Agrimoney.com | Butter price surge may ‘prompt fundamental market change’ – Arla

Screen Shot 2017-08-29 at 6.25.36 AMArla boss Peder Tuborgh sees a shake-up, if the rally continues which has, for the first time, made dairy fats more expensive than protein Source: Agrimoney.com | Butter price surge may ‘prompt fundamental market change’ – Arla

I haven’t been talking much about farming lately because not much has really been going on over the last month or so. But butter — good grief. The butter market has gone goofy.

Wholesale butter prices are flirting with record prices in some markets, even surpassing record levels in some areas. Retail prices have been creeping up. Demand for butter has been just about the only thing that’s been keeping farmgate fluid milk prices at a reasonably decent level over the last few months. Around here prices for generic butter is pushing close to $4/lb. while prices for the “premium” brands is in the $4.50 range, with some of the premium brands pushing $5/lb. retail prices. The exception is KwikTrip, which is selling their house brand for $2.99 in their convenience stores around here.

I’m always fascinated by how the public’s attitude towards butter and dairy fat in general has changed over the last few years. Thanks mostly to the marketing claims made by margarine manufacturers, and with little or no actual scientific studies backing those claims, butter and dairy fat was being blamed for everything from obesity, to heart disease, to stroke, to I don’t know what all else, while margarine was being pushed as a “healthy” alternative, when the opposite was true.

I always hated margarine. I hated it’s texture and flavor, I hated how it melted or didn’t melt, hated how it worked when used in cooking. But then I’m weird that way. I have one of those hypersensitive senses of smell and taste, especially smell. I’ve a bit of a reputation as being a picky eater, but I’m really not. The problem is that I smell and taste things most people seem to be unaware of.

But let’s get back to butter…

The item up there from AgriMoney reminded me of the Great Butter War going on here in Wisconsin right now. The picture of Kerry Gold butter up there isn’t just some random butter image, it’s appropriate because at the moment Kerry Gold is banned from sale in Wisconsin along with a lot of other brands of butter.

Before butter can be sold in the state, it has to be graded on taste, texture and color through some state accepted system, by state accepted inspectors. This means that if a butter maker can’t or won’t spend the time and money to put their product through the state’s inspection system because of cost or whatever reason, it can’t be sold in the state, even though it meets all other accepted federal standards.

Consumers didn’t know about this until one day Kerry Gold butter abruptly vanished from the shelves of the grocery stores here in the state not too long ago. It isn’t that the law was just passed, it’s been on the books since the 1950s. It seems that a lot of grocers just didn’t know about the law until fairly recently.

Wisconsin has a long history of laws about butter. It is still illegal for restaurants to substitute margarine for butter without the customer specifically requesting it. It is illegal to serve margarine in state prisons, schools and hospitals except for health reasons. And until the late 1950s it was illegal to sell margarine in the state that had been dyed yellow. Margarine is actually a rather sickly looking whitish color and is dyed yellow to make it look appealing. Margarine makers used to include a yellow dye packet with the margarine sold in Wisconsin so the consumer could dye it themselves.

I should point out that Wisconsin’s butter grading law has nothing to do with food safety. The grading system the state insists on is made up of largely arbitrary standards for taste, texture, smell and appearance. Kerry Gold and the other butters banned from sale in the state meet all USDA and other federal standards for quality. They just haven’t been subjected to these arbitrary tests.

Well, the whole thing is going through the legal system now, and I suspect that sooner or later the Wisconsin requirements will be overturned. But until then you’ll have to order your Kerry Gold online or hop across the border to Illinois or Minnesota to get your fix.

Farm Catch Up

Stories you might have missed about food, agriculture, and the ever popular ‘stuff’, along with occasionally snarky commentary.

Coffee Linked To Not Dying!

Screen Shot 2017-07-12 at 2.14.11 PMOoo, coffee — that delightful, delicious beverage that both pleasures the taste buds and enlivens the brain, oh I feel so sorry for those of you who drink tea. (Come on, you tea drinkers know what you’re drinking is lawn sweepings soaked in tepid water, right?)

Anyway, now that I’m done annoying the tea drinkers out there (you know who you are), let’s get on with this.

That headline up there is not clickbait. It’s true. According to a study published actual real live doctors from an actual research facility and published in an actual science journal (not the Flintstone’s Institute for Advanced Studies of Sciency Stuff and Flat Earth Society where most of the congress apparently gets its science information) you have almost a 20% less chance from dying from just about anything if you drink coffee. Well, probably not getting hit by an asteroid or something like that. They mean heart disease, stroke, cancer, that kind of thing. If you click the link it will take you to an article over on The Guardian and you can get the links to the actual study from there.

