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.

 

Farm Catch Up

The ag news stories you might have missed this past week

Conagra sells Wesson Oil

Screen Shot 2017-06-05 at 6.45.31 AMConagra is selling it’s Wesson brand of oils to Smucker for about $285 million. Conagra has been going through a reorganization since 2015. Wesson is just the latest part of the business to go on the auction block. The company is trying to change it’s business from selling low profit staples and cheap processed food to producing higher end and higher profit items with fresh(er) ingredients including salsas, organic pot pies and speciality pork and chicken products.

Conagra has sold off it’s private label operations which made products like soups, cookies and other foods that supermarkets sold under their own brand name. The company bought that business in 2012 for $5 billion, never made a decent profit at it, and sold it off in 2015 for half the original purchase price. It even sold of Lamb Weston, the company that’s the french fry supplier to McDonalds and other restaurants. That didn’t make a lot of sense to be because Lamb Weston had had sales of $3 billion and was pretty profitable.

The Wesson brand has been around for more than 100 years. It was originally started by David Wesson in 1899, a chemist who invented a way to refine cottonseed oil to remove bad taste and smell from it so it could be used as a cooking oil.

The acquisition by Smucker is a bit troubling because it already owns Crisco shortening and oils so it’s certainly going to reduce competition in the market. I’ve heard that both products are going to be made at it’s processing facility in Ohio, so basically Wesson oil and Crisco oil are going to be exactly the same product with different labels. I wouldn’t be surprised if the Crisco oil brand (not the shortening) disappears entirely.

Syngenta Lawsuit Goes Forward

Screen Shot 2017-06-06 at 5.34.23 AMBack in 2012 Syngenta released a new GM variety of corn and promoted it heavily. farmers planted it, only to find that they couldn’t sell it to China. The Chinese government had not yet approved that variety of corn for import, and rejected all shipments that were contaminated with it, costing the farmers a lot of money. Grain exporter ADM is also suing Syngenta in a separate suit, as is Cargil.

The claim against Syngenta is that the company knew it’s new corn was not approved for import into China, and was deliberately misrepresenting the approval status of the corn when it was marketing it to farmers so they went ahead and used it. There are other lawsuits going on with more than 350,000 corn growers involved in individual or class action lawsuits against the company, with potential damages hitting $13 billion.

Making things even more interesting is that the China National Chemical Corp, owned by the Chinese government, is in the process of trying to buy Syngenta. So if Syngenta loses, China, which rejected Syngenta corn originally, will own the company.

This particular lawsuit involved 7,000 Kansas farmers, and as noted, others are in the pipeline.  It will be interesting to see how this one plays out.

Home Bakery Ban Overturned

The church/school bake sale is something of a tradition around here. Parents bake up all kinds of goodies and sell them at events to raise money for churches, schools, kids groups, etc. It’s also probably illegal here in Wisconsin. Or at least it was until the ban was overturned recently.

Wisconsin law states that bakery for commercial sale must be produced in a licensed, fully inspected commercial kitchen by staff that are properly licensed. While the state generally has ignored things like school/church bake sales for fund raising, it’s a different story if you try to sell your goodies at farmers’ markets and other places.

Until now. A judge overturned that law, and I’m not really sure if that’s a good thing or not.

While I have some sympathy for the women who were cited for selling their baked goods, there are valid reasons why these rules are in place, and the biggest is food safety.  I’m a stickler for food safety for a couple of reasons.

First because I’ve worked in the food service business, and Mrs. GF is still involved in it, and both of us know how incredibly easy it is for food to become contaminated and cause someone to become very, very sick indeed.

Second, because I’ve been one of those sick people. I was already nearly unconscious, suffering from explosive diarrhea, severe dehydration and I don’t know what all else when the paramedics carted me out of work on a stretcher and rushed me to the ER where I spent the night with multiple IVs hooked to me and wired up like a Christmas tree.

