South Dakota Open and Clean Government Act

Transcription

Coming up on Market to Market - Mother Nature displays her ominous power from the South Pacific to South Dakota. House lawmakers side with farmers against an Obama Administration proposal on water. And wounded by the sting by disease, some of agriculture's busiest workers struggle to survive. Those stories and market analysis with Tomm Pfitzenmaier, next. Funding for Market to Market is provided by Grinnell Mutual. You think differently about a customer when you stand in the middle of his dreams. We work to make sure you get covered right. Grinnell Mutual -- a policy of working together. Information on finding an agent near you is available at grinnellmutual.com. This is the Friday, September 12 edition of Market to Market, the Weekly Journal of Rural America. Hello, I'm Mike Pearson. America's farmers and ranchers have always known that regardless of how well they perform, many factors affecting their profitability remain well beyond their control. Volatile markets, variable input costs, and Mother Nature ALL can have a profound impact on a producer's bottom line. This week, weather extremes included more than 10 inches of rain in Missouri, flooding in Indiana, and the earliest measurable snowfall ever recorded in Rapid City, South Dakota. But 3,500 miles to the west, livestock producers in Hawaii responded to other natural events. In Hawaii, lava from one of the world's most active volcanoes continued its slow but steady creep, nearing rural homes on the Big Island. While Kilauea , has erupted continuously since 1983, scientists warn if the current trail of magma continues its course, it could "lava lock" the town of Pahoa within two weeks. Though rain over the flow site dampened wildfire threats, some livestock owners decided to err on the side of caution. Lee Ho Perreira, Puna District Cattle Rancher: "We removed all the cattle. Yeah, about almost 55 heads." While many residents of the Aloha State accept such events as the price of living in paradise, a wide range of meteorological extremes ran scattershot over the southwest this week. And prolonged drought has jeopardized green chiles, a valuable crop for one mountain state. Stephanie Walker/New Mexico State University: "They have been an integral part of the diet. It's part of the art. It's part of the culture. They're practically part of our soul here in New Mexico. It would be a great tragedy if we lost the chile industry here in New Mexico." Amidst parched conditions and worker shortages, the Land of Enchantment's love affair with the green chile is getting pricey. Last year, 86-hundred acres were dedicated to the beloved veggie, just a quarter of the land devoted to the spicy peppers two decades ago. And with the mighty Rio Grande running at record lows, growers have turned to well water to keep the regional staple alive. In contrast, seasonal monsoon moisture combined with the remnants of Tropical Storm Norbert this week to dump rain throughout the Desert Southwest. Flooding engulfed the Moapa Valley, 50 miles north of Las Vegas, and wreaked havoc on interstate highways in the surrounding area. But the Grand Canyon State endured the most drastic departure from normal conditions. Following rain and dust storms, a single-day record of more than 4 inches of precipitation HAMMERED Arizona's La Paz (luh-POZ) and Maricopa (MARE-uh-COPE-uh) counties, prompting a statewide emergency. Residents were baffled by the intensity of the storm in the arid desert. Greg Montierth/Mesa, Arizona: "When you buy a house, you sign your paperwork for the mortgage and when they say insurance, they look at flood insurance, you're not in a flood zone, you don't buy flood insurance. Why spend money on something that's never supposed to happen." Despite the epic downpour, surging floodwaters have state officials in doubt as to whether Arizona will experience any lasting relief from chronic drought. At a Senate subcommittee hearing this week, representatives of the agriculture, automobile and chemical industries testified that delays in rail shipments threaten to drive some companies out of business. Displaying a photo of a giant pile of wheat standing in the open because North Dakota farmers can't get a railroad to ship it, witnesses expressed doubt that the railways are doing all they can to fix the problem. Meanwhile on the other side of the rotunda, House lawmakers approved a measure restricting the government from creating new definitions on water that some rural groups say is nothing more than a power grab. The U.S. House of Representatives passed a measure this week designed to prevent the administration from broadly defining which bodies of water can be regulated under the Clean Water Act. Last spring, the Environmental Protection Agency and the Army Corps of Engineers proposed rules that raised red flags with many agricultural groups. Farmers and ranchers were concerned the wording put the government in a position to dictate how they manage small streams and flood-prone acreage. But the EPA says it is simply seeking clarity as it tries to ensure America's water quality. Gina McCarthy, EPA Administrator: "Over the past 15 years, two complicated court decisions have tangled up implementations of the law. It's been incredibly difficult