Farming related news you might have missed, stuff I was curious about, commentary about this and that and all that kind of stuff
Amazon Wants to Buy Whole Foods
On Friday, June 16, it was announced that Amazon is looking to buy Whole Foods for almost $14 billion.
As far as WF is concerned, the company hasn’t been doing all that well. Sales have been flat or even declining and the company seems to have stagnated. Some of it’s major shareholders, particularly a hedge fund called Jana, have been putting heavy pressure on WF to sell itself off in the hopes (they say) of shaking up the company and improving sales and WF’s CEO says they only want to do because Jana would make massive profits. Both sides are correct. WF needs to be shaken up if it’s going to survive, and yes, Jana would make massive profits off the sale. If this goes through, Jana would see about a $300 million dollar profit.
Why does Amazon want an upscale grocery chain that caters to people with more money than brains? Amazon has been trying to get into the grocery business in a big way since at least 2008, and while it’s had some limited success, groceries haven’t worked all that well for the company. Buying WF would give it 430 brick and mortar grocery stores already in place along with the supporting infrastructure, access to WF’s supply chain, etc. It would also give Amazon 430 distribution points that already cater to upper middle class patrons, a very profitable class of consumer.
It will be interesting to see how this one plays out.
Okay, why is Cuba popping up in a blog allegedly related to farming? Because we actually sell grain to Cuba, that’s why. Over the last eight months we sold 10 million bushel of corn to Cuba, and it could be a significant buyer of other agricultural products as well.
The current administration is rolling back the lifting of some of the restrictions on Cuba that the previous administration began. It is going to once again forbid travel to the country by individuals, institute new restrictions on trade, and basically try to roll things back to the way they were, despite the fact everyone knows the fifty year old Cuban embargo has done absolutely no good at all.
The thing I don’t understand about Cuba is this — Yes, Cuba is a communist country with a history of human rights abuses. But China is also a communist country with a history of human rights abuses that is, if anything, far worse than Cuba. So why do we have virtually unlimited trade and travel to and from China, but the half century old and totally ineffective embargo against Cuba is still in place?
Lead in Baby Food
A really scary story has been popping up all over the place reporting that FDA testing has found that a large percentage of baby food is contaminated by lead. About 20% of the baby food tested by the FDA over the past ten years or so had lead in it.
The amounts were generally below what the FDA claims is “safe” but you have to remember that modern thinking is that no level of lead is safe for infants and children, and FDA standards for lead are many years out of date.
Even more troubling was that lead seemed to be more common in baby food than in adult versions of the same product. Overall 14% of the adult foods had lead, while 20% of baby foods had lead. Even more strange is that 25% of adult marketed apple juice contained lead while a whopping 55% of apple juice markets for babies contained lead. Makes you wonder what the hell is going on.
I’ve talked about the herbicide dicamba before and all of the problems associated with it, and the lawsuits going on against Monsanto. Let me recap things: Monsanto released a new GM line of seeds called Xtend that was resistant to dicamba as well as it’s RoundUp herbicide because weeds have developed resistance to RoundUp alone. But Monsanto began selling the seed before USDA and FDA had approved the new blend of herbicide that was intended to go along with the new seed. As a result a lot of farmers illegally used non-approved forms of dicamba, causing damage to hundreds of thousands of acres of crops from dicamba drifting into areas where it wasn’t supposed to go. Dicamba is extremely volatile, evaporate easily, and can drift long distances from where it is being applied unless great care is used. Even when the correct blend of herbicide is used and applied properly, it seems it can cause problems. Arkansas has outright banned Monsanto’s Xtendimax dicamba formulation and may ban all dicamba use under emergency regulations because there have already been almost 100 complaints from 14 different counties about misuse of the chemical
There are widespread reports coming from all over Arkansas about damage to crops because of dicamba use already this year, even when the product is being used exactly according to the instructions. There are indications that even when used with the proper equipment and when following the instructions, there dicamba is drifting over large distances, in some cases as much as a mile or more.
Addendum: Arkansas regulators had a meeting on June 20 to consider a complete ban on all in crop use of dicamba. The ban failed because “Due to a procedural error, the vote to consider a ban on in-crop use of dicamba by the Arkansas State Plant Board will be re-voted on at a later time.” So while Monsanto’s formulation was banned, BASF’s version of the herbicide is still legal to use for now.
