Farm And Ranch Country (Bill Graff)

One of the very first "cultivated" crops in North America.  Smoked by "native Americans" long before the "evil Europeans" came to the North American continent. One of the first trans-Atlantic trade commodities.  Smoked along with probably a little "wacky-tabacky" in many peace pipe.  Today scorned by many, thrown out by the government as a government backed farm program crop.  Actually a "buy-out" of the tobacco crop acreage base. Now Herman Cain has a "smokin add", and Senator Dick Durbin along with his fellow liberal democrat senators want to ban tobacco from major league baseball.  I know they say they just want it outlawed during the world series, but how many other liberal do-good laws have suffered "bracket creep"???????? I for one have always cautioned farm groups that doing away with "tobacco" in the farm program may come back to haunt us.  So will it? I guess the main question I have in an era of declining resources can a farm coalition stay together or will it all go down at once? I do not have faith that the right things economically will be done without "wasting" money on some type of feel good agricultural programs.

Farm Podcast Look at the markets from both a short term and long term view. November 9th crop report, yields will be key, but will anybody believe USDA anymore? European plan to deal with Greek debt.  Is Europe capable of coming up with a solution to its problems? Grain market had a tough end to last week, but will start this week off higher. Arab fall instead of an Arab spring? Will Argentina be an example of what the Progressive liberals want to do in this country? Long view of markets.  When will the grain market bull end?  Will hydraulic fracturing to get massive amounts of oil and natural gas out of the ground lower energy prices, raise the value of the dollar sky high, and make the US an energy exporter, end the bull run in commodity prices?  

I was listening to an economic talk radio show this weekend and are people really this uninformed about economics.  I know they live by pay check economic rules and do not even have a clue how to do a cash flow, budget, or simple tax planning.  They have never had to figure out how to stretch money coming in to cover the money going out. It is the same with these people "occupying wall street" if you listen to them being interviewed you just have a hard time believing these people live in the real world. Farmers and ranchers need to be aware of this level of economic education of the "masses" because these are the people voting for the politicians who have too much control over what we do and how we do it.

Podcast on harvest, market comments, political scene

Ugly,ugly week in the markets.  USDA stocks in all positions report really sent the grain markets down.  Is Columbus Day holiday weekend going to be the fall low? Stock market had worst quarter since 2008.  Can Europe get its act together? USDA report and crop insurance fall price implications. Silver,gold, stocks, all commodities really, interest rates, all down.  US Dollar up?  What about the value of the dollar.  Nothing else left to turn to. So where to from here?

Farm Policy, Farm Politics, or more precise how Farm Policy is made has changed.  I do not believe everyone involved in agriculture realizes this.  Just as free agency, then "moneyball" changed the business side of baseball.  The Progressive liberals "Chicago Way" of politics and the Tea Party are changing how Farm Policy will be made in the future.  This is not to say that the Agricultural Committees are still not important, just the the "free rein" that the Ag committees have had in the past to write policy will now have more outside influences that are indifferent or outright hostile to agriculture's needs. Obama's assault on crop insurance is one example.  Many Tea Party faithful are against any government spending not specified directly in the Constitution.  Many main stream agricultural "insiders" thinks this is on the fringe of politics, but look how successful the Tea Party has been in changing the debate in Washington.

Well, Europe finally rolled the world markets.  Stock markets around the world fell, not that I did not expect it, but still bad. Gold and silver as a safe haven?  Higher margin requirements requires more cash. Commodities - slower economy or sell anything to raise cash???  Higher margin requirements require more cash. Grains are down, higher US dollar, bad for exports. Is it deflation or inflation we are worried about, or is it both? Budget cuts, Farm policy, it is all related.  

ADAP - Agricultural Disaster Assistance Program is a farm bill proposal from the National Corn Growers.  ADAP is something of an improved version of the present ACRE program.  It also eliminates Direct Payments, Counter-Cyclical Payments, and the SURE disaster program. I go through a detailed over view of the proposal and compare it to not only ACRE, but how eliminating SURE and Direct payments play out.  I give my take on how the players in the farm bill debate will react. I commend the Corn Growers for getting out front and doing something.  I just worry under the current political climate how possible a farm bill is?  I also talk about the size of the cuts the super committee may tell agriculture it has to contribute to deficit reduction.  I also give my reasons why another round of cuts will happen in 2013. I also go into what I believe has to happen with the next farm bill.  And as a bonus feature I talk about Obama's latest farm policy proposals.  He guts crop insurance once again.  Almost like he does not want any private farm policy, just all of it administered by government workers.  His "farm policy" seems to come from the socialist wing of the Farmers Union.  He has shown once again he has no concern for commercial production agriculture.

USDA September crop report and market reaction to a slightly bullish report, and that reaction was down.  Public release of FSA data, should show up later as lower acreage.  Went over a few yield reports, drought updates, corn on corn yields way down from corn behind soybean yields.  Grains trading independent of "outside" markets. Farm Bill proposals from commodity groups and impact of super budget committee. Europe is a mess.  How this affects US markets.  What will Germany do, and is that the right thing to do?  Overall effect of low interest rates. Farmland still going up.  Where/when will it end?  Or does it end? What topics would you like to hear me cover in future podcasts?