to determine what is and what isn't protected - and that puts wetlands, streams and other water bodies at risk." The House of Representatives passed the bill 262 to 152, with nearly all Republicans and 35 Democrats in favor. The Senate has not yet acted on the measure, but if it were to pass, the Obama administration has already said it would recommend a veto by the president. Various environmental groups expressed disappointment with the House decision and in the reaction from farmers and ranchers. Susan Heathcote, Iowa Environmental Council: "We believe a lot of that concern is due to misinformation that has been circulating about the intent and the actual implications." The dispute does not center on the nation's major lakes, streams and rivers but on smaller waterways, wetlands and even streams that might only periodically contain water. But one Idaho rancher believes Washington underestimates the value of water control. Steve Harrison, Riverbed Ranch commercial operations manager, Idaho Falls: "The idea that on a very minute level, the government can come in and tell a private property owner what he can or can't do with his private property because there happens to be water flowing across. We would be against that because if you control the water, you control the land." The western honeybee is the world's premier managed species of pollinators. More than 100 crops are highly dependent on the insects, and bee pollination's value to the U.S. agricultural industry is valued $15 billion annually. Between 1947 and 2005, the number of bee colonies in the United States declined more than 40 percent. The plunge accelerated in the 1980s, when parasitic mites were accidentally brought into America. But in Iowa, apiarists have been busy as the bees themselves trying to protect the essential labor force. David Miller explains. It's early spring and nearly 60 people have gathered for the Central Iowa Honey Producers' annual auction. The sale, with its reconditioned and specially-made wares - caters to small-scale beekeepers that own or work with just a few colonies of honeybees. The exchange of tools of the trade carries on for a few hours but the more pressing matter for these apiarists is the battle to restore the U.S. honeybee population. They are in a fight to stop what is commonly called colony collapse disorder or CCD. Arvinn Foell, president of the Central Iowa Honey Producers Association, considers himself to be on the front lines. Arvin Foell - Kelly, Iowa, Central Iowa Honey Producers Association: "Colony collapse; there's no magic bullet. All beekeepers are looking for a magic bullet but I'm afraid it's not there. I think beekeepers have to be very contentious about their job and watch their bees. And that's what we're gonna have to do. We're just gonna have to be more proactive with that."." While experts believe there's no single cause for CCD, they do say it's a combination of harsh weather, deadly disease, toxic chemicals and a parasite known as the Varroa Mite. In Iowa, for instance, the coldest winter in 35 years decimated honeybee populations in 2013. State officials estimate between 60 and 65 percent of the state's honeybees didn't survive. Because some of the bees were unable to get enough food- what humans prefer to call honey - they simply starved. According to some scientists, pesticides and other chemicals also have done considerable damage to bee colonies. Jason Foley, an urban beekeeper, raises Russian queen bees for sale to hobbyists and professional producers. Foley believes one way to help reduce the effects of CCD is proper placement of the hives. Jason Foley, Des Moines, Iowa: "Year one: the bees come back with pollen that builds up a concentration in the wax. Year two: that wax gets more concentrated. Year three, four, five, etc. 'til it gets to a tipping point that these young bees are being raised in wax that is just saturated with these systemic pesticides. And the systemics affect the bees nervous system and that's the main thing with the neonicatoids with the honeybee. The nervous system is affected in a way that when it hits that tipping point they have a hard time navigating back to the hive and they get lost." Honeybees also must battle various mites that threaten to destroy entire colonies. The Varroa Mite, a parasite that attaches itself to bees and infiltrates their hives, can devastate bee populations in a few short months. The combined effect has been a decline in honeybee populations of up to 50 percent annually in some regions. That's a major concern for Iowa beekeepers and it's even drawn the attention of the White House. In June, President Obama called for a federal strategy to promote the health of honeybees and other pollinators. The Agriculture Department has made $8 million available to farmers and ranchers in five states to establish new and improved honeybee habitats. In a proclamation, Obama cited USDA data indicating that, "Honeybee pollination alone adds more than $15 billion in value to agricultural crops each year in the United States." "The continued loss of commercial honeybee colonies poses a threat to the economic stability of commercial beekeeping and pollination operations in the United States, which could have profound implications for agriculture and food." New federal