June 30, 2008
For those that are curious, 2 percent of Nebraska's crop was silking at this time last year. No silking was reported this week, but that isn't a surprise considering the spring weather we had.
Nationally, USDA said 61 percent of the crop is in good to excellent condition, 28 percent is fair and 11 percent is poor to very poor. This compares to last week's 59 percent in good to excellent condition, 30 percent fair and 11 percent poor to very poor. A year ago, 73 percent of the crop was good to excellent, 20 percent was fair and 7 percent was poor to very poor.
So overall for the crop we have in the ground, things are looking swell.
In Nebraska, USDA said corn producers planted 9.0 million acres of corn this year. That's about 4 percent below year ago, but up about 200,000 acres from the the March planting intentions report. It estimated that 8.8 million acres in Nebraska will be harvested.
“Despite the wet spring, Nebraska corn producers were able to respond to market demands and increase corn plantings in what turned out to be a narrow window,” said Kelly Brunkhorst, ag program manager for the Nebraska Corn Board in a news release. Brunkhorst said Nebraska corn plantings are the second highest since the 1930s, with last year’s 9.4 million acres being the highest.
Nationally, USDA said 87.3 million acres of corn was planted, down 7 percent from last year’s crop, but 1.3 million more than March intentions. This is the second highest since 1946 (last year's 93.6 million was the highest). That was good news because USDA lowered its harvested acres estimate 2 points due to last week's survey of growers in flooded areas. It said harvested acres would be 78.9 million, down 9 percent from last year but still the second highest since 1944 (last year's 86.5 million was highest).
Using USDA's figures, that means flooding has reduced harvested acres by about 1.7 million, although the more detailed July survey (released in August) will better nail it down.
University of Illinois extension economist Darrel Good said corn prices would move lower with the report (which they did). He also noted that with a slowdown in corn use already happening, year-end stocks will likely be at least 100 million bushels larger than the 1.433 billion bushels already projected.
USDA also said corn stocks in all positions on June 1 totaled 4.03 billion bushels, up 14 percent from June 1, 2007. Of the total stocks, 1.97 billion bushels are stored on farms, up 8 percent from a year earlier. Off-farm stocks, at 2.06 billion bushels, are up 21 percent from a year ago.
June 28, 2008
Mike Krutza, formerly with Farm Credit Services but now a partner in Lighthouse Leadership, told Brownfield that research shows all commodities, but especially oil and corn, are influenced by speculators. He mentioned the “Enron Loophole” -- created when Congress decided to change the rules for investing in commodities. We blogged about this here.
He said part of the problem is the Commodity Futures Trading Commission does not have the ability to regulate this activity and we're all stuck with consequences -- commodity prices that don't reflect their real value.
Krutza said he believes the government should step and get the spec funds out, but this should be done carefully so we don't over regulate markets and stifle creativity.
The full article, by Brownfield's Bob Meyer, and related audio is available here.
June 27, 2008
The website, at www.FoodPriceTruth.org, contains a plethora of information, statistics and the like, and in a consumer-friendly way. It also highlights the ethanol smear campaign.
The site's blog -- at http://blog.foodpricetruth.org -- is equally good and worth a look. So you don't have to visit the site every day, be sure to subscribe with a news reader or through your Google, Yahoo or other home page.
Oil hit $140 for various reasons, but a line in an article on CNNMoney.com caught my eye:
According to a report by the Bloomberg news service, Shokri Ghanem, chairman of Libya's National Oil Corporation, said reductions may be made because the market is oversupplied.
Is the market really over supplied? Saudi Arabia basically told President Bush the same thing last month, even though the country said it now plans to boost oil production. Since it made that announcement over the weekend, by the way, oil prices have done nothing but go up. Something just doesn't add up, does it?
June 26, 2008
The Storage of Wet Corn Co-Products publication includes information on wet and modified wet distillers grains, as well as wet corn gluten feed. Storage options from bags to bunks, and analysis of mixing forage with the wet corn co-product are included.
