Sunday, October 31, 2010

Before you leave for church...

Remember to count the number of young people (20-somethings) in the pews.  No matter what denomination or faith, they are staying away in droves.  And we may now have a hint why.
So, why this sudden jump in youthful disaffection from organized religion? The surprising answer, according to a mounting body of evidence, is politics. Very few of these new "nones" actually call themselves atheists, and many have rather conventional beliefs about God and theology. But they have been alienated from organized religion by its increasingly conservative politics.
During the 1980s, the public face of American religion turned sharply right. Political allegiances and religious observance became more closely aligned, and both religion and politics became more polarized. Abortion and homosexuality became more prominent issues on the national political agenda, and activists such as Jerry Falwell and Ralph Reed began looking to expand religious activism into electoral politics. Church attendance gradually became the primary dividing line between Republicans and Democrats in national elections.
This political "God gap" is a recent development. Up until the 1970s, progressive Democrats were common in church pews and many conservative Republicans didn't attend church. But after 1980, both churchgoing progressives and secular conservatives became rarer and rarer. Some Americans brought their religion and their politics into alignment by adjusting their political views to their religious faith. But, surprisingly, more of them adjusted their religion to fit their politics.
Throughout the 1990s and into the new century, the increasingly prominent association between religion and conservative politics provoked a backlash among moderates and progressives, many of whom had previously considered themselves religious. The fraction of Americans who agreed "strongly" that religious leaders should not try to influence government decisions nearly doubled from 22% in 1991 to 38% in 2008, and the fraction who insisted that religious leaders should not try to influence how people vote rose to 45% from 30%.
This backlash was especially forceful among youth coming of age in the 1990s and just forming their views about religion. Some of that generation, to be sure, held deeply conservative moral and political views, and they felt very comfortable in the ranks of increasingly conservative churchgoers. But a majority of the Millennial generation was liberal on most social issues, and above all, on homosexuality. The fraction of twentysomethings who said that homosexual relations were "always" or "almost always" wrong plummeted from about 75% in 1990 to about 40% in 2008. (Ironically, in polling, Millennials are actually more uneasy about abortion than their parents.)
Just as this generation moved to the left on most social issues — above all, homosexuality — many prominent religious leaders moved to the right, using the issue of same-sex marriage to mobilize electoral support for conservative Republicans. In the short run, this tactic worked to increase GOP turnout, but the subsequent backlash undermined sympathy for religion among many young moderates and progressives. Increasingly, young people saw religion as intolerant, hypocritical, judgmental and homophobic. If being religious entailed political conservatism, they concluded, religion was not for them. [More]
 I would think that other factor are at work here as well. For example, it is harder every day to bridge the gap between increasing sophisticated technology and anti-scientific dogma. From cosmology to anthropology, hardline views such as Biblical inerrancy and creationism complicate our real-life understanding of how our world works.  When delivered in a tone of authoritarinism present in many churches, it seems to be less appealing than simply not participating.

At the same time, the tendency of evangelical conservatism to descend into personality cults makes the natural lifetimes of leaders like Falwell, Robertson and even Graham hurdles for continuity.  Many mega-churches falter when the charismatic leader is no longer at the head.

It is always difficult to identify why people don't do things, but the author, Robert Putnam who did this research is noted for his ability to do just that (Bowling Alone). And coupled with what I see and hear from oncoming generations, I suspect his outlook is not far off.

Saturday, October 30, 2010

How we will know it's a bubble...

From FDIC head Sheila Bair to Marcia Taylor, eyes are peeled for a bubble in farmland.  But all the experts are tut-tutting the warning.
Today, I'd like to follow-up with an analysis coming out of the University of Illinois by Gary Schnitkey, who concludes that farmland prices are not a bubble and an appreciation of 3% next year would be in line with current conditions. His number one concern for downward pressure on farmland prices is the potential for (perhaps rapid) interest rate increases. His second main concern would be a decrease in farmland returns. He doesn't see either in the short term. [More]
I am way too close to the problem to be objective, but I do think this theory might help.
I was reminded of all of this today by an excellent post from Mike Konczal pointing out this exact phenomenon across bubbles and industries:
In my personal opinion, in the same way middle-class people turned amateur stock analysts was the sign of a tech bubble, or middle-class people turned amateur realtors was the sign of a housing bubble, middle-class people turned amateur credit risk analysts and credit channel intermediaries was the surest sign of a credit bubble.
The amateur credit risk analysts he is talking about are the person-to-person lending websites that were once very overhyped in terms of their potential. This is an amateur market I had not considered, but it certainly makes sense.
The lesson here is beware the amateurs. Wherever they gather in huge profitable masses a bubble has surely formed, and the longer they are able to walk around blithely picking up $100 bills off the sidewalk, the bigger the bubble is. [More]
I think these guys are dead-on.  And as a result, I think farmland will be hard to "bubblize" because there really is no market for amateurs to jump into.  Just like Berkshire Hathaway stock, farmland is denominated in too-large lumps for the truly Everyman investor.  Moreover, even now farmland trading velocity is not appreciably greater than the past.
The limited amount of land for sale, along with current returns and the safety of farmland as an investment, kept farmland values steady across the state in 2009. This is according to the 2010 Farmland Values and Lease Trends Report issued at the Illinois Land Values Conference. 