Missouri Bans Dicamba

Missouri joined Arkansas in issuing an emergency ban on the sale and use of herbicides

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soybeans damaged by dicamba

containing dicamba after it was learned that more than 200,000 acres of non-GM soybeans were allegedly damaged by the product. The Arkansas ban was approved by the Governor’s office and will go into effect on July 11, and is in effect for 120 days. The Missouri one doesn’t seem to have a specific time limit, but the agency involved in Missouri said it hoped the problems could be resolved and the ban lifted yet this growing season.

Dicamba has always been difficult to work with. It turns to vapor and can drift for extremely long distances. Non-GM soybeans are extremely sensitive to the product, and even a tiny amount can damage the crop, so any kind of drifting is a serious problem. Monsanto has claimed that it’s “VaporGrip” version of the product cured the problems when used properly. But it doesn’t seem to be working very well.

So, you ask, what dos Monsanto say about all of this? Glad you asked.

They’re blaming everyone else, of course. In an interview over at CropLife, a Monsanto spokesperson blamed everyone and everything except, of course, it’s product. Farmers spraying at the wrong time of day, having residue from other products in the sprayer’s tanks, not following proper procedures, using the wrong spray nozzles, spraying in windy conditions. And all, of course, without offering any proof that any of this actually happened.

More Chlorpyrifos Controversy

Five states (and I’ve heard several more are in line to do it too) are suing the EPA over it’s decision to permit the continued use of Chlorpyrifos, a very nasty pesticide that is known to cause serious health problems, especially in children.

I mentioned this before. Last year the EPA determined that chlorpyrifos was dangerous, and public health organizations, doctors and other health care professionals have been pushing for it to be banned for years. The EPA was going to ban the stuff at last.

But then along came Pruitt and he claimed the stuff is just fine and dandy and that they had real actual “meaningful data and meaningful science” to prove it. Associated Press, other media, and health officials have repeatedly requested the EPA provide them with the data, but the EPA has refused to respond to any of the requests.

I don’t like being a cynical old bastard, but I get the feeling the EPA hasn’t provided it yet because they have interns locked in a back room somewhere desperately trying to write something sciency enough to fool the average reader into believing this stuff is “safe”.

Oh, I should point out that DOW, which makes chlorpyrifos, contributed $1 million to Trump to fund his inauguration, its CEO is supposedly good friends with him, and it has spent over $13 million “lobbying” various politicians in the past year.

Commodities Markets Are Weird

If you followed my old blog on Tumblr you know I’m fascinated with the agricultural commodities market and how it functions. Or, rather, how it doesn’t function, because it’s often so screwed up it’s laughable. Often what’s going on in the futures markets seems to have little to do with reality. Like right now.

USDA came out with it’s crop status report, and it’s the worst that they’ve issued since the 2012 drought, with only 65% of the corn crop rated at “good” or better, and only 62% of the soybean crop rated “good” or better.

Now during the drought, corn and soybean prices skyrocketed, with corn pushing the $8/bushel range for a time. So you would naturally think that a report that bad would push the prices up, right?

Well, no. After the report came out, corn prices fell by about 5 cents a bushel, and soybeans dropped more than 12 cents.

Apparently what drove the morning price down was that the report wasn’t as bad as they thought it would be.

Bureaucratic Run Around

More on the dicamba front: BASF, which has partnered with Monsanto to produce the special dicamba blend that was just banned in Arkansas and Missouri after enormous numbers of complaints about crops damaged by the herbicide, is trying to pull a bureaucratic end run around the ban by applying for something known as a “special local need label”.  This is a special permitting system that allows the use of a pesticide that normally cannot be used, because no other pesticide would be effective. Basically it was originally intended to help during emergency situations where there was an infestation of some pest that threatened to wipe out a crop, and only a non-registered pesticide would work. If you want, you can read the information about that whole process here.

Considering dicamba has damaged literally hundreds of thousands of acres of crops as it has drifted across the countryside, it seems that problem here is dicamba, not the weeds it’s supposed to control.

What The Hell Is Milk Anyway?

Screen Shot 2017-07-11 at 7.42.36 AMThere is a lot of fighting these days over the definition of the term “milk” when it comes to products being sold to consumers, specifically over the use of the term in describing drinks made with various nuts and beans. I.e. “soy milk” and “almond milk” and that kind of thing. Even USDA isn’t sure, and is using the word “milk” in much of it’s literature when referring to these products.

I can certainly understand why the almond industry wants to use the term. It’s because calling “almond milk” what it really is, isn’t exactly appealing. If they labeled it accurately, they’d have to call it “97% water with a few ground up almonds, emulsifiers, stabilizers, gums, flavoring agents, coloring, added vitamins and minerals and preservatives and you’d get more nutrition from just eating five or six actual almonds than drinking this stuff beverage”.