Dr. Galen Erickson, a beef specialist with the University of Nebraska and one of the report's authors, said there are many good options for storing wet distillers grains and other co-products. He said silo bag storage can work well -- but bagging straight wet co-products under pressure will likely split or break the bag. Instead, he said, adding a small amount of forage as described in the manual can solve that challenge. Meanwhile, more forage is needed for bunker methods.
According to the report, inexpensive, low-quality forages are likely the best choice when mixing them with wet co-products for storage. The low quality forages work well because they are more fibrous and this is a great way to improve their palatability.
The manual includes a cost budget worksheet to help livestock producers estimate the cost of storing wet co-products.
A .pdf of the report is available by clicking here. Or you can get a copy by contacting the Corn Board.
Storage of Wet Corn Co-Products continues the Nebraska Corn Board’s series of publications geared towards distillers grains. Utilization of Corn Co-Products in the Dairy Industry came out earlier this year, and an updated Utilization of Corn Co-Products in the Beef Industry was published in August 2007. All are available here -- they are a tremendous resource.
June 25, 2008
Dan Wheldon won the race, but really, we all win since clean burning renewable corn ethanol is the fuel of choice for the Indy Racing League. That's right, the same ethanol that can power your car is powering this highly tuned racing machines! To view photos, videos and audio -- including Helio Castroneves and Rusty Wallace talking about ethanol -- click here.
In the Iowa Corn Indy 250 ad below, can you spot the Nebraska corn grower, who also happens to be a member of the Nebraska Corn Board?
June 24, 2008
The National Restaurant Association said the waiver should be granted because of the impact it is having on the nation's economy. John Gay, senior vice president of government affairs and public policy for the association said that "price distortions in the food supply" (caused by ethanol) have "harmed our customers and businesses."
The unanswered questions: Mr Gay - What about $4 gas? Don't your customers (all of us) have less money to spend eating out because we are spending so much to fill our gas tanks? Wouldn't that have a bigger impact than an extra dime or quarter for my dinner? Isn't ethanol saving consumers billions of dollars this year by increasing the fuel supply?
Grocery Manufacturers Association president and CEO Cal Dooley said, "At a time when tens of thousands of Americans are turning to food banks to feed their children, no Administration could reasonably conclude that ethanol refiners should be given priority over working families, food companies and livestock farmers."
The unanswered questions: Mr. Dooley - Don't some people now have to utilize food banks because they are spending a greater amount of their income on gas, leaving them less money to spend on food? People have to get to work and school, and $4 gas adds up fast. Doesn't ethanol actually save the average family $500 per year?
The American Bakers Association said it "remains extremely concerned about the nations current wheat supply and commodity prices." Robb MacKie, president and CEO of the American Association, said the corn-based ethanol program is one of many factors impacting the current situation.
The unanswered questions: Mr. MacKie - Isn't it true that U.S. wheat acres increased by more than 3 million this year? And that this follows a 3 million increase last year? And this despite higher corn prices? Don't the major wheat growing associations support the current RFS? Why does your opinion differ?
For more specific details and photos showing Nebraska's crop, like the photo below provided by the Heartland FFA chapter, click here.
June 20, 2008
Turkey producers achieve this not only through the products they sell, but through their investment in commodities, equipment, facilities, labor and all the items required to be an efficient turkey producer, said David Nielsen, a corn grower near Lincoln and a farmer-director of the Corn Board.
In Nebraska, the state's independent turkey growers own the Nebraska Turkey Growers Cooperative in Gibbon. Much of the turkey produced by the growers and their cooperative is sold under the Norbest® label. “Every time you buy a Norbest turkey you’re supporting Nebraska turkey producers and Nebraska agriculture,” Nielsen said.
So go out and buy a Norbest turkey and cook it on the grill. You'll eat good. And feel good.
