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Hey - my Cargill rep forwarded a link to an Outlook 2008 Webcast [Full disclosure: sponsored by Cargill] by Steven Johnson. For an economist he gets pretty excited during the presentation.

For an economist.

Still, while there were no earth-shattering new pronouncements, I think it gives some sober, unbiased analysis to balance your own expectations. I appreciated the work, and once again kiss my computer for being able to get this info without traveling or using up prime working hours.

Here is the link.

[Thanks, Paul]

Boy - do I need a way to forward price beans for 2009!..

Behold, a textbook demonstration of pricing power:

Desperate for fertilizer to increase crop yields amid a looming global food crisis, China agreed to pay more than three times as much for potash as it did last year, launching Potash Corp. of Saskatchewan to a record stock price and within spitting distance of becoming Canada's largest publicly traded company.

The unprecedented contract with China spurred a 5.5-per-cent increase in Potash Corp. shares on the Toronto Stock Exchange, increasing the Saskatoon-based company's market capitalization to nearly $63-billion.

The rise bolstered the dominance of resource stocks on the Canadian market, pushing Potash Corp.'s worth above financial services stalwarts Royal Bank of Canada and Manulife Financial and into second place behind oil and gas giant EnCana Corp., which boasts a market value of $63.8-billion.

“We've moved up the TSX quite quietly,” said Potash Corp. spokeswoman Rhonda Speiss. The company's stock has gained 186 per cent in the past year on the strength of an international agriculture boom driven by increased consumption of meat in the developing world.

Demand for potash, a key component of fertilizer, has outstripped supply.

Although China is the world's largest potash buyer, consuming roughly eight million tonnes a year, it had little leverage in this year's price negotiations and was forced to swallow an increase of $400 (U.S.) a tonne.

The 2008 contract, signed with Canpotex Ltd., the marketing company owned by Canada's top potash miners, including Potash Corp., calls for China to pay $576 a tonne for potash, compared with the $176 it paid in 2007. The price does not include shipping costs. [More]

Yesterday I had a farm manager call me to discuss pre-paying NH3 for this fall. It's all the rage with supply coops around central Illinois, I gather. But I wonder at the reason. As my supplier said, N may be the last input to worry about. Judging by this story, I agree.

But we're not far away from $500/A fertilizer costs next year [Update: Make that about $350/A - I got a little hyper on that one. (200N, 200 DAP, 300 Potash) (see Chris's comment)]: $900 NH3, $1300 DAP (wild guess based on $1100 wholesale), $800 Potash (wilder yet). Do the depressing math. And it is rumored seed prices are going up by a whacking percent.

Another admittedly speculative reason might be a desperate need for coops to get working capital. As CoBank funds have been sucked up holding margin calls, supply/grain coops could be looking to operate on farmer money.

This makes elevators cash-poor - something cooperatives understand, said CoBank General Manager John McClelland.

"They've been unbelievable to the point of being heroic," McClelland said of CoBank's lending to many cooperatives through the tight times. "No one anticipated this happening."

Dean Moreau, the western regional president of CoBank's Agribusiness Banking Group, told a group of elevator managers at the KFSA annual meeting Sunday that these days, it seemed, they were getting multimillion-dollar requests in the morning for funds needed by that afternoon. [More]

The significant and growing risk for this is one more move up in corn and more margin calls, which pushes many dealers into liquidation mode and suddenly your prepay is an unsecured debt.

I've been wondering how our national fiscal impropriety would play out on my farm. I think I have a glimpse. Our money will become steadily worth less raising our costs even as we are paid more in the same lightweight currency. Jeez - it's like we're some banana republic where the political leadership is supposed to be democratically elected, but always ends up being a relative of the last bozo.

Wait...


[Thanks, Wes]

[Update: Not really sure what happened with my font on this post. Not enough time to fuss with it. Sorry for the "shouting"]

I'm not sure indignation is the best response...

Corn growers are feeling picked on, I think. Jim Dickrell's editorial in Dairy Today triggered a garbled-message response from Randy Woodruff of the Wisconsin Corn Growers. First, Jim's point:

The only good news is that the shine might be off many new ethanol plants as production starts to meet domestic ethanol requirements. With 140 billion gallons of mobile fuel used annually in the United States, the 10% ethanol standard suggests demand will mature at 14 billion gallons. Boehlje projects we could reach that level sometime next year.

The Federal ethanol credit of 51¢/gallon translates into an additional $1.60/bu that ethanol plants can bid for corn. That $1.60/bu subsidy literally pumps $8 billion into corn growers’ checking accounts—or twice what the new Farm Bill would send out in direct corn payments to growers.

And with those kinds of returns, farmers are planting more corn. That’s driving up the demand for seed corn, nitrogen fertilizer and even combines. [More]

Jim's relatively mild recitation of the facts fired up the talking-point machine for Randy.

Higher grain prices mean taxpayers aren’t supporting farmers via commodity program payments. U.S. tax payers shouldn’t be subsidizing food companies with billions of dollars in farm programs that sustain below-cost-of-production feed and help keep U.S. farmers on government welfare. This year alone, Federal support for farmers dropped by well over $8 billion thanks to higher corn prices.

