground zero for drought in the Midwest. The amount of that state considered to be in severe or extreme drought more than doubled in just one week. And as the drought continues to creep up, corn condition ratings continue to plunge. According to the latest crop conditions report, nationwide corn in the top 18 states has dropped 7 more percentage points from last week. Currently only 11% of the US corn crop is rated excellent while 45% is good. Another 30% is fair. About 10% is average. Al Pell spoke to one farmer in southern Indiana whose corn crop is ahead while conditions are still severely dry. In our part of the state everyone got started extremely early this spring. Then you get mid-90's and 100- degree temperatures especially when there's no moisture in the ground. Most of Indiana is under extreme or severe drought. Case IH and Great Plains manufacturing are joining forces to expand the use of twin-row planters. Great Plains will supply Case IH with twin row planters to be sold through Case IH dealerships. The planters will be sold under the Case brand beginning in 2013. By planting in twin rows, producers are increasing plant population by staggering seed on 30 inch centers.



A farmer from Mount Vernon, Indiana sent us thus current photo of one of his fields. It was planted on March 30th in perfect conditions and yet now he expects it will be less than 50 bushels per acre. In Eastern Colorado, a farmer writes river and irrigation canal levels are already dry for the year and now they have temperatures above the century mark. He says he’ll bale 3 foot tall corn this week. In New England crop reporters in Rhode Island say potatoes are in bloom. It’s earlier than the usual due to the stretch of hot weather. Most of the crop is in good or excellent condition. When we return, Al talks markets with two “Mikes” Logan and Florez.



Roundtable guests today, we have Mike Florez from Forest Trading, and Mike Peterson. I'll start with you first. The report that came out on Friday morning, everyone thought it would be critical. How was it? I thought it was. Well, it came out was not very many surprises I would guess. So it got looked over quickly in the weather is the most important thing end up it went. And that money keeps flowing into the market. I think that's the direction we will still go. Your comments about the report and whatever he said. Yes, I think the most important thing about the report is it isn't the most important because there weren't any surprises. When you look at it does come down to the weather. Right now we are seeing some rain but overall it's still warm and dry. It's been well over a month for most of the corn belt where they receive substantial rain and we are starting to get into some pollination periods. Over the next few weeks it will be critical to the punch moisture in the crowd to get those crops off to a start. It could be even more explosive. I've talked to several marketers and before you guys came and we were talking about this. Usually we have reports and I haven't heard anyone that disagreed with the report. They just sort of pushed it aside and went to the weather. That's because the big argument was all crop stocks. It's not an issue anymore. It's much less important than it once was. But government I think could almost continually say their stocks were bigger than they really were. But now it's all weather and new crop. So you were saying that the mind influence into the traders were looking past whatever the government says, and if it was supposed to be a different story? While I would say, probably even the bigger picture, nothing has disappeared off the stock report. I think that's one of the key is why people were not questioning this one as much. I think I verify that most people believe what they saw. This kind of the summary report. So that's another USDA report but it won't be as critical as this one or at least no one thinks it is. Yes, the most critical reports will be out each day. You have the 10th of the month reports and in the fall you will get --around the 10th of September stock update. That will be probably the weather reports and a private yield estimates. What should a producer do based on information in order to take advantage? What should we be doing? I think the crop is getting smaller and not bigger. And I think it's very premature to do anything. Both in the duration of price and also in time. Yes, that's a lot further at this point in time. It feels different in the past few years and this is being led by a supply issue. We have had years like this where all of a sudden the rains start, temperatures moderate and then we have a corn crop of 180 on the farm. This weather stays here and no doubt we go higher. We start questioning the price, and games are kind of dead in water with their margins. Those are not good signs. We did see some news out of Europe and I think overall you want to get active and that's what account is for in this case. You can take the risk about the price on the crop and get some downside coverage in place. Our roundtable guests this week, Mike Florez and Mike Peterson and we were talking off camera about issues that we don't know about at this point that could change the way we think about the market. And there has to be more than one or two issues. We used to talk about the funds. You might have missed one. So what other issue out there should we be watching? The only one right now is the weather. That's the driving force and I think those greens are insulated from things like Europe and we have their own stronger issue. It will matter less what Europe is doing or some other outside forces. It can have its own little market regardless of what's going on in the rest of the world. Now you were talking about that weather, and we worry about the supply, what other issues should we be worried about. Well I think they put together a nice package today. Recent lows in corn and bean markets will probably hold up until the situations changes. There is that fiscal black and we are pushing up on that. We have the same gusto over the summer and if you remember that probably took the high off the court and a score for a couple months until I was figured out. Certainly China is another issue we have to be aware of and the emerging countries in general. They are growing but about half the pace of what they were. So that's the upswing.

