USFR Weekly Recap - November 24-25, 2012

November 24, 2012 08:43 AM

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EPISODE # 2050

NOVEMBER 24-25, 2012  



Hello and welcome to U.S. Farm Report, I’m Al Pell, in for John Phipps. John recently visited North Dakota where he talked with farmers about the oil boom in that state. It's obvious how "Texas tea" has impacted communities - both positively and negatively. John will share his thoughts later in the show. Time now for the's Tyne Morgan.


Severe dryness continues in the plains states. That has livestock producers worried about feed and pastures supplies during the coming winter and early spring. Meanwhile in the feedlot, the sterling beef profit tracker shows cattle feeding margins continue to decline. The most recent numbers put average feedyard losses at a whopping $93 per head. It also shows packer margins improved, but harvesters are losing about $83 per head. Pork producers tightened their belt to weather the financial storm this fall. And it’s good news as losses haven't been as deep as originally forecast this fourth quarter. Purdue University economist Chris Hurt expects profitability to return earlier than anticipated. He is forecasting first quarter 2013 losses near $15 per head, but by the second and third quarters, pork producers could finally be in the green . He projects profitability in the $10 per head range. Many turkey producers also saw tight margins this year due to high feed costs.


Crop watch this week...


Jim Hemminger of Top Third AG Marketing and Jim Bower from Bower Trading will look at the markets on this holiday-shortened week.


Even though John isn't here this weekend. He has some thoughts about the growing pains associated with the North Dakota oil boom. John. My recent visit in North Dakota gave me much to brood over. I have been there occasionally over the last 15 years and concur with sociologists who consider the state to have the highest social capital in nation. The people are warm and outgoing, the institutions honest and efficient, and there is a real sense of community everywhere. That happy picture is being tested by what can only be called excessive good fortune. Between the Bakken oil field drilling bonanza, a booming AG sector are the corn belt moves north and west, and a remarkably large financial industry, the economy of North Dakota is the envy of 49 other states. But this happy picture is marred by painful dislocations. Long-time residents have seen housing costs spiral out of sight as oil money buys up every available home and rents every apartment at nosebleed prices. The infrastructure - from roads to schools to law enforcement - is struggling to keep pace. Change on this scale - even positive change - is a challenge for us to embrace. The fabled resource curse is not just something that afflicts developing countries. More critically, extremely rapid change can exceed our ability to adapt, and even enormous wealth won't help. It will some time before North Dakotan’s feel comfortable in their new state, I’m guessing. And this new state will not be like the old one. After our initial spasm of envy passes, I think all of us can spare a moment to wish them well as they grow into their future.


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