Friday 27th January 2012

Resolutions

Commentary.  Did you make any New Year’s resolutions? I read somewhere recently that about 45% of us (adults in this country) make at least one resolution each year.

As you might expect, those resolutions more often than not deal with such feats as smoking cessation, weight loss and exercise.

Money management is another popular resolution. In these times, for many, reducing debt is not just an option, it is necessary.

Other popular resolutions focus on getting organized, spending more quality time with friends and family, and simply finding more enjoyment in life.

Making the resolution is the easy part – at least for those of us who admit to being flawed individuals. It is the journey to achievement that is so very difficult. Although, according to my own privately conducted survey, less than half of us will actually stick to our resolutions, it makes most of us feel good to draw out that roadmap to perfection. Many people believe making resolutions is a big waste of time. Why change something unless you are forced to change?

I am a list-maker and a goal-setter so the resolution thing makes a great deal of sense to me. Unfortunately, I am not very good at determining just exactly what my resolutions should be. Like almost everyone else I know, I’ve pledged to lose weight and exercise – both successfully and unsuccessfully, depending upon which year you are inquiring about.

All in all, I think New Year’s resolutions are a good idea. The only thing that would make New Year’s resolutions better would be if we could make them for other people. For example:

The public would resolve not to give celebrities and politicians so much attention for their trips to rehab and for their criminal and stupid behavior.

Television stations would resolve to keep the volume on the commercials they air at the same level as the programming they air.

Cell phone owners would resolve to keep their cell phones turned off or on “vibrate” when in a public place such as a restaurant, movie theatre or church.

Cell phone owners who communicate via text message would put down that silly phone long enough to actually make eye contact with the person with whom they are conversing face-to-face.

Cell phone owners who communicate via text message would stop texting at the dinner table, while driving and while in church. There is something inherently wrong with a person who sends text messages during the Sunday morning sermon.

Oil companies would resolve to lower fuel prices in 2011.

Everyone would resolve to say “please” and “thank you” and practice at least some very basic manners.

Everyone would laugh more frequently, work harder when necessary, and spend more time getting to know their neighbors.

Parents everywhere would stop letting their 6- and 7-year old children determine when, where and what to eat for dinner. The word is “no.” Learn to use it!

No matter what resolution you make – and potentially break in 2011 – I hope you will make an effort to call an old friend, take a walk with your granddaughter, and listen to the rain.

audio

$115 million in damage to Florida crops..so far

While the southeastern United States deals with another round of cold weather this week, assessments of damage done by the last cold snap are coming in. The Florida Department of Agriculture says through December 20th, cold weather did $115 million in damage to crops. The department says the cucumber crop has been wiped out, eggplant, snap beans and peppers were nearly wiped out while cabbage, sweet corn and squash all suffered heavy losses. The state has raised load limits on roads in an effort to help farmers get ripe crops off and to the processor.

Fortunately, it looks like the citrus crop has not been hurt….so far. Temperatures have dropped below the freezing mark the last two nights; Sarah Crizer with the Florida Department of Agriculture says the fruit is more vulnerable the second night in a row but only time will tell if there has been any damage. Orange juice futures have been climbing this week.

AUDIO: Criser talks about the situation 2:37 mp3

Fertilizer stocks following commodities

Rising commodity prices are pulling fertilizer companies with them. The stock price of Potash Corporation of Saskatchewan rose 5.1 percent to $152.07 on the New York Stock Exchange on Wednesday, the biggest one-day gain for the stock since August 17th when the company rejected a buyout offer from BHP Billiton. But this jump is being credited to higher corn and soybean prices as both commodities hit 28-month highs on the Chicago Board of Trade this week. Bloomberg notes the world’s largest phosphate company; Mosaic saw its share price increase 4.7 percent to $74.80 on Wednesday.

Potash Corp stock has gained 40 percent this year.

Potential increase of Missouri’s net farm income in 2011

The University of Missouri’s Food and Ag Policy Research Institute (FAPRI) says Missouri net farm income could increase in 2011 to help the state’s economic recovery. FAPRI’s Scott Brown is optimistic about the 2011 economic year.

“It’s certainly a situation where Missouri farm income could exceed three billion dollars in 2011 and potentially break an all-time record.” 

FAPRI predicts planted areas for row crops will increase to a total of about 14 million acres in 2011. That’s only happened twice in the last 25 years. 

 Although crops are expected to recover, Brown says producers need to be aware that high feed prices could constrain the growth of the livestock sector and prices paid for meat will increase.