Rain and More Rain
We’ve been getting extraordinary amounts of rain here over the last few weeks. It just doesn’t seem to want to stop. And as a result a lot of fields around here look like this:
Fields covered in mud, standing water, and corn starting to turn yellow from too much water. And, of course, there’s more predicted for late tonight and into tomorrow morning.
The entire state isn’t like this, though. Weather patterns have been spotty, with one area getting pounded by rain while just twenty miles away they get nothing. There was considerable damage the other day from a storm that rolled through the Appleton area, even a few suspected tornados, while here, 15 miles away, all we got was a bit of light rain.
Eating Habits Changing?
Is the “fat is evil” belief finally beginning to be laid to rest once and for all? Maybe? Consumption of butter is increasing world wide, sales of “low fat” dairy products are being replaced by “full fat” dairy products. (I put that “full fat” in quotes because it implies that the fat content of the milk is not tampered with. It is. Milk straight from the cow has a fat content that can run as high as 5 – 7% while the “whole” milk you get in the store is 3.25%.)
It isn’t just butter, either. For decades we were taught that eating fatty meat will kill us too, so the trend for many years was to trim all of the fat off of meat, to develop types of cattle and diets that resulted in very little visible fat in the meat, etc. That’s changing now as well it seems. Sales of fattier cuts of meat, bacon, well marbled cuts of beef have all been going up.
The whole “fat free” craze that finally seems to be laid to rest didn’t do us any good and may actually have done us a lot of harm. Especially when food processors resorted to loading up their products with salt, sugar and other crap to make it edible because removing the fat also removed the flavor from a lot of products.
Tyson is launching a very extensive system to monitor the welfare of the animals it raises/processes. It claims it is bringing in a third party monitoring company that will use a variety of techniques including video, data analysis and other techniques to make sure that the animals are treated well. While I am pleased they’re doing it and I hope the other big chicken processors do the same, you and I both know that the only reason they’re doing it is because of the public pressure being put on them because of the videos and information that’s been made public by the animal rights groups that have been exposing how badly many of these animals have been treated.
Just a few weeks ago I saw people predicting milk would be in the mid to high $17/cwt range, with some claiming it would hit $18+. I was skeptic about that at the time because I didn’t see anything to indicate any factors that would push the prices up that much. In fact, we have an enormous surplus of milk on our hands with milk processors actually shutting off dairy farms supplying them milk because they can’t deal with the glut of product coming in. Wisconsin, Minnesota, Pennsylvania and a couple of other states have had incidents of milk processors cutting off dairy farms, forcing them to desperately try to find someone, somewhere, to buy their milk.
Milk on the futures market has plummeted, losing $1.40/cwt in three weeks, and falling by $0.46 just this week alone. Butter fell 4 cents, cheese is down, dry milk is down…
The reason why is simple – too much milk. And production continues to increase. This is going to keep up until there is a major shake up in the industry and dairy farms start to go bankrupt. That seems to be the only thing that will stop this never ending expansion of production.
No Rush On NAFTA
A few weeks ago Sonny Perdue, the ag secretary, was claiming that the administration would re-do NAFTA in just a couple of weeks, illustrating that neither he nor the administration knows anything about how treaties, trade deals or negotiations really work. But apparently someone, somewhere, in the administration does know, and it looks like talks and negotiations will extend well into 2018, a bit more of a rational time frame. Frankly, considering how utterly inept this administration has been in its dealings with other countries, we’ll be lucky if we don’t end up with the administration giving Texas back to Mexico and selling the U.P. to Canada.
Rain, Rain and More Rain
That’s the story around my local area. We had almost three inches of rain Wednesday night. We had two and a half inches last night, when added up with the rain we’ve received over the past week or so we’ve had between 7 – 9 inches of rain over the past week. The ground is saturated, fields have standing water, corn in low lying areas is turning yellow, and anyone trying to get out in the fields around here is pretty much completely shut down if things don’t start to dry out.
My backyard is so saturated with water that the ground makes squishing noises when you walk over the grass, and in the low part of the yard near the property line we have about eight or ten frogs that have moved in. I like frogs, great little critters. But it’s them starting to think that my backyard is a swamp that’s a bit troubling…
2 thoughts on “Farm Catch Up”
I never knew there was so much political intrigue around farming until I started follwing you. 🙂
There is probably more politics involved with ag than any other industry. Every aspect of it is controlled by some government agency or other, with USDA, IRS, FDA, FTC, HSA and ICE all involved at one point or another. Then add in international trade agreements, tax policy, SNAP… The dairy prices are still controlled partly by rules that haven’t been updated since the 1940s. It’s a mess.
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