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coming up on market tomarket -- the federal government releases a fishinto the food system and catches a mixed reaction. and we'll roam the plainson a farmer's quest to revive an iconof the old west. those stories and marketanalysis with elaine kub and walt hackney, next! funding for market tomarket is provided by grinnell mutual.

you think differentlyabout a customer when you stand in the middleof his dreams. we work to make sureyou get covered right. grinnell mutual --a policy of working together. information on findingan agent near you is available atgrinnellmutual.com. this is the friday,november 20 edition of market to market - theweekly journal of rural

america. hello, i'm mike pearson. the price of food,gasoline and shelter all rose last month -- a signconsumer inflation may be rising. according to the labordepartment, the consumer price index rose 0.2percent in october. core cpi, where factorscausing the most volatility are strippedout, increased at the same

rate. new housing startsstruggled last month, declining 2.4 percent. oil traded below the $40threshold early in the week for the first timesince august, with the energy commodity finishingbarely above the line on friday. and just in time forthanksgiving travel, some drivers can fill up forless than $2-a-gallon.

however, aaa says theaverage price for that gallon is $2.11.-- one ofthe discussions during the thanksgiving holidaywill likely include the terrorist attacksin france. the world economy remainedambivalent to last weekend'sassault in paris. and syrians seeking refugefollowing atrocities in their homeland sparkedmixed reaction. in the u.s., more than 30states said "no thank you"

to the immigrants. and for some countries thedrain on basic resources like food was toomuch for them to bear. while the effect ofnew arrivals are on the forefront, a shift in howcertain foods are created and distributed tookplace this week. the science of alteringthe genetic make-up of plants is an old one, butgiving the green-light to the marketing ofgenetically modified

animals is a new one. the fda made historythis week, approving genetically modifiedsalmon for human consumption. the food and drugadministration's move clears the way for theaquadvantage salmon, a fast-growing fishthat will be raised in land-based farmsand put onto u.s. grocery store shelves.

the ceo of themassachusetts-based aquabounty says this is agame changer because the salmon grow twice as fastas traditional animals and is done so inenvironmentally responsible manner. the g-m fish will notneed to be labeled as engineered becausethere are no material differences between theaquadvantage strain and naturally raised salmon.

once the product reachessupermarkets, consumers may not realize they areconsuming a fish from the new line as the flavor,texture, color and odor are the same. critics are callingthe modified salmon a "frankenfish." and some members ofcongress are pushing back against the approval,citing health, labeling and economic factors.

in the days before plowsbroke the plains, the prairies were populatedwith different animals that helped sustainnative american life. stories are still toldabout the open prairie being made black withenormous herds of bison. by the late 1800s,commercial hunting decimated thebovine species. naturalists brought theherd back from the edge of extinction.

and over the pastfew decades, several entrepreneurs have beenworking to increase the herd size androundup some profit. producer joshbuettner explains. it's been said thatgood fences make good neighbors. but for one nebraskan,these fortifications are a gateway - to his vision ofrestoring magnificence to the great plains.

daveklingelhoefer/watertown bison ranch - amherst,nebraska: "the bulls - especially the bulls. they're so majestic. they just...the way theywalk, you know they're the boss...and they're justkind of the king of the prairie like the lion isthe king of the jungle." watertown bison ranch inamherst, nebraska is where dave klingelhoefer and hisfamily house 150 head of

bovine behemoths - whichcan stand six feet tall and weigh up to a ton. bison ranch - amherst,nebraska: "we were going to buy two calves, one foreach grandson, and we came home with 11. so i guess we gotinto it that way." klingelhoefer grew up with11 siblings on a farm just 5 miles away, raisinghogs, cattle and farming row crops mostof his life.

