Farm Catch Up: Why Are We Seeing Shortages?

Oh, oh, GF is trying to do artsy stuff again.

I haven’t done one of these in a long time so I thought it’s high time I took a look at what’s happening in the agricultural world. Especially now because the situation is difficult, to put it mildly. Well, not exactly agriculture directly in this article. I want to try to explain why we’re seeing empty shelves in the grocery stores when we actually don’t have any real shortages of product.

Empty Shelves

We all know that when this started almost immediately stores were stripped bare of sanitizer, sanitizing cleaners, hand soap, protective equipment like masks and gloves, etc. This was followed by store shelves being stripped of toilet paper, paper towels, and then food products, especially staples like rice, beans, flour, canned foods, butter, etc. And, oddly, even things with short shelf life like milk and cream. (Why in the world would people who almost never drink milk in the first place suddenly need to buy gallons at a time? I have no idea.)

But despite the bare shelves there are no real shortages, at least not of consumer food products. There are several factors behind the empty shelves you’re seeing in the stores. Hoarders (how much hoard could a hoarder hoard if a hoarder could hoard hoard?) and profiteers are behind some of this, of course, but the biggest disruptions are due to the way our manufacturing and distribution systems work.

We have what amounts to two almost entirely separate production and supply systems. The first is the consumer system that makes and sells product to you and me. It provides products that individual consumers want, in relatively small quantities that are suitable for individuals or families. The second is the commercial system that sells in bulk quantities to institutions like restaurants, schools, hospitals, prison systems, etc. and industrial processors that use those products to make still other products, like the processed food industry.

The result of this system is that we are in a rather bizarre situation where we have surpluses and shortages, of exactly the same products, at exactly the same time. Dairy is an example of this. Even while a lot of people are reporting shortages of milk and grocery stores putting strict limits on how much milk people can buy, we have such a surplus of milk on the supply side that a lot of farmers are dumping the stuff down the drain because they can’t find a processor to buy it.

So how the hell can you have a shortage and a surplus at the same time?

Well, we have a situation where most schools are closed, most restaurants are closed, a lot of businesses are closed, and a lot of people who would normally be at work or at school are now stuck at home. This means that meals that normally would have been eaten at school, work cafeterias, food trucks, restaurants, etc. are now being eaten at home. (About 50% of the money we spend on food here in the US is spent on meals eaten away from home.) Which means people are buying a lot more groceries, and more milk and dairy products in general for consumption at home. Add in the hoarders who, for some reason, think they need to buy six gallons of milk at a time (seriously, I’ve seen people doing this) despite the fact it will go bad long before they’ll ever use it, and it puts pressure on the whole distribution system delivering milk to grocery stores.

At the same time, schools are a major buyer of milk for the school lunch program, and they are largely shut down. As are restaurants.

So at the consumer level, the grocery store part of the market, we’re seeing increased purchases of products, while at the same time on the commercial side of things we’re seeing a dramatic loss of sales of similar products. So we’re having both shortages and surpluses, at the same time, of the same product.

Why not switch the commercial production facilities to produce for the consumer market? Well, you can’t. Production facilities used to make the half pint cartons for the school lunch program can’t be switched over to making gallon jugs for grocery stores. They use entirely different manufacturing and bottling equipment. The same is true for other sectors of the market. Attempting to switch from production of products for institutional and commercial markets to production for consumer markets is extremely difficult and very expensive. By the time a switchover could be done, the pandemic situation will have subsided and manufacturers will find themselves with manufacturing facilities that are now set up to make the wrong product.

Instead of dumping milk make cheese out of it? Can’t do that either. Cheese makers were already running at nearly 100% capacity even before this started. And even if there was the capacity to produce cheese, there isn’t any market for it because the cheese market is saturated to begin with.

The same is much the same with other products. The products are there, but those products aren’t in a form consumers would accept because they’re intended for the institutional or commercial market and are available only in bulk or in a form consumers don’t want. Toilet paper is a good example of this. While there are shortages on the consumer side, there is a glut on the institutional side of the market. With schools and a lot of businesses shut down, sales of TP for those markets has dried up. But the TP intended for that market would be entirely unacceptable for consumer use. The rolls are too big, or in sizes that wouldn’t fit a home TP holder, or the quality… Well, if you’ve used a restroom in a school you know what a miserable excuse for toilet paper that stuff is.

I have to mention the distribution system, too. Most companies, including grocery stores, switched to what is generically called a “just in time inventory” system long ago. That means that stores don’t stockpile product. You won’t find back rooms chock full of TP or canned goods or whatever at your average store. The store orders only enough product for a very limited amount of time. If they get deliveries every, oh, three days let’s say, they will order only enough product to deal with three days worth of normal sales. Why? Because storage costs money. Adding square footage to a store not only increases its build cost, it also increases its property tax bills, heating and cooling costs, electric costs, etc. So space devoted exclusively to storage of product is kept to an absolute minimum.

Normally this system works fairly well. But these aren’t normal times, so when a store gets hit by abnormally high sales of specific products, well, the whole system falls apart fast. When the panic buying started, grocery stores would see an entire day’s worth of a product sold out in an hour. Seeing the empty shelves spooked other consumers, who immediately panicked and started cleaning out the shelves of other products. Stores would restock as fast as they could, only to burn through several days worth of product in just a few hours thanks to panic buying.

If the distributors had an adequate inventory on hand it wouldn’t have been such a big problem. But they didn’t either. They were using the “just in time” system too, and were only stocking enough product to support their stores for a limited amount of time. Those stocks were depleted within days, and they were scrambling to get product from the flour mills, dried bean distributors, rice distributors, etc. to try to restock. The mills and packaging companies had more than enough bulk product on hand, but their packaging facilities couldn’t increase production beyond a certain point. Basically the entire distribution system began to fail under the strain of the panic buying and the increase in consumer sales.

