Friday, April 25, 2008
Ethanol and biofuels in general have taken a lot of heat lately for the presumptive cause of food price increases. Many want to reconsider the nation’s focus and support for these alternative fuels, including criticism of members of Congress who supported biofuel legislation.
Whatever else one may criticize about corn ethanol, or biofuels in general, they are not the primary cause of recent food price increases.
Consider the fact that growers planted 24 percent more corn in 2007, which more than supplied all the corn that went into ethanol for the year.
One could, therefore, totally remove corn ethanol from the equation and most of the present food price issues still would be present because there are many more factors at play with food prices here and abroad.
The impact of farm gate commodity prices on final retail prices is dampened by the fact that 80 percent of the retail grocery cost is added after the food leaves the farm.
A standard box of cornflakes contains approximately 10 ounces of corn. Even when corn is priced at $4 per bushel, a box of cornflakes contains less than a nickel’s worth of corn.
A can of soda contains less than 2 cents worth of corn sweetener.
Further, the U.S. exported record amounts of corn in 2007, smashing the argument that the U.S. is “starving the world.”
There is no shortage of corn. Greater competition for it, yes, leading to higher prices for corn — but no shortage.
Indeed, livestock producers have been affected by higher feed costs, but those costs don’t get passed through directly to the consumer; it’s felt harder and longer on the farm before it reaches retail.
Additional factors affecting food prices include:
1. Low worldwide wheat prices the past several years have led growers everywhere to plant less wheat, which led to record-low wheat stocks, causing wheat prices to soar.
2. Regional pests, diseases and other natural disasters all impacted fresh produce availability and price.
3. Increases in labor costs, as state and federal minimum wages ratchet up — from farm to processing and the restaurant — affect food prices.
4. Rising fuel costs, over $100 per barrel, make it more expensive to grow, process, refrigerate, and transport food from the producers to stores and restaurants.
5. Personal choices — for example, organic milk costs nearly double conventional milk. Consumers are choosing to pay higher prices based on preferences.
6. Dollar decline makes food imports more expensive at the store and creates greater demand for U.S. agricultural exports. Approximately 30 percent of fruits and vegetables consumed in the U.S. are imported.
7. Corporate profits can be an excuse to hike prices. Kroger: fourth-quarter 2007 sales up 10 percent and profits up 18 percent. Safeway: sales up 3 percent, profits up 12 percent.
There isn’t a single study that has sorted out all these factors on total food price increases. However, given available data, I calculate the 4 percent to 5 percent increases in food prices during the last year can be broken down as follows:
0.2 percent to 0.3 percent due to ethanol use of corn
0.8 percent to 1 percent due to gasoline/fuel price increases
3.5 percent to 4 percent due to other causes
There also are regional differences in food prices, and the impact was more significant in the eastern U.S. than other regions, rising nearly 8 percent, while in Oregon the food price CPI for 2007 was 3.4 percent. (U.S. Bureau of Labor Statistics).
For perspective, between 2001 and 2007, while food prices (national average) rose 11 percent over a six-year period (barely more than 2 percent per year), the average price of a home increased 36 percent; a gallon of gas increase 96 percent; and the price of coffee rose 363 percent.
Hard to blame that on ethanol, but I suppose some will try.
Brent Searle grew up on a farm outside of Idaho Falls and has worked in agriculture his entire life; he is a special assistant to the director of the Oregon Department of Agriculture, where he has worked for the past 17 years. He lives in McMinnville.
Thursday, April 24, 2008
Unsettled and cold weather across Idaho has slowed the greenup on the range. Paul Nettleton of Murphy says they're still feeding their cattle hay. Owyhee ranchers like Nettleton say driving cattle to the spring range is still weeks away.
Futures Market Situation and Outlook from Chicago:
April live cattle settled at $90.82 a gain of $.80, June live cattle settled at $92.10 a gain of $.15, and the August live cattle settled at $98.00 a gain of $.20. In the feeder cattle pit, April feeder cattle settled at $101.70 a gain of $.15, May feeder cattle settled at $106.07 a gain of $.05, and the August feeder cattle settled at $109.07 a loss of $.02. The reported CME feeder cattle index for 4/21/08 was $101.10 a gain of $.62.