Truth is Americans enjoy the safest, most abundant and affordable food supply in the world and even with higher feed costs, today’s efficient dairy farmers can succeed.
Wise up and admit your mistake, Mr. Dickrell. You, Dairy Magazine and the entire Farm Journal Corporation owe us an apology. Ethanol is good for us! [More]

Apologies are all the rage today. This blog won't be where the apology is published, BTW. The sad thing for me is the lack imagination for new justification. Corn growers ares till using the "poor-old-farmers" motif as their public image even as most of us see our profit level triple or quadruple. (We're buying the $8000 ground, ya know).

The idea that ethanol (mandated and subsidized) saves taxpayers money by lowering other subsidies paid is like a bully saying because I'm busy punching you in the face, I don't have time to kick you in the shins. Farmers neither need nor deserve any of these subsidies. If ethanol was a good idea economically it wouldn't need a law to make the numbers work, and as I've said recently this is the great fear behind the increasingly worried voices of the ethanol industry: any glitch in the government largess and the whole thing could collapse. This is the pressing need for this industry - to get off subsidies as soon as possible and let the market allocate scarce corn supplies.

And I love the "most abundant" refrain. How do we measure abundance? Is there an Abundance Index? How do we know we are number 1? Who's in second place, for example? Is food more or less abundant than 2007? This is a pretend statistic. And ditto for safety. Show me any comparative food safety statistics between nations. (I've looked)

Ethanol has at any rate made corn "less abundant". It's not moving to $7 because we've got surpluses sitting around. And perhaps the corn grower memo hasn't gotten to WI yet, because growers are frantically trying to put de-link corn prices and food prices - not assert a cause and effect.

Perhaps Randy doesn't use profit center accounting. My guess is if he did, he would discover he's not adding value to his corn, he's losing money turning it into milk. This is the point Jim was making, I believe, for other dairy farmers who used to be valued corn customers.

When we have decimated our domestic livestock and dairy industries, put thousands of small meat, milk and egg producers out of business, we corn growers may finally realize our ethanol intoxication enriched us at the cost of our best friends.

We've got room...

For all kinds of farmers.



I know you're waiting for some semi-witty put down, but the best I can do is smile without judgment. If you haven't already figured it out from personal experience, such meditative exercises (and there are many types) are probably our best bet for increasing our own happiness and life satisfaction.

Besides, the older I get the better slow exercise looks to me.

[via Arbroath]

Looks like a target to me...

As the food-fuel debate really hots up, ethanol is proving to be the focal point of global - not just domestic - complaints. To be sure it IS part of the problem, but only part, and it's hard to parse out how big a part.

C. Ford Runge, an economist at the University of Minnesota, said it is “extremely difficult to disentangle” the effect of biofuels on food costs. Nevertheless, he said there was little that could be done to mitigate the effect of droughts and the growing appetite for protein in developing countries. “Ethanol is the one thing we can do something about,” he said. “It’s about the only lever we have to pull, but none of the politicians have the courage to pull the lever.” But August Schumacher, a former under secretary of agriculture who is a consultant for the Kellogg Foundation, said the criticism of biofuels might be misdirected. Development agencies like the World Bank and many governments did little to support agricultural development in the last two decades, he said. He noted that many of the upheavals over food prices abroad have concerned rice and wheat, neither of which is used as a biofuel. For both those crops, global demand has soared at the same time that droughts suppressed the output from farms. [More]

I think Runge nails it. Because ethanol never made the effort to lose the training wheels (tariff and blender credit), it is one thing that politicians can do something to change. Even if it is the wrong thing. Ethanol has done practically everything except paint concentric red circles on the tanks. And it's a little late to be looking for support from those in agriculture they stomped on politically to get their industry breaks.

This is another reason I doubt the efficacy of subsidies. No recipient will ever deem themselves ready to do without, and the industry supported is forever at the whims of popular sentiment expressed by political will. In short, if you live by the subsidy, you tend to die by the subsidy.

But the much larger problem is the dots are becoming too big and easy to connect, as food shortages, riots and inflation are flooding the news:

• North Korea: North Korea, which suffered from a famine in the 1990s that may have killed three million, faces a ``potential humanitarian crisis'' after harvests fell on poor weather and food prices surged, the World Food Program said.
  
  The country has a grain shortfall of 1.66 million metric tons this year, the United Nations agency said in a statement today, citing figures from the Food and Agriculture Organization. The shortfall was the highest since 2001, it said.
  
  The crisis may undermine stability in the Communist nation following years of economic decline, isolation and chronic food shortages. The United States is seeking to persuade North Korea to abandon its nuclear-weapons program in talks that also include China, Japan, Russia and South Korea. [More]
• Philippines: “Producing biofuels today is a crime against humanity,” Jean Ziegler, UN Special Rapporteur for the Right to Food, was quoted as saying on German radio. A few days earlier here at home, Agriculture Secretary Arthur Yap said one of the reasons for the food crisis was the booming demand for biofuels worldwide. And last Monday, Rep. Roilo Golez was reported on radio calling for a moratorium on Biofuels Act of 2006, precisely because of the crisis. Making things a little more complicated, there are suggestions that the law is being used by some big landowners to evade coverage of the Philippine agrarian reform program, which is expected to boost the country’s food productivity, aside from making tenant-farmers owners of the land they till. [More]
• Pakistan: Karachi - After five years of solid growth, Pakistan's economy is facing an import payment crisis and an acute food shortage to feed its ballooning population of 170 million. The country's newly-elected economic czar, Finance Minister Ishaq Dar, last week revised the country's expected growth rate to 6 per cent from 6.5 per cent.
  