The system is, finally, starting to adapt, at least around here. But as for what’s going to happen in the future, well, that’s anyone’s guess.

Foxconn Update. No Viruses Allowed.

Since I’m already in a bad mood, let me rant a bit about this whole Foxconn fiasco. I’ve talked about this before going back to 2018, with a couple of brief mentions being tossed into other posts. Basically the situation is that no one seems to know what the hell is Foxconn is up to, not even Foxconn. Anyway, I thought that with the factory supposedly to open in May, this would be a good time to revisit the whole thing.

If you want some background on the situation click that link up there and it will take you to the original item I wrote back then. Go ahead. I’ll wait. (hums ‘Singing in the Rain’ and a few other showtunes)

Ah, good, you’re back. Let’s see what’s going on now, shall we?

The basic answer to that question is that no one seems to know what the hell is going on down there at the Mount Pleasant site. They’re building a factory. Maybe. I think. But what that factory is going to produce is anyone’s guess. No one knows. Certainly not the town of Mount Pleasant itself which borrowed so much money to upgrade the infrastructure around the facility that the inhabitants of the town will probably be paying off that debt for generations to come. Channel 12 in Milwaukee tried to do a story about what was going on with the town a while back, only to have the president of Mount Pleasant literally hide behind a door to try to avoid having to answer reporter’s questions, and their reporter being thrown off the factory site by local security.

Not even Foxconn seems to know what the hell they’re actually building down there. A half dozen different stories about what the company is going to build there, if anything, have come from company spokespersons since this all started, and none of them have anything to do with what the company said it was going to do when they signed the original contracts.

The latest that I heard before the pandemic hit was that they were going to make…

Wait for it… You aren’t going to believe this.

Drum roll please….

Coffee machines for airports.

Seriously. They were going to make, they claimed, automated coffee kiosks for airports according to a story in Milwaukee Business News.

Now that story has changed as well and now the company claims it’s going to make – ventilators for hospitals?

Look, I don’t care how “nimble” a company may be, but… Come on, this is all BS. I’m sorry, but it is. What the hell, exactly, is going on in that building down there in Mount Pleasant? You can’t build a factory specifically to produce flat panel displays, and then suddenly, overnight, decide you’re going to make coffee machines in it. Or then turn around and claim that within just a few weeks you’re going to take your alleged coffee machine/LCD display/whatever factory and start cranking out hospital grade ventilators. Making changes like that would require retooling the entire factory, reprogramming robots, building or buying new equipment, retraining employees. You’re looking at months of lead time plus tens of millions of dollars to retool and, no, ain’t gonna happen.

Well, not that they have many employees to retrain. The 13,000 employees they were going to hire seems to only be about 550.

But let’s ignore all of that for a moment and take a look at the other buildings the company bought here in the state..

Since the company signed the deal it made a huge PR stunt out of buying buildings in Green Bay, Eau Claire, Racine, Milwaukee and Madison. The one in Milwaukee was to be it’s “Wisconsin headquarters” and the others were to be some kind of “innovation centers”. There were big press conferences and media events to publicize the purchases, with the company announcing grand plans for – for something. It was never made clear exactly what they were going to do with the buildings, but it was going to be really, really important.

And absolutely nothing has been done with any of the buildings. At least nothing related to Foxconn itself. It’s been a year or more since the company bought them and they are still sitting empty. The company’s “Milwaukee headquarters” is a seven story building, and it is completely empty except for a bank that leases the first floor. The Eau Claire building is completely empty, and has been since it was acquired. The Green Bay, Madison and Racine “innovation centers” are occupied only by the businesses that were leasing space in them before Foxconn bought them. No renovations, no remodeling, nothing. No signs of Foxconn doing anything, not even any sign of actual Foxconn employees anywhere at any of the sites.

So what the heck is Foxconn actually doing? What will it be doing in the future? No one knows. Not even Foxconn.

Farm Catch Up

It’s been a long time since  I did one of these, so let’s see what’s been going on in the farming world.

Bayer Acquisition of Monsanto Wraps Up — As of Aug. 17, Bayer had finished divesting itself of various businesses to satisfy regulators so it could complete the buy of Monsanto and it will fully acquire the company and Monsanto as an independent company will disappear. Bayer actually bought all of Monsanto back in June, but could not fully integrate the company until it satisfied the conditions set by various governments.

One has to wonder if Bayer is thinking this might not have been such a good idea. Monsanto just lost a $200+ million dollar lawsuit in California which claimed glyphosate caused someone to develop cancer and I’ve heard that there are many, many more lawsuits in the pipeline over the herbicide. And if that isn’t bad enough, Monsanto’s dicamba blend herbicides could actually end up being banned because of continued wide spread damage being caused by the herbicide drifting long distances and harming other crops, gardens, trees, bushes, etc. Despite stringent application requirements the problem has not gone away and there is a lot of pressure to ban the stuff entirely except as a pre-emergent herbicide that can only be used prior to planting. That would pretty much destroy Monsanto’s sales of dicamba resistant seeds.

You have to remember that the lawsuit mentioned above was in California where apparently just about everything causes cancer, even coffee. Which it doesn’t. Coffee, I mean. The slight correlation between drinking coffee and cancer appears to be due not to the coffee but to the temperature of the beverage. There seems to be a link (a very slight one) between drinking drinking hot beverages over 140 degrees and esophageal cancer and some others.

