There has been bad news all over the dairy industry in the past year, it seems. First Dean Foods declared bankruptcy, then just a few weeks later Borden, and now this – In 2019 Wisconsin lost 818 dairy farms, the most ever in a single year. Over the last ten years we’ve lost 44% of our dairy farms, more than 5,600.
When I was a kid, there were ten or eleven small family dairy farms on the road we lived on. Today there are only two remaining. Our place, with 140 acres and milking about 40 cows, was actually the biggest farm on the road at the time. Today that size seems almost ridiculously tiny. The average dairy farm today milks 170 cows, but even that is misleading because most of those cows are now on farms where they’re milking 500 to several thousand cows. They still call them “family farms”, and I suppose technically that’s true because a single family is the majority owner of the corporation the farm operates under. But in reality those “family farms” are no more family farms than Walmart is a family company because Sam Walton’s descendents still own stock in the company.
Borden Dairy Company filed for bankruptcy. Borden said it had debts of $500 million and assets of only $100 million. It employs over 3,000 people. This doesn’t mean the company will completely go out of business, and the statement said the company will continue operations as it works out a way to get its finances straightened out.
Interestingly, Borden was listed as one of Forbes 2019 “Most Reputable Companies” back in May, where it was listed as number 16. Obviously Forbes didn’t look at the company’s actual finances when making up that list.
When companies like Borden and Dean Foods goes under, the pundits and the companies themselves are quick to point the finger of blame at anything and everything. The articles I’ve read about the Borden’s bankruptcy and the earlier Dean Food bankruptcy blame the decline in the consumption of milk, the increasing popularity of plant based “milk”, changes in diet, dietary fads, major retailers like Walmart building their own milk processing facilities, etc. They blame it on everything except the real reason, the company itself. Or, rather the management of the company. The company itself was unable to adapt to changing market conditions, and that is what drove them into financial failure.
Yes, consumption of liquid (drinking) milk has been declining. But this is a trend that has been going on for decades. They can’t claim that they were blindsided by this. Walmart made no secret of the fact that it wanted to build its own milk processing facilities. That was known for years before they actually did it. The growing interest in vegetarian and vegan diets that reduce or even eliminate the consumption of dairy products isn’t new either. This is a trend that has also been going on for years now. The same is true for the increased interest in grain and nut based “milk” products.
That Bordens and Dean couldn’t make it is due entirely to the failure of their own management teams being unable to adapt to changing markets.
I’m sitting here in eastern Wisconsin, just 20 miles or so south of Green Bay, and I’m surrounded by dairy companies that are doing pretty darn good. Over the last few years I’ve seen at least a half dozen major expansions by large processing companies, mostly cheese makers, including some multinational corporations. And they’re all doing pretty well. Why? Because they’ve been able to adapt to a changing market.
Dean and Borden failed because they didn’t adapt to an ever changing marketplace.
It’s been a while since I talked about what has been going on in the ag industry. And I’ve probably been babbling far too much about radio and other non-farming/gardening stuff lately anyway, so let’s take a look at the ag sector. And I’ll slip some radio stuff in at the end that you can ignore if you want.
USMCA (NAFTA 2.0) Passes the House
As I mentioned in a previous post the trade deal to replace NAFTA is finally done and being considered by Congress.. The House has passed one version of it now, with some minor changes, but it has yet to be dealt with by the Senate. It’s not likely it will get passed this year yet (it’s already Dec 21 as I write this) and considering what is going on in D.C., it’s anyone’s guess as to when the Senate will be taking it up. Despite all of the hype coming out of Washington, right now the agreement looks like it is going to be at least as bad as the original NAFTA was. There are some improvements in the protection of workers in Mexico and environmental protections, but other than that, it doesn’t really make many changes. It’s basically NAFTA 1 with a bandaid on it. The claims that it will create jobs for tens of thousands of people and boost the US economy are completely unrealistic. This is another of those deals where the only people who benefit from it are the big corporations and a handful of special interests, but that’s par for the course with agreements like these. The original NAFTA wiped out tens of thousands of jobs, drove a lot of US manufacturing into Mexico, and disrupted the Mexican economy, especially in rural areas. This one probably won’t be as disruptive, but it isn’t going to help much. You can go look up the analysis of the treaty yourself, but right now it looks like it is going to have little or no positive effects on the US economy, and might even be worse for us than the original treaty was.
Trade War Update
It looks like things might finally be calming down a bit with China on the trade front. The administration has been claiming agreements have been made and that China is going to start buying massive amounts of soybeans and other agricultural products from the US. And, well, no, they aren’t. At least not the quantities that they’re claiming in D.C. Some of the numbers I’ve been seeing are simply ridiculous. Things are getting better, yes, but don’t look to China to start importing massive quantities of anything from us. There might be some buys, yes, but I suspect most of those are going to be little more than token purchases with few exceptions.
