Worth saying again

Written by stevefairchild on .

Was visiting with an armchair economist about the state of China's economy and the future of import/export/monetary relations with that country. We didn't have a great many answers, but I thought it worth reviewing this piece from 2005, mostly for that great Jeffrery Benard line at the end. The good prognosticator equivocates to keep shelf life on predictions.

Update 04/02/12 The demographers pay particular attention to the dearth of youngsters compared to the lump of oldsters. "Most particularly, these countries need to change the incentives that, albeit unintentionally, create unsustainable levels of singleness, childlessness and the prospect of massive, rapid aging of their societies."


China is a country of staggering statistics, which we could get staggeringly wrong. 


Fairchild's first rule for bandwagons is to disembark. That's what I've been doing lately with the whole China craze. It's not like I'm going out on a limb. I haven't plumbed deeply into obscure economic data, but anytime the major three news weeklies agree on a topic, there is a good chance they've gotten it completely wrong. China's century, they're calling it. But, if you ask this Sino-skeptic, China is an Asian Tiger with a few hoops to jump through for title to the next 95 years.

I heard at the University of Missouri's Breimyer Seminar earlier this year that the biggest social concern in China is the countryside disgorging as farmers and others of the peasant class head en masse to cities looking for a better life. Perhaps this is a sign of more freedom. And the urban workers often send remittances back to their rural families, which slightly masks the division of wealth. But the migration is creating serious class division problems in east-coast city enclaves. Even in a country whose modern government is shored up by the bones of 70 million dead from Mao Tse-tung's Cultural Revolution, Beijing is loathe to submit itself to radical social upheaval. As we saw with tanks in Tiananmen Square, the establishment's control can be brutal. But brutality in this age of camera phones can cause cracks in the periphery that bring the whole machine down.

We hear plenty about the Chinese economy sizzling along at a sustainable 9 percent growth. Yet, in the grain trade, every statistic about Chinese production or consumption is offered with the caveat: "Of course, because of irregularities in reporting, nobody really knows." That's polite shorthand for the fact that in an authoritarian government, facts are built to suit.

Economists of the Sino-enthusiast stripe have lauded Beijing's decision to decouple the yuan from the underperforming American dollar and its subsequent peg to a basket of currencies. But skeptics point out that during the go-go years when the yuan was pegged to the stable but cheap dollar, hyper investment created overcapacity in backbone industries like textiles and electronics. Meanwhile, some report that to maintain the dollar peg, the People's Bank of China picked up the tab for a fifth of the U.S. Treasury Bonds issued during the deficit-happy Bush administration. Now econ wags say that the Chinese business class isn't interested in buying more American paper but would rather have things more tangible and symbolic. This should sound familiar if you recall a white-hot, T-Bill-rich Japanese economy of the 1980s. American golf courses and iconic cultural real estate fell quickly into Japanese hands. In light of China's similar position, does the junk-bond status of General Motors look more precarious?

That may frighten a union man in Detroit, but it goes to the heart of a Sino-skeptic's thinking. Japan's supposed clobbering of the U.S. economy never materialized. In retrospect, it was the incestuous relationship between its businesses and banks that brought on Japan's economic crash. Observers agree that Chinese banking is corrupt and its stock exchange weak. Is a meltdown in store?

I won't cast predictions here, only doubt. So consider the stability of a state where by 2020 the one-child policy will have produced 20 to 40 million bachelors (and an upcoming pension crisis); a state where an obscene wealth gap breeds contempt and where corruption and brutality still rule; a state that governs behind a cloak of secrecy and duplicity. A runaway China? I'd go with Jeffrey Bernard's wisdom instead: One way to stop a runaway horse is to bet on him.

FAPRI's new baseline

Written by stevefairchild on .


University of Missouri Senior Writer Duane Dailey delivers the specifics on FAPRI’s new baseline, which will color how Congress approaches upcoming farm legislation...

United States net farm income is projected at $95 billion for 2012, down from $98 billion in 2011, by a report to Congress today from the Food and Agricultural Policy Research Institute (FAPRI).

"While net farm income may fall a little short of last year, we expect 2012 to be another good year for most producers," said Pat Westhoff, director of FAPRI at the University of Missouri-Columbia.

Corn yields dropped below trend line the last two years, reducing carryover stocks and pushing up prices. "With normal weather, a bigger crop in 2012 may lead to lower prices this fall," Westhoff said. "Other crop prices tend to follow corn."