Wednesday, April 23, 2008
WASHINGTON--Gulf Ethanol Corp. has indicated that it will no longer use food-based crops to produce biofuels.
Instead, the company will use feedstock such as sorghum, switchgrass and other non-food biomass. "We won't burn your food," President J.T. Cloud said. "The answer to rising fuel prices is not to run away from alternative energy production. It is to move rapidly toward the use of non-food feedstocks that are abundant and cheap."
Tuesday, April 22, 2008
House and Senate negotiators are meeting today and if they reach an agreement on the bill they could codify the agreement in a few weeks according to the House Agriculture Committee.
Congress extended the current farm bill until Friday.
Lawmakers on Capitol Hill are in a stalemate over a five year farm bill that will determine crop and commodity programs along with federal price guarantees.
But time is running out for farmers because many crops about to be planted are partially supported by the Farm Bill.
“Some of our farmers are stuck in a waiting mode because some of their funding comes from the farm bill; it's tough for them to go to the bank not knowing how much to borrow,” said Idaho Farm Bureau President Frank Priestley.
It all boils down to two key issues that the House and Senate must wrestle with: one is if the final bill will include tax cuts and how much. The other issue centers around how much money will lawmakers set aside for a permanent disaster relief fund.
Monday, April 21, 2008
“This agreement with Korea has been a long time coming,” said AFBF President Bob Stallman. “Farm Bureau has been steadfast in its support for fully reopening foreign markets for U.S. beef in compliance with OIE standards. It is important that all ranchers are able to ship their beef based on sound and predictable rules.”
Korea was one of U.S. beef’s top export markets before being closed to the United States in 2003 due to a case of bovine spongiform encephalopathy (BSE). Beef exports to Korea prior to the market closure were valued at more than $772 million.
“It is now time for other countries that have continuing restrictions against U.S.-produced beef to act in conformity with the OIE standards,” noted Stallman.
Further said Stallman, “Now that this obstacle with Korea has been overcome, AFBF urges swift congressional passage of the Korea free trade agreement.”
AFBF estimates the FTA will increase U.S. agricultural exports to Korea by $1.5 billion per year after full implementation.
Friday, April 18, 2008
The new Washington Country President brings a wealth of knowledge to the job. Chandler has ranched and farmed most of his life and currently runs 1,000 head of sheep with a few head of cattle and horses mixed in. The Chandler's have been lifelong members of Farm Bureau.
“Brad Roberts asked if I could get more involved this last fall. I went over to the yearly convention in December and Brad asked if I would consider being the President for the county after that. I hope that I'll be able to represent the Washington County well,” said Chandler.
Thursday, April 17, 2008
Wednesday, April 16, 2008
In comments submitted today to the Department of Labor, AFBF recommended a number of revisions to the H2A program to help alleviate a serious shortage in the number of available agricultural workers. AFBF encouraged DOL’s efforts to move toward a market-based wage in the H2A program and said the existing method for setting wages has “outlived its usefulness.”
The H2A program currently mandates an “adverse effect wage rate” that forces growers to pay wages higher than the market – on top of housing and transportation costs, according to AFBF. In some cases, those requirements make the program impossible to use from an economic standpoint.
“Growers have been clamoring for years for a more sensible, market-based wage,” said AFBF President Bob Stallman. “We are hopeful the Labor Department can implement this reform in an open, transparent manner that makes it easier for farmers and ranchers to use the program.”
Other reforms AFBF supported in its comments were: eliminating the 50 percent rule regarding domestic recruitment; providing a housing voucher for program users; and including packing and processing employees, as well as the dairy sector, as part of the program.
Farm Bureau also asked the department to change some of its proposals. AFBF said the 120-day recruitment requirement was far too long and should be cut to no more than 60 days. AFBF also called for fundamental due-process reforms in the department’s proposed debarment process, and it strongly urged the department to scale back the enormous increase in fees it was proposing for program participants.
In comments to a companion rule proposed by the Department of Homeland Security, AFBF urged DHS not to change its existing treatment of sheepherders and how it treats them under its visa provisions.
Tuesday, April 15, 2008
Did you know?...
In 2007 there more than 206,000 horses in Idaho.
In the year 2005 the Northern region had 21% of all equine, Southwestern region 28%, South-central region 23%, and the Southeastern region had 28%.
