The privilege...


Of being a grandfather.


Vovô from Luiz Lafayette Stockler on Vimeo.

Father's Day is coming up, BTW.

[via sullivan]

Something's fishy...

If not actually rotten in the state of Denmark.  I been spending some time with friends from DK over the last few days (and trying to get planted of course), and their mood was uncharacteristically downbeat.

DK farmland prices are trending down. Despite record grain prices, their heavy dependence on livestock on their smaller farms has made the last few years very difficult. In fact, they are to the point of liquidation to stop the bleeding. This in a country that has had all the pigs the law will allow for years.

While U of I economists tsk-tsk the use of the term "demand destruction", that is sure what it looks like to me. We are at the least shifting the demand curve as we lose entire farms of corn eaters.

Meanwhile, the crop in Europe is not good. Winter barley in France is down ~20%, German grains are poor as well, and dry weather continues.

Europe’s wheat crop, making up a fifth of global output, is under threat in the U.K., France and Germany from the driest growing conditions in at least 36 years.France’s soft-wheat crop, the European Union’s largest, will drop 12 percent, and German output will slide 7.2 percent, local forecasters said today. Wheat jumped 4.5 percent to the highest level since Feb. 14.Smaller-than-expected harvests may boost wheat prices that already rose 59 percent in a year after crops were hurt in the last growing season by floods in Canada and drought in Russia. This year, China is contending with drought while U.S. farmers are facing dry weather in some areas and too much rain in others. The U.S. Department of Agriculture is forecasting a second consecutive annual decline in global stockpiles.“Given the tight levels of stocks for grains and oilseeds we need everything to go right,” Luke Chandler, global head of agricultural-commodity research at Rabobank in London, said in a phone interview. “Downward revisions such as in Europe have the potential to set us on another bull market over the summer.”French soft-wheat production will slide to 31.65 million metric tons, the least in four years, from 35.7 million tons last year, as drought slashes yields to the lowest in at least 16 years, Agritel, a Paris-based farm adviser, said today. [More]

I think there is a partial inability in the minds of American farmers to entertain the fact the world's growers cannot simply increase production at will, and that a massive shortfall is truly possible. In fact, I think it is unfolding as we speak. One more flood somewhere in the US, another month of drought in the EU/China or a monsoon failure in India and the supply demand curves will have trouble meeting, or at least intersecting anywhere congenial.

On a side note, my driving through central and northern IL was not pretty. Waaaay too much water, and mucho beans to plant.

This oughta be good...

Tim Pawlenty, trying to avoid the "Newt takeoff", could be about to repeat.  If he does what he's says he's going to do today, I'll bet he's walking it back just like the Newster in the next few days.

That's why later this week I'm going to New York City to tell Wall Street that if I'm elected, the era of bailouts and handouts for big banks is over. I'm going to Florida to tell both young people and seniors that our entitlement programs are on an unsustainable path and have to be changed. And, today, I'm in Iowa to speak truthfully about farm subsidies. [More]

My guess (and if it's already out, I haven't seen it - just rained out of planting) is he'll offer very timid curbs on these entitlements, and talk about waste and fraud again. But the GOP can't seem to learn this lesson.


Pawlenty may be trying to ignite something before the Big Girls show up and while other guys are folding. He may also be trying to tap into Big Right $$ with some strong libertarian rhetoric. He may also have no idea why he's running.


Maybe he will target ethanol.


Update: That appears to be the case.

im Pawlenty pre-announced his official entry into the 2012 presidential race Sunday with a video promising that he'd tell the hard truths. In Des Moines Monday, the hard truth Pawlenty opened with was telling Iowans that he'd phase out ethanol subsidies, Politico's Kendra Marr reports. The Republican said the government needs to get out "of the business of handing out favors and special deals" and allow "the free market, not freebies" to reign. His truth-telling tour will next take him to Florida, where he'll call for the raising of the Social Security retirement age, then New York, where he'll say it's time to end "the era of bailouts." Pawlenty said he was going against the "conventional wisdom" because "Someone has to finally stand up and level with the American people." [More]

Fair enough. Let's see how it plays.


It will be an interesting test of farm lobby clout, and the possible end of Iowa as our candidate chooser if he pulls this off.

Upperdate: Frum possibly sees the real reason for this IA tactic.