and his own corn andsoybean operation has afforded the opportunityto sow a few hundred acres with seeds from the past. bison ranch - amherst,nebraska: "yeah, ever since i was a little kidi've been fascinated with the wild west and fourthgrade american history we did a lot of stuff withbison and indians and always liked that." estimated at a herd sizeof 30-60 million in north

america in the year 1600,bison, bizon or buffalo as they're known somewhatinterchangeably, were hunted to near extinctionover a century ago. according to figuresfrom the national bison association, by 1900the american buffalo population had dwindledto less than 1,000 head. but conservation haveresulted in a rebound of sorts. industry trade groupsclaim 20,000 bison now

roam publiclands in the u.s. and canada. and while far short of astampede, comparatively, usda's 2012 census ofagriculture adds over 160,000 bison - valued atnearly $95 million - on more than 2,500 privatefarms and ranches on domestic soil. government numbersindicate less than 100 private buffalo herdsexist in the cornhusker

state. but the modest resurgencehas served up niche markets for watertownbison ranch - starting in nearby kearney. yousefghamedi/cunningham's journal pub and eatery -kearney, nebraska: "you know he kind of approachedus and said, hey listen, we have this bison. we'd like to see how itwould work on your menu.

so we have introduced itas a special item and it has gone overextremely well. so it kind ofsells itself. people come inspecifically for it and we've done verywell with it. it's local. that excites people. and it's different." while exotic steaksand burgers spur sales,

proponents also toutnutrition, citing the meat's leanness and omega3 fatty acid content, which they sayrivals that of fish. spencer loescher/headchef, tru cafe - kearney, nebraska: "bison isa beautiful protein. bison itself, as we know,is a lower fat ratio than beef. it has a higher ironcontent and it is very delicate, no gameyflavor to it."

klingelhoefer attributespotential health benefits of bison consumption tohis animals' simple grass diet, which excludesgrowth hormones and antibiotics. bison ranch - amherst,nebraska: "the difference in a pound of beef and apound of bison is, when you're done frying ityou still have a pound of bison where the beefyou dump half a cup or whatever you dumpout as grease.

it's expensive up frontbut you actually get what you pay for." minimal supplements keepinput costs down, but the buffalo man saystime is a top hurdle. it takes 3 years to getbison to market, but similar ruminants, likecattle, are ready in less than half the time. bison ranch - amherst,nebraska: "it's a pretty slow process and kind offrustrating a little bit

because there's nomoney coming in. with the beef cattle youcan sell all your calves at one time and get abig check - whereas these things it's more of sellone or two at a time." premiums, typically athird or more higher than beef, are the payoff. consistent prices helplure customers willing to pay 12 to $16 perpound for bison cuts. however, the bison farmanticipates the extended

shelf life of jerky willhelp provide the backbone they seek fortheir business. upping their ability toprovide a larger volume of merchandise has ledto an arrangement with tennessee-based tractorsupply company that provides cured product tocoastal and southern test markets. charlie emswiler/owner- wahoo locker, wahoo, nebraska: "we have neverpacked one ounce sticks of

jerky before. but it's working well. it was a challenge andit's a learning experience a little bitbut it's fun." when it came time to finda processor, wahoo locker was a no-brainer. a small, well known packera couple of hours away, wahoo locker drawsclientele from nebraska and surrounding states.

with a reputation forhigh quality meats among mainstream and nicheproducers, owner charlie emswiler says variety -from the barnyard to wild game - sets wahoolocker apart from larger businesses which handleonly one type of animal. nebraska: "the processis similar to beef. the meat is leaner. therefore it's going to bea lot leaner product and higher in protein and veryhealthy...healthy snack

compared to beef. beef you can only get solean and bison resembles deer in a sense of theleanness so it makes very good jerky." in the hunt for ancillarymarkets, the rancher from big red country aimsto borrow from native american ways - byutilizing all parts of each beast. old west entrepreneursused buffalo hide to make

leather, bones were groundfor fertilizer, and manure was burned asa fuel source. in the absence of wood orcoal, natives and later settlers used buffalochips, or "plains oak" to keep warm andcook meals over. and with abundant supply,klingelhoefer draws modern parallels tooutdoor enthusiasts. bison ranch - amherst,nebraska: "it burns clean and hot and givesoff a nice smell."

as opportunities arise,and barriers break down, watertown bison ranch willcontinue its multi-pronged approach to themarketplace. and while working toincrease the size of his herd, klingelhoefer hopesthis icon of america's past propels hisbusiness into the future. bison ranch - amherst,nebraska: "i think as long as we can have a qualityproduct, people get used to the prices, used to thequality...i think they'll

stay with us. that's going to be our jobis to make sure people are happy. if they're happy,they'll buy it." for market to market,i'm josh buettner. next, the marketto market report. export sales, liquidationof short positions and anticipation overelections in south america made for mixedgrain markets.