China lost half of it’s entire pig production because of African Swine Fever. It seems to have finally gotten the outbreak under control, but it’s going to be years before things are close to normal. Most of the soybeans China had been buying from the US was going to pig feed. So it’s unlikely it will be making massive soybean buys to feed a pig herd that doesn’t exist any more.
One thing that has improved hugely for US agriculture is China increasing the amount of pork and chicken. Because of ASF China’s lost half of its pig production, which has caused food prices to increase and there is a shortage of protein. So China has increased its buys of US pork and it recently granted permits and licensing to Tyson to sell US chicken in China. While this will certainly help the pork and chicken producers in the US, this is going to be a temporary bump that will only last until China can rebuild it’s pig herds.
African Swine Fever
ASF continues to be a major problem not only in China, which lost over half of its pigs, but also throughout South East Asia. Serious outbreaks are going on in Vietnam and the Philippines. In Sumatra it’s killed about 33,000 pigs. It’s also been found in North and South Korea, Mongolia, Cambodia, and Myanmar, as well in eastern Europe and parts of Africa. Some people feel it’s only a matter of time before it hits Australia despite it’s extremely strict regulations. For some reason people keep trying to smuggle pork from the ASF contaminated countries into other places. Smuggling is an ongoing problem in the US. We confiscate tons of sausages and other pork products from these countries that airline passengers try to smuggle through in their luggage, and even whole shiploads of pork from them. Australia confiscated 32 tons of pork products just from passengers and mailed packages alone in the last half year, half of which was contaminated with the virus. The virus itself hasn’t been seen in the U.S. yet, but it is in the wild pigs in Europe which is making everyone over there more than a little nervous. The US has a pretty good wild pig population, and while they aren’t a big issue (yet) here in Wisconsin, the DNR has issued an advisory to hunters with just about any kind of hunting license to shoot wild pigs, no “season”, no bag limit, just shoot ’em. They’re a huge problem in a lot of states, causing massive amounts of damage. Plus they carry a lot of diseases. If ASF ever gets into the wild pig herd here we’re going to be in trouble.
It was a Rough Year in the Midwest
That’s not one of my photos over there. MrsGF’s surgeries and other things kept me from getting out with the camera, but that is pretty much how it looked around here this year, especially at harvest time. Water everywhere. We officially had the wettest year ever. According to one report I read the longest dry spell we had without rain was three days. That sounded a bit odd to me so I started digging through some of the weather data and it isn’t far from the truth.
By anyone’s standards, it wasn’t a very good year for midwest farmers. Almost non-stop rain made it difficult to get anything done. There were delays in planting, delays in harvest, reduction in yields, all because of the wet weather. Around here there are still a lot of soybean and corn fields that haven’t been harvested at all because of the rain.
Corn prices never broke $4, although soybean prices weren’t horrible. But on top of relatively low corn prices, we had propane shortages which made getting the corn dried difficult and expensive.
The only bright spot was that milk prices finally came up to a fairly decent level for the first time in years. Class III milk is currently sitting at over $19 on the commodities market, but it doesn’t look like it will stay there much longer. January and February prices are down to $17 on the futures market.
As if farmers didn’t have enough to worry about, finding employees continues to be a major problem both here in Wisconsin and in the ag business throughout the country. And as if that isn’t bad enough, an increasingly serious problem is where the heck are your employees going to live even if you do find some? This is a problem for almost every employer around here, not just farmers. Chances are good that employees aren’t going to be able to afford to live anywhere reasonably close to where they actually work. There is virtually zero housing in this town that would be affordable for the average low income worker. And it’s not going to be getting better any time soon. The town is putting in a new subdivision, and is quite proud of itself for doing so, but it isn’t going to actually help the average factory or farm worker around here because all of those new houses are going to be in the $180K to $250K range. What we really need are apartments that rent for about, oh, $500 – $600 a month, not houses that will have $1,500 to $2,000 a month mortgage payments.
What’s happening here is that we have a larger and larger population of people who live here, but don’t actually, well, live here, if that makes any sense. Yes, their houses are here, but their entire lives are up in the Fox Valley area about 20 miles away (the cluster of cities and towns up in the corridor that runs from Appleton, Neenah, Menash, and extends up to Green Bay). They can’t afford a house up in the Fox Valley any more, but they can afford one here. So while this may be their residence, their entire lives are centered around the Fox Valley. They buy groceries there, go to restaurants up there, meet their friends up there, do all their shopping up there. So they may live here, but they don’t actually live here. They don’t patronize local businesses, don’t send their kids to school here, don’t participate in local social events, and aren’t really part of the community.
So not only do we not have housing that is affordable by the average person bolting together snowblowers for $14 an hour, we have an increasing percentage of the population of the town who aren’t really engaged with the community at all. Their residences are here, yes, but they live their lives up in the Valley. They almost totally disengaged from the community they live in. And as a result we no longer have a clinic, no longer have a real grocery store, no longer have a pharmacy… Well, you get the idea.