"There is a limited amount of land for sale," says Bob Swires, AFM, Swires Land and Management, Danville, and overall chairman of the annual survey and conference hosted by the Illinois Society of Professional Farm Managers and Rural Appraisers. "For example, there were 11,000 acres sold in northwest Illinois in 2008. That compares to only 5,900 acres sold in the same region in 2009." 

"Add to that the fact that potential sellers like the current returns, capital appreciation and safety of their farmland investment when compared to the low interest rates on CDs and bonds, and certainly the past performance of the stock market. They are just not letting go of the land," he says. [More]

In other words, nobody is "flipping" farmland. Combine that limitation with the tiny volume of farmland compared to financial instruments and other real estate, and the dynamics of a runaway market will be hard to achieve, IMHO.

What I think will happen is a steady chorus of jeremiads from outside observers for several years until a natural dip in the market occurs, (remember last year?) at which point they will dredge up their earliest warning and say they "called it".

But even then it will still be somebody's farm.  There is no bubble (or bust) if you are not selling.

Also, my barber is not giving me farmland tips.

Thursday, October 28, 2010

A surprise ending...

After all my sniveling about our machinery troubles, it is only fair to report a remarkable effort by our (new) JD dealer to resolve our problems.  While the turbo problem may actually be a combination problem with a fuels system valve (don't ask - I just pretended to understand), my uncertainty about the future of that machine coupled with a need for more capacity had us looking to trade.

The dealer responded with a reasonable offer to trade our current heads for a new, larger cornhead and platform, and then trade our 800-hr. 9570 for a 600-hr. 9670 straight up.  As in no boot.  As in an even swap.

We were floored and deeply grateful. And since we will be adding a new truck (or two) the budget was much happier too.

(I have to admit, though, that after driving a 7120 the cab on the 9670 seems claustrophobic, but maybe next time.)

I hate to think I have become so skeptical and/or pessimistic that I routinely expect the worst, but when vendors make these kinds of efforts, it is certainly trust-building.  I suspect as dealer ranks thin out, both sales and service will be taking an incremental step forward for all of us.  Only the really good survive now.

This is just my impression, but I suspect we are not alone in shuffling equipment. I could see a repeat of the 2008 combine shortage issue again.  Although come to think of it we're not shipping nearly as many overseas as we were then.  Still, $6 corn and $12 beans are doubtless energizing machinery sales right now.

The depreciation giveaway isn't hurting either.

Wednesday, October 27, 2010

Junkbox, Episode VVVROOM...

Things to worry about in your spare time.

Tuesday, October 26, 2010

Speaking of risk...

[Go ahead - kill a half-hour]
This oughta be good (II)...

I have been following The Ethanol Blog by Todd Neeley as he wades through the complex maze of subsidies for ethanol and oil.  His breadth of coverage is admirable, even if his blogging style is distracting, not to mention finding your way past the subscription gates.  Here are links to the first three posts anyway:   2  3

My comments about the latest two installments.

Much space is given to the March study by Bruce Babcock at CARD, although irritatingly, the actual study (pdf) is not linked.  However, the report is accurately reflected and answers one of the questions I had posed about the value of the mandate (RFS).
Babcock said it would be easy to figure out the level of subsidy from RFS if VEETC wasn't there by examining the price of renewable identification numbers, or RINS. These are the numbers assigned to each gallon of renewable fuel to allow the EPA to track usage of those fuels.
Fuel blenders are required to either blend a certain amount of ethanol or to purchase those identification numbers from blender companies that have met RFS requirements and have "excess" renewable fuel to sell. The RIN system works to ensure industry-wide compliance with the RFS.
"All you would need to do would be to look at the RIN price to look at how much support is being received by the ethanol industry. But with VEETC, the RIN price is as much as 45 cents per gallon lower than what it would be," said Babcock.
With the influence of VEETC, the RFS provides little support. With VEETC removed, Babcock said, the RFS would be worth about 30 cents per gallon, or about $3.9 billion, based on the 2010 RFS of 12.95 billion gallons.
Koplow said the RFS will become more valuable every year on its way to the mandated 36 billion gallons of production in 2022. [More]
[Curiously, we have no way of knowing who this "Koplow" guy is, but I appreciate his input.  Actually he is identified in the third? fourth? post.]

This value for the mandate seems low to me, but I can find no fault in Babcock's logic other than at the extremes: low oil prices, for example. 

Also the original study referenced regarding oil protection costs is here. The report does answer my speculation about the importance of Israel vs. oil.
Next, the CRS (1992) claims that the U.S. military salso is concerned with the security of Israel. But we see no evidence of a major military concern for Israel per se, independent of concern about energy security. In the first place, the Military Posture statements cited above make it clear that the JCS cares about Israel only in the context of the Arab-Israeli conflict. On account of its oil interests in the Gulf, the U.S. does want the region to be stable, and to forestall and resolve Arab-Israeli conflicts. As cited above, the Joint Chiefs of Staff are clear on this. Thus, U.S. military planners care mainly about regional stability – because of the region’s oil – and not so much about Israel per se. We believe that, if the Middle East had neither oil nor strategic importance, the U.S. would not maintain a significant military presence in the region solely to help protect Israel. Fuller and Lesser (1997) agree, stating that “at this point, Israel’s security, however important, does not represent an extra dimension of U.S. Gulf Policy” (p. 45).11 [Same]
This will come as harsh news to AIPAC, I'll bet.