While I’m sure these women feel the state requirements are unnecessary, they are there for a reason. And I should point out that one of the reasons they are there is to protect them. If one of their products makes someone sick, don’t they realize that they are liable, especially if it can be proven that they were making products in a relatively uncontrolled environment like a home kitchen? They could end up being sued and losing everything they own.

Milk Mess

Screen Shot 2017-06-07 at 4.45.45 PMIf you look at some of the data being published in the press about the dairy industry, the markets now actually look pretty good. Sort of. In some parts of the world, at least, the dairy markets seem to be improving considerably, especially down in New Zealand. Prices are going up, in some cases significantly, improving the financial picture for farmers. Butter prices are strong and getting better, even the powdered milk market, which had been hit very hard by China’s cutbacks in dairy imports, is doing better. Milk production in the EU continues to drop, showing a decrease of about 2% or more.

But if you take a closer look at the entire picture, there are some troubling indications. Most of this positive data is coming from GlobalDairyTrade, a trade organization which pretends it is a free market in Australia and New Zealand, but really isn’t. It’s actually owned by Fonterra, the huge dairy co-op, and it sells only Fonterra milk products, so the data coming from it is skewed to begin with. And Fonterra has deliberately manipulated the market in the past by increasing or decreasing the amount of product flowing through GDT. So any time I see anyone taking GDT data seriously I wince a bit because not only are GDT prices easily manipulated, but it also deals with a fairly limited market, China and south east Asia, and a fairly limited supply source. A huge market, true, and a significant one. But dairy is a global business and is influenced by a lot more than just China.

The biggest problem right now seems to be US production which continues to go up despite a glut of milk on the market. Speculation that milk prices are going to improve significantly are pushing a lot of mega-farms to add more production, and new mega-farms are in the works. Here in Wisconsin Grassland, the company that infamously stopped taking milk from some 75 farmers here in the state because they claimed new Canadian trade rules cost them sales, is working to build it’s own, 5,000 cow dairy farm.

UW ag economist Cropps says milk prices could go over $17, maybe even hit $18 by the fall of this year, despite the fact US production could be going up by as much as 4%. But that’s based on the belief that China is going to significantly increase milk imports, that EU milk production is going to continue to decline, and production in New Zealand is going to remain flat or even go down a bit.

Changes Oh My

Well, this is going to take a while to get used to. For the first time in like forever, I’m unemployed. Deliberately unemployed. I submitted my resignation at work and I am retiring. Sort of. I won’t be filing for social security for another four years or so, but we planned for this and the finances are already worked out for this situation and active. But it still makes me nervous, anxious.

Granted, I wasn’t exactly working my tail off the last couple of years. I’d dropped back to part time and actually was only dealing with special events at the theater and filling in when one of the day crew was out or we had an emergency to deal with.

Still, it’s a strange feeling, not having a job to worry about.

Fat Saves Dairy Industry?

That’s what it is starting to look like. About the only bright spot in the dairy industry right now seems to be butter and, to a lesser extent, cheese. Butter sales are up dramatically, largely because the fact that eating dairy fats isn’t going to kill you (at least not any quicker than anything else) is finally starting to filter out into the mainstream.

One of these days I’m going to do an article about food and health, and all of the BS we’ve been told over the years. The amount of pure bullshit that we’ve been fed over the decades is mind boggling. From “healthy” hydrogenated plant fats in margarines and shortenings that were supposed to be “good” for us turning out to be responsible for tens of thousands of deaths, to coffee still being demonized despite the fact it seems to help reduce incidences of some cancers and may help prevent some kinds of dementia, to “juice cleanses” that don’t cleanse anything, to the multi-billion dollar “supplement” industry that is selling us little more than snake oil…

Infrastructure Plan? What Infrastructure Plan?

There’s been a lot of press about the administrations “$1 trillion” plan to rebuild the country’s infrastructure and everyone is going “Oh, goodie, isn’t that wonderful!”

