Stalemate, mate...

While many Americans like to gripe about the lack of progress on, well, anything in Congress, few of us are particularly interested in looking beyond facile reasons why it exists.

For example, most of the outrage centers on the people of Congress and their character. This is too superficial by half, IMHO. We have had venal, self-serving political hacks in office for centuries and stuff still got done. I can't find much evidence our current crop of legislators is markedly different than previous members.

Sarah Binder has studied the phenomenon for years. Her take on gridlock:

Three forces fuel today's gridlock. First, divided party control of government raises the bar against major policy change. Parties are the only glue for bridging policy and electoral differences between the ends of Pennsylvania Avenue, meaning that more can be done in periods of unified party control. Just compare President Obama's first two years in office (with Democrats controlling both branches) with the second two years (after Republicans captured the House). Congress was remarkably productive under unified control, enacting numerous landmark accomplishments, from health care reform to Wall Street reform. Under divided government, only do-or-die deadlines brought the parties to the table. Divided government continues in the 113th Congress, handicapping Congress even before it gets underway.Second, legislative parties have polarized over the past half-century, even though Americans remain centrist in their policy views. Polarization increases deadlock, because our political system requires large coalitions to adopt major policy change. Such coalitions are harder to build when few legislators occupy the ideological center. Increased polarization reflects the parties' ideological differences over the proper role of government, plus a strong dose of sheer partisan team play. As a result, much of congressional disagreement is strategic: The parties hold out for a full loaf rather than compromise on a half. Not surprisingly, when deadlines forced parties to the table in the 112th Congress, they often kicked the can down the road. As a result, the 113th Congress starts with a huge plate of leftovers, leaving little room for new issues.Third, stalemate is fueled by bicameral disagreement. Even when a single party controls both the House and Senate, disagreements arise that reflect electoral and institutional differences between the chambers. Bicameral differences are compounded when the parties split control of the chambers, as Congress's recent record attests. Bicameral obstacles remain high this year, with a smaller and more conservative Republican House facing off against a larger and more liberal Democratic Senate. [More]

One analysis I do find worth considering is the fundamental philosophical differences between Republicans and Democrats. It turns out intransigence is not a half-bad way to fight political battles.

Republicans vote more or less exactly the same way, regardless of what kind of district they represent. The Republican representing the squishiest, most RINO-ish district in the country votes almost as conservatively as the one representing the most bullet-munching conservative district in the country. Republicans are voting in lockstep to defeat Mr Obama's legislative priorities; Democrats are showing nowhere near the same kind of discipline in supporting them.This doesn't predict what might happen if Republicans gained control of the Senate, or of the presidency. It's possible that with more power Republicans would feel freer to disagree with each other. With their backs to the wall, out-of-power Democrats might feel the need to present a more united front. But basically Democrats have less voting discipline than Republicans. George W. Bush was detested by Democratic voters every bit as much as Mr Obama is by Republicans, but Democratic legislators cooperated with him to pass major education and Medicare reforms; they negotiated an immigration-reform bill with him, and would have passed it, had he not been abandoned by his own party.In other words, if all else fails, the gridlock of the American government will probably end the next time the country elects a Republican president, since Republican legislators have the discipline to stonewall Democratic presidents while Democrats are more willing to compromise. That asymmetry is probably infuriating to Democrats, but unless their legislators adopt different voting behaviour, it's not going to change. [More]

But the driving force behind this discipline it the importance of gaining and holding political power as the paramount goal - not governing (getting stuff done).

One other theory about what could change this is also worth pondering.

“You should be depressed,” says Keith Poole. “It’s going to get worse.” Poole, a political scientist at the University of Georgia, has spent three decades studying congressional votes that stretch back to 1879. With collaborators Howard Rosenthal of New York University and Princeton University’s Nolan McCarty, he’s found that members of Congress are now less likely to vote against their party than at any time since the first decade of the 20th century.The small number of seats Democrats need to take the House (17) and Republicans to take the Senate (3) makes the problem worse, says Frances Lee of the University of Maryland. She argues a minority party with a plausible chance of reversing its fortunes in the next election has no incentive to cooperate with the majority to pass legislation. “They don’t want to cut deals that will blur the differences,” she says. From the 1950s to 1980, the Republicans couldn’t imagine a majority in Congress and settled for an ability to trade votes in exchange for altering Democrats’ bills. When Ronald Reagan won the White House, Republicans won the Senate and began to dream of the House, the beginning of an increasingly ruthless competition between the parties for control of the Capitol.McCarty is at least somewhat encouraged by the weakened filibuster. It may only address the symptoms of the larger problems, he says, “but some people can live fulfilling lives with illnesses, as long as they have the right drugs.” Lee is less optimistic. She says only one thing can force Congress to get back to legislating: One of the political parties must suffer a crushing defeat. [More]

It would be easy to despair of our future, but somehow in the midst of all this gridlock the country has emerged from a recession, ended two wars, and begun to address our health care problems. It could also be that freeing up unlimited outside money for candidates will have the effect of creating some free agents somewhat less tied to party discipline. I can see that helping compromise, but it will throw a new wrench in the works.

There is an economic question here: how much money can the political system absorb effectively? At some point, I would assume air-time commercials, robo-calls, mailers, GOTV volunteers ads, etc. reach a saturation point and produce few additional votes. Do we know where that level of spending is?  Could we find out?

For years, scholars of elections have argued about whether campaign finance limitations adversely affect electoral competition. In this article, we examine how the institutional campaign finance restrictions differentially affect the performance of incumbents and challengers. Using elections for the state high court bench between 1990 and 2004, we demonstrate that candidate spending in judicial elections has diminishing marginal returns, but that the returns to challenger spending diminish more slowly than incumbent spending. Since this is the case, campaign finance restrictions that limit candidate spending disproportionately harm challengers, increasing the incumbency advantage and decreasing electoral competition. More specifically, we show that states with more stringent contribution limits have lower levels of candidate spending, and these restrictions thus put challengers at a competitive disadvantage. [More]

I could see more Americans becoming more inured, even resistant, to campaign efforts.  We already dread the endless commercials and yard signs. While the big winner in unlimited contributions is those in the business of political campaigns and media, I could see a rapid decrease in bang for the buck.

Psst, buddy - want some mangos?...