for the week, decemberwheat lost 7 cents and the nearby corn contractgained a nickel. anticipation over theargentine elections kept the soybean market flatwith the january bean contract gaining 2 cents. december meal bucked thetrend falling $5.80 per ton. in the softs, decembercotton lost $1.64 per hundred weight.

over in the dairy parlor,december class iii milk futures lost 27 cents. the livestock sectorcontinues to be volatile this week. december cattlelost just under $1. january feedersdropped 90 cents. the december lean hogcontract gained $2.65. in the currencymarkets, the u.s. dollar index increasedmore than half a percent.

december crude struggledto stay above $40, losing 35 cents per barrel. comex gold declined$4.50 per ounce. and the goldman sachscommodity index gained 3.5 points to settleat 337.10. pearson: here now to lendus their insight on these and other trends are twoof our regular market analysts, elaine kuband walt hackney. elaine and walt,welcome back.

kub: always a pleasure. pearson: we'reexcited to have you. we want to jump into thiswheat market, elaine. it has been a tough marketto watch, down 7 cents on the week. u.s. dollar is stronger. are we going to get anypositive news in this market?

kub: it's hard to saylonger term what sort of weather, when we talkabout the strongest el nino that has beenrecorded maybe ever so that's the kind of thingthat internationally could come up with some sortof a weather surprise. but as far as domesticwheat markets, that most recent november reportshowed our export situation, the projectionsare the lowest since 1972. so no, there's not alot of optimism for u.s.

wheat right now. pearson: what have youheard on winter wheat planting progress? how is the croplooking so far? big storms rolling acrossthe plains this week. anybody getting nervous? kub: no, i think that thegeneral conditions for winter wheat are good. we don't want to haveflooding, we don't want to

have excess moisture, youwant to just have the crop be able to make itthrough the winter. so, so far, so good there. pearson: advice forproducers with the wheat in the field? kub: as far as marketinggoes, sit tight. there have been someinteresting things, if you've got wheat in thebin, you've got soft wheat in particular, thatmarket is a little bit

interesting. in the protein scenariothere is actually sort of a shortage or anexcitement for the milling quality low protein wheat,so there is actually a premium for the chicagocontract over kansas city right now, which is aboutthe only interesting thing that we can say for amarket that otherwise is just dragging alonghere in the doldrums. pearson: let's jumpinto the corn market.

positive week, up anickel, elaine kub. does this bode well fora thanksgiving rally"? kub: not necessarily, no. i think maybe the futuresare starting to pay attention to the factor the overall market structure is payingattention to the farmers' non-willingness to sell. we've definitelyseen it in the basis. the nationwide basis onaverage is 20 under, which

is very strong forthis time of year. and individual bids, outon the eastern corn belt there's 25 overbids atprocessors, there are some very strong basis numbersbecause the farmers just don't want to be sellingat this price level. pearson: so as we workinto december, how high can these futures run? how high will they need torun to pull that corn out of the farmers' hands?

kub: well, i'll tell youpersonally going through december i'm more worriedabout how low can they keep falling if the dollarcontinues to be strong. i'm not expecting to seeany major market rally through the endof the year. but once you get past thatand once you get past the usual crush of earlyjanuary selling i think that the market could getanother 40, 50 cents, sort of a rally.

but long-term this is justsort of the price i think, that there's no shortageobviously of supply, there is probably no change inmajor demand patterns at this point so i thinkwe're going to be fairly range bound. pearson: now you mentionedyour bigger concern was how low this can go. how low do youthink it can go? kub: i guess my point isi just don't think that

we've seen a bottombecause we have the potential strength in thedollar, the potential for a rise in interest ratesthat could strengthen the dollar further. those are the kinds ofthings, fund rebalancing here at the end of theyear, things like that, that could still put somedownward pressure on these grain prices. pearson: now we've talkeda lot about the dollar,

big effect in wheat, bigeffect in corn, big effect in hogs. where do you see thedollar going in the short-term? let's talk aboutthrough december as we contemplate, again, theidea of a federal reserve interest rate hike. kub: i think that theinterest rate hike has been priced in so we'vereached this level, it's a

unitless level but 1.00. it made that sort ofpsychological jump this week, which isinteresting. but i think that that hastherefore priced in this interest rate rise. the only surprise will beif they don't raise the interest rates. and in that case, thatwould be bullish to grains if the dollar then fell.