The annual MU FAPRI baseline was presented today (March 5) to the U.S. Congress. The baseline, extending 10 years, provides a measure for analyzing proposed changes in farm policy.

Trend-line yield for 2011 season was 160 bushels per acre; however, actual production was 148 bushels.

"Crop prices would be a lot lower today if we had not had back-to-back years of below-trend corn yields," Westhoff said.

FAPRI projects planted corn acres this year at 93.5 million acres, up from 91.9 million last year. An assumed normal yield in 2012 reduces per-bushel price to $4.81, down from $5.96 for 2011-12 market year.

Ethanol production is projected to remain at 2011-12 levels after years of rapid growth. An end of the 45 cents per gallon tax credit, high corn prices and constraints on ethanol used in conventional 10-percent blends contribute to slower growth.

Soybean prices for 2012 remain over $11 per bushel, after averaging an estimated $11.61 for 2011-12. "Soybeans must remain strong to be competitive with corn for acreage," Westhoff said.

"Given current tight corn supplies, markets will be sensitive to news about 2012 supply-and-demand prospects," Westhoff said. "Prices could fall if favorable weather increases crop production."

Even with good weather and higher yields, demand should stay strong enough to keep crop prices above pre-2007 levels, Westhoff said. "Weather remains the major variable, affecting grain production and livestock grazing."

Volatility can be expected. "Many of the factors that caused recent price swings remain in flux," Westhoff said.

Crop insurance accounts for a larger share of public support to farms than in the past, Westhoff said. High crop prices reduced expenditures on traditional farm programs.

The consumer price index for food rose 3.7 percent in 2011 and could grow a similar rate in 2012. However, in the following years of the baseline, food price growth follows general inflation rates.

Meats will show the highest inflation in 2012, as they did in 2011.

Beef cow numbers fell sharply in 2011, despite the highest cow-calf net return since 2005. Drought in major beef states kept ranchers from responding to demand signals.

Beef exports remain strong, particularly for high-quality beef, helping sustain prices.

The 2012 price of feeder steers, the most common product from Missouri herds, rises to $154 per hundredweight for 600- to 650-pound calves at Oklahoma City. That's up from an average of $139 for 2011 and $102 in the recession year of 2009.

"While beef export growth since 2005 gained much media attention, the drop in imports in that period almost matched the export gains," Westhoff said. "The relatively weak dollar and tight beef supplies worldwide place the U.S. in position to gain markets for the next decade."

Corn and feedstuffs prices will affect feedlot profitability as they bid for a shrinking supply of calves. Domestic meat supply dropped an unprecedented 22 pounds per person between 2005 and 2011.

If feed prices moderate as projected, per capita meat availability should stabilize and then grow after 2013.

While farm income increased, production costs grew $36 billion, almost 12 percent, in 2011. Feed, fertilizer and fuel led increases. Feed should drop; however, fertilizer and fuel remain high.

The MU FAPRI baseline assumes normal weather and continuation of current farm polices. While the 2008 farm bill expires this year, analysts assume current law prevails through the 10 years, for comparison of policy alternatives.

Macroeconomics on interest rates and inflation are provided FAPRI by IHS Global Insight. Economists at the Agricultural and Food Policy Center, Texas A&M, provide the economic impact of the baseline on representative farms across the country.

The MU College of Agriculture, Food and Natural Resources supports MU FAPRI.

When delivered to Congress, the 64-page report will be posted on the Internet at



Grants for high tunnels

Written by stevefairchild on .

The trouble with being a town-marooned farm boy is the green thumb throbs this time of year with no real outlet. I've been flirting with finding an out-of-the-way spot on the home place to build some tunnel houses just so the kids can get a little field-to-table experience, and, if their heart is in it, maybe a side enterprise. The itch arrives about the same time seed catalogs, longer days and daffodils—too late in the season to really get it going given all the rest of a modern family's activities. 

And yet—there's money in those hoops. Got a release today from the NRCS that says Missouri is tops in grant funding for something called the High Tunnel Initiative. Looks like the funds are directed toward historically underserved and beginning farmers and you can get $2.57 or $3.08 per square foot in cost share for the structure. Apply by March 30.

Details are below if you're interested. 