But… Well, sorry, but there pretty much isn’t an infrastructure plan. Seriously. Oh, they’re talking a lot about it but no one is actually doing anything about it because talk is free and bridges cost money, so where’s the cash? There isn’t any. The administration can talk all it likes, but the administration doesn’t hand out the money, Congress does. Congress, not the administration, develops the plan, finds the money for it, etc, not the office of the president. And there is little or no work going on in Congress to do anything pertaining to the administration’s plans.

And some of the things the administration has been talking about are more than a little troubling, especially this “private partnership” thing. Why? Because in most cases these “private partnership” deals end up with things worse than they were before.

There is a reason why we don’t have a lot of toll roads and bridges in this country. It’s because we tried it before, going back 200 years or more, and it was a nightmare. Outrageous tolls, violence, unsafe bridges and roads, no investments in improving the system… One of the reasons we adopted a publicly funded, government owned highway and bridge system in this country in the first place was because the private operators so horribly abused the public, gouged them so badly on prices, that the government had to step in because the private model was destroying the transportation system in the country.

The problem with history is that no one seems to actually remember it.

As for this particular infrastructure plan, well, there isn’t one, as I said. Most of the things the administration is talking about like federal grants to local jurisdictions and all of that? That’s going on right now, for heaven’s sake. The federal government almost never directly funds highways and bridges, it does it through a system of low cost loans, grants, etc. Which is what the administration is claiming is its “new” plan. Oh, please…

And let’s face it, most of the problems we’re facing when it comes to the infrastructure system are our own fault because we don’t want to pay for it. Or, rather, the politicians we elect don’t want to because in order to actually pay for maintenance and new construction and all the rest they might have to raise taxes a few cents and that would make the corporations and lobbyists who bribe them buy their souls [ahem, sorry about that, funny how those typos slip in there] make nice contributions to their campaigns so they can continue the democratic process, a wee bit upset.

But here’s the thing, you are going to pay for it. One way or another. If we don’t pay for it through taxes, we’re going to pay through the nose for it in tolls or user fees. Someone has to pay the bill. There’s no such thing as a free lunch.

4:30 AM? Really???

Not farm related but… This is the third day in a row all three of those stupid cats have been sitting outside the bedroom door yelling at us at 4:30 in the morning. And I come stumbling out of the bedroom in dim light of dawn and stumble over their food dish because they have now gotten into the habit of moving their food dish right in front of the freaking door during the night. How do they even do that? They don’t even have hands much less thumbs and fingers so how do they move a dish half full of kibble all the way across the floor and plant it right in front of the bedroom door???

Oh, very funny, cats. Ha freakin Ha… Good joke. Now stop it!

I don’t know what the world is coming to — cats pulling practical jokes on people…

Just wait, guys. I’m going to find where you’re hiding during the day to take your little 9 hour naps and see how you like being woken up out of a sound sleep…

 

Milk Again

Some of you are probably getting tired of me talking about the dairy industry and the

Screen Shot 2017-04-27 at 6.43.56 AM

Cow is angry.

problems it faces, but I ran across an editorial over at Wisconsin Agriculturalist that was really well written and well thought out that talks about the situation the dairy industry is facing. Go give it a look if you have a few minutes.

The writer brings up a lot of points that I’ve talked about myself, or have at least thought about. I wanted to pass some of that along with my own thoughts on the subject. So if you’re sick of me babbling about dairy farming, feel free to skip this one. I won’t blame you at all if you do.

As the author points out, blaming Canada for our overproduction problems down here is just plain stupid. He doesn’t use that word. He’s more polite than I am.

Blaming Canada for our problems and Grassland cutting off some 75 or so farmers from a market for their milk is stupid. Demanding that the government “do something” to change Canada’s milk production and marketing system because of our problems down here is sort of like a kid demanding his parents take away his friend’s Playstation because he doesn’t have one himself.

Canada has a milk production/marketing system that works fairly well. Dairy farmers enjoy relatively stable prices that let them make a reasonable profit. But the price they pay for this is that their production is strictly limited. They have a system in place that permits them to only produce a specific amount of milk. If they want to expand their operation, the only way they can do it is by acquiring the quota of a different farm that is shrinking or going out of business.

