Saturday, November 27, 2010

There should be a Grandpa Wing, too...

From a father/grandfather who has dabbled in tall-taling, I second this idea.

[More]

Be sure to visit the source and click on the exhibits!
Market plan first, crop plan second...

The fallout from growers' love affair with n-stacked corn continues around the globe.  No matter how much we like them, it's customers who count in the end.  And this is what "the end" can look like.
Favorable weather and genetically modified seeds have given South African corn farmers their biggest harvest since 1982. If only it could be sold.
Dilapidated rail lines and a surging currency are trapping a record corn surplus within the country’s borders. The buildup may force growers out of business and cut jobs in agriculture, the biggest employer in a nation where one in four is without work. And it has caused the benchmark corn price in Johannesburg to slump 19 percent in dollar terms this year, while its U.S. equivalent has risen by 34 percent.
“They can’t get it out because of the rand, because of infrastructure, because some countries don’t want it,” Henk van de Graaf, assistant general manager of the Pretoria-based TLU SA farmers union, said in an interview. “It impacts the economics of the little farming towns who live off the farmers. Businesses in the towns close down, there is a real snowball effect.”
Competition authorities are considering a request by Grain SA, the Bothaville-based growers’ organization, to allow it to hold the surplus off the domestic market to support prices. The government has tried, and failed, to find buyers in China, Egypt and Tunisia, Tina Joemat-Pettersson, the country’s agriculture minister, told lawmakers in Cape Town on Nov. 9.
The country reaped 12.82 million metric tons of corn this year, the government’s Crop Estimates Committee said today in its final crop assessment. That could result in a 4.5 million ton surplus, according to Joemat-Pettersson, triple last season’s exports. At current prices that could be worth at least $818 million.
Bumper Harvests
South African farmers have compounded their difficulties by using genetically modified seeds, disliked across much of Africa, while at the same time allocating three-fifths of their crop to the white variety of the grain, popular on the continent but not in Europe or Asia. This year’s surplus comes after large harvests in 2009 and 2008.
Shipments have been further hindered by bumper harvests in southern African countries, where South Africa has traditionally trucked excess grain. While corn has been exported to South Korea, Kuwait, Spain and Japan, an inability to transport significant amounts of grain to ports has thwarted previous efforts to develop new markets.
“It’s been an absolute disaster,” said John Gordon, who retired last year as chairman of the South African Cereal and Oil Seed Traders Association, from Johannesburg. “It’s the rail system that’s the problem. Grain is not profitable for them.”[More]
So, let's review: Verify your market first, and if you can't easily export, plant stuff you can sell locally.

Actually, I have some neighbors who are putting SmartBoxes on their planter and using their last three years of results (in our admittedly atypical growing seasons) as justification to plant all conventional corn. While I expect seed companies to squeeze our choices by offering fewer and older conventional varieties compared to stacked seed, the burden of proof of trait value has become heavier for many of us.

Many of us remember SA as a significant corn export competitor back in the day. Blunders like this could prompt them to reconsider building ethanol plants. Of course, sitting on enormous gold deposits which make your currency really strong, doesn't help either. Yet another surprising version of the Resource Curse.
What am I missing here?...

There has been a recent spurt of media about "vertical farming". I have dismissed this idea as fundamentally flawed for one simple reason: energy constraints.

Amazingly, even fairly detailed plans gloss over the solar energy input problem.
For building constraints, we assumed we would be working with a space approximately the size of a turn of the century tenement building typical in New York City: six floors tall with a ceiling height of 9 feet and an average of 1500 square feet per floor. Given this size, we expect to grow two rows of crops per floor on the top five floors of the building thereby doubling our yield capacity. Calculations for crop yield are based on 3000 square feet. Based on the calculated square footage, our expected yield is (see Appendix 2 for the conversion to metric units, the editor):
  • Lettuce: 688 lb.’s/100/square feet, 20,640 lbs/3000 square feet (42)
  • Cucumbers: 932 lb.’s/100 square feet, 27,960 lbs/3000 square feet (43)
  • Tomatoes: 835 lb.’s/100 square feet, 25,050 lbs/3000 square feet (44)
  • Sweet potatoes: 1,200 lbs/100 square feet, 36, 000/3000 square feet (45)
  • Strawberries: 333 lbs/100 square feet, 10,004 lbs/3000 square feet (46)
The growing media chosen for the crops is perlite. Perlite is a processed mineral that allows a constant concentration of water and nutrients (47). If maintained properly, perlite can withstand many years of use without degrading (48). Two concerns with using perlite are its poor pH buffering capacity and propensity to encourage algal growth (49). However, with proper inspection and maintenance of the growing equipment, we will avoid any of these potential drawbacks. Figure 1 details the nutrients as well as certain other environmental conditions required for proper growth of each crop. All nutrients will be drawn from the composting and black water, both detailed elsewhere in the paper. We will not need to rely on outside sources of fertilizer. This self-reliant closed system serves to greatly reduce the amount of pollution related to transportation, fertilizer, pesticide and herbicide production. Manual pollination performed by employees will be used for those plants requiring it. [More]

Tell me again how, say, the 3rd floor down produces squat away from the windows.  Mostly these proposals gush over water reclamation systems and "closed loops" efficiencies.  (We do love the idea of nothing going to waste!)

Consider just one design:
[Click to embiggen][Source]

Basically stated these buildings won't get enough sunlight to power the growth of floors of plants.  Think about it - other than those crops at the wall and on the top floor, the every thing else is in shadow.  And the walls are in shadow at least half the time, right?  While they may steal some light from neighboring buildings who are now in shadow more, how much of a gain is that?  Their share of available sunlight is close to the same as the building footprint.

This also assumes sombody doesn't build an eqully tall building next door as well.

So are they using artificial light?  That sure screws up the economics. [Ask pot growers]  This whole idea seems terrifically illogical, albeit futuristically attractive.

Simply put, there is a reason we cover mucho flat acres with crops.  It's how you harvest the dilute energy from the sun, which is essentially the real business of agriculture.  It's also why the corn rows next to the woods are about 50% yield even in good years.

Surely somebody has pondered this problem.  But just in case, it will be interesting to watch one of these follies get built.  Consider this assertion in Scientific American, no less:
A one-square-block farm 30 stories high could yield as much food as 2,400 outdoor acres, with less subsequent spoilage. [More]
 OK, why not build it umpteen miles high and eliminate all the farmland?

Thursday, November 25, 2010

Beats watching the Lions...



Obama Outlines Moral, Philosophical Justifications For Turkey Pardon
Odd thoughts...

From an odd mind on Thanksgiving.  Things that have come up in our family conversations:
Happy Thanksgiving!

Wednesday, November 24, 2010

Seduced by glamour...