NRCS offers financial assistance, $2.57 per square foot or $3.08 per square foot for beginning or historically underserved farmers, for high tunnels up to 2,178 square feet through the Environmental quality Incentives Program (EQIP).  Landowners may construct larger high tunnels, but any square footage greater than 2,178 is at the landowner's expense.  Since 2010, 162 Missouri producers have installed high tunnels through EQIP. NRCS has paid $715,000 to those producers. 
Applications for seasonal high tunnels are being accepted on a continuous basis although three application period cutoffs have been established to evaluate and approve those received to date.  The dates for the remaining two application periods are March 30 and June 1.  Those interested in applying for a seasonal high tunnel may submit an application to their local NRCS service center.  NRCS can be found in the phone book under "U.S. Government, Department of Agriculture," or online at 
Under the High Tunnel Loan Program, Missouri producers who have been approved by NRCS through either the USDA NRCS EQIP Season High Tunnel Initiative or the EQIP Organic Initiative for a seasonal high tunnel reimbursement may be eligible for a short term loan from the Missouri Agricultural and Small Business Development Authority.  Loans are available at a fixed rate of 7.5 percent interest for the amount obligated to the producer by USDA NRCS for a term of up to one year.  Contact the Missouri Department of Agriculture for more information at 573-751-2129.

Organic Seed Growers Trade Association case against Monsanto dismissed

Written by stevefairchild on .

There was a distinct rumbling on from the organic side of the field as this case approached the courtroom. The "Occupy" movement even attended in meager numbers. But we confess to not having the background to comment with much insight. Printed below is the press release from Monsanto verbatim. Scroll past that for links to reaction from various points of view. 


The U.S. District Court for the Southern District of New York has officially dismissed a lawsuit brought by The Organic Seed Growers and Trade Association (OSGATA) and dozens of other plaintiff growers and organizations against Monsanto Company.

OSGATA and plaintiffs in the case alleged that they did not want to grow crops containingMonsanto's biotechnology traits but feared a patent-infringement lawsuit in the event the company's traits happened to enter their fields inadvertently through, for example, cross-pollination. However, the court rejected the lawsuit finding that OSGATA and plaintiffs had engaged in a "transparent effort to create a controversy where none exists."  The Court also held that there was no "case or controversy" on the matter as Monsanto had not taken any action or even suggested to take any action against any of the plaintiffs.

In its ruling, the court cited Monsanto's long-standing public commitment that "it has never been, nor will it be, Monsanto policy to exercise its patent rights where trace amounts of our patented seeds or traits are present in a farmer's fields as a result of inadvertent means."

"This decision is a win for all farmers as it underscores that agricultural practices such as ag biotechnology, organic and conventional systems do and will continue to effectively coexist in the agricultural marketplace," said David F. Snively, Monsanto's Executive Vice President, Secretary and General Counsel. "Importantly, this ruling tore down a historic myth which is commonly perpetuated against our business by these plaintiffs and other parties through the internet, noting that not only were such claims unsubstantiated but, more importantly, they were unjustified."

The ruling makes it clear that there was neither a history of behavior nor a reasonable likelihood that Monsanto would pursue patent infringement matters against farmers who have no interest in using the company's patented seed products.

U.S. District Judge Naomi Buchwald found that plaintiffs' allegations were "unsubstantiated ... given that not one single plaintiff claims to have been so threatened."  The ruling also found that the plaintiffs had "overstate[d] the magnitude of [Monsanto's] patent enforcement," noting thatMonsanto'saverage of roughly 13 lawsuits per year "is hardly significant when compared to the number of farms in the United States, approximately two million."

Snively noted that the company's position on this matter and its support of all agriculture production practices has been clear since the beginning of this case.Monsanto believes that all farmers should have the opportunity to select the production method of their choice – whether that be organic, conventional or the improved seeds developed using biotechnology. All three production systems contribute to meeting the needs of consumers.

The case is Organic Seed Growers and Trade Association et al. v. Monsanto Company et al., No. 1:11-cv-2163-NRB (S.D.N.Y.).

And for the reaction: 

LA Times



Panel on undercover video

Written by stevefairchild on .


The Center for Food Integrity approaches food systems debate with as much scientific objectivity as I've seen out there. Organizing an expert panel to offer opinion on the increasing number of on-farm undercover video releases seems like a good idea to me. Here is how CFI described its goal in a recent press release. Do note that the panel they've assembled isn't stacked with yes-members. These are independently minded and often outspoken experts. 


The release...


Process Established for Addressing Hidden Camera Livestock Investigations

CFI’s Animal Welfare Review Panel analyzes latest undercover probe at Iowa hog farm


Hidden camera investigations at livestock farms have heightened public attention on animal care issues. In an effort to foster a more balanced conversation and to provide credible feedback to promote continuous improvement in farm animal care, the Center for Food Integrity (CFI) has created an Animal Care Review panel.