As horrified tequila, gin, and guacamole consumers are discovering, the price of limes has quadrupled due to disease, drought, and...organized crime.

As a result of high prices and rampant lawlessness in some Mexican regions, criminals who may be linked to drug gangs are plundering fruit from groves and hijacking trucks being used for export, said Bill Vogel, president of Vision Produce, a Los Angeles-based importer. A truck headed for Vision’s sister company in Texas was hijacked two weeks ago in Mexico, he said, and growers and shippers now are hiring armed guards to protect their green gold.The produce wars on the ground are not limited to limes. Criminal cartels now control, to a shocking extent, the growing and packing of much of the Mexican produce on which United States consumers depend. An article last November in the Mexican newspaper Vanguardia reported that the Knights Templar drug cartel has used kidnapping, murder, money laundering and terror to take over the lucrative avocado business in Michoacán, the top state for production and export of the fruit.Criminal elements also have significantly infiltrated the Mexican mango industry to launder money, said Richard Campbell, a horticulturist and mango expert who travels to Mexico several times a year as a consultant. “Many growers don’t go to their fields because they’re afraid,” Mr. Campbell said. “I’m sure that this has lowered the quality of the mangoes, because it’s harder to control quality.” [More]

As bizarre as it looks in print, US drug enforcement success is pressuring cartels to find new things to extort money from. But seriously, mangos and avocados?

The green citrus fruits are largely grown in one specific region: the state of Michoacán in the country's southwest. And that's where a cartel called the Knights Templar has been elbowing in.
Gustavo Arellano, a syndicated columnist and author who writes about Mexican cultural issues, says the Knights Templar have been making their presence known in an area called La Tierra Caliente for a few years now. 
"So what they've done over the last couple of years, is that, if they're nice, they put humongous taxes on the farmers. If they're not nice, they just kill farmers and take the land and take over lime production themselves." [More]

First off - Knights Templar Cartel???

There are all kinds of guessing as to the effect of creeping legalization in the US on the cartels' income. They don't exactly provide press release balance sheets, but all the models show significant losses.

However, experts and studies note that legalization in two U.S. states -- even if the federal government allows it -- probably won't put Mexico's drug cartels out of business.In the lead-up to the referenda in Mexico and Colorado, the Mexican Competitiveness Institute released a study estimating that Mexico’s cartels would lose $1.425 billion if the initiative passed in Colorado and $1.372 billion if Washington voted to legalize. The organization also predicted that drug trafficking revenues would fall 20 to 30 percent, and the Sinaloa cartel, which would be the most affected, would lose up to 50 percent. [More]

If legalization were to become national - which is increasingly being seen as inevitable -  I can't see Big Tobacco simply stepping aside from this lucrative business. Most experts disagree, but I think they underestimate the ability to of our domestic tobacco industry to change course and compete even with illegal challengers.

The only feasible way for Altria, Reynolds American, and Lorillard to compete against lower-priced competitors is to build premium brands that deliver consistent quality. Marijuana comes in all different varieties and potencies; the average consumer of legal marijuana may not want to get a surprise every time he or she inhales a new purchase. Big tobacco companies are in position to provide large-scale, consistent-quality marijuana cigarettes to an American public that wants to take the edge off.For instance, Altria's Marlboro brand already has a strong following of loyal cigarette smokers. Marlboro has a 43.7% share of the tobacco market. Reynolds' Camel and Pall Mall brands have a combined 17.8% market share. Lorillard's retail market share is nearly 15%, thanks to Newport's 12.6% market share. Although not all tobacco smokers will smoke legal marijuana, those that do may stick to their cigarette brand. So Newport marijuana cigarettes will have an advantage over some upstart brand. This gives tobacco companies a built-in advantage in the nascent market.Moreover, tobacco companies can leverage their current infrastructure and distribution channels to dominate the marijuana market. Altria lists $4.7 billion in land, machinery, buildings, and equipment on its balance sheet (before depreciation). Reynolds' fixed assets exceed $2.5 billion and Lorillard's cost nearly $800 million. Tobacco companies have already made the huge investments in infrastructure required to manufacture and distribute cigarettes; all they would have to do to enter the marijuana market is change the ingredients. No other group of companies in the U.S. is better-suited to dominate the marijuana market, which is why Altria, Reynolds, and Lorillard can do so if and when it makes sense.  [More]

But meanwhile, back in the orchards, how serious could this problem become if the drought continues in the Southwest? Mexico is already gaining serious market share of produce - thanks to NAFTA and the CA shift to tree nuts.

[Source]

Also this excerpt from a supporting chart (same source):

[Click to enlarge]

I find myself growing more uneasy with the trends toward concentration of ag production - whether it's the corn monoculture in the Midwest or almonds in CA. This seems to be asking for a catastrophic failure. I think it is tied to what happens with capitalism after years of success: concentration of wealth. The problem with discussing this of course, is the economist who first postulated this problem. Recently, Marx has gotten some respect despite his failure to see the problems of communism. Free markets are a great answer for growing economies, but seem to have some problems with mature ones.

We may be about to see those problems face-to-face.

Did I miss anything?...

Now that was a break!  I just kinda dropped out as a string of events from speeches to church to computer sucked up my time. Oh yeah - I also got totally sucked in to a couple of cheesy SF novel series (No, I'm too embarrassed to tell you which ones).

I'm also deciding which of my favorite sources to subscribe to as the free Internet is slowly evolving into free sponsored-content pitches or usable subscription-based sources.

Plus, once you get out of the habit of posting...

So let's start slowly with a burning question: Why do Danes eat so much dang fruit (apples and oranges, anyway)?

[Click to make readable]

[Source]

I'm open to guesses.

The second morsel will undoubtedly be just the beginning of a longer discussion about water.