Virginia Postrel nails the source of my discomfort with wind power, and my attraction to high-speed rail.
In those glamour shots, wind power seems clean, free and infinitely abundant. Turbines spin silently and sometimes appear barely taller than a child. The wind blows constantly and in exactly the right amount—never so much that it piles up unwanted power and never so little that it requires backup supply. The sky is unfailingly photogenic, a backdrop of either puffy clouds or a brilliant sunset; the landscape is both empty and beautiful; and there are no transmission lines anywhere.
The image of a speeding train, meanwhile, invites you to imagine taking it when and where you want, with no waiting, no crowds and no expensive tickets. Like the turbines, high-speed trains exemplify autonomy and grace, sliding along effortlessly, with no visible source of fuel. To a stressed-out public, they promise an escape from traffic jams—and, at least until the first terrorism scare, from the hassles, intrusion and delays of airport security.
For all its deceptiveness and mystery, glamour reveals emotional truths. What today's green techno-glamour demonstrates, first and foremost, is that its audience has no inclination to give up the benefits of modernity and return to the pre-industrial state idealized by radical greens. Neither the Unabomber nor Henry David Thoreau would go for wind farms and high-speed rail. To the contrary, these iconic new machines cater to what Al Gore denounced in "Earth in the Balance" as "the public's desire to believe that sacrifice, struggle and a wrenching transformation of society will not be necessary." They promise that a green future will be just as pleasant as today, only cleaner and more elegant.
For at least some technophiles, in fact, the trains and windmills are goods in and of themselves, with climate change providing a reason to force the development and adoption of cool new machines that wouldn't otherwise catch on. These technologies also restore the idea of progress as big, visible engineering projects—an alternative to the decentralized, hidden ingenuity of computer code. They evoke the old World's Fair sense of hope and wonder, a feeling President Barack Obama draws on when he endorses high-speed rail subsidies as "building for the future." They are the latest incarnation of flying cars and electricity too cheap to meter.
The problems come, of course, in the things glamour omits, including all those annoyingly practical concerns the policy wonks insist on debating. Neither trains nor wind farms are as effortlessly liberating as their photos suggest. Neither really offers an escape from the world of compromises and constraints. The same is true, of course, of evening gowns, dream kitchens and tropical vacations. But at least the people who enjoy that sort of glamour pay their own way. [More and apologies for the huge excerpt]
We hard-bitten, grizzled men of the dirt would never succumb to an instinctive longing for the perfect, of course. But it does explain our infatuation with idealistic solutions in the face of inconvenient fact. And our lingering hope that sometime in the future the economics and engineering will make sense. (See also: ethanol, corn)

Well, that and our abiding love of subsidies.

Tuesday, November 23, 2010

More health care...

Is not the goal, dammit!  Better HEALTH is the goal!

I get seriously ticked when I read about studies like this:
Lower-income families in health plans with high deductibles are more likely than higher-income families to delay or skip medical care in order to avoid paying for it out-of-pocket, a new study found.

In fact, nearly one-half of all families, from a variety of income levels, who were enrolled in high-deductible health plans (HDHPs) reported they didn't receive a recommended medical service in the past six months because of the cost. By comparison, an earlier study found that 20% of the general U.S. population had reported delaying or missing care in the past year. [More]

The glaring omission in this research is that it did not attempt to answer the question: Did high-deductibles significantly alter the health outcomes for participants?

The presumption that more health care means better health is false. In fact, while we spend and consume vast amounts of GDP on health care our outcomes are slipping by comparison.

While little or no access to health care is terrifically damaging, blanket approaches to health care should be scrapped in favor of more targeted care.

Late in the article the above idea finally gets a ray of consideration.
In an accompanying editorial, Victor Grann, MD, MPH, of the Mailman School of Public Health at Columbia University in New York, said Kullgren and colleagues aren't the first ones to find that higher out-of-pocket costs result in people forgoing care. He pointed to a study that found doubling co-payments from $10 to $20 for a cholesterol drug may cause one-fifth of patients to stop taking it altogether.
Consumers cannot easily distinguish appropriate care from inappropriate care when deciding what to spend their money on, said Grann, who added that a "value-based insurance design" -- in which co-payments are low for medical interventions determined to be of high value, and higher for those determined to be a low value -- could be a better payment model than the current system, which places no judgments on the value of the services offered.
Now that makes sense.
Is this war really necessary?...

I have been reluctant to climb aboard the popular meme of "fighting back" against food activists, because I felt the response was disproportional and really harmful to our sector in the longer run. (See also: TSA)

Many of the supposed threats were extrapolations of tiny numbers and trends into the future without thought of inhibiting factors or countervailing forces that develop with time.

One such trend is veganism. While most farmers (I would guess) fume indignantly at campaigns against animal products, they don't seem to listen to their own words: humans are on the whole omnivorous.  Lookit these eye teeth, for Pete's sake, we splutter.

My take is that assumption is actually pretty strongly grounded in truth, and veganism, while not totally unworkable - is fighting a strong evolutionary tide.  Hence, I think it is a "self-limiting" phenomenon.  Only a segment (likely small) of people will be able to adapt to it.

Consider this admittedly emotional experience from a deeply committed vegan and read a few of the hundreds of comments.
Many of you know that I have recently been struggling for the first time in my life with health problems. When I discovered that my problems were a direct result of my vegan diet I was devastated.  2 months ago, after learning the hard way that not everyone is capable of maintaining their health as a vegan, I made one of the most difficult decisions of my life and gave up veganism and returned to eating an omnivorous diet. My health immediately returned. This experience has been humbling, eye-opening, and profoundly transformative. To hear the whole story just keep reading… [More]
Extreme behaviors are hard to sell to the vast mainstream.  Taking a new look at meat and animal products in our diet is not a bad thing, but fearing every individual choice as the tip of an iceberg of radial overall change is clearly not sound thinking. Going to war with customers over deeply emotional personal decisions likewise has no upside for any supplier.

Indeed, strong reactions by the protein industry may only serve to fuel the publicity that attracts dietary experimenters and invites weaving other controversies with veganism, such as anti-imperialism and feminism.  This really clouds the issues for producers.

But we have not arrived at our current agricultural systems through chance or evil intent. That does not mean they are sanctified by pragmatism, only that they are not the products of malevolent motives too often ascribed to farmers and only much later understood by critics.

