The Phipps Grain Bin Rally...  

Oh yeah, I'm officially taking credit for this corn rally. The Argentines arranged their drought just to have one last cheap shot at me.

As I have mentioned before (at least in speeches) I have built two of the world's most expensive free grain bins under the Cargill Grain Bin Program. This year I thought I was home free.  My target price was $6.34 on the first trading close in February. If Mar corn closes below that, my 41,000 bushels no longer have to be delivered.

Once - just one - I thought I was going to win one. (This is third and final year of the contract) If we coulda just stayed below the trigger AND THEN HAD A BIG RALLY, I could have matched a friend of mine whose bin experience was just that: his trigger was a half-cent higher than the close, and he went on to sell the contents for zillions. He mentions it often...

So as we motor to $7 please wave to me in the rearview mirror.

[Just in case you are new or confused, this is all very tongue-in-cheek. I would never have built the bins without the program, they have already paid for themselves, and railing at higher markets because you voluntarily sold earlier is nonsense.]

It just doesn't feel like a win.

If only NASS could issue a report between now and then...

Junkbox, Episode XMEN...  

I hate moving to a new computer, so I was blown away by the "Migration Assistant" on my Apple iMacs. The computer asked me which computer I was moving from when it found my network, told me it would take about 5.5 hours, and started the move.

About 6 hours later, I essentially had two identical computers. The new 27" screen adds mostly width, but is still a welcome addition for worsening eyes. The speed is noticeably zippier, and I've eliminated some annoying freezes.

Best of all, I get to play Santa Claus to one of nieces/nephews/friends and hand off my old Mac.

Some stuff I've found:

• It's a big fracking deal. The magnitude of this energy boom is just sinking in. Especially in ND.
• Uneasy lie the heads that wear the expensive hats
• Where the coal trains will be heading
• Silicon Valley may be choking its own recovery
• Getting workers to rural boom towns. Not easy.
• The man who starved his country

This is the competition...  

In an amazing and slightly horrifying article, the NYT details why the iPhone is made in China. And it's not just low wages - it's simply incredible organization and speed. The most jaw-dropping revelations:

Apple executives say that going overseas, at this point, is their only option. One former executive described how the company relied upon a Chinese factory to revamp iPhone manufacturing just weeks before the device was due on shelves. Apple had redesigned the iPhone’s screen at the last minute, forcing an assembly line overhaul. New screens began arriving at the plant near midnight.

A foreman immediately roused 8,000 workers inside the company’s dormitories, according to the executive. Each employee was given a biscuit and a cup of tea, guided to a workstation and within half an hour started a 12-hour shift fitting glass screens into beveled frames. Within 96 hours, the plant was producing over 10,000 iPhones a day.

“The speed and flexibility is breathtaking,” the executive said. “There’s no American plant that can match that.”

Similar stories could be told about almost any electronics company — and outsourcing has also become common in hundreds of industries, including accounting, legal services, banking, auto manufacturing and pharmaceuticals. 

...

The company disputed some details of the former Apple executive’s account, and wrote that a midnight shift, such as the one described, was impossible “because we have strict regulations regarding the working hours of our employees based on their designated shifts, and every employee has computerized timecards that would bar them from working at any facility at a time outside of their approved shift.” The company said that all shifts began at either 7 a.m. or 7 p.m., and that employees receive at least 12 hours’ notice of any schedule changes.

Foxconn employees, in interviews, have challenged those assertions.

Another critical advantage for Apple was that China provided engineers at a scale the United States could not match. Apple’s executives had estimated that about 8,700 industrial engineers were needed to oversee and guide the 200,000 assembly-line workers eventually involved in manufacturing iPhones. The company’s analysts had forecast it would take as long as nine months to find that many qualified engineers in the United States.

In China, it took 15 days. [More of what should be mandatory reading to understand globalization]

Just like the old basketball saw, "You can't teach height", we still struggle in the US to grasp what millions of motivated low-wage workers can allow in terms of flexibility and market response. As manufacturing increasingly depends on shorter time horizons and being first to market, the ability to move literally hordes of people around to fit the task is a dominating advantage.

But just as we have centers for specific business activities (Silicon Valley, Motor City, Wall Street) it might be that we are moving to global focal points for manufacturing, finance, technology, etc. For us in agriculture we need ot work to make sure we are the leading location for agriculture.

