Archive for February, 2016

Monday, February 22, 2016 @ 08:02 AM
posted by Kent Lockridge

By Kelsey Faivre                                                                                                        February 19, 2016

A friend of mine mentioned that an agriculture professional came to speak with one of her on-campus organizations a while ago, bringing the message that every person involved in agriculture should be actively blogging and participating in social media “agvocacy” efforts. That’s a pretty common message in agriculture circles today.

Despite hearing this message, my friend still hasn’t started up a blog. Her reasoning?

“I’m not that good of a writer. I like plants, not writing, and I don’t have the time it takes to find accurate scientific information to back up my ideas. I don’t want to muddy the waters for people by contributing to an effort in a way that creates more confusion than good.”

That got me thinking. There’s no question that there is a need to educate consumers on the ways of modern agriculture. But I wonder if relative quality of advocacy messages may have an impact on consumer response and therefore the success of efforts to increase overall agriculture literacy.

It seems like everywhere you turn, agriculturalists are being encouraged to tell their stories, to be “agvocates.” In my opinion, it’s time to think a little harder about the ways we champion agriculture.

How can we advocate while recognizing our limitations of expertise?

Each individual in the agriculture industry has a different perspective and a different story to tell. But nobody is an expert on every topic! It seems like sometimes we are quick to jump to the defense of our fellow farmers, even if we don’t know all the facts about their segment of the industry. This creates confusion.

A good example of this is when some agvocates try to defend gestation stalls but confuse them with farrowing crates. This creates more of a problem, requiring experts to step in and try to provide clarification. In the resulting confusion, both the misinformed agvocates and the swine experts risk losing credibility and the industry seems like it can’t agree on a message.

Are we leaving room for more than one right answer?

The agriculture industry is not homogenous. People down the road from each other growing the same crops may make completely different management decisions for equally legitimate reasons. That’s something to celebrate and share. Advocating for a single production method while simultaneously discrediting those who use others creates confusion and resentment within the industry.

Is advocating badly more damaging than no advocacy at all?

I’m not sure there’s a right answer to this question. On one hand, there are a lot of cooks in the “agvocacy” kitchen. On the other, each of us has a different agriculture story and a different perspective, and there should be room for those in the conversation about food and farming.

Agvocacy efforts are fantastic and necessary. But are there times when inaccurate information, lack of scientific grasp, and/or difficulty communicating clearly makes for poor execution. Is it possible that it’s to the detriment of the industry? Certainly something worth pondering I would say.

Faivre was raised on a farm in Northern Illinois, where she learned to love agriculture. She is a senior studying agriculture communications at Iowa State University in Ames.

 

Tuesday, February 16, 2016 @ 10:02 AM
posted by Kent Lockridge

Corn prices are slightly higher this morning on the heels of a small rebound in wheat and soybeans. There’s really no fresh news to report following the extend weekend, the weather in South America remains mostly benign, the Chinese continue to sit on a glut of corn as their reserve price remains in question, and the trade continues to believe the USDA will soon announce that they see more corn acres being planted here in the U.S. during 2016. From both a spec and technical perspective it seems really hard for me to imagine old-crop prices in the MAR16 contract moving beyond the $3.70 to $3.80 area based on the current circumstances and headlines. Sure I could argue that we will see more of a short-covering rally in the entire commodity sector if crude oil can continue to find its legs and move more aggressively north of $30 per barrel, but I suspect that’s only money sloshing around and does very little to change or alter the overall current bearish fundamentals that are still entrenched in this market. As for new-crop prices, I still argue that the DEC16 contract will continue to find extremely heavy resistance up between the $3.95 to $4.10 area. As a producer who is wanting to reduce more new-crop risk, I simply remain patient! Personally I’m targeting the late-March to early-May time period as our next bullish window of opportunity. A period of time where I suspect many of the current cards on the table are reshuffled and U.S. weather starts to more aggressively move to the forefront… Moral of the story, despite the possibilities of small nearby bounce on increased crude oil optimism and temporary commodity short-covering, I continue to keep hedges place fearing we could still see another round of lower prices within the next 30-days.

Spring Crop Revenue Insurance Guarantees: Remember these prices will update daily during the month of February as the price average is determined.

  • Corn $3.87^6 (Avg. close of the DEC16 contract during Feb)
  • Soybeans $8.85^4 (Avg. close of the NOV16 contract during Feb)

Soybeans bulls are hoping the trade can somehow gather enough momentum into a wave of bearish fundamentals to overcome the heavy resistance on the charts up between $8.90 and $9.10 per bushel. It’s hard for me to imagine this market breaking-out beyond these levels with the South American crop continuing to advance without any major widespread disruptions. The recent rainfall totals in Argentina have helped production in many key locations, while the Brazilian harvest continuing to advance with more reports circulating of better than expected yields. Traders will be eager this week to see how the Chinese crush margins respond now that we have moved past the week long Lunar New Year holiday. As for U.S. headlines, traders are patiently waiting to see what the USDA has to say late next week at their 2016 Ag Outlook Forum. Early thoughts remain +1 to +2 million more soybean acres being planted in 2016, with an average yield starting out somewhere between 46.5 and 47.5 bushels per acre….neither of which are considered bullish! As both a spec and a producer I clearly understand the bearish fundamentals we are facing, but I also have to wonder with most of the bearish cards already on the table and revealed to the trade, how many of the bears are truly willing to increase their wagers? Personally I’m going to stay patient in regard to pricing any new-crop bushels. Producers who are still holding old-crop supply will obviously want to be much more aggressive in their strategy as “time” starts to become another negative variable. In simple terms, moving some old-crop bushels up between $8.80 and $8.90 makes sense, especially as I’m uncertain if we can continue build on the recent bullish palm oil headlines.