guidelines notwithstanding, work has already begun at Spring Valley Honey Farms in Iowa. Besides selling raw honey by the 55-gallon drum, as well as products like beeswax candles and creamed honey, the 3-decade old operation supports 3,600 honeybee colonies and is selling bees to help resupply those who are in the fight against CCD shop. Pat Ennis, Spring Valley Honey Farms: "Basically with the winter die-off here in Iowa, a lot of beekeepers need new bees, there's not enough beekeepers here in Iowa to produce all these. There's probably six or seven producers in Iowa that sell packaged bees to the hobbyist beekeeper so they can get new bees to start out the next year." Spring Valley also does a brisk business renting its hives to fruit and nut tree producers. After helping pollinate Iowa's orchards in the summer, the bees are shipped to the west coast for winter work on California's $4 billion almond crop. But without conservation efforts taken on the front lines by keepers like Foell, Foley, Ennis and other apiarists around the country, bee populations will likely continue to decline due to parasites, pesticides and other perils. For Market to Market, I'm David Miller. Next, the Market to Market report. The Agriculture Department predicted this week that U.S. growers will harvest a record 14.4 billion bushels of corn this fall on an unprecedented average yield of 171.7 bushels per acre. USDA also increased its predictions on stocks to use ratios for both corn and wheat. And, as you might expect, prices declined. For the week, December wheat lost 33 cents, while the nearby corn contract moved 18 cents lower. USDA pegged America's average soybean yield at 46.6 bushels per acre reflecting an all-time high. But that was anything but friendly to prices as the November contract fell below $10 with a weekly loss of 36 cents. Nearby meal prices followed suit giving up $18.80 per ton. In the softs, cotton rallied again as the December contract rose $3.69 per hundred weight. In the dairy market, October Class III milk went up 69 cents, while the deferred contract gained 14 cents. Over in livestock, prices were mixed as the October cattle contract declined $3.48. Nearby feeders advanced by $1.55. And the lean hog contract improved by 8 cents. In the financials, the Euro lost 9 basis points against the dollar. Crude oil lost $1 per barrel. Comex Gold fell by $36 per ounce. And the Goldman Sachs Commodity Index traded 25 points lower to settle at 585.40. Pearson: Here now to lend us his insight on these and other trends is one of our regular market analysts, Tomm Pfitzenmaier. Tomm, welcome back. Pfitzenmaier: Thanks, Mike. Pearson: Now, as we talk about the USDA numbers, we'll get into that, I think everybody is going to be getting into that here over the next couple of weeks. Let's first talk about this wheat market. The changes in the stocks to use ratio, was that really enough ammunition to drive this market down 33 cents? Pfitzenmaier: Oh yeah, I think so. You've got wheat now vulnerable, December wheat vulnerable to breaking down under five bucks. You continue to keep a lot of pressure on corn, that's not going to be helpful. Worldwide wheat supplies are ample. U.S. supplies are ample. Wheat is not really competitive as a feed. That business is going to DDGs and corn. So, yeah, I don't see a lot to support wheat here. Pearson: So, what is the advice to producers then? Do you go ahead and make some sales today while you can? Pfitzenmaier: It's a mantra that you're probably going to hear more from me than you want to but we're in a downtrending market, downtrend in these markets. The quicker you can sell in a downtrend the better off you are. So, maybe you can horse around here and hope for some little pops up. But, unless something changes dramatically there's not a lot of upside potential, I don't believe. Pearson: Any upside potential on the storage side? Any reason to hold it? Pfitzenmaier: Not a lot. Maybe there's a little carrying charge in the market you can capture but other than that there's not, I don't see a lot of hope for big rallies I guess. Pearson: Just get it off and hopefully there's a railroad there who can take if off your hands. Pfitzenmaier: Well, that's going to be an issue for -- I'm glad to see that report on the show tonight because that's going to be a huge issue as we go into the winter here. Pearson: Alright. Well, now let's jump into the corn market. USDA, 171 and change average bushels per acre. Did that strike you as high? Low? Where did you think the USDA was going to come in this time? Pfitzenmaier: Well, I guess it was a little higher than I thought the USDA would come in. It's not as high as I think the actual crop is going to end up. I think it's going to be up in the 175 to 178 range. So, I think there's a lot of increase to come along here. But I wasn't surprised that the USDA kind of spoon fed it to us here I guess. Pearson: So would you expect the October report to be the shaker? Pfitzenmaier: I think each successive report is going to increase right into the final. If you look back at fundamentally similar years we tended to have a much more substantial increase in yield as we went into the final and I don' see this year being any different from that. Pearson: Now, if the viewers who are