USFR Weekly Recap - March 17-18, 2012

March 19, 2012 08:19 AM

MARCH 17-18, 2012

JOHN’S OPEN: Hello and welcome to U.S. Farm Report, I'm John Phipps. Temps in the 80's across much of the Corn Belt have brought trees, skunks and corn planters out of hibernation way ahead of schedule. Given the unusual years growers have endured recently, this apparent blessing is actually a complication. Planting extremely early could sidestep hot temps during pollination, but leaves crops vulnerable to late frosts. Meager seed supplies compound the penalty if we guess wrong. Dry conditions in the spring speed fieldwork but lower the accumulation of needed water reserves. Worst of all, what if all the other guys start planting? Maybe they're right - farmers are never happy with the weather. Time now for the's Tyne Morgan.

ANXIOUS FARMERS: Thank you John and hello everyone. With warm air and soil temperatures, some farmers are getting anxious to get into their fields. And the 30 day outlook may give farmers even more incentive. The national weather service climate prediction center issued its 90-day forecasts, which show April with above-normal temps in all areas east of the Rocky Mountains. The CPC is expecting above normal temps across the south and eastern Corn Belt for April through June. Our Mike Hoffman isn't so sure.

WHEAT PROGRESS: Meanwhile, winter wheat crops are moving right along. In Oklahoma, 54% is good and 12% excellent. Jointing is 39% complete, 17 points ahead of last year. In Kansas, 8% is excellent, 45% is good. The crop is just starting to joint. In Texas, NASS says winter wheat is 9% excellent, good and fair categories both sit at 24%.

MILC PAYMENTS: In news from our partners at Dairy Today - higher feed costs could trigger milk income loss contract payments - or MILC payments - to go into effect. Due to higher milk prices, producers haven't received MILC payments since April 2010. USDA is expected to announce by the end of this month if MILC payments will go into effect. Dairy Today says those payments would be retro-active to include milk shipped in February. If a payment rate is announced, dairy producers will need to show the county FSA office proof of eligible commercial dairy production for that month.

CROP WATCH: Crop watch this week starts in the lone-star state, where farmers are making short-order of corn planting. About 20% is in the ground. In McLennan County - just outside Waco - a lot of corn was planted the last week, most in very ideal conditions. A grower there says his wheat looks great, almost too good -- fearful of a late frost. From Norman County, Minnesota, a farmer said he could have been planting earlier this week with temps in the low 60's and dry fields...but he wouldn't dare try that far north. In Billings, Montana a farmer tells us warm and dry conditions allowed him to start planting malt barley a week ago. Last year, they didn't start until late April.