But faced with fast changing ecological trends that put the nation’s water and food supply in jeopardy, America exhibits little of the national resolve it once had to address the challenges. The country, by and large, is not developing new ideas about pollution control, making new investments in water conservation, and inventing new and environmentally friendlier production practices that respond adequately to new conditions.This is one of the central findings of Choke Point: Index, Circle of Blue’s penetrating assessment of water supply and consumption in three iconic American agricultural areas – the Great Lakes in the country’s Midwest, the Ogallala Basin of the Great Plains, and California’s Central Valley.The second conclusion of Choke Point: Index, drawn from months of field reporting and data collection and analysis, is that the United States’ important food-producing regions are buffeted by the same pollution, scarcity, and water-security deficits that affect China’s Yellow River and Yangtze River basins, India’s Punjab, Australia’s Murray-Darling River Basin, Mexico’s Tehuacan Valley, and other prominent global food baskets.Yet just like farmers and government leaders on other continents, U.S. growers and elected officials cannot agree, or choose to overlook, the urgency of changing conditions, or the potential for real solutions. Instead American agriculture, and its international counterparts, pursue the business and marketing strategies that led to the precarious condition of national fresh water reserves in the first place: Produce more grain and protein. Use more water. Apply more fertilizer and farm chemicals. Consume more energy. [More]

Finally, this thought which has been the subject of a casual search: Did anybody call this rally for corn to over $5? Not just throwaway "volatility" comments, but an actual marketing tactic of seriously expecting selling new crop when above $5? My memory has been, with the exception of Sue Martin (who is congenitally optimistic) and Mike Florez (technical trader), the folks on USFR and in print have been uniformly and relentlessly preparing us for $3 corn.

I have long been ambivalent on the value of market advisers, so consider my bias. But this rally looks like a surprise across the board.

Meanwhile, the enormous rent-seeking cost of Wall Street is slowly coming to light. One hot area is high-frequency-trading (HFT). That questionable practice may already be waning as a reliable revenue stream.

This is silly. I’ll tell you what happens when the little guy presses that key: his order doesn’t go anywhere near any stock exchange, and no HFT shop is going to front-run it. Instead, he will receive exactly the number of shares he ordered, at exactly the best price in the market at the second he pressed the button, and he will do so in less time than it takes his web browser to refresh. Buying a small number of shares through an online brokerage account is the best guarantee of not getting front-run by HFT types. And there’s no reason whatsoever for the little guy to think twice before pressing the button.
HFT is dangerous, I’d like to see less of it, and I hope that Michael Lewis will help to bring it to wider attention. But my tentative verdict on Flash Boys (I’ll write something longer once I’ve finished the book) is that it actually misses the big problem with HFT, in the service of pushing a false narrative that it’s bad for the little guy. [More]

I'm not sure this is the case for commodities, since they tend to lag Wall Street in their self-policing, but I reiterate my caution on trading anything on the exchanges - you are playing against folks you don't know using rules you often don't understand. While you may not miss the few cents you lose on every trade, it's enough to rack up huge profits for no value given. I'll stick to cash contracts, averaging, and my own idiosyncratic analysis and use the time saved for surfing and bad SF.

And to round off the morning, some too-late-for-me-but-not-for-my-grandchilden advice about bullies, from Wil Wheaton:

Later today, I will be beginning a whole-body computerectomy: replacing my iMac with a new one. My theory is the ~$2000 I spend every 2-3 years for a new machine pays for itself in speed and security and problems I don't have. Compared to rolling a combine it's a rounding error, and it makes me far more money than that pile of steel.

Junkbox, Episode MMXIV✜...

Just about off the road for this season. Hartley, IA this week.  Max, ND later in the month and then home to enjoy the rest of the winter.

• Stop saying this
• A thoughtful take on Big Data 
• By today's any standards, The Founding Fathers were lushes.
• Great summary of all the Ukraine situation backstory and details
• Why I think we need a permanent military draft
• For my many soccer-fan readers, more than you want to know about the new and improved ball
• The consolidation beat goes on: flour millers
• Silence is gold
• The English winter wasn't so great either

Enjoy the few mild days. Wear something not made of flannel, for instance.

Huh...

Blew my mind, anyway...

[More]

I think I see one problem...

Like most corn/soy farmers, I'm essentially clueless as to how other crops are grown, especially when it come to irrigated crops. So when I visited Visalia, CA last weekend to talk to young farmers there, it was a true learning experience.

In fact, during one interview (to be shown later on USFR), an almond producer causally mentioned almonds "take about 4 acre-feet of water".  The figure slid by me at the time, but on the flight back, I starting thinking "per what?" - bushel, ton, etc?

It turn out it's PER ACRE. Yup - almonds need 4 FEET of water per year, more or less.

Which led me to this semi-helpful graphic.

[Source]

It turns out almonds are just one of many increasingly thirty, but lucrative crops straining the water supply in CA.

In the past 20 years, the Central Valley has doubled its acreage in almond orchards to nearly 800,000, producing 2 billion pounds a year and exporting 70 percent of the crop, which yields nearly $4 billion in revenue.But almond trees, unlike vegetable crops, can't be taken out of production in dry years. The trees would die. Each acre of almonds needs about 1.3 million gallons of water a year, twice as much as fruits and vegetables, but farmers have planted them without securing sufficient water rights. [More]

This situation looks like a train wreck from here, and that's pretty much what the producers I talked to hinted as well. It looks unlikely that long-term relief will arrive in time or quantity enough to prevent loss of trees (citrus, tree nuts, stone fruits, etc.) since drip irrigation, while efficient, encourages shallow roots which are useless in a drought.

One of the producers also had little sympathy for the almond "speculators" who planted without securing sufficient water rights to cover shortages. He also stated that since the surface water allotment for agriculture this year is ZERO, the rush to drill wells has drillers backed up for a year. His reference to "the longest straw" was explained as the guy with the deepest well will outlast others drawing on the same underground pool of water.

Those supplies are not easily replenished either, so wells are a short-term answer.

I'm looking for a more upbeat ending to this story. Just can't find it 

Bravo, Rep. Camp...  

This wayward Republican was heartened to see a very reasonable proposal from Rep. Camp for tax reform. While there is much I would quibble with, it looks to me like just everybody's special interest ox gets gored.

It turns out that Camp's plan specifies the tax breaks he wants to close in considerable detail. And according to the analysis of the Joint Committee on Taxation, which is usually fairly reliable, it would be both revenue neutral and distributionally pretty neutral too. Over ten years it would raise about $3 billion more than present law, and the chart on the right shows how tax rates would be affected. Generally speaking, effective tax rates would go down for the poor and the middle class, and would go up slightly for the affluent. (These are estimates for 2015. They change slightly in subsequent years.) [More] 

But what's in it for me, I can hear you say. Well, I've got good news and some less good news.