It’s especially difficult for the immigrant community who make up the majority of labor in low paying jobs like farming, manufacturing (they like to talk about how well manufacturing pays – yeah, right. Starting wages at the snowblower place are about $12.95 an hour with no benefits and technically they don’t even work for the company, but for a “temp” agency.) They’re glad to get the jobs and the employers are glad to have them because they can’t find anyone else to do the work. But where are they going to live?
I’ve been talking for a while about moving all my electronics gear, the radio equipment, etc. down into a new shop/radio shack in the basement so MrsGF can take over our shared office so she’ll have room for her own projects. She enjoys sewing, making things, and would like to do quilting, but her existing workspace is a tiny, virtually unheated room upstairs, and there isn’t the room for it up there. Plus its cold in the winter up there. And even with her new knees I don’t want her to have to go up and down stairs a lot. So she’s going to be taking over the office area and I’m moving into the basement.
Now that she’s pretty much recovered from the 2nd knee replacement, I’ve started moving the “big stuff” down there. I have my primary computer down there now (I actually have space for the drawing tablet now!), the big TS-990, the antenna tuner, etc. Much to my surprise, I actually remembered how all of the cables hooked up and when I fired it all up everything actually worked! First time that’s ever happened.
I still need to do a lot of work down there. I have walls that still need to be painted. I still don’t have the electrical straightened out. I need to add at least two outlet boxes on the wall by the computer and radios, plus I need a 240V outlet there for the amplifier. Not sure why because I haven’t used the amp in years, but would be nice if I could.
I didn’t show it in the photos because it’s a huge mess at the moment, but behind me and to the left of that photo is my work bench which is covered with misc. parts, test equipment, tools, bits and pieces of RaspberryPi computers and accessories and breadboards where I’m testing radio circuits intended for the receiver I’m building. And that leads us to…
Update OnThe Great Radio Fiasco Project
I bet you thought I conveniently ‘forgot’ about that project because I am the seventh laziest person in the state (hey, I’ve gotten better, I used to be third). I haven’t, though. I’m still puttering along with this thing, even though I haven’t even fired up a soldering iron yet. Mostly I’ve been doing research. There’s no point in reinventing the wheel. Considering that radio has been around for like a gazillion years, someone, somewhere, must have already published plans for a radio receiver that I could steal (cough cough) borrow, right?
I had some basic criteria in mind when I started this. First it had to be as simple as possible, something that just about anyone who, unlike the young woman in the photo up there, knows how to use a soldering iron without suffering third degree burns can put together. Second, it had to use easily available parts, stuff the average person could get from Amazon or one of the parts suppliers like Mouser. Third, it had to be cheap. I want to encourage people to experiment and build stuff, not blow the family’s entire grocery budget for the month on exotic electronics parts. Fourth, it was going to use “old school”, so to speak, construction techniques and components. No printed circuit boards, no ICs, no SDRs, no surface mount devices, etc.
And fifth and possibly most important, it had to be a genuinely useful radio receiver that people could actually use. There are dozens, even hundreds of plans out there of various types for things like crystal radios and one transistor receivers and other nonsense that… Well, okay, so they might work, under absolutely ideal conditions, with a great deal of fiddling around, and if you live right next door to a 100,000 watt transmitter. But in the real world none of those actually work very well, if at all.
Anyway, I’m looking at various ideas and sketching some things out and doing some experimenting, and hopefully in a short (short? Ha!) time I’ll have something to show for all of this. Hopefully something that actually works. What’s been discouraging is that the schematics and projects I’ve found often contain such basic, fundamental mistakes that it makes me believe that the author never actually built the project himself and just, well, stole it, to be blunt, from someone else who also hadn’t actually built it either. I’ve been seeing things like electrolytic capacitors installed backwards, emitter and collector pins on transistors reversed, wrong pinouts shown on ICs like opamps and similar basic errors that should have been caught if anyone had bothered to actually look at the schematics.
Perhaps a few days ago you heard a rather loud “thud” that echoed all across the farm belt. That was the sound of every corn farmer’s jaw in the U.S. hitting the floor at the same time as they read the estimated corn planted acres just released by the USDA. If you’ve been reading this blog, you know we’ve been having weather problems here in the corn belt. Rain, and lots of it, has meant big delays in getting crops in the ground, and a lot of fields are standing empty because the farmers couldn’t plant at all.
So when the USDA report of acres planted came out and USDA claimed 91.7 million acres of corn was planted this spring 3% more than last year, a lot of farmers looked out the window at fields that were either still seas of mud, unplanted, or planted with cover crops that aren’t going to pay their bills, there was a collective “WTF???” uttered across the entire corn belt as we all wondered what the hell USDA is smoking.
There was so much disbelief and outright anger over the estimate that USDA had to start backpedaling almost immediately and admit that there might be “a problem” with some of their data, and start looking for excuses to explain how their estimates are almost 10 million acres higher than what the best estimates have been from other sources. Typically, they did what they do best, shifted the blame to the farmers themselves, stating that their data isn’t based on the actual number of acres farmers planted, but it was based on what farmers said they might plant at the start of the season…
Anyway, USDA now says they’re going to take a do-over and resurvey the entire midwest to see if they can get better numbers, but that isn’t going to be done until August, we’re told, by which time, well, it isn’t going to matter much anyway so in reality the resurvey is really going to be little more than a waste of time and money.