Nor does it relieve us from constantly upgrading and refining our work to limit externalites and improve efficiency. This process does not occur overnight and the self-education of consumers will not either.  But the same questions must eventually be confronted by both sides of the issue.
I eventually forced myself to apply the same ethics I had used to analyze animal foods to the analysis of plant foods, and tried to calculate the macro impact of my food choices.  I soon realized that I had to make a serious change. As I’ve written about before, the foods I was eating as a vegan saved no more animal lives and were no ethically better than the foods I am now eating as an omnivore, with two main differences. First, I now no longer lie to myself about the fact that life requires death. Second, I am now healthy. Just like always, I still care intensely about the environment, the well being of animals, and the politics of food, but my ideas of how to do the most good and effect the most change have drastically transformed. I reexamined the party line of veganism, that it is the moral baseline, and admitted to myself that I had never been comfortable with the arbitrary declaration of drawing a line in the ethical sand. In fact, during my time as a vegan I never stopped searching for an even better solution and a more ethical way to live. I definitely believe I’m on the right path. My new thoughts don’t have veganism’s catchy slogans like ‘Meat is Murder’, but here’s a quick wrap up:
In one of those strange circumstances of serendipity that life is always throwing our way my veganism induced health problems coincided with a period of intense food justice activism in my own life. During this time in my work as a food rights advocate I had many, many discussions with agronomists, farmers, agroecologists, and global south advocates, and I learned how very wrong I was in my previous conviction that veganism would save the world. While veganism presents a very simple and easy to understand solution to the world’s problems, and has therefore become the go to politically correct strategy, it is at best a band-aid for the ecological and world hunger crises we are facing. The need for the entire world to go vegan in order to stop global warming or prevent chronic hunger is simply and irrefutably false.
As I learned while sitting at the metaphorical feet of the world’s leading revolutionary ecologists and food rights advocates, the only way for humanity to survive in any meaningfully sustainable way is for us to live entirely within our local food systems, eating the plants and animals that naturally live on our immediate landbase. And this most definitely does not include millions of acres of grains, the cultivation of which is amenable to only very small parts of the globe. To produce the vegan foods that I used to consider so cruelty-free; modern, industrialized agriculture forces land to grow crops that are alien and unnatural to it, robs the planet of its resources, destroys whole eco-systems, wipes out entire species of plants and animals, and creates a chaos of death and destruction as more and more wild land is needed to replace the devastated cropland.
This planetary devastation (and the resulting socio-cultural ramifications) has been going on far longer than the advent of factory farms, which were only introduced in the past several decades. Of course, just like any decent human being, I abhor the evil that is factory farming, and I stand opposed to their slavery, torture, and abuse. I also recognize that the massive production of grain is what led to the creation of factory farms in the first place; they simply would not have been possible otherwise. We do not grow so much grain because we want to have factory farms; we have factory farms because we are growing such an avalanche of grain. Veganism, while coming from a decent place of compassion, is ultimately short sighted and does not fix our problems. Truly local, preferably wild food is the only way we can live without causing devastation to this planet. And living truly locally, without massive consumption of monocrop industrialized grains or soy, in almost every part of the world necessitates the use and consumption of animals for us to be healthy. [Same]
I suspect such painful epiphanies are more numerous that we know.  After all, who announces they are going off their diet when they had promised to lose XX pounds?  Therefore knee-jerk angry rebuttals to even outrageous claims by food extremists seem to me a waste of our time and suggest an embarrassing insecurity in our industry.  Better to listen when we can, do our work well, and allow people to cope with the same real-world factors we do.  Many will come closer to our views simply because they are not irrational.

I for one am tired of getting angry at every criticism and launching yet another "campaign" of some sort. It's exhausting. While good for the employees in the "campaign" industry, like organization and media professionals, it wastes time I could be doing something useful. Not to mention significant sums of money. Blogging has taught me that at least. Let time lower temepratures and uncover more good information. Truth endures. And there is no rule that every argument has to be settled in this news-cycle.


 

Monday, November 22, 2010

Oh, yeah...

I told you I would mention my observations after the Elite Producer Business Conference. (Thanks, JR)

In no particular order. [Hey - your mind will work this way too someday.]
  • The pressure on California dairies is intense. Water may be the biggest threat, but producers are really nervous about immigration issues.
  • Cheese consumption is exploding.  Although it wasn't mentioned it is also being noticed by obesity experts. There is a lot of fat in cheese.
  • Food retail at all levels are cutting the number of items (SKUs) pretty sharply.  We may only have 48 kinds of corn flakes.
  • Traditional supermarkets (e.g. Kroger) continue to lose ground to supercenters and discount clubs. The concentrates buying power even more intensely into fewer hands.
  • Dairy at retail is the most profitable sector in the supermarket, but frequently is constrained by its floor space due to being crammed onto outside walls. More retail info here.
  • Yogurt is the dairy product of the near future.
  • Every speaker I heard had a remark about "biofuel" policy.  Not a happy comment either.
  • Regional banks are looking for the exit on large dairies, according to some.  Where that capital will be replaced is a big question.
  • I talked to one 500-cow guy who is seriously considering shrinking back to just his very profitable breeding business.
  • A presentation by the Ohio animal welfare coalition left many producers glad their state doesn't have initiative power for voters.  Many producers are already getting ready to comply with stricter handling rules.
  • Dairy is the poster child for the productivity curse. From breeding technology likes sexed semen to robomilkers, every advancement makes overproduction just a little easier.
  • Policy outlook seemed to be "something's gotta change".  Frankly my eyes glazed over during the pricing support discussions.  They were pretty realistic about maybe less aid would actually be less distortionary.
Overall, I felt a grim determination in the face of a very difficult outlook.  While looking for markets overseas, local economic/regulatory conditions seemed to be the forest fire of the moment.

If I remember anything else, I'll update this post.

Sunday, November 21, 2010

The wonder meat...

I like Chinese food, and for many of us, that meal is most often served at Panda Express. Sometimes called the next McDonald's, this fast-growing chain makes an interesting business case and success story, but buried in an article outlining the future of the business was this little gem:
To reach Cherng's goal of $2 million per store in annual revenue and $2 billion in total sales, the company is going to have to make some changes. Lunde, the highest-ranking Caucasian in a company dominated by Asians and Latinos, believes he can improve sales by tweaking the menu. Lunde is a creature of the fast-food industry. At Taco Bell, he came up with hit products such as the Chalupa and the Gordita. He joined Panda in 2005 and has since created two recent popular additions to the Panda menu, Kobari Beef and Honey Walnut Shrimp. Kobari Beef is based on a dish originally served at the Panda Inn, where it was known as Panda Beef. "We focus-grouped it and found that some people thought we were actually serving panda," says Lunde of the name change. Lunde is best known for his judicious use of one key ingredient: bacon. "I put bacon in everything," he explains. He worries that to expand the business, the chain might need to move into breakfast meals—not a natural area for an Asian-themed restaurant—and add even more bacon. So far, experiments with bacon-cheddar bao—steamed buns—have not met with much success. [More][My emphasis]
I wonder if, just as we have bred poultry with supersized breast proportions, we will (or perhaps are) breeding pigs primarily for bacon (bellies).  Apparently we have done so in the past.
Most people would rather spend their time eating crispy, smoky strips of bacon than studying the breed it came from, but when a pig has earned the nickname “the bacon pig,” it deserves a closer look.
Ohio Farm Bureau members Paul and Marilyn Morrison raise this special “bacon” breed called the Tamworth on their 350-acre Darke County farm as show pigs and breeding stock for pork producers throughout Ohio, New York and as far west as Missouri and Arkansas.
“I’ve raised just about every breed of meat pig over the past 20 years,” Morrison said. “What makes Tamworths special is that they grow slowly so they are leaner with just the right amount of belly fat.” That’s what you look for in good bacon: lean, finely grained meat balanced with ribbons of fat running throughout.
The Tamworth originated from central England and was imported to America in the early 1800s. Considered a heritage breed, it is the result of centuries of breeding to preserve unique and desirable genetic traits including ones that help it resist disease and tolerate local environmental conditions. [More]
I like the stuff, but it seems to be taking on a whole new role in modern menus.  Explosive demand like this always makes me nervous. This smells like a salty fad to me.

Ye Olde Ballgayme...