It’s courageous, principled, and right for Tim Pawlenty to travel to Iowa to denounce ethanol and other farm subsidies. But I’m also left wondering: is this also a very good way to manage expectations if he comes second or third or worse in Iowa, where Pawlenty is currently polling in single digits? [More]

Pawlenty is having trouble raising money compared to Romney, and maybe blowing off IA makes some kind of sense.


Still it seems to have a whiff of "loser" about it.

World's Worst...

Hunting beagle.

[Source]

FMD...

May not be the panic-maker it used to be.

The mass culling of cattle to control outbreaks of foot and mouth disease may soon be a thing of the past, according to scientists who have made a breakthrough in understanding how the virus is transmitted.A study has established a hidden "window of opportunity" between the point when a cow becomes infected with the foot and mouth virus and the time when she is able to transmit the virus to another animal.Scientists said that this discovery, combined with the realisation that cattle are only infectious for about a two-day period, means it should be possible to identify infected animals and eliminate them from a herd before they can pass on the infection. [More]

While I understand and agree with the draconian responses needed to control FMD, I can't help but wonder if the testing materials won't be priced right at the max-profit level where many farmers will elect to avoid detection rather than know for sure.

The pattern of reaction to this type to discovery has been to extract maximum shareholder value first. I have no real objection with that, but wonder if a longer term outlook might benefit both the test manufacturers and the livestock industry simultaneously.

If it is possible it will likely occur in the EU before here, IMHO.

It doesn't get any easier...

If you use AgWeb, you may know by now of the tragic death of Lindsay Hill, who was just beginning what could only be called a promising career at Farm Journal Media.  She was taking over as Agribusiness Director for US Farm Report, and in the short time she had, made a powerful impression on me and all my colleagues.

The older I get the more untimely deaths dismay, I guess. Lindsay seemed (in the short time I spent with her) exactly who we needed at USFR and the perfect foil in many ways to my blindspots and prejudices. It may be odd to say, but I will miss her future as well as her person.

Others who knew her better can express the deeper loss of a friend and family member, but my grief drifts toward who I could see her becoming. And that is sorrow enough.

But I had the chance to meet and work with her briefly. I will be grateful for that.

Arctic ice update...

Basically, it's slip-sliding away.

 [Source]

I realize the disappearance of the all Arctic ice would not phase the economic and political objections to the concept of global warming for many in the US, but you have to admit, an open ocean north of us would be hard to ignore.

This graph shows Arctic sea ice volume (not area, not extent) by month, over the course of the satellite record, with the vertical axis units being km³. (See the link above for more detail on the source of data used in the graph. I also recommend Neven’s post Trends in Arctic Sea Ice Volume.)Notice that not only is there, shall we say, a distinctly noticeable downward trend, but that the decline for any given month is actually accelerating. Also notice that the vertical axis begins at 0, so there’s no funny business happening here to make the image look even scarier.The month with the lowest volume, September, has declined from roughly 18,000 km³ to around 4,000 km³. I’ll leave it up to you, dear readers, to conjure up your own way to visualize the volume or weight of that missing 14,000 km³ of ice. (Remember that 1 km³ of ice weighs 1 billion metric tons.) Presumably there are two main factors at work here: Increasing warming due to our continued, non-stop efforts to aerosolize every last gram of carbon we can rip or pump out of the ground, plus Arctic amplification, a.k.a. albedo flip, in which open sea water absorbs much more heat from the sun than would snow and ice.Of course, the thing that many of you immediately looked for is none of the above details, but when the September line is projected to hit 0, roughly 2015.This is the part where we all try to resist the urge to say, “that can’t possibly be right”. [Not much more, because I couldn't stop extracting]

More important, perhaps, is my discovery of a blog dedicated solely to Arctic ice. This is what the Internet is doing for us, folks. And then Google helps us find it.

For all our troubles, we live in a magical time.

Tillage experiment...

We're testing a vertical tillage tool from Kongskilde (disclosure: I am on the board of directors).  It seems too good to be true, but this machine is allowing us to get into fields 1-2 days earlier. Nobody else is running beside us, and the finisher was a real mistake.

We're running about 2-3 inches deep, 9 mph, 4 degrees gang angle.  So far it opens up the thin dry layer and doesn't produce clods.  Our hope is to follow a day later with the planter.  It levels extremely well.

In the fall we'll use in on cornstalks.

I'll let you know.  But we're convinced we need to try something as the last four springs have not given us long stretches in between rains, and then you get what we got the last 6 days- a s-l-o-w storm that prevents drying even when you don't get much rain.