Milk Labeling Controversy Continues — The argument over what products can use the label “milk” continues. Despite the fact that FDA has, for decades, had an official, legal definition of what “milk” is, defining the term as the secretions of the mammary glands of animals, various makers of nut, grain and plant juices have been using the term “milk” in their labeling for years. Protests about the mislabeling and demands for enforcement of the existing regulations have been ignored for decades. But it seems the FDA is finally going to do something about it because of increased pressure, and it looks like the agency might actually start to enforce it’s own regulations in the fairly near future. I’ve talked about this before so I’m not going to repeat that.

The interesting thing is that a couple of senators tried to slip an amendment into an unrelated spending bill that would have kept the FDA from actually enforcing it’s own rules by prohibiting “the use of funds to enforce standards of identity with respect to certain food.” The amendment would not have altered FDA’s definitions, but would have kept the agency from actually enforcing it’s own rules. Exactly why these two tried to slip this through I don’t know. I’m sure they didn’t get, oh, large campaign contributions from people or organizations linked to the nut “milk” lobby. (Here is where I wish we had a sarcasm font)

Anyway, the amendment was shot down in flames by the Senate. The vote was something like 14 for, 84 against.

I’ve long believed that what we really need is a better definition of the term “bribery” and a law enforcement agency willing to enforce it.

Wisconsin Loses 382 Dairy Farms In First Half of Year — That number should give you some idea of how bad the dairy industry is doing right now. Last year Wisconsin lost about 465 dairy farms. If the attrition continue at this rate, we’re on track to lose more than 650 farms this year. It’s easy to look for scapegoats, of course. The dairy industry itself is a primary contributor to the problems thanks to massive over production. This administration’s nasty little trade war isn’t helping, of course. I’ve seen estimates that this trade war has knocked about $1.50 off the price of milk as countries that used to import our dairy products are now looking elsewhere.

Tariff Relief Program — USDA announced at the end of July it would be starting up a tariff relief program to try to make the hit farmers in the US are experiencing a bit less painful. It announced $12 billion would be funneled to farmers in one way or another using existing relief programs. The exact details are a bit muddy, and USDA seems to be in utter confusion about exactly how this is going to work, so if you’re a farmer who’s been hurt by this, don’t expect any kind of relief any time soon. Considering Perdue, the Secretary of Ag, claimed well over a year ago that the administration would renegotiate NAFTA in just a “few weeks” and they’re still fighting over it today with no end in sight, I wouldn’t count on seeing any actual money coming out of this program for some time.

Another big question is exactly where this $12 billion is going to come from because Congress hasn’t authorized any spending for this program.

Almond “milk” Recalled Because It Has Real Milk In It — HP Hood, makers of Almond Breeze nut juice, is recalling more than 145,000 cartons of it’s product because it may have actual real milk in it instead of it’s nut juice stuff.

Still More Tariffs — The administration will begin to levy 25% import duties on still more Chinese imports soon. This time it’s going to be mostly industrial products like chemicals, plastics and machine parts. China has promised it will strike back dollar for dollar by putting it’s own penalties against US products in place. And it could get worse fast, with the US apparently considering tariffs on an additional $200 billion of Chinese products. The administration has uttered threats of putting tariffs on all Chinese imports.

What a lot of people, especially those who blindly back what the administration is doing, don’t seem to realize is that this while this may hurt China a bit, the ones who are really paying for it are us, and not just in lost sales to China. A lot of these products that are being imported from China simply aren’t made anywhere else, or are made in such small quantities that the domestic makers can’t even come close to meeting the demand.

Let me point out one thing that people don’t seem to understand. That 25% tariff isn’t being paid by China.

That tariff is being paid by the people who buy the product here in the United States. We pay it. If a manufacturer makes a product that includes parts and materials that can only be sourced from China, it has to pay that extra 25%, and that’s what’s happening right now. Yes it will cut back on the amount of purchases from China, but in a lot of cases there is no choice. You pay that 25% tax or you can’t make your product.

That extra cost has to be accounted for somewhere. At the moment a lot of manufacturers are absorbing that extra cost in the hopes that this situation won’t last long. But eventually they aren’t going to be able to keep that up and they are going to have to increase the prices of their finished product. So in the long run, the people who are paying that tariff are us, the consumers.

Lost Valley Farm Saga Continues — A mega dairy in Oregon called Lost Valley Farm is in the news yet again. The farm has only been in existence less than two years, and it has already racked up an impressive list of operational violations that is unprecedented in my experience. Illegal manure disposal, illegal pumping of water from aquifers, illegal generation of wastewater, failure to obtain proper permits, violations of permits… The list goes on and on according to the Oregon Dept. of Ag. (ODA). Most recently the farm was ordered to produce no more than 65,000 gallons of waste water per day to meet permit requirements, but allegedly has continuously violated that agreement by producing as much as 375,000 gallons in excess of the limits.

Meanwhile, the farm’s bank has been going after them. They took out a $60 million loan from Rabobank to start this thing up and the bank is not exactly pleased with things. The farm agreed to sell off the cattle to try to pay down debt.

And then declared bankruptcy the day before the sale was supposed to happen to prevent the sale and keep the bank from foreclosing.

The attorney for the owner of the farm claims they are doing everything the ODA is asking, that they’ve made significant progress in meeting the requirements, etc. ODA counters by pointing out the farm has been in almost continuous violation of of the deal. And the judge handling the case is considering contempt charges against the owner.

Drinking Straw Bans — Oh, brother… Just about everyone seems to be jumping on this call to ban plastic drinking straws. Using data allegedly developed by a nine year old kid, everyone seems to now think that plastic drinking straws are killing the planet and have to be banned right now. Almost every time I look at a media outlet I’m seeing yet another article about some restaurant or town or university or some organization banning plastic drinking straws.

