Don't pay the ransom...

I've been tied up at a meeting in Minneapolis for Cargill this week.  Not literally, of course, but really busy, so no posting.

Yesterday I was sitting with all the most of the marketing brainpower and at the morning break looked at my phone, saw the prices and asked what the heck was up with corn.  I was reassured to not be the only one darn surprised.

These are not going to be dull marketing times ahead, methinks.

Learned some neat stuff - more anon.

Thanks for your patience.

Why not grain?...

If you want to measure the uncertainty and anguish of the consolidation of the beef industry, you don't need to go too much farther than AgWeb.  The current debate over GIPSA enforcement of new meatpacking regs is well-framed in adjacent posts. 

But the real crux of the matter is familiar: who gets to say what agriculture looks like?

What the Dudley Butlers want isn’t going to work.  Consolidation is being driven by factors well beyond their control. You and I may not like it, but it is helping provide consumers with more affordable, higher quality products. We’re not all going to be able to make a living growing cattle in the future, I suppose. But by what reasoning do we suppose we have a right—a RIGHT!—to do so?
This is, when you boil it down, the same debate we’ve been hearing in recent years about big box stores driving the mom and pop locals out of business. I never believed that a local hardware man had a “right” to force me to pay more for his products. I’m not sure why, then I have a “right” to feed cattle when others can obviously do it better and cheaper.
We have a right to a fair market. A fair chance. We have a right to start the race, but we don’t have a right to win the blue ribbon. [More]

It is curious to me how many in our industry fall back on the lament of "not liking" where the industry is going, but nonetheless would not pry the status quo's hands off the wheel while smaller producers fall under the bus. Impotent sighs of regret strike me as remarkably unhelpful and perhaps short-sighted.

What if the almighty consumer fecklessly drifts to another consumption ideal from "cheap".  I have always considered that a long shot, but given my own buying eating habits, maybe less far-fetched than previously. Could beef be going to bat for a business model that will leave a bad taste in consumer mouths regardless of the flavor of the steak?

Meanwhile, smaller producers see the matter somewhat differently:

Our cattle industry is at a historic crossroad. With the proposed GIPSA rule we can begin to work to rid the marketplace of the ongoing practices that are causing our industry to contract by making sure that our industry receives the full protections Congress afforded us since 1921, but which have yet to be implemented by GIPSA’s proposed rule.
Or, we can continue to believe that the meatpackers have our best interests in mind and do exactly what U.S. hog and poultry producers did. As we all know, the hog and poultry producers did nothing while the meatpackers used their market power to vertically integrate the production segments of those industries and, as USDA data show, the result was a loss of about 90 percent of all U.S. hog producers. [More]

I suspect Steve's point of view will prevail, but I doubt if the rewards to economic rationalism will bring him or the industry all that much satisfaction.

More importantly, if grain producers don't see this as relevant to their sector, they are fooling themselves IMHO.  Cattle producers may be the closest we have to our heritage of independent producers, and if they can be convinced vertical integration is the future, I see few factors that would prevent a duplication in grain production.

The refusal to accept any limitations, to support wholesale restructuring for a few percent of efficiency or growth has pushed into harsh extremes. Regardless, I see no hint of interest in compromise between the factions.

The question for our farm is what strategy do we deploy to cope with the same pressures on our farm?  I see only one sure bet: own the land.

Storms...

[More great storm photos]

Actually, it makes sense to me...

With the passage of the "finreg" bill, credit card companies are looking at the business model and going, "Dang!".  To the surprise of many, they are considering actually charging folks who receive the benefits of cards - not just those who they can exploit.

Though industry experts say the case is extreme, it illustrates the challenges credit card companies face. Issuers typically generate revenue from two sources, interest rates and fees. Congress has clamped down on both of those channels this year, including banning interest rate hikes on outstanding balances and curtailing penalty fees for late payments and over-limit purchases. The new rules are estimated to cost the industry at least $12 billion annually, according to law firm Morrison & Foerster, and issuers have long warned that customers in good standing could wind up paying the bill.

"A lot of people thought they were blowing smoke, but they were spot on," said John Ulzheimer, head of consumer education for Credit.com. "Now something has to give."

Many issuers have homed in on fees that typically accompany rewards cards as a potential moneymaker. The Pew study, which was to be released today, found that about 14 percent of bank credit cards have annual fees, about the same as last year. But the median annual fee for the 12 largest banks' cards rose 18 percent, to $59, over the past year. The cost of cash advances and balance transfers also rose from 3 percent to 4 percent.

Some consumers say they feel penalized for what they thought was good behavior. D.C. resident Alanna Sobel said she pays her balance in full each month and was surprised to get a letter from Chase, the nation's largest card issuer, notifying her that the annual fee on her Freedom card would be $30. The letter stated that the fee had been waived the previous year and would allow her to receive 3 percent cash back on gas and grocery purchases. If she did not pay the fee, she would have to settle for fewer perks. [More]

Many of us thought we were doing Citibank (in my case) a favor by allowing them to extend me ~30 day loans when I swiped my card at Sam's.  But that economic dog don't hunt.  I have been a freeloader on the system except for those aggravating days when I failed to pay the balance due to umm....lethargy.

But as protection for less liquid users roll into place, those of us who like not having to carry cash probably should pick up some load.

While many still are convinced "cash" has intrinsic value (It's a piece of paper, folks!), mostly they enjoy the sense of moral superiority left over from the Great Depression that still attaches to currency. Not withstanding, the hassle of cash is increasingly obvious.

The realistic prospect of an entire country abandoning cash illustrates the direction in which world commerce is headed. A whole host of forces (from government policy to consumer trends) is conspiring to make cash less and less relevant to daily economic life.

In fact, new transaction methods are popping up every day. Cell phone-based payments, for instance, have become widespread overseas in recent years and are now a standard means of paying for just about anything in Japan. The Times Online notes that of Japan’s six competing cashless payment systems, “many” are built into wireless phones. In total, Japanese consumers are estimated to carry some 120 million cashless payment chips.

In the United States, companies like PayPal are making it easy to make purchases and swap money using only a mobile phone. Rather than trying to replace credit and debit cards, American companies like Square and GoPayment are equipping phones to work with them. As the New York Times explains, the credit and debit card issuers “stay in the middle, extracting a fee with each swipe or bump” of the mobile phone. It may take a while for consumers to abandon cash completely, but in many ways, even here in the U.S., we already are a cashless society. [More]

While I can appreciate the fear many have that some government official or bad guy could wipe out their wealth by hacking a file, we passed that point long ago.

