One of my New Year's resolutions is to be a better blogger (don't we all resolve that every year?). For example, not to post anything on old news. Ah, well, resolutions are made to be broken. Here is an old story as I'm have an hour to catch up from the holiday break before I take another break:
American farmers have prospered during a three-year boom in corn and cropland prices. As values have soared since 2011, farmers bought more acres and upgraded their harvesters to produce a record corn crop of almost 14 billion bushels in 2013. ...
Now, as corn prices start to decline, bankers and agricultural economists are predicting a slowdown in farmland prices that could turn into a bust. ...
U.S. farmers, whose earnings grew an average 6 percent in 2013, face several challenges: a likely reduction in corn exports to China after a record year; greater competition from other nations; moves in the U.S. and the European Union to limit the use of ethanol, a biofuel made from corn; and a possible record production of the crop in 2014.
Kohl said a plunge in land prices would strip value from farms and put over-leveraged farmers out of business. Farmland prices are up 72 percent to about $8,000 an acre in the last three years, according to data from the U.S. Department of Agriculture. In Iowa, the largest producer of corn, the gain was 90 percent, according to the Iowa State University in Ames.
The third paragraph is going to be a little confusing for anyone who doesn't obsess about this stuff. First, why would corn exports fall after a record year? Some demand condition isn't being described. But this isn't a challenge, unless farmers treated a temporary demand increase like a permanent one and borrowed too much money. Second, why would "record production of the crop in 2014" be a problem in 2014? It might be that the demand for corn is inelastic so that a big increase in supply leads to a smaller increase in quantity demanded (in percentage terms) and revenues will fall (or it might just be bad writing).
Groan, I know, but use this one if you are tired of those Florida freeze examples:
A rare collision of ill-timed rain, marauding animals and a growing love affair between the Chinese middle class and the pecan has resulted in the worst pecan supply in recent memory. As a result, grocery store prices are up by about 30 percent ....
In 2012, the nation’s pecan orchards produced about 302 million pounds of pecans. This year, that number could drop by as much as 35 percent, according to industry officials. In Georgia, the nation’s leading pecan-producing state, the crop is expected to be about half of what it was last year. In South Carolina, some orchards succumbed completely.
The problem began with record rainfall last spring and summer. Pollination became difficult, and the moisture encouraged disease. Pecan growers sprayed their fields in record amounts, but it was not enough to fight off a disease called scab.
In Texas and Oklahoma, it was a summer drought that hurt the trees. Then came autumn’s heavy rain, which made the ground too wet to hold the heavy equipment that shakes nuts from trees and sweeps them up.
As a result, harvesting was sporadic, and the pecan supply was left wide open for feral pigs, which have become quite a problem in Texas, and for squirrels, which are always looking for a free nut. ...
The bad nut crop has a few other causes, one of which is the cyclical nature of pecans: Typically, if one year is good, the next year is not.
Last year, for example, Texas produced about 65 million pounds of pecans, said Larry Stein, a professor of horticulture at Texas A&M University. Most estimates indicate that this year will bring no more than 35 million pounds. ...
In the mid-2000s, the market for pecans in China began to grow rapidly. China now consumes more than a third of the American pecan crop, a development that followed the country’s inclusion in the World Trade Organization in 2001.
This week, the EPA is expected to announce changes to the ethanol mandate, a 2007 law that requires energy companies to mix billions of gallons of ethanol into gasoline and diesel fuels. After six years in the mix, corn-based ethanol has lost its popularity, and a diverse group of critics is calling for the law's repeal.
Why are environmentalists in favor of a rollback/repeal?
Though ethanol fuel releases less carbon dioxide than other kinds of gas, many question if the side effects of production are worth it...Growing corn requires fertilizer, which requires natural gas to make. Fertilizer also has contaminated rivers and drinking water, says the report. And ethanol factories usually burn coal or gas, which dumps carbon dioxide into the atmosphere.
Why are Tea Partiers in favor of a rollback/repeal?
Other opponents complain the mandate — like any energy subsidy — is free market poison, claiming it "distorts fuel markets and will raise gasoline prices, especially as the increased blending requirements collide with declining demand for gasoline," reports Politico.
Strange bedfellows indeed.
And who is in favor of keeping the mandate?
Meanwhile, the ethanol industry is asking the AP to retract the story. “At best, the AP article is lazy journalism, but at worst, it appears purposefully designed to damage the ethanol industry,” American Coalition for Ethanol Executive Vice President Brian Jennings said in a statement to the press. “There was an incredibly reckless disregard for the truth in the handiwork of this hit-piece.”