However, the authors of the study warn against using their analysis to do, well, what this series is doing - numerical comparison.
Our analysis of these steps generally is illustrative, not rigorously quantitative. We estimate that there were no oil in the Persian Gulf, then U.S. combined peacetime and wartime defense expenditures could be reduced in the long run by roughly $27 to $73 billion per year (in 2004 dollars). If all motor vehicles in the U.S. did not use oil, U.S. military expenditures could be reduced by $6 to $25 billion per year, or $0.03 to $0.15 per gallon ($0.01 to $0.04 per liter) of all motor fuel. [Same]
The next installment (I think it's next, the numbering is not readily apparent) does yeoman work on summarizing all the possible "subsidies", and again the writing style is puzzling.  The data begs for columns.  Hidden in plain sight are the per-gallon totals I think more accurately reflect subsidy levels, except for one thing: they compare apples to fruit salad.

The oil industry, unlike ethanol, has more products in addition to gasoline.  To allocate all the subsidies to that one product makes no sense.  Here is what you get from a barrel of oil.

[Click to enlarge] [Source]

So if we use 51% as gasoline's share (allocated below), here is what the subsidy levels per gallon look like, using Todd's numbersI think this is fair because Todd counts home heating oil subsidies, for one example, in the mix, which don't have anything to do with the 140 B gallons of gasoline he divides by.  The last column using the energy difference between gasoline and ethanol (80%) for an energy equivalent number.

DTN Allocated Allocated
  $B $/gal $/gal $/eqiv gal
Oil (high) 133.2  $0.96  $0.49  $0.49
Oil (low) 280.8  $2.01  $1.03  $1.03
Ethanol 16.1  $1.24  $1.24  $1.55

It is fair to report the huge total number oil gets, but as I noted before most farmers still believe the bigger you are the more subsidies you deserve.  And oil is a really big industry.

So for this observer, I think the idea oil is getting "more" subsidies is an artful arrangement of fact.  At the very least, oil gives the taxpayer more energy bang for his/her subsidy buck.

Forget "sports drinks" or "energy drinks"...

Get a load of the power of the "civilization drink": milk.

One of the reason the sight of Visigoths coming over the hill toward them was pretty unnerving to Roman soldiers was the dudes were huge - relatively speaking.  And all because of a tiny evolutionary mutation and the ultimate secret weapon - the cow.

The new settlers also had something of a miracle food at their disposal. They produced fresh milk, which, as a result of a genetic mutation, they were soon able to drink in large quantities. The result was that the population of farmers grew and grew.
These striking insights come from biologists and chemists. In a barrage of articles in professional journals like Nature and BMC Evolutionary Biology, they have turned many of the prevailing views upside down over the course of the last three years.
The most important group is working on the "Leche" project (the name is inspired by the Spanish word for milk), an association of 13 research institutes in seven European Union countries. The goal of the project is to genetically probe the beginnings of butter, milk and cheese.
An unusual circumstance has made this research possible in the first place. Homo sapiens was originally unable to digest raw milk. Generally, the human body only produces an enzyme that can break down lactose in the small intestine during the first few years of life. Indeed, most adults in Asia and Africa react to cow's milk with nausea, flatulence and diarrhea.
But the situation is different in Europe, where many people carry a minute modification of chromosome 2 that enables them to digest lactose throughout their life without experiencing intestinal problems. The percentage of people with this modification is the highest among Britons and Scandinavians (see graphic). [More of a must-read for any dairy producer]

[Click to embiggen]

The ability to tap into this mother-lode (heh) of protein and fats helps me understand why dairy farming is deeply woven into the tradition of  agriculture of Northern Europe. (Check out the slopes they graze in Switzerland, for one extreme).  Milk literally made them the people they are today.


Not only could cows utilize some pretty marginal terrain, but the invention of cheese provided a storage and nutrient concentration method that further exploited this food source.  This evolutionary advantage we take for granted is also one big headache for the global future of lactose-purveyors as much of the population growth is not occurring among milk drinkers.

Experts disagree on the extent, but it also adds into the reason the Dutch (big dairy consumers) have shot past Americans as the tallest people in the world, although superior pre- and post-natal and genetics care are likely much bigger factors.
While obesity has tripled in many Western European countries since the 1980s, the Dutch keep growing upwards. The average height is now 6 feet 1 inch for Dutch men and 5 feet 7 inches for Dutch women. So why are the Dutch so tall? Theories abound. An often-heard argument is the Dutch love of dairy and their protein-rich diet, but there are also serious studies that look at height differences, and the Dutch pop up time and again in many of them. [more]
Milk - it does a people good.

Monday, October 25, 2010

OK, now it's the perfect...

Christmas gift.  Not only has Amazon lowered the price of the Kindle*, but finally seems to be poised to allow book lending on a limited, but helpful scale.
This new feature of Kindle, while maintaining DRM, recognizes the human need to share books that have been enjoyed and/or found important. Not surprisingly, Amazon set up a few ground rules for its electronic version of lending: A book can be lent only for up to 14 days. A single book can only be lent once, and the lender cannot read the book while it is loaned out. Also, not all books may be loaned. It is up to the publisher or copyright holder to determine whether the title can be loaned out. [More]
It remains to be seen how publishers react, but assuming most go along, this will make the device even more popular, especially among women, I would hazard. I know Jan will now be able to share books with her sister, to whom she has been sending hard copies.  It also means we can share those rare books we both read.