Another "Big Food" industry guy wants cheap input prices.  Peter Brabeck-Letmathe chairman and former CEO of Nestle Corporation is against biofuels.  Surprise, surprise, maybe he just wants cheap commodities for inputs that will be made into Nestle products. I will argue that the "cheap food policy" that agriculture was under for years led to this current round of high prices.  Best cure for low prices is low prices and best cure for high prices are high prices. Some people in the world are spending 80% of their disposable income on food.  Well, this has been this way for 4 thousand years and probably 4 thousand years from now some people in the world will still be paying 80% of their disposable income on food.  Tribalism in Africa and central Asia has more to do with poverty there, then any biofuel production does. He also says the demand for meat multiplies the food "problem" by a factor of 10 is in my opinion is just an outright lie.  When you compare ranchland production to midwest corn production you will need 10 times the acres of land, but modern meat production is very efficient. He does get a couple of things right he supports GMOs and is not in favor of organic production.  Remember what my wife says about organic, over priced, over hyped, and over manured. He also is right in that the vast majority of people in the developed world would have no idea how to feed themselves if there was no food in grocery stores tomorrow. He is also wrong about raising the cost of water.  Raise the cost of water and you make more people in the world poorer when it comes to food availability and cost. I give examples how prices have gone up dramatically for many items in the last 40 years and commodity prices have not gone up as much. I also discuss how China is improving infrastructure around the world and the US and Europe are still spending too many dollars on things other than infrastructure.  While at times even calling what we spend as "investments" that are not really worth anything.

Tomorrow morning much anticipated September crop report.  Corn number between 12.3 and 12.7?  Grain futures were lower last week.  Frost/freeze next week?  Is everybody bullish corn?  Livestock is all drought corn prices right now. Many possible "black swan" events out there.  I think big one that is not on a whole lot of radars is Israel Turkey, Egypt problems.  Will Greece default.  They have to do something.  Everybody thinks that massive deflation is coming, I worry about hyper-inflation.  If that happens cash is useless.  Labor unions are hitting back hard against tea party and businesses.  Labor trouble at grain handling facility in Oregon. Farm groups want cheap undocumented farm labor.  I think this is a mistake at this time. Final thoughts on 911. Have you forgotten - I hope not. Red white and blue - anger will destroy you if held onto too long, but OK in the short run God Bless the USA - what more is there to say.

Sunday 9/04/11 Agricultural markets tended to the crazy side on Thursday and Friday.  Grains were down big time Thursday, but up big time Friday.  Last Friday or this Tuesday are two possible top days, at least a few timing people say so. I still look for the stock market to tank in September or October, I hope I am wrong, but does it feel like 1987 to you too? John Mauldin's newsletter talks about his thoughts on Gold ownership and speculates if we are headed for a recession. Third straight month in which inventories rose more than new orders.  Every time this has happened US goes into a recession.  Is it different this time? Grain markets rarely rally into harvest.  I am looking to sell some more corn Tuesday.  Judi has had a profitable trade by owning corn for a long time.  She bought it at $3.68.  She also bought silver at $16.  We like to buy and hold for awhile, or sell and stay that way for awhile.  Do not get married to a bad trade though. Be safe out there this fall.  Podcast next on the chairman of Nestle corp. comments on grain markets and fuel usage.

Links to people and organizations I mentioned in the podcast D.B. Marketing,Inc. ADM Investor Services Taloma Farmers Grain Thoughts from the frontline - John Mauldin Personal friends and/or business associates who I mentioned in no particular order Garry, Fred, Mark.  My wife Judi who is the second best thing to ever happen to me.  I will podcast sometime about the best thing.  And yes I am only the second best thing to happen to her. The bunch at Garry's office and I will not list everybody who has attended just some of the originals and regulars, Doug, Dave, Roger, Kevin, Joe, Steve, Jean, David,Jeff, Jerry of course (who else would keep Garry straight), and all the other semi regulars. All my banker friends who have given me some of the best advice I ever could hope for. Please leave a review in itunes of my show. (click "view in itunes") Thanks to one and all.

Please leave a review of my show in itunes (click "view in itunes") Prices as of 9:00 P.M. central time Sunday August 28th Dec. corn $7.72 Nov. soybeans $14.27 Dec. wheat $8.00 Oct. cattle $115.00 Sept. Gold $1814.20 Sept. silver $41.14 Wow!!!!! Cash corn only second time I have sold above $7.  Exports for grains bad, but lower dollar will help.  Drought causing cattle liquidation, but prices will be higher when drought ends.  Chicken sets are down.  Mentioned Pro Farmer crop tour. Stock market could go to 1/2 of its high.  Gold and silver high.  Interest rates very low, could 30 year home mortgage be at 3.98% ??????  Farmland very high, but commercial real estate and home prices especially not doing very well. Europe is a mess.  Swiss Franc very high in value, still good value in Canadian and Australian dollar.  Japan is a wreck financially.  Hyper-inflation could be our (world's) next problem. Mentioned John Mauldin and his book ENDGAME The end of the debt supercycle and how it changes everything. His weekly newsletter,Thoughts from the frontline.

  Please leave a review of my show in itunes. President Obama really does not understand what farmers and ranchers do.  His comments to a farmer's question about regulation sums it.  Call USDA and ask them was his answer. Comments from the Federal Motor Carriers Safety Administration Officials tell just how little they understand about agriculture.  Economic confidence index poll and how out of touch Washington DC is. How some University Professors that claim to be agricultural policy "experts" are 60 to 75 years out of touch.  "Balancing farmers rights versus society" is a comment by an "agricultural writer". Farmers do not understand how USDA really works.  Super committee political picks.  Is Vilsack clueless?  I kind of defend him.  Other odds and ends on "they do not understand what we (farmers/ranchers) do.