I loved his book...

But he talks even better.  Dan Ariely, who wrote Predictably Irrational:



[via ezra]

Junkbox, Episode MMGOOD...

No adult supervision this week.

• No wonder I like woodworking.
• Maybe there is no carbon dioxide yield bump.
• "The worst thing you have ever done is often the first thing everyone knows about you." Or, I remind myself, the worst thing you have ever written.
• What will happen to my credit card now?
• Something I didn't know about my own church: what is in effect pay-for-members pastor incentives.

We're all Number One...

At something.  A little self-esteem boosting for the globe.

[Note in the tiny print: "Mostly % of population" (per capita) data].

[Source]

Even lower...

I have looked into long-term mortgages to restructure debt and improve our farm transition and our retirement.  While looking at some historically low offers on interest rates, believe it or not, I think they could go even lower.  At the very worst, I don't think there is a huge rush in order not to miss rates touching bottom and bouncing up. To buttress my case:

First, this bit of research from the Fed.

A recent study by the Federal Reserve (The Depth of Negative Equity and Mortgage Default Decisions by Bhutta, Dokko and Shan) investigated the question: at what point do underwater homeowners “strategically default” on their mortgages? Surprisingly, it found that the average borrower doesn’t walk away from his home until negative equity reaches a very high level, -62%. But the fascinating thing was that there was something that could trigger underwater borrowers to default much, much earlier – and that something was an interest rate rise.
With a quarter of US mortgages underwater, and likely to stay that way for some time, the Fed must follow its own research if it wants to prevent a cascade of defaults. Hence, expect US interest rates to stay ultra low for an ultra long time. [More]

Second, the strong likelihood that stimulus measures are over, and austerity is the political flavor of the month.  This will seriously slow or stop the economic recovery right in its tracks, I believe.

From Alec Phillips at Goldman Sachs (no link):

Congress looks increasingly unlikely to extend ay more fiscal aid to state governments, despite ongoing shortfalls in state revenues, and they have already let several other items lapse. We are therefore removing from our estimates an assumption of further fiscal stimulus beyond the policies in law (including this week’s unemployment extension), though we continue to expect extension of most of the expiring 2001/2003 tax cuts. This adds almost a full percentage point to the drag on growth from Q4 2010 to Q4 2011 to what we had already estimated.

[More]

This seems likely to me with unemployment stagnant and demand dismal.
Third, there are more calls for Fed action in the face of fiscal anticipated pro-cyclical action to stimulate demand and get credit flowing.  And Bernanke is keeping them in mind.

Bernanke outlined the further actions he had in mind: cutting the interest rate paid on bank reserves, strengthening the Fed's promise to keep short-term interest rates low for the foreseeable future, or buying enough mortgage securities to replace those that are paid off. If the economy appeared at serious risk of returning to recession, the Fed would consider large-scale purchases of Treasury bonds or mortgage-related securities. [More]

Finally, Fed inflation expectations continue to hint of near-deflation for forseeable future.

 As a follow up to my recent post on the Cleveland Fed's update on its expected inflation series, I have graphed below the expected inflation curve.  This curve plots the average expected inflation rate at various yearly horizons using the Cleveland Fed data. This figure makes clear that inflation expectations are headed down across all horizons. [More]

As always, I am not advocating mimicking my actions, just letting you know how I see it. Place your own bets. I have been hearing from inflation hawks (with reasonable arguments) for nearly two years warning of skyrocketing interest rates only to watch them tumble to an effective less-than-zero for most savers (rolled over a CD lately?)

All the trends in our recent economy have taken longer to reverse than we expected from history or theory.  I'm not sure why, but from the stock market to house prices, it seems even when unsustainable trends emerge, they wear out the patience of those who just know they can't continue.

I see some parallels...

In the wake of the housing (mortgage) meltdown, some economists looking back are questioning the very basis of the "ownership society".  I think they make some sense.

The formula, however, changed dramatically at the end of the 20th century. From 1994 to 2005, the homeownership rate reached record highs, thanks largely to innovations in the mortgage-finance market that reduced down payments and minimized equity. This shifted the basic wealth-building proposition of homeownership away from savings to an almost exclusive focus on capital gains. Average down payments fell, reducing the savings required to “get in the door.” More significant was the rise of mortgages that involved no forced savings: the interest-only loan, in which no equity is built because the principal is never paid down, and the “negative amortization” loan, in which payments are so low that they do not even keep up with the interest, leaving homeowners more indebted, rather than less, each month. By 2006, more than one-third of subprime mortgages had amortization schedules longer than 30 years, nearly half of Alt-A mortgages were interest-only, and more than one-fourth were negative-amortization loans.

One effect was to reduce the social benefits of homeownership, because the benefits are a product of equity and not of the mere fact that a contract has been signed and a mortgage taken out. The relationship between homeownership and social goods had been misunderstood: The traits that enabled households to build up the savings necessary for significant down payments — hard work and the deferral of gratification — were misattributed to homeownership itself. Paying a mortgage did nothing to improve children’s educational outcomes; instead, the factors that gave rise to homeownership also led parents to raise children in a manner that led to greater educational attainment.

Without substantial down payments and conservative amortization schedules, the entire proposition of homeownership as a social good is turned on its head. Think of a homeowner with a zero-down, negative-amortization mortgage: The balance would equal at least 100 percent of the value of the house at origination and would steadily grow, putting him ever deeper in debt unless the market value of the house grew at an even faster rate. Rather than being a source of wealth, the mortgage would actually reduce the net worth of this homeowner below what it would have been had he rented.

Rather than providing a social benefit, then, homeownership without equity imposes costs. Andrew Oswald of the University of Warwick has argued that such homeownership can exacerbate unemployment by making workers less likely to move from one labor market to another. Labor mobility is badly undermined when homeowners in a depressed market can’t sell their property for anything approaching the principal balance of the mortgage they originally took out to buy it.  [More]

This may not be the minefield it first appears. Rather than saying we allowed the wrong people to borrow too much money betting on always-rising home prices, I believe the authors correctly suggest the housing policy was a gigantic subsidy to the wealthy and housing-specific businesses (construction, RE, finance, etc.) that actually harmed low-income people by diminishing the social goods associated with home ownership. 


In fact, what has been viewed as a causal relationship (home owners become better citizens, etc.) was probably a correlation.  As they illustrate, the behaviors that got a 20% downpayment and other underwriting criteria met are the same ones that cause more civic participation, education, social mobility, etc.