Primary use of horses in Idaho: 40% Pleasure, 13% Breeding, 12% Farm and Ranch, 11% Packing. Proportion of Horses by Breed: 53.3% American Quarterhorses, 13.9 % Paints, 6.3% Arabian, 5.2% Appaloosa, 4.2% Thoroughbred Percentage of Different Types of Equine in Idaho: 81% Riding Horses, 5% Ponies, 3% Race Horses, 3 % Mules 2% Donkeys,1% Wild Horses, 1% Draft Horses The world's first cloned equine, the mule Idaho Gem, was born at the University of Idaho in 2003.
The Appaloosa horse, which is named after the Palouse River in northern Idaho, is the state horse of Idaho.
Monday, April 14, 2008
BOISE--While Southern Idaho Reservoirs won’t reach full capacity levels this summer, there should be more than enough water for farmers, boaters and endangered species.
Hal Anderson, chairman of the Idaho Water Supply Committee predicted a quiet year on the water front. "After being not a boring year last year, I'll take boring."
After the curtailment calls, a persistent drought, record high temperatures, and severe water shortages in 2007, Anderson said he’ll welcome a slow year with open arms.
Friday, April 11, 2008
MINNEAPOLIS--Archer Daniels Midland is suing the Union Pacific Railroad along with four other railroad giants, in a federal lawsuit filed in Minnesota. The Ag giant is accusing the companies of conspiring to fix rail fuel surcharges.
The lawsuit was brought by agricultural product processing company Archer Daniels Midland Co., based in Decatur, Ill. Archer ADM says that the company has payed out more than $250 million to the railroad companies since 2003 because of the alleged conspiracy.
Railroads impose rail fuel surcharges on shippers for transportation services. The fees help railroads hedge unexpected spikes in fuel prices.
The ADM lawsuit alleges that the five big railroad companies fixed the prices so they wouldn't have to compete with one another and kept the surcharges artificially high.
Similar lawsuits have been filed in other jurisdictions.
BOISE--Idaho received above normal precipitation in March, which has helped to maintain snow packs in most areas of the state to near or above normal. However, some southern Idaho reservoirs may not completely fill depending on the weather this spring and the early season demand for irrigation.
Members of the Idaho Water Supply Committee will meet today at the Idaho Water Center to review the latest data and formulate a comprehensive water picture for the 2008 growing season.
The annual mid-April meeting is one of the most important water supply meetings during the water year. April 1 traditionally marks the end of the winter mountain snow pack accumulation period. Between April 1 and April 15 stream flow forecasts are refined and growing season water supplies are assessed.
Although the threat of spring flooding has deceased, there is still the possibility of flooding in North Idaho and in the Weiser River basin. Information will also be provided at the meeting concerning possible spring time flooding.
The Idaho Water Supply Committee includes water managers and hydrology experts from both the private and public sectors.
Wednesday, April 9, 2008
Global Warming gets the Cold Freeze
Global warming hoax exposed by record global cold
by F. William Engdahl
The media and governmental hype over a danger from global warming that already is allegedly causing the polar icecaps to melt and threaten a global climate catastrophe, looks more and more like the political hype it is. This year to date, snow cover over North America and much of Siberia, Mongolia and China is greater than at any time since 1966.
According to the US National Climatic Data Center (NCDC) many American cities and towns have suffered record cold temperatures in January and early February. According to the NCDC, the average temperature in January "was - 0.3 F cooler than the 1901-2000 average."
China is surviving its most brutal winter in one hundred years. Temperatures in the normally mild south were low for so long that some middle-sized cities went weeks without electricity because once power lines had toppled it was too cold or too icy to repair them.
There have been so many snow and ice storms in Ontario and Quebec in the past two months that the real estate market has been hurt as home buyers have stayed home. In just the first two weeks of February, Toronto received 70 cm of snow, breaking the record of 66.6 cm for the entire month set back in 1950.
Arctic Ice Melt has Reversed
One of the most dramatic results of the record cold over much of the planet is the reversal of the much-reported melt of the icebergs in the Arctic Ocean. Last autumn the world was alarmed to hear from certain climatologists that the ice in the Arctic had melted to its "lowest levels on record.” What was carefully omitted from those scare stories was the fact that those records only date back as far as 1972, and that there is anthropological and geological evidence of much greater melts in the past.