How old is baseball?  Wouldja believe over 700 years?

The image in question is found in the margins of the calendar that was originally part of the Ghistelles Hours, a 14th-century Flemish book of hours probably made for John III, Lord of Ghistelles and Inglemunster or his wife. Since John died in 1315 and the calendar begins its cycle of years on Sunday, it's usually dated to either 1301 or 1307. (If the name of the manuscript sounds vaguely familiar, it's because the Ghistelle Hours was broken into pieces and sold as individual leaves and quires, so fragments of it are perennially on sale at Sotheby's and Christies and the like.**)

The calendar pagers were kept together and sold all as one unit and are currently in the possession of the Manuscript Library of the
Walters Art Museum, which featured the image recently as part of an exhibit titled "Checkmate! Medieval People at Play".  A few media outlets picked the story up from the exhibit's press release, and it's been bouncing around the web lately with various claims about its origin and subject.***

So, is it the first ever image of baseball?  If you're willing to count proto-proto-proto baseball as baseball, and put an "extant" in front of image,**** well sure. Though there's no base in sight, various historians of sport have identified this game as a version of "stool ball" or "stump ball", which was baseball played with only one base, where the object was for the pitcher to hit a stump or a stool or other handy protrusion with the ball while the batter protected it by batting away the pitcher's balls.  Each player stood on or near what was essentially a "base" If the batter made contact, he was expected to run around the pitcher's base and back to his own.  Various fielders could catch the batted ball and throw the ball at the stool while the batter is occupied running. We have no clue how the scoring might have worked, but apparently the game was co-ed and the sort of thing you'd play at an Easter festival. 

[More - including medieval monkeys at bat]

The more I learn about the Middle Ages the more I realize people were much like us.  Only hungrier, colder, sicker, shorter, more ignorant...
Up is good , right?...

I've spent enough time with the livestock and dairy sector to realize that soaring grain markets are not good for every part of agriculture (although to be fair the protein sector understands this as the way things work, but protests the unfair market manipulation by mandates, etc.)

But what about poor farmers around the globe? Do high commodity prices hurt more than help by raising food costs?
They conclude: “Adverse agricultural price shocks can have negative effects on poor urban households through labor market transmission, which can offset the gains they might realize as net consumers of agricultural products.”
Conversely, they find that when rice prices go up the overall impact is progressive. The demand for unskilled labor in agriculture goes up, which raises incomes, and raises wages not just in agriculture but generally across unskilled labor markets. The rural poor are the clear winners, earning higher prices for their crops and higher wages (or incomes) from their labor, even if they are net buyers of food. Some of the urban poor end up worse off, but some of their fellow net food buyers end up better off in spite of higher food prices. They are earning more for their labor.
Carnegie recognizes that this will play out differently from country to country, but the report’s conclusions for India are unequivocal: high prices for agricultural commodities are progressive and certainly preferable to low agricultural prices which hurt the poor the most.
George Dyer showed the same thing in some of his modeling related to higher corn prices in Mexico. Dyer modeled higher corn prices, looking only at rural areas, to examine the effects on net sellers and net buyers in rural Mexico. He found that the main source of income gains in rural Mexico came not from crop sales but from higher wage income. The negative effect of high prices on net food buyers was cushioned in the case of subsistence farmers, by higher wage income and some increase in their own production. (See my summary and reference, p 27.)
The models most commonly used (e.g., GTAP) often fail to capture these distinctions because they impose fixed constraints on employment. Carnegie, in its various Doha studies, showed just how important that can be. In the case of agriculture, it turns out to be critical, precisely because the rural and urban poor both depend on wage income, agricultural employment is significant and is strongly impacted by prices, and agricultural labor markets have an impact on urban labor markets.
What is perhaps most telling about the price increases of recent years is the negative impact of their extreme volatility. Both high and low prices have winners and losers, but volatility hurts everyone except the traders and speculators. Stable and remunerative prices should be the goal. That is what will attract investment into agriculture and bring long-term benefits beyond the short-run effects. [More]
Maybe I'm actually a humanitarian now.  Yeah - that's it.  I don't want high prices just for me.  I want them for poor farmers.

Saturday, November 20, 2010

Not the end of the world...

What if China does slow down their economy?  Jerry Gulke accurately points out how important China is to grain prices right now.

With no signs indicating a curb in China’s corn demand, there’s going to be reasons to take the market higher. But with weak economic news coming from that country this week, it shows exactly how much control they have over corn and soybean prices, says Jerry Gulke, president of the Gulke Group.
They are the big customer for major U.S. crops.
"China has been the driving force in our soybean economy," Gulke says. "They can make us or break us and that’s not good. I’d much rather see five or six China’s, so if one had a hiccup, we wouldn’t have a problem."
It was likely a small hiccup we saw this week as corn closed about 13 cents lower and soybeans closed almost 70 cents down for the week, on negative news about China’s economy. The Chinese government’s announcement last week that it intended to raise interest rates in order to curb inflation was the driving factor taking prices lower then. This week that rumor was confirmed this week as rates increased ½%.  [More]
Other than an increasing reluctance to check the markets now, how should this news be affecting my decision-making?

I would suggest some other standard to compare to other than the top of the market. The last few days I've been churning out new roadmaps for our farm and the transition to Aaron. I probably need to do this more often, or better yet to get him to check it more often because I've been meaning to be more punctual for the last few decades with little visible result.  But so many LARGE market influences such as funds, climate, and China now active in grain markets facing serious demand growth, losses and gains like we've had in the last few weeks could lead to some serious over-emoting.

I also think a little historical perspective might help our brains, as well. (This is favorite trick for old guys - "I remember back when this happened before blah, blah, blah...)  In this case there are some parallels to Japan that seem appropriate.
 I think the Japanese story has important implications for our analysis of China.  If China indeed experiences a rapid slowdown in GDP growth, the impact on the rest of the world may be far less than we expect.  The real key is the evolution of the Chinese trade surplus.  If it contracts, it will provide an expansionary boost to the rest of the world, not a contractionary one.
Of course that doesn’t mean that the world will grow quickly.  My expectation is that global demand growth over the next several years is likely to be anemic with or without China.  But it does man that a slowdown in Chinese growth might not be the disaster for the world that many believe.
Also a rapid slowdown in Chinese growth does not mean a social or political disaster domestically  It depends on how serious China is about rebalancing its economy.  If policymakers are willing to force up interest rates and wages, most of the adjustment pain will be borne by SOEs and the state sector, not by the household sector.  In that case we might see a slowdown in Chinese consumption growth, but one not nearly as severe as the slowdown in Chinese GDP growth.  Since the Chinese, like everyone else, probably measures their well-being in terms of purchasing power per capita, rather than GDP per capita, a sharp slowdown might not be nearly as painful as we assume.  [More - well worth reading]
Finally, it is good to remember it is now official that we can't predict squat about the global - or the American - economy.  Everybody does, of course, and some will seem to be right occasionally simply by random chance, but otherwise surprise will be the constant factor.

