Category Archives: Agriculture

Stay awake on the ag markets

CattleFax Executive Vice President Randy Blach told his audience this week at the Kansas Livestock Association’s convention not “to go to sleep.” And he wasn’t talking about their state as they sat in their chairs at the Hyatt Regency Wichita.

Blach was referring to staying sharp on being better risk managers with such a volatile market.

“The volatility will stay there for a while,” said Blach, whose company provides an information and analysis service for producers. “We’re one crop failure away (from serious problems), and it wouldn’t have to be a very big crop failure. So don’t go to sleep. Stay focused on the margins and when the market gives you an opportunity, take it.”

Blach also told the producers that 2008 saw record-high prices but also record-high costs. He said the U.S. had the smallest cow heard since 1962 and will continue to shrink in this economy. At the same time, it takes less cattle to feed more because of improved weights, genetics and nutrition for the cattle.

At the ranch level, Blach said the cost to raise and carry a cow for a year has increased $150 per head over the last five years. He also recommended that cow-calf operators retain ownership through the feeding phase.

Because of the economy, he noted that consumers have shuffled their beef cuts downward. He said trimmings are up 15 percent, chucks 10 percent, rounds 9 percent, while ribs have remained unchanged and loins are down 7 percent.

Blach also projected beef exports will increase 27 percent in 2009.

Ask T. Boone Pickens

I’m in Kansas City at the Society of American Business Editors and Writers fall workshop. There are some great speakers lined up here. Today’s events include a training session about the ag economy, an address from Ford vice president Joe Hinrichs and a discussion about the biofuel debade.

The session I’m looking most forward to is entitled: “A conversation with T. Boone Pickens: Will his plan work?”

We will be given the opportunity to ask questions during the session. So what do you want to know? If I get a chance to ask, I’ll publish the response here.

Outta here but still around

Today is my last day at the Wichita Eagle.

What a strange sound that has.

After 18 years and a lot of topics, I’m leaving the Eagle to become editor of Kansas Farmer magazine, a Farm Progress publication.

I’ll still be in Wichita, working the state from a home office, and my new bosses tell me there will even be blogging in my future, so I won’t be going away, just changing location.

I want to say thanks to all those who have been faithful readers through the years and I hope to see you around at some of the state’s agricultural events _ including the Kansas State Fair just around the corner.

Keep the fences tight and the rows straight.

Food vs. Fuel: How about both?

A new alliance supporting credible science and funding for research in agriculture technology has been formed. Key players are Deere and Co., Dupont, Monsanto, Archer Daniels Midland and the Renewable Fuels Association.

The new alliance aims to advance the idea that agriculture is capable of supply the world with food, feed, fiber and fuel.

Ethanol foes miss details of pesky numbers

There was some astonishment among rural economy watchers when reports began hitting the presses that a respected USDA economist, Keith Collins, had conducted a study saying ethanol production had driven food prices up 30 percent.

Well, it turns out, that’s not quite what the study actually said.

Collins reported that ethanol production had been a factor in the increasing price of corn, which does have an impact on other food prices, especially poultry and pork. He put the ethanol impact at about 1.8 percent of a 4.3 percent rise in food prices.

Mike Woolverton, grain marketing economist with Kansas State University Research and Extension, said some mainstream media — including some with considerable influence in Congress — were just a tad math challenged when they converted those numbers into a 30 percent increase.

Collins’ numbers are actually pretty much in line with those reported by K-State for months. And Woolverton said future impacts on food prices are also being grossly overestimated.

Collins’ complete study is still available to read on the Farm Journal website.

 

New report goes wild on ethanol-food debate

Wow! The British newspaper, The Guardian, published a claim over the holiday weekend that it has obtained a confidential copy of a World Bank study that blames ethanol for 75 percent of the increase in world food costs.

Of course, since the cited report is top secret with unnamed authors, there’s no methodology or mathematics to back up this claim, which is wildly out of balance with even the highest end of prior reports.

