If you raise corn, are an investor in an ethanol plant, or bought you a flex-fuel vehicle to burn ethanol, your bubble may be about to burst after the election.
Pols will keep the ethanol subsidies of some 58 cents a gallon in place until the election, and keep out imports of cheaper Brazilian sugar cane ethanol into the U.S., until then.
But after there's no election threat for two years, Katie Bar the Door. As evidence continues to mount that ethanol causes more air pollution than regular gasoline, that it takes more energy and water to make than it returns in power to cars, and that it has badly skewed food prices by driving up the price of corn, pols are ready to back away.
Ethanol interests were already in trouble with high corn prices, which have moderated in recent weeks, and the bad credit conditions to be provide the operating money they need to keep their plants in operation. Without the 58-cents subsidy from Congress, which is likely to be cut or dropped althogether after November, cash flow will drop and profits will cease.
Suddenly ethanol will sell for more per gallon than gasoline, and the party will be over.
Natural gas, hydrogen and electricity, in the long term, are all better alternatives to gas or diesel powered cars, than ethanol. These facts will trump ethanol as the coming weeks and months unfold.
Watch out, and be prepared. You read it here first.
Thursday, July 31, 2008
Tuesday, July 29, 2008
Wild horses eclipse critical ag issues
What a gas!
For those in production agriculture, life-and-death issues affecting your business are constantly on the horizon. They are commented on on this blog and many others, with very little response and reaction.
Dare breath a word about sacred wild horses, however, and all hell breaks loose. The "horses as pets" syndrome has so taken over the emotions and hearts of city folks that they are unable to see the traditional role horses played in the first few centuries of this country.
Critical issues and concerns that very much affect the continued viability of producing food in this country--ah, so what. Milk comes from cartons and food comes from the grocery store. It's always been there when I needed it, and always will be.
The wild horse problem, on a list of the top 100 challenges facing production agriculture today, would probably be in the bottom 50 somewhere. Yet, unlike things that really matter and can really make a difference, wild horse control generates white hot controversy--tremendous passion and deeply held feelings.
Here we are with $4 gas, wars in Iraq and Afghanistan, rising unemployment, a housing and mortgage foreclosure crisis--and what catches the public fancy is wild horses.
Go figure.
For those in production agriculture, life-and-death issues affecting your business are constantly on the horizon. They are commented on on this blog and many others, with very little response and reaction.
Dare breath a word about sacred wild horses, however, and all hell breaks loose. The "horses as pets" syndrome has so taken over the emotions and hearts of city folks that they are unable to see the traditional role horses played in the first few centuries of this country.
Critical issues and concerns that very much affect the continued viability of producing food in this country--ah, so what. Milk comes from cartons and food comes from the grocery store. It's always been there when I needed it, and always will be.
The wild horse problem, on a list of the top 100 challenges facing production agriculture today, would probably be in the bottom 50 somewhere. Yet, unlike things that really matter and can really make a difference, wild horse control generates white hot controversy--tremendous passion and deeply held feelings.
Here we are with $4 gas, wars in Iraq and Afghanistan, rising unemployment, a housing and mortgage foreclosure crisis--and what catches the public fancy is wild horses.
Go figure.
Monday, July 28, 2008
Ag overplays Ft. Carson expansion
A well-orchestrated campaign by a few liberal Farmers Union-style ranchers to oppose the U.S, Army's plan expand the Ft. Carson practice range by 100,000 acres in South Central Colorado was misguided from the start and is wearing thin as time goes on.
We'e not talking prime ranchland here. Ranches in this area have been "starvation flats" for years due to rocky, hilly terrain, chronic drought and poor economic conditions in the industry. State Rep. Wes McKinley of Lamar, a liberal Democrat and veteran critic of the military from his days serving on the grand jury that investigated the Rocky Flats nuclear weapons plant decades ago, has orchestrated the crusade.
His left-wing, anti-military slant never gets publicized--only his cowboy image as a lone voice in the wilderness for the poor downtrodden ranchers of southern Colorado. The dubious truth of McKinley's sensationalist charges pale in the face of the national security and economic justification of expanding Ft. Carson.
Since Ft. Carson already has several hundred thousand acres in the area, as well as a multi-billion dollar installation in Colorado Springs of longstanding, to expand elsewhere would be outrageously expensive. Ft. Carson is an important economic engine for southern Colorado and needs to be encouraged and accomodated, not fenced in and encouraged to go elsewhere.
In reality, the ranchers are only trying to drive up the price the Army has to pay for the land it acquires. Anyone familiar with ranching in the area knows that the highest and best use of the land is to sell it and invest the money. That'll produce more profit than cattle ranching there ever did.
We'e not talking prime ranchland here. Ranches in this area have been "starvation flats" for years due to rocky, hilly terrain, chronic drought and poor economic conditions in the industry. State Rep. Wes McKinley of Lamar, a liberal Democrat and veteran critic of the military from his days serving on the grand jury that investigated the Rocky Flats nuclear weapons plant decades ago, has orchestrated the crusade.
His left-wing, anti-military slant never gets publicized--only his cowboy image as a lone voice in the wilderness for the poor downtrodden ranchers of southern Colorado. The dubious truth of McKinley's sensationalist charges pale in the face of the national security and economic justification of expanding Ft. Carson.
Since Ft. Carson already has several hundred thousand acres in the area, as well as a multi-billion dollar installation in Colorado Springs of longstanding, to expand elsewhere would be outrageously expensive. Ft. Carson is an important economic engine for southern Colorado and needs to be encouraged and accomodated, not fenced in and encouraged to go elsewhere.
In reality, the ranchers are only trying to drive up the price the Army has to pay for the land it acquires. Anyone familiar with ranching in the area knows that the highest and best use of the land is to sell it and invest the money. That'll produce more profit than cattle ranching there ever did.
Sunday, July 27, 2008
Wild horses ravage western ranges
An increasingly serious problem is that western rangelands are being overrun by wild horses, who reproduce unimpeded. The liberal press is wringing their hands and scratching their heads, and implying that man must be the problem.
The competition with cattle, sheep and wildlife for the limited grass on the range is a costly problem for the meat industry, which can be managed, but animal rights loonies and environmentalists won't allow it to be.
Glamorized by Hollywood as "mustangs" and "stags," wild horses are off limits. You can slaughter and eat cattle, sheep, chickens, turkeys, etc. but horses are pets and must be protected, in their lexicon. Even dogs and cats can be euthanized as a last resort, but horses are sacrosanct.
We only make petfood out of horsemeat in the U.S., but it is considered a delicacy in France and much of Europe and other countries around the globe. For years, the U.S. had an active industry to round up wild horses, slaughter them, and export the meat to countries that were eager to receive it.
But loa and behold, eastern congressmen and big city congressmen finally succeeded in outlawing horse slaughter in the U.S., falling into the "horses as pets" syndrome and the last U.S. plant went out of business in 2004. Now the horses must be exported to Canada or Mexico to be slaughtered and the same extremists are moving in on the border patrol to prevent the export of horses. We can't control our borders for people, but horses? You bet!
That's why wild horses are backing up on western ranges. It is a man-caused problem all right, but not the usual suspects the left likes to rail against. They need only look in the mirror.
The competition with cattle, sheep and wildlife for the limited grass on the range is a costly problem for the meat industry, which can be managed, but animal rights loonies and environmentalists won't allow it to be.
Glamorized by Hollywood as "mustangs" and "stags," wild horses are off limits. You can slaughter and eat cattle, sheep, chickens, turkeys, etc. but horses are pets and must be protected, in their lexicon. Even dogs and cats can be euthanized as a last resort, but horses are sacrosanct.
We only make petfood out of horsemeat in the U.S., but it is considered a delicacy in France and much of Europe and other countries around the globe. For years, the U.S. had an active industry to round up wild horses, slaughter them, and export the meat to countries that were eager to receive it.
But loa and behold, eastern congressmen and big city congressmen finally succeeded in outlawing horse slaughter in the U.S., falling into the "horses as pets" syndrome and the last U.S. plant went out of business in 2004. Now the horses must be exported to Canada or Mexico to be slaughtered and the same extremists are moving in on the border patrol to prevent the export of horses. We can't control our borders for people, but horses? You bet!
That's why wild horses are backing up on western ranges. It is a man-caused problem all right, but not the usual suspects the left likes to rail against. They need only look in the mirror.
Saturday, July 26, 2008
Shoulda' bought a house in town
There' s no big farmer bail-out, although some have characterized the recent new Farm Bill that way. It is over-generous in subsidies for grain and other crops, but generally, farmers hailed out, snowed out or tornadoed out--it's tough to get any help at all. That's the vagaries of agriculture
You get in because you like the freedom and lifestyle--not for the money, because there isn't much.
It's always been hard to borrow money for operations or land or equipment purchases for agriculture. You can usually get about a 50% loan to value, with a short amortization that guarantees hefty payments.
Farmers marvelled at their brethren in town, where home mortgages got easier and easier. You could borrow up to 125% of value, with no down payment, on adjustible rate mortgages that began with low payments. If a deal like there were available to farmers, young people could afford to go into the business.
