Food Prices Set To Go Lower

Via Big Picture Agriculture , the UN gives a negative outlook for grain prices:

Global food prices could decline further in coming months after hitting their lowest level in more than a year in July, the United Nations' food agency said on Thursday, pointing to prospects of abundant grain supplies.
Food prices surged during the summer of 2012 due to a historic drought in the United States but improving prospects for cereal supplies in 2013/14 are fueling the opposite trend this year, the Food and Agriculture Organisation (FAO) said.

"Supplies are proving to be much better than anticipated a few months ago. The weather has been pretty good in many cases and is giving hope for higher production," FAO senior economist Abdolreza Abbassian said.

He said good prospects for maize output in the United States, Argentina and the Black Sea region meant corn prices could lead other markets down this season, reversing their supportive influence on higher prices last summer. Food prices could face further downward pressure if the U.S. dollar strengthens, he said. A stronger dollar weighs on dollar-traded commodities as it makes them more expensive to holders of other currencies.
"There is an extent to which prices could fall," Abbassian said. "But I'm not sure we are going to see as much of a decline in coming months as we saw in the past few months."

I can hear the farmers already, "but the corn out in Iowa and Minnesota is a lot worse than what people think."  I don't think it will matter.  The combination of funds moving from commodities to stocks and the increasing yield trend is pointing to lower prices for a fairly long time.  Some folks who've gotten fat and happy the last few years are going to be worse off going forward.  That includes me.

The Birdman

The Birdman from Jessie Auritt on Vimeo.

Back At Chase Bank

Considering my history with Chase Bank, it may sound strange that I just opened up a new checking account there.  But, actually, there's a really simple explanation: I'm a whore.  Like the legendary welfare queen, I'll try to get any money for nothing, and that is exactly what Chase offered.  Apparently, the bank needs to draw in customers in order to get new hosts they can parasitically latch onto and extract fees from.  So they sent me a card in the mail offering $200 for opening up a checking account (they also put a $150 offer in the local coupon mailer, so its not like this is a limited offer).  You only needed to deposit $100, but to avoid fees, the balance would have to be $1500.  Then you had to keep the account open for at least 6 months.  Six months to get $200 on $1500 is 26.67% APY, and that ain't too shabby (I wonder if the use the deposits to fund credit card loans). 

So, obviously, I took them up on the deal.  I kind of see it as getting back at one of the too-big-to-fail banks that loots our economy and steals from people of modest means.  I figure if Jamie Dimon and his henchmen are willing to give me $200 for nothing, they can't be the financial geniuses they claim to be to justify their criminal salaries.  Anyway, that's one way I justify taking 20 minutes out of my life to sign up for a useless checking account in order to score $200.  It sounds a lot better than saying insatiable greed drove me to it.  That would be way too Jamie Dimon-like.

Returns To Labor

Henry Blodgett makes the case that it isn't a requirement of capitalism to pay your employees as little as possible:

One obvious solution to this problem is for big companies to pay their people more — to share more of the vast wealth that they create with the people who create it.
The companies have record profit margins, so they can certainly afford to do this.
But, unfortunately, over the past three decades, what began as a healthy and necessary effort to make our companies more efficient has evolved into a warped consensus that the only value that companies create is financial (cash) and that the only thing managers and owners should ever worry about is making more of it.
This view is an insult to anyone who has ever dreamed of having a job that is about more than money. And it is a short-sighted and destructive view of capitalism, an economic system that sustains not just this country but most countries in the world.
This view has become deeply entrenched, though.
These days, if you suggest that great companies should serve several constituencies (customers, employees, and shareholders) and that American companies should share more of their wealth with the people who generate it (employees), you get called a "socialist." You get called a "liberal." You get told that you "don't understand economics." You get accused of promoting "wealth confiscation." You get told that, in America, people get paid what they deserve to get paid: Anyone who wants more money should go out and "start their own company" or "demand a raise" or "get a better job."
In other words, you get told that anyone who suggests that great companies should share the value they create with all three constituencies instead of just lining the pockets of shareholders is an idiot.
After all, these folks say, one law of capitalism is that employers pay their employees as little as possible. Employees are just "costs." You should try to minimize those "costs" whenever and wherever you can.
This view, unfortunately, is not just selfish and demeaning. It's also economically stupid. Those "costs" you are minimizing (employees) are also current and prospective customers for your company and other companies. And the less money they have, the fewer products and services they are going to buy.