This also means that Canada has to put in place import restrictions that prevent outsiders from dumping their surplus product onto Canadian markets at cut-throat prices and destabilizing their whole system.

This, some claim, is “unfair”. Canada, they claim, should simply allow the US to dump it’s surpluses on the Canadian markets so the US can continue to ramp up milk production to make even more product that no one wants and wrecking the Canadian dairy industry just as badly as we’ve wrecked the US markets.

They want a “free market”. But only a market that’s “free” for them, and not for anyone else, it seems. They want a market where they are free to dump their excess on everyone else, but at the same time they want the US to protect them from other countries doing the same thing to us. Hence all of the rhetoric coming out of DC about tariffs on imports, claims that China and Mexican products are “destabilizing” our markets by dumping cheap products on us.

But we should be able to do it to them?

Could the government here ever develop a marketing system that actually works? Sure it could. But it won’t. It can’t.

The problem is that the government is no longer in the hands of elected leaders who represent us. Instead politicians have sold their souls (and ours) for the almighty dollar. Their actions are being influenced not by the voters who elect them, but by a handful of well financed special interest groups that are largely funded by a tiny handful of wealthy individuals and corporations and which pump hundreds of millions of dollars into election campaigns.

The author of the editorial wants farmers to join up with one marketing board or farmers’ organization or other to try to work with the government to get changes made. It’s highly unlikely that will work. It certainly hasn’t worked in the past. Farmers’ organizations attempting to change the system have come and gone by the dozens, and almost none of them have had any real positive influence on things. In some cases, they’ve made things worse.

What’s the solution? The government isn’t going to be any help. That system is largely broken. The government no longer responds to the needs of the people it’s supposed to represent, but only responds to those who can write out six figure checks or own a high priced and well funded lobbyist in DC.

I wish I had an answer. I don’t.

 

 

70 Percent Chance Dec. Corn Futures Hit $4.40-$4.50 – Corn – News | Agweb.com

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Source: 70 Percent Chance Dec. Corn Futures Hit $4.40-$4.50 – Corn – News | Agweb.com

I read this item over at Agweb twice and I still don’t understand why she thinks there’s a 70% chance corn could go over $4.40. She doesn’t give any data to actually back up that statement in the article. I hate items like this where some “expert” comes along and makes a specific statement, and then the report doesn’t give any reason why.

As of right now I don’t see any indication corn is going to go that high barring some kind of significant weather event or similar wide spread problem. We have massive amounts of corn still in storage from last year’s harvest, planned corn plantings for this year are down only slightly from last year… There basically is no pressure at all on the market to move the price up significantly.

At the moment, China has drastically cut back imports of corn to try to draw down it’s own stocks, and has increased production. There seems to be no increased demand for US corn anywhere, really. Ethanol production is relatively flat, we have grain storage facilities full to bursting with last year’s crop, weather has been relatively good… There doesn’t seem to be any reason for corn to go up almost $1 a bushel over the next few months. So why does she think it’s going to go up? Don’t know.

Farm Catchup

Time to get caught up with what’s been going on in the farming world.

Elderly Corn

China has a problem with corn. As in it has too much of it. It’s been sitting on a large amount of stockpiled corn for years now, and it needs to get rid of it because some of this has been sitting in storage for ages now and if they don’t get rid of it soon it’s going to be unfit for even animal consumption. Agrimoney posted a story indicating China is going to start dumping a lot of it’s aging corn on the market beginning May 5. Some of this stuff has been in storage since 2012. The country has had a problem with this for some time now, and there are rumors flying around that the quality of this stuff is marginal at best. China has been working to make their grain markets less dependent on government support programs and to draw down massive amounts of grain that they have in storage. The result has been a huge drop in the import of grain, especially corn. Chinese corn imports in March were 91% lower than they were a year ago.

GM Corn Saving Lives?