Kindles are perfect grain cart/elevator-line/airport companions. Coupled with the new lower $139 price, I would put this at the top of my list of gifts to give.

*I recommend the Wi-Fi version for rural areas without great cell coverage.  I order all my books on line anyway, so paying more for 3G is a waste.  Downloading still takes about a minute either way.

Sunday, October 24, 2010

Incremental steps...

With all the charges and counter-charges about animal welfare, some entrepreneurs are looking to provide answers. This is why I think patience and listening can reduce, but not eliminate, the bulk of the public apprehension about animal agriculture.
Two premium chicken producers, Bell & Evans in Pennsylvania and Mary’s Chickens in California, are preparing to switch to a system of killing their birds that they consider more humane. The new system uses carbon dioxide gas to gently render the birds unconscious before they are hung by their feet to have their throats slit, sparing them the potential suffering associated with conventional slaughter methods.
“When you grab a chicken, turn it upside down and put it on the line, it’s stress, stress, stress,” said Scott Sechler, the owner of Bell & Evans. “Our system is designed so that we put them to sleep without stress and we kill them without stress.”
That is sure to appeal to a segment of the chicken-buying public. But telling them about it presents a marketing challenge.
“Most of the time, people don’t want to think about how the animal was killed,” said David Pitman, whose family owns Mary’s Chickens.
Anglia Autoflow, the company that is building the knock-out systems for the two processors, calls the process “controlled atmosphere stunning,” but Mr. Pitman said his company was considering the phrase “sedation stunning” for use on its packages. Also on the short-list: “humanely slaughtered,” “humanely processed” or “humanely handled.”
The trick, he said, is to communicate the goal of the new system, which is to ensure that the birds “not have any extra pain or discomfort in the last few minutes of their lives.”
In a typical processing plant, birds are unloaded in what is known as the “live hang area.” Workers hang the chickens upside down from metal shackles connected to a mechanical rail that conveys them into the plant. They go first into a unit that uses a mild electric shock to make them unconscious, and then they are brought to the “kill machine,” where a blade cuts their throat and they bleed to death.
In the new system, birds will arrive at the processing plant in special containers that will go directly into a chamber to which carbon dioxide is slowly added, displacing some of the oxygen and making the birds unconscious. Only then will workers handle the birds and hang them on the shackles.
Temple Grandin, a professor of animal science at Colorado State University and a prominent livestock expert, consulted with Bell & Evans as the company worked with Anglia to design its system. She said it was better because the chickens were not aware of what was happening to them. “Birds don’t like being hung upside down,” Dr. Grandin said. “They get really stressed out by that.”[More]
I don't underestimate the endorsement by Temple Grandin, a voice that carries weight with both sides.  Nor do I dismiss the economics of this upgrade, but remain convinced the market will support such measures.

We can make this transition to different meat production techniques that allay consumer dismay and exact recoverable costs.  It will just take time, and during that interval, getting in consumer faces is the wrong strategy, IMHO.
Don't think we'll be left out...

Of the foreclosure debacle.  I refer, of course, to title policy costs.
Title insurance is defined as protection against losses stemming from any problems connected to the title of a piece of property. So if there were homeowners’ association fees that went unpaid by a previous owner, or liens against the home placed by local tax assessors that weren’t detected during the title search conducted while the home was being purchased, those costs would be covered by title insurance. The insurance company will also cover all legal fees rising from the dispute.
The problems that have arisen in the wake of the real estate craze early last decade stem from the fact that mortgages and titles changed hands so quickly and so many times that, in many instances, no one knows how to track down all the original paperwork.
In regions hard hit by foreclosures -- Florida, for example -- much of that paperwork isn’t showing up when title searches are being conducted on sales of foreclosed home. Consequently, lots of potential problems are going undetected.
“There is information that isn’t making it to the proper place quickly enough and it’s making it difficult to be certain that the title has completely cleared,” Epstein explained.
Epstein said there are cases in which mortgages were split up among several investors and those separate investors have foreclosed on the same mortgage at different times, leaving the current title holder in an uneasy state of legal and financial limbo.
That’s the sort of dispute that title insurance is designed to settle.
At least one large title insurer isn’t exactly embracing these issues. On Oct. 1, Old Republic National Title Insurance Co., a unit of Old United International Corp (ORI: 13.91 ,0.00 ,0.00%), announced it wouldn’t issue new policies on homes recently foreclosed by GMAC or JPMorgan Chase. [More]
The last land transaction I made included a real surprise for the title policy cost. I'll bet losses in the foreclosure arena could prompt rate increases in healthier sectors like agriculture.
As if consolidation...

Wasn't reducing our numbers fast enough.
Now, other agencies want to capitalize on progress in robotics to transform their own fields. The National Institutes of Health (NIH) is after “robotic applications to surgery,” as well as “computerized therapist personalities [and] artificial intelligence capable of real time monitoring” along with patient interaction and day-to-day care-taking tasks. And robots won’t just be health care providers — the NIH is also interested in organ- and limb-replacement robotics, including advanced prosthetics and “implantable smart robotics for monitoring/drug delivery.”