Coupled with more tile, I hope we're expanding our planting windows.

It's what you do when you agree with John Huntsman on climate change.

The right smacked Ryan and Gingrich into Correct Thinking. Let's see how long his belief holds up.

Had a bad day?...

Here are about two minutes of distraction.




[via sullivan]

Hence the name...

This is box-turtle-road-crossing season around here, so I thought his might make them feel better: a three-toed sloth zips across a highway.



[via ezra]

Meanwhile, back at the bank...

The small thump you heard yesterday was the US Treasury hitting the debt limit. As expected by most, the sky did not fall, but lest you be too sanguine, a series of events have been triggered that could affect many farmers.

First, foreign investors, who hold nearly half of outstanding Treasury debt, could reduce their purchases of Treasuries on a permanent basis, and potentially even sell some of their existing holdings. A worrisome precedent is the sharp decline in foreign sponsorship of [government-sponsored enterprise, or G.S.E.] debt since Fannie Mae and Freddie Mac were placed under conservatorship. Despite assurances from Treasury officials regarding the U.S. commitment to these institutions, foreign sponsorship has yet to return to pre-conservatorship levels. If foreigners began curtailing their investment in Treasuries as a result of a default, Treasury rates, and thus Treasury’s borrowing costs, would undoubtedly rise. A sustained 50 basis point increase in Treasury rates would eventually cost U.S. taxpayers an additional $75 billion each year. [More]

While the focus here is Fannie and Freddie, don't forget the Farm Credit System is a GSE as well. The longer this game is prolonged, the more problematic its bonding power could become. And if we slip to deeper levels of default beyond the euphemistically labeled "technical default", at some point the implied guarantee of FCS paper becomes worth much less, if not zero.

The POMO schedule for next week calls for only $15-22 billion in gross aid. Because $6 billion in GSE paper will mature, net POMO will total “just” $9-15 billion, so the market’s performance in light of that should give us an interesting perspective. If the market can’t hold up with $9-15 billion of support from the Fed, how will it do with none? 
On the other hand, the debt ceiling issue looms, and I don’t presume to know how that will play out. It’s a contaminating factor insofar as making any judgment about the influence of reduced POMO. This problem needs to be resolved so that we can get back to the business of analyzing this mess in a more “pristine” environment. 
Primary dealers are handing over their long term Treasury paper to the Fed as fast as the Fed will take it, and interestingly the dealers are not replacing it. PD inventory of Treasuries is crashing. This looks like distribution. They're piling up cash at a breakneck pace. But to what end? Are they preparing for the apocalypse come the end of June, or are they preparing to buy massive amounts of Treasury paper once the Fed leaves the market. The answer to that is a no-brainer, but the Street wants us to believe otherwise. 
Wall Street keeps telling us that there will be plenty of buyers for Treasuries once the Fed stops POMO. All the evidence that I now see points in exactly the opposite direction. Not only are the PDs treating Treasury paper like last week’s garbage, banks in general are also dumping the stuff. Only foreign central banks have been good public servants picking up tons of the stuff in recent weeks, but even that appears to have stopped. If they go on strike, it will be a catastrophe for the market. [More]

No, I won't pretend I grasp that, but it seems semi-obvious that nobody truly knows what will happen in the debt markets. we've never charged down this road before. Although after the Lehman Bros. collapse, FCS funding was a struggle at best.


But I thought "uncertainty"  was the favored cause of sluggish business investment. And it was caused by the Obama administration policies. Why aren't Republicans in Congress horrified at the thought of all this real and debilitating uncertainty in the bond market - which they are seemingly happy to provoke?

Nevertheless, Republican leaders view this as a “leverage moment,” to borrow House Majority Leader Eric Cantor’s phrase. They figure that they can extract maximum concessions from the self-styled adult in the room (President Obama) by pushing as close to the edge of the cliff as possible. On Wednesday Cantor upped his leverage moment ante by declaring that the House GOP "will not grant [the] request for a debt limit increase" without major spending cuts or other concessions. As Politico reports, "In the most recent budget battle–over a six-month spending bill–Republican leaders carefully avoided threatening to shut down the government. Now, Cantor says he’s ready to plunge the nation into default if the GOP’s demands are not met." So they’re more willing to flirt with "financial disaster" than they were to talk about government shutdown. Wonderful.
[Read the U.S. News debate: Should Congress raise the national debt limit?]
Which brings us back to the concept of uncertainty. If there’s one thing businesses and Wall Street like less than uncertainty about whether taxes might go up, it’s uncertainty about things like “financial disaster.” They prefer that we not be making a bee line for a cliff at all, because of the attendant uncertainty about the politicians’ ability to avoid driving off of it. [Check out political cartoons about the economy.]
Specifically, while Boehner has tried to explain to Wall Street types the politics of this ‘leverage moment,’ they have shot back that the debt ceiling vote (and the possibility of “financial disaster”) really isn’t something pols should be mucking around with. And it’s not just the Wall Street money wizards who are telling the GOP to quit it: Main Street business groups like the U.S. Chamber of Commerce and the National Association of Manufacturers are also lining up in the don’t-play-politics-with-the-debt-limit camp (h/t Steve Benen). [More]