  Pakistan has witnessed phenomenal annual growth rate of around 8 per cent since 2002, thanks in part to billions of dollars in US aid to fight Islamic extremism after 9/11.
  
  According to local reports, Pakistan has received close to 11 billion dollars of such aid since the twin tower attacks in New York in 2001. [More]
• Nigeria: The World Bank has said it is ready to assist Nigeria in solving the problem of rising in food prices that threatening the world.
  
  This is coming on the heels of Federal Government's assurance that it is already taking proactive steps to avert the impending rice shortage in the country. [More]
  

It is fair to say the ethanol boom is a victim of extraordinary and virtually unpredictable bad timing. While producers in the US have been talking for years about the demand that would eventually arrive when billions of poor people finally make enough money to afford better diets, most of us gave up on that ever happening - at least in time to help our retirement plans. But global trade changed all that, and we now see the highest growth rates where the most people are.

The argument it's all another problem caused by Big Oil just isn't gaining traction - for reasons I have noted before. Plus the size of the ethanol industry, and its spectacular profits (well, until recently) doesn't make the industry sympathetic. Heaven forbid folks find out what kind of windfalls early ethanol farmer investors took home, although that story too is leaking.

Corn farmers are loath to admit that we can't grow everything for everyone, and offer some backtracking on mandates or subsidies. (Another problem with subsidies - they are addictive). So it looks to me we will push our production capacity to the breaking point.

And this is where we will see the collapse, I believe: the meat/dairy/egg industry.

Beginning this week, Canadian hog producers can receive cash for culling their breeding swine. A $50-million federal program is offering to pay $225 per breeding swine culled after April 14.

“The program is a reaction to what’s been taking place in the market,” says Gary Stordy of the Canadian Pork Council. “The decrease in sow breeding herd should have a good effect on the market.”

Through the program, Canada’s breeding swine inventory should shrink by at least 10%, or roughly 150,000 sows, boars and pregnant gilts. Producers must fill out an application and receive approval to qualify for the program. Reimbursements will be made to the producers for slaughter and carcass-disposal costs. [More]

The point is of all the causes to blame for the food crisis: weather, bad governments, demand for feed, rising diet expectations in poorer nations, and ETHANOL, which one is the easiest to take a stand against? And the easiest to shutdown almost overnight?

I'll give you a second to choose.

Hey - the marketplace is working after all!

The real reason I stay in the studio...


For those of you who watch US Farm Report, you may be wondering why Al Pell is always the guy on the road.



The dude is tough, I tell ya.

[via Neatorama]

A crisis of conscience - for now...

Most farmers in red states are decidedly red. The key issues: guns, gays, God, war, torture, and the firm conviction they are right about all of them make them the Republican party's most loyal (albeit sparse) votes. Sen. McCain will test that linkage as never before, and he told farmers this in Ames, IA last November, by hitting them where it hurts.

Many Iowans have heard that I oppose federal subsidies for ethanol production. Some of you will have heard that I oppose a protective tariff against sugar-based ethanol imports from places like Brazil. Some of my opponents will describe my positions as opposition to American ethanol producers or, for some inexplicable reason, a personal dislike of Iowa. Neither is true, of course, and I appreciate the opportunity to set the record straight. But I have always believed before you can win someone's vote, you have to earn their respect. And I intend to earn your respect by being honest with you.

Yes, I oppose subsidies. Not just ethanol subsidies. Subsidies. And not just in Iowa either. I oppose them in my own state of Arizona. I am a proud of the conservative tradition that the government can sometimes best serve the interests of the American people by knowing when to stay out of their way. And I've always been reluctant to grow the size of government to do the business of the American people for them or to favor one industry over another or because one sector of our economy has better lobbyists than another. I want the government to do its job, not your job, to do it better and to do it with less of your money. I want our economy to grow, not the size of government. And I don't want government to divert resources from the growing industries that hold the key to America's continued economic success. Excessive and intrusive regulation undermines the flexibility needed for business success.

There is no economic force on this globe that is stronger than free people. Entrepreneurs lie at the heart of innovation, growth, and advancing prosperity. Entrepreneurs should not be shackled by excessive regulation that raises the cost of business. Entrepreneurs should not be disadvantaged by earmarking and pork-barrel spending that favors politically connected competitors.

I trust Americans, I trust markets and I oppose subsidies. As President, I'll propose a national energy strategy that will amount to a declaration of independence from the risk bred by our reliance on petro-dictators and our vulnerability to the troubled politics of the lands they rule. That strategy won't be another grab bag of handouts to this or that industry and a full employment act for lobbyists.