Now, as a result of the recent record cold weather, the ice is back. According to Gilles Langis, a senior forecaster with the Canadian Ice Service in Ottawa, the Arctic winter has been so severe the ice has not only recovered, it is actually 10 to 20 cm thicker in many places than at this time last year.
What few people know and what the Global Warming lobby seems at pains to keep known is the fact that there is considerable seasonal variation in how much pack ice of the Arctic ice pack covers the Arctic Ocean. Much of the ocean is also covered in snow for about 10 months of the year. The maximum snow cover is in March or April — about 20 to 50 centimeters over the frozen ocean. The thickness is not one of the universal constants, never was.
Admit flawed Climate Model
There is also admission by several intellectually honest climatologists that their predictive models are flawed. Robert Toggweiler of the Geophysical Fluid Dynamics Laboratory at Princeton University and Joellen Russell, assistant professor of biogeochemical dynamics at the University of Arizona, two very prominent climate modellers, recently admitted that the computer models that show polar ice-melt cooling the oceans, stopping the circulation of warm equatorial water to northern latitudes and triggering another Ice Age (as in the fictional movie The Day After Tomorrow) are wrong. In a recent interview Russell said, “It's not ice melt, but rather wind circulation that drives ocean currents northward from the tropics. Climate models until now have not properly accounted for the wind's effects on ocean circulation, so researchers have compensated by over-emphasizing the role of man-made warming on polar ice melt.” Now that’s very interesting.
When professors Toggweiler and Russell reprogrammed their model to include the 40-year cycle of winds away from the equator, then back towards it again, the role of ocean currents bringing warm southern waters to the north was obvious in the recent Arctic warming.
Russian climatologists believe recent weather changes around the globe are results of solar activity and not man-made emissions. Oleg Sorokhtin, a fellow of the Russian Academy of Natural Sciences, calls the argument for man-made climate change "a drop in the bucket." His research shows that now the recent very active solar activity has entered an inactive phase. He advised people to "stock up on fur coats."
Kenneth Tapping of Canada’s National Research Council, who oversees a giant radio telescope focused on the sun, is convinced we are in for a long period of severely cold weather if sunspot activity does not pick up soon. The last time the sun was this inactive, Earth suffered the Little Ice Age that lasted about five centuries and ended in 1850. Crops failed through killer frosts and drought. Famine, plague and war were widespread. Harbours froze, so did rivers, and trade ceased.
The Global Warming Geopolitics
The recent Global Warming hysteria is in reality a geopolitical push by leading global elite circles to find a way to get the broader populations to willingly accept drastic cuts in their living standards, something that were it demanded without clear reason by politicians, would spark strikes and protest. The UN’s latest IPCC report on Global Warming calls for diverting a huge 12% of global GDP to “prevent the harmful effects of climate change.” The UN report, for example, estimated that its recommendations to reduce certain manmade emissions would cost about $2,750 per family per year in the price of energy.
Today there are two principal policy options of the Anglo-American power establishment to impose their further control over a world that is rapidly slipping out from under them. We might call them Plan A and Plan B for short.
The first, Plan A, was the option represented by Bush-Cheney and the big oil and military industrial complex behind them. Cheney and his close Houston friend, Matt Simmons, propagated the myth of Peak Oil to lull populations into accepting the inevitability of $100 a barrel or even higher oil prices. In the meantime, the relative strength of the Big Oil and the related US military establishment grew with higher oil prices.
Their global War on Terror provided a cover or pretext to justify military control over the major oil reserves and oil transit passages of the world. From Iraq to Afghanistan to Kosovo, the US and NATO agenda was aimed at future control of the extraordinary economic powers emerging from Russia to China to India to Brazil and Venezuela and beyond. Through China’s effective diplomacy in Africa, many African countries are on the brink of slipping out from under the US or British control into Chinese or more independent status.
If John McCain becomes the next choice of the US power elites to be President, that will signal that that military and oil agenda will escalate, especially as the USA sinks into a severe economic depression in coming months.
The second broad faction of maintaining their control over the greater part of the world economy, Plan B, sees Global Warming and “soft power” as embodied in the organs of the United Nations and IMF and World Bank as the more suitable vehicle to convince people to willingly accept drastic reduction in living standards.