The USDA is looking at an agricultural-bot takeover that would reduce labor costs and streamline production and food-safety checks. The agency wants robots that’d be responsible for crop harvesting, sorting and inspecting, along with “detecting ripeness, physical damage [and] microbial contamination.” Robots would also rule over animal herds, taking on tasks like “sorting, vaccinating [and] deworming” large numbers of livestock.  [More]
I have always believed much of our work was vulnerable to automation, and recent upgrades like auto-steer reinforce this conviction. While much of this research is likely pointed toward labor-intensive  crops like fruits and vegetables, the advancements will spill over into row-crop farming I suspect.  Also remember, these are your government dollars at work, even while we expend resources to help struggling producers keep going.
I wonder how many farmers we will need in say, 20 years?   10,000?
Government by precipitation...

Consider the idea that democracy depends on "Goldilocks" rainfall patterns.

Why have some countries remained obstinately authoritarian despite repeated waves of democratization while others have exhibited uninterrupted democracy? This paper explores the emergence and persistence of authoritarianism and democracy. We argue that settled agriculture requires moderate levels of precipitation, and that settled agriculture eventually gave birth to the fundamental institutions that under-gird today’s stable democracies. Although all of the world’s societies were initially tribal, the bonds of tribalism weakened in places where the surpluses associated with settled agriculture gave rise to trade, social differentiation, and taxation. In turn, the economies of scale required to efficiently administer trade and taxes meant that feudalism was eventually replaced by the modern territorial state, which favored the initial emergence of representative institutions in Western Europe. Subsequently, when these initial territorial states set out to conquer regions populated by tribal peoples, the institutions that could emerge in those conquered areas again reflected nature’s constraints. An instrumental variables approach demonstrates that while low levels of rainfall cause persistent autocracy and high levels of rainfall strongly favor it as well, moderate rainfall supports stable democracy. This econometric strategy also shows that rainfall works through the institutions of the modern territorial state borne from settled agriculture, institutions that are proxied for by low levels of contemporary tribalism. [More] [Emphasis added]

This is an intriguing thought, and if climate change should result in more arid regions, it seems to presage a challenge for democracy globally.  Heck, Indiana could become an autocracy

Illinois could already be there, judging by our politics.

Junkbox, Episode OVERDUE...

Finally, some quality computer time (although I do have to reassemble my budget, as well)

Saturday, October 23, 2010

At least we walked away...

Behold, harvest has finished, but not without one of the most tortuous endings I have known.  Two weeks ago with a mere 200 acres of corn left, a relatively benign season reverted to the sad average.
  • The turbocharger issue on our 9570 continues.  Although currently "functional" neither the mechanics nor we have any confidence this third one will last long.  Something is screwy in the electronics.  High marks to the service people, but there aren't that many spares around, and the problem seems to be deeper than we can diagnose.
  • Thanks to a good friend and neighbor who helped with 70 acres of specialty corn that was less horrible than we thought.
  • When we spoke to our CIH dealer about our situation he offered a demo 7120 to get the last 60 acres. This was a two-class leap (V to VII) and the machine blew our socks off.
  • Meanwhile, a faithful old IH1800 tandem broke.  By "broke" I mean Jan called me in South Bend (everything happens on Thursday night when I leave to tape USFR) and said just that: "The truck broke."  When I asked what part she meant she said the "whole thing".
She was right. While raising to bed to empty, the anchor plate for one lift cylinder broke free, and immediately, the strain cracked and bent the frame on the opposite side. The truck is literally broken.

Jan was brilliant - carefully lowering the bed as far as it would go and preventing a sideways collapse. Aaron got to scoop out yet another truck.

So with help from a cousin's truck we limped across the finish line.  We ended with our worst field (corn-on-corn) which left a bad taste in our mouths.  But we finished.

So I hope to be posting a little more often.  I just haven't been able to think of other things for a while.

Really need rain here too.

Thursday, October 21, 2010

Reality check...

In the bombardment of political commercials and heated charges, I had bought into the idea myself that federal spending was zooming upward at an unprecedented rate.  After all, we had a deep recession, wars, and etc.

But guess what?  While certainly going up, it is not accelerating.

This is with a log-scale. Why logs? Because with logs a straight line means a constant growth rate. In a world where population and productivity are always growing, virtually any long economic series is going to look like a giant swoosh. That’s just because America is much bigger now than it was in the 50s. [More]
Spending is growing, but at a surprisingly consistent rate.  The deficit problem that faces us largely due to the failure of government revenues to grow apace. Hence the term recession - duh!


With all the talk of runaway spending, it may be less the threat right now than getting revenues up by growing the economy.  Hence the rising concern with anemic growth.

I'm all for cutting spending, but so far I haven't heard any modestly detailed ideas about where to start other than the detail-free ideas by Rep. Ryan.  It's a good opening statement, but handing out vouchers instead of Medicare looks dead in the water to me.

For all the hype I still think Bruce Bartlett has it right - the bond market will tell us when we really have to make income and expenses come closer together. In the meantime, a little factual background on what federal spending is really doing couldn't hurt.

Sunday, October 17, 2010

A developing story...

Consider this map.


I sure have.

What if we are in a different climate pattern?
How dey do dat?...

Something called building mapping.