Try fitting that on the label on the bottle.

Rural Internet Access

For anyone living out in the country internet access is a major problem. There are various schemes and scams floating around that claim they will bring high speed internet to rural residents, but most of them are never going to get anywhere for various reasons.

Why won’t the ISPs connect rural customers? Cost, of course. It would take ages for them to make up the cost of connecting everyone outside of cities and towns. The same thing happened with electricity and telephone back in the day, the providers wouldn’t hook up rural areas until the government pretty much forced them to and paid a lot of the costs associated with it. And in this current political climate, well, a prominent Wisconsin politician (Sensenbrenner) is on record as saying that no one actually needs internet in the first place, thus illustrating that he hasn’t a clue as to what life is like out here in the real world.

The problem with most of these schemes is that they rely on some type of radio communication, either types of cellular networks, microwaves, or some kind of extended wifi system. And the fact of the matter is that we don’t really have the spectrum available to make these schemes work. The radio spectrum is so severely overcrowded now that cellular companies are paying billions of dollars for access to a few frequencies to expand their networks and improve their systems. So exactly where they’re going to squeeze in these new services is problematic.

The other problem is that some of these systems are already being tested or are even already in use in limited areas, and they don’t really work very well and they aren’t really all that fast. We have a kind of microwave system in use around here serving residents that live outside of the wired system, and it has some serious issues. Heavy rain and snow disrupts service, speeds slow to a crawl during ‘prime time’ when many people are trying to use the system, and most of these systems are very expensive, have some very serious data caps, and have lots of other issues associated with them.

Yet another problem is that what the feds are calling “broadband” isn’t really broadband by anyone’s definition. The US has some of the most abysmal internet speeds of any first world country. The ISPs here have been concentrating on throttling back usage, restricting bandwidth, charging utterly ridiculous amounts of money for going over artificially created caps so they can cram ever more paying users into an already overloaded system, and not investing any of that money in improving the infrastructure or in extending their coverage. The result is that US speeds are about half of what they are in the UK, the EU, Japan, Korea, and even the metro areas of China.

The feds definition for “broadband” internet for rural areas is even worse than what it is in urban areas, about 10 meg/second. So you can forget about making that conference call to work if your kid is playing WOW or your dear spouse is down in the basement watching PornHub.

Manure Rules

Wisconsin is finally doing something about the very serious contamination of wells by

Screen Shot 2017-07-12 at 2.45.57 PM

Why is she wearing a mask? If you had to pose in a swimsuit with a bunch of cows, you’d probably wear a mask too.

manure from farming operations. I’ve mentioned before that we have had problems with well contamination from farm runoff, especially in Kewaunee County, were it’s estimated that 30% – 40% of the wells are contaminated. It hasn’t been widely reported, but the problem is so bad that local organizations, schools and others have been giving out drinking water to local families because of the widespread contamination of the wells up there.

The state is going to be issuing new rules that will finally put some restrictions on when, how and where farms can spread manure. Hopefully this will help.

Okay, okay — I know that photo has nothing to do with the story. But if I come across a photo of a person in a swimsuit, wearing a mask, standing with a bunch of cows, I’m going to put it up. I can’t help myself.

 

Farm Catch up

Catching up with the past week’s ag/food news

Yoplait Sales Drop

Yoplait sales have fallen by 22% as the brand’s popularity continues to diminish. I have to point out that I hate Yoplait. I dislike pretty much everything about it; the flavor, texture, smell, everything. But then I feel the same way about almost all of the big name brand yogurts. The stuff is mostly inedible, and if you read the list of ingredients on some of these brands you’ll see why.

Drought in Spain

Spain has been having some serious drought issues this year which has been wrecking havoc with it’s farmers. The country has lost almost more than a quarter of it’s soft wheat production this year because of the weather and will probably have to import 40% more wheat than last year. There have been significant losses to the corn and barley crops as well.

The Guadalquivir delta, the Spain’s biggest rice producing area, is having serious problems with it’s water supplies. The aquifer from which water is pumped to irrigate crops is almost completely depleted, with only about 20% of the aquifer remaining, largely because of unregulated and illegal wells being drilled apparently by strawberry growers. There are reports of farmers renting drilling rigs and dragging them out in the middle of the night to or on holidays to drill wells without permits. There are an estimated 10,000 illegal wells in the area. They’ve even built their own reservoirs hidden in the forests in the area to store water they’ve been pumping illegally.

The aquifer is not being replenished because of the drought and increasing temperatures. The river itself is becoming increasingly salty as sea water creeps up into the river. Within a very short time they will have pumped the aquifer dry and put themselves entirely out of business by going after short term profits now and sacrificing the long term existence of their businesses.