I haven’t seen so much anger and outrage in the ag community in a long time. Normally the comments sections at AgWeb are, well, empty, really. If someone does make a comment it’s relatively thoughtful and calm. But now? The comments on this story were livid. How could USDA screw up the numbers so badly? We’re talking close to a ten million acre discrepancy here according to some sources.
USDA’s reputation was already on somewhat shakey ground before this happened. The agency already had a reputation of providing crop and yield estimates that weren’t accurate. That was generally attributed to sheer incompetence and not outright fraud.
But it wasn’t just the crop numbers that seemed a bit off. Other things were going on at USDA as well have made the agency look, well, more than a little shady. It’s made decisions that have favored the big ag monopolies and multinational corporations at the expense of the farmers the agency is supposed to protect. It’s seemed way too cosy with certain big ag business companies. And a lot of the people at USDA who are supposed to be helping and protecting farmers have come straight from the offices of the very companies USDA is supposed to be regulating.
After this report was released, a lot of farmers now think the fix is in, and that USDA is actively manipulating the data for the financial benefit of big commodities brokers, financial institutions, and the big ag companies. Just read the comments following some of these stories and you’ll see that even the farmers who don’t believe USDA has sold itself out lock, stock and barrel, think there is something going on over there.
I had to read this article twice before I realized that it wasn’t a belated April Fool joke and that they were serious about this. Yes, they’ve really built a kind of dairy farm on a barge floating in a harbor. Now I’ve tried to find out more information about this but all I’ve been able to find have been more PR fluff pieces, with little or no actual facts. The Beladon website link in the original story has been “in maintenance mode” for several days now (just what are they maintaining?) but there is a link to a site https://floatingfarm.nl/ about the farm itself. Sort of. If you like more PR speak, that is. (You’ll have to use Google Translate) And again, there are no actual facts, just lots and lots of enviro-babble and grand statements and “oh my, aren’t we wonderful!” silliness, and things like that tend to make me a bit skeptical.
I also noted that there is no mention of exactly what this white elephant cost them to build in any of the stories I found. It took a bit of digging to find that out and again, as with everything else about this, everything was more than a little vague. The only numbers I found were from about three years ago when they first proposed this project. They claimed at that time it would cost about $3 million to build this thing. $3 million… To house just 32 cows. (And they claim that traditional farming is wasteful???) And I’d be willing to bet that when all of the bills are added up, this was considerably more than that.
But then nothing about this project makes sense if you look at it closely. They claim that we need different methods of farming going into the future, that raising cattle is extremely wasteful in terms of land use, has pollution problems, etc. And they certainly are right about all of that. But this project doesn’t solve any of those problems.
They claim that moving the cows offshore onto a barge eliminates the need for large spaces for cattle to be raised. But the biggest use of land when it comes to cattle isn’t housing the cattle, it’s growing food for them. Millions of acres of cropland is used just to raise grain, soybeans and hay to feed cattle. The cows themselves are generally housed in feedlots or housing units that actually take up very little acerage. Simply moving the cows off the ground onto a barge doesn’t do anything to eliminate the need to grow food for them.
Now they claim that they’re going to grow 20% of the cattle feed right there in a sort of greenhouse on the top level using LED grow lights, and, well, good for them, but it ain’t going to happen. Do they even know how much cows eat? The average milking dairy cow eats about 100 pounds of feed per day. That means they need about 3,200 pounds of feed a day for their small herd. So their little green house will have to produce 640 pounds of high quality cattle feed per day. Ain’t gonna happen, as I said. But even if they did, that means they still need to come up with 80% of the cows’ diet from other sources, and they claim that’s going to come from human food waste. And there is a huge problem with that. Human food waste doesn’t make very good cattle feed.
Cows evolved to eat mostly grass with a bit of grass seed (i.e. grain) mixed in. And not much else. Modern cattle rations include soybeans and corn and other grains for added protein, mineral supplements and a lot of other stuff that isn’t part of a cow’s normal diet, but is added to improve milk production.
Now I don’t know about you, but here at the house we don’t eat a hell of a lot of grass, and what grain we do eat is almost all in the form of various baked goods like bread. Human food waste is made up mostly of things like spoiled fruit and vegetables, spoiled or outdated, highly processed baked goods, bits of fat, gristle and meat, and all of it thoroughly laced with salt, fats from a variety of sources, and lots and lots of preservatives, “flavor enhancers”, texture modifiers and other things that, while edible, aren’t really, well, food. Not for people and certainly not for cows.