June 19, 2008
One of these unstable spots is Nigeria -- an important U.S. crude oil supplier.
This morning, militants in the country attached an off-shore oil facility, forcing Shell to shut it down, cutting oil supplies from Nigeria by 10 percent. Constant bombings, attacks on export facilities and kidnappings by the "Movement for the Emancipation of the Niger Delta" and other gangs have already cut oil production in the country by 20 percent.
Yesterday, oil prices went up because Chevron's workers in Nigeria wanted to go on strike. Strikes -- or the threat of them -- are fairly constant. Fortunately for us all, the strike was averted. An interesting note...one of the reasons for one of the recent strike threats was the high price of gasoline.
June 18, 2008
Nebraska Corn Growers Association president Randy Uhrmacher gave a speech recently at an ethanol plant ribbon cutting celebration. In it, he addresses several issues that are important to corn producers today.
Here are is a portion, but you can view the full speech here:
As a corn grower, I became frustrated over the last year as I saw my input costs – for things like fertilizer, chemicals and diesel – go up in price considerably. In some cases, my input costs have doubled in the last year or so.
Being involved in a hog and cattle operation, I have seen our input costs go up, for everything from feed to trucking to animal health products. It seems like a never-ending cycle of escalating prices for just about everything. I can understand the frustration of all livestock producers who are also facing increased input costs.
But we need to be careful in where we place that frustration. In the grand scheme of things, ethanol is part of the answer and scaling back the Renewable Fuels Standard or wishing we could go back in time will not solve the problem.
Now more than ever we need renewable fuels like corn ethanol. Every week we hit new oil price records, gasoline and diesel fuel costs go up and we all pay along every step of the food chain. Yes, there is no doubt that high oil prices impact corn production, meat and milk production, food processing, packaging, transportation, storage, delivery and so on. Then we all pay again when we go to the grocery store – at the gas station on the way there and in the store itself in terms of higher food costs.
June 17, 2008
The Omaha World Herald yesterday published an article highlighting the "PR war" over ethanol -- the battle between corn and ethanol supporters and the Grocery Manufacturers Association. The lead paragraphs focus on "the Food Dude" radio ads that are airing in some markets around the country. They'll be airing soon in Nebraska and hopefully we'll put them on this blog as a podcast.
Here's a line on the radio spot from the article:
In one spot, "Winnie in Wisconsin" calls in to suggest that rising food prices are the result of the record-high corn prices that have been driven up by the boom in ethanol production.
"At today's prices, there's still only 8 cents worth of corn in a box of corn flakes, so there's something else going on here," the Food Dude cheerfully tells Winnie. "Me, I'm more worried about paying four bucks a gallon just to get to the store."
GMA wouldn't give the reporter any details on its "Food before fuel" campaign, but it is continuing. Hopefully the Food Dude can help get the word out and tell the whole story.
June 16, 2008
Merrill Lynch commodity strategist Francisco Blanch also estimated that U.S. ethanol production has increased corn prices by just 21% since 2004. Since only small changes in corn prices are passed through to retail food items, this means ethanol has increased household spending on retail food items by about $15 per year.
“By keeping gasoline prices lower than they otherwise would be, ethanol is helping the average American family save about $500 a year, even after accounting for the slight increase in food prices due to higher prices for corn,” Bob Dinneen, president of the Renewable Fuels Association (RFA), said in a news release.
In its news release, RFA provides the details, as well as a link to Merrill Lynch's full report. To access it, click here.
Separately, USDA and the Department of Energy have put out a new fact sheet on ethanol and biofuel use. It was part of a response to a request by Sen. Jeff Bingaman (D. - N.M.). The two departments estimated that biofuels save 20-35 cents per gallon or $150-300 per year for a typical household.
The full fact sheet is available here.
June 13, 2008
The state has about 59,000 dairy cows, and they are part of what ties corn production, ethanol production and distillers grains together.