Look, has anyone actually thought about this? Hmm? I’m not sure about the exact numbers because they bounce all over the place because no one seems to know the actual facts, but it seems that straws account for something like 0.0002% of the plastic waste being generated by people. I’m all for reducing waste, especially plastic waste, but there are a heck of a lot more serious sources of plastic waste to go after than drinking straws.

Some places are talking about going to reusable straws made of stainless steel or some other substance that can tolerate cleaning. Have you ever tried to actually clean and sanitize a straw? Basically, you can’t. If put in a dishwasher, the water isn’t going to actually get inside of the straw to clean it. Some might trickle through it depending on how it’s oriented inside of the washer, but not enough to do a thorough job. And as for hand washing, you can run water through it, but that isn’t going to actually remove anything clinging to the inside of the straw. Or you can get, oh, a tiny, tiny brush and wash each one individually, but of course no one is going to do that. Then you’re going to have to try to sanitize it, perhaps by soaking it in some kind of bleach solution. But water is a tricky thing. Because of things like the surface tension of water, you can get air gaps in small spaces…

Do you really want to be drinking out of a straw that’s been used by someone with, oh, hepatitis, for  example, or norovirus?

Well, that’s enough for now. You’re probably getting as bored as I am. And the way the garden looks outside MrsGF and I are going to be busy processing tomatoes for a while. They’re starting to come on fast right now.

Catch Up: Monsanto Ceases to Exist, Heat, and Stuff!

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A picture of a rose because, well, why not?

That heading up there is not a typo. Monsanto ceased to exist as of June 7 when the merger with ag giant Bayer was completed. The name “Monsanto” will be retired completely within a few months, the company will no longer exist, and all of its business will be conducted under the Bayer name. The complete acquisition will take a few months longer. Bayer still has to sell off some of its business parts to satisfy the DOJ’s requirements for approval of the acquisition, but it’s pretty much a done deal.

If you don’t find these mergers concerning, well, you should. As the saying goes, “the only thing we learn from history is that we learn nothing from history”. The claim that these “mega-mergers” improve the efficiency of a company, reduce prices to consumers, etc., is pure nonsense. There were valid reasons for the rise of the “trust busters” in the late 19th and early 20th century as the abuses of the monopolies became so great and so obvious that not even their wealth and influence could prevent the outrage that caused the development of the anti-monopoly laws, lawsuits and legal actions that broke many of them up back then.

Trade Wars

Oh brother… I could go on and on about this nonsense. I won’t. I try to stay away from politics here because, well, why bother? You get flooded with enough of that nonsense in other forums. However, I find it more than a little ironic to have you-know-who here in Wisconsin celebrating giving away more than $4 billion in taxpayer money to a Chinese company to lure it to Wisconsin while at the same time engaging in never ending tweet-storms about unfair trade practices by that country.

Oh, I should add that the company quietly announced that, to paraphrase them, “oh, by the way, the factory we’re going to put up is going to be a fraction of the size we said it would, isn’t going to make the product we said it was going to make, and we’re only going to hire a few hundred people not the 13,000 we said, but that the big factory will be put up “real soon”. Maybe.”

What remains to be seen is where FoxCon is going to find any employees. The unemployment rate in the state is under 4%, and in some parts of the state it’s under 3%. Employers have tried hiring bonuses, improving benefits, even upping starting wages. Several companies here have now even dropped the high school diploma requirement.

How Hot Is It?

In a word, very. It hit 97 F here yesterday (Friday), with very high humidity. Heat index was up around 107 the weather people said. It’s supposed to be even worse today with a heat index pushing 110. It was already 83 when I got up at 5:30 this morning. Basically no one goes outside in this weather unless they absolutely have to.

I remember what it was like milking cows in this kind of weather. Dear lord, it was bad. The cows were miserable, we were miserable, the cats were miserable, the dog was miserable…

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I don’t know what in the world made me think taking this photo was a good idea. MrsGF makes me wear the dopey vest. Make it easier for the police to find my body when I get hit by a truck, I guess.

While I looked at the poor bike sitting there in the garage behind the car, and was momentarily tempted, not even I am crazy enough to go out on the back roads and trails on a bicycle in this kind of weather.

I’ve become addicted to biking, though. Whenever the weather is even close to being decent I want to get out and put at least a few miles on. Being addicted to biking isn’t a bad thing, of course. It’s healthy, fun, relaxing.

But definitely not when it’s this hot and humid.

Amateur Radio Stuff

Okay, I have to admit it, I’m a bit bored with the FT8 mode. Don’t get me wrong, I’m not agreeing with the curmudgeons who think FT8 is ruining amateur radio. FT8 is just one of a long line of technologies that was going to “destroy amateur radio” according to the GOBs (good ole boys).  If you get on some of the amateur radio forums like QRZ and listen to some of these people ranting, you’d think FT8 was the harbinger of the apocalypse, for heaven’s sake.

But dam, FT8 does work if you want to make contacts under bad conditions and with less that ideal equipment.

Speaking of the QRZ website, I don’t know what’s wrong with some of the people who stalk the forums. And I do not use the term “stalk” lightly. That’s what they seem to do. They haunt the forums just waiting to pounce on anyone they think they can get away with insulting. Newcomers to the hobby are the natural prey of these jackasses. The most innocuous question will result in them pouncing on them without mercy with snide remarks, sarcasm, insults, accusations of them not knowing what they’re doing.

It’s a shame, really. QRZ has some great resources and there are a lot of people in the forums who are genuinely willing to help when you run into problems or are looking for information. But this handful of jackasses really ruin things. The moderators really need to step up and shut this kind of crap down. Right now QRZ has become so toxic because of some of these people that I have started to tell newcomers to avoid it completely and when my current subscription runs out next year I might not renew it.