China and Pork

The demand for pork in China is showing no sign of slowing down anytime soon. The country just started it’s first government approved pork pricing index on their commodities exchange to  try to help stabilize prices. The pork supply in China is still dominated by small farms that are sensitive to price swings. As the market fluctuated, pork farmers would react accordingly, cutting way back in production during times of low prices and causing a subsequent wild upsurge in prices during the subsequent shortage of pork. Gee, sounds bit like the US milk market, doesn’t it?

The index could also be leading up to the introduction of futures and options contracts which could help stabilize prices as well.

The country is also trying to end urban pig production to get the animals away from waterways and densely populated areas to reduce pollution, the spread of disease, etc. There have been bans on pig production in cities and towns being put in place by local authorities all over the place.

China and Beef

With China now importing US beef (sort of) a lot of people are speculating on what effects the Chinese market will have on the US beef industry.

At the moment, no effect at all, really, because China won’t accept the hormone and drug laced meat that most commercial growers are dumping on the US consumers. Virtually none of the commercially produced beef in this country meets Chinese health and safety standards. The beef now being exported to China is basically just PR fluff so politicians can pose for pictures with thick steaks in Beijing  while pretending they actually did something.

The Chinese market is potentially huge, but it’s going to require ranchers to grow cattle from birth without the use of the hormones and drugs they’ve been using for decades. It will be interesting to see what happens here and if US growers can adapt to the market.

Walmart Goes Angus?

Walmart is facing extreme competition from places like Aldi, Save-a-Lot and newcomer Lidl in the cut price grocery business, and it’s sales have been flat or even shrinking, so the store is trying to improve its image by claiming that all of it’s beef is now “certified Angus“. The store apparently made some kind of deal with Cargill an Tyson to get Angus steaks and roasts at the same price as whatever it was they used to sell before. They’re doing it only for steaks and roasts and not ground beef products.

Walmart might be better served by looking at the quality of it’s stores and it’s whole “shopping experience” than by trying to put yet another marketing scam in place. From unstocked shelves to dirty floors, to untrained employees, to failing to staff the checkouts lanes, to, well, you get the idea. At least three times in the past year I’ve been in one of the local stores to find entire categories of product just — just gone. One day it was sugar. There was literally not a single container of sugar on the shelves. Anther time it was iodized salt. Again, not a single container of iodized salt. Another time it was white flour…

Milk Price Insanity: Nobody Knows What’s Going On

Watching the various agricultural media outlets is utterly infuriating some days. On the very same day, in the very same ag news outlet, I found these two stories:

Milk Prices are Exceeding Expectations

Dairy Prices Fall

Oh for heaven’s sake… trying to figure out what’s actually happening is enough to make one bang one’s head against the nearest wall.

One article claims milk prices are going up, another, often in the exact same news outlet, claims they’re going down. Another claims the future is utterly horrible, another claims the future is bright and sunny…

Does anyone really know what the hell is going on?

Wisconsin Is Cheese

Well, okay, so it isn’t made of cheese, but some days it seems like it around here. Still, Wisconsin is one of the largest producers of cheese in the world, and home to some of the biggest cheese related companies in the world.

The little town of Plymouth, Wisconsin, about 20 minutes from here, apparently handles 15% of all of the cheese produced in the entire country. It’s the home of Sargento, one of the biggest cheese processors in the country. Satori is big, and some privately owned companies like Masters Gallery Foods, all have locations in Plymouth that process, package and warehouse cheese products.

These few companies are a Big Deal around here, employing thousands of people at processing and shipping facilities scattered all over this area. Sargento just put in a huge addition here in the town where I live and there is talk that they’re going to expand the facility again in the next few years. Sargento alone employs over 1,000 people in just Plymouth and hundreds more here in Hilbert.

There Are Consequences When You Piss People Off

Mexico is no longer the largest buyer of US corn. It has spent about $1 billion less when compared to last year. The country is actively talking with Argentina and Brazil to buy corn. Mexico is becoming very nervous about the horrible comments that have been made by this administration about the country and it’s people, and is no longer looking at the US as a reliable trading partner.

You can’t blame Mexico, really. Having your citizens branded as murders, rapists and drug dealers as this administration has done isn’t exactly what you could call a ‘friendly gesture’, now is it?

EPA Approves Chlorpyrifos, Gets Sued

The EPA, against the advice of almost everyone (except the manufacturer), approved the continued use of a rather nasty insecticide, chlorpyrifos.  If you click the word over there to get to the Wikipedia link, you’ll find this is nasty, nasty stuff, causing developmental problems in children, muscle weakness, seizures, coma, vomiting, paralysis, and suffocation from lung failure. Exposure to it is especially bad for children, causing low birth weight and extensive neurological problems.