Nonetheless, that kind of lending virtually guarantees that some unqualified people borrow money, and that when a crash comes, as it has the last two year--some borrowers and some lenders get wiped out.
But wait--Uncle Sam (ie, the taxpayers) have thrown 400,000 of you a lifeline. Congress has just passed, and President Bush has said he will sign, a mortgage bail-out bill.
Now, no matter how deep you got in over your head, no matter how crooked a lender may be, no matter how irresponsibly you handled your loan payments or refinanced to take on more debt for furniture and toys like boats--relief is on the way.
What a kick in the teeth to the 94% of home mortgage holders who are not in default--many of whom took on a second or third job, put the wife to work or gave up recreation and entertainment, just to keep the mortgage current. We don't hear about them, and nothing's coming their way.
That's right farmers, you shoulda' bought a house in town!
You get in because you like the freedom and lifestyle--not for the money, because there isn't much.
It's always been hard to borrow money for operations or land or equipment purchases for agriculture. You can usually get about a 50% loan to value, with a short amortization that guarantees hefty payments.
Farmers marvelled at their brethren in town, where home mortgages got easier and easier. You could borrow up to 125% of value, with no down payment, on adjustible rate mortgages that began with low payments. If a deal like there were available to farmers, young people could afford to go into the business.
Nonetheless, that kind of lending virtually guarantees that some unqualified people borrow money, and that when a crash comes, as it has the last two year--some borrowers and some lenders get wiped out.
But wait--Uncle Sam (ie, the taxpayers) have thrown 400,000 of you a lifeline. Congress has just passed, and President Bush has said he will sign, a mortgage bail-out bill.
Now, no matter how deep you got in over your head, no matter how crooked a lender may be, no matter how irresponsibly you handled your loan payments or refinanced to take on more debt for furniture and toys like boats--relief is on the way.
What a kick in the teeth to the 94% of home mortgage holders who are not in default--many of whom took on a second or third job, put the wife to work or gave up recreation and entertainment, just to keep the mortgage current. We don't hear about them, and nothing's coming their way.
That's right farmers, you shoulda' bought a house in town!
Friday, July 25, 2008
Big Boys use certainty to cut cattle prices
The cattle futures speculators, Big 3 meat packers and their handmaidens who own big feedlots, have used their power to corner the Chicago Mercantile Exchange this last week, and drive cash fed cattle prices down $2-$3. This is after a loss last week of $1-$2.
Simple supply-and-demand free market economics paint this as ludicrous. Slaughter-ready fed cattle supplies are very short. The U.S. Cattle Inventory report shows cattle numbers down more than forecast. These are conditions ripe for firm to higher fed cattle prices. But by playing on the uncertainty of market direction, wholesale beef bookings, consumer beef demand due to high gasoline and food prices--the Big Boys have rolled cattle owners into lower prices.
This is how the futures market and the near-monopoly on meat packing the Big 3, soon to be Big 2, meat packers have. There is no competition when they choose to put pedal-to-the-metal.
Meat packing is a very cash intensive business, and only the heavily capitalized public firms on Wall Street can come up with it on the scale necessary to meet demand. Cattle have to be paid for before they can be killed. Modern packing plants are massive installations with hundreds of employees, all of whom must be paid before the plant can collect from the sale of meat. Cash flow needs are enormous, and can only be met through Wall Street short term debt offerings.
That's why individual cattlemen are at such a huge disadvantage on cattle pricing and leverage. They can rail against it, but are powerless to do much about it.
Simple supply-and-demand free market economics paint this as ludicrous. Slaughter-ready fed cattle supplies are very short. The U.S. Cattle Inventory report shows cattle numbers down more than forecast. These are conditions ripe for firm to higher fed cattle prices. But by playing on the uncertainty of market direction, wholesale beef bookings, consumer beef demand due to high gasoline and food prices--the Big Boys have rolled cattle owners into lower prices.
This is how the futures market and the near-monopoly on meat packing the Big 3, soon to be Big 2, meat packers have. There is no competition when they choose to put pedal-to-the-metal.
Meat packing is a very cash intensive business, and only the heavily capitalized public firms on Wall Street can come up with it on the scale necessary to meet demand. Cattle have to be paid for before they can be killed. Modern packing plants are massive installations with hundreds of employees, all of whom must be paid before the plant can collect from the sale of meat. Cash flow needs are enormous, and can only be met through Wall Street short term debt offerings.
That's why individual cattlemen are at such a huge disadvantage on cattle pricing and leverage. They can rail against it, but are powerless to do much about it.
Thursday, July 24, 2008
Jalapeno pepper fingered in E. Coli
The Food and Drug Administration continues to finger fresh vegetables in a now not-so-recent E. Coli outbreak. Having flunked out tomatoes, now declaring them safe, they have named jalapeno peppers as a possible culprit.
The only small problem is that they had no proof on tomatoes, and they have none on japapenos. They are costing producers, wholesalers, retailers and restauranteurs tens of millions of dollars in lost sales and lost inventory, but have solved nothing. Denver suupermarket chain King Soopers, the local Kroger affiliate, has pulled all fresh jalapeno peppers off his produce counters--not only losing the perishable inventory, but also the sales from customers who buy them.
This is happening across the country--all for some bureaucrat's hunch, but with no proof.
Jalapeno peppers are an even poorer suspect than tomatoes were. With capacin that makes them hot, it also kills a very weak pathogen like E. Coli. Cooking also kills E. Coli, and most japapenos are cooked. Any food with acid, like tomatoes, was also a poor suspect, as the acid in tomatoes was strong enough to kill E. Coli.
The FDA dimbulbs should ask a farmer, rather than destroy farmers and an industry, when they have no solid scientific grounds for doing so. Meanwhile, those got sick with suspected E. Coli--they're well by now, and have no answers for what happened to them.
And FDA never has to say they're sorry.
The only small problem is that they had no proof on tomatoes, and they have none on japapenos. They are costing producers, wholesalers, retailers and restauranteurs tens of millions of dollars in lost sales and lost inventory, but have solved nothing. Denver suupermarket chain King Soopers, the local Kroger affiliate, has pulled all fresh jalapeno peppers off his produce counters--not only losing the perishable inventory, but also the sales from customers who buy them.
This is happening across the country--all for some bureaucrat's hunch, but with no proof.
Jalapeno peppers are an even poorer suspect than tomatoes were. With capacin that makes them hot, it also kills a very weak pathogen like E. Coli. Cooking also kills E. Coli, and most japapenos are cooked. Any food with acid, like tomatoes, was also a poor suspect, as the acid in tomatoes was strong enough to kill E. Coli.
The FDA dimbulbs should ask a farmer, rather than destroy farmers and an industry, when they have no solid scientific grounds for doing so. Meanwhile, those got sick with suspected E. Coli--they're well by now, and have no answers for what happened to them.
And FDA never has to say they're sorry.
Wednesday, July 23, 2008
Farmer's Markets flourish on naivete
A hot national trend, certainly very prevalent in the Denver area, are weekly Farmer's Markets, typically held in booths on shopping center parking lots. The Norman Rockwellesque ideal is that local farmers, who lovingly coddled each crop, got up early, picked them, and brought them to their booth to sell direct to you, the eager suburban housewife.
In addition to all the fresh produce, other booths sell allegedly homemade stuff, from foodstuffs to handicrafts, and "organic" products manufactured locally by craftsmen.
It's great, to the extent that this is actually true. Those true farmers who picked the crop out of their own fields or off their own vines and are selling it direct to the public, to pocket the full price without a wholesaler in the middle--more power to 'em.
There are way too many Farmer's Markets held for this to possibly be 100% true, as not enough farmers exist any more, or produce enough and have enough relatives to get to them all. You only have to look around a little bit, and see stuff that probably came from a wholesaler who hired sombody who looked like a farmer, to sell direct to the public.
Products may all be organic and wholesome, but many probably are just like those at the grocery store. And prices aren't always any cheaper than the grocery story either.
But it sure creates a comforting, idyllic story for suburbanites to share and live as they put dinner on the table. And farmers are laughing all the way to the bank.
In addition to all the fresh produce, other booths sell allegedly homemade stuff, from foodstuffs to handicrafts, and "organic" products manufactured locally by craftsmen.
It's great, to the extent that this is actually true. Those true farmers who picked the crop out of their own fields or off their own vines and are selling it direct to the public, to pocket the full price without a wholesaler in the middle--more power to 'em.
There are way too many Farmer's Markets held for this to possibly be 100% true, as not enough farmers exist any more, or produce enough and have enough relatives to get to them all. You only have to look around a little bit, and see stuff that probably came from a wholesaler who hired sombody who looked like a farmer, to sell direct to the public.
Products may all be organic and wholesome, but many probably are just like those at the grocery store. And prices aren't always any cheaper than the grocery story either.
But it sure creates a comforting, idyllic story for suburbanites to share and live as they put dinner on the table. And farmers are laughing all the way to the bank.
Tuesday, July 22, 2008
Anti-rodeo activists out in Cheyenne
A standard fixture at rodeos across America anymore are animal rights activists, who maintain that rodeo is cruel to animals and inhumane. This week at the vaunted Cheyenne Frontier Days (The grand daddy of 'em all, as the slogan goes), the anti-rodeo crusaders are out in force.