And the math should prove to be quite interesting, given what we know about the total percentage of food prices that are attributable to raw materials. Even if you buy into the woes of poor, poor Tyson paying through the nose for chicken feed, the balance sheet still shows only about 13 percent of the supermarket costs of poultry comes from the cost of feeding birds to harvest weight.

Interesting note: the paper claims the report dates back to April, but the “leak” came just in time for the summit of the top eight industrialized nations on the issue of biofuels and the food crisis.

Call me cynical, but that makes my phony report radar go “beep.”

Ethanol cuts gas prices, has little impact on food

The average American family has saved more than $500 at the gas pump in the last year because of the impact of ethanol on fuel prices, according to new research from Merrill Lynch.

Commodity strategist Francisco Blanch reported that retail gasoline prices would be $21 a barrel higher without ethanol, an average savings of $526 a year.

At the same time, ethanol has boosted corn prices just 21 percent since 2004, an increase that accounts for about $15 a year in food expense.

The real culprits in escalating food prices are rapidly increasing oil prices, increased global demand for meat and grains, commodity speculation, the declining value of the dollar, droughts and bad weather.

There are, however, some folks — some big oil companies among them — that really don’t want that message to reach the public; hence an ongoing public relations campaign to blame ethanol for all the woes in the grocery aisle.

It’s not so folks. Only a tiny portion of the food dollar pays for raw materials. The rest of your money pays for processing, packaging and transportation, all energy-intensive segments.

Those acres of corn … really aren’t there

As the furor over food prices and all the acres converted to growing corn for ethanol  reaches a fever pitch, it’s worth noting that it’s a brand new spring and a brand new planting season and this year is most definitely NOT all about corn.

But don’t look for the rhetoric to tone down anytime soon. The PR machines of big oil and big environmental hoopla _ odd bedfellows indeed _ won’t be able to turn on a dime and you can’t expect right wing talk radio to pay any attention at all to the facts, let alone current events.

But here’s reality from the May 12 USDA planting intentions report. Acres are NOT being converted to corn. In fact, USDA says farmers will plant 7.6 million acres LESS in corn than they did in 2007. Iowa will see the biggest drop, down a million acres from last year’s record.

Also worth noting is the fact that ethanol production is growing at less than half the forecast rate from this time last year and the red hot pace of two years ago is now barely a crawl.

Soybeans, meanwhile, get the big acres this year, up 18 percent over last year. Wheat is up 6 percent to 63.8 million acres, thanks to the huge price hikes that have come from depleted world stocks and global weather problems including last year’s drought in Australia and the Easter freeze in Plains.

Cotton takes a big drop, down 13 perent from last year to the lowest level since 1983. You can find all the reports on Prospective Plantings at www.nass.usda.gov

StarLink episode over at last

It looks like we’re finally past the StarLink episode. The FDA has let corn dry millers and masa flour manufacturers stop testing for the Cry9c protein – the marker for the StarLink hybrid.

At the same time, EPA has come out with a white paper saying StarLink has been sufficiently removed from the human food supply that there is no longer any need to test for it.

The StarLink hybrid had not been approved for human food consumption back in 2000 when the protein turned up in tortillas and millers have been testing all inbound corn for its presence since January of 2001.

This is a guy who knows his stuff

One of the major goals of any university is to have world-renowned researchers among its faculty, and K-State just scored big in that department.

Bikram Gill, distinguished professor and guru of all things wheat genomic, has been listed on ISIHighlyCited.com as one of the world’s most influential researchers in the site’s plant and animal science category.

Gill’s work was cited 2,177 times from 1984 to 2003, officials with the Web site said, putting him among the top half of 1 percent of all publishing authors.

At K-State, he heads a team responsible for mapping the genome of the wheat plant so breeders can create new varieties able to resist disease, produce higher yields or be used for biofuels.