It would seem to me that this is common sense, but reading the comments sections of any blog post that suggests that current compensation schemes might not represent true value added brings down tons of comments about working harder and getting educated and earning what you get.  As a person who works in an office at a factory, I can say that the guys on the floor in the summer heat, working 10 or 11 hour days putting together industrial fans, are contributing pretty significantly to the product going out the door to customers.  They certainly work harder, physically, than any person in the office, under much worse conditions, but I'm pretty sure the folks in the air conditioning get paid more.  However, it isn't even the office workers who get the most rewards from the business for the least work when things are going well.  Unfortunately, our business hasn't been very profitable lately, but when it is, I can expect that much more of that profit will go to the owners who inherited the business from their parents or grandparents than will go to the guys sweating their asses off and actually earning that money for the business.  Luckily for me, I happen to be more closely related to the owners than to the workers, but the injustice of the setup isn't lost on me.  It just stuns me that so many people in the bottom part of the income pyramid buy into the tripe put out by the folks at the top to justify their position there.  Someday, probably sooner rather than later, that will change.

An Ecosystem at Risk

NYT:

Along 50 miles of northern estuary waters off Brevard County and the Kennedy space complex, about 280 manatees have died in the last 12 months, 109 of them in the same sudden manner as the Banana River victims. As the manatee deaths peaked this spring, hundreds of pelicans began dying along the same stretch of water, followed this summer by scores of bottlenose dolphins.

The cause continues to evade easy explanation. But a central question is whether the deaths are symptoms of something more ominous: the collapse of the natural balance that sustains the 156-mile estuary’s northern reaches.....

Mr. Rice’s fear, widely shared, is that an ecosystem that supports more than 4,300 species of wildlife — and commercial fisheries, tourism and other businesses generating nearly $4 billion annually — is buckling under the strain of decades of pollution generated by coastal Florida’s explosive development.

The evidence of decline is compelling. In 2011 and 2012, unprecedented blooms of algae blanketed the estuary’s northern reaches for months, killing vast fields of underwater sea grass that are the building blocks of the estuary ecosystem. The grasses are breeding grounds for fish, cover from predators, home to countless creatures at the bottom of the food chain and, not least of all, the favorite menu item of manatees.

The sea grass has largely been supplanted by macroalgae, fast-growing seaweeds that clump into huge mats that drift free in the waters. And the character of the estuary is changing: already, algae-eating fish like menhaden are significantly increasing, Mr. Rice said.

Leesa Souto, a conservation biologist who heads the Marine Resources Council, a nonprofit group devoted to protecting the estuary, quoted one expert as saying that the loss of grasses destroyed the habitat for 1.4 billion immature fish.

“We fear the fishery collapse may be forthcoming as these missing juveniles will never reach adulthood two or three years from now,” she wrote in an e-mail.

Scientists are blaming nitrogen loading.  Nitrogen and phosphorus are wreaking havoc in rivers, lakes and oceans, and these stories could be written almost anywhere.  One more thing on the list we're going to have to deal with if we don't want to end up like those manatees.

Bankrupt By Beanies

Bankrupt By Beanies from Chris Robinson on Vimeo.

As much as I would typically laugh, I feel bad that the guy got caught up in that craze.

The Mine's Running Dry

 Farmers in Kansas are cutting back on irrigation:

And neighbors know it. Anthony Stevenson, who farms near Ulysses, Kan., knows his neighbors pump his water, and he pumps their water. " 'Cause they're hooked in the same reservoir," he says. "If he don't pump it, I will."
But Stevenson waters more judiciously these days. His irrigation system is efficient, delivering water to the base of his lush, 8-foot-tall plants. And this year, Stevenson planted only half his field in corn. His well produces just half the water it once did, and the lingering drought isn't helping.
"We can't out-pump a drought," Stevenson says. "We can't out-pump Mother Nature. Our wells aren't big enough."
Stevenson is gradually farming more like people did in Kansas before irrigation: Growing more wheat, less corn and letting dry fields sit fallow a full year between plantings to collect moisture. But his income is taking a serious hit.
The aquifer's decline hasn't gone unnoticed. Wayne Bossert runs one of the state's four groundwater management districts. Kansas stopped new development on parts of the aquifer 30 years ago, he says.
"So we prevented it from getting any worse a long time ago," Bossert says.
In 2012, Kansas began enforcing very stiff penalties for overpumping. That drew death threats against state water officials. Still, most farmers now want to manage the decline of the aquifer, Bossert says. They can't ignore it.

I think it's a little too late.  If you think that part of the country is empty now, give it 30 years.

China Manufacturing In A Chart

Wow:

The pork thing really gets me.  You know how many hogs are in this country?

Camera Obscura Paris

FRANCOIS 1ER ● STENOP.ES ● from Romain Alary on Vimeo.

Has The Barnett Shale Peaked?

