Monday, December 30, 2013

Local boy makes big city news...

University of Illinois ag econ professor Scott Irwin, who I think has always struggled to escape the shadow of colleague Darrel Good, has emerged into the sunlight of a bizarre NYT "expose".  David Kocieniewski's amateurish hack-job purporting to show proof of academics for hire, is oddly devoid of, you know, facts pertinent to his conclusion.

Over the Felix Salmon at Reuters for the brutal takedown:
Ostensibly Respectable Academic Is In Fact A Hack: it’s a hardy perennial, and an enjoyable one at that. The best example is Inside Job, where big names like Ric Mishkin and Glenn Hubbard got their well-deserved comeuppance. And it’s a genre I’ve indulged in myself: last year, for instance, I spent 4,500 words on a paper by Bob Litan, showing how he lies with numbers to arrive at his paymasters’ predetermined conclusion.But here’s the thing: for this kind of article to carry any weight, it has to demonstrate the mendacity or venality of the academics in question — and, ideally, those academics should have a high-profile reputation which deserves to be tarnished.Which is why David Kocieniewski’s article about Craig Pirrong and Scott Irwin this weekend is such a disappointment. It’s currently doing very well on the NYT’s most-emailed list, but it’s easy to guess who’s doing the emailing: people who love to hate Wall Street, and who will use just about any possible excuse for doing so. Because in this case Kocieniewski has missed the mark. Neither Pirrong or Irwin is mendacious or venal, and indeed it’s the NYT which seems to be stretching the facts well past their natural breaking point.Let’s start, for instance, with the one part of the article almost everybody will read: the big picture at the top of the article, showing the gleaming and extremely expensive University of Illinois business school. “The Chicago Mercantile Exchange has given more than $1.4 million to the University of Illinois since 2008,” says the caption, “with most of the money going to the business school.”That number — a very big sum, which is more than enough to buy research from for-sale economists — gets repeated further down the article:
Mr. Irwin, the University of Illinois and the Chicago exchange all say that his research is not related to the financial support.
This is carefully written to be as damning as possible. Yes, it makes perfect sense that the CME would fund a major business school right in its own backyard — and that it would fund activities related to its own business of commodities trading. But surely Kocieniewski is about to show us how the grants are linked in some way to Irwin’s research: no NYT reporter would write such a thing unless he had reason to believe that there was some kind of quid pro quo, or that the grants to the business school were written in gratitude to Irwin.
Except, if you keep on reading to the point at which you’re 2,500 words into the piece — and pretty much nobody reads that far — you’ll find this:
One of the most widely quoted defenders of speculation in agricultural markets, Mr. Irwin of the University of Illinois, Champaign-Urbana, consults for a business that serves hedge funds, investment banks and other commodities speculators, according to information received by The Times under the Freedom of Information Act. The business school at the University of Illinois has received more than a million dollars in donations from the Chicago Mercantile Exchange and several major commodities traders, to pay for scholarships and classes and to build a laboratory that resembles a trading floor at the commodities market.
While the C.M.E. has given more than $1.4 million to the University of Illinois since 2008, most has gone to the business school and none to the School of Agriculture and Consumer Economics, where Mr. Irwin teaches. And when Mr. Irwin asked the exchange’s foundation for $25,000 several years ago to sponsor a website he runs to inform farmers about agricultural conditions and regulations, his request was denied.
This is real jaw-on-the-floor stuff. The NYT has published an article about how academics who write nice things about Wall Street “reap rewards”, in the words of the headline — and its main illustration is donations to a business school where the academic in question doesn’t even work! Anybody trying to hold academics to standards of intellectual honesty has to be intellectually honest themselves. And the fact is that there’s zero reason to believe that there’s any connection between the business-school donations and Irwin’s research.
[More - no, I didn't excerpt all of it]

Felix has little heavy lifting to do to show this article is not supportive of its innuendo or tone. In fact, it's an embarrassment to the NYT editorial staff, IMHO.

The basis for this exercise is many want to believe speculators are ruining things for investors (or farmers), but as unlikable as those guys are, there isn't much proof to support this claim.  Besides, as I see it, any farmer who climbs in the ring with these guys at the urging of a market consultant shouldn't whine when he loses his shirt.

I'll stick with cash markets and forward contracts, thanks all the same. The kitchen looks too hot from where I stand.

Sunday, December 29, 2013

First off, it's not a game...

I'll be writing a column about the hyper-fashionable droning on about drones for FJ, but the hype surrounding this technology is spiraling out of sight.