Like I said, it’s nasty stuff. The EPA was on track to issue an outright ban on it’s use because of the scientific data it had developed in November of last year.

But then we had an election and, well, now Pruitt says no, it isn’t bad, and the decision to continue to permit it was based on “meaningful data and meaningful science.”

And it then refuses to give Associated Press copies of the scientific studies Pruitt claims that determined it is safe.

Editorial Comment: This kind of thing absolutely infuriates me. Study after study that I’ve turned up indicates chlorpyrifos is dangerous at even very low exposure levels, especially to children. Then Pruitt and the “new” EPA come along and claim they have studies that indicate it’s safe, and won’t tell anyone what those studies are, who did the studies, where the data came from, nothing…

 

Farm Catch Up

 

Syngenta Loses Lawsuit

Hundreds of farmers in both class action lawsuits and individual suits, along with Archer Daniels Midland Co. and Cargill are suing Syngenta, claiming that the company misled them into believing that it’s GM corn was accepted for import by China when it wasn’t. They claim that the company cost them billions of dollars in lost sales and shipping fees and caused corn prices to plummet.

One trial just ended last week, and Syngenta lost. It was ordered to pay $217.7 million to Kansas farmers. It’s not over yet. Syngenta is going to appeal, of course, so this Kansas suit could drag on for years yet. And this is just the start. Lawsuits involving 350,000 corn growers plus ADM And Cargill have yet to go to trial. Another suit is scheduled to start in Minnesota in August for more than $600 million. Cargill’s suit is supposed to start next year, and another one is coming up in Louisiana yet this year.

Still More Dicamba News

It isn’t just Arkansas with reports of dicamba drift causing crop damage. Now Tennessee has been hit with problems as well. As of June 26 there have been 27 reports of crop damage caused by dicamba drift. Not many compared with Arkansas, but Tennessee doesn’t get its crops in the ground as early as Arkansas does so it’s still relatively early in that state. No one seems to know yet if this is a problem with the herbicide blend itself or if it is a problem with the application techniques and equipment. Monsanto, of course, is claiming that either A) no such thing is happening at all, B) the product wasn’t used in accordance with proper application techniques, or C) insert your favorite excuse here. I don’t know, maybe fairies are killing off hundreds of acres of beans.

German Grocery Invasion

The Germans are coming. Lidl, the no frills German grocery store chain, is coming to the US. They’re planning on opening 500 new stores over the next five years. They’ve opened 10 new stores in the Carolinas and Virginia. The store is similar to Aldi’s model; no frills, very limited selection of product, lots of private label products at cheap prices, no shelves, just boxes of product stacked up.

Will it survive? My best guess is that they’re going to have a rough time of it. Most of the areas where they want to put stores are already more than saturated with grocery stores, and the chain has little to distinguish it from the other no-frills outfits like Aldi and Save-a-Lot. And it’s going to have a difficult time competing against Walmart which has fairly good prices and much better selection of product.

I have two major problems whenever I go to one of these places. The first is that if you really watch what the prices are, they generally aren’t all that cheap when compared to other stores. If you average out the overall cost of all the products, except for a few loss-leader items you aren’t really saving all that much money. The second is that the quality of the store brand products often isn’t all that good.

Beef Exports to China Begin

Well, sort of. A packing company sold a whopping 40 boxes of ribeyes and other steaks to somebody in Shanghai a couple of weeks ago. And I suspect most of those were eaten by US politicians for photo ops where they were trying to take credit for China announcing it was going to start buying US beef.

There are, of course, some problems. One of the biggest being that the vast majority of beef raised commercially in the US doesn’t meet Chinese health and safety standards. China bans the use of growth promoting drugs and hormones, feed additives, antibiotics and artificial growth promoting tricks US growers use. As the Farm Bureau pointed out, “only a small proportion of commercial beef production would fit the current parameters”. Commercial growers who want to get in on the market are probably going to have to start from scratch, raising cattle from birth to meet Chinese standards. As of right now, it’s going to cost growers more to meet the stringent health and safety requirements than it’s worth for most of them.

The articles I’ve seen on this subject all seem to also ignore the fact that the primary reason China is suddenly interested in US beef is because their suppliers in Brazil are now embroiled in a massive corruption scandal that seems to involve much of the Brazilian government. The scandal included bribing inspectors, shipping out diseased and contaminated beef and I don’t know what all else. The president of Brazil has been formally charged with corruption, allegedly taking $150,000 in bribes from the huge JBS meat processing company. China, like the US and most other countries, has banned imports of beef from Brazil until they get the situation straightened out down there.

“Pink Slime” Case Finally Over?

It seems that ABC has settled out of court with BPI in the slander case BPI brought against ABC for it’s stories about so-called “pink slime”, a heavily processed, treated meat substance made from scraps and trimmings, and then injected into hamburger. BPI was suing ABC for almost $2 billion. With damages and other penalties, ABC could have been on the hook for $5.7 billion if it lost the case.