Man, I'm going crazy with the question headlines tonight.  Anyway, Dave Summers questions the conventional wisdom about the shale gas boom:

Figure 3. Projected decline in Barnett shale production (assuming continued drilling). Note the steep decline rates for new wells.(Bureau of Economic Geology)  

Because of the current cooler weather in parts of the country, gas prices for September are down to $3.35/kcf.
This was one of two contributing factors to the problems that the domestic industry is undergoing, both foreseen by Art Berman, an accurate, albeit in some quarters very unpopular, prophet to the industry. The first problem, clearly is the low price that natural gas continues to sell at in most of the country. (The high prices in the NorthEast are because of the perception that the fuel is abundant, set against the current limited capacity of pipelines to carry sufficient gas into the region.) The second problem, which Art has also clearly identified, lies in the very rapid decline rates that are seen in the natural gas wells that have been drilled and fracked in these shales.
The Barnett shale has now been sufficiently well developed that production has now peaked and is recognized to now be in slow decline, though that rate is projected to accelerate. There is also sufficient information such that, for example such industrial stalwarts as the Oil and Gas Journal are confirming some of Art’s earlier predictions. A current article examines the economics of the Barnett shale development under DFW airport, first undertaken in 2009 following a lease agreement in 2006. The article examines the economics of the operation in which the airport has made over $300 million. Chesapeake, who have drilled 110 wells on the property, out of an anticipated 330 originally projected, has recovered some 104 bcf, but the undiscounted all-in cost is calculated at $7.21/kcf. While that was viable in 2008, when gas prices were north of $9.00/kcf it becomes quite a burden when they are down around $3.35/kcf. The loss to the operator is reported to be more than $300 million.

The next 18 months or so are going to be really interesting for the shale plays.  I wouldn't be surprised to see a production peak in the Bakken in that time.  If that happens, a lot of people are going to realize that we're going to have to change how we do things.  If it doesn't, I'll look like Chicken Little.  I really think the producers are hitting the best places first, and they'll struggle after those start declining.  Only time will tell.

Civil Forfeiture Or Criminal Theft?

Some police departments have been pushing toward the latter in many instances:

Many states, facing fiscal crises, have expanded the reach of their forfeiture statutes, and made it easier for law enforcement to use the revenue however they see fit. In some Texas counties, nearly forty per cent of police budgets comes from forfeiture. (Only one state, North Carolina, bans the practice, requiring a criminal conviction before a person’s property can be seized.) Often, it’s hard for people to fight back. They are too poor; their immigration status is in question; they just can’t sustain the logistical burden of taking on unyielding bureaucracies.
Victor Ramos Guzman, a Pentecostal Church secretary from El Salvador, who lives in the U.S. under temporary protected status, is typical in all these respects. A year and a half ago, he and his brother-in-law were driving along Interstate 95 near Emporia, Virginia, en route, documents show, to buy a parcel of land for their church. When a state trooper pulled them over for speeding, Guzman and his brother-in-law disclosed that they were carrying twenty-eight thousand five hundred dollars in parishioners’ donations. Although the trooper found no contraband, he seized the cash. By reporting the case to Immigration and Customs Enforcement (Guzman was in the country legally, but he spoke little English), the state police could gain up to eighty per cent of the seizure through the federal Equitable Sharing program.
“We could prove beyond a reasonable doubt that the money was church money from parishioners’ donations,” David Smith, who was a deputy chief of the Justice Department’s Asset Forfeiture Office during the Reagan Administration and now defends the policy’s targets pro bono, told me last January. Only after he intervened were the funds returned. “But these were people who didn’t have the means to fight back. They weren’t well-to-do. They didn’t know any senators or congressmen, they weren’t citizens. They had no voice.” For the people who hoped to take on the Tenaha operation, the challenge was to bring claims like these into public view.

So thirty years of cutting taxes for the wealthiest Americans has led some police departments to steal and extort some of the poorest?  Unfortunately, it is not surprising.  I highly recommend reading the whole thing.

More Cows To Improve Rangelands?

Morning Edition:

Conventional wisdom tells you that if ranchland ground has less grass, the problem is too many cows. But that's not always the case. It depends on how you manage them, if you make sure they keep moving.
"Plants actually respond to grazing. It actually stimulates growth in some ways," said William Burnidge, an ecologist with the Nature Conservancy. Burnidge runs the Conservancy's Colorado grassland program, which includes a 14,000-acre nature preserve and working commercial cattle ranch, the Fox ranch...
Here's how planned grazing works: A detailed chart drives every decision made on the ranch. At the beginning of each season, you plot out your moves on the map, like a Monopoly board. If the grass is better on the eastern part of your ranch, the cattle should stay there longer, but not too long. The cattle have to keep moving. The animals' hooves push on the soil, helping it to retain more rainfall.
The most common word tied to the planned grazing movement is "mimicry," as in mimicking the wild herds of large mammals that used to move across the Great Plains in tightly herded packs.
"You're only ever approximating what wild animals did when there weren't any people or fences to tell them what to do," Burnidge said. "But it's reasonable to think that they tried to stay on the forage that was best for them at the time."
What makes the Fox Ranch unique is its approach to documentation. The idea of planned grazing isn't new, but the Nature Conservancy wants evidence that it works before telling other ranchers to try it out.
The godfather of this grazing technique is Allan Savory, the creator of a few organizations that tout the ability of these methods to restore grasslands and pull ranchers across the world out of poverty. If his name sounds familiar you might have seen his TED talk from earlier this year. The video went viral, currently at almost a half-million views, and introduced a whole new audience to the concept of holistic, or planned, grazing.