Granted, there are some human foods cattle can eat, but that material is going to have to be carefully selected (requiring labor and energy), is going to have to be processed (more energy and labor), is going to have to be tested (more energy and labor), other feed products are going to have to be added to make sure the cattle are getting a diet that meets their nutritional needs (still more energy, labor and added feed costs), and… Well, when you add in the labor, the energy, the supplements, etc., then add in the cost of running that LED lighted green house that’s supposed to produce 20% of the cows’ diet, this is going to be the most expensive cow diet of all time.
Then there are other questions I’d like answered, like where is the energy going to come from to operate this thing and what is that going to cost? This is going to be veryenergy intensive, far more so than a normal cattle housing operation. Robotic milkers, the LED lighted greenhouse, the sophisticated sewage treatment system on the lower level, heating, cooling, ventilation… This operation is going to suck up a lot of energy.
So, how much milk are they going to get out of this system so they can pay their bills? They claim they’ll get about 200 gallons a day out of those 32 cows, and while that sounds like a lot, it really isn’t. Running calculations are a bit tedious because the dairy industry doesn’t generally deal with gallons of milk, at least at the farm level. Farmers are paid by the pound, not the gallon. Milk weighs about 8.6 pounds per gallon, so 200 gallons would be about 1,700 pounds, and they have 32 cows so that would mean production of about 53 pounds of milk per cow per day, while the average dairy cow in Wisconsin produces about 64+ pounds per day on average and our best producing cows put out considerably more than that. So when you look at the cost per pound of milk, this operation is going to be ridiculously expensive to operate and extremely inefficient in terms of milk production.
And then why in the world float the whole thing on a barge in a harbor? How are they going to deal with storms, waves, flooding, connecting pipelines, electric cables, communications cables, etc. back to the mainland? All that is going to require special infrastructure that is going to have to be built from scratch and will be very expensive.
Now I’m all for experimentation and innovation. But there is nothing innovative going on here. Every single technology and technique that they’re touting here has already been tried and is already, if it’s useful, being used. Robotic milking? Already being done and spreading rapidly. Using human food waste? Already being done where financially feasible. Treating cattle waste? Already being done. LED growing lights? Been around for ages. There is literally nothing new here. All of the technologies and techniques being used here are already being used, or have been tried and discarded because they weren’t practical or economical, or, like putting cattle on a barge, are so fraught with problems and impractical on the face of it that no one would bother even trying.
Back in the Victorian era there was a fad where wealthy people would build ornate, ridiculous and rather silly structures on their estates for no other reason than they could. These structures were often technically advanced, attractive, even artistic. But ultimately they were useless for any practical purpose. These structures started to be called a “folly”. That’s what this is. A modern version of the folly. Interesting but ultimately useless and utterly impractical.
Spring has finally arrived! Well, sort of. At least according to the calendar if not the weather. It’s been too wet and too cold to be able to do much of anything outside except cleaning up the flower beds and yard. So let’s take a look at what’s going on in the ag industry since the last time I did one of these.
Dean Foods For Sale
If you’ve ever had a hankering to own one of the largest dairy processors in the world, now is your chance. Dean Foods, once the largest dairy processor in the U.S., is apparently trying to sell itself off. The company has been having a difficult time of it. It’s been forced to close processing facilities, it lost a major contract with Walmart, and its efforts to rebrand some of its products and buy into other businesses haven’t been successful, or at least not successful enough to prop up the company’s dwindling sales. It’s been missing its sales targets for something like two years in a row now, and there are no signs things are going to get any better. Supposedly Canadian based Saputo, the 8th largest dairy company in the world, is interested in acquiring Dean. If successful this would be just the latest in a wave of mega-mergers among agriculture related businesses in the last few years.
If you find these mega-mergers to be troubling, well, you should. Despite claims to the contrary, these mergers are resulting in the creation of huge, multinational companies that dominate their markets and often they have virtual monopolies on the product lines they sell.
Bayer Stockholders Angry
Speaking of mega-mergers, Bayer’s management is facing repercussions from stockholders over it’s acquisition of Monsanto. It was expected that a lot of large stockholders were going to disapprove of the board of directors’ and management’s acquisition of Monsanto at the annual general meeting of the company. While this doesn’t change what management has done, it does indicate that a lot of stockholders are very angry over the decision to buy Monsanto, and the subsequent legal problems over the lawsuits about the adverse health effects from RoundUp, and most importantly, Bayer’s plummeting stock value.
Frankly, buying Monsanto was a really bad idea from the beginning, and if the executives at Bayer didn’t realize it, the company’s lawyers sure as hell should have. Even back when the negotiations for the purchase started Monsanto was already facing thousands of lawsuits over the alleged cancer risks of glyphosate. Now there are about 13,000 lawsuits in the pipeline concerning the herbicide. No, that was not a typo. Thirteen thousand.
And that isn’t the end of Monsanto’s legal problems. There is the whole dicamba fiasco to be concerned about as well. The lawsuits over the damage the company’s dicamba based herbicide has done since it was released a couple of years ago, along with lawsuits over Monsanto’s marketing tactics for it’s dicamba resistant soybeans, are starting to pop up now and are only going to get worse. Basically Monsanto is a legal nightmare and it is dragging down Bayer with it.