So far so good.  But tell me why this reasoning should not apply to the numerous farm ownership efforts or beginning farmer programs?


Back in the day when I served on the old FmHA local board, I wondered at the cases that clearly would never "graduate" to economic "adulthood".  I also began to question whether we actually helped with low interest, low downpayment, etc. tools.  It would be interesting to see the persistence of ownership from beginning farmer loan programs that subsidize first-time buyers with public funds.  How many still are farming or own the land in say 10 years?


Are there any records of the outcomes (with privacy protected, of course) for agencies such as IFDA? None that I can see from their minimal website.


Without such followup data, we could be fooling ourselves as to whether these programs are helping folks or simply employing transaction agents.

Slow scrolling?...

A reader asks:

I enjoy reading your blog, we must have a similar sense of humor.  However, since you changed backgrounds a couple weeks ago scrolling down to read the page has become exceptionally slow.  Your page is the only place I experience this.  I know I should use this as an excuse to upgrade computers, but this one still does everything else acceptably.  Maybe I'm the only one having this problem?  Anyway I thought you would want to know.  Keep up the good work.

Is anyone else having this problem?  If so, please leave a comment below. I'd hate for this loyal reader to have to upgrade to a new computer with a 1 TB drive, 24" screen, wireless keyboard/mouse, 2 GB RAM, fast graphics, etc...

[Update: I have deleted the background image - any help?]

Junkbox, Episode DDT...

Is it me or did the crabgrass arrive early?

• One scary, but fascinating computer security story.
• Not everyone is crying about the BP spill.
• We survived the flu. Again.
• Why would an aspiring farmer want to go to Harvard?
• I'm calling 97% a true consensus.
• Another reason manufacturing jobs are declining.

Irony is not dead...

It's posted.

My personal favorite:

[More]

Corner on cocoa!...

This title is lost on those who have never played "Pit", but maybe you've seen "Trading Places".  Anyhoo, somebody is choking the chocolate market. It turns out to be a guy named Tony Ward.

Big action in chocolate: Somebody bought almost all of the cocoa registered in European warehouses last week.
The buyer, according to the FT and the Telegraph, was a company called Armajaro, which runs several hedge funds and sells cocoa to the chocolate industry.
The purchase — 240,000 tons, worth about $1 billoin — amounts to about 7 percent of global annual production of cocoa. So it's not like the hedge fund can immediately turn around and control the global price of cocoa.
But if this year's cocoa harvest is weak, the buyer could have significant pricing power, Laurent Pipitone of the International Cocoa Organization told me today. [More]

I thought we had left those days behind us, but perhaps the staggering amounts of loose money wandering the globe like buffalo herd will cause more market-torturing excursions of volatility as frustrated investors look for a play.

Unfortunately, for Mr. Ward, when guys like me in farm country know about it, you usually lose.

However, Mr. Ward and company made a serious mistake by allowing word to leak about the operation. Rule #1 when it comes to market manipulation is secrecy. If rumors of your operations become known, the market will start to turn against you. Hedge funds in particular will start shorting cocoa because they know that if they can force heavy losses for Anthony Ward, at a certain point, he will be forced to sell his entire position for a steep loss. This will in turn cause cocoa prices to plummet as everyone tries to get out ahead of Ward and company. We might already be seeing this happen considering today's action in the cocoa market. Cocoa prices are down 5% as the market digests this recent news. It seems the market is going against Mr. Ward.  Will this end well for Mr. Ward? We don't know yet, but if history is any guide, it probably won't. [More]

Maybe the ol' Internet is the the best regulator of all.

[Thanks, Aaron]

I don't wanna go there, Ctd....

Re: weed herbicide resistance, two further observations.

First, Pam Smith's article on HPPD (e.g. Callisto) resistant waterhemp.

A waterhemp population in a central Illinois seed corn production field has been shown to withstand foliar applications of the popular herbicide. University of Illinois weed scientist Aaron Hager says the wily weed has already adapted to resist four other classes of herbicides (triazine, PPO inhibitors, glyphosate, ALS inhibitors) in the state, but HPPD-inhibitor resistance has never previously been recorded. [More]

In fact, as I was mowing roadsides I think I may have been staring some of this stuff in the face.

Second - and purely anecdotal - the sprayer operator from my fertilizer/chemical dealer called to check what I had planted in an adjacent field as he was respraying a neighbor's beans because the ragweeds don't seem to be paying attention to the glyphosate.  As we shot the breeze, this grizzled veteran of thousands of sprayed acres suggested the new weed to watch around here was velvetleaf. It seems the usual dose of glyphosate just speckled the leaves in many cases. Waterhemp and marestail were old news, of course.

As always, we all can place our own bets.  I don't think this involves my widely suspected socialist tendencies, but FWIW, I'm proceeding as if everything I battle weed-wise is glyphosate resistant.

Not so different...

I was going to put this in the next Junkbox, but my reaction to it grew.  So FWIW: the earliest surviving painted portraits.

It is the remarkable realism, almost photographic, that separates these portraits from Egyptian wall paintings or even Medieval art.

The portraits were attached to burial mummies at the face, from which almost all have now been detached. They usually depict a single person, showing the head, or head and upper chest, viewed frontally. The background is always monochrome, sometimes with decorative elements. In terms of artistic tradition, the images clearly derive more from Graeco-Roman traditions than Egyptian ones. The population of the Faiyum area was greatly enhanced by a wave of Greek immigrants during the Ptolemaic period, initially by veteran soldiers who settled in the area.
Two groups of portraits can be distinguished by technique: one of encaustic (wax) paintings, the other in tempera. The former are usually of higher quality.
About 900 mummy portraits are known at present. The majority were found in the necropoleis of Faiyum. Due to the hot dry Egyptian climate, the paintings are frequently very well preserved, often retaining their brilliant colours seemingly unfaded by time. [More]

These were folks like us.

Bring back bear-baiting, too...

Obviously way too many people took those Renaissance Fairs too seriously, because they are trying to make jousting the new Extreme Sport.

