Farm Catch Up

I haven’t done one of these in a while, so let’s take a look at what’s been happening in the farming world.

Dicamba Herbicide Fight Continues: The fighting over the new Dicamba blends of herbicides continues. BASF and Monsanto continue to argue that their newly approved blends of herbicides containing dicamba are completely safe and aren’t a problem at all, while the farmers who have had thousands of acres of soybeans ruined by the herbicide after it drifted long distances, argue that it isn’t safe for use.

Arkansas is pushing for a ban on all dicamba use except for those uses that were permitted before the new blends came on the market. The ban would last until October, 2018, and would halt the sale and use of both Monsanto and BASF’s new dicamba based products, and probably halt the sale of Monsanto’s dicamba resistant soybeans as well because if the herbicide can’t be used, there’s no point in paying a premium for Monsanto’s new beans, either.

Monsanto is, of course, not happy about any of this since they stand to lose millions of dollars in sales of both their herbicide and seed. The company is blaming anyone and anything for the problems that have been going on, claiming that there is no “scientific” basis for the ban, that “scientists” have discovered that even if their product does drift outside of the application area, it doesn’t really hurt anything anyway, that some of the experts testifying in favor of the ban are prejudiced against the company, blaming the people who apply the herbicide, blaming the equipment used.

It isn’t just Arkansas that’s having problems. In Missouri it’s estimated that up to 22% of the soybeans planted in the Bootheel area were damaged by dicamba drift, along with acres upon acres of tomato, watermelons, vineyards, pumpkins, organic vegetables and even trees, shrubs and people’s home gardens. The product isn’t just moving a few yards, in some cases there are indications the herbicide is drifting for miles according to the Missouri Extension weed specialist Kevin Bradley.

Farmland Partners Makes Major Buy: Farmland Partners is an investment company that buys up farmland for no reason other than to rent it to actual farmers. The company now has about 160,000 acres of farmland. They just bought over 5,000 acres of nut orchards for $110 million from Olam, a Singapore based company that ventured into the nut business.

My feelings about this kind of thing? I find it extremely concerning. Companies like this are, well, to put it bluntly, parasites. They insert themselves into the process, competing against actual farmers for a scarce resource, farmland. They artificially inflate demand for that resource, driving prices up. They rent the land back to the farmers at ever increasing prices because the shareholders demand ever increasing profits, and at the same time the company itself provides absolutely no value at all to the whole process. It exists only to skim off profits from the whole system while contributing nothing itself, while at the same time destabilizing the whole system and actually degrading its health through it’s manipulation of the market.

Seed Terminator: Combines are great at two things; harvesting wheat, corn, soybeans, Screen Shot 2017-09-26 at 5.53.30 AMetc., and spreading weed seeds all over your fields. The problem is that a lot of weeds are coming ripe at around the same time as your crop. So when you combine your crop, you’re also combining the weeds and blowing the weed seeds out the back of the combine and scattering them all over the field. A lot of people have worked for a very long time on this problem, with various attempts at a solution.

This one which is now going into production it seems, adds a screening system and high speed flails that pulverizes the weed seeds before they get blown back onto the field. If you click the link up there you’ll jump to the article about it. Apparently it works pretty good, and I’m always in favor of anything that helps farmers reduce the need for herbicides.

The problem is that this puppy costs about $70,000. Even when we’re talking about combines that cost a quarter of a million dollars or more, that is a pretty significant amount of money. Is it worth it? No idea.

Pork Cheap, Beef getting more Expensive: Beef prices at the consumer level haven’t been all that good for some time now. Pork is almost ridiculously cheap right now. Pork futures have fallen like a stone since July, dropping some 30%. Pork bellies, where we get bacon from, dove straight into the dumper, falling 60%. Although I note that hasn’t helped the price of bacon in the store. That keeps going up and up, it seems.

Beef on the other hand… Sheesh. Prices on some cuts have moderated a bit, but not by much, and they’re claiming prices are going to go up significantly over the upcoming months. We generally buy a lot of beef from MrsGF’s brother and sister, but because of logistics issues they aren’t going to have any ready to go for probably a year now. So MrsGF and I are looking into seeing if we have enough freezer space to get a quarter or half of beef from the local butcher because we can get that dressed, cut, wrapped and frozen, for $3.90 a pound which is less than what hamburger is going for in the grocery stores around here.