Beyond the possible FCS hiccup, I think uncertainty is the word dof the day for our commodity markets as well. I also think there is greater downside than up, as panicky money starts running for cover. 


I think this is a moment of greater peril than most realize simply because our financial is so complex it may be impossible to predict. Lord knows we haven't done well the past few years. Like kids playing with explosives, we only have the vagues idea of the interlinkages that could bring down even seemingly unrelated financial activities. 


In short, I think we have just entered a "What-were-we-thinking?" moment.

Everything you need to know...

About the great economic philosophy debate now raging.



FWIW, I think this overall is remarkably accurate. Logic seems to side slightly more heavily with the Hayekian principles, but it simply has been demonstrated* as beyond our ability to enact.

Example one is any attempt to touch Medicare, despite the screaming danger signals flashing in our eyes. When the ACA tried, the GOP ran to victory by scaring old people. Unbelievably, they ran to jump on the same land mine as soon as they could.

Example two is every attempt at even modest financial regulation. Both parties feigned holding their noses to bail out banks, Wall Street, and companies.  But you'd think that would encourage regulation to wall off big firms to prevent chain reactions in crises. Once again, it was not  possible, and even the modest Dodd-Frank reform is pilloried from (illogically) the right.

So we are stuck with incremental adjustments which neither side likes and are probably grossly - but not totally - inefficient. My feeling is we will see some Hayek results in the reluctance to bailout large firms in the future, as well as acceptance more resources (taxes) to fund sacrosanct social welfare (safety net) programs.


*Full article well worth the time

September excitement...

After my post about falling global crop yields, a friend in PA sent this note:

After church I was approached by the grain buyer for a large mill in the area and said he raised his basis to +.90 cents for August and September and was unable to buy one bushel of corn. I talked to a dairy vet in the area about 10 days ago and his comment is that there will be dairy farms that will be without corn in August and September because they do not know where it is coming from and are making no plans till they are out to look for corn. Another large end user, (feedmill) with 300+ tons per hour capacity is entertaining the idea they will have to pay $12.00 a bushel to get corn sometime before new crop corn becomes available.
[Note: this morning he updated the basis as $1.20 over]

This is the slow motion train wreck I see happening due to lackluster yields last year in the ECB, and our subsequent slow start this year - especially IN and OH.  Sometime in July (perhaps sooner with a cool summer) it could become obvious despite "ample" carryover, it is badly mislocated and livestock operations on the East Coast will be up the Chesapeake without a paddle.

This is undoubtedly a major item of discussion at Cargill, etc.  My expectation is for early delivery of new-crop to be enticed by free drying schemes, lucrative basis, toasters, whatever.  That's why we're shifting to more short season corn for the last 40%. 

I believe the phrase is "giant sucking sound". 

Yeah, I need me...

One of these...

Junkbox, Episode 0.VIII"...

Things that go bump in the day as well.

• Zombie ants (truly ghastly)
• Maybe not shale gas
• Mon Dieu! We have become French!
• Why there is still very low inflation
• A little help with self-help
• This is your brain on poverty

The rich aren't different...

After all. I have struggled to follow the line of reasoning that raising the top marginal tax rates will make rich  people "go Galt" and lay down in the harness, and in their absence we feeble ordinary citizens will be unable to propel the economy.

I'm not alone in thinking this is improbable logic.