The difference is, they are swimming upstream in Cheyenne, Wyoming, where even the press likes rodeo and its readers could easily be organized into brigades to take them on. How dare you even question our state's biggest sport?
The liberal, sensationalist press in Denver, Houston, Las Vegas and other cities is ripe for the picking by animal rights activists and they are written up like conquering heroes at the rodeo each year. But in Cheyenne, the rebels are gasping for breath, at least locally. And watching their backside.
The facts are that nothing happens at a rodeo that doesn't happen on most ranches across America every day. Cattle must be worked, and horses are used to do it. Calves are roped, wild horses are ridden and broken for riding, and bulls are dodged due to their ferocity. That this daily ritual would be sport for spectators at a rodeo is more like icing on the cake.
The animal rights activists have had an effect, of course. It is riotously funny to hear the rodeo announcers fall all over themselves when a cowboy or animal is hurt at a performance. They go into a memorized monologue, undoubtedly written by the PRCA, about the outstanding medical and veterinary care available on the scene, and the humane, caring approach they take, always ending with "let's have a round of applause for these outstanding professionals performing their humane duties flawlessly . . ."
And now . . .out of chute 7, riding a horse named Applesauce . . .
The difference is, they are swimming upstream in Cheyenne, Wyoming, where even the press likes rodeo and its readers could easily be organized into brigades to take them on. How dare you even question our state's biggest sport?
The liberal, sensationalist press in Denver, Houston, Las Vegas and other cities is ripe for the picking by animal rights activists and they are written up like conquering heroes at the rodeo each year. But in Cheyenne, the rebels are gasping for breath, at least locally. And watching their backside.
The facts are that nothing happens at a rodeo that doesn't happen on most ranches across America every day. Cattle must be worked, and horses are used to do it. Calves are roped, wild horses are ridden and broken for riding, and bulls are dodged due to their ferocity. That this daily ritual would be sport for spectators at a rodeo is more like icing on the cake.
The animal rights activists have had an effect, of course. It is riotously funny to hear the rodeo announcers fall all over themselves when a cowboy or animal is hurt at a performance. They go into a memorized monologue, undoubtedly written by the PRCA, about the outstanding medical and veterinary care available on the scene, and the humane, caring approach they take, always ending with "let's have a round of applause for these outstanding professionals performing their humane duties flawlessly . . ."
And now . . .out of chute 7, riding a horse named Applesauce . . .
Monday, July 21, 2008
Corn prices drop, feeder cattle rise
With the state of flux the U.S. Department of Agriculture (USDA) has thrown the corn business in with its fluctuating forecasts of the size of the corn crop, prices have fallen for the last week. The competition for corn between the livestock, food and energy business has suddenly taken a backseat to just trying to stabilize the business.
Corn futures on the Chicago Board of Trade were down again today, as it appears corn will be more plentiful than forecast. This, in turn, has caused feeder cattle futures on the Chicago Mercantile Exchange to rise, as the cost of corn to feed cattle directly relates to the profits for doing so. Suddenly optimism has risen in the cattle feeding business.
Until the actual ears of corn are harvested and in the bin, nobody knows how much there'll be and everyone is operating on pure speculation at this point. Nonetheless, the scary USDA forecasts during the Mississippi River flooding, appear to have been overblown. Nobody knows at what price level corn will eventually settle, but rising energy and food prices may stabilize now that one of the key inputs is moderating in cost.
Oil prices have been dropping in recent days, as U.S. consumption drops in the face of $4 gasoline and $5 diesel. Ethanol, to be financially feasible at all, has to sell for less than gasoline, and the drop in corn prices may make this possible. It had been shaky to this point.
Pity the poor farmer that actually has a corn crop in the ground, about half way to tasseling. USDA and the futures market have been reeking havoc with prices, so he has no idea what his return will be.
Such are the vagaries of farming.
Corn futures on the Chicago Board of Trade were down again today, as it appears corn will be more plentiful than forecast. This, in turn, has caused feeder cattle futures on the Chicago Mercantile Exchange to rise, as the cost of corn to feed cattle directly relates to the profits for doing so. Suddenly optimism has risen in the cattle feeding business.
Until the actual ears of corn are harvested and in the bin, nobody knows how much there'll be and everyone is operating on pure speculation at this point. Nonetheless, the scary USDA forecasts during the Mississippi River flooding, appear to have been overblown. Nobody knows at what price level corn will eventually settle, but rising energy and food prices may stabilize now that one of the key inputs is moderating in cost.
Oil prices have been dropping in recent days, as U.S. consumption drops in the face of $4 gasoline and $5 diesel. Ethanol, to be financially feasible at all, has to sell for less than gasoline, and the drop in corn prices may make this possible. It had been shaky to this point.
Pity the poor farmer that actually has a corn crop in the ground, about half way to tasseling. USDA and the futures market have been reeking havoc with prices, so he has no idea what his return will be.
Such are the vagaries of farming.
Sunday, July 20, 2008
Global warming hoax infects agriculture
Today the food editor, no less, of Parade magazine fell for the leaky boat of global warming. You get Parade in your Sunday newspaper, and its the glitzy, fluffy puff piece that rarely tackles anything serious.
The article was on how to save money, and recommended one way was to not eat meat. It repeated the outright lie that livestock grazing causes 18% of the greenhouse gasses that allegedly poison earth's atmosphere. Vegetarians and animal rights activists love this dubious statistic, because it makes their case for them.
The fact is that a good share of the wide open spaces in the U.S. aren't good for anything but grazing animals. There isn't enough water to farm it, and without animals grazing to keep the grass growing, it will turn into a 1930s-style dust bowl. They like to perpetuate the myth that the land can just lay there, if only the animals didn't exist.
The land and vegetation need animals to fertilize and break the top crust, to allow what moisture does fall to go down to the roots of the grass and other plants. If this doesn't happen, the vegetation dies and the land turns to dust, as it did in the 1930s. If domestic animals like cattle and sheep didn't exist, wildlife like deer and elk take over.
Meat is the best source available to the human diet for zinc, iron and Vitamin B complex trace minerals. These come into cattle and sheep from grazing the wide open ranges, and are passed to humans in the meat--as man cannot eat and digest grass, and even if he did, it passes through without leaving off the vitamins and minerals. Animals can harvest the vitamins and minerals, and pass them on to man.
That Parade magazine would just blithely fall for a global warming bugaboo is not unusual--it happens all the time. But someone who will present the facts--that's rare.
Like they say, common sense is really very uncommon.
The article was on how to save money, and recommended one way was to not eat meat. It repeated the outright lie that livestock grazing causes 18% of the greenhouse gasses that allegedly poison earth's atmosphere. Vegetarians and animal rights activists love this dubious statistic, because it makes their case for them.
The fact is that a good share of the wide open spaces in the U.S. aren't good for anything but grazing animals. There isn't enough water to farm it, and without animals grazing to keep the grass growing, it will turn into a 1930s-style dust bowl. They like to perpetuate the myth that the land can just lay there, if only the animals didn't exist.
The land and vegetation need animals to fertilize and break the top crust, to allow what moisture does fall to go down to the roots of the grass and other plants. If this doesn't happen, the vegetation dies and the land turns to dust, as it did in the 1930s. If domestic animals like cattle and sheep didn't exist, wildlife like deer and elk take over.
Meat is the best source available to the human diet for zinc, iron and Vitamin B complex trace minerals. These come into cattle and sheep from grazing the wide open ranges, and are passed to humans in the meat--as man cannot eat and digest grass, and even if he did, it passes through without leaving off the vitamins and minerals. Animals can harvest the vitamins and minerals, and pass them on to man.
That Parade magazine would just blithely fall for a global warming bugaboo is not unusual--it happens all the time. But someone who will present the facts--that's rare.
Like they say, common sense is really very uncommon.
Saturday, July 19, 2008
Solons create multi-agency confusion
As each Congressman with any seniority at all likes to protect his little sinecure, such as a subcommittee chairmanship, Congress and the government are massively duplicative and inefficient. There are literally thousands of examples that could be cited, but one in particular has reared its ugly head in recent days.
Both the U.S. Department of Agriculture (USDA), and the Food and Drug Administration (FDA), inspect and govern food regulation. It is a crazy quilt, patchwork mess of who does what, on what food. It is such a byzantine, arcane mass of departments, agencies, rules and informal traditions, that no one knows everything. The latest time it has become readily apparent is in the E. Coli sickness outbreak that first was thought to be caused by tomatoes, now by jalapeno peppers, but no proof of anything.
This incompetent state of confusion comes about because you have Congressmen and Senators who want to protect their own power fiefdoms and refuse to bring legislative or regulatory sense to the process. You have two liberal old hack solons (and there are many others) in Rep. Rosa DeLauro of the great farm state of Connecticut and Rep. Mary Rose Oakar of an urban Ohio District, who have lots of seniority but no knowledge of agriculture--who continually pour sand in the gears.
They are Big Government leftwingers, even by Democrat standards, who want more money, more regulations, and most importantly, their own power bases, protected ahead of actually solving any problems. The bureaucrats at FDA and USDA, who must answer to these people, mainly want to cover their own hides and protect their jobs, obfuscate and crawl behind the Civil Service regulations that give them lifetime tenure.