Yes, that means no ethanol subsidies. But it also means no rifle-shot tax breaks for big oil. It means no line items for hydrogen, no mandates for other renewable fuels, and no big-government debacles like the Dakotas Synfuels plant. It means ethanol entrepreneurs get a level playing field to make their case -- and earn their profits. [More]

Yikes! But consider that the current front-runner for the GOP VP slot is Gov. Tim Pawlenty from Minnesota (Land of 10,000 Mandates). This strikes me as more than curious.

Should Sen. McCain choose Pawlenty, I think the above quote will fade into empty rhetoric. Despite his efforts to portray himself as a fiscal hawk, he is far more interested in lowering taxes than controlling spending. This urge arises from the now debunked myth that tax cuts "pay for themselves".

The recent analysis by Mr. Page at the Congressional Budget Office dismisses the idea that tax cuts may actually improve the government's fiscal situation. Even in his most generous scenario, only 28 percent of lost tax revenue is recouped over a 10-year period. The United States, it seems, is firmly planted on the left side of the Laffer Curve. Recent experience corroborates this prediction. In the second quarter of 2001, just before the first of President Bush's tax cuts took effect, federal receipts from personal taxes accounted for 10.3 percent of the economy. By the end of the post-recession slump, receipts had dropped to 6.4 percent. But in the third quarter of 2005, with the economy booming, they were still under 7.5 percent - an enormous difference. In dollar terms, federal receipts from personal income taxes, at $802 billion in 2004, are still lower than they were in 1998 ($826 billion) and much lower than in 2001 ($994 billion). ... [More]

Yo, Senator - we've heard this refrain from other so-called "fiscal conservatives". So, how's about cutting spending first, and then cut taxes.

Farmers can relax, IMHO and vote on issues that really matter, like "elitism", secure in the knowledge that a well-trained Congress will curb the War Hero's rational economic instincts.

Unless, of course, we fail to push through another "Corn-first" Farm Bill.

Then it will get really interesting.

Think how low land had to get...

To induce some of us to buy in 1987 or so. That's the problem facing the housing market, and a big headache for economists and policy-makers.

A FEW weeks ago I argued, to the consternation of many commenters, that government intervention in mortgage markets might be warranted. My view was that home prices were likely to overshoot on the way down, with potentially catastrophic effects. Falling prices destabilise borrowers leading to default, defaults roil credit markets, and tight credit sucks any willing buyers out the market, perpetuating the downward spiral.

This diagnosis is gaining ground in the economic community, but proposed solutions continue to differ. In the New York Times today, Edward Leamer agrees that the market is in desperate need of buyers, and that lower prices and cuts in the federal funds rate are insufficient to deliver them. Mr Leamer goes on to suggest that a massive tax credit to first-time homebuyers--of something like $25,000--is needed. Colour me sceptical. While a tax credit of that magnitude would create a powerful incentive to buy, it would have little effect on markets if desiring buyers are unable to secure a mortgage loan. The credit would essentially lower home prices to new buyers by $25,000, but if low prices aren't able to solve the problem, as Mr Leamer says, then the subsidy is useless. [More]

Looking back, I think it is fair to say land prices overshot on the way down. My brother casually bought some ground for about $1250 on a whim with profits from his medical group. That land is now worth north of $7000, I would guess. Pretty good gains. In fact, the land doubled in the first about 5 years back up to ~$2500 or so, hence my call that prices overshot.

For home buyers, it may be different. This is not a productive (income-generating) investment that can reach an income capitalization figure that makes buying a good idea. Which to me indicates it will be harder to prevent a gross devaluation before recovery. In fact, we seem to be gathering momentum downward.

As my son tries to sell a house in Will County - just a few months ago the hottest area in the country, our family is parsing real-time data. (OK - an anecdote.) But I'm having trouble imagining the motivation for a home buyer right now.

And I'm also glad I'm not a residential real estate appraiser.

The lender now faced a dilemma: whether to pay maintenance costs on the vacant house or dump the property at a fire sale price. Both of these options can reduce real estate values. Homes that sit vacant can become neighborhood eyesores, while rock-bottom sales prices drag down the values of similar properties.
I spoke with Rodney Ready, who owns Aegis Appraisals in Napa. He said that when the lenders dump the properties on the market at ridiculously low prices, he must take those sales into consideration when he completes an appraisal. The reduced price artificially lowers the prices of other homes in the neighborhood, and dramatically affects those who are not being foreclosed upon. He said, “It is criminal the way the lenders’ decisions are driving down the equity of every homeowner. They just want to get the property off their books at almost any price with no concern of the impact.”

Back to the Jones example: After the foreclosure, the lender decided it didn’t want to carry the house and sold it for $345,000. The lender simply ate the $140,000 loss and wrote it off as a bad loan. [More]

Whaddaya think? Will a 30% drop be enough to restart house buyers? Is there any other way to make it happen?

Not a lot of laughs, professor...

Nobel Prize-winner Joseph Stiglitz isn't crazy about globalization and he's not optimistic about the apparent slowdown here in the US. Regardless of your political/economic point of view, his is a voice of some considerable credibility.



Now consider the demise of subprime lending is producing financial losses in the strangest places. I agree with Alex Tabarrok, spreading the pain has been a good thing since it would otherwise have been concentrated here in the US.