Nobel Prize winning economist* and colleague of mine, Brent Sohngen, wrote the following for his undergraduate class in "Food, Population and the Environment":
high prices for energy and food leave many concerned that we are pushing the
limits of the earth's system with too many people and too much consumption. One
example of our over-indulgence is meat eating. Estimates vary, but in
general, a cow has to eat 12 calories of food for us to get one calorie of
edible meat. Surely we would use less land and be better off if we just
ate less red meat, right?
look more carefully at this question. Just how much land does our meat eating
use? Beef is intensive, and the typical American's annual beef intake is
58 pounds. It takes about 2400 square feet of cropland to produce that
beef, or the size of the average house. As a whole, we use about 6% of
our cropland to grow our annual beef intake.
sources of meat are more efficient than beef. It takes 2 calories of
input for a calorie of pork, and 4 calories of input for a calorie of
chicken. This translates into 400-600 square feet of land, or an area of
land about the size of our living rooms, for us to eat the equivalent number of
calories as 58 pounds of beef. If we want to use soybeans, tofu, other kinds of
beans, or tree nuts like almonds instead, we would use up more land than if we
were to get the same number of calories from pigs and chickens.
if we are not using that much land now, aren't we constantly using more land,
and consuming more food? One economic "certainty" from the past is
that the wealthier people are, the more meat they eat. In the US, meat
consumption grew substantially after World War II as per capita income rose, and
the middle class grew. People in other parts of the world are less
wealthy than we are, and they eat far less meat right now. As their incomes
rise, they will consume more meat.
food reality here in America, though, is not one of endlessly increasing
consumption. Over the past 30 years, our diet has actually become a lot
less land consuming. Actually, it's pretty amazing what we have done.
Based on our typical diet today, we eat the equivalent of about half an acre
each year. Back in 1980 we used two-thirds of an acre, or about 35% more
land per person, for our food consumption. How have we managed to
economize like this?
we seem to have turned the corner on overall food consumption. Between
1980 and 2004 per person food consumption in the US rose by 0.6% per year, but
it has fallen ever since. This recent reduction probably results from
higher real food prices, but it may also have to do with the influence of our
national dialogue on obesity. Second, we've changed our diet by consuming
more poultry and tree nuts, and less beef. We have traded off more land
consuming foods for less land consuming foods.
we have dramatically increased the productivity of our agriculture. Food
production in the US, as measured by cereal yields, has increased by 1.6% per
year since 1980. About half of the reduction in land needed for our
consumption is due to a change in our diet, and the other half is due to an
improvement in land productivity.
are 38% richer in real terms, and population has grown by 36% since 1980, but
today we only need 145 million acres to feed ourselves, down from 147 million
in 1980. We nevertheless still use about 335 million acres of productive
cropland, and an additional 700 million acres of less productive land. The
excess food we produce is exported or turned into ethanol.
less meat will not necessarily cause us to use less farmland – exports and
ethanol are just too lucrative. But eating less meat, when combined with
productivity improvements, does help us use the land we have more
effectively. Given a rising global middle class in Latin America and Asia
that will demand more food and meat, this will be a good lesson for other
countries to learn.
Several dead or dying ash trees dot lawns along Canterbury Road, but only one has drawn the
attention of Upper Arlington city arborists.
Last week, Jim Lekoy and Scott Conover pointed to a dead limb in one backyard that hangs over a
set of power lines.
The city has ordered the homeowner to remove the tree before the limb snaps and falls on the
“They want to take it down in September,” Lekoy said. “We’re here to see if it will last that
Such visits have become more frequent as the emerald ash borer spreads through central Ohio,
where it is expected to kill nearly every mature ash tree by 2018.
Ash borers were first discovered in 2002 near Detroit, where they likely had hitched a ride in
wooden packing crates shipped from China. A minor pest in Asia where ashes are more resistant to
borers, the insects have proved deadly to North American ashes. Borer larvae eat the soft wood
under the bark, cutting off water and nutrients in the trees.
At Wayward Seed, we strive to be an example of Ohio at its best.
We're passionate about selecting the vegetable varieties that not only
promote Ohio's farming heritage, but bring the very best flavor to your
Union County authorities raided a property last night belonging to Wayward
Seed Farm — a significant player in central Ohio farmers’ markets and the organic farm-to-table
movement — and confiscated more than a half-million dollars worth of marijuana plants.
Industrial-scale hog farming has been a contentious issue in Eastern North Carolina for decades. In 1997, amid uproar about environmental problems in hog farming, the state slapped a temporary moratorium on new or expanded hog farms that used what is known as the lagoon-and-spray-field method. It’s simple and relatively inexpensive, yet odorous and pollution prone: Waste is flushed from hog barns into open-air lagoons, and the effluent is sprayed on fields.
In 2000, Attorney General Mike Easley negotiated the landmark Smithfield Agreement with the state’s main pork producers in which the company agreed to concessions including paying $50 million over 25 years for environmental projects. They also funded a $17.1 million research quest for a new method of treating hog waste.