Jousting was popular enough to last for more than 400 years in Europe, but these days there are only some 200 competitive jousters around the world, about 30 of whom are in North America. (A couple hundred more perform at Renaissance fairs and festivals but do not compete.) The basic concept is unchanged from medieval times: two armor-clad opponents charge at each other on horses while wielding 11-foot-long wooden lances. The goal is to break your lance on your opponent’s shield or on a metal plate bolted to his chest called a grand guard, but unhorsings are an added thrill and — in the North American style of competition — the surest way to rack up points.
At the Pensacola championships — as will be the case later this summer at the heavy-armor tournament at the Longs Peak Scottish-Irish Highlands Festival in Estes Park, Colo. — two competitors began at opposite ends of a 180-foot list, or jousting field, with a rope barrier called a tilt rail running down the middle of it. A match consists of four passes, and a panel of four judges awards points after each pass: 1 point for a strike to the gridded grand guard, 5 for a broken lance and 10 for an unhorsing. Over the course of the three-day championships, there were four separate tournaments — one on Friday, two on Saturday and one on Sunday — with a winner of each and an overall champion at the end.
The championship event was created by two men, both professional jousters, who are on a mission to transform jousting from Renaissance-fair entertainment to arena sport. One is Shane Adams, the knight who unhorsed Tolle. The other is Charlie Andrews, a Hummer-driving former bull rider who spent six years as a Navy Seal and is hard-pressed to utter a sentence that doesn’t include at least one profanity. “I personally believe that Shane Adams and myself are the two best jousters in the world, period,” he says. “Anybody wants to argue it, you can come out and joust us or shut your pie hole.”
A member of the Chukchansi tribe in California, Andrews is 6-foot-4 and about 250 pounds, with tattoos of his spirit animals ringing his thick biceps. He doesn’t joust because he’s attracted to romantic notions of honor and chivalry or because he has an affinity for the medieval period. (“I don’t know jack about history, nor do I care,” he says.) He does it because he considers jousting one of the most extreme sports ever invented, and he likes doing things that most other people can’t or won’t do.
“I like violent sports,” says Andrews, who also participates in mixed martial arts. “I like hitting you. I like getting hit. I like competing man to man to see who the better man is that day.” [More than you may want to know about modern jousting]

I pause to let the testosterone clear from the air....

Well, could we be sending little Jacob (and Isabella) to jousting camp soon?

I don't think so. And neither do some guys who really understand the history involved.

And this is to be expected.  We just don't have the built-in communal language or familiar reference points to elevate jousting to a popular sport once more. We're too far removed from horses and lances to be able to tell what makes a skilled rider different than an adequate one or a good hit different than a loud one. Sure, we can appreciate a dude getting knocked off a horse, but that does not a sport make. If NASCAR really were just people waiting for a car crash to happen, it wouldn't be popular enough to make building all those nice tracks worthy anyone's while, and the TV networks would never show up, not even ESPN 32¾.

I understand the fun of reenactment for reenacting's sake, but I don't understand why anyone would think that people outside the immediate circle of reenactors and associated enthusiasts would much care. If jousting really wants to make the break to modern popularity, it probably needs to just drop the medievalism in anything other than name only. Sure, call the athletes knights and let them go by Sir This or Lady That if you want, name their teams or squads or whatever after medievalish things, but drop any pretense of reenacting. Leave the shiny plate mail and the fake British accents to your mascot on the sidelines. Gear up in ballistic nylon and kevlar and figure out a style of helmet that'll protect while still letting people see some of your face. Devise new rules that have little to do with whatever the 13th-Century Sir Whatsisface would have called proper. Add electronic sensors and an elaborate point-scoring system if you can't come up with any other way to judge who's the best than who gets knocked off the horse first.

Frankly, the idea of jousting with several-hundred-year-old weapons and armor would probably be pretty insulting to any of the knights who actually made their living jousting in the Middle Ages. They didn't technologically handicap themselves in order to meet some artificial standard of authenticity. If there had been some new affordable type of stirrup that kept them from breaking their ankles when dragged around by their horses after unseated by their opponents, they would have been queuing up around the block to get themselves one. [ More]

Of course I didn't think tattooing would become popular either.

Watch some jousting here (they didn't allow embedding).

[They rode sheep?!]

I don't wanna go there...

The last three days I have been working with Bayer in Memphis at an event called "Respect the Rotation". [More][More] There were research types, producers, dealers, a smattering of organizations and seed folks, and of course, lots of Bayer guys.

The focus was weed herbicide resistance. To be fair, while I was aware of a problem in the Mid-South with pigweed, I hadn't given the threat much thought for Prairie Township.

I do now.  And this is not just the Emcee fee speaking.

The personal epiphany occurs when you are talking to a AR grower whom you soon realize is every bit as professional as you (if not more) and listen to the story of his last three years and then...

YOU LOOK AT A FIELD OF PIGWEED that has laughed at quarts of glyphosate, ALS, and most of the herbicide arsenal.  Sweet mother of pearl, that is bad*** flora!

Suddenly that oddly persistent patch of giant ragweed, and the spot of lambsquarters look more ominous. In fact, just across the border in IN, giant ragweed resistance is more common than I thought.  Now throw in my now shopworn prediction for IL climate, and you have a there-but-for-the-grace-of-God realization.

Preventative measures of all kinds are a hard sell, because if you are successful...nothing good happens. Other than nothing bad happens. Which is hard to prove would have occurred otherwise.

Long story slightly less long, to quote that deeply spiritual Christmas carol, "Grandma Got Run Over By a Reindeer":

"You may say there's no such thing as Santa, but as for me and grandpa, WE BELIEVE!"

It dawned me too that this could be an approach to handling volunteer corn in continuous corn, for example.  There were a few (ahem) issues with that around here this year.

Besides, with the residual I'm already putting down and a grass post to get the volunteer RR corn in beans, I could start working some glufosinate (Ignite/Liberty) and LibertyLink corn/beans into my rotation at pretty minimal cost, or at least one I could live with.

And so could whoever farms this ground twenty years from now.

This assumes I can get the genetics I want relatively "unstacked" which will probably mean ordering plenty early. It also means I (as in Aaron) need to devise a sailor-proof marking and mapping system to prevent unfortunate mistakes, but the mode-of-action (MOA) color labeling and cheap "bicycle" flags look feasible to me.

It also occurs to me there could a killer app opportunity in this that would require entering which MOA is loaded in the sprayer and would block nozzles where the right seed trait was not present by comparing to the planter map.

It won't matter if glyphosate is cheaper than water if it doesn't kill the weeds, and I think we're headed there faster than I ever imagined. We need to rotate to keep that tool useful.

Before GPS...

There were lighthouses.

[More]

Oh, snap!...