My opinion of genetically modified crops is mixed. I believe the science that proves that the GM crops in use currently are generally safe and that consuming them does not cause health problems. But GM crops have other issues associated with them that are problematic. Like the fact they don’t really improve yield at all, that they lead to the development of herbicide tolerant weeds and that in the long run, GM crops modified to resist weeds and things like the corn borer are little more than stop gap measures that will ultimately fail… The list goes on and on.

But there is one GM crop that could genuinely be of benefit. Aspergillus is a type of fungi or mold that produces aflatoxin, which is not only a carcinogen, but can also cause stunted growth in children and damage immune systems. And it causes liver cancer. It can be found in all kinds of things; peanuts, walnuts, the list goes on and on. Aflatoxin is especially a problem in corn. Corn that is harvested wet, stored improperly, can easily be hit with this stuff, and it can be very nasty.

Here in the US and other first world countries corn and other food crops are tested for the the stuff, but that’s not the case in other places that don’t have the resources, the money, or the expertise to do the testing.

They’ve developed a modified variety of corn that resists the development of the toxin in the corn kernel. Aspergillus can still develop, the the toxin itself will not get into the kernels of the corn.

The early test results are very promising, but they’re going to have to hook up with someone who can afford to foot the bill for large scale testing of the modified crop and go through all of the regulatory paper work and testing.

It wouldn’t just help poorer countries which can’t do the testing. Farmers have  huge amounts of corn rejected because of testing positive for the toxin, so a variety of corn that didn’t develop the toxin would be a significant financial benefit.

Weed Wars

I ran into this item over at agweb.com: When Will the Herbicide Cavalry Arrive? It talks about herbicide resistant weeds and new chemicals to kill them and all that stuff. The usual kind of thing that reads like a PR piece written by the chemical companies. But if you scroll down a bit over halfway through the piece, you’ll find a somewhat different tone when someone, finally, utters the phrase “we’ll never spray our way out of the problem.

And we won’t. Sooner or later the pests will develop resistance to whatever chemical solutions they come up with and the problem will come back just as bad, probably worse, than it was before. They go on to praise two Australian “innovations” that attach to the combine to capture weed seeds before the combine can blow them back out onto the field.

It’s certainly a good idea. Any weed seeds you can capture at the combine aren’t going to germinate the next year to infest your crops. But innovative? Hardly. Similar technologies have been around for decades. Back in the late 1950s our old Massy Harris combine had a device mounted on it that did something similar. It collected the weed seed that would have been blown back out onto the field or gone into the grain tank with the oats and dumped it into a feed sack attached to the back of the combine. At the end of the day we’d have bags of the stuff. It certainly wasn’t 100% effective, but every weed seed it did collect was one that wasn’t going to cause a problem the following year.

Will these devices be helpful? Hell yes, if they ever get them into production and farmers buy into the idea.

I’m not sure why the process went out of favor. I think our combine was the last one I ever saw that was equipped with it. I suppose people figured why bother when all we need to do is just spray. Just blow the weed seed out the back of the combine and let the chemicals deal with it.

School Lunch Controversy

You’d think that one thing everyone would agree on is that school kids should be fed lunches that are safe and healthy, right? But you’d be surprised. Opinions range all over the place out there, from people who think parents should be responsible to feeding their kids and the schools shouldn’t be serving any food at all, under any circumstances, to those who think schools should be feeding kids everything; breakfast, lunch and dinner.

And as for what schools should be serving, well, it’s turned into an utterly ridiculous and totally unnecessary political fight that started the moment the Obama administration announced new rules to insure that what kids were being fed in schools was, if not actually good for them, at least wouldn’t actively harm them. There is absolutely no doubt that we eat too much fat, too much sugar, too much salt, too much processed food and we don’t eat enough vegetables, fruit and whole grains. The new rules were intended to help deal with that, and from the moment they were even mentioned, the fight started because, well, Obama, and as far as certain politicians and special interest groups were concerned, anything coming out of the Obama administration was automatically the spawn of Satan.