So we're fixing on accomplishing specific goals and letting others try to maximize selling price. If we can continue to solidify our land base, deploy all family assets as fully as possible, enhance our personal satisfaction with our lives, and get me into a new wood shop (and Jan into a new greenhouse) over the next 2-3 years, we're going to call it a win, regardless of whether China takes beans to $25 or not.

Friday, November 19, 2010

Lost loves...

I wrote in Farm Journal about trading off one of my favorite combines long ago (1999):
Letter to the New Owner

Hi. My name is John and I raised this combine from a pup. Over the years, this machine and I have been through a lot of experiences, and I thought it might be helpful to pass on the history.

1.    I rewired the radio to a live lead from the battery so you can sit and listen to the radio with the key off while waiting for trucks. Unfortunately, I discovered that the LCD readouts are therefore always energized, and draw just enough amps to slowly discharge the battery over a few weeks. That’s what the unmarked toggle switch is for. Be sure to turn it off when storing.
2.    The front cross auger in the bottom of the grain tank should be replaced soon. I did the back one last year, and it was so expensive I decided to wait on the other one.
3.    The low speed setting on the chopper will cause an alarm, and neither the service manager nor I can figure out why. All the parts have been tested or replaced, but feel free to spend several hours going nuts over it. I did.
4.    The attractive grain tank extension is actually homemade. (I know, you couldn’t guess.)  Under absolute maximum conditions (15%, 62# TW) the tank holds 208 bushels, not counting the pile on the cab.
5.    There is an auxiliary battery stud (+) low on the left rear side. I put this on after lugging my big battery charger all the way up to the engine deck several times because the cables are way too short.
6.    The electric fan speed control works fine, but will get stuck on max rpm. Stop just before that.
7.    The odd bracket in the cab on the upper right was to hang a bag phone on.
8.    Speaking of which, don’t talk on the phone while unloading on the go – a little advice.
9.    If the water pump goes out, you can drive at least 5/8 mile to the shop before massive engine failure.
10.The vibration dampener was replaced (by the dealer) last year. It feels like a bad water pump vibration when going out.
11.The original rasp bars are still on the machine. Each time I thought about replacing them I decided they work better for food grade corn. However, green stems are a tedious experience.
12.Some fool forgot to disconnect the header height controller wire when uncoupling from the grain header last year. Check to make sure the connector has been replaced.
13.The grain loss monitor can drive you crazy if you let it. Although the book says to find an “acceptable loss level”, this is an oxymoron, and I constantly fiddled and adjusted to get the loss down. By the way, my personal best setting was 9.5.
14.We changed the oil and filters religiously. But then again, I’m a Methodist.
15.For the most part, we have kept mice out of the cab. I think the concept of keeping ample corn supplies in the cornhead and rotor area kept them busy there. We did have a “raccoon surprise” in the fan one spring when we were moving and running the combine. Not coincidentally, that is the year we decided to upgrade to the newer style fan.
16.You can go about 150’ after the grain bin alarm goes off in 50-bushel beans. In normal corn, stop immediately. By immediately, I mean of course, not IMMEDIATELY, but easing back on the propulsion control to prevent overflow.
17.The lower clean grain elevator housing was replaced last year.  A word of warning: it wore out on the “inside” side of the boot, where the hole could not be seen. What could be seen was a bright green line of soybean plants in the field a few days after a fall shower.
18.The parts manuals are enclosed. I tried to note the year that parts were replaced so you can get some idea of what the repair frequency is. Any part that was replaced twice in the same year (as noted by “95, 95” for instance) is likely one that can be installed incorrectly or backwards, leading to immediate failure.
19.The radio is not too bad on FM, and can get WGN from about 180 miles out. Of course, I never listen to “Kathy and Judy”. Well, rarely. The tape deck will mangle approximately every fifth tape, especially if it’s Neil Diamond or disco.
20.The tallest point is (surprisingly) the top of the auger discharge boot. Notice the bolt on top is reversed to keep from catching on the shop door beam.
21.The seat raise-lower control is a real pain, but it does work, after a fashion. To prevent it pumping all the way up, lift your weight off after the proper height is reached. If your wife is about 5’7”, she might appreciate a 3” foot platform (not included) to prevent her legs from going to sleep.
22.During really wet falls, this machine is a real trooper. It will, however, generate ruts that can be felt for the next 6 years.
23.You can get the whole family in the cab if you put the two-year old in the right front corner and the five-year old on the left.
24.She answers to the name LuAnn.


To my surprise received a wonderful letter from the new owner.

This week, he just updated me on how LuAnn is getting along.





John:
I thought I would give you an update on LuAnn. She has been a very good machine for me.  I finished my farm shop the same year I got her, so she has never sat outside.  We made 300 hours this year so I treated her to new tires. I enjoyed the letter you sent me after I bought her so I thought I would give you a story. If you notice in front of the spreader there is a shiny piece of aluminum.  I had a $350 cob throw the belt off a gearbox and knock the seal out. Problem solved. She is a joy to operate, and even though she has a woman's name you can see what she has hanging under the cab*.  I enjoy reading your articles and I hope things are going good for you.

As folks today would say, Lou Ann has "had some work done".  She didn't look that good when she left my farm.  My combine friend is obviously a meticulous caretaker.

I'm glad. It makes me feel good that my happy memories of harvest with Jan and I with our boys are not the end of LuAnn's story.

How do we get so attached to machines?

*FWIW - I have no idea about the combine-scrotum-thing, and frankly don't want to know.

[BTW - the "two-year old" I refer to in the FJ article now has his own two-year-old.]

Thursday, November 18, 2010

Junkbox, Episode CLRNG...

Way too much time with my spreadsheet this week.  It's almost credible, however.
Seriously, I've read 3 of them...

Really, really bad science fiction book covers.


(I had an aunt who wore eye makeup like that.)

[More]

[via mr]

Wednesday, November 17, 2010

The Inflation Watch (yawn)...

Nope - all quiet on the monetary front.

[More]

More seriously, it is important to remember that there is a very real penalty to betting on inflation year after year. "Just-you-waiters" may place themselves in costly positions by ignoring reality to hold onto their now several-years-old hysterical warnings.

For example, it is really hard to imagine interest rates being forced up by wage pressure with 9+% unemployment. Tell me when that is going to drop and then I'll believe.

The bad news is the power of money to earn a return passively.  Sooner or later, investors will have to take a chance.
Small vs. big, etc, Round 27...

The continuing friction between agrarian and industrial agriculture will be in full view today and a major food safety bill comes up for cloture.  It is laden with intricate detailed controversies, but has become another rallying cry for both sides to try to avoid the hard work of compromise. These days leaders don't get much credit for getting things done, and proponents on both sides understand the highest accomplishment is unbending confrontation.
"This is an important test to see if Democrats and Republican senators representing farm states will stand up for small farmers or cave to special interests and agribusiness," said Dave Murphy, founder and executive director of the organization.  "It could be the first lesson the food movement gets on how the new Congress will respond during the 2012 Farm Bill."

"The behind-the-scenes efforts to kill any provisions that protect family farmers from burdensome regulations has been intense, but efforts by real farm groups and sustainable ag organizations may have turned the tide," added Murphy.