Meanwhile, foods like tomatoes and peppers are slandered and drug through the mud, by nameless, faceless papershufflers, while their overseers in Congress fight for position and influence. Producers lose money with false accusations, while the cause of the sickness goes unfound and unlamented.
If this is hard to read and decypher, its because the whole "system" in food regulation is. And nobody's doing anything about it.
Both the U.S. Department of Agriculture (USDA), and the Food and Drug Administration (FDA), inspect and govern food regulation. It is a crazy quilt, patchwork mess of who does what, on what food. It is such a byzantine, arcane mass of departments, agencies, rules and informal traditions, that no one knows everything. The latest time it has become readily apparent is in the E. Coli sickness outbreak that first was thought to be caused by tomatoes, now by jalapeno peppers, but no proof of anything.
This incompetent state of confusion comes about because you have Congressmen and Senators who want to protect their own power fiefdoms and refuse to bring legislative or regulatory sense to the process. You have two liberal old hack solons (and there are many others) in Rep. Rosa DeLauro of the great farm state of Connecticut and Rep. Mary Rose Oakar of an urban Ohio District, who have lots of seniority but no knowledge of agriculture--who continually pour sand in the gears.
They are Big Government leftwingers, even by Democrat standards, who want more money, more regulations, and most importantly, their own power bases, protected ahead of actually solving any problems. The bureaucrats at FDA and USDA, who must answer to these people, mainly want to cover their own hides and protect their jobs, obfuscate and crawl behind the Civil Service regulations that give them lifetime tenure.
Meanwhile, foods like tomatoes and peppers are slandered and drug through the mud, by nameless, faceless papershufflers, while their overseers in Congress fight for position and influence. Producers lose money with false accusations, while the cause of the sickness goes unfound and unlamented.
If this is hard to read and decypher, its because the whole "system" in food regulation is. And nobody's doing anything about it.
Friday, July 18, 2008
Mistaken USDA estimates do matter
The U.S. Department of Agriculture (USDA) likes to maintain the fiction that its crop size estimates are just a wonderful public service, and do not affect the market.
Nothing could be farther from the truth.
The futures traders at the Chicago Board of Trade and Chicago Mercantile Exchange glom on to each estimate like it was the holy grail, and drive the market up and down like a yo-yo, in order to generate trading commissions. As this blog has stated many times, traders don't care whether the market goes up or down, or what effect it has on the cash price of the actual commodity underlying the futures contracts--they just need to generate commissions.
The more volatile the market, the greater the commissions. And there's little better than a good USDA crop size estimate to create volatility.
The latest example has been USDA's corn crop estimates, which have been revised downward now twice. It's driven CBOT corn futures and CME cattle futures into a tizzy with each recasting. It severely damages the actual farmer or rancher who actually owns real, existing corn or cattle, as opposed to only a futures contract.
But there's never an apology from USDA for their wild guesses, which more often than not are off. Because, of course, they will only admit they are doing a public service by estimating the crop or livestock numbers, never affecting the market.
Right. That white lie and $2 will get you a cup of McDonald's (not Starbuck's) coffee. Oh, and by the way--the coffee crop in Central America looks pretty healthy this year.
Nothing could be farther from the truth.
The futures traders at the Chicago Board of Trade and Chicago Mercantile Exchange glom on to each estimate like it was the holy grail, and drive the market up and down like a yo-yo, in order to generate trading commissions. As this blog has stated many times, traders don't care whether the market goes up or down, or what effect it has on the cash price of the actual commodity underlying the futures contracts--they just need to generate commissions.
The more volatile the market, the greater the commissions. And there's little better than a good USDA crop size estimate to create volatility.
The latest example has been USDA's corn crop estimates, which have been revised downward now twice. It's driven CBOT corn futures and CME cattle futures into a tizzy with each recasting. It severely damages the actual farmer or rancher who actually owns real, existing corn or cattle, as opposed to only a futures contract.
But there's never an apology from USDA for their wild guesses, which more often than not are off. Because, of course, they will only admit they are doing a public service by estimating the crop or livestock numbers, never affecting the market.
Right. That white lie and $2 will get you a cup of McDonald's (not Starbuck's) coffee. Oh, and by the way--the coffee crop in Central America looks pretty healthy this year.
Thursday, July 17, 2008
FDA exonerates tomatoes, make no one whole
The Food and Drug Administration has now exonerated tomatoes in the recent E. Coli outbreaks, without even saying "sorry" to the hundreds of aggrieved farmers, processors, shippers and retailers who have lost hundreds of millions of dollars in the phony scare.
No reparations are available, no ability to sue the federal government for besmirching their name and product, not even an apology or even an "oops, we screwed up." It shows the crushing power of Big Government when it runs amuck and goes after innocent products and producers.
Cattlemen and beef processors know all too well about the sloppy way the feds point the finger, driving people out of business willy nilly, according to the hunches and whims of its "civil servants."
I always order sliced tomatoes in place of potatoes at breakfast, and when the waitress who knows me asked if I still wanted tomatoes, I said "Yes, I'll stare death right in the face."
Unfortunately, a large slice of the public doesn't react this way, and a huge economic dislocation results. Apple growers never have fully recovered from the testimony in Congress a few years ago from that distinguished scientist and botanist Meryl Streep about alar in apples. Alar was exonerated, Street was shown to be a naive fool, but its still the apple growers, who have trouble to this day selling their product.
Agriculture is a victim, and deserves compensation. Fat chance.
No reparations are available, no ability to sue the federal government for besmirching their name and product, not even an apology or even an "oops, we screwed up." It shows the crushing power of Big Government when it runs amuck and goes after innocent products and producers.
Cattlemen and beef processors know all too well about the sloppy way the feds point the finger, driving people out of business willy nilly, according to the hunches and whims of its "civil servants."
I always order sliced tomatoes in place of potatoes at breakfast, and when the waitress who knows me asked if I still wanted tomatoes, I said "Yes, I'll stare death right in the face."
Unfortunately, a large slice of the public doesn't react this way, and a huge economic dislocation results. Apple growers never have fully recovered from the testimony in Congress a few years ago from that distinguished scientist and botanist Meryl Streep about alar in apples. Alar was exonerated, Street was shown to be a naive fool, but its still the apple growers, who have trouble to this day selling their product.
Agriculture is a victim, and deserves compensation. Fat chance.
Wednesday, July 16, 2008
Naive food writer misses the story
A city-girl Denver Post writer wanted to do a food section story on lamb. A perfectly legitimate thing to do, for an excellent meat that has priced itself out of the average family's food budget and largely become a specialty meat for the wealthy, ethnic or an occasional splurge meal out.
The thought process and idea were good, but the execution was what you'd expect from someone who knew nothing about the subject, besides liking lamb chops, and quickly got in over her head. As one of my favorite pundits has said of much political commentary "it had the depth of a saucer."
What the story only hinted at, or left out altogether, was much more important than the cutesy-pie drivel that was left in. The reporter attended the weekly sheep auction at the livestock market in Fort Collins, CO. A perfectly good auction, which would be out of business except for everything else it sells at other times of the week besides sheep. On a good week Fort Collins might sell 500 head of sheep, while the main market maker at San Angelo, Texas regularly sells over 8,000 head a week and frequently hits 12-15,000 head a week.
Even this impressive total is only a fraction of the sheep slaughtered and eaten each week, as most sheep never see the inside of an auction barn, selling directly on a very thin market to the packing plant in Greeley or the one in San Angelo. The market for sheep is not made in Fort Collins, believe me.
The writer interviews the owner of an ethnic restaurant in Fort Collins who bought one head for that week's menus. That's the problem with the lamb business: it's become a rare specialty meat. They slaughter over 100 times more cattle or pigs or chickens each week in the U.S. than they do lambs.
It's reflected in the supermarket meat case and on restaurant menus. If lamb is there at all, it's off in a small corner and very expensive. This is a shame, but what the environmentalists and animal rights activists have done in not allowing sheep to be protected from predators like coyotes, and western ranges protected for meat animal grazing.
You understand, you'd have read none of these facts in the Denver Post article. But boy, those baby lambs sure are cute . . .
The thought process and idea were good, but the execution was what you'd expect from someone who knew nothing about the subject, besides liking lamb chops, and quickly got in over her head. As one of my favorite pundits has said of much political commentary "it had the depth of a saucer."
What the story only hinted at, or left out altogether, was much more important than the cutesy-pie drivel that was left in. The reporter attended the weekly sheep auction at the livestock market in Fort Collins, CO. A perfectly good auction, which would be out of business except for everything else it sells at other times of the week besides sheep. On a good week Fort Collins might sell 500 head of sheep, while the main market maker at San Angelo, Texas regularly sells over 8,000 head a week and frequently hits 12-15,000 head a week.
Even this impressive total is only a fraction of the sheep slaughtered and eaten each week, as most sheep never see the inside of an auction barn, selling directly on a very thin market to the packing plant in Greeley or the one in San Angelo. The market for sheep is not made in Fort Collins, believe me.