South American production? They will be planning and coming along and what prices the way they are right now, it seems to be that we plant more acres. It seems like we have that issue every year. I guess we are trading the markets in shorter time windows all the time. So if you are interested in hedging, you have to have everything to hedge no. I don't think you can look at it and today I’m afraid of Europe, or production coming out of South America, the market will tell you technically or momentum wise, it's over. And it's just not flashing that yet, so I can't worry about those other issues. It's so strong; you have to look just towards that. Well, and I know that has changed, how does that change for the producer? While the way it happens at the roundtable, these conversations are almost nonexistent inside her office. What it comes down to its mass and a bunch of calculators. And we use tools every day whether it's edging or cash sales or combination. And hopefully they look fairly decent and a lot of scenarios. And, that's the most important change that we've had to make and what does the same price with regardless of all the difference because anything could happen at any time. Well you have to look at what's ready and take advantage of a price move and let it go by. We just have a different approach of the market, I’m just interested and what the positions are. But I’m not concerned about making a profit. I'm just speculating so I’m just trying to make the next $0.10 and that's what I’m interested in. So my focus on the market is different. Right now we are going higher. Thank you for being here today on US Farm Report.



A new poll about the public perception of global warming both encouraged and dismayed me. Agreement with the statement, “there is solid evidence of climate change” has risen from about half of Americans to two thirds. However, there is a really disappointing reason for this shift. It was not due to increased evidence from new studies or efforts by climatologists to educate the public. In fact, reliance on the advice from the scientific community contributed less to public opinion than ever. What shifted minds and hearts was simply that, it's hot. After the warmest 12 month period of time ever recorded in the US, global warming does not seem quite so far-fetched. Maybe I should just be satisfied with the ratings and let it go but the more we continue to consider science, an interesting but minor factor for such public decisions, the more often we can expect really bad policy to result. It appears that, despite the old saying, everyone can have their own facts. Thanks to Google, anyone can access solid or dubious information to justify any opinion. This may seem like democracy in action but it has some big drawbacks for farmers. When you consider that expert consensus on climate change is greater than the scientific consensus on GMO safety, loss of confidence in scientific advice might impact us in a big way. Keep an eye on the referendum in California on GMO labeling. Sound science is not just when experts agree with me. Let us know what you think. Send e-mails to mailbag at, or call and leave us a voicemail.



Hello and welcome to US Farm Report. I'm John Phipps. Fame looks a lot different than it used to. Being on the front page of the newspaper means a lot less when you realize how many people don't read newspapers nowadays. So we have a story of what it means to find sudden fame in today's media. Even with these new avenues in the public spotlight, I suspect many will find that even fleeting moments of celebrity status can be less than they expect. In fact, the older I get, the more alluring anonymity looks. Just being a facing the crowd isn't so bad, especially on high-definition TV.