ABC is claiming the stories “accurately presented the facts and views of knowledgeable people about this product”, while BPI claims it’s product is “safe, wholesome, and nutritious”.

What bugged me the most about the whole thing wasn’t the “pink slime” itself. I’ve eaten raw eel, lutefisk and cheese that smells so bad it wouldn’t be allowed in a landfill. What bothered me about it was no one told me this stuff was in the hamburger in the first place.

Ethanol Still Doesn’t Make Sense

While this was sparked by an article about ethanol production possibly ramping up in the UK, this is more of an editorial comment, so feel free to skip this one if you like.

I’m not a fan of ethanol. It makes no sense at all. At least not the way we’re doing it. If you look at the entire production cycle of ethanol production and it’s overall effects, one could argue that producing ethanol is actually worse for the environment than producing the equivalent amount of energy in traditional fossil fuel. If you trace back all of the energy inputs into the system, the things like transportation costs, fertilizer costs, herbicide costs, the energy used to plant, grow and harvest the crops, it quickly becomes apparent that ethanol, as a “green” fuel, isn’t all that much better than gasoline. Yes, it produces less carbon and pollution when it’s burned, but that is just looking at the end product and its use, and is ignoring everything else that goes into actually making the stuff. When everything is added in, the adverse environmental effects of ethanol production and use is almost as bad as fossil fuels, and according to some studies, actually worse. Go look it up. You got Google. If you ignore the industry funded fluff and nonsense studies and look at the truly independent research, you’ll quickly find that the whole ethanol system is far from being environmentally friendly.

Then there is the economics of the whole industry. Without massive government subsidies, tax breaks, usage mandates, and other taxpayer funded subsidies, i.e. “corporate welfare”, the whole system would fall apart like the house of cards in an earthquake.

Disconnected from Reality?

That’s what I suspect a lot of “experts” are when it comes to milk prices, disconnected from reality. While various experts are claiming milk prices will be pushing $18/cwt “real soon now”, things out in the real world are considerably different. The market has actually been trending down for a while now, with prices on the commodities market falling on the futures market.

Of course the futures market isn’t what farmers actually get paid for their products. What a product trades for and what the farmer is actually paid for the physical product often have no relationship to one another. As a lot of farmers found out when Grassland told them they were going to have to find a different place to sell their milk and some got offers as low as $6/cwt from some processing facilities.

Dicamba – What’s The Problem?

Screen Shot 2017-06-24 at 7.58.59 AMIn the last Farm Catch Up I talked a bit about the herbicide dicamba and noted that Arkansas regulators had already banned Monsanto’s brand Xtendimax of herbicide blend that contained the product and were considering a ban on the other one that was approved for use with Monsanto’s Xtend line of seeds, Engenia. “Procedural irregularities” prevented the Arkansas State Plant Board from passing an emergency ban on June 20, but I should have waited a couple of days because on June 23 ASPB passed a 120 day emergency order banning in-crop use of dicamba.

Someone pointed out to me that a lot of my readers aren’t in the agriculture business and may not know what the whole problem is, and that it would be a good idea to give a better explanation of what’s going on and why this is so important to so many people. So here goes

Super Weeds

That’s where it all starts, of course: super weeds, the ones that have been developing resistance to glyphosate, the active ingredient in herbicides like RoundUp. Everyone knew that as soon as glyphosate and the GM crops developed to work with it were released, weeds would begin to evolve resistance to the herbicide. That’s just the way nature works. Guidelines for usage that would help to prevent this, or at least slow it down, were developed even before the products were released for general sale. But everyone knew it was just a matter of time before “super weeds” started to pop up and spread. The fact that the guidelines and safeguards were largely ignored didn’t help much, either.

So now we’re faced with glyphosate resistant weeds that are spreading all across the country. So a new magic bullet needed to be found, and they picked dicamba.

Dicamba has been around for a long time. It was first discovered back in 1942 and has been used to control brush, legumes and cacti. It was also used along fence lines and roads to control brush. Some formulations have been used for weed control on lawns, golf courses, etc. for decades as well. It was never used on crops because it was highly toxic to commercial crops.

Dicamba has some serious issues, not the least of which is it’s tendency to drift over large areas beyond the treatment area.

Monsanto decided that dicamba was an excellent solution to the problem of weeds that were resistant to glyphosate, and developed it’s Xtend soybean plant, which could tolerate both glyphosate and dicamba. It developed a new formulation containing both glyphosate and dicamba.