From the frozen lands of Norway's Arctic Circle to the hot sands of the Middle East and the booming metropolis of Shanghai the losses from America's subprime crisis are popping up around the world like angry whac-a-moles. The losses are large and appear larger by being found in the most unexpected of places. Today the focus is on these world-wide losses but I think future historians will focus on how the crisis demonstrated to everyone the power of integrated capital markets to diversify risk.

Still, of all the exports we that we can point to as rising briskly, debt default is an odd one for us to be the world leader. It is also a product that will have few second-time customers, I think.

The longer the uncertainty surrounds credit markets, the more likely the recession will lengthen and deepen. While I have always considered the periodic reporting of popular confidence in our collective economic future to be amusing anecdotal data, how people feel about the future is far more important to how they act that I had allowed. We will learn more about this when the tax rebates likely flow into debt repayment rather than purchases.

It's not that we will talk ourselves into a bad recession, it's that we now have many more sources of very good information pouring in and as we emphasize those that can harm us most, we begin to reduce economic activity. This pattern is not easily turned around.

The larger, and looming worry for me, is unemployment, and Stiglitz didn't ease my mind, that's for sure. As the first wage-stagnant expansion (I know, it doesn't include benefit cost growth) in history closes, it seems a different relationship - or perhaps more properly - lack thereof with employees now permeates modern business. While not necessarily adversarial, it is certainly indifferent, having distinctly focussed on shareholder value as the major, perhaps only goal. This may be good business for an entire industry, where firms coming and going as investors reward the best performers, but labor mobility has failed to demonstrate the capacity to keep up.

The efficiency of rational business management may be countered by humans who cannot live 100% rationally. This atmosphere will be further eroded by the fact that firms have now seemingly lost almost any corporate reluctance to lay off workers, so that when they begin, I think they may snowball in a way we have perhaps never seen before.

One big difference this time is the precipitate drop in state/local tax revenues from lower economic activity and lower property values (which have a long delay factor) are already being felt as politicians refuse to raise taxes and unlike the federal government, cannot operate in deficit. Government jobs, long a robust growth area for employment and wages are unthinkably facing shrinkage with teachers, agency staff, and other public employees seeing pink slips.

Not only are these some of the last jobs with old-time lavish benefits, they were usually a compromise employment deal: we'll pay you less and stick you in a labyrinthine bureaucracy with stultifying work, BUT you'll be impossible to fire and won't have a huge co-pay.

If Stiglitz is right, one more semi-palatable option for job security will be diminished.

We could rewrite the work culture rules for Americans with this recession. Or maybe we'll just do away with most of them.

Worth your consideration...

After an interesting comment on a post below, I surfed over to RaisingCountryKids.com to see who the commenter was. (I love this part of blogging.)

Here is what I found: exceptional writing and wonderful pictures from a Montana ranch - a state with THREE dimensions (What's THAT about?).


Ordinarily, blogs like these are a a little ... ummm, "hyperglycemic" for me. But with my grandson back on the farm, I was surprised by my own enjoyment of the pictures and stories. Her posts about her autistic son are remarkably free from self-pity and gently inspiring.

More to the point, it reinforced why I think our farm policy is blatantly unfair. Cattle ranchers (along with the rest of the livestock industry) are getting the shaft from their own government and farm neighbors simply because they have a history of self-reliance. These people are more than picturesque landscape accessories, and they deserve a chance to be treated fairly in a free market.

Regardless, I recommend Erin's charming blog and will be checking in from time to time to see how her family is doing.

Of course, there will be some worker "dislocations"...

The adjustment to new technology seems to be a traditional human problem.





[via Optical Poptitude]

A new endangered species?...

Even though they have saved us from our worst literary excesses and even outright blunders, most writers don't like editors. And the feeling is mutual.

Writers are sensitive souls--generally intelligent and hardworking but easily bruised. Treat them right, though, and you will be rewarded. Writers shape words into luminous sentences and the sentences into exquisitely crafted paragraphs. They weave the paragraphs together into a near perfect article, essay or review. Then their writing--their baby--is ripped untimely from their computers (well, maybe only a couple of weeks overdue) and turned over to editors. These are idiots, most of them, and brutes, with tin ears, the aesthetic sensitivity of insects, deeply held erroneous beliefs about your topic and a maddening conviction that any article, no matter how eloquent or profound or already cut to the bone, can be improved by losing an additional 100 words.

If you're lucky, your editor will have lost all interest in your article by the time you produce it, and on the way to a fancy expense-account lunch, he will pass it along unmolested to the copy editors (apprentice fiends, with intense views about semicolons). If you are not lucky, your editor will take a few minutes to ruin the piece with moronic changes and cloddish cuts before disappearing out the door.

I didn't always feel this way. (And even now, nothing here should be construed to apply to the editors of TIME, who edit with the care of surgeons, the sensitivity of angels and the wisdom of the better class of Supreme Court Justices.) I have spent most of my professional life as an editor. When editors get together, they complain about writers with the same passion that writers bring to complaining about editors. [More of a brilliant and funny essay]

Of course, this is why we are drawn, often self-destructively, to blogging. Nobody touches our stuff. And way too often, somebody really needs to. Still, it looks like editor jobs may be the street car conductor occupation of the next decade.