As the Supreme Court wraps up business for the summer, a ruling handed down this week could impact of labor in Arizona. This could directly affect the state's dairy farm as immigrant workers account for a considerable amount of that workforce. On Monday the US Supreme Court upheld part of an Arizona law allowing police officers to check the immigration status of people pulled over on routine traffic stops. The Arizona immigration law, known as SB 10-70 was passed in that state back in 2010. The Obama administration sued Arizona calling the law unconstitutional and it was sent to the Supreme Court. The courts upheld section part 2B which allows police officers to check immigration status during a traffic stop. Officers, however have to check with Federal agents before being able to hold or deport anyone suspected of being in the Country illegally. Tomato growers in Florida say they are hurting from cheaper tomatoes shipped in from Mexico. Growers want a new trade agreement with Mexico. U.S. tomato growers say Mexico sells or dumps their tomatoes below market prices. Farm stand owner Robert Moehling is worried they will soon lose all of their American growers and suppliers to Mexican competition. “It’s a shame that we let other countries destroy our food production. No tariffs, and there ought to be some kind of rule. If you come in there should be a minimum tax on each bushel or each box to make the product up to the standards.” He says he thinks tomato growers will go out of business due to what he sees as unfair competition from Mexico. We are ending this news block on a much lighter note. Three Kansas brothers have made quite a name for themselves this past week. The brothers who are from a small Kansas town with less than 500 people, posted a video to YouTube called, “I’m Farming and I Grow it”. It’s a parody to the song “I’m Sexy and I know it”. The brothers voiced the music video while doing work around the farm like driving a combine and feeding cattle. In case you haven't seen it, here's a little taste. The oldest brother, Greg Peterson, is an AG journalism major at Kansas State. In less than one week the video has more than 1 million hits. To see the full video, go to YouTube or the Peterson Farm brothers Facebook page.



Many of my fellow farmers are quite committed to a certain color of farm equipment. So what happens when your last name is Case? Is there any doubt what equipment you run? As it turns out, the Case family of Texas also run red Herefords. We get the details from the Nathan Smith in this report provided by the Texas Farm Bureau. Case IH has a reputation for building quality tractors. What you Texans don't realize is the link between the two. The international tractor and implement Company may have its roots in Wisconsin but its Texas ties are strong. Just ask Pete Case of El Dorado. He's a direct ascent of those who founded this company a century ago. They cultivate land originally purchased by his great- grandfather in the 1890's. As far as I know I’m operating some of the last way and that's left as far as land holdings, and I found that all my life as far as growing up and everything and I understood where I came from. The company recently had an event and a small camera crew was there to catch Pete in action on his ranch. We are pleased that they are using case equipment and we are proud that Pete and his family are part of the legacy that Jerome Case started in 1842. Moving hay, beating cows and other work are a common sight on the ranch. He and his wife and daughter raise top-quality Herford breeding stock. Although massive in size, most of the bulls are tame and look like in luxury. His dad was a very active participant here on the ranch, so it's exciting to have those kinds of people in your membership. He attributes his success to his family. They do a good job of selecting the genetics and build a really outstanding heard here. I'm a lucky guy in the family. This is one that Pete is committed to carry on. If we do, go through the spells that we are going for now, it's a great place to be. As far as Pete is concerned, his tractor is a good match with red cattle. Red is kind of my favorite color. According to the Case IH website, Jerome Case established the Racine threshing machine works in Racine, Wisconsin in 1842. In 1863 he named the company after himself. When we come back, our biweekly visit from Baxter Black.