The writer interviews the owner of an ethnic restaurant in Fort Collins who bought one head for that week's menus. That's the problem with the lamb business: it's become a rare specialty meat. They slaughter over 100 times more cattle or pigs or chickens each week in the U.S. than they do lambs.
It's reflected in the supermarket meat case and on restaurant menus. If lamb is there at all, it's off in a small corner and very expensive. This is a shame, but what the environmentalists and animal rights activists have done in not allowing sheep to be protected from predators like coyotes, and western ranges protected for meat animal grazing.
You understand, you'd have read none of these facts in the Denver Post article. But boy, those baby lambs sure are cute . . .
Tuesday, July 15, 2008
Futures traders screw $3 out of feeders
The Big Boys at the Chicago Mercantile Exchange, representing the Big 3 meat packers and very biggest traders of cattle futures contracts by the largest feedlot owners, can pretty well corner the market and call the tune on futures pricing--and therefore, cash fed cattle prices, whenever they choose too.
Cattle supplies are very tight right now, due to a big cut in brood cow numbers from drought and high corn prices, and therefore, a smaller calf crop this year than expected. Herd expansion has stalled before the expected peak, and numbers are, in fact, falling. Cattle owners have an advantage, since retail beef demand has stayed high.
When things look to be getting a little too much leverage in the hands of cattle owners, the Big Boys put the hammer down. They did it early this week, trashing live cattle futures Monday, and leading to Nebraska cattle feeders taking a $3 hit in selling cash cattle to the Big 3 packers at $155 instead of last week's $158 or the previous week's $160.
Late today, after the Big Boys at the Merc successfully caused live cattle futures to only tread water at yesterday's greatly shrunken prices, instead of rallying today as they should have--Texas and Kansas feeders took a $2 whack and sold fed cattle at $98, below last week's $101-$102 pricing.
Futures traders only care about generating trading commissions--their sole source of income. They're always glad to cooperate with the Big 3 packers when they need to show cattle owners a thing or two. Driving futures up and down generates commissions, so volatility is a key factor for futures trader's economic health.
This is not always so healthy for cattle owners, as this week's action shows. It's why the egg industry ended futures trading in eggs a few years ago. Cattle owners don't have the clout to end futures trading in cattle, although many would like to do so.
A week like this one gives them ammunition.
Cattle supplies are very tight right now, due to a big cut in brood cow numbers from drought and high corn prices, and therefore, a smaller calf crop this year than expected. Herd expansion has stalled before the expected peak, and numbers are, in fact, falling. Cattle owners have an advantage, since retail beef demand has stayed high.
When things look to be getting a little too much leverage in the hands of cattle owners, the Big Boys put the hammer down. They did it early this week, trashing live cattle futures Monday, and leading to Nebraska cattle feeders taking a $3 hit in selling cash cattle to the Big 3 packers at $155 instead of last week's $158 or the previous week's $160.
Late today, after the Big Boys at the Merc successfully caused live cattle futures to only tread water at yesterday's greatly shrunken prices, instead of rallying today as they should have--Texas and Kansas feeders took a $2 whack and sold fed cattle at $98, below last week's $101-$102 pricing.
Futures traders only care about generating trading commissions--their sole source of income. They're always glad to cooperate with the Big 3 packers when they need to show cattle owners a thing or two. Driving futures up and down generates commissions, so volatility is a key factor for futures trader's economic health.
This is not always so healthy for cattle owners, as this week's action shows. It's why the egg industry ended futures trading in eggs a few years ago. Cattle owners don't have the clout to end futures trading in cattle, although many would like to do so.
A week like this one gives them ammunition.
Monday, July 14, 2008
You read it here first!
All you rich farmers out there, stacking up the big bucks in droves--watch out, they're wise to you.
Yes, that's right. The same liberals who are calling for windfall profits taxes on oil comapnies are now calling for windfall profit taxes on farmers. With oil companies reporting record profits off of $145 a barrel oil, surely farmers, with $12 a bushel wheat and $6.50 a bushel corn--they must be hauling it in too, right?
Wrong. There's plenty wrong with this call, not the least of which is that the windfall profits tax during the Carter Administration, in the last major oil crisis, dried up supplies and led to long lines at the gas pumps. Don't think for a moment that it wouldn't happen again.
The real problem at the bottom of high commodity prices, be it oil, corn or wheat, etc.--is the weak U.S. dollar on global markets. The price of imported oil is much higher just because it takes more dollars to buy it with the weaker dollar. Similarly, foreign countries, with their currency suddenly strong against the dollar, find it quite profitable to swoop in and buy U.S. commodities like corn and wheat at the current inflated prices--with the practical effect of keeping the price up and taking it even higher.
As for as farmers stacking up major dollars that are worthy of a windfall profits tax, forget it. High oil prices means high tractor fuel, high transportation costs to get the crop to market, high fertilizer costs as its made from petroleum.
Those wise heads in Washington that are always on the lookout for more tax revenue--you won't find in farm country, any more than it'll last very long if you tax it, in the oil business.
Yes, that's right. The same liberals who are calling for windfall profits taxes on oil comapnies are now calling for windfall profit taxes on farmers. With oil companies reporting record profits off of $145 a barrel oil, surely farmers, with $12 a bushel wheat and $6.50 a bushel corn--they must be hauling it in too, right?
Wrong. There's plenty wrong with this call, not the least of which is that the windfall profits tax during the Carter Administration, in the last major oil crisis, dried up supplies and led to long lines at the gas pumps. Don't think for a moment that it wouldn't happen again.
The real problem at the bottom of high commodity prices, be it oil, corn or wheat, etc.--is the weak U.S. dollar on global markets. The price of imported oil is much higher just because it takes more dollars to buy it with the weaker dollar. Similarly, foreign countries, with their currency suddenly strong against the dollar, find it quite profitable to swoop in and buy U.S. commodities like corn and wheat at the current inflated prices--with the practical effect of keeping the price up and taking it even higher.
As for as farmers stacking up major dollars that are worthy of a windfall profits tax, forget it. High oil prices means high tractor fuel, high transportation costs to get the crop to market, high fertilizer costs as its made from petroleum.
Those wise heads in Washington that are always on the lookout for more tax revenue--you won't find in farm country, any more than it'll last very long if you tax it, in the oil business.
Sunday, July 13, 2008
Leasors take ag to the cleaners
It's hard to make a living as a farmer and rancher. Any supplemental income you can get, with very few chances in isolated rural areas, you take.
The sharpies from the big city frequently take advantage of trusting rural folks, who are used to operating on a handshake and goodwill. The most common arrangements are with oil and gas companies, who seek leases to explore your land, or if you're up against a major highway or intersection, to take a corner of your place for a retail outlet.
Such is the plight of a farmer named Coyle, east of Denver near Strasburg, Colorado, who many years ago signed a lease with Valero Petroleum and its predecessors, for a gas station on the corner of his property, adjoining an intersection of I-70. It operated for many years, and then a fire closed it down. Coyle had soil tests run, as it was hard to grow crops on his land abutting the gas station, and sure enough underground tank leaks and lubricant spills on the ground had polluted the soil and groundwater.
He has been in court now for 8 years, with no end in sight, to try and force them to clean up the land and vacate the lease, which now pays him the princely sum of $100 per month. He is about down to his last dime, paying lawyers and expert witnesses to keep his case alive. The oil company, of course, has a substantial legal team on staff, so it costs them very little to brush off this nuisance.
It appears the oil company has the upper hand. Coyle not only has a pile of money invested, but due to the pollution, has trouble farming the rest of his land. The oil company has counter-sued, and could get his farm to compensate them for damages they claim to have suffered. Hindsight is 20-20, as they say, but in the quest for more income, signing up that long term oil company lease probably wasn't such a good idea.
Farmers and ranchers frequently report similar troubles with oil and gas exploration leases on their land. The company tears up the land, doesn't restore it adequately, leaves old equipment behind, and if oil or gas is discovered, pays a pittance in royalties, or even worse, caps the well and doesn't pump it.
If you enjoy the rural lifestyle, great caution is urged in signing up leases. They can come back to bite you.
The sharpies from the big city frequently take advantage of trusting rural folks, who are used to operating on a handshake and goodwill. The most common arrangements are with oil and gas companies, who seek leases to explore your land, or if you're up against a major highway or intersection, to take a corner of your place for a retail outlet.
Such is the plight of a farmer named Coyle, east of Denver near Strasburg, Colorado, who many years ago signed a lease with Valero Petroleum and its predecessors, for a gas station on the corner of his property, adjoining an intersection of I-70. It operated for many years, and then a fire closed it down. Coyle had soil tests run, as it was hard to grow crops on his land abutting the gas station, and sure enough underground tank leaks and lubricant spills on the ground had polluted the soil and groundwater.
He has been in court now for 8 years, with no end in sight, to try and force them to clean up the land and vacate the lease, which now pays him the princely sum of $100 per month. He is about down to his last dime, paying lawyers and expert witnesses to keep his case alive. The oil company, of course, has a substantial legal team on staff, so it costs them very little to brush off this nuisance.