(FWIW, I'm trying to litter my conversation with up-to-date conversational aphorisms)

So economists at the Universities of [Areas of] Illinois produced a report for the OECD showing speculators were not guilty in the commodity 2008 markets, and that regulation would cripple their essentially beneficent presence in the marketplace.

Professors Scott Irwin, of the University of Illinois, and Dwight Sanders, of the University of Southern Illinois found the amount of money flowing into commodity index funds increased substantially in the period from 2006 to 2008. But although this increase represents a major structural change in investor participation in agricultural commodities futures, it has not increased price volatility, according to the study.

The paper said there is “no convincing evidence that positions held by index traders or swap dealers impact market returns.

“These results tilt the weight of the evidence even further in favour of the argument that index funds did not cause a bubble in commodity futures prices.” [More]

Then an economist bar brawl breaks out.

Last week, OECD published a report co-authored by two Illinois professors, Scot Irwin and Dwight Sanders. The report, entitled Speculation and Financial Fund Activity, purports to find statistical evidence that speculation played no role in generating the damaging volatility in food and energy prices witnessed during 2008-9. In fact, it claims that speculation by long-only index investors with no understanding of underlying supply and demand conditions actually helped reduce volatility, by providing liquidity.
The study and its findings can be disregarded for three reasons:

1. The statistical methods applied are completely inappropriate for the data used.
2. The study is contradicted by the findings of other studies that apply more appropriate statistical methods to the same data
3. The overall analysis is superficial and easily refuted by looking at some basic facts. [More]

[Note: This is the economist equivalent of "Yo Mama!".]

But without trivializing further, it does strain credulity to suggest the immense wealth pouring into our relatively small markets did not distort the price-determining function.  The comment about the price of oil is telling, IMHO.

Worse by far is the idea that this study, even if flawed will be used as criticism against derivative market regulation which has widely been considered lacking.  Overall, it appears nobody know what the new regulations will mean to farmers.

The question for these farmers is whether such rules will make hedging more expensive. Some say new requirements on big players will create higher costs for small players, including the cash dealers will have to put aside to enter into private derivatives transactions. Some brokers think restrictions on big-money banks and investors will drain the amount of money available to the everyday deals farmers favor.
Others predict the opposite effect, pushing money from the private market to the exchanges and creating more competition that will benefit farmers. [More]

This account as well is open to valid criticism. 

It gets worse. For all the apparent handwringing about farmers and feedlots, the story then slips in this show-stopper:  "Faced with intense lobbying, Congress partially exempted businesses that use derivatives for commercial purposes. So, farmers and co-ops probably won't face new collateral requirements."

Say what?  Farmers and other end-users are exempt from the new rules?  Then why are we being subjected to this article?

The truth is that the only players who most certainly stand to lose are the big banks, like JP Morgan Chase and Goldman Sachs, that will have to either spin off their derivatives-trading operations or put them into separate subsidiaries that require higher capitalization.  [More]

 But here is my beef. If the criteria for good regulation is lower transaction costs for farmers, why not simply state that as the primary goal?  If it is for efficient markets, maybe it should cost more.

God knows, we've paid plenty for CDOs and other derivatives.

(I'll try to follow this contretemps and see if any light is shed)

Junkbox, Episode CCCP...

Really, you don't want to know.

• Emergency underpants. [Insert your wisecrack here]
• The Middle Ages weren't "dark".  They were blotto.
• My best childhood memories revolve around model rockets.  (I heard that snicker)
• Read it three times, still don't get how biofuels are good for hog producers.  Maybe it's an EU thing.  (Somebody help me out here - I'm beggin' ya!)
• Speaking of dead pigs: the all-bacon burger.  My question is what do they put on top? Shrimp?
• But do they talk like Gabby Hayes?

I've decided to flee to Memphis to escape the heat.  More when temperatures allow.

Facts are not enough...

Thanks to a helpful comment and the following article, I have managed to get a glimpse into the genesis of a rather pessimistic outlook I have been entertaining.

As I have written, it seems to be increasingly clear facts no longer persuade - if indeed, they ever did. In fact, according to some research, they simply harden our existing biases.

Maybe not. Recently, a few political scientists have begun to discover a human tendency deeply discouraging to anyone with faith in the power of information. It’s this: Facts don’t necessarily have the power to change our minds. In fact, quite the opposite. In a series of studies in 2005 and 2006, researchers at the University of Michigan found that when misinformed people, particularly political partisans, were exposed to corrected facts in news stories, they rarely changed their minds. In fact, they often became even more strongly set in their beliefs. Facts, they found, were not curing misinformation. Like an underpowered antibiotic, facts could actually make misinformation even stronger.

This bodes ill for a democracy, because most voters — the people making decisions about how the country runs — aren’t blank slates. They already have beliefs, and a set of facts lodged in their minds. The problem is that sometimes the things they think they know are objectively, provably false. And in the presence of the correct information, such people react very, very differently than the merely uninformed. Instead of changing their minds to reflect the correct information, they can entrench themselves even deeper.

“The general idea is that it’s absolutely threatening to admit you’re wrong,” says political scientist Brendan Nyhan, the lead researcher on the Michigan study. The phenomenon — known as “backfire” — is “a natural defense mechanism to avoid that cognitive dissonance.”

These findings open a long-running argument about the political ignorance of American citizens to broader questions about the interplay between the nature of human intelligence and our democratic ideals. Most of us like to believe that our opinions have been formed over time by careful, rational consideration of facts and ideas, and that the decisions based on those opinions, therefore, have the ring of soundness and intelligence. In reality, we often base our opinions on our beliefs, which can have an uneasy relationship with facts. And rather than facts driving beliefs, our beliefs can dictate the facts we chose to accept. They can cause us to twist facts so they fit better with our preconceived notions. Worst of all, they can lead us to uncritically accept bad information just because it reinforces our beliefs. This reinforcement makes us more confident we’re right, and even less likely to listen to any new information. And then we vote.

This effect is only heightened by the information glut, which offers — alongside an unprecedented amount of good information — endless rumors, misinformation, and questionable variations on the truth. In other words, it’s never been easier for people to be wrong, and at the same time feel more certain that they’re right. [More of a very insightful piece well worth reading]

This observation acts as a confirming data point of the futility of putting scholarly information out to buttress my opinions. I am not persuading many, if any.

But that isn't why I've been on a downer.  This idea forced me to ask whether any facts would alter my own views.  For example, is there any evidence that would make me change my mind about evolution? Or subsidies? Or...(gasp, choke)... Sarah Palin?