I'm not sure that is our goal right now, and the sacrifices (less subsides for production, more for research, education, for example) needed to make it happen aren't being asked or made.

Update: For a refreshingly upbeat case that clearly articulates the other side of the story for the US, read this gem by Dan Dresner.

Probably not to get...  

US government grants, anyway. If there is a non-scientific reason why the Chinese climatological community is sounding the alarm about global warming, I haven't seen it. The usual accusations applied to our own scientists don't seem to work, however.

Anyway, the latest Chinese assessment of the impact of climate change sounds familiar, if not more urgent.

Both drought and flooding are already major issues in China. The report predicts an increasing concentration of rain during the summer and autumn months, overwhelming rivers in the south; and long dry winters, which will be especially crippling for those living in China’s parched northwestern provinces.
Rising sea levels will also make coastal areas more vulnerable to flooding from typhoons and flood tides, defenses for which are currently “inadequate,” says the report. This is of particular concern, as such coastal areas are home to the major cities and Special Economic Zones at the center of China’s rapid industrialization. Shanghai is expected to see an increase of 10 to 15 centimeters in its coastal waters over the next three decades; it has already risen by 11.5 centimeters in the previous three.
With global warming will come changes to the pattern of the seasons and thus the realignment of China’s agricultural map. A warmer, wetter northeast will sustain more rice and other crops, while the cotton-growing region of Xinjiang in the northwest could suffer a decline in agricultural output. [More]

Another article on this report helpfully mentions a little more detail about ag:

Under one scenario of how global warming will affect water availability, by 2050 eight of mainland China's 31 provinces and provincial-status cities could face severe water shortages -- meaning less than 500 cubic metres per resident -- and another 10 could face less dire chronic shortages.
In low-lying coastal regions, rising seas will press up against big cities and export zones that have stood at the forefront of China's industrialisation.
China's efforts to protect vulnerable coastal areas with embankments are inadequate, says the report, noting their vulnerability to typhoons and flood tides that global warming could intensify.
There are sure to be shifts in Chinese crop patterns as well, says the report. More rice and other crops will probably grow in the northeast, thanks to warmer weather and possibly more rain. In the northwest cotton-growing region of Xinjiang, shrinking water availability could lead to a "marked decline in agricultural crop productivity". [More]

I think the steadily growing body of evidence will slowly (as in decades) overcome ideological opposition to the overwhelming scientific consensus here in the US and as we see  above, around the globe. It will simply never be acknowledged.

That is an OK outcome, IMHO. It matters less, for example whether farmers stop railing against government or scientific leaders than if they install tile, revise planting dates and change maturities, or even crops. They can even claim alternative reasons such as merely cyclical patterns. But I am doubtful this will be the rule for those who succeed us. This is how public opinion changes now. 

It is rebuilt mind by mind.

A reason to visit Germany...  

Way cool.

 


Almost makes me want to go to Hamburg.

Almost.

[via sullivan]

As you can see...  

From the updated speaking schedule at right, I'm on the road for a while. I'll post when I can and when I learn something interesting. 

Speaking of which, what up with the root worm insecticide shortage? Could it be people are doubling down on 17-stacked trait-hybrids or (like us) are planting more "refuge" corn?

As for the reports this week, I'll let time render a verdict.

BTW, Mike Hoffman (the USFR Meteorologist) is beginning to eye the NWS long range forecast of a wet, cold, late spring. Doesn't mean squat now, but I'm not bailing on my sales yet.

Maybe we don't need to raise taxes...  

We could just collect what is owed right now.  Bruce Bartlett has the sad story.

  [Be sure to click and view full size and read the lower right caption]

Clearly, therefore, one solution to the tax gap is to increase reporting and withholding requirements. However, previous efforts by Congress to do so have been met with huge political resistance. People don’t like the intrusion into their privacy — and the diminution of their opportunities for tax evasion — and businesses don’t like the cost or the alienation of their customers.

In 1982, Congress briefly enacted a withholding requirement for interest income and the outcry was so loud that it was repealed almost immediately.

Conservatives tend to talk about noncompliance as if it were solely a function of tax rates. The higher tax rates are, the greater the incentive for tax evasion; lower tax rates and evasion will decline. Thus tax evasion is yet another excuse to cut taxes.