Monsanto developed what was supposed to be a complete system, it’s new GM soybean coupled with the new formulation of glyphosate and dicamba. The new formulation was supposed to cure the problems dicamba had with easy volatility and wide spread drifting. The company claimed that if used according to its guidelines and with the proper equipment, the issues with the herbicide would be eliminated.

Well, there was one big problem right off the bat. Monsanto started to sell the GM seed before the government had approved the use of it’s new herbicide blend. This led some farmers to dump dicamba on their fields even though the government had not yet approved any form of dicamba for use on crops. Without the special low volatility formulation and without using the proper equipment, dicamba spread widely, damaging or destroying tens of thousands of acres of non-Xtend soybeans, it is claimed. Oh, and somebody got shot and killed over it, too. A heated argument between farmers over alleged damage to crops ended up with someone getting killed.

Well, the new formulation of herbicide is now approved, and things don’t seem to be doing much better for either Monsanto or the other company that makes the new herbicide. There are reports popping up all over the place that the new herbicide, even when used exactly according to the recommendations, is drifting all over the place. In one case it’s alleged that it drifted more than a mile and a half. In Arkansas alone there have been around 250 reports of damage caused by herbicide drift.

As noted at the beginning of this, Arkansas has already instituted a ban on Monsanto’s formula, and the government is now issuing an outright ban on all dicamba use on cropland because of all the damage reports.

The whole thing is a real mess at the moment. Lots of finger pointing, lots of accusations, even conspiracy theories. I heard one farmer claim that the drift problem is deliberate. He claims that the company knew this was going to happen, wanted it to happen, because it would force farmers to buy the GM seed from the company because even if you didn’t use the new herbicide, drift from neighboring farms that did would wipe out your crop unless you used their beans.

I haven’t seen reports from other states about this situation. If I do I’ll pass them along. Right now it’s a huge mess and the only people who are going to be profiting from any of this seems to be the lawyers.

Farm Catch Up

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.

Cuba

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.

Dicamba. Again.

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:

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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.

Animal Welfare

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.

Milk Prices

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…

 

Farm Catch Up

SNAP Program

The SNAP (food stamp) program has been in the cross hairs of certain parties for ages now. They haven’t been able to entirely eliminate the program because it would generate an enormous amount of public outrage. So they go after it with what I call “Death From A Thousand Cuts” (DFATC). DFATC works by going after a program by deliberately instituting rules and requirements that make it so difficult to apply for and get benefits that people just give up and don’t even try. Of course that’s not how the administration presents these changes. The changes are presented as being “reasonable”, cutting fraud, or even somehow “helping” the recipients.

The latest one to be proposed for SNAP is that the administration now wants to charge retailers fees for being able to accept SNAP that range anywhere from $250 – $200,000 depending on the size of the retailer. The amount would range from $250 for small retailers, up to $200,000 for large retail chains like Walmart. It doesn’t sound like much, but small retailers are already financially stressed, and this would just add even more to their cost of doing business. A lot of them are going to think it isn’t worth the extra cost and paperwork involved and will just drop participation in the SNAP program.

Be Careful What You Ask For

People in the ag industry are getting a wee bit nervous as the date for the administration to “renegotiate” the NAFTA agreement approaches. Mexico is a huge market for US agricultural products, and the administration’s near constant use of Mexico and Mexican immigrants as scapegoats hasn’t been doing much to make Mexico willing to cooperate with us. As the article linked to above says, “Farmers are hoping NAFTA can be updated without blowing up the trade agreement.”

Considering this administration is spending almost all it’s time trying to do damage control as one scandal after another hits the media, and that it it doesn’t seem to understand what NAFTA actually is, doesn’t seem to understand how it works, and doesn’t even seem to understand how trade agreements work, and that it regularly uses one of our NAFTA partners as a scapegoat, calling the people of that country rapists, drug dealers and “bad people”… Well, let’s just say this has the potential of blowing up in everyones faces.

The biggest issue for the US dairy industry is Canada. Canada has a dairy marketing system that actually works relatively well. Granted, a lot of people up there don’t like it, but it has kept Canadian prices fairly stable, kept dairy farmers reasonably profitable, and it has avoided the boom/bust cycle that the dairy industry in the rest of the world has been following for decades now. The US dairy industry would like to see that system totally destroyed, it seems, and force Canada into the same chaos we’re enduring down here.

Don’t get me wrong, the Canadian system has a lot of problems, but you have to admit that the system has kept Canadian dairy farmers largely insulated from the insanity going on in the rest of the world where, it seems, the business model is that if the market is flooded with way, way too much milk, the solution is to produce even more milk.