NOPA To Release Crush Data Today: Most sources inside the trade are looking for a number just above 155 million bushels. In other word down about -3 to -4 million bushels from December and down about -5% from last year. Who knows on soyoil stocks as that number appears to be much more of a wild-card?

Wheat catches a small tailwind as Paris strings together three consecutive days of higher prices. Unfortunately the French still remain much more completive than U.S. suppliers The bears also quickly to remind us that we have heavy competition remaining from Russia, Romania, Argentina, etc… I continue to hear wildly mixed estimates in regard to India’s wheat crop. Many of the bulls argue there’s a very real possibility of a -10 MMTs reduction, while the bears are sighting surveys that show little to any reduction to the 2016 crop. Bottom-line, there still appears to be a ton of unknowns inside India. From a technical perspective, there still remains heavy resistance on the charts up between $4.85 and $5.00 per bushel. As a spec it’s tough for me to imagine a nearby short-covering testing or pushing these levels. From my perspective the market continues to feel heavily weighted to the bearish side, meaning  sub-$4.50 prices are still a very real possibility.  As a producer, keeping hedges in place on the downside still feels like the smartest play, at least until U.S. weather headlines become more of real concern. Stay patient!

Tuesday, February 9, 2016 @ 07:02 AM
posted by Kent Lockridge

Another week, another decline at the gas pump for much of the country. Gasoline prices fell 6.2 cents in the last week, according to GasBuddy.com live data. The national average stood $1.74/gallon yesterday, some -25.6 cents lower than last month and -44.4 cents below last year’s prices. No where in the country has the decline been as large as in the Midwest, where refiners have continued to churn out cheap winter gasoline. In just the last week, average prices in Indiana, Michigan and Ohio fell 14 cents per gallon, while some stations in these states fell over -30 cents per gallon. Over half the states in the country have seen gas prices decline over -20 cents in the last month, while the Great Lakes and West Coast sit atop the list: Indiana, Illinois, Ohio and Michigan saw declines of 41-43 cents, while California, Oregon and Washington saw declines of 36-37 cents. Nationwide, just 13.1% of gas stations are selling over $2 per gallon while over 25% now are selling under $1.50 per gallon. (Source: Gas Buddy) Gas Near $1.00 Per Gallon In Some Parts Of The U.S. – There are at least eight states where some stations are now selling gas for less than $1.25 a gallon, according to GasBuddy.com. The cheapest gas at the moment is at a 7-Eleven in Oklahoma City, which is selling a gallon of regular for $1.11. In fact, more than a dozen other stations in that city have gas for $1.14 or less. Extremely cheap gas can also be found in Texas, Missouri, Ohio, Indiana, Illinois Michigan and Kansas. Nationwide, the average price of a gallon of regular is down to $1.74, the cheapest it’s been since early January 2009. Read more at CNN Money

Cheapest States for Gasoline

 

Monday, February 8, 2016 @ 11:02 AM
posted by Kent Lockridge

Capital One recently conducted a survey in the payment and financial services industry and found that over half the experts in the field believe the U.S. will be a totally cashless society by 2030. Most of them think that mobile devices with fingerprint readers will end up being the leading form of payment in this new cashless world. Currently, about 85% of all transactions in the world today are cash based, led primarily by developing countries. In fact, the majority of people in places like Africa, India and South America don’t even have bank accounts. Here in the U.S. though, only about 8% of consumers do not have a bank account. And of course, a debit card generally comes with a bank account. Only about 40% of transactions conducted in the U.S. are carried out using cash. That’s still a surprisingly high percentage, but experts nonetheless seem to believe America will mostly give up paper and coin transactions. One major reason they see cash falling by the wayside is because cash is actually really expensive! It’s estimated that about 1.5% of U.S. GDP is spent handling cash…printing it, distributing it, securing it, collecting it, cleaning it. So our government has a huge incentive to encourage electronic transactions. There is also the crime factor. Cash is pretty much impossible to trace. Most forms of fraud, money laundering, black market activity and other crime is conducted in cash precisely for that reason. Some European countries are already close to ditching cash. Denmark’s government has a laid out plan to eradicate the use of cash by 2030. In Sweden, some banks no longer dispense or accept cash, ATMs are increasingly being removed and a growing number of stores won’t take cash. Only about 2% of the countries financial transactions are cash based at this point. Cash transactions of more than 2,500 euros have already been banned in Spain, and France and Italy have both banned all cash transactions of more than 1,000 euros. In Australia, banking experts have predicted they will be a cashless society by 2022, just six years from now! The idea of the government being able to monitor absolutely every transaction we make is not something I see going over well in the U.S., as it is in total opposition to some of our most highly valued liberties and privacy. I suspect if Washington makes the push we will start to see more protests and objections from the crowd. Bottom-line, it will be extremely interesting to see how the battle between technology, government and consumer privacy plays itself out during the next few years. I would propose bracing yourself for some extreme change!