For many writers, an important joy of blogging is that one can write without having the copy vetted by an editor. The downside is that a lot of the writing isn't nearly as good as it could be: I sometimes cringe when I reread some of my 2Blowhards postings.

Dean Barnett, who now writes for the Weekly Standard, mentioned that his policy was to wait at least 20 minutes before posting a blog item. I think that's a good idea, even for the political blogging Barnett does, when there is pressure to get commentary out the door as fast as possible while topics are still hot.

For what it's worth, I try to give a piece as many re-reads as possible, even when I need to post something soon. But waiting is better, and I breathe more easily if I can let an article sit overnight or even for a few days before going live. [More]

This is good advice, I think. They are ideas I'm trying to take on board. Unfortunately, it diminishes the Great Blogger Advantage: immediacy. I can make 5 comments/links/speculations before most observers have gotten to the office. And if only 3 are coherent, that's still way more output faster than the competition.

The Internet is roiling the writing profession, and when I see the talent I have read for years moving increasingly to blogging, I suspect my instinct was in the right direction. There is something to this medium, and we're going to have to learn to balance the pluses and minuses by trial and error, I think. The good thing is we can go through 100 iterations in the time the print media has settled in for a staff meeting.

Thanks for reading. And like USFR, I'll be working to do even better.

I almost forgot to post this...

We're all getting there:

This divide produces moments of social combat. Some vaguely familiar person will come up to you in the supermarket. “Stan, it’s so nice to see you!” The smug memory dropper can smell your nominal aphasia and is going to keep first-naming you until you are crushed into submission.

Your response here is critical. You want to open up with an effusive burst of insincere emotional warmth: “Hey!” You’re practically exploding with feigned ecstasy. “Wonderful to see you too! How is everything?” All the while, you are frantically whirring through your memory banks trying to anchor this person in some time and context.

A decent human being would sense your distress and give you some lagniappe of information — a mention of the church picnic you both attended, the parents’ association at school, the fact that the two of you were formerly married. But the Proustian bully will give you nothing. “I’m good. And you?” It’s like trying to get an arms control concession out of Leonid Brezhnev.

Your only strategy is evasive vagueness, conversational rope-a-dope until you can figure out who this person is. You start talking in the tone of over-generalized blandness that suggests you have recently emerged from a coma.

Sensing your pain, your enemy pours it on mercilessly. “And how is Mary, and little Steven and Rob?” People who needlessly display their knowledge of your kids’ names are the lowest scum of the earth. [More]

We've all known people who could remember names and faces and lineages. And we've secretly, but genially despised them. Of all the obvious but unanticipated consequences of hosting a TV show, the increased exposure of my recognition handicap may be the worst.

Forget NAIS, we need a National Mandatory Name Tag System.

In case you can't make it to church tomorrow...

Listen to one of Pastor Eric Filkin's sermon's. Eric is Jan's nephew - a lawyer who became a pastor, to the surprise of all of us. His sermons are witty, insightful and truly inspired.

Eric used to visit us on the farm as a little boy, and I suppose I'll always struggle to see him as other than that. Listening to the voice alone helps me revise this prejudice and experience the man of God he has become.

This is another example of the power of this medium to lift lives. I can hear Eric now by downloading his podcasts, after promising to drive to Rockford to hear him for years - and never making it. I'll bet many of you would find something of value as well.

My favorite so far is Science and the Bible. (You hafta imagine the slides at the beginning...)

The Chinese problem solves itself...

Good news for trade worriers concerned that cheap Chinese products will totally wipe out manufacturing in the US. The price of cheap is going up.

But now a perfect storm has hit China's manufacturers. So far this year, the renminbi has been appreciating at a 16 percent annualized rate. And prices for raw materials, which account for 60 percent to 70 percent of manufacturers' costs, are soaring. Hundred-dollar-a-barrel oil has raised transport costs and the price of oil-related materials such as plastics. Although some economists expect raw material prices to weaken in the second half of this year, in the long term, the emergence of millions of new car drivers, home buyers, and office workers in India and China will keep the price of steel, plastic, and other raw materials high.

At the same time, China is rolling out wage increases around the country and tightening its labor laws. Wages are rising at double-digit rates in coastal China. In January, Beijing introduced a new labor law that significantly strengthened the influence of the union in management decisions. The All-China Federation of Trade Unions, the country's state-backed labor organization, has launched an aggressive recruiting campaign. Beijing hopes that better protection for workers through the union and the new labor law will placate its increasingly restive manufacturing workforce. But a tidal shift in the country's demographics—a dwindling supply of young workers as a result of the "one child" policy in effect since 1979—will counteract Beijing's efforts. [More]

Of course this seemingly happy outcome for American laborers has a downside - a big one. Consumer (imported) goods are going to get more expensive here. In fact, so great is the rising consumption in China, India, Brazil, Russia, etc. that we will be bidding against them for consumer goods. And with pretty flimsy money at that.

One thing I will be looking for to indicate this shift in consumption leadership is whether our recession (I'll hazard the label) spreads deeply to these countries. If they continue to grow as we stagnate, it means we are not the engine of the world economy any more.