The other mechanism that seems to be on offer is labor supply. This makes a lot of sense to me as applied to low-income people. If you work at McDonald’s or drive a taxi then you face a real choice about whether or not to increase your hours worked at the margin in exchange for more money. Driving a cab at 2AM is obviously a huge pain in the ass and not especially lucrative. To the extent that cab drivers face higher income taxes, they have even more reason not to work so late since it becomes even less lucrative. And the availability or non-availability of late night cabs has a variety of downstream impacts on bars & restaurants, drunk driving, etc.But it’s a lot harder to see this at the high end. A very large share of high-income professionals basically have a marginal wage of $0. The CEO of WalMart can’t cut back his hours by 5 percent in exchange for a 5 percent pay cut. What’s more, a lot of high-end work is characterized by zero-sum competition. It’s plausible to imagine higher income tax rates making veteran NBA players more likely at the margin to retire rather than play one more season at the minimum. But what are the downstream economic implications of Mike Bibby retiring? There overall quantity of NBA players is fixed and there are plenty of other people willing to step up and do that job. The average quality of NBA talent might decline, but so what? The players just play against each other. And it’s not just athletes. Fancy lawyers and high-frequency traders are playing against each other. Marginal changes in average quality don’t matter. If anything, reducing the average quality of America’s lawyers and finance guys would be beneficial if it inspired more people to do something else with their time.Last, of course, one of the main reasons for taxing the rich is precisely that the utility of a rich person’s marginal dollar is so low. Giving the dollar to someone else will increase overall well-being. But another implication of this is that the strictly pecuniary motivation to earn more money is already extremely weak. Whatever it is that motivates Sergey Brin it’s obviously not that he’s dissatisfied with $19.8 billion and wants more money. Plausibly he wants to get more money than Bill Gates because that would prove a point (i.e., that Google is awesome), but these pure competition dynamics strengthen the case for taxation. [More]

Many rich guys are simply lucky guys. Even in our sector. The idea that this tiny elite has to be indulged to keep their powerful job and wealth creative moxie churning out for all the rest of us morons is bogus. Others could step up when they balk at 3% higher taxes and replace them without an economic blip, I'll bet.


Besides, top tax rates are historically very low, and have been  for the last few years...

[Source]


...and I don't see them creating more jobs now than they did in say, the '90's. 


Nope, they haven't been creating jobs, they've been investing in investing. We farmers know them as index funds, and those are not businesses that reduce the unemployment rolls. 


Besides, if income is a valid tax source, then lets be clear about where the income is.


A few days ago the WSJ tried to muddy the debate by suggesting with the following chart that we needed to tax the upper-middle.

At the time, I thought this was a little fishy, especially how the income croups are divided. Sure enough, Kevin Drum revised the chart to be a little more illustrative.

Jon Chait takes a closer look at a Wall Street Journal chart intended to suggest that the middle class has all the money:

The chart has been making the conservative blog rounds, from Powerline to Hoosierpundit to Reihan Salam to (not really conservative) Andrew Sullivan, who reproduces it under the headline "Where the Money Is." The chart most certainly does not demonstrate the Journal's point. It instead relies upon an optical illusion. Democrats have been arguing that their tax increases should solely affect income over $250,00 a year. The Journal makes that pot of income appear small by divvying it up into seven different lines. See, the $100,000-$200,000 line is tall, and all the other lines to the right of it are short. That tall line must be where the money is!

As a public service, I've redrawn the chart for the Journal. On the left is the original. On the right is the chart that shows the actual amount of money earned by the tiny handful of people making over $200,000. It's a lot.

[As the WSJ drifts more and more to the model of Fox News of Finance they are going out of their way to man the barricades for the very, very wealthy.  And it's their right to do so. But I lament the loss of a formerly steady news source. At least, I'm not paying for it.]

But it would appear the rich are getting pretty nervous. Which means Republicans are getting nervous. Ezra Klein tracks down their  derailed thought train and concludes otherwise.

Leonard Burman isn’t a Republican economist, but he is a tax expert. He was actually deputy undersecretary for tax analysis in Bill Clinton’s Treasury Department. And when I reached him for comment, he found the whole conversation baffling. “You can build these models where people are very sensitive to changes in taxes,” he said, “ but in practice, there’s scant evidence of it actually working out that way. And lucky for us. If we really needed to get the tax code just right in order for the economy to grow, we’d have been in a depression for the last 40 years.”The bottom line, he says, is that these theories were tested, and recently. “In the 1990s, we raised taxes, particularly on the rich. And a lot of these people were saying our tax increases were going to kill the economy. But remember what actually happened? We got rid of our deficits and the economy grew really robustly for 10 years. And what if it happened again? We might get rid of our deficits and the economy would grow really robustly for another 10 years. Maybe it’s good for the economy to actually get the deficit under control.” [More]

I'm all for getting the deficit under control, as well as cutting spending as fast as the economy will allow (starting with ag subsidies). But pretending we cannot raise tax rates on people like me and richer, as well as eliminate tax expenditures to accomplish this long term goal is unreasonable.