Dan Rice, a dairy producer from Firth, Neb., said since Nebraska is a leading corn and ethanol producer, it is important to continue efforts to make Nebraska a leader in milk and dairy products production, too. Rice is also president of the Nebraska Dairy Industry Association.
Randy Klein, director of market development for the Nebraska Corn Board, said supporting and growing the state’s dairy industry is a priority for the state’s corn producers. One way the Board has provided assistance is by supporting research aimed at helping the industry take advantage of distillers grains produced in the state. “We recognized early on that the corn co-product distillers grains is well-suited for beef and dairy cattle,” Klein said. “This led us to support feeding trials, and earlier this year publish a corn co-products manual specifically for the dairy industry.”
The Utilization of Corn Co-Products in the Dairy Industry was completed in February. It's available online so check it out. Maybe while you're enjoying a nice glass of milk. Or a bowl of ice cream.
June 11, 2008
To help combat this, he suggested we quickly adopt flex fuel vehicles. He acknowledged that it's not an overnight fix, but that if we combine flex fuel vehicles -- which use gas, ethanol or methanol in any combination -- with more domesitic oil production and increased nuclear power, it could save the country in 10 years.
Flex fuel vehicles would give people a choice in their fuel -- allowing them to choose gas, a high-ethanol or methanol blend or any combination. Right now people don't have a choice because gas and oil dominate.
O'Reilly's push for flex fuel vehicles is similar to that of Robert Zubrin, who we blogged about earlier.
Read O'Reilly's full "We are all in danger" Memo here.
June 10, 2008
Despite these poor conditions, the corn crop progressed nicely. For the week ending June 8, corn was 95 percent emerged, above last weeks 82%, but slightly below the average of 98%. Corn crop conditions, meanwhile, were 8 percent poor to very poor, 27 percent fair and 65 percent good to excellent. A year ago, 75 percent of Nebraska's crop was good to excellent at this time.
For details and photos of the crop, click here.
June 9, 2008
June 8, 2008
It gives livestock producers who have met the standards appeal a denial that is based on emotion or local politics.
That's good news, because livestock and poultry producers add a lot of value to Nebraska commodities -- like corn and soybean meal. And in the process, the add billions and billions to the local and state economies.
A good story about the ruling appeared in the Grand Island Independent.
June 5, 2008
First is an editorial, "It's time to stick up for the farmers". This editorial mentions the smear campaign by the Grocery Manufacturers Association and its PR firm Glover Park Group. It notes that the smear campaign ignores other reasons for food price increases.
The second is a piece related to the recent ribbon cutting ceremony at the VeraSun ethanol plant in Albion. This piece highlights many of the positive aspects of an ethanol plant to rural communities. It's part of the full story of corn ethanol production that sometimes gets lost in the noise from GMA and others.
June 4, 2008
Tom Dorr, under secretary for rural development at USDA, said Monday at the New Horizons Corn Utilization and Technology conference, that USDA was studying the issue and wanted to have the facts before entering the debate. Now that it has them, it's ready to help.
Nebraska Farmer's Lon Tonneson wrote a short piece on Dorr's comments here.
Most members of the Senate Commerce Committee would disagree on the energy price notion. The Committee held a hearing yesterday on energy market manipulation, and the testimony was clear that speculation has added a significant “premium” to oil prices. (For info on yesterday's CFTC announcement on ag futures, click here.)
Michael Greenberger, a law professor and former director of the Commodity Futures Trading Commission (CFTC), said markets that are supposed to allow individuals and companies to hedge their needs in a commodity like oil have been turned into “gambling casinos.” He said speculators were regulated in this country for 78 years, from 1922 to 2000. At that point, CFTC “modernization” legislation passed Congress and contained what is now referred to as the “Enron Loophole”. (Enron - who believed it could make more money bidding up energy in the futures market than by creating and selling energy.) This loophole allows speculators to take over energy markets.