The Associated Press reports that some farmers have already begun flying their own drones ahead of Federal Aviation Administration approval for commercial use of drones. There are roughly 2.2 million farms in the United States, according to the Environmental Protection Agency. Not every farmer is going to buy a drone, of course. But many will. And when it comes to agriculture, drones are a complete game changer. [More breathless hyperbole]
Where to begin?
  1. In the above article the author doesn't seem to grasp the difference between a 2 HA. rice paddy and a section of wheat. Drones don't scale up well, at least on the budgets we're looking at in 2014 and beyond. 
  2.  Look at a typical farmer-affordable drone. Even if we forked over thousands we'd still end up with a payload of (drum roll, please) about 2 pounds for a popular model. But wait, on the plus side, it will fly for a whole ten minutes! I suppose we could be talking about spraying on weed or a small patch, but if it's beans or corn below 6' that's what tall sprayers are for. It looks to me that any problem that a drone could handle is not likely to be visible on your bottom line or yield map.
  3. The one task we know drones can handle are surveillance. OK, you can send a drone to criss-cross your cornfield in a perfect pattern videoing your crop. You end up with hundreds of gigs of video someone must review or watch in real time.  And then you.....?  What crop problems are you going to be able to identify from 10 feet at 20 mph or? Let alone mitigate? 
  • Bugs? I'll be generous and allow you have super vision to see the damage under leaves or in a whorl AND identify the bug in question (which is preposterous, of course) but then you run into issue (2).
  • Population? Too late.
  • Fungus? Too late, usually. Besides we really don't have a great selection of curative fungicides.
  • Drainage. Cripes, you should know those problems before you plant. I will give points for finding new tile holes.
  • Fertility? Yard-by-yard measurement of greenness is much less useful than infrared satellite images, IMHO. I can see applicators with greenness sensors - at least they are closer to the plant. And I'm not sure the science is there to tell us what to do with whatever data product we get back.
The basis for all this hype seems to be split-second monitoring of crops can make a crucial difference. Maybe. But if you're standing there flying your drone, I'll bet it might occur to you to, well, walk into the field and look around.

I just don't think this is The Next Big Thing. I think it's the Next Ephemeral Fad and I've started the clock on its fifteen minutes. 

Besides, anybody want to bet what these agri-toys will cost 5 years from now? All those who think they'll be the cost/utility ratio won't plummet raise your hands.

I think we've learned this lesson. It won't change my game. 

Breaking the seed corn cartel would. This looks like a bright shiny object to draw our gaze away from real issues like that.

Children and their toys...

Amazingly poignant.  My favs.

(Also note where they are from.)

Tuesday, December 24, 2013

Junkbox, Episode MMXIII ...

Wishing you all a great day tomorrow!

Fear not - good news!
My Ad of the Year...

Vote in Andrew Sullivan's awards here.

Boy - I'm becoming a sentimental softy in my old age...

Maybe it's the granddaughter-effect.

Monday, December 23, 2013

I've been spending too much time...

In the northern Corn Belt.  I'm starting to talk like them.

Take the test yourself.

They've come a long way, baby...

Those enterprising Chinese!  They are striving to match the transparency and integrity of the American financial sector, and have great leaps of progress.  Even in ag industries!
A finance manager in China reached out to her bosses, concerned that auditors would discoverAgFeed Industries Inc. (FEEDQ) was reporting bogus revenue.“Sometimes I really want to work well on the real stuff, but the need to balance the falsified data often takes up my time,” Wu Jiangqi wrote to supervisors at the Nanchang, China-based animal-feed company in 2009, according to a copy of an e-mail she sent.Wu’s e-mail focused on top management’s “most serious headache, which can only be resolved by money,” then-Chief Executive Officer Xiong Junhong responded. Officials were “thinking of ways to get 30 to 40 million to resolve this!” he wrote.The e-mails, which were translated from Chinese, and other documents obtained by Bloomberg News provide the first detailed glimpses behind what a U.S. Trustee in bankruptcy court called “massive fraud” in AgFeed’s Chinese operations. Managers in China openly discussed their methods for doctoring results, according to the e-mails. As evidence of irregularities began accumulating, executives and directors waited at least four months before disclosing any of it to investors, corporate documents show. [More]

I think they are ready for Lesson #2: What not to put in e-mails.

Sunday, December 22, 2013

No wonder...