It's hard for me to imagine any of the above. So it is hardly surprising that few of you who read will find my information bundles very persuasive.  Maybe I am only reinforcing my own biases. My own epistemic closure, as it were.

Nonetheless, by abiding by a few rules such as peer review criteria, full source linkage, and at least attempting to read opposing viewpoints, I can test my prejudices, and perhaps occasionally master them.

More importantly, letting go of the conceit of being able to persuade allows me to make more effective plans for our farm's future, I hope.

This changes everything...

There are 5 BILLION mobile phones in the world.  With our population of  6.8B, this is very impressive. (Note that some folks have more than one, of course).

There are now more than five billion connections worldwide.
In many regions, penetration exceeds 100%, where there is more than one connection per person in the country.
Ben Wood, mobile phone analyst at CCS Insight said the mobile phone may be "the most prolific consumer device on the planet".
"If you just take the UK in 1987, when the first mobile companies launched, an industry insider predicted a maximum of 10,000 phones.
"Now almost every adult, child and domestic pet seems to have one, given that 30 million phones are sold every year in the UK," he said.
Rapid growthThe four billion connections mark was surpassed at the end of 2008, and analysts at Wireless Intelligence predict six billion connections worldwide by the middle of 2012. [More]

What this means to me is you can throw predictions about the future out the window.  Never have so many had access to so so much information. 

We are about to unleash more global brain power than we have ever imagined.

Think about cell phones raised productivity in rural America.  Now add in the "first-pound-of-fertilizer" effect for places like India and Africa. As the market information finally penetrates to every corner of of the world, and information flows essentially unfettered, several business plans built on the ignorance of customers will fail.

Stop and think how much of your farm profits are based on folks (especially landowners) not knowing current market dynamics.  Put that on your "to-be-fixed" list.

Something new: A Guest Blogger...

Dan Grifen contacted me about a guest post, and here it is.  These are his opinions, but in the same vein, if you would like to post your views, let me know.  Respond in the comments or in his blog.

Dan is a web engineer in Upstate NY with a passion for political blogging in his free time. As of late, he has been enjoying writing about hot topics in conservation, sustainability, and the environment. Some of his writing can be found at his blog.

Sustainability Through the Consumption of Things Conserved

"In other environmental issues we tell people to stop something, reduce their impact, reduce their damage," - US Ecologist Gary Nabhan

Since the beginning of the green movement, there has been a rise in the number of organizations and businesses that are doing their part in the promotion of sustainability through conservation. As human beings, we're told to reduce our carbon footprint, consume less unhealthy foods, and spend less time in the shower! But let's take a minute to step back and look at this from a different perspective; one that Gary Nabhan strongly suggests.

Gary Paul Nabhan, phD., is a Arab-American writer/conservationist whose extensive farming work in the U.S./Mexico borderlands region has made him world renowned. Specifically speaking, Nabhan is known for his work in biodiversity as an ethnobotanist. His uplifting messages and attitude towards life and culture has granted us access to multiple beneficial theories including his latest of eat what you conserve.

According to The United Nations' Food and Agriculture Organization, about three quarters of the genetic diversity of crops been vanishing over the last century and that a dozen species now gives 90% of the animal protein eaten globally. In accordance, just 4 crop species supply half of plant based calories in the human diet.

Nabhan claims that by eating the fruits and vegetables that we are attempting to conserve/save, we're promoting the granular dissemination of various plant species. But this goes beyond what we typically buy in supermarkets, particularly because of price and abundance. We must remember to try new things and immerse ourselves in the very concept of diversity. Keep in mind- the benefits of splurging for that costly fruit/vegetable supremely outweigh the cons. Not only are you promoting biodiversity and further eliminating the needs of farmers to remove rare, less purchased crops off their agenda, but you're also effectively encouraging healthier lifestyles.

Agriculturist Marco Contiero mentioned that "biodiversity is an essential characteristic of any sustainable agricultural system, especially in the context of climate change."[1] With sustainable crop efforts being lead by the CGI (Clinton Global Initiative) and the IRRI (International Rice Research Institute) the duo plans to provide a more sustainable crop that can withstand natural disasters, avoiding food shortages like Haiti is experiencing. Contiero goes on to state "We need to ensure this is the basis for the future…" – This is exactly what Doug Band, the CGI, and the IRRI are doing by engaging in sustainability efforts.

So remember, next time you're in the supermarket picking out a common varietal of navel oranges or strawberries, turn your attention to something that's a bit more exotic in nature. The same goes for salads/salad ingredients; shop outside the norm, picking spices and vegetables that you wouldn't normally incorporate into your everyday diet. During such economic downtime it isn't always easy to maintain the same level of grocery shopping intrigue, but we must also not forget that in this sundry of foods we can find fun!

Dan Grifen – Supporter of all things green and progressive.

Thanks for contributing, Dan.

Drink it for your bones...

I don't like beer.  Much.  But at my age, I have to take science like this seriously.

A new study suggests that beer is a significant source of dietary silicon, a key ingredient for increasing bone mineral density. Researchers from the Department of Food Science & Technology at the University of California, Davis studied commercial beer production to determine the relationship between beer production methods and the resulting silicon content, concluding that beer is a rich source of dietary silicon. Details of this study are available in the February issue of the Journal of the Science of Food and Agriculture, published by Wiley-Blackwell on behalf of the Society of Chemical Industry.
"The factors in brewing that influence silicon levels in beer have not been extensively studied" said Charles Bamforth, lead author of the study. "We have examined a wide range of beer styles for their silicon content and have also studied the impact of raw materials and the brewing process on the quantities of silicon that enter wort and beer."
Silicon is present in beer in the soluble form of orthosilicic acid (OSA), which yields 50% bioavailability, making beer a major contributor to silicon intake in the Western diet. According to the National Institutes of Health (NIH), dietary silicon (Si), as soluble OSA, may be important for the growth and development of bone and connective tissue, and beer appears to be a major contributor to Si intake. Based on these findings, some studies suggest moderate beer consumption may help fight osteoporosis, a disease of the skeletal system characterized by low bone mass and deterioration of bone tissue.
The researchers examined a variety of raw material samples and found little change in the silicon content of barley during the malting process. The majority of the silicon in barley is in the husk, which is not affected greatly during malting. The malts with the higher silicon contents are pale colored which have less heat stress during the malting process. The darker products, such as the chocolate, roasted barley and black malt, all have substantial roasting and much lower silicon contents than the other malts for reasons that are not yet known. The hop samples analyzed showed surprisingly high levels of silicon with as much as four times more silicon than is found in malt. However, hops are invariably used in a much smaller quantity than is grain. Highly hopped beers, however, would be expected to contain higher silicon levels. [More]

Feel free to use this research to staunch criticism of your breakfast beverage of choice.

