2009 Kansas Agriculture Outlook

Let's Play A Game

“You got to know when to hold 'em, know when to fold 'em, know when to walk away and know when to run.” These well known lyrics of Kenny Rogers, The Gambler don’t just apply to a game of cards anymore.

As producers look down the road to 2009 a lot of questions come to mind. Hold out for better prices or take the money and run? The stakes are high and the winnings are uncertain.

But every hand’s a winner and every hand’s a loser – it’s all in how you play your cards. Before laying your chips on the table, consider the inside advice of Kansas agriculture leaders.

Kansas Secretary of Agriculture, Adrian Polansky sees 2009 as a year with challenges that will push for sound decision making. “One area we really need to focus on is risk management,” Polansky said. “For production agriculture the volatility that we’ve seen on the input side whether it’s diesel fuel, fertilizer or other inputs; it appears that we are likely to continue to experience volatility. There will certainly be some market dynamics that we will have to pay attention to in order to be successful.”

Polansky also mentions the uncertainty that lies ahead with a new administration on the federal level. “There is certainly interest in some of the critical appointments, we also have much of the Farm Bill yet to be worked through and there are still many unanswered questions in regard to how the Farm Bill will be delivered, which is very significant to all producers.”

In terms of crop agriculture decisions, Polansky says that policy in terms of biofuels could have significant impact on potential profitability. “For agriculture and the rural economy it’s important that we work towards policy decisions to enhance biofuels and bio-refineries that have positive impact.”

Hereford Family Tradition

Hereford producers find significance in functional cattle

Peacefully grazing the gently sloping hills near Concordia, KS is what appears to be a typical herd of Hereford cattle. To the common eye they are nothing more than livestock, but to the Swenson family they are a cherished product of careful evaluation and strategy. Although humble in a pasture they are sought to be sound in form, efficiently functional and the result of generations of hard work and passion.

It all began when Emil and Carl Swenson purchased their first Hereford females and established Swenson Brothers Herefords in 1934.  From there, the operation grew and yearly production sales were held until the late 1980’s.  “Back then, we were only selling two year old bulls, but the demand that year had buyers coming back to the farm after the sale to purchase yearlings, and from then on, we sold the bulk of our bulls by private treaty on the ranch,” said Richard Swenson. The family will celebrate 75 years in the Hereford business next year with many more to be continued on by Richard and Denise Swenson and their three sons; Ryan, Kevin and Ben.

The Swenson’s adopted the teachings of Dr. Jan Bonsma, a South African scientist who toured the U.S. and wrote the book “Man Must Measure”. As a researcher, Bonsma is internationally famed for his knowledge of the relationship of cattle to their environment and to each other. The book, which went out of print in 1983, outlines beef animal growth characteristics, environmental impacts and fertility, among other traits Bonsma taught the utilization of linear measurements of cattle to predict maternal function, growth and performance in various seminars and lectures.

“My dad attended a lecture and demonstration at K-State given by Dr. Bonsma, and was very impressed with his knowledge and understanding of function and fertility of cattle and how animals relate to their environment,” Richard Swenson said. “By studying an animal, he could easily visualize its functional efficiency and fertility.”

Mad Cow #14

Fresh "Mad Cow" Case In Canada

It's time once again for that same song and dance... this time it's Mad Cow #14. Mad cow disease has struck Canada, with the country's food authorities reporting yet another case on Friday.

The Canadian Food Inspection Agency said that a six-year-old cow was found to be afflicted with the disease, also known as bovine spongiform encephalopathy (BSE) on a farm in Alberta province.

It assured the Canadians that no meat from the animal has entered the food chain or the animal feed system. This is the 14th case of mad cow disease in Canada which has been declared "safe'' by the World Health Organization after the last case two years ago.

The food agency said it is tracking other animals of the herd which came in contact the diseased cow to know whether they have been infected. Since the disease is caused by the consumption of feed which contains traces of brains and spines of infected animals, the agency is also tracing the source of the feed.

Though Canada banned the use of brains and spines in animal feed in 1997 after BSE outbreak in Europe, the new case is a bad news for the economy and for nearby cattle markets.

What's Driving Food Prices? (not ethanol)

Ag Economists Analyze High Commodity And Food Prices

In case you haven't heard, food prices are going up. Go ahead... protest, panic, point fingers. It's that evil ethanol industry that's doing this afterall, how dare they use corn to make fuel, taking away from the supply and making the grocery bill go up.

Recent studies of Purdue University ag economists show that in fact the food prices are drven by a combination of factors... not only ethanol. High oil prices, the weak dollar, world production and consumption trends all add a little 'push' to the price. But that's a side of the story less often mentioned.

The following is a excerpt from the press release from Purdue University about the findings:

--- In a Farm Foundation commissioned report, the Purdue economists - Phil Abbott, Chris Hurt and Wally Tyner - highlight key factors gleaned from examining 25 recent studies plus their own analysis. Their conclusion: a complex combination of factors is fueling agricultural commodity price increases and rising food costs.

 Tyner, an expert on energy and policy issues, said the price of oil is an important factor that has increased the demand for biofuels. "About $3 of the corn price increase is due to the higher oil price and $1 to the ethanol subsidy," he said.

 As high oil prices spur demand for biofuels, the increased corn production stimulates demand for fertilizer, diesel, propane and other agricultural inputs. Prices for these inputs have also risen due to the "demand pull" from more corn being produced and subsequently the "cost push" due to the fact that petroleum products are key ingredients in many of these inputs.

Pushing the pork

U.S. Pork Exports Jump 200% In 10 Years 

 (From the U.S. Meat Export Federation)

"One of Every 3.3 Pounds of Pork Traded Globally Is Ours"

Ten years ago, the United States exported 1.116 billion pounds of pork, making our nation the source of about 1 pound of every 6 pounds of pork traded globally.

How times have changed.  In the first four months of 2008 alone, the U.S. pork industry already has exported 1.389 billion pounds of pork products to trading partners around the globe.   What that means is that for every 3.3 pounds of pork traded in the world, 1 pound came from the United States.

The consistent taste and quality of U.S. pork products and decades of campaigns and promotions to bring the message of the high quality and reliable attributes of U.S. pork to the attention of the world have made the United States the dominant player in the global pork industry.

“It’s clear that future growth and prosperity for the U.S. pork industry are inextricably tied to our ability to grow exports,” said Danita Rodibaugh, USMEF executive committee member, a pork producer from Rensselaer, Ind., and past president of the National Pork Board. “The increasing presence and importance of U.S. pork in the global marketplace is a tribute to the quality of product, in addition to how well we are marketing it overseas.”

U.S. pork has set export records for 16 consecutive years, the best two months ever for U.S. pork exports were both in 2008 and this year exports have accounted for 22 percent of total U.S. pork and pork variety meat production, versus 16.5 percent last year.

Total pork exports for January-April 2008 are up an impressive 52 percent over January-April 2007, and are valued at $1.4 billion.  USMEF forecasts total 2008 pork exports at 3.34 billion pounds – a 200 percent increase over exports in 1998 – which could be conservative if exports continue at the torrid pace of the first four months, according to Erin Daley, USMEF manager of research and analysis. Unprecedented volumes of pork exports to Japan, the China/Hong Kong region and Russia have resulted in record-breaking monthly volumes during 2008. Click to view release.