However, as the I.R.S. data show, noncompliance increased between 2001 and 2006, a period in which a substantial number of tax cuts were enacted. The top rate fell to 35 percent from 39.6 percent, the bottom rate fell to 10 percent from 15 percent and the rate on dividends fell to just 15 percent from a top rate of 39.6 percent. If the conservative model is correct, tax compliance should have increased, since the return to evasion fell substantially.

Of course, another factor in tax compliance is enforcement. Someone who thinks the odds of being caught are close to zero is going to be strongly tempted to cheat no matter how low tax rates are.

Unfortunately, Republicans have been treating the I.R.S. like a political punching bag for years, cutting its personnel and restricting its ability to do its job. The number of I.R.S. employees fell to 84,711 in 2010 from 116,673 in 1992 despite an increase in the population of the United States of 53 million over that period.

Federal revenues are at a historically low level and are a key cause of the federal budget deficit. Sooner or later, taxes will have to be increased. It would be better to minimize that increase by ensuring that taxpayers pay what they owe. It’s unfair to honest taxpayers and undermines tax morale when large numbers of people and businesses don’t pay their taxes. [More]

With a smaller workforce, I suspect the IRS will be targeting the richest hunting ground. And that looks like my ground. Could it be that grain 1099's will finally happen?

The fate of the last 1099 change does not make it seem likely.

I had hoped...  

To have grandchildren earlier.  This wasn't the reason, but...

New moms and dads with visions of Ivy League degrees dancing in their heads should be prepared to face a bill of $422,320 in today’s dollars if Junior heads off to one the country’s priciest colleges as a member of the class of 2034.

If college costs keep rising as they have for the last three decades, the inflation-adjusted price of four years of tuition alone will more than double at private colleges and nearly triple at public universities by the time a baby born this year is ready to enroll, an analysis by The Daily shows.

Even after adjusting for inflation, college tuition has increased by an average of 3.5 percent a year at private schools and 4.5 percent a year at public schools, the analysis showed. When room and board are factored in, the total cost of college has gone up by an average of 3.08 percent a year at private schools and 2.96 percent at public schools. [More depressing projections]

I wonder how this would compare to my own education cost and calculated in acres of farmland. If I remember correctly, it was about $6000 total at RHIT (1966-1970).  I think land was selling for about $600, so it cost ten acres to educate me.

Pricing land at $12,000/A, today's 4-year private education cost looks like about $160,000 or 13 acres. 

These are quick and dirty numbers - just thinking out loud.

What Bt boost?...  

Contra conventional wisdom, new hybrids don't seem to be moving the corn trend line.  In fact, there isn't one right now.

This is less unusual than it might seem.

Statistical analysis finds no statistically significant time trend in average U.S. corn yields since 2003. Thus, the increase in consumption of U.S. corn from 10.2 billion bushels to 12.6 billion bushels between the 2003/04 and 2011/12 crop years, has largely been met through an increase in planted acres of 13.3 million (from 78.6 million acres to 91.9 million acres).
It is important to note that it is not uncommon to find no statistically significant trend in U.S. average yield over a 9 year period. Of all 64 9-year periods starting with the 9 years that begin in 1940, less than half had a statistically significant upward trend in corn yields. This may seem surprising since the average annual increase in U.S. average corn yields since 1940 is 2.2% per year. [More]

It is much harder to come up with some sort of composite (rain, heat, delays, etc.) weather graph that shows a trend is weather influence. But my bet it it would not be flat like the above.

There are many of us with a downward 9-year trend since 2003. Those who have had some spectacular crops in the last few years may be misled into thinking the curve always goes up.

At the very least, the assumption of unlimited productivity advances looks a little shaky to me.

I did not know that...  

That famous line from Johnny Carson leapt to mind as I saw this photo showing the shadow of the rings of Saturn. It never dawned on me they would be dense enough to cast shadows. I'm trying to get my head around what it would look like on the surface.

This is a stunning portrait of Saturn taken by the Cassini spacecraft in December. Its beauty and fantastic — in the literal sense of being like a fantasy — cloudscape are so overwhelming you might not even notice the moon Tethys hanging just under the knife-edged rings. To give you an idea of how immense Saturn is, "tiny" Tethys is over a thousand kilometers across. [More]