China to Import US Beef

Back in 2003 China banned imports of US beef because of incidents of Mad Cow Disease (bovine spongiform encephalopathy, or BSE). Although the ban was eventually lifted fairly quickly, China shifted it’s imports to Australia and South America, and the US has exported pretty much no beef at all to China. That looks like it will be changing. China’s imports of beef have expanded massively in the last five years, going from $275 million in 2012 to $2.5 billion in 2016. Needless to say the US beef industry would dearly love to get a piece of that market.

Wally Melons?

For decades we’ve been putting up with fruits and vegetables that pretty much don’t taste like fruits and vegetables. Those California strawberries may look beautiful, but they don’t actually taste much like strawberries. Or pears that are so rock hard you have to boil the bloody things to make them edible. And don’t get me started on whatever the hell it is supermarkets sell as “tomatoes”. I don’t know what those things are. They look like tomatoes, but they have the flavor and texture of drywall. Well, I’ve never actually eaten drywall. I mean that would be silly. But I suspect that if I ever did eat drywall, it would have that… Wait, what was I talking about?

Oh, yeah, melons.

Apparently Walmart’s melons are so bad that even Walmart hates them, and they’ve apparently done something about it. They’ve come up with their own variety of melon.

Wally world apparently worked with Bayer to develop… I was going to make a joke about an aspirin flavored melon, but that would be in bad taste, wouldn’t it… Develop a melon that can handle the stresses of shipping long distances, but still somehow manages to taste like something reasonably close to an actual melon.

It is not genetically modified, but was specifically bred just to satisfy Walmart’s specifications. Is it any good? I have no idea, and I’m not about to try one of the things.

Weather Worries Push Prices Up

Weather concerns in the US have been slowly pushing grain futures prices up on the commodities market. Hard red spring wheat, used for bread, has been hurt by dry conditions in large parts of the US grain belt. And while there is rain in the forecasts, it’s felt that much of the crop is too far along for rain to help much at this point. One of the concerns is the protein content of the wheat. They want a protein content of at least 10.2% and it looks like large amounts of the crop is going to be coming under that level. Hard red spring wheat hit $6.45 at one point, the highest it’s been since 2014, before going to 6.41. From what I’ve seen they’re claiming the spring wheat crop is the worst it’s been in almost 30 years.

Weather concerns have the markets a bit nervous right now as the climate can’t seem to figure out what it wants to do. Here in my part of Wisconsin we’ve been abnormally wet. In other parts of the grain belt it’s been abnormally dry, with parts of the Dakotas going through drought. Corn finally has been seeing some significant movement in prices, pushing up to 3.83 as of this morning.

Mergers and still more Mergers

It seems that every ag company is trying to buy every other ag company these day. The Bayer/Monsanto merger is still in the works, with Bayer trying to sell off bits and pieces of itself so it can claim that its takeover of Monsanto won’t reduce competition. Of course it won’t. (I wish there was a “sarcasm” font, don’t you?) Of course it will reduce  competition. That’s the whole point behind these mergers, to get rid of competition and increase the market share and profits of the new company that emerges after they have merged.

Anyway, Bayer is trying to sell off it’s Libertylink genetic modification trait, it’s glufosinate weed killer, and maybe it’s garlic and pepper seed operations and some other bits and pieces it hopes will satisfy regulators. BASF and Syngenta are supposed to be interested.

Meanwhile Syngenta itself is the target of a takeover. It’s being bought by China National Chemical Co, owned by the Chinese government. DuPont is selling parts of itself off in order to try to merge with Dow Chemical.

Will any of these mergers and buyouts actually help farmers as the companies claim? Of course not. The only people who ever benefit from these mergers are the lawyers, corporate executives who cash in big time on bonuses and stock deals, and a handful of investors.

Glyphosate Study Craziness

Glyphosate, commonly known as RoundUp(TM), was ruled to be a “probable carcinogen” by the World Health Organization, despite the fact that it has been throughly studied for decades by dozens of organizations and scientists and they’ve found no real link between the herbicide and cancer. Even the European food Safety Authority, one of the most cautious and paranoid out there, didn’t find a link.

But WHO and IARC, the International Agency for Research on Cancer which is part of WHO, came to the conclusion that it was “probable”. Why?

This is where the story gets very, very strange. A fellow named Aaron Blair who led the IARC’s review panel on RoundUp, knew of a large study which indicated the herbicide did not cause cancer. If that study had been included in the data given to the IARC it would almost certainly have determined that glyphosate was not a carcinogen.

So why wasn’t that study included? Did Blair not know about it? Well, he did know about it. It was his study. He knew that if the study was included glyphosate would ruled to be not a carcinogen. He admitted that is a sworn deposition, as well as admitting that if that data had been included IARC’s analysis would have been significantly altered.

So why did a scientist deliberately withhold the results of his own study from IARC’s analysis? Because it hadn’t been published yet, he said. And that it wasn’t published yet because it was “too big” to put in a single paper, he claimed.