Junkbox, Episode XXXL...

The eye blinks, the mind boggles.

• Six things we picture wrong. (We hope to see the Pyramids next year, so I'm filing this away)
• Not only was Tom a deist, he ate macaroni and cheese.
• Odd how apocalyptic doomsayers always advise buying farmland.
• I wonder what weeds would plague a dandelion farm.  Soybeans?
• Hold this kitten and then tell me what you think about my blog.
• The war against boring living.

[via mr, mefi, utne, browser]

Yuan to talk banks, dude?...

It wasn't that long ago the top ten banks were dominated by US institutions, but look at the change.

[Source]

More interesting is the highlighted bank- the Agricultural Bank of China - just had its IPO and guess who bought into it?

The deal attracted more than the usual amount of attention—in part because of ongoing palpitations in global markets, in part because Chinese share prices in particular have collapsed in recent months, and in part because the listing coincides with fierce debate about the health of China’s banking system. Agricultural Bank itself is notable for both its gargantuan size (320m customers) and its giant past loan losses. Optimists see it as a superb macro play on China, pessimists as a Chinese version of Fannie Mae and Freddie Mac, America’s nominally private, and deeply flawed, housing-finance firms.
Pricing was a matter of guesswork until the last moment. Outside China, big investors seemed anxious to buy in. “Cornerstone” investors included sovereign-wealth funds (Qatar and Kuwait), banks (Standard Chartered, Rabobank, Singapore’s United Overseas Bank), a global agricultural giant, Archer Daniels Midland, and the now usual smattering of tycoons (Hong Kong’s Li Ka-shing and Australia’s Kerry Stokes). Inside China, internet polls suggested retail investors were less keen. These differing perspectives may explain a rare outcome for dual-listed shares: the bank’s stock was valued more highly (by around 5%) in Hong Kong than Shanghai. [Same]

Now currency fluctuations strongly change these rankings, of course, but still it's an impressive rise for Chinese finance.  As a frind of mine who was just assigned to China for a by his seed company pointed out, that's where the growth will be - not fighting for a 1% market share swing every year here.

As ag suppliers focus more on China, it will be curious to watch how US farmers react. I remember the mild consternation when you couldn't buy a combine because so many were shipping out to Russia, etc.  What would be really paradigm-shifting would be if China got the hot new GMO traits earlier since the regulatory process is faster and less driven by public acceptance.

We are living yesterday's tomorrow...

Stay with me on this one. 

The consequences of actions taken in my father's time are reaching maturity - and not in a good way. And they presage the the results of my own decisions.


Example:  The Hoover Dam

Nobody loves to watch those History Channel pieces about building the Hoover Dam more than I. But demand for water has made it less an answer than a relic.

The promise of abundant water and power took the brakes off the growth of Los Angeles, San Diego and many other western cities; it encouraged farmers to complacently plant the most water-thirsty crops; and it gave us city dwellers the impression that we can water our lawns every day without worrying about waste and runoff.

Yet the world Hoover Dam made is now facing the era of limits. For decades California was able to use Colorado River water formally apportioned to Arizona and Nevada, because those states weren't developed enough to use their full allocations. That condition ended in the mid-1990s, at which point California had to give up nearly 20% of its Colorado River supply.

Thus far we've managed a "soft landing" from that shock by crafting intricate reallocations of water among the state's agricultural, urban and ecological interests. But the balancing act is only getting harder, as a long drought shrinks our water-supply cushion and population growth continues almost unabated. Up to now, solutions to our water needs have been worked out in a crisis atmosphere. In the future, they'll take place against a political background too.

In the Central Valley, farmers are already marching to demand the construction of more dams to provide more water for irrigation, as if one can just create abundance out of thin air. Environmentalists' efforts to discharge water from reservoirs to preserve riparian and marine habitats draw the ridicule of conservative television pundits. Private companies have moved into the water business, figuring that where there's scarcity there are profits. [More]

Now consider how temporary that drought could be.  My guess: not very. 

In fact, let's go the the "worsest" case of all.  This is the 5% probability of climate change and global warming. (Not for the squeamish)

There is a horrible paper in this week's Proceedings of the National Academy of Sciences (hat-tip Desdemona Despair), which looks at how the limits of human physiology interact with upper-range global warming scenarios.  The bottom line conclusion is that there is a small - of order 5% - risk of global warming creating a situation in which a large fraction of the planet was uninhabitable (in the sense that if you were outside for an extended period during the hottest days of the year, even in the shade with wet clothing, you would die).  To give you a feeling for the likely uninhabitable regions, it's the portions of the map above that are in the white or pink/purple color (above 35^oC wet bulb temperature on the scale).  As you can see, it includes most of the eastern US, much of inland Brazil and Latin America, tropical Africa, pretty much all of India, portions of northern China, and most of Australia.  Plenty to qualify as a "Risk to Global Civilization", I think.

 Some explanation is in order so I will borrow freely, with apologies.

More precisely, the wet bulb temperature being plotted here is the average annual high that extended for at least six hours, and the data is for 1999-2008.  So the filthy-hottest parts of the planet become clear - the tropics of course, with the inland Amazon and northern India worst, but the eastern US is not far behind, as also northern China and much of Australia.

So how high a wet bulb temperature can people tolerate?  The paper doesn't cite much experimental data (apparently the Nazi scientists missed this in their program) but what is known is that skin temperatures above 35^oC (which is 95^oF) are fatal for an extended period (your skin needs to be at least a few degrees cooler than your core temperature of 37^oC/98^oF so that heat can be conducted from the blood to the skin in order to shed metabolic heat).  So it's reasonable that if the wet bulb temperature is above this for an extended period (they take six hours) you won't be able to survive.  In fact, given that a human who needs to be outside probably won't be sitting in the shade with wet clothes and a big fan, the maximum survivable wet bulb temperature may actually be a degree or two lower.

At the moment, as the map above shows, nowhere on the planet gets up that high.  The highest is in the low thirties - pretty damn unpleasant, no doubt, and no-one is going to do a whole lot outside under those conditions, but not actually fatal for all but a small minority of folks (probably with other health conditions). [Same source]

OK, it's fair to howl derisively at the long shot this represents, but keep that 5% chance number in mind when you hear predictions about deficits, hunger, health care costs, etc.  If you use any 1-in-20 example to buttress your case, then this exercise is for you.