As Food Safety News reported yesterday, large food and agriculture interest groups, including the American Meat Institute, the United Fresh Produce Association, and the United Egg Producers, sent a letter to committee staff Monday asking that the Tester amendment be excluded from the bill.

Popular authors and food policy gurus, Eric Schlosser and Michael Pollan, issued a joint statement Tuesday, through Tester's office, stating their support of the senator's amendment and the food safety legislation. 

"S 510 is the most important food safety legislation in a generation," they said. "The Tester amendment will make it even more effective, strengthening food safety rules while protecting small farmers and producers.  We both think this is the right thing to do." [More]
For a deeper analysis on specific points, Grist has assembled a good discussion that illuminates many aspects of this legislation. Like all laws, there is something for everyone to carp about, but the greater underlying theme I get is the ongoing grievance from the agrarian community about the excessive aid and regulatory favoritism channeled to industrial ag.

At first blush, this would not seem to be a big deal to corn/soy guys like me, but what I think is worth watching is how much support the agrarian lobby has picked up recently (or not).  If they able to add the Tester amendment exempting small farms from many rules, it would be a sign, I believe that agrarian interests will have more say in future legislation, like the 2012 Farm Bill.

Of course, that debate may be pretty small change - literally. But the effect of small/big fights can also be seen paying out more powerfully in the regulatory arena.  Consider the ongoing slugfest, that the new GIPSA rules have triggered.

These and other examples of the oddly (and unnecessarily, IMHO)  aggressive attacks between two segments of our tiny sector further illustrate the pointless harping about agriculture "speaking with one voice."  That has never happened and now is even further from reality.

We continue to fracture into specialty producers serving narrow markets. on any given economic or regulatory issue, we will reliably line up with pour own interests regardless what other "farmers" want. That's because we all think we are the real American agriculture.

In short there ain't no "us" in farming - there is only "me".  I don't think this is good, but it is good to keep in mind.

Monday, November 15, 2010

I wanna see it do a curve...

Still, pretty cool.



[via ezra]

Saturday, November 13, 2010

My second cousin's daughter's boyfriend...

Is the guy in green on Level 4 with the dark hair.


Casteller from Mike Randolph on Vimeo.

Let's see NFL cheerleaders do that!

[via RGS]
Junkbox, Episode CRPY...

A real deluge here today: 0.03"
Are you refinancing?...

Even with record low mortgage rates, refi's aren't flying out the door at banks and mortgage companies.
Mortgage rates dropped to another record low this week following the Fed's move to pump hundreds of billions of dollars into the U.S. economy. Though officials hope that buying Treasuries with newly-printed money will give the slow-growing economy a big boost, the move likely won't give today's homeowners much relief.
Now is one of the cheapest times in decades to finance a home, but few are actually locking in record low mortgage rates. This isn't just because many don't qualify for refinancing as home prices plummet and banks continue to enforce tighter lending standards.
It's also because many owners who locked in relatively low rates between 2003 and 2005 don't think it's worth refinancing, according to a U.S. Federal Reserve study of the mortgage market released in September. This is a factor that has largely been overlooked. [More]
This got me to wondering about farmland refinancing.  Even though it has been widely advised by ag business gurus, I can't find any good stats (outside the Farm Credit System) to show farmers are leaping to lock in low long-term rates.  Anecdotal data from around here seems like they are: it takes several weeks to get a title policy done because they are backed up with refi's.

But if the number is smaller than rates would seem to suggest (i.e. the savings are significantly greater than the costs of refinancing), I think I can guess some reasons holding guys back.
  • Loan-office aversion.  On the whole we would just as soon not borrow any money, and even if we have a good relationship with our lender(s), it is not a transaction we enjoy.  There may need to be a powerful incentive to get us to initiate the always emotionally fraught moments in the bank.
  • Lender reluctance.  You can sure bet your lender isn't going to trade a higher rate mortgage for a much lower one spontaneously.  Hence the trigger is tripped only when faced with the loss of the mortgage by you going somewhere else for your money. But it is important to remember bankers face the same tricky calculation when interest rates are rising.
  • Personal ties. A good lender becomes a close adviser and often one of your best friends.  Even mildly adversarial conversations ("I've had an offer from another lender") seem to put a real chill in the air.
  • Ignorance.  Many farmers may not know where interest rates (especially long term) are as they don't read much or talk to friends about money. And even if they do, they may not be able to calculate the savings or analyze the possibilities with any confidence.  Maybe they've always left it up to their banker. 
  • Pure laziness.  Lookit, prices are good.  I'm making my payments.  Why stir up trouble or make more paperwork for myself? Besides not all my bank experiences have been happy ones.
  • Still not low enough.  I'll  bet there are a few holding out for 2%/30-year fixed mortgages.
  • Only X years left anyway.  [Where X<5] I'll bet some guys my age can see the end of the tunnel and the trade-off may be worth it, but inertia is pretty powerful.
Doubtless there are many other reasons, but if American homeowners are slow to take advantage of lower rates, I really wonder if some farmers aren't also missing some opportunities.

Friday, November 12, 2010

Meanwhile, back at the austerity ranch...

The early consequences of the much applauded efforts to battle budget deficits look umm, predictable.  The question is how deeply they will undercut the nascent EU recovery.
Europe’s economic growth weakened in the third quarter from the fastest pace in four years as governments’ austerity measures to cut record budget deficits dented the recovery.
Gross domestic product in the 16-nation euro area rose 0.4 percent from the second quarter, when it increased 1 percent, the European Union’s statistics office in Luxembourg said today. Economists expected a gain of 0.5 percent, the median of 35 estimates in a Bloomberg News survey showed. Industrial output fell 0.9 percent in September from the previous month, the largest drop in 18 months, separate data showed.
Europe’s economic expansion is cooling as leaders grapple with how to handle the sovereign-debt crisis, which has pushed Irish bond yields to records and weakened the euro on concern the EU may need to step in. Ireland and Greece have failed to restore economic growth as they contend with bloated deficits and soaring borrowing costs, while Germany’s expansion slowed from the record pace in the second quarter. [More]
I frankly don't know how austerity measures will play out, but I am not optimistic.  The "uncertainty" argument seems full of logical holes. Nor do I even think worrying about the deficit is the cause of all the uncertainty - it's worrying about growth and employment (especially your own).

“The markets hate uncertainty.”
If you wandered anywhere near a television in advance of the midterm elections, the Federal Open Market Committee meeting or October’s employment report, that cliche was unavoidable. It was the pundits’ preferred proverb.
Wall Street has a sweet tooth for such investing maxims. They infect the trading community like influenza in December. Repeat mindless dictums ad nauseam, and they soon become the accepted wisdom.
The problem with these supposed truisms is they are no more accurate than the flip of a coin. A closer look at this uncertainty meme reveals it to be a false-ism -- one of those emotionally appealing phrases that ping around trading desks. The lack of evidence supporting their premise seems to matter very little.
To recognize how meaningless these statements are, consider the opposite: Could markets function without uncertainty? It takes only a little thought to realize that markets actually thrive on doubt, imperfect information and a lack of consensus.
Uncertainty drives the market’s price-discovery mechanism. Investing requires there to be differences of opinion. When there is broad agreement as to an asset’s fair value, trading volume falls. Without any uncertainty, who would take the opposite side of your trade?
History teaches that whenever the opposite occurs -- when certainty overwhelms uncertainty -- the herd tends to be wrong. In rare instances, when there is a near-total lack of uncertainty in the market, the outcome is usually a spectacular disaster. [More]
One thing seems clear: we will have ample opportunity to see what happens when deficit reduction overpowers growth policy early in a recovery.  I"ll be watching the UK for the verdict.