 “Certainly the dairy industry prices have been slow to recover, both to Missouri as well as the rest of the country. We have seen some better times for hog producers in 2010. We hope that we’ll carry some of that into 2011, but just as we talk about higher crop prices we are talking about higher feed costs.”

He gives some advice to farmers for 2011.

 “Producers need to develop marketing plans that try to minimize volatility as best they can, which is not an easy task to accomplish, but very important for those producers that want to remain viable for the long-term.

FAPRI also predicts producers will see prices offset high input costs as foreign growth expands.

New Soy Transportation Council officers

The top officers elected to the Soybean Transportation Coalition are from Iowa, Ohio and Kansas. Ed Ulch of Solon, Iowa – who is the vice chair of the National Biodiesel Board and is a member of the Iowa Soybean Board – has been elected coalition chairman. Patric Knouff of Minster, Ohio has been elected vice chair. Knouff is a member of the Ohio Soybean council board and is active in Ohio Farm Bureau.

Jerry Wyse of Haven, Kansas has been elected secretary/treasurer.

The Soybean Transportation Coalition, formed in 2007, is made up of nine state soybean boards, the ASA and the USB and supports and encourages a “cost-effective, reliable, and competitive” transportation system.

Could this be a “low” for butter?

Cash cheese prices nudged a penny higher on the Chicago Mercantile Exchange on Wednesday. A busy day with 8 loads of barrels and 12 loads of blocks sold but a couple of unfilled bids set the market at $1.33 each. Class III futures responded accordingly with 2011 contracts gaining from 4 to 24 cents.

The cheese market is described as “unsettled”. Dairy Market News reports that even though cash cheese prices gained a penny on Wednesday, plants have plenty of milk to use while schools are shut down, demand is soft and inventories are building. Cheese production will slow down over the long holiday weekend.

Butter is quite a different story, the price has held at $1.6525 for the last eight trading sessions. That compares to $1.3275 a year ago and $1.14 in 2008. Dairy Market News notes this is the highest butter price at this time of year in the past 25 years. Domestic butter demand has been soft this week but there are indications export demand will be strong in 2011, in fact some are speculating this $1.6525 may be the low for the year. Remember, the USDA  Cold Storage Report last week  had 70 million pounds of butter in storage as of the end of November, less than half what they were a year ago. Only 11.1 million pounds in CME approved warehouses last week, the lowest yearend total since 2000.

Cattle, hog futures supported by cash trade

Chicago Mercantile Exchange live cattle futures were higher on the weak dollar and improving cash and wholesale demand. Boxed beef at midday was sharply higher and closed sharply higher as well. Also, according to Dow Jones Newswires, there was talk on the floor about reduced slaughter rates early next month. December was $.87 higher at $106.32 and February was up $.45 at $108.25.

Feeders were steady to modestly higher following the live pit. January was $.15 higher at $120.85 and March was up $.62 at $124.07.

There was active trade in most of the major areas at $106 to $107 Live and $167 to 1$70 Dressed. On the live basis, that’s up $3 to $4 from most of last week’s activity while on the dressed trade, it’s an increase of $5 to $7. Still, there is probably some business yet to be done. Boxed beef cutout values were sharply higher on moderate to good demand and light to moderate offerings with Choice up $1.55 at $162.82 and Select $1.67 at $156.44. The estimated slaughter of $130,000 head was down 1,000 from a week ago but up 3,000 from a year ago.

Hogs were higher on the steady to sharply higher cash and weak dollar. Overall, trade volume was pretty light as the markets get ready for a shortened trading day Friday. February was up $.97 at $79.60 and April was $.85 higher at $83.35.

Bellies were unchanged in relatively quiet trade with February settling at $106.25.

Cash hog trade continued strong on solid pre-holiday packer demand. The Eastern Cornbelt was up $.78 with a weighted average of $69.75, the Western Belt was $3.90 higher at $73.22 and Iowa/Southern Minnesota was up $4.01 at $73.50. Butcher hogs at the terminals were steady to $1 higher with tops at $45.50 to $48 and Missouri Direct butcher trade was steady to $1 higher at $62 to $66. The average Iowa/Southern Minnesota barrow and gilt weight for the week ending December 25 was 274.3 pounds, compared to 273.8 the previous week and 267.5 a year ago. The pork carcass cutout value was up $.09 at $76.81 in slow trade with light demand and light to moderate offerings. The estimated slaughter of 426,000 head was down 3,000 on the week and 5,000 on the year.

