~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Oklahoma's latest farm and ranch news
Your Update from Ron Hays of RON for Tuesday January 22, 2008!A service of Farm Credit of East Central Oklahoma, American Farmers and Ranchers & Midwest Farm Shows
-- New President Plus the Pressure of a Free Trade Agreement with the US May Finally Be Providing Movement in Korean Beef Impasse.
-- The 2008 Feed Outlook for Cattle Producers- Look for Continuing Change!
-- FEAR!!!!!!! Will the Stock Market Crashing Knock Out the Supports in the Commodity Markets?
-- Should the Dollar Per Head Beef Checkoff Be Increased?
-- Will Volunteer Wheat Last Fall Mean More Wheat Streak Mosaic this Spring?
-- The Farmer's Share- pennies on the dollar.
-- Thanks to those who responded to our offer of a copy of the 2008 Oklahoma Almanack!
Here's your morning farm news headlines from the Director of Farm Programming for the Radio Oklahoma Network, Ron Hays. We are proud to welcome Farm Credit of East Central Oklahoma as a regular sponsor of our daily email update. Farm Credit of East Central Oklahoma has ten branch offices to serve your farm financing needs and is dedicated to being your first choice for farm credit. Check out their website for more information by clicking here!
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New President Plus the Pressure of a Free Trade Agreement with the US May Finally Be Providing Movement in Korean Beef Impasse.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~The Korea Herald newspaper is reporting that the Korean government may soon accept US beef under 30 months of age with bones as a first step to fully reopen the South Korean market to US beef- a major hurdle to having any hope of getting the FTA with the United States successfully through the US Congress this election year.
The Herald reports "President-elect Lee Myung-bak, who will be sworn in next month, supports the deal, which it is believed would reinvigorate the economy. In the first stage, the government in considering allowing previously unaccepted beef on the bone into the country, while keeping intact its restrictions on the age of cattle. "
"The Agriculture Ministry will expand the imports of beef, including beef on the bone from cattle of less than 30 months old, according to the ministry's report to the power transition team led by President-elect Lee Myung-bak. It added that the government could further permit the imports of cattle of all ages, on condition that the United States tightens its rules on the use of cattle feed containing animal parts, which is a suspected cause of BSE."
Of course, the question is will the US go along with any phased in process- as the Bush Administration has been very gung-ho on an all or nothing strategy of demanding countries like Korea and Japan embrace the OIE's determination that beef from the United States is safe as long as the Specified Risk materials are removed. We have a link to the Korea Herald article below- take a look!
Click here for the Korea Herald article on the Korean ideas to reopen their market to US beef.
The 2008 Feed Outlook for Cattle Producers- Look for Continuing Change!
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~In a piece written by OSU Extension Livestock Market Economist Dr. Derrell Peel, he calls 2007 as the start of major changes in the makeup of U.S. agriculture. Dr. Peel writes "Prices for all major U.S. grains and oilseeds will average 50 to 100 percent higher in the 2007/2008 crop year compared to just two years ago. Prices for energy and protein feeds, as well as forage crops, will generally be higher than producers have been accustomed to in recent years. Although all feed prices are expected to be higher, there will be relative feed bargains for producers in various regions and at various times. The beef cattle industry as a whole responds to higher feed costs by modifying production systems to take advantage of the feeding flexibility that goes with ruminant animal production. The industry will see changes in market incentives that will generally favor forage-based production and reduced use of concentrate feeds.
2008 will be a continuation of a massive series of impacts that will reverberate through agricultural markets for several years. 2007 was just the beginning! The sharp rise in corn prices in late 2006 prompted a 20 percent jump in corn plantings in 2007. That acreage increase, combined with good yields, resulted in a record corn crop of about 13.1 billion bushels. Ethanol demand for corn in 2007/2008 crop year, at 3.2 billion bushels, is roughly 50 percent higher than the previous crop year and almost twice the amount of corn used for ethanol just two years ago. This rapidly growing corn demand for industrial use, combined with slight increases in corn used for feed and exports, results in a projected total corn use for the 2007/2008 crop year of nearly 13 billion bushels. Because of excellent production in 2007, corn inventories at the end of this crop year are projected at 1.4 billion bushels. For many years, this level of ending stocks would be sufficient to allow corn prices to drop significantly but that is not the case this year."
Dr. Peel adds that there is no relief when it comes to feed grain prices in sight, which means that high feed grain prices may force some changes in feeding patterns. "High grain prices are an incentive for the cattle industry to use less grain and more forage to the extent possible. The primary means for the beef cattle industry to use less grain is to place cattle into feedlots at bigger weights, which means that feeder cattle must be grown longer as stocker cattle and thus represents an increased demand for forage. These same conditions may also be an incentive for cow-calf producers to retain calves to bigger weights through the stocker phase. Cattle producers must be aware of changing market conditions for both feed and cattle and be prepared to consider a wider range of production alternatives. It is not business as usual for the foreseeable future and while there are significant challenges and potential threats, there are also new opportunities in the current situation. It is imperative to remain vigilant and to be prepared to adjust to a very dynamic feed market environment."
FEAR!!!!!!! Will the Stock Market Crashing Knock Out the Supports in the Commodity Markets?
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~As we write this on a an early Tuesday morning- we are expecting the US stock market to follow the lead of the Asian and European markets and perhaps have their worst day since 9/11. Asian markets have tumbled more than 8% in some cases, as they fear a recession in the United States from our subprime debacle.
The agricultural markets are not immune to this, as we have seen European ag futures falling sharply earlier this morning because of concerns that the stock market woes will impact ag commodities.