What is with this low pressure system?...

We seem to be stuck in a immobile storm system that features heavy overcast skies, occasional showers, and a constant 52℉. Worse still, like some lame Star Trek NG plot device, it is sucking my lifeforce and rendering me intellectually and morally inert.

So when I read about one of my favorite bloggers being assaulted last night in DC while walking home, it just seemed to fit.

So . . . I was walking back from the home of Megan McArdle and Peter Suderman and instead of doing the normal thing and taking Q Street west to 5th and then walking south, I wanted to take a shortcut by walking south on North Capitol to then cut southwest on New York. But then lo and behold right by Catania Bakery a couple of dudes ran up from behind, punched me in the head, then kicked me a couple of times before running off. Once, years ago, in Amsterdam a guy threatened me with a knife and took my money. These guys took nothing, and just inflicted a bit of pain. All things considered the threaten/rob model of crime seems a lot more beneficial to both parties than the punch-and-run model. But I guess it takes all kinds.To offer a policy observation, higher density helps reduce street crime in an urban environment in two ways. One is that in a higher density city, any given street is less likely to be empty of passersby at any given time. The other is that if a given patch of land has more citizens, that means it can also support a larger base of police officers. And for policing efficacy both the ratio of cops to citzens and of cops to land matters. Therefore, all else being equal a denser city will be a better policed city.That said, as a matter of personal ethics you really shouldn’t run around punching random dudes in the back of the head irrespective of the prevailing level of population density or policing. [More]

The comment thread really brightened my day, though. Check out some of the wit.

Toy Alert #35...

They finally made a Verizon-native iPad 2, and I saved my pennies up (which are a bad idea, BTW).

Here is the verdict after two weeks: simply amazing!

This is the best on-tractor computing device available. It's large enough to read and the touch-keyboard is much easier to use than a phone. The backlighting is great for all light conditions, and by loading the free Kindle app, I was able to give away my rather beat-up Kindle.

I can see my working spreadsheets and maps, via Dropbox, although the translating them back and forth between Excel and Numbers isn't worth it for me right now. (There is no iPad version of Office)

The camera functions are great. Here's what my days looked like this week (although too few of them).



Uploading or emailing video/pics is a two-touch process. It also "skypes" well with (Facetime) with two cameras.  Good battery life as well.

I'm still climbing the learning curve which has been pretty easy, except for Blogger.  One reason I haven't been posting is there is not good app for doing so for the iPad.  I expect the Google guys will have something soon, but I can't really post easily yet.

Still, this is the mobile computing device that dovetails with auto-steer to make cab-computing work, IMHO.  Best of all it's relatively cheap.

This is the device that will replace notebooks and make phones just phones again.

I recommend the magnetic cover, and maybe a heavier one for rough use.

Wait for it...

This fits perfectly with the most recent Doctor Who episode I have seen.

[Good ol' xkcd]

Not just Edgar County...

The flow toward urbanization is an international phenomenon. While becoming pronounced in our Heartland states, rural depopulation in Russia is extreme.