Some of the farm-specific details I could find:

• Cash accounting for all farms (although your accountant thinks it is a really bad idea)
• Sec. 179 made permanent at $250,000; phased out at $800,000 total purchased.
• Repeal of soils and water conservation expenses deduction
•  Fertilizer would not be a deductible expense (if I'm reading this right)

Sec. 3115. Repeal of deduction for expenditures by farmers for fertilizer, etc.

Current law:

Under current law, a taxpayer engaged in the business of farming may elect to

deduct immediately expenditures for fertilizer, lime, ground limestone, marl, or other materials to enrich, neutralize, or condition land used in farming.

Provision:

Under the provision, the special rule for deducting expenditures for fertilizer and

other farming-related materials would be repealed. The provision would be effective for

expenses paid or incurred in tax years beginning after 2014.

•  Repeal of 1031 exchanges
• Repeal of biodiesel  and cellulosic ethanol tax credits
• Repeal of farm income averaging
• Generally slower and straight-line only depreciation after 179 deductions
• C ans S Corp stuff I couldn't understand

Of course, farmers will enjoy (?) all the benefits available to all filers that will make the headlines - lower rates, bigger standard deduction, etc.

More later.

Bottom line, we'll mostly hate it in farm country, but I think it's a remarkable start from the Republican side.
 

Years ago...

I gave a wistful commentary on what RR beans might mean to monarch butterflies.  The link is the virtual eradication of milkweeds from our fields.

Never mind I thought I hated them as they slipped aside from my hoe walking beans or the sticky sap gummed up my fingers.  Still there were the amazingly beautiful surprises when the combine reel would whack a ripe pod and the seeds would explode like graceful slow-motion snowflakes.

But like my ancestors talking about passenger pigeons, it may soon be a lost piece of nature.

While other factors cannot be dismissed, lack of milkweeds is the main cause of the monarch's slide toward extinction.

“The migration is definitely proving to be an endangered biological phenomenon,” Lincoln Brower, a leading entomologist at Sweet Briar College in Virginia, told the Associated Press. “The main culprit is now GMO herbicide-resistant corn and soybean crops and herbicides in the USA, [which] leads to the wholesale killing of the monarch’s principal food plant, common milkweed.”Monarch butterflies lay their eggs on milkweed plants. When the eggs hatch, the larvae feed off the plant. Researchers say that without milkweed, there are no butterflies."They can't lay eggs on anything else,” Christopher Singer, founder of the nonprofit Live Monarch Foundation, said in a statement, according to theChristian Science Monitor. “Can't lay it on a watermelon, can't lay it on a parsley plant. It has to be a milkweed plant."[More]

This is not an "Alas Babylon!" post. Species go extinct and arise constantly. This one strikes me as regrettable, but only because of so many milkweed-monarch memories. My grandchildren will never miss the monarch butterflies they never saw. 

It does seem a little unnecessary, however. And more than a little sad.

Peak of the Week...

Is there a limit to how many cars we can crowd into cities?

The world that Henry Ford put on wheels is poised for a stall.In the globe’s growing megacities, pollution and gridlock are putting a damper on driving. In India, some commuters are leaving their cars at home to avoid traffic snarls and long prowls for parking. More young Americans are forgoing the dream of auto ownership for public transport, bikes and vehicle-sharing. Cars on the road are lasting longer than ever.
All of that may herald a new era for an auto industry weaned on a century of global growth. The world will reach “Peak Car” -- a point at which annual global sales growth will top out -- in the next decade, several auto-industry analysts predict. Researcher IHS Automotive, for one, sees annual sales cresting at 100 million within that time.Peak Car is at odds with the ambitious expansion plans of global automakers, which IHS says are gearing up to produce more than 120 million vehicles by 2016 -- almost 50 percent more than last year’s worldwide sales mark of 82 million. The dynamic also threatens the business plans of parts producers, suppliers of raw material and oil companies.Driving this upheaval is a rapidly emerging reality: The vehicle that ushered in an unparalleled era of personal mobility in the last century is, in many cases, no longer the most convenient conveyance, particularly as more of the world’s population migrates to big cities. [More, with a great infographic]

I find this concern a plausible problem in the medium-term future, but it could be worse in cities I have not first-hand knowledge of like Mumbai. But the inability or reluctance to spend on roads, parking, and other auto infrastructure seems like a transportation "wall" we are hurtling toward. 

Basically, you can only get X cars on Y roads, no matter how wealthy a population is. Something will give: decentralization to shorten commutes; public transport; telecommuting; bicycles, etc.; even denser urban living to allow walking to work; whatever.

This doesn't even take into account China-like smog and the externalities of cars. But it also seems to me to cap one one the most cherished "good" job sources: the auto-industry. Between a ceiling on demand, increased use of robots, and other factors affecting labor needs, this key middle-class life-lifter industry could be less of a contributor to economic mobility in the future.

Junkbox, Episode MMXIV ⨩...

I have no idea what those ending characters are for. They are cute, though. Bonus points if you can identify them. Without googling.

• Dave Barry on manning up
• China looks to be concentrating on animal agriculture
• What's next - Ag Mech 101?
• The best guess on Ukraine I've found
• Where children go hungry
• The Federal Reserve Comedy Club
• The Iran "martyr-state" illogic
• Rural America still losing jobs
• It just looks like there's a choice

NASS is sponsoring the taping of USFR Roundtables at Commodity Classic. I am not making this up.

Lucky us...

While we're whining about this bitter, and unending winter, the rest of the world is sweating it out.

We seem to be a smidgen self-centered, no?

Why we can't have nice things...  

Count me alongside Kevin Drum on the issue of better credit cards here in the US.