ROUND TABLE: Round table guest this week we have Greg Hunt, and Brian Basting, having a good time off camera talking about what really is moving the market and both of you have agreed on something. That's unusual and that's the corn spread, coming up was going to say what happens the rest of the year. Greg why don't you explain what we are talking about? We don't see this often at all. We have seen little blips last ten years or so, with where May goes over July corn, the classic one, that --happened in 1996 where we traded 20 some cents May over July. I remember that real well. I have to be careful what I said. Just a scary --in reality we didn't have any left. We had to go, destroy billion bushels to a man. That was then. Why is this happening now? Well, conventional wisdom would say --obviously heard that a thousand times, two is China, we saw corn make historic all-time highs in the September contract today, and they bought a little bit of corn and most of that corn is going to the south of China to the --livestock areas down there. The government is not --I don't think it's really in there entertaining at least at the moment by large quantities of old crop corn, probably looking more for new. The other thing is --and --is hard for me to get it out, is that the government --I never argued with their number when is it came to yields until the finals come out, stock report. You are talking about government numbers. Government numbers. And this time it --the spread may tell you that they are wrong. You aren't making the accusation. Your comments on this? On the spread? You see that the same way? Your message something off camera about wheat rather than corn. Yeah. I think --on those points where he brings up. Maybe just two points, looking at the balance sheet as is, the corn control that the USDA said --and the possibility it could be a little smaller, I will throw in one other thing that will be interesting to see how that May, July spread acts, we continue to hear reports of wheat in for feed and throughout the Midwest, even as far as western areas, that will be something to watch, that could be a sign that perhaps the old crop is being substitute wheat for corn.  It started us with --corn --might be more economical. The economics are great this year for feeding wheat before corn. You don't mix it up. No you take it back the whole nine months. It's a fact that the government said. The government numbers are in question at least in my mind. They may not be in anybody else's mind. They are having less ethanol. We will look at some of the plants that are back and they are big users of corn. Is that contributing to the spread that you are talking about? The export of it'll be more along those lines, we plateaued out. We will do probably what the government says on five billion use but --you know you can watch sugar is another indication there, that starts taking back off its chopping around two, three cents but --doesn't look like there will be a problem with the sugar crop. Getting it online for the start of the harvest, could take time.  A lot of places further north than ever in the Corn Belt planting corn at this point in time. The question I’m going to come back with is how many acres of soybeans will be able to pick up because that's the next thing we will talk when we come back with more here on U.S. Farm Report. When we left the first segment I said we would talk about soybeans, you had a couple comments about soybeans, what are you talking about? I think the producers who haven't committed to planting corn yet are taking a second look at beans, very gotten a couple phone calls the last few weeks, not a lot of acres but a few considered, beans, maybe not so last fall. The other thing is a big wild card, double crop bean acres, southern areas, delta, if the wheat comes off in a high faction big incentive. How high do bean prices need to go to get acres and of course I don't have to go from corn if you have the --it doesn't make sense to come out of corn but to come from rice, from hay, or any crops out there. What do you think? And double crops, how high does it need to get? We have $13 beans now? Let's back up. Are we going to need the beans, have a good carry out. We don't know what the stock report will show but everything else up until now is saying beans are going to be the shortest, of what's happening in South America. Demand. That swing factor about three to five million, metric tons, what is being dialed in. So, we will see, China will plant less beans again, Northern Province it doesn't work and the government trying to sell them out of the government warehouses. They do plant corn. That's where they are going. Yeah. Planting corn at this one. I think what's happening now, you mentioned in South America, not only have short term we could look at strong September, October, November export from the United States, this fall relative to a year ago. Maybe a couple hundred million bushels, let's move onto wheat. We haven't talked. I heard --rush of --export capitol wheat but it's not looking good this time. A lot of the wheat jointed because of the early spring, what happens if that April freeze comes along and hurts us on the wheat. What is the answer to wheat? You kind of saw it yesterday, it jumped 20%. The warm weather will help the spring planting, spring wheat because --we don't have that big, big problem north of the falls in the past. Thinking about that, that's probably the more of the wild card, last year, when I walked away from that seminar, they are saying they will take down the national average in North Dakota. Just real quick, this point in time seems like farmers not really having to worry about getting enough money to pay the taxes through this year, last year was a good year, would you agree to that or not? That's been the case. Things can change quickly but that's the case today. They are --word and you know --when you don't have to make marketing decisions, if you have to make marketing decisions based on paying bills verses the right thing with those advantages and it adds to income.

JOHN’S WORLD: There are several lessons agriculture should take on board regarding the "pink slime" controversy. This processed meat product is more correctly called "lean finely textured beef". It is a perfectly safe beef derivative, which helps lower the cost of hamburger-like products and reduce the fat content. It also has been eaten safely for years. However, all that doesn't matter. For the same reason many of us balk at raw oysters, educating consumers about "LFTB" - I'm inventing an acronym here - is probably won't work. What is occurring here is a phenomenon identified by Nobel Prize winning psychologist Daniel Kahnemann: what you see is all there is. This Wysiata Principle states that our decision-making process is dominated by the most available evidence, and visual data trumps rational explanations. Thanks to you tube and cheap video technology, consumers now get to see everything, or soon will. Trying to stop this growing transparency is futile. Even the new Iowa penalties penalizing livestock abuse exposers will only taint Iowa producers as "hiding something", I predict. Agriculture needs to abandon its conceit that food is all about farms. What happens downstream will continue to hammer us if we don't appreciate how closely linked we are to the gigantic food industry. Consumers can now pull back the curtain on every link in that chain. It better look good. Because telling customers their opinion’s just wrong is a losing strategy. Let us know what you think.... Send emails to or call and leave us a voice mail.

Hello and welcome to U.S. Farm Report, I'm John Phipps. One of the most curious aspects of ag media this year is the relative disinterest in new farm bill coverage. Usually by this time in the legislative cycle, we are constantly analyzing rumors and projections, and quoting the major players. While there is coverage of congressional hearings and organizational positions, my take is most producers just aren't that into the process. My guess is our expectations are simply too low to pay attention. Congress simply doesn't do things any more - they take pride in obstruction and gridlock. And budget numbers rule. With those constraints, farm bill wrestling seems like an exercise in futility. Tyne Morgan is here with today's headlines...