Amazing Building Mapping - Vimeo Festival from Dan Ilic on Vimeo.

[via sullivan]
And the beat goes on...


After 10 hours, a reman turbocharger failed suspiciously like the original on our JD9570STS combine. So we're 200 acres from the finish line, and I'm getting ready for Plan D if we repeat this exercise.  I have had machines with continual failures before, and know now to cut my losses a little earlier.

I'll let you know.
This oughta be good...

I would commend to your attention a series by Todd Neeley (The Ethanol Blog) now in progress.  I was going to wait until he finished, but not knowing the schedule, I think I'll jump in to comment on some aspects of his framing of the debate.

His analysis to date seems to supply some ammo for ethanol supporters in their fight to continue its enormous cost to the taxpayer.  He trots out the standard talking points from Big Ethanol.
Using the most liberal definition of public financial support, including tax breaks on equipment depreciation and foreign investments, oil’s total benefit from the public treasury can be as much as 10 times that of ethanol. [Same source for all quotes]
Please read the whole first installment, but that statement alone is subject to one observation.  Namely, since the oil industry delivers roughly ten times the fuel to consumers (not to mention enormous amounts of feedstocks for the chemical industry) on a per-gallon or per-energy-unit basis couldn't oil subsidies actually be similar or even lower?

Moreover, isn't this essentially the Big Farmer argument for DCP's and no payment limits - that we should receive proportional to our output?  Comparisons should at least offer some numbers other than gross totals.

The canard I struggle to find valid is assigning a common good paid for by the government (freedom of the seas) to specific beneficiaries: the tired idea our US Navy is acting as a private protection service for oil tankers.
But oil also benefits from a variety of indirect taxpayer supports, including U.S. military spending to protect the Persian Gulf. Mark Delucchi, a research scientist from the Institute of Transportation Studies at University of California Davis, said in a study that oil’s share of that protection ranges between $6.9 billion and $28.8 billion.
First of all, when your estimate varies that much, it indicates to me you don't know what to measure or how to measure it.  It's a SWAG (Scientific Wild-Ass Guess). 

Second, correct me if I'm wrong, but much of our Middle East presence is actually due to the security of Israel and the Suez Canal. And if we are concentrating massive resources on oil tankers, how the heck did those bozos in rubber rafts hijack so many of them?

Finally, don't farmers benefit from open seas when we ship to China?  Are there no subs and carriers in WesPac? What is agriculture's share of the naval presence on OUR trade routes?

This figure is specious and undermines the nature of a function of government (common defense) that is at the heart of our constitutional framework.

But of all the reactions to this first article, I was most struck by the failure to mention the word - at least I couldn't find it - "mandate".

This may be corrected in later posts, and that will be truly interesting. What is the economic value of the ethanol mandate?  I would suggest it is much, MUCH higher than the other subsidies combined.  

Ask yourself this: Without the mandate how much ethanol would be blended? Todd hints at this idea.
"One rule of thumb, where industry claims something is not a subsidy, is to see if they then don't care if the policy is terminated," he said. "If they fight removal, expiration, narrowing, or termination, it is quite good evidence that the policies they claim publicly aren't really subsidies, are in fact subsidizing them."
I will interested to see if any attempt is made to include some estimate of this cost in the subsidy total for ethanol.  It is, of course, possible all this will be discussed later.  I hope so. Todd does good work.  But writing in installments begs for responses in kind.
My drinking is not a problem...

It's a feature.

It is important to note that both income and education, as well as childhood social class and parents’ education, are controlled in multiple regression analyses of these data from the US and the UK.  It means that it is not because more intelligent people occupy higher-paying, more important jobs that require them to socialize and drink with their business associates that they drink more alcohol.  It appears to be their intelligence itself, rather than correlates of intelligence, that inclines them to drink more. [More]

Sullivan adds this comment.
It's what Oakeshott called "the ordeal of consciousness." When you have constantly charging brain, you need to shut it off sometimes in order to breathe and live. It's no wonder so many brainiacs self-medicate in this way. The key thing, as always, is moderation. [More]
Ah yes - moderation.  Which is in the eye of the beholder, I have discovered.

Friday, October 15, 2010

And yet, it can happen...

Even if you drive the right car...


Somehow, blowing through a 45-mph zone will even catch a Vibe.

Words of the Day...

Words we need but didn't have before now (my favorites):
BELL’S LAW OF TELEPHONY No matter what technology is used, your monthly phone bill magically remains about the same size. 
DENARRATION The process whereby one’s life stops feeling like a story.  
INTRAVINCULAR FAMILIAL SILENCE We need to be around our families not because we have so many shared experiences to talk about, but because they know precisely which subjects to avoid. 

Wednesday, October 13, 2010

This works for my brain...

A new way to depict maps.

Most city maps are insufferably hard to read. Street names are never big enough, map keys are too complicated, and neighborhoods are rarely delineated; you could wander into the heart of West Oakland and never know it, if not for the symphony of Glocks going off around the corner.
A clutch of city maps by the Hewitt, Texas-based cartography firm Axis Maps offers a clever solution. The maps use typography as the sole visual clue. So everything from streets and highways to parks and waterways are labeled with text. The bigger the thoroughfare or the landmark, the bigger the words. So far they have maps of Chicago and Boston; New York, SF, and DC are coming up. Chicago's shown here: 


[via sullivan]
It came on Wednesday...