Syngenta Lawsuit Settled: Syngenta, a seed company, was sued a while back over one variety of it’s corn. The corn, a GM variety, was heavily marketed by the company and a  lot of farmers planted it. Only to find that when it came time to actually sell their corn to China, the country rejected it because Syngenta allegedly hadn’t told told the farmers that China had not approved that type of corn for import. In addition, it was alleged that the company deliberately misled farmers by claiming the corn variety had been approved by China when it had not.

Farmers, grain shipping companies, etc. lost millions of dollars on the deal and sued. Syngenta claimed they had told them that China hadn’t approved it. Lots of lawyers paid for their kids’ college education out of this one, raking in millions in legal fees, and the final result is Syngenta and the plaintiffs are apparently now going to settle out of court. I haven’t heard yet what the settlement will be, but you can expect that the company is going to have to pay a huge amount of money to make this one go away.

Addendum: Just ran cross another story that had more details. Syngenta is apparently going to cough up $1.4 billion to make this lawsuit go away. The company already lost a $218 million jury trial to a group of Kansas farmers about three months ago. There are still lawsuits pending in Canada against the company that will not fall under this agreement and will be thrashed out in the Canadian courts.

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.

Assembly Passes $3B Foxconn Incentive Package | Wisconsin Public Radio

The Wisconsin Assembly approved a $3 billion tax break bill for Taiwan-based Foxconn to build a new display panel factory in the state. Source: Assembly Passes $3B Foxconn Incentive Package | Wisconsin Public Radio

I almost never talk about politics here and I try to refrain from headlining a post with a referral to a news story, but this whole Foxconn deal has me rather concerned.

While the governor’s office and the state legislature are collectively wetting themselves over this deal, and are flooding the airwaves with self congratulatory images and stories hyping this whole thing, if you start to look into the deal itself, if you really look into the details of the whole thing, it starts to look more than a little concerning. There is so much misinformation and outright lying going on over this deal it’s hard to keep track of what’s a fact, what’s hyperbole, and what’s an outright lie.

The whole 13,000 jobs claim is, at best, a wild exaggeration, accompanied by rarely mentioned and even deliberately hidden disclaimers of “if this” and “if that” and “maybe”. The actual number of jobs Foxconn is going to develop is 3,000. And even that number is in dispute because if you read the fine print there are a lot of “maybes” and “ifs” buried in that as well.

Then the governor’s office is claiming that the plant will add 22,000 or even as many as 35,000 jobs in associated support industries. That is a number that is wildly exaggerated as well. If the company ramps up to the full 13,000 positions that the politicians are claiming, it might, might result in the creation of 15,000 new jobs in businesses that support the facility.

The state claims that all of this will be watched carefully, largely by the Wisconsin Economic Development Council or WEDC, to make sure they adhere to the terms of the deal. Well, that’s part of the problem. The WEDC has a long history of being utterly incompetent and there are charges of it being actually corrupt because of it’s dealings in the past. It has “lost” loans that it had given out, gave loans and tax deals to people under indictment on criminal charges in other states, given deals to individuals and companies that donated heavily to politicians or to their PACs, given deals to companies that moved jobs out of the state… The list goes on and on. And while the administration claims it’s all better now, recent audits of the organization’s operations indicate that no, it isn’t. It still has serious problems and if it were a department in a business out in the real world, most of them would have been fired for incompetence or even brought up on charges.

The data I’ve been seeing about the actual financial arrangements don’t look very encouraging either. Not only is the state giving the company exemptions from specific taxes, other tax breaks, free infrastructure and dozens of other deals, there are actual cash payments to the company in play as well. If I’m reading this right, not only is the company going to pay virtually no taxes at all, the state is actually going to pay them up to $250 million a year, depending on the number of people it employs.

Then there is the fact that a lot of those jobs aren’t going to be going to people from Wisconsin. The facility is being built down near the Illinois border, and they’re estimating that as many as 40% of the jobs are going to be going to people from across the border.

Then there is the company itself. Let’s face it, this is not a good place to work. They had to put safety nets around their factories in China because employees were committing suicide because of the working conditions. It’s CEO publicly called the company employees animals and said he hired zoo keepers to train his managers in how to deal with the rank and file employees.

This whole deal — I hope it works out, but nothing about this smells right.

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.

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.