Yet in 2013, virtually all North Carolina hog farms still use the same method.
[Don] Webb, a former hog farmer himself, owns a fishing camp – a string of small lakes where members fish for bass, brim and crappie – near Stantonsburg in Wilson County.
Webb said Stantonsburg recently spent millions on a sewer system for its 800 residents. But a farm with 3,400 hogs, which might produce the equivalent waste of 10,000 people, is allowed to store its sewage in ponds and spray the contents on fields.
“They need to keep their stench on their own land,” Webb said. “A good American would never stink up another American’s home with feces and urine.”
Another complainant is Elsie Herring of Wallace, who lives on a family plot her grandfather bought 99 years ago. Next door is a hog farm with two hog houses and a lagoon. The farmers spray the hog waste on fields next to the Herrings’ property.
“Sometime it comes over like it’s raining on us,” Herring said. “It holds us prisoner in our own home. It has changed our life entirely.”
A hedonic study of rural residential house sales in southeastern North Carolina was conducted to determine the effect of large-scale hog operations on surrounding property values. An index of hog manure production at different distances from the houses was developed. It was found that proximity caused a statistically significant reduction in house prices of up to 9 percent depending on the number of hogs and their distance from the house. The effect on the price of a house from opening a new operation depended on the number of hogs already in the area.
*Note: Either that, or male graduate students are not good Americans.
I'm risking biting a hand that partially feeds me with this post:
Bruised from the defeat of a massive farm bill last month, Republicans are giving the legislation another chance by bringing a pared-down version to the House floor.
GOP leaders were still counting how many votes they could muster for the new measure, which drops the politically sensitive food stamp portion of the bill, when they released the legislation late Wednesday. The White House swiftly issued a veto threat, and House Democrats reacted angrily to the last-minute move. A vote is expected Thursday.
The dropped section would have made a 3 percent cut to the $80 billion-a-year food stamp program. Many Republicans say that isn't enough since the program's cost has doubled in the last five years. Democrats have opposed any cuts.
The White House said food stamps should not be left out of the bill. The Obama administration had also threatened to veto the original bill, saying it did not include enough reductions to farm subsidies and the food stamp cuts were too severe.
Republicans are proposing a measure containing only farm programs, with a food stamp bill to come at a later date. Farm groups, anti-hunger groups and conservative groups have all opposed the idea, for different reasons.
I have often stated (in private of course) that food stamps and farm provisions of the farm bill should be separate pieces of legislation. The food stamp program is an equity program designed to redistribute income from those who have to those who don't. It has little to do with efficiency of markets. I'm not saying that's a bad thing, but it is difficult to design an effective program when it is paired with legislation that is supposedly aimed at improving market efficiency.
The farm provisions are a highly bastardized attempt to deal with market failures in agriculture. About the only farm provision left in the Farm Bill that is even partially defensible on efficiency grounds is subsidized crop insurance designed to help alleviate systemic regional risks (like drought). Private insurers have trouble staying afloat in the presence of systemic risk, and actuarily fair pricing would be prohibitively expensive for many farmers. Beyond that, many of the farm provisions in the farm bill bear little resemblance to efficiency improving market policies and we would all benefit from an examination of the provisions independent from food stamps. If that happens (and that's a big if) I'm not sure Republicans (or farmers) would like the outcome.
Now I will sit and wait for my boss' phone call...
Raising the price of a calorie for home consumption by 10 percent might lower the percentage of body fat in youths about 8 or 9 percent, according to new research from the National Bureau of Economic Research.
I think... the main cause of the upward trend in
weight in the U.S...FOOD IS CHEAP and getting cheaper. I present as
exhibit A the graph on the right.
The graph maps the relative price of food (as measured by the BLS
Consumer Price Index for all food realtive to the overall CPI for all
goods) from 1980-2005. As you can see, food prices have fallen
dramatically since 1980 relative to other goods. The economist in me
says "Hmmmm...food is getting cheap relative to other goods, maybe
people are eating more." But the story gets better.
If we look at the price of 'fats and oils', 'sugar and sweets' and
'fruits and vegetables' relative to 'All foods', again we see a not so
surprising result (see the other graph to the right). The
prices of fats and sweets have fallen since 1980 relative to all foods
while the prices of fruits and vegetables have risen dramatically.
So why are people gaining weight? Sure part of it might be genetic
or social or environmental, but I think it's equally plausible that the
reason is economic. If the price of food falls relative to other goods,
and the price of fatty and sweet food falls relative to other foods,
what would you expect? People will substitute eating fat and sweet
foods for more expensive alternatives like eating fruits and vegetables
Why do we care? The CDC estimates that Medicaid and Medicare
expenditures for overweight and obese people were between $25 and $50
billion in 1998. Can anyone say 'Fat Tax'? I'm now ducking.
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