It appears the oil company has the upper hand. Coyle not only has a pile of money invested, but due to the pollution, has trouble farming the rest of his land. The oil company has counter-sued, and could get his farm to compensate them for damages they claim to have suffered. Hindsight is 20-20, as they say, but in the quest for more income, signing up that long term oil company lease probably wasn't such a good idea.
Farmers and ranchers frequently report similar troubles with oil and gas exploration leases on their land. The company tears up the land, doesn't restore it adequately, leaves old equipment behind, and if oil or gas is discovered, pays a pittance in royalties, or even worse, caps the well and doesn't pump it.
If you enjoy the rural lifestyle, great caution is urged in signing up leases. They can come back to bite you.
Saturday, July 12, 2008
Enjoy eating? Take a farmer to lunch
Americans have gotton farther and farther removed from the reality of where food comes from. The number one response of elementary school children, when asked where their food comes from, is "the grocery store." Tragically, adults aren't much better.
As we eat less and less fresh, raw food, the problem gets worse. More and more, restaurant meals out, or brought home for dinner, or buying pre-cooked meals at the grocery store, or making dinner from a box by adding water or popping a pouch in the microwave--takes the place of dealing with actual food in its basic state.
The reality is that fewer and fewer farmers and ranchers produce more and more food every year. As American agriculture has gotton increasingly efficient and productive, less acreage and fewer people are needed to produce a food bounty so great that the U.S. is also the number one exporter of foodstuffs around the world.
A few years ago, I took some freshly arrived Soviet immigrants to the U.S. to a supermarket to get their first groceries. It was a religious experience for them. They were used to a meat ration of two chicken wings a month, to make soup out of. They had a severely limited ration of potatoes, carrots, beans and rice. When they went to the grocery store, the shelves were empty.
They were overwhelmed at seeing an American supermarket for the first time, with dozens of choices of everything, the shelves full and groaning under the weight of massive supplies. They were unconcerned about the price--where they came from, they couldn't buy such quantity and variety at any price,
Americans don't realize or appreciate what they have. As urbanization takes more and more productive farm land out of agriculture, as more and more water is diverted from agriculture to homes and lawns--we could become like the rest of the world.
It behooves you to take a farmer out to lunch, and say thanks.
As we eat less and less fresh, raw food, the problem gets worse. More and more, restaurant meals out, or brought home for dinner, or buying pre-cooked meals at the grocery store, or making dinner from a box by adding water or popping a pouch in the microwave--takes the place of dealing with actual food in its basic state.
The reality is that fewer and fewer farmers and ranchers produce more and more food every year. As American agriculture has gotton increasingly efficient and productive, less acreage and fewer people are needed to produce a food bounty so great that the U.S. is also the number one exporter of foodstuffs around the world.
A few years ago, I took some freshly arrived Soviet immigrants to the U.S. to a supermarket to get their first groceries. It was a religious experience for them. They were used to a meat ration of two chicken wings a month, to make soup out of. They had a severely limited ration of potatoes, carrots, beans and rice. When they went to the grocery store, the shelves were empty.
They were overwhelmed at seeing an American supermarket for the first time, with dozens of choices of everything, the shelves full and groaning under the weight of massive supplies. They were unconcerned about the price--where they came from, they couldn't buy such quantity and variety at any price,
Americans don't realize or appreciate what they have. As urbanization takes more and more productive farm land out of agriculture, as more and more water is diverted from agriculture to homes and lawns--we could become like the rest of the world.
It behooves you to take a farmer out to lunch, and say thanks.
Friday, July 11, 2008
USDA: After the cow's out, close the barn door
Today U.S. Department of Agriculture (USDA) Secretary Ed Schaffer announced a new policy for naming names on recalls of meat due to unsanitary packing plant conditions, or other suspected disease infestations.
Now that USDA has driven at least three packing plants out of business this year alone, bankrupt and hundreds of jobs lost, an actual policy is being announced. Think it's a little too late?
Actually, its too little, too late. When there's a recall, its only a sign that USDA inspectors fell down on the job, and rather than get a problem solved when it was minor and manageable, they let it fester and become a fullblown crisis. Inspectors need to watch closely, and change habits as they go along, rather than wink and grin, letting the packers think they can get away with something.
The public health and safety is already endangered--potential sickness unleashed, if you will--by the time a recall occurs. USDA is really only doing its job effectively when they act far before its gets to that point.
USDA's new policy amounts to closing the barn door after the cow's out.
Now that USDA has driven at least three packing plants out of business this year alone, bankrupt and hundreds of jobs lost, an actual policy is being announced. Think it's a little too late?
Actually, its too little, too late. When there's a recall, its only a sign that USDA inspectors fell down on the job, and rather than get a problem solved when it was minor and manageable, they let it fester and become a fullblown crisis. Inspectors need to watch closely, and change habits as they go along, rather than wink and grin, letting the packers think they can get away with something.
The public health and safety is already endangered--potential sickness unleashed, if you will--by the time a recall occurs. USDA is really only doing its job effectively when they act far before its gets to that point.
USDA's new policy amounts to closing the barn door after the cow's out.
Thursday, July 10, 2008
Enviros cherry pick judges, shut down CRP
Wild-eyed environmentalists in the state of Washington got a liberal judge appointed by President Jimmy Carter to issue a temporary restraining order to prevent emergency grazing of Conservation Reserve Program (CRP) lands without an environmental impact statement.
CRP lands are under the purview of the U.S. Department of Agriculture, not the Environmental Protection Agency, and the judge's ruling is probably null and void on that issue alone. But the enviros filing the suit don't care, as the whole matter will be irrelevent in 60 days anyway, when the grazing season is over.
They will have won, and cattlemen will have sold off cattle prematurely because they have no grazing to hang on to them with. The rule of law is secondary to locking up and obstructing access to the land--and just stalling it off has the same practical effect as winning the lawsuit.
The real question is that we're talking about private land, usually owned by the same man getting temporary grazing rights to it. CRP land is not government land, trust land or public land in any way. The landowner, of his own free will, has placed the land with the CRP and received payments for not using it. If the USDA allows temporary, emergency grazing on the land, a right granted to them in the law, the landowner foregoes receiving CRP payments.
This case is the ultimate in judge shopping in filing a suit. Most judges would see that they had no jurisdiction, and would refuse to issue a temporary restraining order. You have to shop carefully to find an environmentalist judge who is more interested in the outcome than what the law says, and they did that.
CRP lands are under the purview of the U.S. Department of Agriculture, not the Environmental Protection Agency, and the judge's ruling is probably null and void on that issue alone. But the enviros filing the suit don't care, as the whole matter will be irrelevent in 60 days anyway, when the grazing season is over.
They will have won, and cattlemen will have sold off cattle prematurely because they have no grazing to hang on to them with. The rule of law is secondary to locking up and obstructing access to the land--and just stalling it off has the same practical effect as winning the lawsuit.
The real question is that we're talking about private land, usually owned by the same man getting temporary grazing rights to it. CRP land is not government land, trust land or public land in any way. The landowner, of his own free will, has placed the land with the CRP and received payments for not using it. If the USDA allows temporary, emergency grazing on the land, a right granted to them in the law, the landowner foregoes receiving CRP payments.
This case is the ultimate in judge shopping in filing a suit. Most judges would see that they had no jurisdiction, and would refuse to issue a temporary restraining order. You have to shop carefully to find an environmentalist judge who is more interested in the outcome than what the law says, and they did that.
Wednesday, July 9, 2008
Tight loan funding squeezes agriculture
The credit crisis spawned by the sub-prime residential loan foreclosure debacle, is hitting all businesses, but none more than agriculture.
Agriculture is a credit-based business. You take out a loan to get the funds to support your family, plant a crop and maintain your livestock and equipment, and hope that after the harvest, there's enough finds to pay off the loan and have a few bucks left over.
When they're scared, as they are in the present mess, lenders cut back loan-to-value ratios, demand more strict appraisals of real estate, crops and livestock so that they show less value--which when combined with a lower loan-to-value ratio, puts a real squeeze on farmers and ranchers.
Crop and livestock prices are good right now, but costs are high and rising--led by fuel and oil-based products like fertilizer and corn. When skittish lenders cut back on loans, the crunch it creates is real. Mama is probably already working in town, and chances are Dad does at least a little something to generate cash, besides farm or ranch. Now with inadequate operating funds, they're staring down the barrel of a shotgun.
The credit squeeze has especially hit agricultural real estate hard. It's always hard to find money to buy or sell a farm or ranch. Now its almost impossible. For a farmer or rancher in trouble, the prospects of selling out to raise enough money to buy your way out and live to fight another day are dim. Ranch real estate brokers say times are real tough in their business.
It's probably a temporary condition, and most farmers and ranchers will live to find a way to muddle through. But it's nerve wracking while you're going through it.
Agriculture is a credit-based business. You take out a loan to get the funds to support your family, plant a crop and maintain your livestock and equipment, and hope that after the harvest, there's enough finds to pay off the loan and have a few bucks left over.
When they're scared, as they are in the present mess, lenders cut back loan-to-value ratios, demand more strict appraisals of real estate, crops and livestock so that they show less value--which when combined with a lower loan-to-value ratio, puts a real squeeze on farmers and ranchers.