In any case, we're finally getting EMV technology in the United States starting in 2015. But in possibly the stupidest decision in the history of payment networks, we're actually getting chip-and-signature cards. Why? I've been unable to find a straight answer to this. The banks vaguely talk about merchant resistance to getting new terminals that accept PINs, but that makes no sense. PIN terminals aren't very expensive, and the cost would be effectively zero if you have a five or ten-year phase-in.
Alternatively, they make noises about American consumers not being used to PINs, but that doesn't make sense either. We all use PINs for our debit cards already. We'd learn to use PINs for credit cards in about five minutes.
And then, to add insult to injury, the cards we're getting will mostly be signature-only. That's not a requirement of the technology, though. They could be "signature preferred," which requires a signature if possible but accepts a PIN if not (at automated kiosks, for example). Why not do that? I truly have no idea.
Honestly, the whole thing is just a mystery. EMV technology is old and well-tested. Everyone knows how to make the transition because dozens of countries have already done it. It's not wildly expensive. It wouldn't spark a consumer revolt. So why are we getting idiotic signature-only PIN cards, which are probably the worst possible compromise imaginable? They require more expensive cards and upgrades to infrastructure, but they don't provide much additional security and they don't work universally outside the US. [More of a quality rant]

I got a new Citicard with chip before going to Africa last year. Just called them up and asked. But I didn't realize it wasn't a real EMV card like my European friends have.

Cripes, if we admit they can build better cornheads why can't we accept they have better credit cards? And adopt them?

Aussies are realists...  

It's hard not to admire the attitude of pragmatism of our southern cousins.

DO Australians need to rethink which areas of our country are actually viable for farming?
Droughts and floods are an inevitable part of agriculture in any country but it seems rational to ask how often these calamities can afflict a region before prudence demands it is marked as unsustainable for food production.

“In most Australian farmlands, the rainfall is sufficient to raise crops to maturity in only a fraction of all years”

If a private company wishes to run at a loss, it is no-one's business but the proprietor's, however, when that business is subsidised by taxpayer dollars, it's commonsense we ask questions about where the money is going.
The 2009 Australian Productivity Commission report on government drought support found some Aussie farms had been on "income support continuously since 2002". [More]

There is more at at stake here than just political or economic policy. Extended life support for farm that make no sense strips the farmers and the profession of any dignity. This is the same argument I have heard in our ag press about food stamps, oddly enough, but we can't seem to realize it applies similarly to our farms.

What worries me most is subsidies outlined in the new farm bill will encourage unneeded production too far into the future by enabling marginal land to stay in production. When economic response times are expanded like this by artificial means, the whole system suffers from an inability to adjust supply and demand in a timely way.

On a different note, climate change - which has become a political rugby ball there - may rule out Australia as a major competitor for Asian demand.

The Walmart of space...  

'Splain to me again how we are going to compete technologically with India.

While India’s recent launch of a spacecraft to Mars was a remarkable feat in its own right, it is the $75 million mission’s thrifty approach to time, money and materials that is getting attention.

Just days after the launch of India’s Mangalyaan satellite, NASA sent off its own Mars mission, five years in the making, named Maven. Its cost: $671 million. The budget of India’s Mars mission, by contrast, was just three-quarters of the $100 million that Hollywood spent on last year’s space-based hit, “Gravity.” [More]

As the world splits into a tiny number of extremely rich and a gargantuan population of poor, the middle class will be built by societies like this, I think.

We may have fallen into a logical trap of assuming they will have to upgrade their vast agricultural system before becoming a true competitor. Maybe the Indian leadership believes it is better to keep most down on the farm progressing slowly through an agrarian phase until labor demand pulls them to the cities.

Another hint... 

The GMO labeling battle is only beginning.

Consider this reference from an article about using CGI (computer-generated imagery) in the porn industry to "remove" condoms from video while still following health regulations.

The adult industry has an even more symbiotic relationship with technology, so you can bet top-billing actors will be asking for reductions, edits, and enhancements during their porn post-production. It will be up to the fans to ask for better labeling: “This porn contains no digitized parts”—the equivalent of GMO foods where most pornography will be modified in some form. There will be a Whole Foods of porn, and it will do great. [More]

When casual references like above begin to pop up, it's usually a sign somebody has lost control of the narrative, as they say these days.

Literally lost...

This year has been a year of transition unlike all the rest of them, I suppose. But as some readers have noticed, my views have changed or become less rigid as a result of cumulative experience and some additional learning. Much of that evolution has been part and parcel of my faith experience, and how I try to make sense of belief and its purpose.

Perhaps, the ending of my work as a choir director suddenly put in stark comparison how crucial that ministry was for my Christian identity. Choral music was deeply important to my life pattern and a powerful shaping force for my belief system. Its ending left a  much larger hole than I ever anticipated, and a grief that abides today.

Simultaneously, the more history I listened to on my commute the USFR - from history of the early Church, to the Crusades, to the "alternative Christianity's", to the ongoing story of how religion and secular government have evolved, to any number of carefully substantiated historical dismantling of my rather naive lay convictions of who we Christians are and how we got here - the more my understanding was pressured to either give up on reason or bend to the facts.

Additionally, in the past two decades at least, the conflict between politics and religion has been brought into sharper focus and stronger engagement, as the wall between church and state has been questioned by the right. I see this widely evident in disagreement about global warming, diplomacy with other cultures, support of Israel, welfare policy, and perversely, economic theory justification.

For the last few months I have been slogging through the exhaustive (and exhausting) Christianity: The First Three Thousand Years.

It is a monsterpiece of academic precision and detail, as well as an ongoing challenge to my commitments to rationality and faith. While I highly recommend it, pack a lunch - this is no quick read.

I have been sequentially intrigued , disconcerted, alarmed, and antagonistic toward evangelical Christianity as practiced in the new business model developed over the last three decades.

Apparently, I'm not the only pilgrim wandering on roads less traveled. New research, as well as a spate of commentary from thinkers I respect has flooded media from religious periodicals to popular blogs.

One current subject of contention is what is happening in the evangelical wing. Even I have been startled by the findings.