Soybeans see modest profit taking

Soybeans were lower on profit taking after several straight higher or mostly higher sessions. Contracts were due for a bit of a correction after the recent gains. Losses were limited by hot, dry weather in Argentina, some dry conditions in Brazil and the strong supply and demand fundamentals with China buying 120,000 tons of 2011/12 U.S. beans ahead of the open. According to Dow Jones Newswires, Michael Cordonnier, President of Corn and Soybean Advisor, lowered his Argentine projection by 1 million tons to 48 million. USDA sees Argentina’s 2010/11 crop at 52 million tons. Soybean meal and oil were lower on profit taking but losses were limited by good demand and the supply implications of South American crop loss. USDA’s weekly export sales report is out Thursday at 7:30 AM Central. Soybeans are pegged at 900,000 to 1.3 million tons, meal is seen at 175,000 to 225,000 tons and oil is placed at 20,000 to 50,000 tons.

Corn was mostly firm, hitting new 29-month highs on commercial and technical buying. Contracts settled in positive territory for the tenth consecutive session. Argentina’s weather is also a concern for corn with an increasing portion of the crop in the key pollination phase. Ahead of the open, Mexico bought 120,000 tons of U.S. corn for delivery during the current marketing year. Demand, especially from the ethanol side, continues to look strong over the near term. USDA’s next set of supply and demand estimates is out January 12. Ethanol was mixed. Weekly corn sales are expected to be between 750,000 and 1.05 million tons.

The wheat complex was mostly lower. Chicago was mostly firm and hit a new two year high on world crop weather worries from the past several months as traders remain concerned about the global feed wheat supply. Kansas City and Minneapolis were down modestly on profit taking. Losses were limited by solid demand projections for wheat in general and weather worries with only light precipitation in the forecast for the dry Southern U.S. Plains. Russian weather forecaster HydroMetCenter reports recent freezing rain didn’t do much damage to crops in central Russia, adding roughly 60% is in good condition. Weekly U.S. wheat sales are projected at 450,000 to 640,000 tons.

Vilsack and the 2012 Farm Bill

During a recent appearance on the Iowa Public Television program Iowa Press, Ag Secretary Tom Vilsack was asked for his thoughts on formulation of the next farm bill.

“I’ve had a chance to visit Chairman Lucas, the incoming chairman of the house ag committee, and I think he is going to take some time to establish his chairmanship, establish his staff and he sees the debate discussion about the farm bill not taking place until probably 2012, so we have probably a year or so to talk about this.”

 Vilsack points out that, when it comes to the farm bill, there are a number of competing interests.

 “We have to have a strong safety net. Secondly we’ve got to structure it in a way that doesn’t get us in trouble with the the WTO and our global trade responsibilities. And finally, it has to be done in a way that gets the support of people who may not be fully understanding of what happens on the farm. Those rural and suburan legislatures who are now coming into Congress in increasing numbers.”

Which means, Vilsack says, that USDA’s food assistance programs will play an even bigger role the discussion.

“That’s one of the reasons why you see a Farm Bill discussion linked to nutrition. Food safety and the SNAP program, the Supplemental Nutrition Assistance Program, and the school lunch program is a way of gathering enough support for farmers and for the safety net. So, it’s an extraordinary balance.”

The other major factor in the farm bill debate will be deficit reduction.

“We’re going to have a debating conversation about this, there’s no question about it. The deficit reduction commission has proposed reductions. We have already taken steps-this is very important to emphasize-we have already reduced the deficit by four billion dollars with steps we took at USDA in reforming our crop insurance program, which is part of the safety net, so we have already started that process.”

Vilsack calls it “our patriotic responsibility” to figure how to do a better job with less resources.

Closing Grain and Livestock Futures: December 29, 2010

March corn closed at $6.24, up 3/4 cent
January soybeans closed at $13.66, down 9 and 3/4 cents
January soybean meal closed at $365.70, down $2.90
January soybean oil closed at 56.38, down 44 points
March wheat closed at $7.99 and 1/4, up 1 cent
December live cattle closed at $106.32, up 87 cents
February lean hogs closed at $79.60, up 97 cents
February crude oil closed at $91.12, down 37 cents
March cotton closed at 140.43, down 392 points
January Class III milk closed at $13.25, up 15 cents
Dow Jones Industrial Average: 11,585.38, up 9.84 points