Crop and livestock prices are good right now, but costs are high and rising--led by fuel and oil-based products like fertilizer and corn. When skittish lenders cut back on loans, the crunch it creates is real. Mama is probably already working in town, and chances are Dad does at least a little something to generate cash, besides farm or ranch. Now with inadequate operating funds, they're staring down the barrel of a shotgun.
The credit squeeze has especially hit agricultural real estate hard. It's always hard to find money to buy or sell a farm or ranch. Now its almost impossible. For a farmer or rancher in trouble, the prospects of selling out to raise enough money to buy your way out and live to fight another day are dim. Ranch real estate brokers say times are real tough in their business.
It's probably a temporary condition, and most farmers and ranchers will live to find a way to muddle through. But it's nerve wracking while you're going through it.
Tuesday, July 8, 2008
Beef only a pawn in Korea civil war
To read the liberal media, who fawn over vegetarian and animal rights activists like they were martyrs, you'd swear the whole populace of South Korea had taken on their cause, as they demonstrate in the streets against U.S. beef.
The demonstrators claim U.S. beef carries a danger of BSE (Mad Cow Disease). There is much more BSE in South Korea's own domestic cattle herd than has ever been found in the U.S. The truth is, they need more U.S. beef available to consumers to counteract the dangers of South Korea's own beef.
Those arguments aside, beef is a sideshow in the current street demonstrations. South Korea has a new, narrowly elected government of just a few months. It is still feeling its way along, and frankly, lacks the deft political touch to cement its hold on power.
The street demonstrators care very little, and may not even know, what the issue is. They are just opposed to the new government and want to bring it down. If U.S. beef is the convenient whipping boy to get this job done, so be it.
That's why much of the U.S. press coverage is such a farce. The press has fallen for the line that the demonstrations are about U.S. beef--and by extension--we in the U.S. must also be in grave danger, eating U.S. beef. To anyone who truly understands what is really going on in South Korea, they just laugh at how badly out of touch the U.S. press is.
Most of the rest of the world understands the South Korean situation, and consumers in Japan, Hong Kong, Taiwan and other Asian countries buy U.S. beef with none of the public outcry. We just need to wink at South Korea's inept government, and understand that we are just convenient pawns in their sideshow.
As the saying goes "and this too shall pass."
The demonstrators claim U.S. beef carries a danger of BSE (Mad Cow Disease). There is much more BSE in South Korea's own domestic cattle herd than has ever been found in the U.S. The truth is, they need more U.S. beef available to consumers to counteract the dangers of South Korea's own beef.
Those arguments aside, beef is a sideshow in the current street demonstrations. South Korea has a new, narrowly elected government of just a few months. It is still feeling its way along, and frankly, lacks the deft political touch to cement its hold on power.
The street demonstrators care very little, and may not even know, what the issue is. They are just opposed to the new government and want to bring it down. If U.S. beef is the convenient whipping boy to get this job done, so be it.
That's why much of the U.S. press coverage is such a farce. The press has fallen for the line that the demonstrations are about U.S. beef--and by extension--we in the U.S. must also be in grave danger, eating U.S. beef. To anyone who truly understands what is really going on in South Korea, they just laugh at how badly out of touch the U.S. press is.
Most of the rest of the world understands the South Korean situation, and consumers in Japan, Hong Kong, Taiwan and other Asian countries buy U.S. beef with none of the public outcry. We just need to wink at South Korea's inept government, and understand that we are just convenient pawns in their sideshow.
As the saying goes "and this too shall pass."
Monday, July 7, 2008
Cattle marketing delayed by July 4 holiday
Early indications are that beef clearance at the retail level, and cattle prices, have held up through the July 4 Independence Day holiday.
Feeder cattle were steady to strong today at the bellweather Oklahoma City livestock auction, on 4,800 head--about half of normal. Boxed beef and cattle futures were essentially steady today, the other key parts of the cattle price equation.
Many local auctions weren't held at all last week, and the ones that were had greatly reduced volume, as buyers and sellers alike played hookie for the long holiday weekend. For that reason, you'll be able to tell a lot more about the cattle market in a week than you can today.
Traditionally, beef goes into a summer slump after July 4, as cooks decide not to heat up the kitchen with oven roasts and meat loaf, until the weather cools off in the fall. Cattle numbers are down in the sale barns until fall, as the great numbers of cattle are out on summer grazing. No major drought appears to be on the horizon to bring them in early.
The other factor, just now seriously coming into play, is that cattle numbers are greatly diminished, due both to recent death loss in snowstorms in some areas, and drought culls in others. The calf crop was smaller, and that will be reflected in fall cattle marketing. Less supply, which is expected to be met by steady demand, will keep prices up.
That's a thumbnail sketch of the summer, 2008 cattle market.
Feeder cattle were steady to strong today at the bellweather Oklahoma City livestock auction, on 4,800 head--about half of normal. Boxed beef and cattle futures were essentially steady today, the other key parts of the cattle price equation.
Many local auctions weren't held at all last week, and the ones that were had greatly reduced volume, as buyers and sellers alike played hookie for the long holiday weekend. For that reason, you'll be able to tell a lot more about the cattle market in a week than you can today.
Traditionally, beef goes into a summer slump after July 4, as cooks decide not to heat up the kitchen with oven roasts and meat loaf, until the weather cools off in the fall. Cattle numbers are down in the sale barns until fall, as the great numbers of cattle are out on summer grazing. No major drought appears to be on the horizon to bring them in early.
The other factor, just now seriously coming into play, is that cattle numbers are greatly diminished, due both to recent death loss in snowstorms in some areas, and drought culls in others. The calf crop was smaller, and that will be reflected in fall cattle marketing. Less supply, which is expected to be met by steady demand, will keep prices up.
That's a thumbnail sketch of the summer, 2008 cattle market.
Sunday, July 6, 2008
Commodity prices, not weather, affecting markets so far
The livestock markets, including cattle, hogs and poultry, are affected more so far this growing season by high grain prices, particularly corn, than drought, floods or pestilence.
USDA revised its corn acreage report to show much less loss than expected from the Mississippi River flooding, levelling out grain prices, but certainly not bringing them down. Corn prices are much more a function of the dual demand from ethanol and livestock consumption, than the weather.
The primary effect on livestock is that numbers are being cut. Cattle, hog and poultry numbers are down already, and will come down further, because grain is too pricey to profitably feed to livestock. This will, in turn, put less meat on the retail market and it will be more expensive in the supermarket. This effect is already reflected to some extent in food prices, but it will get more pronounced through the rest of this year and early next year, analysts say.
With this election over in the fall, and more scientific consensus that ethanol from corn is not an efficient way to produce gasoline, there will be a shakeout in the ethanol business, and Congress might even drop subsidies, and tariffs on foreign ethanol. This will lessen the competition for corn, as ethanol makes no sense without the federal subsidy, and bring corn prices down to where the livestock industry can afford to feed it again.
Everybody has to eat, and high food prices will catch the attention of politicians. One sure way to bring prices down is to get corn prices in line. It not only affects meat, but any product like soft drinks and baked goods, that use corn sweeteners. This reality will sink in quickly, and bring action.
USDA revised its corn acreage report to show much less loss than expected from the Mississippi River flooding, levelling out grain prices, but certainly not bringing them down. Corn prices are much more a function of the dual demand from ethanol and livestock consumption, than the weather.
The primary effect on livestock is that numbers are being cut. Cattle, hog and poultry numbers are down already, and will come down further, because grain is too pricey to profitably feed to livestock. This will, in turn, put less meat on the retail market and it will be more expensive in the supermarket. This effect is already reflected to some extent in food prices, but it will get more pronounced through the rest of this year and early next year, analysts say.
With this election over in the fall, and more scientific consensus that ethanol from corn is not an efficient way to produce gasoline, there will be a shakeout in the ethanol business, and Congress might even drop subsidies, and tariffs on foreign ethanol. This will lessen the competition for corn, as ethanol makes no sense without the federal subsidy, and bring corn prices down to where the livestock industry can afford to feed it again.
Everybody has to eat, and high food prices will catch the attention of politicians. One sure way to bring prices down is to get corn prices in line. It not only affects meat, but any product like soft drinks and baked goods, that use corn sweeteners. This reality will sink in quickly, and bring action.
Saturday, July 5, 2008
USDA: left hand doesn't know what right hand's doing
As the soap opera continues to play out in the big salmonella scare in tomatoes, the U.S. Department of Agriculture (USDA) has suddenly decided it wasn't tomatoes afterall, and is now fingering jalapeno peppers used in salsa, as the culprit.
This is after farmers, wholesalers, grocers, restauranteurs, and ordinary consumers have lost millions on recalled tomatoes and lost sales of all tomatoes. Now it's "oops, we're sorry" and jalapeno pepper farmers, wholesalers, grocers, restauranteurs and ordinary consumers will lose more money and sales, as USDA still doesn't have its act together.
In the first place, neither tomatoes or jalapeno peppers are likely carriers of salmonella. It is a very weak pathogen, and the acid in tomatoes and capucin in peppers would likely kill it.
Even more likely, since USDA says the use of both tomatoes and jalapenos in salsa caused the outbreak, the combination of the two, along with the likely addition of either vinegar or lemon and lime juice that is common in salsa, would certainly kill salmonella.