The common thread in these books is the contention that Christianity, especially conservative Christianity, is rapidly losing strength and cultural authority in a changing America. Charting Americans’ religious beliefs is notoriously tricky, as comparison between any two religion-related polls will attest. Nevertheless, these authors’ argument that conservative Christianity — both evangelical Protestantism and conservative Catholicism — is losing sway in America has become the consensus view of most experts who study American religiosity. In 2012, the Pew Research Center made headlines with a study showing that for the first time, the percentage of Americans claiming no religious affiliation (19.6 percent) surpassed the number of white evangelical Protestants (19 percent). Other surveys conducted in recent years (by Gallup, the General Social Survey, Baylor University, and other research organizations) show declines in the number of people who identify as Christian, believe in God, and attend church regularly. American Catholicism has undergone its own similar involution, with nearly half of all Catholics under age 40 now Hispanic and a majority of Catholics favoring same-sex marriage, according to Pew. Meanwhile, the number of Muslims in America has risen rapidly, more than doubling since 1990. In the most recent (2008) American Religious Identification Survey, Islam surpassed Mormonism as America’s fastest growing faith.For conservative Christians, the turnabout has been disorienting. Just 10 years ago, conservative Christianity appeared ascendant, with a coalition of evangelical Protestants and conservative Catholics twice electing a born-again Christian to the presidency and, in 2004, outlawing gay marriage in 11 states. Today, laws against same-sex marriage are being rolled back and conservatives have failed to budge debate over access to contraception in the new health law. The Tea Party, which pairs evangelicals in an uneasy alliance with an increasingly assertive libertarian movement, is now a dominant force in Republican politics, shouldering aside once-feared evangelical organizations such as the Christian Coalition. Key evangelicals, stung by polls showing younger Americans are turned off by strident conservatism, have begun pivoting politically, as have Catholic bishops in response to Pope Francis’s attempt to reorient his church toward evangelism and social justice. Last year, prominent evangelical leaders, including the political director of the Southern Baptist Convention, spurned the Tea Party and emerged as prominent backers of comprehensive immigration reform. Evangelical leaders told me they were responding to demographic change in America: both the rise of immigrants in their churches and the emergence of a younger, more politically progressive generation of Christians. Yet in a sign of Christians’ diminished political clout, so far evangelicals’ fervent activism on this issue has failed to garner congressional Republican support. [More highly recommended]

Disclaimer: I have grown increasingly intolerant of the fundamentalist branch of the the church, probably because its increasingly anti-intellectualism. This mindset is nothing new, of course. Aaron offered this helpful quote from Isaac Asimov: 

“There is a cult of ignorance in the United States, and there has always been. The strain of anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured by the false notion that democracy means that "my ignorance is just as good as your knowledge.”

Amen. But my intolerance is of the same cloth as those I condemn, and singularly unhelpful as well.

So I find myself simply withdrawing, less willing to dispute of even acknowledge what I consider bad religion and life-damaging practices. This is a path of least resistance, and certainly lest reward as well. At the same time, I find myself more likely to try to help rather than persuade. I am beginning to think I waited far to long for this step.

I am also growing less discouraged with my sense of disconnection with modern religious practice - slightly more comfortable in the wilderness I wander. I still find meaning in belief and communal worship, but am actively looking for a more cohesive view of my life and purpose. 

This all sounds like I've postponed my hippy phase until marijuana was legal. But it is also immensely absorbing and frankly time-consuming. I find some evidence to support the theory this is typical for my age, but precious little literature to compare my thinking with others. Maybe, as suggested above, these journeys are just beginning to be chronicled.

I'll keep you updated as I think appropriate, but if you are finding your life is taking you places you never really imagined before, be assured it's not just you. 

Junkbox, Episode MMXIV ⋇...

Rain, believe it or not.

• Once a week I force myself to read Fox
• Even as cable news is slip-sliding into irrelevance
• Is America resilient?
• This post may be recorded
• The new hot spot for snowbirds: Somalia
• What was the ROI on farm bill lobbying?
• Own nothing, lease everything

Good crowd at TP seminar. Good to see old long-time friends.

In case you missed it...

Paul Neiffer has a small bombshell regarding the ARC program on his blog at AgWeb.  We talked about this Wednesday night at the TP seminar and he ran some numbers to try to verify our back of the envelope thinking.

I ran some numbers for Buchanan County, Iowa based upon the county yields for the last five years and arrived at the following conclusion:

• The Olympic average yield for the last five years for the county is about 169 bpa.

• The Olympic average corn price over the last five years is $5.15 (this is for the whole US, not just the county).

• A claim would be paid if the actual revenue was less than $748.

• The maximum claim is about $75 and if the yield was 160 bpa and the average corn price was less than $4.25, then the full claim of $75 would be paid.  The average price would have to rise to almost $4.75 to have no claim.

• If the yield was 170 bpa, then a full claim would happen at about $4.10.  At about $4.40, no claim would be owed.

• If the yield rises to 180 bpa, then a full claim is allowed if the average price falls below $3.70 and no claim is allowed if the price goes over $4.15.

Let’s assume we have a Buchanan farmer with 1,000 corn base acres in 2014 and the county yield ends up at 170 bushels per acre and the final corn price for the year is $4.  In this case, he would receive the maximum $75 per acre on 850 acres (1,000 times 85%) or $63,750.  Since the payment limit is now $125,000 per person ($250,000 for married couples), the farmer will get the full amount.  In fact, the farmer, if married he could farm 4,000 acres and collect full ARC payments.  Under the old law, this most likely would be limited.  If these numbers were based on his actual yields, then the payment would be reduced to 650 acres times $75 or $48,750.  Using this coverage, the farmer could farm 6,000 acres and collect full ARC payments. [More]

It looks like this math will be roughly the same for 2015 too because of the Olympic averaging. So while I had been wondering why Heritage, AEI, etc. had been complaining about the bill cost estimates being way too low, this would seem to confirm it.

We're talking ~2.5 X DCP payments. I'm calling it a 7.3 (out of 10) boondoggle.

The catch: the payment won't be made until Oct 2015, and of course everything depends on actual prices and yields during the 2014 year. My thinking is if yields are higher, prices will be (much) lower, so this is a reasonable first guess.

Meanwhile, an alternative...

The Danes are getting great mileage out of this article on a Danish Crown slaughterhouse and it strikes me as well deserved. The photos are outstanding and this one was the most impressive to me - hogs waiting to be slaughtered.