They are the cowboy equivalent to the infamous fruitcake. A flexible pastry that does more than fill an empty stomach. Baxter Black joins us now to tout “Lebkuchens” a treat with multiple benefits. Every Christmas, regular as an insulin shot, we received one of my favorite annual gifts. 16 square feet of these cookies. I've never asked about the cooking directions although they I’ve tried to duplicate the recipe. I assume she uses a cement mixer and pours the sticky dough on the driveway and once they parted, it can be lifted like a sheet of plywood and allowed to age like fine wine, silage or Chinese thousand -year-old eggs. Then there is a flat black lumber behind the shop under a blue plastic tarp. Time goes by. It's a secret how long the dough is allowed to compress, but I as a newspaper stuck to the bottom with President Nixon’s picture. I saw the initials because b carved into one, I guess it was Buffalo Bill. Of course it's not always wise to examine the process. The result is addictive, the luscious, Chile and long- lasting prospered delicacy that you can carry in your back pocket like a wallet. In addition to lasting longer than jerky, plastic bottles in a landfill or 7% iodine on your fingers, it can be molded into decorative or punctual sheets to change your welding table, resold your shoes or patch. They have gone across the state, climbed to the North Pole and used as a heat shield on Apollo 13. So you can see why I wait every year for mine to arrive. They are the cowboy’s alternate tool. You can sharpen your knife, pad your tail, shoe your horse when you need them. My favorite Frederick Rivington painting features cowboys holding the all-purpose back aloft as the saluting. This is Baxter Black from out there. Baxter joins us again in two weeks. Until then check out his work online at



Al rejoins us now and we have a tractor tale from Washington state this weeks tractor come to us from a husband and wife team. They both have fond memories of growing up on working farms in Missouri but this Farmall C hit a little closer to home for her. This is a 1951 Farmall zippered C. That was made in the Avon Allen area. Primarily because I grew up farming back in Missouri with horses and then we went into and out of some old Minneapolis bully Molina and then I had a John Deere 51 B and a 1947 John Deere so it seemed only appropriate that we get a farm also did it the John Deere started if we needed two. I remember my dad using it and fixing it when it broke down and using it some more. They had a little trouble because I kept asking about the bails. We used it mostly for cleanup. It had a bucket on the front and it wouldn't start so we had quite a few things that were taken care of to start with. It's very presentable and it's a nice sized tractor and we enjoy it. The family and grandkids, they all seemed to be very impressed at this time and hopefully we can let them live a little bit of the past. I can't imagine anyone enjoying it more than we do. Hopefully it will be a memory for them. Join us next week as we head back to Washington to hear how one collector found what he was looking for in an unusual place. You can find more on or also Facebook.



Today's country church salute goes to Boehmer United Methodist church in Liberty Center, Indiana. In the late 1800’s a settlement sprung up across a rail line on the northeast of Indiana. They needed a name for the community and the train stop. One of the construction crew suggested in jest that they use his name Boehmer. Apparently there wasn’t a better idea so that's the name they chose. In 1886, some of the town’s people said they needed a church. In three days they collected $700 towards the church building fund. By June 1887 construction was underway. One year later services began in their brand-new building. Thanks to Kim Huffman for sharing their story.



It's time now for a weekly look inside the old Farm Report mailbag. The next few weeks will likely embed indelible memories of what drought can be like. Gary Gollehon from Brady, Montana shares 1 that I had never heard. Pheasant populations were declining due to a lack of dew in the mornings to enable the hens to wet their breast feathers to dampen the shells of the eggs to enable hatching.  He has another unsettling memory in his email that you can read on our website. But they all illustrate how the extreme weather will sear strong recollections in all of us this year. Drought, unlike many natural disasters unfolds at an agonizing pace. During oppressive heat and lack of rain, a powerful natural defense mechanism will take charge for all forms of life caught in its grip, even people. Notice how farmers are starting to recite dates as if they were excellent vintages or scripture references. 76, 80, 83 and the legendary 33 and 36. 2012 may take its place with the best or worst of these infamous years. My memories of those later “vintages” lead me to offer one suggestion. Take the stress seriously. Be careful of your alcohol intake and be on guard for unexpected emotional behaviors. Above all I think you will find that competing in apocalyptic forecasting won't help much. This is as they say going to leave a scar. But it is also an hour in which we can be true to the remarkable character of American Agriculture that brought us through those earlier trials.  I am John Phipps saying, thank you for watching US Farm Report. Be sure to join us next week and will be working to do even better.




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