Scaring the public is a USDA specialty, as beef producers know from the recent E. Coli recalls. Just like the old joke "Where does an elephant sleep? Anywhere he wants to," USDA blunders in unannounced and uninvited. It's CYA time for the professional bureaucrats, just in case something is found, they can say "see, I told you so."
This is a very expensive, dilatory and needless waste of taxpayer's money. USDA needs to keep quiet, unless it has definitive proof. They're already received as the little boy crying wolf.
This is after farmers, wholesalers, grocers, restauranteurs, and ordinary consumers have lost millions on recalled tomatoes and lost sales of all tomatoes. Now it's "oops, we're sorry" and jalapeno pepper farmers, wholesalers, grocers, restauranteurs and ordinary consumers will lose more money and sales, as USDA still doesn't have its act together.
In the first place, neither tomatoes or jalapeno peppers are likely carriers of salmonella. It is a very weak pathogen, and the acid in tomatoes and capucin in peppers would likely kill it.
Even more likely, since USDA says the use of both tomatoes and jalapenos in salsa caused the outbreak, the combination of the two, along with the likely addition of either vinegar or lemon and lime juice that is common in salsa, would certainly kill salmonella.
Scaring the public is a USDA specialty, as beef producers know from the recent E. Coli recalls. Just like the old joke "Where does an elephant sleep? Anywhere he wants to," USDA blunders in unannounced and uninvited. It's CYA time for the professional bureaucrats, just in case something is found, they can say "see, I told you so."
This is a very expensive, dilatory and needless waste of taxpayer's money. USDA needs to keep quiet, unless it has definitive proof. They're already received as the little boy crying wolf.
Friday, July 4, 2008
It oughta be a riot at the Greeley Stampede
One of the great small rodeos in America is the Independence Day Stampede in Greeley, Colorado. It is a big time, outdoor rodeo, accompanied by community festivals, a parade, carnival and big name entertainment.
Tomorrow night, the over-the-hill, has-been rock band Poison, is due to perform. The drummer in the band, Rick Rockett, has suddenly claimed he did not know that the Stampede includes a rodeo, and that he is opposed to rodeo because it is cruel to animals. As part of a band on the downhill side, bucks are triumphing over principle, however, as he will perform anyway.
Rockett is due to attempt to deliver an anti-rodeo screed during the performance, which ought to be a gas in Greeley, Colorado--which could be the red neck capital of the state. We can only hope that he is merely booed off the stage, rather than something even worse happening.
It has gotton so bad since Rockett went off, that the lead singer in the band, Bret Michael, has had to point out that he disagrees vehemently with Rockett and said "we'll make up for it by playing one hell of a concert."
Rodeo, which merely emulates what goes on at farms and ranches everyday, has cowtowed to the animal rights crowd, and drastically changed (some purists say ruined) the treatment of animals. Nonetheless, there are now organized professional protestors who appear at virtually every rodeo to garner their share of press publicity.
They've been at Denver's National Western rodeo the last few years, at Cheyenne Frontier Days, in Houston, Ft. Worth, Calgary or any other rodeo you want to name. That's their right under the First Amendment to the U.S. Constitution that we're celebrating on this July 4 holiday.
Perhaps its time to do as the owner of Denver restaurant J.P. McGill's has done. When confronted by animal rights activists who objected to his lobster tank, where patrons pay $2 to run a mechanical arm and pick out their lobster for dinner out of the tank, he told them where to go. He is not taking out the tank, and says someone needs to take a stand or we'll all get run over.
Here, Here!
Tomorrow night, the over-the-hill, has-been rock band Poison, is due to perform. The drummer in the band, Rick Rockett, has suddenly claimed he did not know that the Stampede includes a rodeo, and that he is opposed to rodeo because it is cruel to animals. As part of a band on the downhill side, bucks are triumphing over principle, however, as he will perform anyway.
Rockett is due to attempt to deliver an anti-rodeo screed during the performance, which ought to be a gas in Greeley, Colorado--which could be the red neck capital of the state. We can only hope that he is merely booed off the stage, rather than something even worse happening.
It has gotton so bad since Rockett went off, that the lead singer in the band, Bret Michael, has had to point out that he disagrees vehemently with Rockett and said "we'll make up for it by playing one hell of a concert."
Rodeo, which merely emulates what goes on at farms and ranches everyday, has cowtowed to the animal rights crowd, and drastically changed (some purists say ruined) the treatment of animals. Nonetheless, there are now organized professional protestors who appear at virtually every rodeo to garner their share of press publicity.
They've been at Denver's National Western rodeo the last few years, at Cheyenne Frontier Days, in Houston, Ft. Worth, Calgary or any other rodeo you want to name. That's their right under the First Amendment to the U.S. Constitution that we're celebrating on this July 4 holiday.
Perhaps its time to do as the owner of Denver restaurant J.P. McGill's has done. When confronted by animal rights activists who objected to his lobster tank, where patrons pay $2 to run a mechanical arm and pick out their lobster for dinner out of the tank, he told them where to go. He is not taking out the tank, and says someone needs to take a stand or we'll all get run over.
Here, Here!
Thursday, July 3, 2008
USDA love driving out packers
As news comes today that the U.S. Deparment of Agriculture (USDA) and Nebraska Beef LLC have widened the ground beef recall from 500,000 pounds (see blog below) to 5.3 million pounds, one can only conclude that USDA relishes driving packers out of business.
This is the third one this year (although no word had been received at press time about the status of Nebraska Beef LLC), the others in California and New York. Think about it--there is little excuse for USDA not to do their inspections and enforcements in such a way that the problem at a meat plant is corrected long before a public recall of 5.3 million pounds is needed.
One can only conclude that USDA is out to get Nebraska Beef, by letting things get that far out of hand. Packers by law must pay cash for the cattle they slaughter on the front end, then pay the employees, utilities, interest cost, etc., and only then have beef to sell, which is shipped and billed out typically on 30-day terms.
A recall means all the money was paid out, with little or no revenue received. When you add the shipping costs of getting the meat back, all the extra accouting and paperwork in proving you got it back, and then destroying the meat, plus pay a hefty fine from USDA--it almost always drives a packer out of business.
If this were a life or death matter for the consumer, (which it isn't, as explained below) that might be justifiable. Short of that, USDA should have found the problems in its inspections, talked to the packer for corrections in private and if a recall was then found to be justified, do it before it got 5.3 million pounds out of control.
This way, it is USDA that is endangering the public health, not the meat packer.
This is the third one this year (although no word had been received at press time about the status of Nebraska Beef LLC), the others in California and New York. Think about it--there is little excuse for USDA not to do their inspections and enforcements in such a way that the problem at a meat plant is corrected long before a public recall of 5.3 million pounds is needed.
One can only conclude that USDA is out to get Nebraska Beef, by letting things get that far out of hand. Packers by law must pay cash for the cattle they slaughter on the front end, then pay the employees, utilities, interest cost, etc., and only then have beef to sell, which is shipped and billed out typically on 30-day terms.
A recall means all the money was paid out, with little or no revenue received. When you add the shipping costs of getting the meat back, all the extra accouting and paperwork in proving you got it back, and then destroying the meat, plus pay a hefty fine from USDA--it almost always drives a packer out of business.
If this were a life or death matter for the consumer, (which it isn't, as explained below) that might be justifiable. Short of that, USDA should have found the problems in its inspections, talked to the packer for corrections in private and if a recall was then found to be justified, do it before it got 5.3 million pounds out of control.
This way, it is USDA that is endangering the public health, not the meat packer.
Wednesday, July 2, 2008
Ho hum--another beef recall
The mass media is all agog yet again, about a recall of 500,000 pounds of ground beef from Kroger stores by USDA and Nebraska Beef Packers Inc. As with most beef recalls for E, Coli, a good share of the suspected beef never reaches consumer hands, and the part that does rarely makes anyone sick, as E. Coli is a very weak pathenogen and is killed by proper cooking.
Steak Tartare, a dish made from raw ground prime beef, is not made out of supermarket hamburger, the kinds that comes in cryogenic tubes like that recalled at Kroger. The point is, most people do not eat hamburger, and particularly low-end factory packaged ground beef, raw. They cook it and don't face any danger.
This isn't the story that comes across in the mass media. They talk of death and destruction, hysteria and pestilence. The truth is considerably short of that.
It is inexcuseable, and completely preventable, that even one possibly tainted tube of ground beef would make its way into a supermarket meat case.
But it's also not a major crisis that it did. Let's have a little sense of perspective here.
Steak Tartare, a dish made from raw ground prime beef, is not made out of supermarket hamburger, the kinds that comes in cryogenic tubes like that recalled at Kroger. The point is, most people do not eat hamburger, and particularly low-end factory packaged ground beef, raw. They cook it and don't face any danger.
This isn't the story that comes across in the mass media. They talk of death and destruction, hysteria and pestilence. The truth is considerably short of that.
It is inexcuseable, and completely preventable, that even one possibly tainted tube of ground beef would make its way into a supermarket meat case.
But it's also not a major crisis that it did. Let's have a little sense of perspective here.
Subscribe to:
Posts (Atom)