Astronomy Stuff

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my 11 inch Celestron set up in the driveway. I must confess I don’t use it very often because the thing is almost impossible for one person to set up. Just the optical tube goes about 70 pounds.

Newcomers to this blog or whatever it is may not know I’m also an amateur astronomer because I haven’t talked about that in a long time here. I have two telescopes, the big 11 inch Celestron shown here, and a 3 inch Meade. I’ve been fascinated with astronomy since I was a kid. But as much as I love astronomy, there are aspects of it that I find more than a little tiresome, the main one being so-called scientists who claim life is everywhere out there.

It seems NASA spokespersons and even a lot of professional astronomers have gone right off the deep end with this. Mars could have life. Or may have had life billions of years ago. Moons of Jupiter and Saturn could have life. Hell, according to some of these people, Pluto could have life because they think there may be liquid water under the crust. Venus, which is as toxic a place as you can imagine with temperatures of 700+ degrees and sulfuric acid rain could have life, they tell us. And…

well, it’s all BS. I’m sorry, it just is.

As the Fermi paradox points out, if life out there is as common as some people claim, where the heck is it? Fermi pointed out that, given the number of stars in the galaxy and the age of the universe, if there was any intelligent life out there, there should be some kind of evidence that it exists that should be obvious to us by now. So where is it?

Despite the PR fluff pieces coming out of NASA and from astronomers who really should know better, there is no evidence of life anywhere outside of the Earth. The SETI project has turned up nothing but a few questionable signals that could be from natural sources or from man made sources. The Mars rovers have turned up some interesting results,  yes, but any sign of actual life either now or in the past? No. A lot has been made of the presence of methane on Mars and they’re attempting to link that to some kind of life. But there are other, far more likely explanations for the presence of methane.

We have no evidence at all that there is life out there. None. All we have is speculation, theory, beliefs, claims, and no actual evidence.

A study by Oxford scientists Sandberg, Drexler and Ord that came out a short time ago, examined the Fermi paradox and the Drake equation and other factors with an unbiased eye and, well, the results aren’t good for the proponents of life being common. They found huge margins for error in the calculations and that the “evidence” presented to support wide spread life in the universe is little more than wishful thinking.

The Drake equation is pretty much worthless. The parameters assigned to the equation are, well, flat out guesses. No one knows for sure. The parameters are often wildly optimistic, failing to take into account known facts.

If you look at the actual facts, the results are less optimistic. As the authors said in their report, “When we take account of realistic uncertainty, replacing point estimates by probability distributions that reflect current scientific understanding, we find no reason to be highly confident that the galaxy (or observable universe) contains other civilizations.”

“When we update this prior in light of the Fermi observation, we find a substantial probability that we are alone in our galaxy, and perhaps even in our observable universe.

“‘Where are they?’ — probably extremely far away, and quite possibly beyond the cosmological horizon and forever unreachable.”

 

 

As Milk Prices Decline, Worries About Dairy Farmer Suicides Rise : NPR

“The nation’s dairy farmers are facing their fourth year of depressed milk prices. The outlook is so bleak, it’s increased worries about farmer suicides. One recent outreach effort drew criticism.”

Source: As Milk Prices Decline, Worries About Dairy Farmer Suicides Rise : NPR

The situation for dairy farmers in 2017 was not good. A lot of diary operations are running right on the edge, trying to stay profitable at a time when there is ever shrinking demand for liquid milk for drinking, and a glut of other dairy products like cheese, butter and powdered milk. This story above from NPR illustrates just how bad the situation is getting. Go read the article if you have the time. It isn’t very long.

If you don’t have the time, here’s a brief summary: A dairy co-op in the north east US, Agri-Mark, has seen three of it’s farmer members commit suicide in the last few years. Agri-Mark makes Cabot cheese among other products, and has about 1,000 members. In February when it sent out the milk checks, it included a chart showing just how bad the dairy market was looking for the upcoming year, and a list of suicide prevention hotlines. The reporter talked with Will Rogers, who milks 75 cows in Massachusetts, who is having a difficult time keeping above water. Even more upsetting is the fact that his own father who used to own the farm, killed himself because of financial problems.

While the letter from Agri-Mark was probably well intentioned, it certainly added to the stress a lot of it’s farmers are already facing and Rogers says in the article, it might push some farmers so far that they think “there’s no point in going on.” Agri-Mark certainly could have done a better job of trying to communicate with it’s farmer members.

And as if dairy farmers don’t have enough problems, they are increasingly worried about being able to sell their milk at all. Dean Foods just told at least two dozen farmers in Pennsylvania, Indiana, and four other states that Dean will no longer take their milk as of May 31, leaving them scrambling to find a milk processor they can sell their milk to.

The same thing happened here in Wisconsin last year about this time when Grassland rather abruptly dumped a group of farmers, leaving them to desperately try to find a market for their milk.

The article at Dairy Management about Dean seems to be trying to blame Walmart for Dean’s decision. Walmart used to buy it’s in-house brand milk from Dean, but Walmart is building it’s own milk processing facility in Indiana which will come on-line in May, so Dean is going to be losing a significant amount of sales as Walmart switches to product coming from it’s own production facility.

Certainly there is enough blame to go around, but everyone is ignoring the fact that the real reason behind almost all of the money difficulties dairy farmers are having is over production. They are producing more product than the market really wants, which is pushing prices down lower and lower.

There are various marketing boards, government agencies and others trying to help the situation, but almost all of them are focusing on one thing, trying to increase sales of a product that increasingly people don’t really want, and shouldn’t be eating much of. At at time when a recent study just found that 75% of the people in this area are overweight, we have government agencies and marketing boards trying to convince food makers to shovel ever more cheese into their products.