Beef Industry Lawsuits
While I’m on the subject of legal problems, the beef industry has been hit with two separate but related lawsuits alleging the four biggest beef packing companies, Tyson, JBS, Cargill and United Beef Packing (together they control 80% of the US beef market) conspired together to manipulate the price they paid to cattle growers and the prices charged to consumers. Basically it’s another claim of monopolies using their lock on the market to manipulate prices. Just those four companies control about 80% of the beef market in the US. Anyway, I won’t go into depth on this one. I’ll leave it to you to follow the link and sort out the details if you’re interested.
Walmart Gets Into Beef
I mentioned Walmart briefly when I talked about Dean Foods. Dean lost a huge contract to make Walmart’s house brand liquid milk not long ago when the retailer decided to experiment with eliminating the middleman and become its own processor. It built a large milk processing facility, cut deals with dairy farms to supply milk, and cut Dean Foods out completely in one district.
Walmart is now trying to do the same thing with beef. It is developing its own end to end supply chain to supply beef to some 500 Walmart stores. This won’t take care of all of Walmart’s meat. Most of it will still be supplied by Tyson and Cargill. But it does indicate a troubling trend where these big companies are trying to develop a complete monopoly over not only sales, but supply as well. Costco is doing something similar with chicken, developing its own supply chain that will supply about 40% of its needs.
Trade Wars Continue: Updated 5/6/19
I had this section all wrapped up and ready to go when the you-know-what hit the fan and… Okay, here’s what’s going on.
I really want to talk about the China situation, but let’s deal with something closer to home first, the new NAFTA treaty, USMCA, the US-Mexic0-Canada-Agreement. The USMCA negotiations finished some time ago, a treaty was agreed to, and all is well and good now, right? (Side note: Am I the only one who thinks USMCA is the title of a Village People song?)
Well, no. Yes, the treaty was negotiated, but everything is most definitely not good because not only are we still operating under the old NAFTA treaty, the administration has still left the punitive tariffs in place that have been causing disruptions of the economies of all three countries.
So what the hell is going on? We have the new treaty, so why are we still operating under the old NAFTA and why are the tariffs in place yet? Because before a treaty can go into effect it has to be ratified by the US Senate, and the US Senate has been doing what it does best, acting like a bunch of petulant, spoiled brats who are more interested in back stabbing each other and playing at politics and dabbling in personal attacks than they are in actually doing their bloody jobs. Supposedly one of the reasons why the tariffs are still in place is because the administration is trying to use that to goad the Senate into doing something. And since that hasn’t worked, the administration has threatened to cancel the existing NAFTA treaty, which would cause utter chaos, if the Senate doesn’t get off its ass and actually do its job for a change.
Now let’s move on to China. Now if you haven’t really been following what’s been going on there, you can be excused for thinking that all is sweetness and goodness and we’re all well on the way to being best buddies and all of this trade war nonsense will be over soon and, well, no. Sorry, but no.
As you’ve probably found out in the last couple of days, despite all of the positive PR fluff that’s been released by both sides over the last few months, things have most definitely not been going well with the negotiations. While both sides have been putting out positive sounding press releases, there have been issues, as they say. Behind the scenes things have been more than a bit testy.
Yes, China did a soybean purchase, but that was more PR than anything else. While the amount they purchased sounds quite large to the average person, in actual fact it was little more than a token purchase to indicate good faith on their part.
Things did sound positive for a while, though. Both sides were stating that things were going well and that they were on the verge of coming to an agreement. But then something happened. I’m not sure what, exactly, but whatever it was put a definite chill on the whole thing. There are a lot of rumors flying around. One is that the Chinese are very much aware of the legal and ethics issues the administration is involved with here in the US and as a result they just don’t trust anything the White House says.
Anyway, we suddenly had the administration muttering vague threats that it was considering pulling out of the negotiations entirely. Then the administration started threatening to ramp up the trade war to new heights, doubling the cost of the tariffs and including even more Chinese products in the tariff war. Then the Chinese started threatening to pull out of the negotiations… Oh, brother…
As I write this (May 7, 2019) things look tense, and the effects from this little tiff are rippling through the economy. The stock market is down. Commodities prices have fallen. Corn is down to 3.55, soybeans are down to 8.20… Sigh…
Even more disturbing is the fact that statements being made by the administration indicate that the administration doesn’t really know how tariffs work in the first place. One statement implied that the administration believes that China is paying the tariffs and that they are actually good for our economy. If the administration really believes that, it shows a fundamental ignorance about what tariffs are. Let me explain.
A tariff is intended to discourage the importing of a particular product into the US by increasing it’s cost to the importer. Let me emphasize that by repeating it: “increasing it’s cost to the importer.” Not the country of origin, but to the person or company that is importing the product. So for the most part, China doesn’t pay anything extra on products it exports to the US (except indirectly through lost sales). The people who pay the tariff are the US companies that are importing the products. And that cost is passed along directly or indirectly to us, the consumers.