As the current administration works to roll back or eliminate everything that it’s predecessor did, it’s been going after the school lunch program as well. The ag secretary announced in a self promotional fluff piece that reads like it was written by the food processing companies and backed with “information” that either isn’t true, is misinterpreted or cherry picked, that they’re going to “make school meals great again” by rolling back the Obama era nutritional guidelines, and allow schools to return, at least partly, to serving kids little more than junk food disguised as a meal. Restrictions on salt, fat, sugar, serving increased amounts of vegetables and whole grain breads and fat free milk are all being rolled back

One of these days I need to do an article about the school food service system. I’ve been involved in it either directly or indirectly for decades and some of the crap going on in that system, well, it’s scary sometimes.

Milk Wars

Well, the politicians have gotten involved in the dispute with Canada over their change Screen Shot 2017-04-27 at 6.43.56 AM.pngto their milk import policies, and as you might expect, there has been a lot of muttering, tut-tutting, bloviating and ranting, with absolutely nothing being done about anything. The president got involved, appearing in Wisconsin briefly where he said many, many things to try to make it sound like he was going to do something, and as soon as he got out of the state and safely back in DC, the Whitehouse immediately disavowed everything he said, blunted or even eliminated entirely the vague threats, and we aren’t going to do this or that, but oh, even though the dispute is about milk we’re going to put a tariff on Canadian wood…. Wood? Really? Oh, well…

The state’s ag secretary is apparently actually doing his job, trying to help the dairy farms that are being dumped by Grassland. But in the long run there isn’t a heck of a lot that can be done at the state level. Fortunately it seems like most of the farmers effected by this have now found other markets for their milk, but the situation is still very concerning, and I expect things will get worse before they get better.

Blaming Canada for this, as many are doing, is silly. These new rules should not have blind sided anyone. From what I’ve been reading, the rules have been in the works for at least a full year, if not longer. Back in November already we were seeing stories popping up about the change in rules and warnings of how it would effect the markets here. So the processor’s claim that they were blindsided by this is a bit disingenuous. If their management didn’t see this coming, they really should be in a different business.

The real problem is the dairy industry itself and the politicians who keep fiddling with it, not any specific country. And the problem is world wide, not limited to the US or Canada. The problem is that dairy farms are producing way, way too much milk. More than the market can absorb. And instead of trying to deal with the situation, the reaction of the whole industry is to try desperately to come up with some kind of market for the stuff, any way they can, even if it destabilizes some other country’s farming industry. Pressuring politicians to institute still more ways to artificially prop up prices.

Canada has done something no other country has, it has actually been trying to deal with the problem of oversupply. It has a fairly strict quota system on milk production to try to keep the market stable. But in order to make it work, they have to restrict imports of dairy products from outside of Canada or the whole system would fall apart as the country is flooded with cheap imports. (The EU tried a quota system but abandoned it a year or two ago)

Is this protectionism? Of course it is. But you have a choice: Do you protect your businesses at home, giving them a level playing field to work with, restrict production so the farms can be relatively profitable, or do you open up your markets to cheap imports, often cheap because of government subsidies, tax breaks and other things that make it cheaper for them to produce the product than you can?

Then the politicians get involved… Price supports, tax breaks, grants, subsidies, government agencies buying up surplus product to artificially prop up prices, mandates that you have to use certain products (Wisconsin still has laws that force restaurants and food service operations to serve butter, for example), the list goes on and on. The end result is that anyone who thinks there is a “free market” for dairy products is living in a dream world.

What’s the solution to the problem? I really don’t know. My father used to say that the system was so screwed up that the whole thing should be scrapped. All of it. Make it a true free market. No government subsidies, no tax breaks, no marketing boards. Leave the health and safety regulations, testing, etc. But get rid of everything else. Turn it into a real free market that has to respond to normal supply and demand rather than a government supported mess where farms are propped up by various programs and price manipulations that encourage overproduction.

Would it help? I don’t know. But it seems to be about the only thing we haven’t tried yet. It’s obvious that all of the quota systems, price supports, surplus buys and everything else isn’t doing any good.