Bailout Nation

An interesting article in the New York Times:

“For the government to print money at the expense of taxpayers as opposed to requiring or going about a receivership and wind-down of any insolvent institutions should be troubling to taxpayers and regulators alike,” said Josh Rosner, an analyst at Graham Fisher & Company and an expert on mortgage securities.

“The Fed has now crossed the line in a very clear way on ‘moral hazard,’ because they have opened the door to the view that they are required to save almost any institution through non-recourse loans — except the government doesn’t have the money and it destroys the U.S.’s reputation as the broadest, deepest, most transparent and properly regulated capital market in the world.”

Food for thought...

Maybe that's why the pork industry isn't quite as nervous as it should be with respect to expansions and new builds here in Indiana, despite the gloomy forecasts experts have been giving it:

"Excessive pork production combined with feed price escalation has the North American pork industry on pace to suffer the most damaging financial year ever, said a Purdue University expert."

Thing is, if they're expecting help (or bailouts) this time, they best not be looking toward the taxpayer, because word on the street is they're Fed up. (yeah, poor pun - but I couldn't resist)

What is our Govt. saying about the future for ag?

Check out this recent forecast put out in December 2007 by the USDA:

USDA Agriculture Predictions to 2017: "Pacific Rim nations and Mexico are key markets for long-term growth of U.S. pork exports. Higher income countries of East Asia increase pork imports as their domestic hog sectors are constrained by environmental concerns. Mexican pork imports rise rapidly, driven by increases in income and population. Brazil is constrained in its pork trade by the presence of foot-and-mouth disease, but continues to be a major pork exporter to markets such as Russia, Argentina, and Asian markets other than Japan and South Korea."

Did you notice something odd in the above quote?

Please permit me to highlight this:

"Higher income countries of East Asia increase pork imports as their domestic hog sectors are constrained by environmental concerns."

If I understand correctly, East Asia's hog sector is constrained by environmental concerns, ergo they'll import more from countries where, say, there are maybe less environmental concerns and/or constraints?

~ shaking my head here ~

Maybe it doesn't make you pause for thought, but I have to admit, it struck me as an odd thing to say by the USDA.

Anywhooooo, here's another important reason why taxpayers won't be too sympathetic toward government handing out subsidies, grants, etc. with respect to larger farms in the years ahead:

"Although net farm income initially declines from high levels of 2007 and 2008, it is projected to remain historically strong throughout the projection period, and reach record levels beyond 2011. Growth in export demand contributes to increases in agricultural commodity prices and gains in farm cash receipts. Increases in corn-based ethanol production also provide a major impetus for this strong income projection. Higher commodity prices lower government payments for price-dependent program benefits, although annual CRP payments increase. With lower government payments, the agriculture sector relies increasingly on the market for its income. Cash receipts represent more than 90 percent of gross cash income in the projections, up from about 85 percent in 2005."

Keep in mind... "The report assumes that there are no shocks due to abnormal weather, further outbreaks of plant or animal diseases, or other factors affecting global supply and demand."

Since our Fed is pretty thin from bailing out the billionairs in recent weeks, I'm guessing they won't have much available to help in any upcoming catastrophes ...like the massive floods swirling throughout the midwest these past few days (and prior).

In other news, I spoke to a friend of mine down in southern Indiana today. He told me about the Michellen (sp?) tire plant layoffs (and other shut downs going on in his area).

Thousands of jobs disappearing in his area...

Times are tough.

Money's tight.

So please don't ask taxpayers to dig deeper.

Thank you.

Meanwhile, while most will be watching the Markets, I'll probably be staring up at the skies on Thursday night searching for a hint of the Auroras this spring equinox.

Tackling the Gard

Not long ago, Senator Gard called Hoosiers losers.

Her latest gig, conveniently combining both Senate Bill 200 and Senate Bill 199 with Senate Bill 43, effectively wiped out some important environmental legislation in the process.

She waves her little magic wand and *poof* -- in your face, hoosiers - literally speaking or not.

Sure, go ahead and call me bitter, because it is a tough pill to swallow over and over and over again whenever that woman touches any piece of legislation that could potentially improve our State. One gets kind of sad at our poor environmental record, 49th out of 50.

But I take heart hoping the electoral process will bring with it some much needed housecleaning.

I for one, can't wait to say, "buh-bye-Bev."

Maybe the National Pork Association has a position waiting for her?

hehehe

Drugs in our Water

The Barbara Cox video interviews are now posted over at the Bloomington Alternative (link), in which Barb makes a very important point with respect to water:

"What's in my backyard today is in your backyard tomorrow."

The Barbara Cox interviews were taped before the BIG BOMB dropped regarding water supplies across the country.

Here's what I mean...

On March 10, 2008, the Associated Press released some of the details of an intensive 5 month study of the nation's water supplies -- and they came up with some startling results:

A vast array of pharmaceuticals — including antibiotics, anti-convulsants, mood stabilizers and sex hormones — have been found in the drinking water supplies of at least 41 million Americans, an Associated Press investigation shows.

...And while researchers do not yet understand the exact risks from decades of persistent exposure to random combinations of low levels of pharmaceuticals, recent studies — which have gone virtually unnoticed by the general public — have found alarming effects on human cells and wildlife. (link to full story)

Here's the kicker...

The federal government doesn't require any testing and hasn't set safety limits for drugs in water. Of the 62 major water providers contacted, the drinking water for only 28 was tested. Among the 34 that haven't: Houston, Chicago, Miami, Baltimore, Phoenix, Boston and New York City's Department of Environmental Protection, which delivers water to 9 million people.