Seventy-five percent. Think about that for a moment. We are facing a national health crisis due to people eating too much of what is bad for them, with government agencies and others trying to figure out how to help people get their weight under control, and at the same time other government agencies and marketing specialists are trying to get food manufacturers to drastically increase the amount of cheese they use in their products.

 

Strangeness in New Tax Law for Farmers

The interesting thing about the new tax law that got rammed through is that no one really seems to have known what was in it, not even the people who wrote it. This law was literally written in secret, behind closed doors, with only a very few people being allowed to know what was actually in it. Special clauses were inserted for no other reason than to get support from members of congress who threatened to vote against it. And often the people writing it had no idea what they were actually putting into the law. Except for a few high profile items and talking points, none of it was allowed to be made public until it came to the floor for a vote. And finally it was passed in such a rush that the people voting on it didn’t know what they were actually voting for or against.

Apparently even the people who actually had specific items inserted into the law didn’t know what the clauses that they themselves had put in would actually do. Part of the new law, IRC Section 199A that applies to earned income from pass through business activities is one of the items that even it’s authors didn’t really understand.  And one section of the 199A deduction could have a huge impact on farmers and how they sell the commodities they produce. I ran across this over at WallacesFarmer and it gives a brief rundown on how it works. But if you don’t have time to go read it yourself, here is how it would work.

The law includes a deduction for income from cooperatives for members of co-ops that is calculated differently from other sources of income. Basically income derived from selling your crops to a co-op you belong to is treated entirely differently from income from selling your products to a non-co-op.

The whole thing is a bit complex. What it essentially does for farmers is that in certain situations it carves out a huge deduction for selling your commodities to your co-op instead of to a commercial grain dealer. In the example they give in the article over at Wallaces, a farmer who sells his grain to a non-co-op business like an ethanol facility and ends up with a $50K profit, will end up owing about $4K in taxes on the profits from the sale.

If he sells it to a co-op, however, the farmer will end up owing zero taxes on the net income from the sale.

The really scary part is that the senators who inserted this into the tax bill, apparently had absolutely no idea this would be the result of the clauses they put into it. Two senators, Hoeven of ND and Thune of SD seem to have been largely responsible for shoving this into the bill just hours before it passed, and both claim that they did not intend to favor co-ops over any other business, despite the fact that is exactly what this does.

And this is just one clause in a law that is hundreds of pages long. No one knows yet what kind of traps, loopholes, give aways or other little surprises are lurking in this thing, and it could be months before we really know. And you can be sure that a lot of this is going to end up going through the courts before it all gets settled.

 

Farm Catch Up

Well, I’m bored, I haven’t written much here of late, so let’s take a look at what’s been going on in the ag world recently.

Dicamba Issues Abound — The controversy over Monsanto’s dicamba herbicide blends and those approved under license, XtendiMax, Engenia and FeXapan, continue to have problems and generate considerable controversy, complaints and legal issues. Minnesota and other states have instituted restrictions on when, where and how the herbicides can be uses, new federal restrictions regarding training requirements and new application restrictions, etc. Other states have issued wide ranging restrictions as well.  Even Mother Jones has gotten into the act with an article about the drawbacks of the product.

The companies involved are fighting back, blaming anything and everything for the fact that over 3.5 million acres of crops were allegedly damaged by the herbicide drifting away from the application area this past year. They’ve been claiming farmers are spraying the product with the wrong equipment, failing to follow the proper application techniques, etc. They’ve even tried claiming that famers are illegally spraying non-approved types of the herbicide. In one case one of the companies involved tried to get a member of the board that regulates herbicides in one of the states involved removed from the board.

Words Are Worth MoneyThe University of Arizona did a study of how consumers react to the term “natural” on meat labels and found out pretty much exactly what you might think: that people who know what the term means were unwilling to pay more for meat labeled “natural”. In the study half of the people involved were told the legal definition of the term, and half were unaware of what the legal definition was. They found that those who did not know would pay $1.26 more for steak labeled “natural”, while those who did know wouldn’t pay more.

Under USDA definitions, all fresh meat, even hamburger, can be labeled as “natural” as long as it does not contain artificial flavors, colorings, chemical preservatives or other synthetic ingredients. So basically if you’re paying more for a package of steak or roast labeled “natural” you are being scammed.

What it boils down to is that a lot of these companies will use any  kind of marketing tricks they can to fool you into paying more for a product than you should.

Meat Tax Coming? — Methane and carbon emissions from cattle raising operations makes up almost 15% of the total production of greenhouse gases, and the production of cattle is projected to increase by 70% over the next fifty years or so. So some people are considering taxing the production and sale of meat to try to reduce the reduce greenhouse gas production from cattle. There are serious talks going on in some countries to institute tax policies similar to those used to curb tobacco in order to reduce production and consumption.

Frankly this seems a bit silly to me. The two largest producers of greenhouse gases are electric power plants and motor vehicles. The amount of methane and carbon dioxide produced by cattle hardly makes more than a blip on the charts when compared to that. So I’d think that if they were really serious about greenhouse gas reduction they’d be going after those two sources far more vigorously.

Corn Acreage Shrinking — It looks like farmers are finally beginning to cut back on the amount of corn they’re raising in response to poor prices. USDA is predicting that for the first time in years the number of acres of soybeans will equal or even surpass the number of acres of corn being planted in the US. Corn prices on the Chicago Exchange never went much over $3.75 or so at the peak, and have been sitting at the $3.50 or lower level for some time now. And, of course, the commodities price generally isn’t what the farmer gets for the corn. They often get considerably less than that. When you add in other costs like storage fees, etc. farmers are often getting a lot less than the commodities price.  A awful lot of farmers out there are just barely breaking even on corn this year.