Of course the rest of the country isn't doing so well either. The population has dropped by 2.2 million people, or 1.6%, since the last census was taken in 2002. These were supposed to have been the glory years under Vladimir Putin, who has ruled Russia since 2000, first as president and now prime minister. And in that time, a handful of cities have indeed prospered, with Moscow becoming home to more billionaires than any other city in the world. But more than 6,000 villages have meanwhile turned into ghost towns, or as the census calls them: "population points without population." About 2,000 of those are in Pskov.
In just eight years, the region has lost 11.5% of its population, a rate of decline more often seen in times of war and famine. This might have been expected in Russia's permanently frozen north, like the region of Magadan, once home to the Gulag prison camps, where the population dropped 14.1% in that time. But Pskov lies on the border with the European Union, and the city of St. Petersburg, Putin's birthplace, is only 100 miles away.
In Soviet times, huge collective farms and machine works were based in Pskov. Village life thrived, and the main city was still famed for nobler things, like fending off the Teutonic Knights in the 13th century. But traveling the region's backroads now inspires the creepy feeling that a plague has just passed through. Every few miles a cluster of huts emerges from behind a hill, and most of them turn out to be abandoned, their floorboards warped and splintered, releasing a smell of decay. The fields are overgrown, and old grain elevators tower over them like enormous ghosts — landmarks to Russia's demographic catastrophe.
So by local standards, the village of Lopotova is doing fairly well. The villagers say it still has a few hundred residents (down from about a thousand ten years ago) as well as its own grocery store, where the saleswoman spends most of the day ringing up liquor sales on an abacus. No surprise that the most popular item is vodka, the cheapest half-liter bottle going for 68 rubles, or $2.25. Far from everyone can afford it.
Behind the store, at the end of the unmarked village road, Zhbanov comes across a group of five young men in their 20s sitting on a log in front of a sheet-metal shack. They are not homeless, but they look it. In a week or so, the weather will let them pick mushrooms and berries to sell on the side of the road, the steadiest form of employment they have had since 2003, when the local farm went bankrupt. Aside from that, they can forage for scrap metal or go talk to Zhbanov, who makes enough selling his paintings in St. Petersburg to give them a handout from time to time.
[More]

Note the statement "the local farm went bankrupt".  In a world of grain anxiety and real questions about enough ag production this boggles the mind. This is not desert or swamp, but a place where stuff can be grown.


I think it may be partly or even largely due to Stalin's massacre of the peasants. He literally killed off the nations farmers and with it all working knowledge of what the right answer looked like. They have never recovered.


The other mystery is the debilitating problem of alcoholism in Russia. I don't think we can even begin to comprehend how pervasive and pernicious this cultural pillar is there.  But it also tempers my expectations for how much load Russia will be able to handle agriculturally in the demand years ahead.

Epistemic closure, part IV...

Google isn't helping.



I have noticed this when I use my son's computer to search for something. Algorithms can be changed and I suspect information like this will help.

For myself, I'm taking a little more time to read stuff I do not agree with. It is frankly hard, because much of it is not substantiated in a way I have come to expect.

Tale of two charts...

First consider this surprising new population estimate.

 But the most dramatic changes are national, not global. America's population, now 310m, is likely to rise to 400m in 2050 and 478m in 2100. China's is forecast to fall by 400m between now and 2100. Russia’s population is now 142m; Afghanistan’s slightly more than a fifth of that; Niger’s barely a tenth. But by 2100, Afghanistan is forecast to have the same population as Russia (111m) and Niger will be larger. Such forecasts need to be taken with a bucketload of salt: tiny shifts in today’s birth rate extrapolated over 90 years produce huge changes. But the general picture is probably right.[More]

Ominously, it is not about Asia (China and Russia). In fact, the projection for China is mind-boggling.

It's about Africa, and I think it is one more indicator of what we are overlooking most often about the future. Africa has been easy to ignore, but just like the wholly unexpected uprisings in Tunisia, Syria, Libya, Egypt, etc. it is more a case of casual indifference from the West than lack of evidence.

It is hard to say we need to get over China, but for certain longer time frames, this suggests we should widen our view.

Now combine that with this growing uneasiness.

Why is food production slowing down? This is from Michael Roberts:

Is this because of changes at the intensive or extensive margins? That is, is the slowdown due to declining productivity on existing land, e.g. from bad luck with the weather for several years in a row, or a more permanent change like global warming? Or is it because world growth is bringing marginal, less productive land into production? Whatever the cause, Michael Roberts thinks it's likely a permanent rather than a temporary problem:
There are many reasons for high commodity prices. But recent data from FAO shows a pretty rapid slowdown in productivity growth. The price spike in 2008 occurred in a particularly bad year in which yields declined on a worldwide basis for three of the four largest food commodities. In 2009 all four of the majors saw yield declines, something that hasn't happened since 1974. 2010 couldn't have been much better and was probably worse, given how bad things were in the U.S, the world's largest producer and exporter (worldwide data for 2010 isn't available yet).
The yield slowdown comes at a particularly unfortunate time, with accelerating demand from emerging economies like China and subsidy-driven expansion of ethanol. Keep in mind: we need productivity growth to accelerate considerably to keep up with projected demand growth. FAO says we need 70 percent higher yields by 2050. (Although I'd like to do my own projections, and will one of these days...)
Maybe it's just bad luck with the weather. But I think it just may be a longer run phenomenon.
Yeah, resource scarcity will be in the news for awhile yet. [More, with apologies for the generous extract]

These are not two compatible trends, folks. It may take a few more production years like 2008-2010 for growers to question how soon we'll get to "800 bushels per acre", even if we do buy every seed, machine and chemical being touted to get us there.