i don't know that that'sgoing to happen but that's the thing to belooking out for. pearson: is there --should the fed raise rates, then we're going tostart pressing for another rate increase one wouldassume, is this a cycle that is going to continueto build face headwinds for producers all year? kub: it could and we haveto look so far back in history, at least in ourcareers -- pearson: early

2000s. kub: or the '80s wheninterest rate changes happened every monthor every few months. but it has been so longsince the interest rate or the fed has been changinginterest rates from one month to the next thatit's really hard to know how the commodity marketswill react to that kind of activity. pearson: with that riskout there, potentially, do

producers need to be doinganything with their '16 crop today, on thecorn side especially? kub: i think that theyshould be looking long and hard at selling the '16crop at the same time that they sell the '15 crop orstart selling some of it. i don't want to be tooaggressive because we don't know what theweather situation will be. we've started to get alittle bit dry here this fall and if we had ala nina, which is a

possibility to developlater on, we could have a drought year. we don't know. so i wouldn't be realaggressive with '16 sales yet but once we see a 40or 50 cent rally in the spring, which is possibleand seasonally expected, i would normally besuggesting to make seasonal sales. pearson: okay.

now i want to go to ourgood friends over at twitter. these folks have tweetedto us @markettomarket. we encourage all ofyou to do the same. and this question camefrom jerod in oklahoma. since we're talking feedgrains, and we have two of the world's greatest feedgrain experts on hand, jerod in oklahoma, jerodmcdaniel is curious, will sorghum, milo, exportnumbers match or beat the

usda estimate? and if so, willbasis improve? elaine, i wantthis to go to you. pearson: so myunderstanding -- this is a china story. china has been the onethat has really been driving the excitementfor sorghum in 2015. but going into 2016the usda is no longer projecting those excitingsort of export numbers.

so if the sorghum basis atthis premium that we have been experiencing in 2015falls back, that would not be a major bearishchange, it would just be a reverting back to normalsort of situation. and i think that that'sprobably the most likely scenario for sorghum. it might not go all theway back to normal because we do have increased foodgrade use for sorghum that we hadn't seen fiveyears ago, let's say.

but otherwise, andwalt can speak to this, typically sorghum, miloand corn are basically the same value ina feed ration. hackney: i think yourcomment one to one is pretty accurate. i know as an ex-feedlotmanager i know that we looked at it in thatregard too, our feeds and feeding charts. and in regard to that iwould certainly agree with

you. the only problem is as wetalked in our conversation is in milo, when you'reflaking, if that's your goal at the feedlot, itgelatinizes much quicker than corn in the rollers. and you have an issuethere that you have to be sensitive to and you haveto turn your heat down and you've got to readjustyour rollers and so forth. pearson: now, walt, inyour conversations with

cattle feeders,particularly in kansas, oklahoma, sorghum growingareas, are they eyeing these large sorghum acresas a relatively cheap feed source for theremainder of '16? hackney: yes, i think thatyou could easily say they always are looking foralternate sources of grain that might help themin their ration costs. but there are overridingissues in regard. for instance, wheat.

you should not apply over41% of your ration as wheat in the ration andyou need to have the balance of it incorn or so forth. you have the gelatinizingissue if you're a flaker with milo. so there are thoseoffsetting circumstances that you haveto be careful. not to say you can't useit if it's financially to your advantage, but becareful if you're putting

it in the ration. and if you get it too hot,if you will, too high in the protein, then allof a sudden you start ulcerating the livers,then all of a sudden you start taking big discountsfrom the packer with ulcerated livers. pearson: this is not thetime to be taking big discounts from the packer. hackney: absolutely not.

pearson: now we wantto come back and talk livestock. but first, elaine, i wantto get your thoughts on the soybean market. as we look out thisweek, relatively flat, argentinianelection on sunday. is that going to have abig impact on the u.s. bean market on monday? kub: i hope not.

i mean, it wouldn'tlogically make sense especially because both ofthe candidates that are up for the presidency haveboth said that they intend to remove the restrictionsor the export taxes or whatever it is that hasbeen reducing the exports coming out of argentina. both of them have saidthat they want to do that. now, the actual timing,are we really going to witness thathappening very soon?