The Panel, made up of recognized animal well-being experts, will examine video footage and report back to the public. The process has been established initially for the pork industry but CFI is willing to engage with other sectors of animal agriculture as they show interest.


The Panel will include an animal scientist, a veterinarian and an ethicist to assure various perspectives are represented. CFI is recruiting several experts to participate in the process, but for the video investigation at a swine operation in Iowa released last week by Compassion Over Killing, the panel is comprised of Dr. Temple Grandin, Colorado State University; Dr. Candace Croney, Purdue University; and Dr. Tom Burkgren, American Association of Swine Veterinarians (biographies below).

Ideally, the panel will receive complete and in-context video footage from the organization that obtained it. This will provide the best opportunity for the experts to have a full understanding of the situation. Short of that, the panel will review edited segments that have been released to the public.

After reviewing the video released last week the panel made the following observations:

Most of what is shown in the video are normally accepted production practices and there was nothing that could be considered abusive. It was noted that employees appeared to be competent and well-trained and that the barn floors and the pigs themselves were clean.

In one scene, an employee is shown castrating and docking the tail of a piglet in close proximity to the mother. The video contends the sow is grunting in distress. One of the experts said that while it is likely that the sow experiences some distress in such a situation, both the sow and her piglets would probably experience similar or greater levels of stress if the piglet was transported elsewhere.

An employee is seen using tape on a piglet’s incisions following castration. One of the experts noted such a practice is considered more welfare friendly than stitches because it is less intrusive and requires less handling of the pig.

There was a short glimpse in the video of what appeared to be a herniated piglet and it was implied it was caused by incorrect castration. One expert noted the assertion is not correct – that the condition was likely related to genetics.

A scene showing several flies in a farrowing room was a point of concern and something the experts felt should be corrected.

Another point of concern is a portion of the video addressing the practice of “back feeding” – a process in which organs of piglets that have died are fed to the sows to boost their immune systems. The experts noted that it is unclear if this practice involves sows or pigs and its exact purpose. It is a normally accepted production practice used to stimulate the immune systems of pregnant sows late in gestation. This results in more effective and improved passive immunity that is passed from the mother to her offspring through the colostrum.

A sow shown walking awkwardly because its hooves had not been properly trimmed was also discussed. The experts noted the hooves should have been trimmed but they would have preferred seeing more than just a few seconds of the sow in question so it could be determined if there was a lameness issue.

The issue of only seeing brief scenes was a common concern for the experts. They noted that seeing longer excerpts from the video would allow them to place the practices in better context to allow for evaluation that encourages continuous improvement.  Attempts by CFI to secure longer video segments from Compassion Over Killing were unsuccessful.   CFI remains committed to working with animal protection groups to secure more complete video for evaluation.

The Animal Care Review Panel operates independently. Its reviews, assessments, recommendations and reports will not be submitted to the pork industry for review or approval. CFI’s only role is to facilitate the review process and release the panel’s findings.  The opinions expressed in the review are solely those of the expert panel.

About our Experts

Dr. Temple Grandin

Colorado State University

Dr. Temple Grandin is one of the most noted experts in animal behavior and animal welfare. She is a bestselling author and consultant to the livestock industry. Dr. Grandin is a professor of animal science at Colorado State University and also designs livestock handling facilities. She has authored over 400 articles in both scientific journals and livestock periodicals on animal handling, welfare, and facility design.


Dr. Candace Croney

Purdue University

Dr. Candace Croney is a renowned expert in applied animal behavior, with an emphasis on animal learning, welfare and ethics. She is an associate professor of animal sciences at Purdue University. She has contributed to nationwide animal welfare efforts working with organizations such as the American Zoo and Aquarium Association and many others. She is on the Scientific Advisory Committee of the American Humane Certified program, and her research on farm animal cognition has been featured in national and international broadcast programs.


Dr. Tom Burkgren

American Association of Swine Veterinarians

Dr. Tom Burkgren, is the Executive Director of the American Association of Swine Veterinarians (AASV). He provides analysis and advocacy on issues related to the practice of swine medicine. Further, he develops public policy and manages the business affairs of the AASV. Dr. Burkgren received his DVM from Iowa State University in 1980 and his MBA from Drake University in 1989. His practice experience includes mixed animal practice as well as exclusive swine practice.


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