Some people are pinning their hopes on China increasing their imports of corn. China has been drawing down it’s huge stockpiles of corn over the last year or so, and some are taking that as a sign the country will begin to import more corn. But continuing to produce corn in the hopes that China might increase imports sounds like a great way to end up bankrupt.

Screen Shot 2017-12-20 at 7.33.13 AMChicken Suits — No, not that kind of suit. The legal kind. Both California and Massachusetts are being sued over regulations they’ve instituted regarding how chickens (and other farm animals  as well in the case of Massachusetts) are raised. The regulations require chickens (and in the case of Mass. other agricultural animals as well) from which products are derived for sale in the state, must be raised according to certain minimal humane standards. The plaintiffs claim that the regulations dramatically increase the cost of eggs and that it will cost consumers hundreds of millions of dollars, and that the cost of eggs nation wide has increased as much as 5% because of it. A claim I view with considerable skepticism. Locally the retail price of eggs is at almost an all time low. They’re going for about $1.00 to $1.28 per dozen at most retail outlets around here for standard, non-organic “generic” brands, and I’ve seen them as low as $0.79 and even less.

Farm Catch Up: What’s going on in Agriculture.

Screen Shot 2017-11-29 at 6.48.45 AMLet’s catch up with what’s been going on in agriculture.

Let’s lead off with this odd little item. So, here’s the scenario: You’ve just survived a hurricane. Your house has been flooded, your whole neighborhood has been destroyed, you’ve lost everything you own, you’re trying to cleanup and rebuild. You desperately need money, building supplies, cleaning supplies, drywall, lumber, shingles, plywood… So you’re sitting there staring at the ruins of your neighborhood and you think, “Wow, what I really need is a big hunk of cheese…”

That is apparently what some people in Wisconsin thought when they shipped 45,000 pounds of cheese to the hurricane ravaged areas of the country. Yep, they thought, what they need isn’t money or building supplies or cleaning supplies or anything else that might actually be, well, useful. What they need is forty five thousand pounds of cheese

Screen Shot 2017-11-30 at 6.25.07 AM
Little known fact: Cows are one of the few animals that can pick their noses with their tongues.

Dairy/Milk: All things considered, the dairy business wasn’t totally horrible this year. Not great, but not terrible. The average price for Class III milk (the kind that’s used for cheese and butter) for the year was in the $16.10 to $16.20 range for 2017. That’s considerably better than 2016 when the average price was about $1.60 lower. The price seems to have been propped up largely by demand for butter and cheese, which has remained fairly strong through a large part of the year.

But the ever present specter of over production is once more haunting the dairy business. Production in the US was up around 2.5% over the year, and production has been going up in other dairy producing areas of the world as well, and the market is showing signs of strain. Butter prices on the Chicago Mercantile have dropped from 2.65 to around 2.21, butterfat exports have fallen, cheese prices have dropped about 10 cents and cheese in storage has increased almost 6% over last year.

Mexico is one of the biggest purchasers of dairy products from the US, but it is actively seeking other sources of supply because, well, would you be comfortable dealing with a merchant who called you a drug-running murdering rapist? It has cut it’s purchases of nonfat dry milk from the US by around 20%, and is getting it from Canada and the EU.

Throwing a monkey wrench into the works is NAFTA, which the administration is supposedly renegotiating. Does anyone except me remember that the Ag Secretary, Perdue, was proudly claiming that the administration was going to renegotiate NAFTA in just three weeks back in early May? Sigh… I try to keep politics out of this, but it’s hard sometimes.

The end result of all of this is that the future for the dairy industry doesn’t look very good. Between over production, declining demand, declining exports, well, right now it looks like 2018 is going to see milk prices dropping by at least $1/cwt, down to the $15.50 range, and they could even get lower than that.

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This was a pasture before the pigs got into it

Wild Pig Population On The Rise: Wild pigs are a huge problem. It’s estimated that there are 6 to 11 million wild pigs running around out there, and according to the National Feral Swine Damage Management Program they are responsible for up to $1.5 billion in damage every year.

They’re trying to get approval for a poison based on sodium nitrate called “Hoggone” which would apparently be placed out in the field in “a species-specific feeder”.

The problem with that kind of thing is, of course, that other animals other than that target species often consume the poison because these “species-specific feeders” often aren’t all that specific. Then there are problems with poison residue left in the carcass being consumed by predators and scavengers. And if you read the article tagged up there you’ll see that some of the experts don’t think poisoning is going to do all that much to cut down the size of the population.

Can you hunt them? Hell yes. You need to check the regulations in your own area for specifics, but most states strongly encourage hunters to take wild pigs, and have few restrictions and no bag limits, and no restrictions on size, gender, no specific season.

Can you eat ’em? Ah, well… Here’s where I get a bit nervous. A lot of DNRs encourage people to eat them. But that’s because they hope you’ll go out and shoot a lot of the buggers. I know people who wax poetic about the joys of eating wild pig. Me? I wouldn’t touch one. They carry a lot of diseases, many of which are infectious to humans and pretty nasty. A lot of them are infested with parasites… No, I wouldn’t eat one.

Cranberry Glut: We are growing way, way too many cranberries. We have so many cranberries already in storage that even if we’d lost the entire 2017 crop, we still would have had a surplus.

The Cranberry Marketing Committee is trying to get USDA to issue a marketing order that would require cranberry growers to produce 25% less cranberries than market demand.

The problem with cranberries is that except for the holiday season, there is really little demand for them. Despite efforts by marketing companies to boost demand, consumption of cranberries in any form has been shrinking. Cranberries, at least by themselves, just don’t taste very good. They are so sour and so bitter on their own that they are virtually inedible unless you add a huge amount of sugar to them, or use them only in very small quantities as a flavoring agent.