George Soros, chairman of Soros Fund Management, said speculators should play a role in markets but that they shouldn’t control markets. If speculators are over involved, markets tip. Soros said it could be done with oil, even though it is a big market, but would be easier to do with agriculture futures.
Mark Cooper of the Consumer Federation of America said OPEC manipulation tacks on $40 to the price of oil, while rampant speculation tacks on an additional $40. Meanwhile, we’re all paying higher gas prices and small businesses are struggling to survive because they can’t hedge their needs
Greenberger said adding one word (“energy”) in two places in the CFTC legislation would control speculators. That and some other simple fixes would cause oil prices would drop 25 percent "overnight." He said the attempted fix in the Farm Bill won’t do it.
The testimony by these individuals and others, delivered in a replay last night by C-SPAN, was fascinating. Read their submitted comments or view the video here.
Read articles about the hearing here and here.
Oh…and here’s some interesting tidbits: A big player in the oil markets is the Intercontinental Exchange (ICE) based in Atlanta, who owns the International Petroleum Exchange in London. ICE was founded by Goldman Sachs, Morgan Stanley and British Petroleum and is unregulated because it is considered a foreign exchange. So if Goldman Sachs has a net long position in oil and it trades oil through ICE, who benefits when Goldman Sachs comes out and says oil could hit $200 per barrel?
And guess who is setting up an exchange in Dubai - with Dubai partners? NYMEX - the New York Mercantile Exchange. And what will they trade? Oil. Will it be regulated? Not by CFTC.
June 3, 2008
The story of Nebraska's cattle industry began more than a century ago, and "Beef State" weaves together "historical background and human determination into a fascinating saga that takes viewers on a panoramic sweep through a century of American history." It follows the fist cattle drives into the state, traces the impact of the industry over the last century and continues with the evolution of the modern ranch. Along the way stories are told about the growth of the beef industry through two world wars, the incredible blizzards of 1948-49 and the rise and fall of the Omaha Stockyards.
Did you know that in the 1950s and '60s, Nebraska's license plates carried the nickname "The Beef State"?
To learn more, watch program and view additional images and videos, visit NET's Beef State website by clicking here.
Funding for "Beef State" was provided by the Nebraska Beef Council, the Nebraska Cattlemen Association, Farmers Mutual of Nebraska, the Nebraska Corn Board and the Nebraska Farm Bureau Federation.
June 2, 2008
It is safe to say that some biofuel bashing will take place, and much will likely be pointed at ethanol. Corn ethanol, to be exact. FAO's pre-meeting documents cover U.S. biofuel and ethanol policy. In fact, parts of a "key policy document" reads much like the talking points the Grocery Manufacturers Association (GMA) used in it's press call a couple of weeks ago. Mentioned specifically, among other things, is the ethanol blender tax credit.
Could it be that GMA and the Grocery Gang - and it's PR firm Glover Park - had some input? The Illinois Corn Growers think so anyway, as they state that Glover Park and GMA has visited numerous foreign embassies and food groups several weeks ago.
Since at least one UN official considers corn ethanol a "crime against humanity", it's safe to say some anti-ethanol sound bites will come from the invitation-only meeting this week.
On an interesting note, FAO reports that trade policies by some countries can exacerbate price instability on world markets. I imagine they are referring to some countries halting exports. Then after a line saying biofuels policies may need to re-examined, here's the conclusion:
“This is a unique moment in history: for the first time in 25 years, a fundamental incentive - high food commodity prices - is in place for stimulating the agricultural sector,” Jacques Diouf said. “Governments, supported by their international partners, must now undertake the necessary public investment and provide a favourable environment for private investments, while at the same time ensuring that the most vulnerable are protected from hunger.”
In other words, high prices will stimulate investment and production. Just like they are supposed to. In the mean time, we need to take care of the hungry, which the United States does like no other country in the world -- footing half (or more) of the world food aid bill.