Barack Obama, the apparent choice of the same elites as a “breath of change” to allow them to regroup after the debacle of the Bush-Cheney years, would likely opt for the second faction of the global elite—the Global Warming option to lowering general living standards, ‘Plan B’ of the Anglo-American establishment. In a recent campaign speech in Wallingford Pennsylvania, Mr. Obama replied to a question about Al Gore, the hero of Global Warming. As President, Obama said he would consider putting Al Gore in a Cabinet-level position—or higher. He stated, “I will make a commitment that Al Gore will be at the table and play a central part in us figuring out how we solve this problem. He's somebody I talk to on a regular basis. I'm already consulting with him in terms of these issues but climate change is real."
The two major global factions
Today there are two major factions within the Western political power establishment internationally. They cooperate and share broad elitist goals, but differ fundamentally on how to reach these goals. Foremost is their goal of sharply controlling global economic growth and population growth. The first faction is best described as the Rockefeller Faction. It has a global power base and is today best represented by the Bush family faction which got their start, as I document in my book, as hired hands for the powerful Rockefeller machine. The Rockefeller faction has for more than a century based its power and influence on control of oil and on use of the military to secure that control. It is personified in the man who is since 2001 de facto President in terms of decision-making—Dick Cheney. Cheney was former CEO of Halliburton Corp., which is both the world’s largest oilfield services company (now based in Dubai for tax reasons), and the world’s largest military base constructor.
The second faction might be called the Soft Power Faction. Their philosophy might be summed up that they think its “possible to kill more flies with honey than with vinegar.” Their preferred path to global population control and lowering of the growth rates in China and elsewhere is through promoting the fraud of global warming and imminent climate catastrophe. Al Gore is linked to this faction. So is British Prime Minister Gordon Brown. They see globalist institutions, especially the United Nations, as the best vehicle to advance their agenda of global austerity.
The Intergovernmental Panel on Climate Change (IPCC) was created by the United Nations Environment Programme. Its reports have been demonstrated to be fundamentally flawed in scientific methodology, yet they are aggressively being promoted as revealed truth by the powerful media behind this faction. Others in the circle include billionaire speculator George Soros, parts of the British Royal family and representatives of European “old money.”
With the meteorological evidence of their claims for global warming dissolving as the ice forms anew, it is not surprising that news of the Arctic refreeze and other contrary evidence to their doomsday thesis are kept from mainline international media.
F. William Engdahl is a Research Associate of the Center for Research on Globalization and author of the recently-released book, Seeds of Destruction: The Hidden Agenda of Genetic Manipulation (www.globalresearch.ca). He also author of ‘A Century of War: Anglo-American Oil Politics,’ Pluto Press Ltd. He may be contacted at his website, www.engdahl.oilgeopolitics.net.
Monday, April 7, 2008
Analyst Heather L. Jones of Capital Markets said growers are on track to produce just 200 million bushels of corn. She thinks that will tighten demand and force drastic changes, she told the Capitol Press there might not be enough corn to go around.
Winter wheat plantings are pegged at 46.8-million acres. Of that some 32.5-million acres are hard red winter, 10.7-million are soft red winter and 3.63-million are white winter. The USDA says spring wheat for 2008 is expected to top 14.3-million acres. Thirteen-point-six of those acres are hard red spring wheat.
Spring wheat planting was also forecast to climb 8 percent to 14.3 million acres. Together with winter wheat seeded last fall, all wheat seeded for harvest is projected at 63.8 million acres, an increase of 6 percent from 2007. That won’t be a record in 2008…the record stands at 88 million acres planted in 1981.A look at the markets explains the upsurge in wheat. The first of April saw the all-wheat price, at $11.70 per bushel, up $1.72 from February and $6.95 above the March 2007 price
Sunday, April 6, 2008
Friday, April 4, 2008
But understanding the “how” and “why” behind this trend is fairly complex. A booming ethanol industry that has contributed to higher corn prices seems to get a lion’s share of the blame. While ethanol production has decreased our nation’s dependence on foreign oil, it has also increased demand for corn, which in turn increased the price of corn and the other grains followed suit.