And don't, for one minute, think that all of this only has to do with human drugs entering the water supply.

In the United States, the problem isn't confined to surface waters. Pharmaceuticals also permeate aquifers deep underground, source of 40 percent of the nation's water supply. Federal scientists who drew water in 24 states from aquifers near contaminant sources such as landfills and animal feed lots found minuscule levels of hormones, antibiotics and other drugs.

Of particular concern, the news article highlighted this:

Human waste isn't the only source of contamination. Cattle, for example, are given ear implants that provide a slow release of trenbolone, an anabolic steroid used by some bodybuilders, which causes cattle to bulk up. But not all the trenbolone circulating in a steer is metabolized. A German study showed 10 percent of the steroid passed right through the animals.

Water sampled downstream of a Nebraska feedlot had steroid levels four times as high as the water taken upstream. Male fathead minnows living in that downstream area had low testosterone levels and small heads.

This news comes at a time when the...

EPA is proposing a voluntary option for CAFOs to certify to the permitting authority that they do not discharge or propose to discharge and therefore do not need NPDES permit coverage. (link)

Seems to me that there is a WHOLE LOT OF GOVERNMENT HOUSECLEANING needed. Our tax dollars are paying these people to do ...what, exactly?

Don't think you've heard the end of this. The news is heightening worries among scientists of long-term consequences to human health.

"Tick. Tock" Time will tell.

Jasper County Long Range Planning

Thursday is the big day, folks.

It's your chance to have a voice in Jasper County Long Range Planning.

Meetings held on Thursday, March 13, 2008, will determine the future of our county, so if ever there was a meeting to attend, this would be the one. It will be held twice, so choose the time that best meets with your schedule:

1. Thursday March 13th at 11:30 am at the Jasper County Fairgrounds
2. Thursday evening, March 13 at 6pm at the Demotte Fase Center

Both meeting times/places are open to the public. This is the place to voice your opinions about CAFOs, subdivisions, etc. The meeting/s will explain the writing of the new comprehensive plan for the future of Jasper County and then people will take a short survey and be allowed to make public comment.

Hope to see you there!

Desparate Acts by Hog Producers

On the subject of "desparate acts" by the hog producing sector, it would appear that at least one large provider has finally "blinked" ...or so it would seem when reading this article:

This week, Smithfield's production arm, Murphy-Brown, said it will eliminate 40,000 to 50,000 sows from its overall herd of over 1 million sows. "There's a glut of pork out there, and with high input costs, there's no way we can add enough value to make money," Don Butler, director of government relations for Murphy-Brown, told Agriculture Online. "We must cut back. We would hope that other pork producers around the country would see things the same way and take similar action."

While the announcement sent the message that five-dollar corn and $40-hogs don't work, it sent a different concern to the hundreds of contract farmers who operate the farrowing and finishing operations that crank out Murphy-Brown pigs. Which contract farms will Murphy-Brown no longer need?

Indeed, even as the price of corn continues to rise while pork drops further, one has to wonder why anyone would even consider starting a HOG CAFO or CFO in this economic climate.

Sure, the plummeting dollar makes the price of our pork a wee bit more enticing in some foreign markets, but here at home -- you gotta think twice about getting into 'da biz, right?

Well, maybe "how it works" might shed some light onto the "why" of it all. This post by a prospective hog CFO owner is asking for help making his decision of whether or not to go into hog farming. It's quite enlightening:

The deal is that a huge hog farm will "build" me a hog barn on my land and fill it with their hogs, I have to take care of the hogs daily ect., I am also told that the big farm will guarantee me to pay off the barn. I am sure you guys know the type of deal I am talking about.

My question is, Is the hog market so bad that doing this kind of contracting makes no financial sense or is the market bad to the "small" hog farmer. Any insight is appreciated (link)

I've mentioned in the past about integrated contracts -- how it's not necessarily just the farm and/or farmer that needs to go under the microscope as the "source" of problems relating to factory-style farming. The people getting off virtually "scott-free" in all the wastes these farms can produce are the larger entities who "come bearing gifts" ...virtually bribing farmers to go big (or threatening them to get out by pulling their patronage away).

A small farmer with no customers is a bankrupt farmer.

A large farmer with contract in hand, well, maybe he'll eke out enough to feed his family and keep his land a few more years (?) ...

I've said it before, and I'll say it again, CAFOs and CFOs are NOT farms. If anything, owing to their size and the sheer volume of wastes they produce (to say nothing of the water they consume daily), the closest category could be -- light industrial -- and in extreme cases, heavy industrial is more appropriate.

Sure, that's just my humble opinion, but I can assure you, it's an opinion shared by others.

In fact, I was pleasantly surprised when I recently read Mr. Schellinger's official statement on the subject:

Confined Animal Feeding Operations or CAFO's represent a significant challenge to Indiana's quality of life. These enormous, largely unregulated facilities produce vast amounts of animal waste that are then released untreated into our rivers, streams and spread across our land. The magnitude of these operations means that one facility has the potential to affect thousands of people in proximity to it.

I believe economic growth and protecting our environmental quality of life are not mutually exclusive goals. CAFO's can be of economic value to Indiana if they work with the community and not against it. That means taking responsibility for the waste they produce and the impact they create.

As Governor, I would pursue a policy that regulates CAFO's under industrial zoning restrictions rather than agricultural. I would work to implement stronger oversight and monitoring of these facilities, working with communities and CAFO owners to ensure an open, fair and constructive dialogue.

Industrial zoning restrictions -- gotta love it!

Permit me to savor the thought.

Now, once they're all rezoned (to industrial from agricultural), let's take another look at them thar farm subsidies, eh?