The slaughterhouse at Horsens was truly one of the most fascinating places I have visited on my travels. It is an experience that will leave a mark on my daily life, and help me to understand, just a little, about another important aspect of my food. As you can probably tell, this post is not an in-depth exposé of an industry, and my experience is not enough to knowledgeably critique the process of delivering Danish Crown bacon to your breakfast table; nor can I account for the processes of Danish Crown outside what I saw in Horsens. But I was pleasantly surprised by the openness of the plant about its operations and methods, and it is clear that when they designed the slaughterhouse they were thinking ahead in terms of what consumers will want to see from food producers: more transparency. And while I can’t comment on the conditions of the lives of the pigs before they get to the slaughterhouse (the vast majority of which come from Denmark), I can only make an educated guess that, through my experience as a resident of Denmark, the laws that govern the treatment of pigs would be about as strict or stricter as they would be anywhere else in the world. Anyone with any knowledge on that would be welcome to chip in. [More]

It is hard for competing meat companies to say things can be done better when faced with examples like this.  Bottom line, this could be the best answer to the slide in meat consumption, not confrontation or security.

The Farm Bill...

Isn't the NCBA's biggest headache, after all, IMHO.




Chipotle is slick and the effect is cumulative.

Heck, I'm going to watch it.

Outliving Twitter...

There has been modest pressure from a few readers, etc. for me to be more active on Facebook and Twitter. Very modest.  But aside from the the time I don't want to spend checking my phone more, it could be these peculiar media have their own built-in obsolescence.

Take Justin Bieber, for example.As reports of the once-angelic and deeply troubled Canadian pop star’s arrestbegan to make its way around the web, reactions streamed onto Twitter, ranging from jokes to tongue clucks.But by far, the most common refrain was something like this: “Why is this news??”The simplest answer is that it wasn’t — at least not the most important news happening on that particular day. But Twitter isn’t really about the most important thing anymore — it stopped being about relevancy a long time ago. Twitter seems to have reached a turning point, a phase in which its contributors have stopped trying to make the service as useful as possible for the crowd, and are instead trying to distinguish themselves from one another. It’s less about drifting down the stream, absorbing what you can while you float, and more about trying to make the flashiest raft to float on, gathering fans and accolades as you go.How did this happen?A theory: The psychology of crowd dynamics may work differently on Twitter than it does on other social networks and systems. As a longtime user of the service with a sizable audience, I think the number of followers you have is often irrelevant. What does matter, however, is how many people notice you, either through retweets, favorites or the holy grail, a retweet by someone extremely well known, like a celebrity. That validation that your contribution is important, interesting or worthy is enough social proof to encourage repetition. Many times, that results in one-upmanship, straining to be the loudest or the most retweeted and referred to as the person who captured the splashiest event of the day in the pithiest way. [More] 

Meanwhile, the predicted imminent demise of Facebook was proven to be just bad math, but there are some indications that some type of saturation has been reached.

According to the Pew Internet and American Life Project, as many as 61 percent of Facebook members have tuned out the website for weeks and sometimes months at a time. The reasons listed for these extended breaks are as banal as they are predictable: 21 percent of those surveyed “are too busy/don’t have time for it”; 10 percent “just aren’t interested/just don’t like it”; and another 10 percent simply think it’s a “waste of time.” [More]

Jan uses FB and finds it helpful, but even she is noticing how it can get out of hand. There is usefulness, but you attract a lot of barnacles as the ship steams on. And it is a major time suck.

Meanwhile, as oldsters dip their wrinkled toes in the social media waters, horrified hipsters are screaming out of the water. This is not good news for advertisers looking for that highly desirable young adult cohort.

It seems to me we wear out new toys faster and faster. I've always suspected that Twitter could have a short-half life since it is built around snark as communication. The short zinger is the winner tweet. It also fails to give context for complex issues.

That said, for breaking news or unexpected events (like Bob Costas during Congressional action) it may continue to be a go-to source, languishing is a swamp of trivial self-serving celebrity chasing in between.

The diminished hammer...

Of all the dire predictions about the farm land market, I think we can deduce one thing: the action is going to change.  First, compare farmland with the red-hot fine art market.

And now, Bowley is naming names (and numbers) when it comes to the shadowy practice known as “enhanced hammer“. 

Officially, if you consign an artwork to Christie’s, and it is hammered down for millions of dollars, then you owe the auction house a piece of the action — known as “seller’s commission”. In practice, however, the art world’s biggest rollers never pay seller’s commission. For big-ticket items, the auction house is entirely reliant, for its revenues, on the buyer’s premium — the difference between the hammer price and the actual price paid. 

Increasingly, however, the hammer price has become completely meaningless. It used to give a pretty good indication of how much money the seller took home; no longer. Top clients, it turns out, aren’t just paying zero seller’s commission: they’re now paying a negative seller’s commission, and earning much if not all of buyer’s premium on top of the hammer price. [More]

"Enhanced hammer" would make a good pesticide name, BTW. 

Anyhoo, I think the buyer fee that had been introduced in some parts of the country may be about to die a deserved death.  And real estate agents may have to settle for more modest fees from all but clueless heirs who think they have to pay list price.

If the 80's are any foreshadowing, power is about to wander back to the land buyer, mostly becuase a lot of us will be scared to take on extra debt or part with cash. You'll be surprised I think how fast this transition will take effect, as it feeds on itself.

But I will also venture to forecast some of the greatest opportunities of our careers (or those younger than me, anyway) will not just knock, but hammer on the door. Those who have the courage and admittedly, inexperience could position themselves for the next ag boom.

And yes, there will be one.

Junkbox, Episode MMXIV ⅋...

A day to find a good book.

• Millennials looking for liturgy
•  Where will your grandchildren work?
• Or the Chinese, for that matter?
• Tribal reality and your marketing plan
• Why farmers pee in the field
• The closing of the industrialization window

Stay warm!

SNAP reform...

I'm open to suggestions. But first consider the worst (I hope) of the problem.

It works like this: Once a month, the debit-card accounts of those receiving what we still call food stamps are credited with a few hundred dollars — about $500 for a family of four, on average — which are immediately converted into a unit of exchange, in this case cases of soda. On the day when accounts are credited, local establishments accepting EBT cards — and all across the Big White Ghetto, “We Accept Food Stamps” is the new E pluribus unum – are swamped with locals using their public benefits to buy cases and cases — reports put the number at 30 to 40 cases for some buyers — of soda. Those cases of soda then either go on to another retailer, who buys them at 50 cents on the dollar, in effect laundering those $500 in monthly benefits into $250 in cash — a considerably worse rate than your typical organized-crime money launderer offers — or else they go into the local black-market economy, where they can be used as currency in such ventures as the dealing of unauthorized prescription painkillers — by “pillbillies,” as they are known at the sympathetic establishments in Florida that do so much business with Kentucky and West Virginia that the relevant interstate bus service is nicknamed the “OxyContin Express.” A woman who is intimately familiar with the local drug economy suggests that the exchange rate between sexual favors and cases of pop — some dealers will accept either — is about 1:1, meaning that the value of a woman in the local prescription-drug economy is about $12.99 at Walmart prices. [More of a must read for farmers who depend on SNAP for subsidy politics]

We have created a bizarrely volatile mix of economic disparity, educational left-behinds, ingenious welfare work-arounds, astonishingly effective and easily manufactured opioid narcotics, and declining social immobility that sustains such appalling lifestyles. Clearly, the best-intentioned and even administered efforts, private and public don't seem capable of eradicating these outcomes.