EARLY SPRING: Thanks John. Winter ends and spring begins this coming Tuesday. But for many farmers you don't need a calendar to say that spring has already sprung.
Warmer than normal weather this week is pushing field and crop conditions through-out much of the nation's mid-section and in the south. In southern Michigan, fruit trees are pushing buds at least two weeks premature. Teichman says the earlier producing crops, like tart cherries and apricots, have the biggest risk of damage if a freeze or frost should occur. The earlier than normal flowering is also causing an issue in getting bees, which are vital for pollination. He says he'll rely on native bee producers, but he's not sure if he'll receive enough. We also spoke to an apple producer in Missouri who says his trees are four weeks ahead of schedule.

SNACKING RESEARCH: It appears a growing number of people are ignoring mom's warning - "no snacks between meals". USDA studied 5,000 adult snackers over a two year period. The results showed that about a third of all daily calories for that group come from snacks. And usually empty calories, like fats and sugar. The average intake of empty calories for men was 923 calories a day - which is three times higher than the recommended limit. And for woman empty calories measured 624, which is nearly four times higher that recommended levels.

MORE SNACKERS: Not only are people snacking more, but more people are snacking. The food research firm Technomic says nearly half of consumers they polled now snack at least twice a day. That compares to 25% of people just two years ago. Technomic says more people are "grazing" through-out the day. Their study shows people have also broadened their definition of snacks to include mini-sandwiches or smaller wraps at quick service restaurants.

HEARTLAND WORLD CLASS MUSHER: After ten days on the grueling Iditarod trail, there's a winner in the thousand mile trek across frozen Alaska. At age 25, Dallas Seavey is the youngest winner ever of the Iditarod sled-dog race in Alaska. Dallas is a third generation musher. His dad won the race in 2004. When the race began on March 4th, there were more than 50 mushers with teams of dogs who set-out on what's called "The last great race". One of those racers was Tom Thurston of Oak Creek, Colorado.  Prior to the race, Anne Herbst from the Denver Post visited with tom who enjoys the support of whole family - his wife, two adoring daughters and a big pack of pooches. Tom did not complete the grueling race. According to the official Iditarod website, Tom dropped out due to concern for his dogs.

CATTLEMAN ESTATE TAX: There are 29 different pieces of legislation pending in congress that address the estate tax. One of them would permanently repeal the tax. The National Cattlemen's Beef Association made that a top legislative priority this year. Regional Reporter Michelle Rook says it's a political football during this election year. NCBA believes some farmers and ranchers would take land out of production to pay for a tax. And with global food shortages, the U.S. needs to be producing more food with that land. Stay with us - Tractor Tales and our Country Church Salute are coming up next.

TRACTOR TALES: John, we're headed to central Arizona for this week's classic tractor. This 1957 John Deere 720 was a workhorse in its day. The owner bought this machine because it reminded him of his farming days in northern Michigan. Don't forget - Tractor Tales is always available online at or on Facebook. You can also download the segments as podcasts from iTunes.

CHURCH SALUTE:  And now to today's Country Church Salute which goes to Hebron Lutheran Church in Madison County, Virginia. According to church member Carol Hill, this church is the oldest Lutheran Church - in continuous use - in the United States. It was founded in 1717 by German colonists. They built their first structure in 1740. Hebron's organ was installed in 1801. And believe it or not, it's still there today - and in nearly original condition. Reverend Patricia Covington leads the congregation today. Congratulations to Hebron Lutheran church on their 295 years of worship. 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 thought I would share one of many Tractor Tales e-mails we receive. "Just thought you'd enjoy hearing that our Saturday morning routine means leaving the house 15 minutes earlier than usual so we can arrive at work in time to dash to the office and catch "Tractor Tales"! Losing that extra 15 minutes of sleep is well worth it to me just to watch my husband enjoying the tractor memories. He has dreams of restoration dancing in his head for a particular old tractor that's sitting in his dad's shelter belt......maybe someday!" Don and Lenore Neuharthlake of the Ozarks, Missouri. We appreciate hearing from all you old tractor enthusiasts. I've often wondered if this hobby would dwindle as living memory of these machines working in the fields slowly diminished. My impression is we are a long way from reaching that point. While I am fond of my AC WD-45 because it triggers so many childhood memories, I have yet to get the "fix 'em up" bug. But the enthusiasm of those who do enjoy this pastime is entertaining and infectious. Tractor Tales is and will be an important part of our effort to show viewers what makes country living and rural memories a joy to so many of us. American culture is perhaps getting old enough to have more reverence for its past. Tractor Tales is one piece of evidence that knowing more about where we came from helps us to imagine where we might be going. As always, we want to hear from you, send comments to or leave us a voice mail at 800-792-4329.

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