Friday the 13th, that is.  Here is the summary of breakdowns during the final stages of our hitherto trouble-free harvest.
  • Tandem #1: blown o-ring on the hoist. Upside: We fixed it ourselves - an increasingly rare feat.
  • Tandem #2: hard-to-diagnose priming problem caused by tiny leak in fuel return line.  Had to order and wait for new line.
  • 9570 Combine: blown turbocharger.  So few of these machines are out there so we couldn't cannibalize a new one. Dealer doing his best, but day 4 and counting.
  • Brand new CIH MX 305: After 4 calls for the a/c the technician finally discovered the little beads in the receiver dryer (don't ask me!) has escaped into the lines and valves. Maybe tomorrow.
  • With all the harvesting stopped, we started hauling fall delivery beans from bins we couldn't deliver from the field because of train problems at the elevator, and...(wait for it)...Tandem #1 is developing a significant shimmy.
Meanwhile, like EVERYONE around me is done (pdf)!  The horror!

Still, all I have to do is pull out last year's work log and things fall into perspective.  Just not much interest in blogging right now.

Sunday, October 10, 2010

Junkbox, Episode MSG...

Slowly getting back into the groove (No, not done yet - major truck casualty)
The securitization downside...

The process of turning loans (mortgages) into securities was vaguely understood by the folk who generated these "tradable" pieces of paper.  But as we sorta knew then, it did muddy the water of ownership of the loan.

Heck, it turned it into sludge!
Consider the latest revelations. The big banks are so backed up with foreclosures that some of them resorted to hustling through repossessions without the proper paperwork. Some of them—including Bank of America, J.P. Morgan Chase and Ally Financial's GMAC Home Mortgage—have announced a temporary freeze in some states on further foreclosures while they sort through the mess.
In one case, a bank employee said she was approving 8,000 foreclosures a month. By my math, that's roughly one for every minute and a half. No, she wasn't reading all the documents thoroughly. (As one wit observed, the banks paid about as much attention to foreclosing on the loans as they did to making them five years ago.)
In many cases, thanks to the fallout from securitization, it's not even clear who owns the mortgage. The payments may be due to different financial institutions around the world, some of which have gone the way of all flesh. [More]
Thinking about this, I wonder if the wave of defaults is just beginning, and if the financial community has even the faintest hint of how to handle the result.

Farm mortgages are not in trouble, of course, and they are remarkably straightforward.  I can point to the folks to whom I owe the bucks.  Which makes you wonder if more lenders won't want farm real estate lending as part of their business, or more of it if they are doing it now.

Couple that with the continued slide in long term interest rates, and surging commodity prices, and my wildly bullish land price forecasts could seem embarrassingly tame.

Saturday, October 09, 2010

Back off, Jack...

I'm packing Elgar.

Classical music isn't just for listening to - it is a powerful people repellent.

The use of classical music in public places is increasingly common: in shopping malls, parking lots, and other places where crowds and loitering can be problems. The TTC is by no means the only transit service to use the technique: in 2005, after classical music was introduced into London’s Underground, there was a significant decrease in robberies, assaults and vandalism. Similar results have been noted from Finland to New Zealand. The idea may be a Canadian innovation: in 1985, a 7-Eleven store in Vancouver pioneered the technique, which was soon adopted elsewhere. Today, about 150 7-Elevens throughout North America play classical music outside their stores.
As a classical music lover, I’d like to believe that my favourite music has some kind of magical effect on people – that it soothes the savage breast in some unique way. I’d like to think that classical music somehow inspires nobler aspirations in the mind of the purse-snatcher, causing him to abandon his line of work for something more upstanding and socially beneficial.
But I know better. The hard, cold truth is that classical music in public places is often deliberately intended to make certain kinds of people feel unwelcome. Its use has been described as “musical bug spray,” and as the “weaponization” of classical music. At the Bathurst Street Subway Station, the choice of music conveys a clear message: “Move along quickly and peacefully, people; this is not your cultural space.”
Some sociologists have expressed concern that this particular use of classical music only serves to further divide society along lines of age, class and ethnicity. And, not surprisingly, some in the classical music community are offended by this new purpose for their art. The English music critic Norman Lebrecht has written that using classical music as a policing tool is “profoundly demeaning to one of the greater glories of civilization.”
However, it’s not really the fault of those concerned with public order and safety that many young people – especially those who come from economic and cultural backgrounds that have never embraced Western classical music – have an aversion to classical music. The managers who install the loudspeakers and switch on the music are pragmatists who are taking convenient advantage of a pre-existing socio-cultural state of affairs. To direct hostility against them, as Lebrecht has done, is to shoot the messenger. [More]
I think I have reached that point where old guys stop apologizing for unpopular beliefs or tastes. I have watched with quiet detachment as my own church embraces music that touches me not, and have dropped out of the popular music culture without a backward glance.

But just like the new politics, the triviality of contemporary music seems based too much on simple emotion and minimal intellectual effort. It is fast food for the ears.  And just like foodies swimming upstream in this current, I happily can choose to join that tiny minority with my listening tastes.

I do not begrudge others their their own joys, but suspect they will pall quickly because they are built to be ephemeral.  Like the incredibly uninformed political opinions (Cut taxes to fight the deficit!) rampant across the US, I don't have to argue against them, just wait.  Illogic collapses on its own.  So too will much of what passes for music, I would venture.