We'll adjust. It may even work out better than we imagine.

I'm building a submarine out of used cultivator sweeps*...

I hope we're all becoming aware of the urgent need for more nautical recycling. For example, what to do with used chopsticks?

A former city employee in the Fukushima prefecture town of Koriyama has built a 4-meter (13-ft) long canoe from thousands of used disposable chopsticks recovered from the city hall cafeteria. Bothered that perfectly good wood was going to waste after a single use, Shuhei Ogawara — whose job at city hall involved working with the local forestry industry — spent the last two years of his career collecting used chopsticks from the cafeteria. An experienced canoe builder, Ogawara spent over 3 months gluing 7,382 chopsticks together into strips to form the canoe shell, to which he added a polyester resin coat. The canoe weighs about 30 kilograms (66 lbs), which is a bit heavier than an ordinary cedar canoe, but Ogawara is confident it will float. A launching ceremony is planned for May at nearby Lake Inawashiro. [More]

So far the only problems are that about an hour after a canoe ride, you get hungry.

*Theme of the Week

[via Andrew Sullivan]

Maybe they are trying...

A loyal reader writes today:

"Now the fun begins in earnest." He cites this article:

Today, Agriculture Committee Ranking Republican Bob Goodlatte offered a motion on the House Floor to instruct conferees not to agree to any provisions that increase taxes in a final farm bill agreement. This motion sets the tone for the conference committee as it moved forward in negotiating the differences between the House- and Senate-passed farm bills. Six Republican Members of the House Agriculture Committee, plus a member of the Republican Leadership, were named to the official conference committee (names included below). The motion to instruct passed by a 400-11 margin demonstrating the bipartisan belief that taxes do not belong in a farm bill.

Last summer, after earning bipartisan support in the Agriculture Committee, a variety of tax increases were added to the House farm bill causing the majority of Republicans to withdraw their support of the bill. The Majority has since removed the tax provisions and pledged not to add any further tax increases. [More]

My question: What if legislators have been in earnest all this time?

I have noted the frustration and impatient anger in farm editorials over the farm bill. The implication is legislators have just been foolin' around and playing games. That level of contempt for legislators doesn't strike me as the way to open many new doors on Capitol Hill.

I think the "frustrated" are not only dead wrong - they are the entire problem. Congress has been working as hard on the farm bill as any other legislation. But the powerful special interests in agriculture will not brook deviation from their demand: money the way (and amount) we want it, when we want it, and nothing else.

No mention in those caustic criticisms of compromise. No, no - theirs is the language of pure entitlement (They are pretty sure it's in the Constitution somewhere that 8 crops get lots of money - only in fancy-schmancy language).

If farmers really, really needed a farm bill in order to grow (oh yeah - that's really holding up our planters), maybe they better decide what they will give up to get one. In fact, since there is no evidence of cooperation from farm payment recipients, no sense of panic - just a petulant hissy-fit, I think it is fair to say this farm bill is chump change that we can ignore until we have time to fuss about it occasionally.

We've done plenty of "demanding". How's that workin' for ya?

Why I'm going to Poland...

I'm heading off to Poland along with other stops in July. This will be my big experiment in "vlogging" (video blogging - a term which never really caught fire). If the video is mildly competent, we may try to use some in USFR. I will be visiting the main manufacturing plant for Kongskilde Industries and talking with my friends in Denmark as well as visiting some Polish farms.

And trying to keep my expenses down to oh, a few hundred $ a day...

But Poland is in the middle of compressing a few centuries of progress into a decade as their accession to the EU has wrenched the lives of millions of Poles who still live on very small farms.

While overall farm income in Poland has gone up since the country has joined the European Union, that is certainly not the case for the small farmers here. In Poland, 22 percent of the work force is employed in agriculture, and the country boasts by far the highest number of farms in Europe. Most of them are tiny. The average farm size is about 17 acres, compared with about 59 acres in Spain, France and Germany. There are 1.5 million small farms in Poland. Only Italy, with its proliferation of high-end niche agricultural products, compares to Poland in its abundance of small producers. But the fall of Communism and, more recently, European Union membership have opened this once cloistered land to global forces: international competition, sanitary codes, trade rules and the like. Sir Julian recalls that at an agricultural conference in 1999 a pamphlet advertised “Poland up for grabs!” That is what has happened, he said. In a market newly saturated with huge efficient players, these small traditional farmers are being overwhelmed. The American bacon producer Smithfield Farms now operates a dozen vast industrial pig farms in Poland. Importing cheap soy feed from South America, which the company feeds to its tens of thousands of pigs, it has caused the price of pork to drop strikingly in the past couple of years. Since European Union membership, the prices of pork and milk have dropped 30 percent. [More]

My friends in Europe see Poland as a new agricultural frontier, but like native Americans, I wonder if the existing residents will make it through the adjustment. Polish farmers in particular were a hard sell on the accession referendum.

Meanwhile Polish laborers are flooding into EU states as low-cost, highly skilled labor (hence the Polish plumber jokes in Europe), many are leaving the farms for the opportunities of a better life.