For my part, the fact this horrific outcome has a 5% chance, while a double-dip recession now is accorded a 12% chance and many of us have already taken that to heart means it is not a future we should discount out of hand, if only for relative probability consistency.

Back to the Hoover Dam.  The scenario outlined above certainly casts in doubt the future of water-intensive commodities like cotton in California.  If there is water for crops, it will be very high value produce, I would suggest.

Compare and contrast the above charts. I have, just like the maps of IL moving (climate-wise) to AR.

[More]

So let's say you are skeptical of these outcomes.  How about if the USGCRP is just half-right?

OK, make your own bet.  But I think the money is going to be made adapting to very high temps and rainfall here and desertification farther west.

Everybody gets to take a position on this one.

Pull out the plastic...

For all you income tax wonks, remember when I stumbled across the 1099 reporting changes contained in the ACA?  Well, others have uncovered the hidden time bomb as well.

But wait - there may be some good news (sorta).

The Taxpayer Advocate Service estimated the new requirement will affect 40 million businesses and other entities. Those include about 26 million sole proprietorships, not counting farms.

The IRS "will face challenges making productive use of this new volume of information," the mid-year report said. "In our view, it is highly likely that the IRS will improperly assess penalties that it must abate later, after great expenditure of taxpayer and IRS time and effort."

The requirement could bury the IRS in tens of millions of paper filings that it will have to pay employees to process or discard, Olson said through a spokesman.

The requirement, which was intended to help pay for the health-care legislation, is projected to raise $13.7 billion over 10 years, according to Olson's report. That does not include the IRS's administrative costs.

Under an IRS proposal, many purchases made with credit or debit cards would be exempt from the requirement because the IRS obtains information about them through other channels, the IRS has said.

The agency is trying to do what it can to minimize the burden on businesses and is seeking public comment on how it might do so, spokesman Terry L. Lemons said. [More][My emphasis]

Yup, this will be the new marketing answer for credit cards.  We'll be heating our homes with junk mail from Capital One!

'Tis an ill regulation that blows nobody good...

Junkbox, Episode DDGS...

The mind wanders.

• What is the ROI on degrees from your college?  (RHIT is #40 - not bad!)
• Read all the horoscopes.
• Visit the world's largest food market.  (Really good)
• It's a bad sign when you remember smudge pots.
• What would happen if the earth stopped spinning? (This will keep you awake)

[vi mefi, mr, sullivan, FX]

Crossing the line...

One more reason why the media are their own worst enemy.

Kevin Drum calls them out.

An Economist editor responds with some examples of obvious image alteration they've used in the past, but then falls down trying to explain why they did some pretty nonobvious alteration this time around:

I asked for Ms. Randolph [the woman next to Obama] to be removed because I wanted readers to focus on Mr. Obama, not because I wanted to make him look isolated. That wasn’t the point of the story. “The damage beyond the spill” referred to on the cover, and examined in the cover leader, was the damage not to Mr. Obama, but to business in America.

The Economist has a history of using photos more as illustrations than as objects of straight news, but this still crosses a line that a news magazine shouldn't cross. Hell, I wouldn't do something like this on my blog, let alone on the cover of the Economist. But decide for yourself. The full transformation is illustrated below — and yes, I used Photoshop to create it. [More]

It would interesting to ask ag magazine/web editors about their photoshopping rules.

Maybe I will.

It makes you wonder why we try...

To persuade people to our point of view.  It's really hard, and I think becoming harder for us to change our  minds, especially on issues we deem important.  This could be one reason political compromise is so hard, and Congress so dysfunctional.

Much of the reason may be simply how our minds are built.

Max Bazerman, Harvard Professor and author of one of our favorite books, Judgment in Managerial Decision Making, offers some clues on why we find it so hard to appropriately weigh new informaiton that goes against our prior beliefs:

The first has to do with the way the human mind is designed to retrieve information from memory. The mere consideration of certain hypotheses makes information that is consistent with these hypotheses selectively accessible (Gilbert, 1991, How Mental Systems Believe). Indeed, research shows that the human tendency to entertain provisional hypothesis as true even makes it possible to implant people with false memories.

We also succumb to the confirmation trap due to how we search for information. Because there are limits to our attention and cognitive processing, we must search for information selectively, searching first where we are most likely to find the most useful information. One consequence is the retrievability bias. Another consequence is that people search selectively for information or give special credence to information that allows them to come to the conclusions they desire to reach (Kunda, 1990, The Case for Motivated Reasoning).

A lot of this boils down to psychology. Cognitive dissonance is a state of tension that occurs whenever a person holds two cognitions (ideas, beliefs, attitudes, or opinions) that are psychologically inconsistent. Dissonance produces an uncomfortable mental state the the mind needs to resolve. In resolving dissonance our minds trend towards self-justification which makes it hard to admit mistakes. [More]

Notice the reaction to the HSUS/OFB compromise on animal care standards.

“Dismayed” and “betrayed” are two words being used being used by farmers and ranchers in Ohio—and across the entire U.S.—in reaction to the compromise agreement between Ohio’s ag and livestock organizations and HSUS.
Ohio Farm Bureau spokesman Joe Cornely says he understands those strong sentiments, many of which are based on the belief that HSUS wants to abolish animal agriculture.
“I could not agree more with those people,” Cornely says. “We at Ohio Farm Bureau fully recognize and believe that is the ultimate goal of the Humane Society of the United States—just as our ultimate goal is to not let that happen.  We haven’t given up the battle—we’ve just changed the rules of engagement.” [More]

That is a real stretch even for FB spin, IMHO.  My assessment is they essentially read the handwriting on the wall, and then committed farmers who couldn't be there because they hadn't been born yet to the solution.  Given the age of a typical FB group, it would appear they allowed time for themselves to finish a career before massive changes in practices have to be implemented.

But there are certainly other interpretations.  Perhaps negotiators are trying to stall, while pushing for ex post facto changes by the legislature, hoping the HSUS will lose clout over time.  Perhaps they think more producers agree with the changes than is apparent now.

Finally, we could be overestimating the actual production and economic impact of these changes.  At best they add a few percentage points of rather grim efficiency to production.  Showing evidence of being sensitive to consumer concerns could outweigh these losses in the long run.

One thing I suspect is certain: farm negotiators were not optimistic about what would happen in a referendum.  Those kind of stark expectations can change your mind.