watching aren't strictly hog producers or cattle producers, they hear 177, 178, that's going to raise some issues. How do you market in this environment? Would you just be selling everything you've got with what the market is paying you today? Pfitzenmaier: Well, I guess it's kind of a two-part answer. There's carrying charge in the market. You can go out to July, sell that at the $3.60 or somewhere and capture some fairly good premium to pay you for storing the crop and then that gives you the opportunity to sort of see if you can shop the basis as we go through the winter here. So, that is probably a strategy. If you don't have storage and you can't utilize that opportunity to capture a carrying charge then, again, I go right back to what I said on wheat, the faster you can get it sold the better and use any, if we have a little frost scare or something, some hiccup some place that gives it a little pop, I think you use that and get sales made. Pearson: Now, you mentioned a frost scare. We have, actually right now as of Friday afternoon there's talk of tonight and potentially tomorrow night a frost and a freeze warning in parts of the Corn Belt and the Midwest. Did that come back into the market? Did we see any pop on either corn or beans? Pfitzenmaier: That shows you how important that is, is that corn still closed down two and a half cents on Friday. You had all that talk and you still can't rally the market. And going back to your point earlier, this transportation issue on corn, that's going to back up corn, its' not going to move like -- it's going to be more expensive to get it to the Gulf, it's going to hurt exports, that whole thing is going to back up. As far as beans go, I don't know, I don't hold a lot of hope there either I guess. Pearson: Okay. Well, before we get to talking about beans, Calvin in east central Iowa has a question on Twitter and he submitted it for our social media. We're on Facebook and Twitter. Please check us out if you're a viewer. And Calvin is curious, do you think we ought to be taking some time right now to be making some '15 sales in both corn and beans? Pfitzenmaier: Yeah, we have been. I think especially if you can get December '15 corn back up above $4. I think you have to start doing some sort of scale up selling there. Now, if you don't like that idea, buy yourself a $4 put and use some put/call strategy to help finance that to get it cheapened up because you're buying a lot of time when you go out to December '15. But yeah, I think you need to -- now, having said that, there is the only sort of bright potential spot for that is that there's a lot of talk of acreage shifting away from corn into beans. It is already pretty much set that that's going to happen in Brazil and Argentina. Farmers tell us they're going to do that in the U.S. too. So, maybe they'll pump up that new crop a little bit and sort of put some risk premium into the price. But, that may rally it back from $3.50 back up to $4 too. So, I guess I still think you have to get started here as you get up toward $4 or better. Pearson: Okay. Alright. Now, as we take a look at the soybean market, you were saying that you didn't hold out a whole lot of hope. USDA's numbers 46.6. I forget their 475 million bushel was their carryout if I remember correctly. Are those numbers kind of in line with where you see the soybean crop? Pfitzenmaier: Again, I think that's going to be bigger too. I think you're going to see a bean yield up in that 47 to possibly 49 range. I think you're going to see a carryout that approaches 600 million bushel. You sit and think about this for about 30 seconds and you're going to have a carryout of 500 to 600 in the U.S. The Brazilians are set up to have a big crop with some estimates in the 92 to 98 million metric ton range. And then everybody and their brother is talking about planting beans here next year. We're going to have so many beans it's going to be unbelievable and your $10 bean days are going to go away quick. So, and here we sit, new crop '15 if you want to talk about that for a second, it's $9.85 to $10, it popped up over $10 several times this week, if you get that up there you need to make some sales. If you're one of those that is going to go whole hog on planting beans next year you better have some of them planted. Pearson: Get some protection because $10 for a lot of producers is a profitable level in the soybeans with decent yields. Pfitzenmaier: Depends on who you talk to but yeah. Pearson: Right. So, you'd much rather have some sold in advance at $10 than -- where do you think we could be? I'm just guessing here with a 600 million bushel carryout, what does the outlook look like for beans? Pfitzenmaier: I think November '14 beans can work their way down $9.50 to $8.75, somewhere in that range. I think you could see a $7 in front of those '15 beans. Pearson: As we see the South American harvest. Pfitzenmaier: If that thing shapes up the way I outlined here. Pearson: Okay. Well, that would be a big change from where we're at today. Pfitzenmaier: Yeah, everybody is excited about planting beans because it's a cost saving and all that. But it's not going to make you a lot of money at those levels, at least you can hold it together at $10. Pearson: Alright. Well, now let's jump over to the