Perhaps because of the strong Polish tie with Chicago, it's relatively easy to get there from ORD. And with a little help with the language, I hope to get a glimpse of farms in greater transition than mine, and how people are managing. It's always interesting to see what they think about Americans currently too.

Man - that's a lot of Dreamsicles...

What the Hel? I guess it is because I'm right in the middle of "Pillage and Plunder 315" that this caught my eye.

A Viking ship made from ice-cream sticks set sail for England from the Netherlands on Tuesday. The 15-metre (50-foot) long ship, named after the Norse god Thor, is made from 15 million recycled ice-cream sticks glued together by U.S.-born stuntman Robert McDonald, his son and more than 5,000 children. [More]

Why aren't there glue company NASCAR-type ads all over this craft?

It would make me feel safer.

The fear-shortened outlook problem...

As Americans grow increasing worried about the future, they begin to ignore the far horizons to concentrate on tomorrow - or better yet, this evening. Perhaps partly due to the flood of new information flows - like (ahem) blogs - we have a seemingly real-time readout of how we are doing, and as anyone who has just gotten their first car with the thermometer in it can tell you, it is mesmerizing.

One result is short-termism. While this arguably may be crippling investors, it subverts our ability to find satisfaction by focusing our attention on every tiny up-and-down event, instead of progress toward a goal or even just a well-lived life (which is likely the tool to produce the deepest happiness).

Immediate dangers certainly call for immediate attention, but I wonder if we have not been led to believe too many routine problems are "the nose of the iceberg" of a future calamity. Indeed a brisk industry has erupted among commentators such as your humble correspondent in making the early call for the next recession, epidemic, shortage, rock band reunion tour, or similar catastrophe.

For example, I was about to remind you I had mentioned spiraling steel price jumps way, way back in February. The increases are receiving more attention now.

Chinese steel exports surged in 1H07, then dropped precipitously in 2H07, largely due to booming domestic market prices and increased export costs induced by the government's export policy restrictions. However, recent price data indicate the gap between Chinese domestic prices and international prices has widened sharply over the past month (see chart over the page). We think this justifies Chinese steel exports regardless of the export tax and reduced VAT rebate and suggests exports are likely to bottom out in 2Q08.

Over the past week, Chinese steel prices increased again, reaching record highs. Hot rolled coil prices were quoted at US$662/t ex-Vat, up by 0.4% WoW and cold rolled coil prices also increased by 0.2% WoW to $805/t ex-Vat. Galvanised steel prices were up by 0.5% WoW to US$786/t ex-Vat and rebar prices climbed to US$739/t ex-Vat, up by 2% WoW. [More][BTW, I think WoW = week-over-week. Took me a minute.]

The result is grain bin prices are skyrocketing yet again. [Note: Good article on this in the most recent FarmWeek, but not posted yet, I guess.] The fact I had been told by a friend in the machinery industry earlier doesn't make me any smarter than anyone else, just lucky to have knowledgeable friends. But we still "smug up" when our prediction - especially a grim one - comes to pass.

Such a pastime does little to encourage us to think longer term, rather to scan the ground at our feet for tracks of our next great fear. This game is not worth playing.

Now add to this the breakdown of tools we used to combat these tendencies such as long term business commitments, and it is small wonder most of us have little interest in addressing larger, future problems. Much of the pushback on climate change could be coming from people who feel overloaded at present and really don't need to worry about 2100. Ditto for Social Security, Palestine, education, and yadda, yadda.

I have written about the failure of one of our tools - the futures markets - to manage these fears by transferring risk. But the first steps of disengagement with a riskier future interlock with other mechanisms, causing a domino effect of lost opportunities. I just found out steel prices, futures failures, and production risks have combined to put a hiatus on Cargill's Grain Bin Program (along with similar producer contracts like scholarships, HSA funding, etc. which were essentially based on options) for the time being.

All these aftershocks are tied to something we didn't think would reach all the way out to our farm - the credit crunch afflicting huge investment banks. It turns out it is a small world and no man is an [economic] island. Even in the midst of the ag boom, uneasiness is reshaping our planning. One thing is very likely: when the chances to transfer risk reappear they will look better than ever to many of us. This small financial deprivation has been a sobering reminder of some good deals we have taken for granted.

Oddly though, steps taken now could have the greatest long term payoff we've ever seen. More than a few fortunes were made by shrewd business decisions during the Great Depression. The movie industry was one example. While most suffered greatly, it was not 100%, nor were those winners blessed with wealth to begin with.

Maybe we have lost sight of the probability this tough time will actually pass, and that the US will emerge functional on the other side. There is always a chance that won't happen, but it's a poor way to bet, since this is the boat we are sailing in. In the process of believing that farther on things will get better, we change how we act today.

At the same time we can put today's fears in a better prospective. For example, suppose the looming downturn lingers for a looooong time, like 5 years. I've outlasted 5-year irritations and even had intermittent times of happiness. Maybe it's my age, but it might help if some of us geezers try to share the secret that even a decade can go by in a hurry.

I'm not talking "put on a happy face", but rather avoiding fear-laden myopia. Not only will you not ease your worries, but there is a chance you will be passed by competitors who can still look down the road occasionally.