What The Heck Is Actually In That Stuff?  You might like to think that manufacturers are required to list the ingredients in a product on the label, but there are all kinds of loopholes in labeling regulations that let them refuse to tell us what exactly is in the products we use. But California has passed new legislation that will lift the veil from at least one category of products, cleaning chemicals. When you see that term listed, it means that chemicals have been added to make the product smell nice. But what exactly is “fragrance”, or the ever popular “cleaning agents” that are listed on the labels? Turns out “fragrance” can contain one or more of thousands of different chemicals, some of which, it seems, are highly toxic, and even are known to be carcinogens. Some labels don’t tell you anything at all. This will will help a bit, but the law doesn’t really go far enough. It only covers cleaning products, for one thing.

Note: The article at Mother Jones that I’ve linked to here seems to be focused on fragrance for some reason, while the bill itself (yes, I’ve read the thing) does not seem to be restricted to chemicals added for fragrance alone. Fragrance is specifically mentioned in the bill, yes, but the bill seems to cover all chemicals in a product not just those used as fragrances.

 

Good Bye Tumbler: Tumblr Tumbles

I finally pulled the plug entirely on my blog over at Tumblr. I’m not exactly sure what Tumblr has become, but it isn’t a blogging platform any more, isn’t a social media platform.

The first blog I had was over at Tumblr and I was fairly active over there for many years. It was wildly popular at one time, and I liked it over there. It was a unique place. It was simple to write short entries, a few paragraphs long, shovel in some photos, and generally talk about anything you wanted with few, if any, restrictions on content. There were no intrusive ads being shoved in your face. There were a lot of thoughtful, interesting people. A lot of them were friendly, supportive. A lot of us using the service made some very good friends among the inhabitants of Tumblr. It had a commenting system that was easy to use, permitted people to respond easily to comments, fostering lengthy discussions.

Yes, it had it’s problems. It had the usual trolls, jackasses, jerks, etc. But generally speaking it was a fun, informative place to hang out. At it’s peak, Tumblr was seeing over 100 million new posts every day, and almost a quarter of a million new blogs were starting up every day. Now the number of new blogs starting up has fallen by more than half, and the number of new posts has fallen to 35 million.

How many people actually use the service? That’s almost impossible to find out. Tumblr seems to not make the number of active users public. Plus what exactly is a “user”? While I still have an account there, I’m not active any more. Haven’t been for some time. The situation is the same for most of the people I followed over there. Their accounts are still active, but they don’t bother posting anything any more. Considering that the number of new posts has dropped by two thirds, I’d suspect that the number of actual users has dwindled considerably as well.

Now, to make things even more interesting, the founder of Tumblr, David Karp, announced he is leaving.

What happened? Well, a lot of us who have seen the service falling apart blame it on Yahoo. Yahoo bought Tumblr in 2013 for $1.1 billion. Yahoo publicly promised it wouldn’t screw things up. But, of course, it did. Well, Yahoo already had a long track record of buying prosperous companies and running them into the ground through mismanagement, starving them of resources, and operating with a ‘profit at any cost’ philosophy that quickly destroyed the popularity of the services.

The problem with Tumblr was that while it was wildly successful, it also wasn’t making any money. Yahoo planned on changing that. They waited a while for the anger over the sale to die down and lull users into a false sense of security, and then started to tinker with things. They injected ads into people’s dashboards, utterly destroyed the comment system while claiming they were “improving” it, destroyed the messaging system, and even worse, enabled the abuse of the system by allowing people to deploy “bots”, automated systems that had the guise of being regular users but which instead were fake accounts set up by porn distributors, advertisers, etc. It’s added “enhancements” which rearrange the material that shows up on your dashboard so that it is no longer in chronological order, but now places what Tumblr considers to be the “best” content first, which means cute GIFs of kittens will be pushed to the top of your dash while the stuff you really want to see is shoved down to the bottom…

The whole atmosphere became increasingly difficult to deal with, even downright toxic. At the point I abandoned Tumblr entirely about 2/3s of my “followers” were bots because I gave up trying to weed them out. It wasn’t worth the effort.

Well, Verizon now owns the thing, and it doesn’t seem to know what to do with it either. With a declining user base the value of the service as an advertising platform is shrinking fast. The only thing that surprises me, really, is that Verizon hasn’t spun it off into an independent company again or sold it at a loss just to get out from under it.

I think the biggest mistake that was made was they tried to monetize Tumblr at the expense of the people who created the content that kept it going. It was the bloggers, the people who wrote the material, posted the pictures, created the artwork, that made Tumblr popular and who attracted new users to the service. And almost everything Yahoo did to “improve” the service seemed to destroy the atmosphere that had attracted the bloggers to begin with. About all that’s left over there now are “blogs” that are really nothing but thinly veiled advertising sites, the bots, and people who endlessly reblog content created by others.

I knew that Yahoo was not going to deal gently with Tumblr. It’s track record with other acquisitions, some of the things it’s CEO and others at the company said when they thought no one was listening, the pressures Yahoo was facing from investors as it continued to fail at pretty much everything it tried to do, everything was indicating that the future was not bright for Tumblr. The only thing that’s really surprised me is that it’s taken this long for it to get this bad over there.

This morning I was scrolling through my dash, and I realized that of all the blogs I followed over there, only about three are left, and they don’t post very often any longer. I was looking at endless re-blogs of other people’s material, photos I don’t care about, and realized this was pointless. I haven’t posted over there in ages. Why am I bothering?

So I pulled the plug, deleted my account, removed the shortcuts, killed the links. That’s it. I’m not going to put up with it any more.

 

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.