Let me emphasize that: China doesn’t pay the tariffs, we do.
This is one of the reasons why tariffs are generally a bad idea except under extreme circumstances. It causes as much economic pain or more to the country importing the products as it does to the country exporting them.
It also makes the stock and commodities markets very, very nervous, especially in this situation because they don’t know what the hell this administration is going to do next. The markets like stability. They like predictability. And this administration is providing neither of those things at the moment.
Well, I’ve been babbling along for far too long already here, so let’s wrap this up.
Hopefully in the very near future I’ll have some new radio equipment to talk about. I’m seriously considering going QRP and I’ve been looking at mag loop antennas and the Yaesu FT-818ND QRP transceiver. We’ll see how that goes.
It’s bloody cold out there. In the last few of weeks we’ve had a 14 inch snow storm, some of the coldest weather the state’s ever had, followed by temperatures jumping from -37F to +50F in just a couple of days, then more snow, then back in the deep freeze again, then freezing rain and more snow. In other words, a fairly typical Wisconsin winter. So with nothing to do outside I might as as well do something to justify the name of this website and talk about farming for a while.
No, that’s not some kind of strange code or some new meme up there in that title. I mean seriously, we’re talking about feeding pigs weed. Well, sort of. Moto Perpetuo Farm in Oregon is feeding their pigs marijuana. They’re feeding scraps and outdated marijuana laced bakery products to their pigs because, well, they can, I guess. I suppose it was only a matter of time before someone would do something like this as some kind of marketing gimmick. And I suppose it’s better to feed the stuff to pigs than landfill all those brownies, cookies and other stuff when they go stale. Feeding bakery waste to pigs and other cattle is a pretty common practice and has been going on for as long as there have been bakeries. But feeding them marijuana brownies? Well, hell, why not, I guess. As MrsGF said when I told her about this she said “Damn, I bet those are some happy pigs!”
I wonder what this is doing to the pigs, though. Marijuana is not a normal part of a pig’s diet and while it doesn’t seem to be harming them, no one knows for sure. They seem to be doing this for no reason other than as some kind of marketing gimmick and that troubles me.
African Swine Fever
I haven’t seen much about ASF outside of the ag press, but this is a seriously scary disease if you’re in the pork business. ASF doesn’t harm humans, but it is highly contagious among pigs, and almost always fatal. There is no vaccine or treatment for it. It can’t be cured. All they can do is try to isolate it, and that is proving to be almost impossible. In China it has quickly spread to more than 25 provinces. The country has instituted bans on moving live pigs and other measures to try to contain it, but that doesn’t seem to have done much good. It’s been hitting small Chinese pig farmers hard because they have trouble dealing with the restrictions and health measures. It’s looking like a lot, if not all of the small pig farms will be put out of business by this.
It’s been spotted in the EU as well. Authorities are urging hunters to kill wild pigs which can carry the disease. There has even been talk of putting up fences along borders to keep wild pigs from spreading it into adjacent countries. France has supposedly deployed the military along the border with Belgium because they’re afraid swine from Belgium will sneak across the border
There is a swine fever problem going on in Japan as well, but that seems to be a different strain of disease that isn’t related to ASF. The country has slaughtered thousands of pigs in some prefectures in an effort to halt the spread of the disease, and the farm minister called the situation “extremely serious”. The major concern there is that no one knows how the disease is spreading.
Whole Milk in Schools?
You may not know this, but it is illegal to serve anything except low fat or skim milk in public school lunch programs. Apparently the belief is that if you let one tiny, tiny bit of milk fat past the lips of a child they will immediately swell up to 300 pounds, get diabetes and drop dead of a heart attack. Yeah, right… As if the few calories they’d get from whole milk is going to make any difference to a kid who is gorging on chips, soda, candy, and sodium loaded fast food outside of school.
Anyway, a couple of professional criminals — ahem, excuse me, I mean congress persons, are trying to change that and are putting forward a new regulation that would permit whole milk to be served, accompanied by the usual hype from the dairy industry. The usual suspects, the various dairy marketing organizations, are hyping the hell out of this, using it as an opportunity to promote the alleged “health benefits” of drinking milk. They are desperate to try to prop up ever decreasing consumption of milk. About 10 ethically challenged bas… oops, a bit of a typo there… Ten congress persons have signed onto this thing so far and I would think more will join up because it’s “for the children”, makes them look like they really care when they don’t, and doesn’t cost them anything while letting them suck up those yummy bribes … oops, another typo there. I mean, of course, campaign contributions from the dairy industry. Wink wink nudge nudge…
Uh? What do you mean I’m a cynical old grouch?
Dicamba Antitrust Lawsuit
I’ve talked about the herbicide dicamba before so I won’t go into detail about it here except say it is nasty stuff with a habit of vaporizing and drifting long distances and killing and damaging millions of acres of crops, mostly soybeans, and a lot of other plants. Despite changing the formula of the herbicide, more strict application regulations, etc., nothing seems to have stopped the damage.