really hard to say. but when you lookshort-term this past week's export salesnumbers for soybeans was reduced or was lower thanwe've been seeing lately. so maybe our exportcustomers are looking out through 2016 anyway andsaying, well maybe we're going to turn to argentinaonce we see this happen. pearson: given thatthat's, again, another downside risk opportunityor potential i should say.

do growers need to beaggressively marketing that '15 crop here beforethese kinds of changes can take place? kub: i wouldn't say thatthis is a threat of that level just becausei believe our u.s. soybean prices live anddie based on our domestic demand more sothan exports. or we're not going to loseso many exports based on this factor alone that youneed to be worrying about

this on monday. pearson: so if folks havebeans in the bin, keep them there? what would beyour strategy? kub: yes, probablybecause they also would be seasonally expected tobe rising in the spring. but if you need cashbefore the end of the year beans are a better betthan corn just because you can raise cash faster witha bushel of soybeans than

a bushel of corn. pearson: alright. thank you so much,elaine, great answer. now, walt, want tocome over to you. we have seen a lot ofvolatility in this live cattle market inparticular, big up days, big down days, finishedthe week down a dollar. what does that mean forthe producer, the guy trying to use theboard to hedge?

how do you manage risk? hackney: i'm so glad youbrought that to the table. volatility is a new animalin the livestock industry. and it has created anenvironment in the average producer sector of hisinability to arrive at a sensible price discoveryin regard to the cash market. he can't do it. he has no sense of valuein regard to the current

cash market. as a result he can'taccurately price his product even in anegotiating environment because this volatility isup the limit one day, down the limit the next, up thelimit the next day and it has taken away from himall the confidence of arriving at pricediscovery and the value of cattle specifically. and then of course weare all aware of what has

happened to thefeeder market also. we went from in the high,historically high feeder price in the mid-summerof $2.50 or $2.60 on a six and a half weightfeeder steer for october delivery. we're down under$2 a hundred now. pearson: do feed yards getin and buy at this price? are we at a fear-basedbottom here? do you expectthings to go higher?

or do you hold off andgive it some more time and let it continue to fall? hackney: they'll buy atthe current market even though they have no realsense of price discovery in the value of thecalf or yearling. the fact remains though ifit's ridiculously priced lower well then again yes,they'll buy and fly, if you will, by the seat oftheir britches in regard to the break even and whatthe economic return on

those is going to be200 days down the road. and so as a result, you'vegot a real reluctance out here, there has been aphenomenal money drain in the cattle feedingindustry specifically. now we're seeing itin regard to the ranch community. they have loved the marketand well they should have. but now all of a suddenthose that retained the ownership of their calfcrop, for instance,

they're sitting out thereon the point of a needle and they don'tknow what to do. they can't objectivelykeep them, put them on feed, take the gambleof feeding them out. they don't have thefacilities or the grain supply and all. so they've got to lookat the cash market. and that's true in thefed cattle market too. today, as an example, mikethey're sitting here as we

speak getting bid $1.23on cattle that a week ago were at least$1.29 to $1.31. it's just phenomenalthe volatility. pearson: a $9 enginea week is incredible. now, before we let you gowalt, we want to get your thoughts on the hogmarket, up $2 this week. do we find a bottom? are we moving higher? hackney: i think it wouldbe really dangerous to be

seeking $1 or $2 as faras a bottom in the market goes. i don't know where it is,neither does anyone else. the analysts that i reallyrespect and pay attention to are fearful thatwe're going to be able to accurately and adequatelyhave a 2.3 million head hog slaughter weekly goinginto the first quarter of this coming year. they think we've got anexpansion rate out there

that is going to supplythose hogs and those numbers. alright. and we will pick that upin the market plus and get into more details. walt and elaine kub, thankyou both so much for being with us this week. hackney: you'revery welcome. pearson: that wraps upthis edition of market to

market. but elaine, walt andi will continue our discussion and answer someof your questions in that market plus segment,which you can find on our website. it's the place you'llfind audio podcasts and streaming videoof the program. you can also interact withus through our twitter and facebook feeds.

we are @markettomarket. and join us again nexttime when we'll examine a group of farmers who helppeople in need on the other side of the world. so until then,thanks for watching. i'm mike pearson. have a great week. ♪♪ market to marketis a production of iowa

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