This all sounds terribly condescending, and I suppose it is, but our race to the bottom culturally, fed by economic bifurcation, will make such views more common coming from that tiny portion of us who are doing well in the US. We will simply have fewer things in common with the lower 99%. (Yeah- I'm in that bracket, and unlike many farmers I know, I at least admit it.)

The weird thing is that even though my attitudes irritate so many, those same folks are sacrificing their own futures to defend mine.  (Go ahead - cut my taxes.)

I seem to have wandered from the music intro, but perhaps classical music is a small window into the growing division between us.

Thursday, October 07, 2010

There's an app for that..

iPhones in Space (  How cool is this?

Homemade Spacecraft from Luke Geissbuhler on Vimeo.

Wednesday, October 06, 2010

As a minor-league TV host...

This was not encouraging.  Re: the debacle that is the Tribune Co.
And management still is confident that the new thinking has Tribune on the right track. The company recently announced the creation of a new local news format in which there would be no on-air anchors and few live reports. The newscasts will rely on narration over a stream of clips, a Web-centric approach that has the added benefit of requiring fewer bodies to produce.
“The TV revolution is upon us — and the new Tribune Company is leading the resistance,” the announcement read. And judging from the job posting for “anti-establishment producer/editors,” the company has some very strong ideas about who those revolutionaries should be: “Don’t sell us on your solid newsroom experience. We don’t care. Or your exclusive, breaking news coverage. We’ll pass.”[More]
For those of us in the Chicago orbit, the debasement of institutions such as WGN and the Trib at the hands of foul-mouthed yahoos (read the whole article!) is deeply saddening. Progress is one thing, but vulgar arrogance as a method to accomplish it is not a sustainable (note the buzzword) pattern.

Tuesday, October 05, 2010

Who you calling a "pinko forager"?...

A new look at how our political divisions may be more ancient and closer to home than we thought.
Types A and B map reasonably well onto today’s culture wars, with A the modern/liberal and B the traditional/conservative. It maps well to the rich-poor axis from the World Value Survey.  But in fact, type A vs. B are actually foragers vs. farmers. Which is my point: I think a lot of today’s political disputes come down to a conflict between farmer and forager ways, with forager ways slowly and steadily winning out since the industrial revolution. It seems we acted like farmers when farming required that, but when richer we feel we can afford to revert to more natural-feeling forager ways. The main exceptions, like school and workplace domination and ranking, are required to generate industry-level wealth. We live a farmer lifestyle when poor, but prefer to buy a forager lifestyle when rich. Why this should be will be the subject of my next few posts. [Please read the whole short post for context - I hated to excerpt more]
I'm always suspicious of methods to sort people out, but I keep finding references to agriculture creeping into our cultural debate. This will impact our ag policy debate to some degree IMHO.

[via mr]

Sunday, October 03, 2010

Atrazine is still in trouble...

This type of information format is not easy to counter emotionally. And farmers end up looking like insensitive tools too often when we try.

[Please go here to see the video in question.  I couldn't embed it with controls]

With the rising question of weed resistance making many of us reach for new/old herbicide tools, losing atrazine would really hurt.  It could be some farms/areas will have to be "sacrificed" to reach a compromise with regulators.

Personally, I would favor more local monitoring at farmer expense to provide hard evidence our farm is not contributing to the problem.  This would impact coarse soils most, and ease the burden on high clay soil types, I would guess.  These areas also seem to overlap somewhat with irrigation as well.

This is pretty "throw-under-the-bus" for the farm community, but solidarity should not be the impediment to solving the problem where the problem exists.
The best new thought ...

On "sustainability" I've read all year.
In other WIF news, I moderated a discussion of "the sustainable energy state". I have long thought "sustainable" a term best avoided, though I find it creeping into my head (and my articles) now and then. Few good things are sustainable, it seems to me, and many bad ones (such as economic stagnation) can be sustained quite easily. Honor-bound not to attack the title of my own session, I was pleased that Michael Shellenberger of the Breakthrough Institute said that very thing--and even more pleased, and surprised, that the point commanded almost universal agreement in a group that represented every shade of opinion on energy policy. Sustainability is the wrong model, he said: we need a new vocabulary that recognizes the need for ceaseless change and innovation. Yes, we do. [More]
Amen.  Not only can't we agree on definition of the word of the decade, the goal itself suggests a "final solution".  As if once in place, a sustainable system should become sacrosanct and off limits for improvement.

Not only do I think most sustainable methodology being batted around - agrarianism, for example - to be critically short of hard evidence of their claims, I am always suspicious of comprehensive solutions to complex problems. Most problems are complex because they constantly change, requiring periodic tweaking to our answers as well. Also by the time comprehensive solutions are worked out the problem has long since moved on.

In fact, as I mentioned on USFR this week, the sustainability of no-till in my area is debatable as either a remarkable string of extreme seasons or possible hint of climate change has left most operators aghast at the conditions of our fields.  Perhaps no-till on heavy, poorly drained soils is still sustainable, but that doesn't seem to be the way most are voting.

Saturday, October 02, 2010

Meanwhile, back at reality...

We're pretty rich.  If Friday's markets bummed you out (and they did me) check out this calculator for how rich you really are.