A new lawsuit has been started against Monsanto, now owned by Bayer, claiming it violated antitrust laws when it introduced it’s “Xtend” brand dicamba resistant soybeans. Xtend soybeans have taken over almost 75% of the North American soybean market in just three years. The company claims this is because their seed is just better. The plaintiffs claim that sales are driven, at least partly, by fear.
The claim is that farmers are planting the stuff not because it’s better, but because they’re afraid they’re going to lose their whole crop if their neighbors use the stuff and the herbicide drifts over their fields. That fear is entirely justified because dicamba damaged or killed millions of acres traditional soybeans across the country since it came into widespread use when Xtend seed came on the market. They also claim that seed salespeople are actively promoting this fear, telling farmers that if they don’t buy Xtend seed, they risk losing their whole crop. The lawsuit claims that Monsanto knew about the risk of dicamba drift and deliberately exploited it in order to drive competitors out of the market.
Bayer, which bought Monsanto last year, denies it, claims that the herbicide doesn’t drift if used properly, and claims that damage from drift were down last year after new restrictions were put in place. The plaintiffs claim that the damage has been reduced because farmers have been forced to buy the Xtend seed or face losing their crops.
Rent A Chicken. Seriously?
In the “no one ever lost money underestimating the intelligence of the American people” department: There is something out there called “Rent a Chicken”. For “just” $450 – $600 a season, this outfit will rent you a couple of chickens, a small coop, a bag of feed and a couple of dishes. And…
Oh, come on, really? The free range “organic” eggs you’ll get out of those two birds will cost you something like $20 a dozen. Plus you will experience the “joy” of taking care of a pair of birds that will try to escape, run out into the road and get run over, piss off your neighbors and leave chicken crap all over your yard for your kids to play in.
But apparently people are actually doing this. And enough of them are doing it to let this outfit have outlets in 23 states and parts of Canada and…
Look, you can get free range, organic eggs from small farmers around here for about $5/doz if you’re looking for eggs. And if you think a chicken is going to be your pet, well, tell that to the emergency room doctor when you have to take your four year old in to get her face stitched up after the bird went for her. Can you say tetanus shots?
Look, if you really, really want to have a couple of chickens for some reason, here’s how you can do it for free.
You can cobble together a pretty good coop out of an old pallet or two and chances are good you can pick up a couple free. The birds themselves? Check Craigslist or other community bulletin boards and you’ll generally find ads from people trying to give the things away because they found out what you’re about to find out, that chickens are A) stupid, B) vicious, C) annoying, D) filthy, E) without a carefully controlled diet the eggs they produce (if any) taste bloody awful, and F) drop dead for no apparent reason leaving you to try to explain to little Rachel why her bird went to live in chicken heaven, and costing you thousands of dollars in therapy bills when you haven’t even paid off the ER bill yet from the time the chicken tried to peck her face off. And as for feeding them, well, that’s free too because, well, your neighbors got bird feeders, right? Besides, chickens will eat damn near anything including small rodents, bugs, snakes and each other.
Danone, makers of Dannon and Activia coagulated milk products (yogurt), bought a building in Pennsylvania that it plans to use to make “vegan yogurt”. Basically you take soybeans or some other legume or nut, process the hell out of it, spin off some kind of juice from it, throw in a bunch of chemicals and additives to make it vaguely resemble real yogurt, add a lot of sugar and/or artificial sweeteners and flavoring agents so people can gag it down, then throw in some bacteria, cheap vitamins mass produced in China, and then use a massive marketing campaign to convince you it’s “healthy”.
Anyway, the company has jumped into the fake dairy product market with both feet. Back in ’16 it bought the company that manufactures Silk and other vegan products for something like $12 billion so they want to get into the fake milk and dairy business really, really bad because, well, profits, of course. Sales of regular yogurt have gone flat or even started to decline in some areas so it has to do something to prop up the sales.
What really caught my eye in this story was the term “flexitarian”. I’d never heard of it before. What the hell is, some of you are asking, a flexitarian? A flexitarian, my friends, is a vegetarian who eats meat. Seriously. Oh, they say, I’m better than you are because I don’t eat a lot of meat… And, well, it’s all just pretentious drivel. It’s greenwashing on a personal level
Tinder for Cows
Yeah, seriously, Tinder for cows. A company in the UK has introduced an app called “Tudder” which lets farmers find breeding matches for their cattle by using a Tinder style app where you can swipe left or right as you page through a selection of cows and bulls. You can narrow things down by specifying various characteristics such as breed of animal, whether it’s organic or not, health, age, etc. I know it sounds silly but there is a genuine market for this kind of app. It isn’t being put out by a fly by night company, either. It’s backed by Hectare, which provides marketing platforms for trading cattle and grains that are used by about a third of UK farmers.
And, of course, the article offers the obligatory pun about a possible sheep version called “Ewe-Harmony”.