livestock markets. We've seen some stability recently this week, fat cattle were down a little bit, $3, close to $3.50. What is changing there? Are we seeing any changes on the demand side in the beef market? Pfitzenmaier: No, actually demand has held up really quite well I think. We rallied October cattle up to about $160, Dec up in the $162 plus or minus range, which was kind of the resistance it ran into the last time and boom, we ran into resistance again this time. So, I think you're up at levels where it's going to be a little tough. It appears to me that the consumer has sort of adjusted to these higher prices and said okay, I like steak, I like my hamburger, if I have to pay a little more for it I guess that's what I'm going to do because demand has really held up quite well I think and export demand has held up. The demand for protein around the world is high. So, the demand side seems to be okay. Now, we're probably going to sag a little bit into October. I wouldn't be surprised at all to see a little pullback here and then possibly by the end of the year go back and retest those highs again and maybe even take them out. Pearson: Okay. Now, in a pullback would you be looking to see fat cattle with a 4 in front, $140 and change? Pfitzenmaier: No, I'd say $152 to $154. I don't see them going that low I guess. Pearson: Okay. Well, now let's jump over to the feeder cattle market. Same story this one, we were actually up a little bit, $155. Again, the strength is continuing, buyers are out there it seems. Pfitzenmaier: Well, a lot of people are looking at the corn price the way I am and looking at relatively cheap corn hoping to walk some of that off the farm with the feeder cattle. So, I think that's going to continuously be supportive of that market. And if the fats hold up here that's just another contributing factor. Pearson: Now, and you mentioned could see a pullback here through October on the fat cattle. Do you see a similar pullback potential in the feeder cattle as we work through October/November? Pfitzenmaier: Not so much if you continue to keep pressure on corn prices. Corn doesn't historically in fundamentally similar years you don't tend to bottom out until Thanksgiving, December timeframe, quite a while from now. So, that's going to be a constant drum on these feeder guys and I think it's going to continue to support feeder prices. Pearson: Alright. Well, now let's look over at the hog market, which is a market that has been a roller coaster throughout the year, record highs then pulled back into the 90s and now we've had stability here. We've moved 8 cents in a week. Has the hog market found stability for the time being? Are we just waiting for the hogs and pigs? Pfitzenmaier: Well, that's part of it but I think a lot of it has revolved around numbers and the effect of PED. I think that was suppressed more this summer than people expected. On top of that weights continue to hold up. So, that is why you had that pretty sharp selloff. But, like you said, now we have stabilized. We're going to go into the winter. There's supposedly some vaccines that are going to keep that PED in check. That's still a wild question mark. The other thing is producers continue to put heavier weighed hogs out, which if we have cheap corn that's probably not going to stop. So, I think there's upside potential here and certainly pork is going to pull a little demand away from the beef. But I think it's going to struggle to go up much and probably going to be under some pressure. And I think if you see any expansion in the livestock industry it's going to probably come in the pork, and to some extent in the poultry. Pearson: And, now, that was a surprise. Last time we saw the hogs and pigs report breeding stock was down. Is the trade anticipating to see an increase this time? Pfitzenmaier: Yeah, they are and I think eventually there will be. The profitability is too good. The corn prices are too cheap. And demand is good enough both on the export market and domestically. It's kind of interesting to me that you've seen the dollar rally like it has over the last month or two and you continue to see the export demand for meats hold up relatively well. Pearson: Alright. Well, Tomm, thank you so much for being with us here this evening. Pfitzenmaier: Thanks, Mike. Pearson: That wraps up this edition of Market to Market. But we'll continue our discussion and answer some of your questions in our Market Plus segment online. You'll also find audio podcasts and streaming video of our program as well as links to our Twitter feed, Facebook page and the rest of our social media outlets exclusively at the Market to Market website. And be sure to join us next week when we'll examine a spirited effort to use a byproduct from one industry as a major feedstock in another. Until then, thanks for watching. I'm Mike Pearson. Have a great week. Market to Market is a production of Iowa Public Television, which is solely responsible for its content. Funding for Market to Market is provided by Grinnell Mutual. You think differently about a customer when you stand in the middle of his dreams. We work to make sure you get covered right. Grinnell Mutual -- a policy of working together. Information on finding an agent near you is available at grinnellmutual.com.