I favor virtually all the measures being suggested to reduce the deficit - but not now.  We have a long term budget problem, so enacting long term solutions that kick in gradually makes more sense to me.

Thursday, November 11, 2010

I wept like a girl...

Since it would appear 1 November is the start of the season, this wonderful start to my and I hope your Christmas time.




I hope I never lose my vulnerability to great music to overwhelm me by surprise.

BTW:  Given the acoustics and scattered nature of the singers, this was no small accomplishment.

[Thanks, Brian]

Tuesday, November 09, 2010

At least there's more humidity...

I'm at the Elite Producer Business Conference in Las Vegas right now, so I'll post my reactions to what I hear the dairy industry saying.

But the report this morning was no comfort for feed users.

I keep going back all the times I heard speakers from seed, fertilizer and grain merchandising tell me "You guys can't grow a bad crop anymore".


Well, we showed them, didn't we!

Long time readers know my feelings about this, but our best strategy in east central IL is to devote resources to battle climate changes, IMHO.  One example is the oft-derided rush to buy new steel. If we're going where I think we're going, our windows for fieldwork will be either very long or very short. See 2008, 2009, 2010 for examples.

Maybe farmers aren't simply drooling over shiny toys.  Maybe we're not unreasonably stocking up on capacity we need to cover acres during the "blitzkrieg" seasons.

In fact maybe we're shifting to digital agriculture in some areas: 1 or 0; on or off. 

That's my thinking now, anyhoo.

Saturday, November 06, 2010

Junkbox, Episode VSOP...

Election-free surfing results.
Suppose you bought TV shows...

Like you do steaks: one at a time.  That could well become a significant business model in the near future.

This is a potentially disruptive innovation for the television industry because one of the main ways the industry had practiced price discrimination (and therefore increased both revenues and quantity) was to engage in bundling. A switch to a la carte will probably result in an increase in consumer surplus per unit demanded but a drastic decrease in quantity supplied. (“Consumer surplus” is econ jargon for the subjective experience of a “bargain”).
Suppose that my household values watching True Blood and Mad Men at $5 an episode, Top Chef at $2 an episode, and Mythbusters and Toddlers and Tiaras at 50 cents an episode. Now suppose that my next door neighbors have the exact opposite set of preferences. In both cases there is a total of $13 of demand for television per household per week. If the cable company charges $12.99 per week, both my neighbor and I will write the check, but do so reluctantly as we’re just barely this side of the indifference curve.
Now suppose that someone (say, Apple or Amazon) starts selling shows a la carte. If the price point is 50 cents both my neighbor and I will still watch all five shows. However we’ll only be paying $2.50 a week and will be getting $10.50 in consumer surplus. If the price point is $2, each of us will get three shows and pay $6, for $6 in consumer surplus. If the price point is $4.99 we’ll each buy two shows, pay almost $10, and get two cents of consumer surplus. There is no price point where we both pay $12.99 like we used to. At any one a la carte price point, both my neighbor and I will pay less than we used to, watch the same or less amount of tv, and get the same or higher consumer surplus.
Thus a switch to an a la carte model implies much lower costs to the consumer. Because revenues would fall, so would production by some combination of reduced numbers of shows and reduced production values. Basically, we’re looking at an end to the television renaissance we’ve enjoyed since the late 1990s as people like me decide that we’d rather pay $10 or $20 a month for the few shows we love and do without the rest than pay $50 a month for a bunch of stuff, most of which we don’t even really like.
However desirable the trade-off of less viewing for a much lower price may be, it may prove unsustainable in the long run. I may love Mad Men so much that $2 an episode to stream to my Roku feels like a bargain. However these shows may only be economically viable because there are also some people who have a marginal attachment to the same show and the current business model of cable bundling lets the content producers effectively get several dollars per episode from the cult following and maybe fifty cents an episode from the casual viewers.
...
That is to say, television may not be economically viable when priced on an a la carte basis and this could lead to a decline in volume and possibly quality of original programming. This will probably involve a slow decline but could be catastrophic. The most likely scenario for a catastrophic collapse is if the studios forecast that a la carte means declining revenue and try to pare back their cost structure in anticipation. This would probably lead to a militant slate getting elected at both WGA and SAG and an even worse strike / soft strike than we had on the last contract cycle. [More]
This type of platform crosses that critical line from "free" to "cheap" and that is a quantum leap in cognitive psychology.  I agree it would be deeply disruptive not simply to television production but also the advertising business models that currently support it.  It could even revitalize broadcast TV to some extent.

Meanwhile, the emergence of powerful new ways to get TV is not exactly making things easy for the distribution system.
The number of programming blackouts this year between content owners and distributors has escalated to the highest level in at least a decade. TV providers, like AT&T, are trying to stem rising programming costs, which are typically passed on to consumers, in a weak economic environment. Programmers are trying to maximize their distribution and content fees.
AT&T said Scripps is demanding it pay more than double what its competitors pay for the same programming.
Scripps denies the claim, saying the "impasse is not about money" and that the two parties came to an agreement in principle before their deadline.
...
The problem, Johnson said, is that Scripps did not want to sign away rights to its programming on various non-TV platforms without specifics from U-verse.
"They are asking for broad, unlimited distribution on nonlinear platforms that go well beyond emerging media technologies," Johnson said.
A spokesman for AT&T declined to comment further, referring the Tribune to its earlier statement: "We've been working for weeks to reach a fair deal, but they didn't hold up to what had been agreed upon verbally, leaving us without the rights to offer these channels.
"We apologize to our customers who've been affected by this. We want to keep these channels on, at a fair price for you."
Increased use of video on the Web and mobile platforms represents new territory for programmers like Scripps and providers like U-verse. While Internet video services like Hulu and Netflix Streaming have wide popularity, their offerings are typically not comprehensive. [More]
Technology is often destructive creativity, and few can come close to predicting how putting more choices into consumer hands will play out on a macro-scale.  Heck, we can't even explain most developments after the fact!
On the whole, not good news...

For potash prices.  The "conservative" government in Canada steps back from free-trade rhetoric to old-fashioned protectionism.  I suspect this same tendency abides in our right-wing.  Free trade is a good deal for industries in another guy's district/state.
This is the second time the Conservative government rejected a significant foreign takeover. In 2008, the Conservatives cited national security concerns when it rejected a proposal by Minnesota-based Alliant Techsystems to acquire MacDonald Dettwiler and Associates (MDA), the maker of the Canadarm.

At a media conference with his cabinet, Mr. Wall said the decision demonstrated that Canada could still be a free-market, open-trading economy while saying no to certain foreign investments that involve so-called “strategic resources.”