But in spite of the fact that about 15 percent of the U.S. corn crop is now being channeled through ethanol plants and that amount is expected to increase to 30 percent by 2010, the amount of corn available to support the U.S. food supply hasn’t changed. According to the USDA’s Economic Research Service, U.S. - produced corn typically accounts for 60 to 70 percent of world corn exports. And that percentage is dropping. In simpler terms, we produce a heck of a lot more corn than we can use here. We are not running out of corn but we are exporting less.
With regard to wheat, a drought in Australia, one of the world’s leading wheat exporting countries, the low value of the U.S. dollar in comparison to other world currencies, and the fact that consumers worldwide are currently consuming more wheat than is being produced are also factors that have increased demand for U.S. wheat, pushing prices to record highs and stocks lower than they have been in over 20 years.
Consumers should understand that if the price of grains had not changed in the past two years, food prices are likely to be close to where they are today anyway. And on top of that we would be in the midst of a farm crisis like never before. Here’s why: Energy costs including crude oil, diesel fuel, electricity and natural gas are up significantly. Natural gas is used to make fertilizer and fertilizer costs have doubled in the last three years.
Another important thing to remember about the agriculture sector, as history suggests, is that the bottom has been known to fall out of commodities markets overnight, and the energy sector won’t necessarily follow suit. If that scenario were to play out today, farmers would be stuck with impossibly high production costs and no hope to recoup those costs at harvest time.
To sum up this point, understand that the cost of everything used to produce and transport your bread, eggs, milk etc. to the store, has gone up a bunch in the last two years and if grain prices had not matched that increase, our farms would not be able to make ends meet today.
To further illustrate this point consider the fact that the cost of a 5-pound bag of flour has increased by 69 cents to $2.39, AFBF nationwide average, over the past six months, or up to a cost of about 48 cents per pound. Yet the cost of the wheat used to make that flour at today’s price is between six and seven cents per pound. Many other raw commodities compare similarly. For instance, the rough break even price to produce Idaho potatoes is six cents per pound, but the grocery store price typically ranges from 39 to 69 cents per pound. We are not insinuating that food retailers and manufacturers are gouging consumers; they have to make a profit to stay in business. The point we are trying to drive home is that packaging and transportation of food products requires materials and energy, and the cost of all of those things is up. Blaming ethanol for rising food prices is a simplistic way to look at a complex issue.
Thursday, April 3, 2008
It was slowed from the start by a downturn in the economy, declining state revenues, internal partisan strife not to mention harsh critism from Governor Butch Otter.
Speaker of the House Lawrence Denney had hoped to end the session by mid-March but the optimism faded after harsh disagreements over tax exemptions,transportation, and primary elections. Despite critism the body got a lot of state housekeeping work done.
The final hurdles to adjournment boiled down to an exemption on personal property tax on business equipment. The legislation exempts up to $100,000 of equipment for 88 percent of Idaho businesses at a cost of $17.8 million. Lawmakers prudently added a clause that called for the exemption when the state's general fund grows by 5 percent.
"If you don't know what this bill does at this point, you probably don't deserve to be re-elected," Senate Tax Committee Chairman Brent Hill, (R-Rexburg), said prior to voting. The Speaker then called on the bills sponsor, Rep. Jim Clark of Hayden Lake to open debate, Clark was so exhausted and spent, said only,"It's a good bill, should pass."
With the vote the legislature came to an end with some lawmakers like Rep. Margaret Henbest (D-Boise) giving a touching farewell speech after 6 terms.
Even though lawmakers were unable to raise all of the highway money, there were a number of road issues that did get solved. One involved GARVEE funding, which provided about $100 million for large road construction projects in the Treasure Valley.
On Tuesday the legislature sent a message to developers and addressed growth, passing a bill that forces developers to contribute to the infrastructure costs, making growth pay for itself.
With little fanfare the Legislature passed HB 428 which set up significant water legislation that will conduct in-depth scientific studies of our aquifers. The bill also develops comprehensive management plans for aquifers throughout the state.
Wednesday, April 2, 2008
Tuesday, April 1, 2008
BLACKFOOT--According to Time magazine the price of wheat has hit a record high on the world market reaching the $12-dollars a bushel mark. The sudden spike in wheat can be traced directly to record high crude oil prices which also hit the $100 per bbl. The sudden price hike for the basics like bread, corn, eggs and potatoes has been causing unrest in Saudi Arabia where inflation has topped 6.5%. That's lead to protests and even riots throughout the Middle East.