Sen. Baucus is headed for Japan.  He's going to take some heat from Big Ethanol for his energy tax reform plan.
Baucus's proposal would be to get rid of those 42 energy tax incentives and, in their place, create two broad credits:1) First, any facility producing electricity that is at least 25 percent cleaner than the average for all electricity production facilities would receive a tax credit. The cleaner the facility, the larger the tax credit. (By "clean," Baucus is referring to greenhouse-gas emissions per unit of electricity produced.)This credit starts at 2.3 cents per kilowatt of generation and rises to a maximum of 20 percent of the total cost of the investment. Companies couldn't get the credit until they started producing power, and then they'd get the break for 10 years.All of these credits, meanwhile, would phase out in four years once the greenhouse-gas intensity of the entire U.S. electricity sector is 25 percent below current levels. So there's an overall limit.2) Likewise, any transportation fuel that is at least 25 percent cleaner than conventional gasoline will generally receive a credit. Again, the cleaner and more energy-efficient the fuel, the larger the credit — and the bill would take the entire life-cycle into account when judging the fuel. So if, say, corn-based ethanol wasn't cleaner than gasoline, no tax credit.(Note that the credit for transportation fuels would likely need to be paired with a repeal of the Renewable Fuel Standard that requires refineries to blend a certain amount of ethanol into gasoline. It wouldn't make sense otherwise. But Baucus's committee doesn't have jurisdiction over that fuel standard, so this part isn't in the proposal.)  [More]

Ya live by the mandate, ya perish by the mandate.

My only comment...

On the A & E Duck Dynasty flap. I'm absolutely unqualified to opine since I have seen all of about 3 minutes of the show and only recently paid any attention to the GQ interview fiasco.

But this commenter on The Dish probably nails it, I think:

So I had seen the headlines, a bit on the story in various places, and then your post - I completely agree with you. (I also assure you that as I bear, I was not unduly swayed by his massive beardage.) But as the day progressed, I heard Chris Mathews, Jon Stewart, Colbert and various other people right/left in the cableverse and realized we’ve been duped. This is a PR move to get more hard-right viewers. Phil Robertson is not fired, as some have said. He’s suspended, “after the season has wrapped,” yet before the season premieres. I will bet you anything that he will be unsuspended before the next season. They are simply drumming up ratings. They will have the biggest season premiere ever. In the end, it’s TV – that’s what matters.
Not trying to add more cynicism to the season, but what little I get exposed to the business side of TV informs me this is a very plausible prediction. 

Right-winders are being played.  And boy-howdy, does it raise the stakes for the next outrageous outburst, since I think Robertson has already covered (in graphic detail) most sensitive topics - gays, Orientals, blacks, etc.  What's left?

It is also perhaps an insight into the troubled future of cable channels. I notice my Dish subscription just got bumped up $5/mo. and that $95 is starting to look like a bad deal as we watch more and more stuff via Apple TV and NetFlix ($8/mo.)

Saturday, December 21, 2013

Christmas cheer...

Test Answers of the Year

My favs:

It was really hard to pick the winners - check them all out.

Thursday, December 19, 2013

Junkbox, Episode MMXIII ₪...

No kidding - when they said "flu season" I didn't think they meant a whole season of flu!

Bonus points: Anybody guess the currency?

Wednesday, December 18, 2013

Not necessarily the best...

Much of the battle over health care reform is the persistent belief that the current US system is hands-down the best in the world, despite considerable and growing evidence it's barely average for a developed nation and getting worse in comparison.

Aaron Carroll does yeoman work on educating laymen on medical statistics, and this is one of his best.

This is the overlooked consequence of not engaging in efforts to make our system better, but simply stop any change: we will be stuck with an expensive, and increasingly ineffective health care industry that will crowd out other economic activity.
He sang surprisingly...

As a man who can keenly remember waiting until age 15 for my voice to break - yeah, that was a loooong sophomore year - this report about the dwindling numbers of boy sopranos in Europe was interesting.

But maintaining Bach’s legacy has become more difficult. The problem is with the sopranos. At St. Thomas, as in all boys choirs, the oldest of those singers with unbroken voices are the most prized. Like flowers that are most beautiful just before they die, these boys have the most power, stamina and technique. There are scholars who say that in Bach’s day, some boys’ voices didn’t change until as late as 17. Now boys’ voices are changing earlier, a lot earlier. Medical records tracking puberty through history do not exist, but Joshua Goldstein, chairman of the demography department at the University of California, Berkeley, has analyzed mortality patterns among boys, which can show increased risk-taking and, by extension, the onset of puberty. His research suggests that the age of puberty for boys has dropped, on average, 2.5 months a decade since the mid-1700s. That would mean that boys are sopranos for a shorter time. To maintain a well-stocked soprano section, St. Thomas needs to start with and train more boys. To house growing numbers of recruits, the choir has built a new, larger glass-and-steel-frame alumnat. [More for choral music fans]
I was fortunate to have been in school when chorus was attractive as a way to get out of study hall, and I subsequently learned to love singing. Like golf, it's something you can do for almost all of your life.