Personally, I think it is the extra moisture in the atmosphere, but the idea this could be what the crop future looks like is becoming less unthinkable.

To cap it off, there was this alarming "Dr. Drought" comment in this week's ProFarmer:

That means there’s still a chance for “normal” corn yields in the Corn Belt — but that’s not what Taylor anticipates. Based on current conditions  and his summer weather outlook, he puts 70% odds on below-trendline yields with his “most likely” current yield at an eye-popping 147 bu. per acre

All these are simply projections, and population estimates 90 years out should be taken as possibilities not prophesies. Still this is the first I have seen of 1) the staggering change in Africa's demographics and 2) the equally unexpected sharpness of China's decline.

All in all, those who confidently predict the current commodity boom is another brief interlude between overburdening surpluses need to provide their own data, not simply history, to buttress their conclusions from now on.

Jeez - just think of the fallout from a 147 bpa crop!

Mothers come in all kinds...


No More Questions! from StoryCorps on Vimeo.

Happy Mother's Day to all mothers and their children!

[via sullivan]

This just in...

(Or maybe out) I have a new grandson: Duncan Jack Phipps*.

10 pounds 2 ounces, 21 inches.

I'm going to see him and the blog can just wait.


*I'm assuming it's not "Dunkin' Jack" (which would be pretty awesome as well)

Looks like a right-fielder to me...

Slowly and creepily they get better.

What space really looks like...

From space.  Via the Hubble Telescope

[Even better when clicked]

[More]

What does "high" mean?...

Record prices in many commodities like sugar and copper feed our availability bias to conclude we are experiencing unprecedented costs. Actually, we are close to where we started over a century ago. But have we shifted long term downtrends for commodities?  This graph gives me pause.

Statistically, most commodities are now so far away from their former downward trend that it makes it very probable that the old trend has changed – that there is in fact a Paradigm Shift – perhaps the most important economic event since the Industrial Revolution. [More]

The instinctive or at lease, accepted response is to smell inflation but as I have pointed out before, it is very hard to have inflation if wages cannot grow - consumption simply shifts because there is only so much money in consumers' hands. With 9% unemployment wage pressure is tough to imagine.  This is pretty much what recent data suggest.


What is striking is the very long term decline has been essentially erased in the last few years. I'm not sure this is a paradigm shift, since energy uses and sources are in high flux. But if it isn't - think about where prices would revert to on the above chart!

Junkbox, Episode VXN...

Best quote for today: "US terror alert level raised to confetti."

• Four words I'll think about before I use again
• It just seems like we're planting faster
• At last - computer-generated dirty jokes
• Quality matters, but what is it, exactly?
• I predict you'll love this post
• Don't touch the armadillos ( AKA: western possums)

Contextor™ Lives!...

One of my favorite crusades has been to put popular farm statistics in context, so farmers understand better how we fit into the global economy. I have been criticized by listeners/readers that pointing out farming only contributes 1% to the US GDP is bad for our self-esteem. (Seriously, a FB operative actually said that.)

The problem I see with this fairy-tale approach is producers are a) ripe for being fleeced by those who sell us wildly overblown visions of our importance and 2) we make really bad decisions because we don't know how big the other players are.

Here is an example from commodity markets:

The money tells the story. Since the bursting of the tech bubble in 2000, there has been a 50-fold increase in dollars invested in commodity index funds. To put the phenomenon in real terms: In 2003, the commodities futures market still totaled a sleepy $13 billion. But when the global financial crisis sent investors running scared in early 2008, and as dollars, pounds, and euros evaded investor confidence, commodities -- including food -- seemed like the last, best place for hedge, pension, and sovereign wealth funds to park their cash. "You had people who had no clue what commodities were all about suddenly buying commodities," an analyst from the United States Department of Agriculture told me. In the first 55 days of 2008, speculators poured $55 billion into commodity markets, and by July, $318 billion was roiling the markets. Food inflation has remained steady since. [More] [My emphasis] 

While Kaufman is railing about speculators in the above article, about which I am less outraged, I was struck by the sheer numbers. I knew there was a flood of money coming in - I did not appreciate exactly how big this was.

Which kinda makes my point.