As of 5:45 am, the overnight electronic trade in Chicago has come off of the limit down positions that we saw in corn futures earlier in the morning- but the nearby corn futures are still down by 16 and 3/4 cents. Kansas City Hard Wheat futures, after closing above $10 a bushel last Friday before the MLK Holiday, are down hard in the electronic trade with the March delivery off 28 cents to $9.83 and the July New Crop futures off 23 cents to $9.43 and 1/2.
Soybeans have also come off the lows of the morning with the March
delivery up 16 cents from its lowest point of the electronic trading of
the morning- now sitting at $12.30- down 33 cents from last
Should the Dollar Per Head Beef Checkoff Be Increased?
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~We are starting to see this issue gather steam, as a couple of groups have weighed in on this in recent days. At the recent American Farm Bureau Federation convention, delegates rejected an amendment to current policy that says that the AFBF supports "changes in the checkoff rate" but does not specify an exact amount. Texas Farm Bureau delegates offered the amendment that called for a checkoff rate of $2.00 or another amount as decided by cattle producers. Farm Bureau delegates decided to leave the amount unspecified.
Scott Dewald with the Oklahoma Cattlemen's Association confirmed to me on Monday that the OCA supports the idea of giving cattle producers the opportunity to vote on a higher checkoff rate of up to $2 per hear. And at their January 15 Board of Directors meeting, the Texas Cattle Feeders Association approved a resolution that they will offer at the NCBA annual meeting next month in Reno that calls for "supporting an increase in the Beef Checkoff up to $2 if approved by a producer vote."
The original dollar per head amount was approved nationally in the late 1980s, and inflation has eroded the bang for the buck in the areas of promotion, education and research. An example of this is the inability to even consider a national TV campaign in recent years for the "Beef it's whats for dinner" promotion because of the lack of dollars to properly fund it. It's expected that this will be one of the higher profile topics to be discussed at the Cattle Industry Convention in Reno in a couple of weeks.
Will Volunteer Wheat Last Fall Mean More Wheat Streak Mosaic this Spring?
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~The answer to that is a definite "maybe." Dr. Bob Hunger of Oklahoma State University writes us that "The high incidence of volunteer wheat in Oklahoma last fall put us on alert that the incidence and severity of Wheat Streak Mosaic Virus may be high in 2008. Although none of the samples collected in Oklahoma last fall tested positive for WSMV, this was not the case in Texas (some samples tested positive around Amarillo). However, this past week a sample from Kingfisher County was received that tested positive for WSMV and negative for high plains virus. Additionally, a wheat curl mite (WCM) was found on the foliage, which is one of the few times I have ever found a WCM on a field sample. The sample was labeled as being "volunteer," and although the sample tested positive, to me the symptoms were not what I would call typical of WSMV. There was an abundance of dead lower leaves. The younger, living leaves were small and narrow and although areas of a typical mosaic could be found, there also seemed to be more of a consistent yellow present such as what could result from alternating warm and cold temperatures. I'll keep you informed about how WSMV plays out in Oklahoma this spring."
Beyond Wheat Streak Mosaic Virus, things are relatively quiet on the disease front here in Oklahoma. The OSU Plant Pathologist tells us "Some producers in southwestern OK indicated to me this past week that although it was dry and rain was needed, overall the wheat looked good. They also reported seeing some leaf rust as well as aphids/greenbugs. This is similar to what I have observed around Stillwater, where I have seen scattered "old" pustules of leaf rust on lower leaves, but no highly active infections as well as a scattered occurrence of aphids (both greenbugs and bird cherry oat aphids)."
The Farmer's Share- pennies on the dollar.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~On a regular basis, the National Farmers Union includes in a weekly newsletter that they put out on Mondays a chart that shows the retail prices of food items versus the cost of the raw commodity as produced by the producer- in other words, how much a farmer gets when he sells that gallon of milk that ends up in the supermarket versus what the consumer actually pays.
I thought you might find it interesting to take a look at the "farmers share" page they have put together- using USDA stats. They show that for that pound of Top Sirloin Steak that the consumer pays $7.99 a pound for- the cattle producer gets 91 cents. For an 18 ounce box of cereal that a consumer might pay up to $5.05 for in some of the pricier super markets on the east or west coast- the farmer captures all of THIRTEEN CENTS!
We have a link to their listing of a bunch of commodities- and the retail supermarket price versus the price that the farmer captures for his or her efforts. Some of the differences may surprise you.
Click here to view the Farmers Share of the Retail Food Dollar.
Thanks to those who responded to our offer of a copy of the 2008 Oklahoma Almanack!
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~We had about twenty folks spread out across the state asking for a copy of the Almanack- and we checked with Brett Elliott- the Editor of the publication, and he has graciously agreed to provide us with a few more copies to cover all that asked for one on Monday.
It was fun to see the variety of locations where we got requests from- Beaver and Hollis and Nash and Stigler and Pryor and Canton and Stillwater and Walters and even Kildare! Thanks again for your comments- we always welcome any thoughts you have about what we do on a daily basis.
One of our respondents told us that she would provide a little more fodder for our ego- and she proceeded to say some very nice things- and they are appreciated- but I often get a lot more from those of you that want to take us to the woodshed and offer some tougher words about how we should be covering things- and what should be covered. Those emails really help us gauge the "mood of the ship" and hopefully improve the product for one and all. So, we welcome your comments from both sides of the street! And thanks again for telling colleagues, neighbors and friends about this daily email- let them know that it's worth every penny that you pay- and encourage them to sign up as well! Have a great day!!!!
In case you missed the link from yesterday- here's a link to the 2008 Oklahoma Farmer and Rancher Almanack.
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