Laugh if you want, but The Stone's Keith Richards was a boy soprano who sang for the Queen. 

That's satisfaction.

Tuesday, December 10, 2013

Trooping farmers to Washington, DC...

 Won't solve this problem.

Consumers, or at least food companies are replacing regulators as the deciders-in-chief about what America eats. And how it is grown.
There are, apparently, a number of ways to make breaded chicken sandwiches healthier. To this end, Chick-fil-A has been quietly switching out ingredients over the last decade. According to Nation’s Restaurant News, the chain eliminatedheart-disease-promoting trans fats in 2006, removed high-fructose corn syrup from its bagels and golden wheat bread, and gradually reduced sodium in some products. Now, the 1,700-store chain is working to remove preservatives from its breads and oil.What’s unusual about the efforts is that Chick-Fil-A has largely avoided publicizing them until now, hoping to avoid ire about any perceived change in flavor. Fast food companies have had to balance customer loyalty to well-known menu items with growing pressure to offer healthier options. “We didn’t necessarily want the customer to know we’ve tweaked their favorite product,” the chain’s senior nutrition consultant told NRN.Chick-fil-A is testing a new preservative-free white-bread bun in about 200 stores, and it’s trying out a peanut oil without TBHQ, a chemical that extends the shelf life of oils but can cause health problems if consumed in large volumes. It will remove high-fructose corn syrup from sauces and dressings. And due to concerns about thehealth-effects of food dyes, the chain is also looking into removing yellow food dye from its soup base and ice cream, reported NRN. [More]

And the animal welfare crusade seems to have a weekly victory as well.
Nestle's Northbrook-based pizza division, which makes DiGiorno and Jack's frozen pies, has cut ties with a Wisconsin farm after an animal rights group released a video of dairy cow abuse.Mercy for Animals revealed an undercover investigation on Tuesday that showed video footage of cows being beaten, stabbed and dragged by a tractor. [More]
Like generals in WWI, agriculture is fighting this war the wrong way. We shouldn't be at war with consumers to begin with. But so far, our plan seems to be:
  • Deny, deny, deny
  • More security (Farm fortresses)
  • Federal regulation (even though we hate federal regulation)
  • Refusal to consider alternatives
  • Self-reassuring reporting in ag media that consumers are sadly misled imbeciles
  • Lather, rinse, repeat
I grow more bearish on meat consumption and public support for ag every day.
Great Twitter feed...

Faces in thing. [@FacesPics]

Time-suck Warning! 

Monday, December 09, 2013

You can't party all the time...

 It's hard to take the Tea Party seriously when their heroes take positions like this:
The story ends on the comical note of quoting Florida Representative Ted Yoho, tea party maven and avowed enemy of big government, defending his strong advocacy of sugar subsidies: “I ran on limited government, fiscal responsibility and free enterprise, but when you’ve got programs that have been in place and it’s the accepted norm, to just go in there and stop it would be detrimental to our sugar growers.”You hear that? Sugar subsidies are an accepted norm. If tea partiers believe anything, it’s that, once a government program has been in place, we can’t get rid of it. It would hurt sugar growers, Yoho proceeds to explain, by forcing them to sell their product in the free market on even terms. This is completely unlike programs such as Medicaid and food stamps, which Yoho wants to cut, because cutting them wouldn’t be detrimental to anybody. At least not anybody he cares about.We should be perfectly clear about the fact that Democrats do not have clean hands here — especially not on sugar subsidies, where Democrats representing rural constituents happily shovel billions into the farm subsidy maw. But the Republican enthusiasm for wasteful domestic spending here is what’s especially telling, because it’s the Republican Party that has declared rhetorical war on government, and which is its entire weight behind a broad-based assault on Obamacare, food stamps, unemployment benefits, and the entire structure of government support for the disadvantaged. [More]

What is is about farm policy that can completely undermine absolute positions without causing heads to explode? This is hypocrisy of the highest level.

I am beginning to think Republicans are realizing with teammates like this, who needs opponents?

It also suggests there can be perverse consequences to severe gerrymandering.