“We are open to foreign investment, open to takeovers, but there may be strategic considerations that we will take into account,” Mr. Wall said. “I think we have struck the right balance. And maybe Canada has entered a new phase in terms in terms of how we look at these deals.”  [More]
The effect on potash prices would have been felt via the loose cartel that sorta controls world potash trade, CANPOTEX. It was expected BHP would run this business like engineers rather than supply-control economists.
BHP Billiton’s planned $40bn (€31bn) takeover of Canada’s Potash Corp of Saskatchewan (PotashCorp) will likely put an end to the Canpotex export group, thus changing the way potash is marketed and priced on global markets, Canadian analysts said on Thursday.
Canpotex has marketed and distributed potash from Canada's Saskatchewan province to overseas buyers since 1972. Its potash sales are 8m-9m tonnes/year, according to Canpotex.
Jacob Bout, an analyst with CIBC bank, said that if 
BHP Billiton were successful, it would likely want to go it alone, rather than sell through Canpotex.With the loss of its largest member, Canpotex, which also includes Agrium and Mosaic, would come to an end, he said.
Mario Maselli, market strategist for Chicago-based futures trading firm Lind-Waldock told Canadian business television that BHP was keen on making its own mark in potash, after an earlier attempt to merge with mining firm Rio Tinto failed. 
The analysts' comments came after BHP chief executive Marius Kloppers said earlier that his company’s strategy was to run its assets throughout the cycle, in good times and bad times, and that it preferred to market itself to its customers. [More]
The worst part of this broken deal is the emboldening effect it will likely have on other governments, especially those who pay even less lip service to free trade. If good guys like Canada can invoke national interest, so can we could become a common refrain.


BHP may not be done. As yet, they have not responded.  This could even be a simple ploy to bump up the bid or get a different deal on taxes. I'll keep and eye on this, but sadly, with corn prices rising, the thinking at CANPOTEX is to squeeze the market, I'll wager.
Beats walking fields...

There has to be an ag application for drones rolling around somebody's head.

[Source]

But the real prize may be in civilian applications. "The military stuff is kind of passe," Ms. Cummings said. "It doesn't take a rocket scientist from MIT to tell you if we can do it for a soldier in the field, we can do it for anybody." As a parent of a 3-year-old, she said, she could use the same technology to track her daughter on her way to school (she would need to plant an electronic bug in her lunch box or backpack). That would "bring a whole new meaning to a hover parent," she said. Schools could even use drones for perimeter control.
Indeed, many nonmilitary uses of drones provide obvious benefits—from surveying wildlife to tracking the security of oil pipelines. Other potential commercial applications include unmanned cargo flights.
But human nature being what it is, it won't take long for the technology to be embraced for less noble ends. Could nosey neighbors use a drone to monitor who isn't picking up after their dogs? "That's possible," said Henry Crumpton, a former top CIA counterterrorism official who is now chairman of a company that develops drones—including one that can take off vertically, fly through a window and hover silently over your breakfast table.
"The only thing you're bounded by is your imagination—and the FAA in the United States," he said. [More]
I had variable luck with model planes as a youth, but I'll bet these suckers get cheap and user-friendly pretty fast. You'd think livestock guys would be all over them.



Then again, maybe not.

Thursday, November 04, 2010

It's not QE2...

It's China.  As we see today, the Fed announcement of a second (and bigger) quantitative easing is perking up commodity markets.  Economist had expected it, except that may not be what is really happening.

So which kind of rise are we observing? James Hamilton credits QE2 with lifting commodity prices and posts charts tracking price rises across a range of commodities:
But what's interesting about his charts is that the steady upward trend common to all of them starts around the beginning of July—not the beginning of September, as we'd expect if QE2 were the causal factor. What happened around the first of July? Well, China's government, which had grown concerned about the too-rapid slowdown in its economy, paused or reversed some of the steps it had taken to dampen activity. This included restrictions on bank lending and a temporary halt to appreciation of the yuan. And what followed, we now know, was a remarkable resumption in Chinese industrial activity. To me, the steady climb in commodity prices over the past four months seems indicative of the surprisingly strong performance of emerging economies.
That doesn't mean that Fed activity has had or will have no effect. I'd be surprised if commodity prices didn't go on rising. But much of that rise will be an unavoidable knock-on effect from the collision of soaring global demand for commodities with lagging global supply. [More]
If you have entertained any doubts about the leading global economy right now, this might shift your gaze from Washington much further east. Despite our overwhelming lead in actual GDP size, it is the growth rate differential that will make China the mover and shaker.

Add in what will surely be a push for austerity measures which could well stop our feeble recovery in its tracks, and we'll be checking the overnights more assiduously than the noon prices.

Wednesday, November 03, 2010

Remember the Bermuda high?...

As we rip bone-dry fields and neighbors pause to debate applying NH3, the faint memory of drought and the mysterious "Bermuda high" came tumbling back into my thoughts.  It could be worrying about our well here at house helped trigger this speculation.

Anyhoo, this may be just another aspect of climate change from global warming that was predicted by ag climatologists.
A new study by a Duke University-led team of climate scientists suggests that global warming is the main cause of a significant intensification in the North Atlantic Subtropical High (NASH) that in recent decades has more than doubled the frequency of abnormally wet or dry summer weather in the southeastern United States. 
 

The NASH, commonly referred to as the Bermuda High, is an area of high pressure that forms each summer near Bermuda, where its powerful surface center helps steer Atlantic hurricanes and plays a major role in shaping weather in the eastern United States, Western Europe and northwestern Africa.
By analyzing six decades of U.S. and European weather and climate data, the Duke-led team found that the center of the NASH intensified by 0.9 geopotential meters a decade on average from 1948 to 2007.  (Geopotential meters are used to measure how high above sea level a pressure system extends; the greater the height, the greater the intensity.)
The team’s analysis found that as the NASH intensified, its area enlarged, bringing the high’s weather-making western ridge closer to the continental United States by 1.22 longitudinal degrees a decade.
“This is not a natural variation like El Nino,” says lead author Wenhong Li, assistant professor of earth and ocean sciences at Duke University’s Nicholas School of the Environment.   “We thoroughly investigated possible natural causes, including the Atlantic Multivariate Oscillation (AMO) and Pacific Decadal Oscillation (PDO), which may affect highs, but found no links.
“Our analysis strongly suggests that the changes in the NASH are mainly due to anthropogenic warming,” she says. [More]
It is back-to-back episodes of heavy rain and drought that has me most concerned about how to prepare our farm. To be sure we have been tiling like crazy (BTW - plastic tile is hard to get around here), but the on-off nature of rain the last 3 years is growing tiresome.

Frankly, I think it will continue to be a massive marketing headache for seed and biotech companies, as the traits don't sem to add much value if the borers are extinct and the rootworms drown.All the drought-tolerance in the world won't help a plant underwater during May and June. DAMHIKT.

Luckily, we're soon to be legislatively freed from any climate change problem. But just in case, that doesn't work, I think I'll have a backup plan.

[Update: for help with the idea of "geopotential meters" this is the best I could do. And I'm still pretty vague.]