For some, that would justify ending such efforts. I think a better choice - or at least one somewhat easier to live with - is to continue the struggle to minimize the number of people who choose or are forced into these situations. I'm not advocating more public dollars, but relentless efforts to find ladders and and reasons for people to use them to lift themselves to better lives. In short, make The White Ghetto smaller inch by inch.

Connecting the dots...

The Cheerios announcement is the subject of intense debate right now as farmers try to figure out what it means. Frankly, I think it may signal game over for at least labeling, but I don't think our hysterical predictions of what that will mean are likely.

But more interesting to me is the juxtaposition of two public trends. First, GMO's.

With this move, General Mills is "testing" the market on a brand that is relatively easy to rid of GMOs, says Harry Balzer, chief food industry analyst for the NPD Group, a global market research firm. After all, Cheerios' main ingredient, oats, cannot be genetically modified. Heightened consumer awareness of GMOs, which has been building during the past decade, is what is driving the decision, he says. Ten years ago, 43 percent of US consumers were aware of genetically modified food; today, 55 percent are, according to an NPD Group study released in December. NPD also reports that 20 percent of US consumers are “very” or “extremely” concerned about genetically modified food; in 2002, that concern was shared among just 10 percent of consumers.The General Mills decision stems from a “movement driven by consumers, rather than driven by companies," Mr. Balzer says. "Marketers will surely follow wherever consumers go.” As more food manufacturers and grocery chains push for GMO-free products, the potential exists for higher costs for the consumer, he says.Moreover, GMO technology requires “fewer pesticides, less water, and keep(s) production costs down,” the Grocery Manufacturers Association says. Thus, it “helps reduce the price of crops used for food, such as corn, soybeans and sugar beats,” by 15 percent to 30 percent.Eliminating GMO ingredients from the American diet is largely impossible, most experts say, because processed foods are such a dominant part of it. As General Mills and other food suppliers unveil GMO-free versions of popular brands, they will likely create a niche market for those consumers who want a choice. This will be especially true of products ingested by children, such as cereal and baby food.“The way to sell any food product is to have several different versions. That’s probably where we’re going to be in a few years,” Mr. Albala says. “This is a specialty market.” [More]

Note the way consumer polls are moving on this issue even as farmers and Monsanto, et al. apply a full-court press.

Now consider this nugget of what the popular mind is thinking.

One possibility is that respondents who identified as Republican and believed in evolution in 2009 are no longer identifying as Republicans. Fewer scientists, for example, are reportedly identifying with the GOP, and the overall trend is for fewer Americans to call themselves Republicans. But both Gallup and separate polling from Pew found approximately the same party ID in 2009 and 2013.Another is that the rise of "intelligent design" education has helped to swing younger Americans against evolution. Yet the age breakdown remains similar in 2009 and 2013, with respondents ages 18 to 29 most likely to believe in evolution.What does that leave? Maybe the gap represents an emotional response by Republicans to being out of power. Among others, Chris Mooney has argued that beliefs on politically contentious topics are often more rooted in opposition to perceived attacks than anything else—an instance of "motivated reasoning." Given that Democrats have controlled the White House and Senate since 2009, this could be backlash to the political climate, though it will be hard to tell until Republicans control Washington again.Of course, motivated reasoning might help explain why many Democrats also believe in evolution. [More]

Some pundits argue there is an indication of tribalism going on here.

So what happened after 2009 that might be driving Republican views? The answer is obvious, of course: the election of a Democratic presidentWait — is the theory of evolution somehow related to Obama administration policy? Not that I’m aware of, but that’s not the point. The point, instead, is that Republicans are being driven to identify in all ways with their tribe — and the tribal belief system is dominated by anti-science fundamentalists. For some time now it has been impossible to be a good Republicans while believing in the reality of climate change; now it’s impossible to be a good Republican while believing in evolution....And look, this has to be about tribalism. All the evidence, from the failure of inflation and interest rates to rise despite huge increases in the monetary base and large deficits, to the clear correlation between austerity and economic downturns, has pointed in a Keynesian direction; but Keynes-hatred (and hatred of other economists whose names begin with K) has become a tribal marker, part of what you have to say to be a good Republican. [More]

Such ideas are worth pondering, but I would add two more points.

1. Americans have decided science (or even rational thought) is not necessarily the last word for any policy debate. As such farmers are free to argue against global warming if it looks like it may interfere with current practices. Likewise, other special interests use the same selectivity in respecting science. Sound science is science that agrees with my ideology, so to speak.
2. Ag and agribusiness has framed this debate as digital: either 1 or 0, no shades of compromise. This is proving to be a much riskier gamble than any of us imagined. In fact, I think the odds are now we could lose.  And losing means losing big, because we won't offer anything halfway to meet critics. Meanwhile, I have heard or seen nothing about any Plan B.

I still believe we could have negotiated some kind of labeling and eliminated much of the possible damage. But even if we see this type of Big Food action snowball, my guess is we'll dig in and rally around the same seed companies we are outraged at for trapping us into no-choice high prices by cartel action and decreasing non-GMO seed production.

In other words, we may not only lose this battle for consumer acceptance, we may actually make its consequences worse.  The sun will come up no matter which way this battle is decided, but it could be a testing time for corn/soy producers and our value chain. We may have also exhausted considerable political capital that won't be there for crop insurance, TMDL regs, animal welfare public relations, etc. Bungling this controversy will have collateral damage.

I would watch the stock price of Monsanto for a hint of a disruptive event coming down the road.