Sounds crazy to me, but maybe the counter-intuitive strategy might work.  On the other hand, here's a story about New Mexico's grasslands turning into desert.

Agricultural Technology 150 Years Ago

Scientific American looks back:

REAPING MACHINE:

Using a machine to mow a hay field was at first said to be “impossible and absurd to the last degree.” Inventors eventually developed a wide variety of agricultural machines that had different purposes and abilities.  [Less] [Link to this slide]

Scientific American, November 7, 1863

More at the link up top.

Farmland Prices Increase Again

Via Big Picture Agriculture, USDA releases the latest farmland price report:

I really think we have to have hit the peak in land prices.  I would expect if some really prime land comes up for sale, we might see some high prices, but the days of $8000 an acre across the road from where I farm are probably already past.  I guess if we get a hell of a crop this year, guys can fantasize that we'll get $7.00 corn again and may bid things up.  But my guess is that the commodity boom is over, and this fall will be the start of a downtrend in grain prices, which will be fairly bad news for land prices.

Be More Kind

That was George Saunder's advice in his commencement speech at Syracuse University this spring:

What I regret most in my life are failures of kindness. 
Those moments when another human being was there, in front of me, suffering, and I responded…sensibly.  Reservedly.  Mildly.
Or, to look at it from the other end of the telescope:  Who, in your life, do you remember most fondly, with the most undeniable feelings of warmth?
Those who were kindest to you, I bet.
It’s a little facile, maybe, and certainly hard to implement, but I’d say, as a goal in life, you could do worse than: Try to be kinder.
Now, the million-dollar question:  What’s our problem?  Why aren’t we kinder?
Here’s what I think:
Each of us is born with a series of built-in confusions that are probably somehow Darwinian.  These are: (1) we’re central to the universe (that is, our personal story is the main and most interesting story, the only story, really); (2) we’re separate from the universe (there’s US and then, out there, all that other junk – dogs and swing-sets, and the State of Nebraska and low-hanging clouds and, you know, other people), and (3) we’re permanent (death is real, o.k., sure – for you, but not for me).
Now, we don’t really believe these things – intellectually we know better – but we believe them viscerally, and live by them, and they cause us to prioritize our own needs over the needs of others, even though what we really want, in our hearts, is to be less selfish, more aware of what’s actually happening in the present moment, more open, and more loving.

Further on, when he talks about growing old and loving those you are leaving behind, it reminds me of this interview with Maurice Sendak. As to my failures of kindness, there have been plenty. 

Good Neighbors

From a couple Saturdays ago:

Detroit Bulk Storage, the company responsible for storing the pet coke, did not return calls from the Star on Wednesday.
A company spokesman told the Windsor Star that the dust cloud was caused by high winds that blew in just as inventory was being loaded onto a ship. The company uses an epoxy seal to contain the dust, but the seal has to be broken to load the material onto the vessel, he said.

The pet coke piles were produced at Marathon Petroleum’s refinery in Detroit and are owned by Koch Carbon, a company owned by the American billionaire Koch brothers, famed for their support of conservative political causes.

Detroit billionaire Matty Moroun’s real-estate entity, Crown Enterprises, owns the property where pet coke is being stored. But according to Crown Enterprises president Michael Samhat, Norfolk Southern has a perpetual lease for the land, and is responsible for subcontracting its use.

Detroit Bulk announced earlier this month that it has stopped accepting shipments of pet coke. Koch Carbon, which did not respond to a request for comment, has said that it plans to store the pet coke in another, as yet unnamed, state.

Brad Wurfel, spokesman for the Michigan Department of Environmental Quality (MDEQ), said pet coke, which is nearly pure carbon, is non-toxic. But MDEQ has long had concerns about the impact of “fugitive dust in the air” unleashed when the product is loaded onto barges.

I don't think that dust can be harmless, but Koch Carbon isn't storing any pet coke near me, so I probably don't have to worry as much as the folks in Windsor.

NASA Photo of the Day

Video, actually:


130 Years of Earth Surface Temperatures
Image Credit: GISS, NASA Explanation: How has the surface temperature of Earth been changing? To help find out, Earth scientists collected temperature records from over 1000 weather stations around the globe since 1880, and combined them with modern satellite data. The above movie dramatizes the result showing 130 years of planet-wide temperature changes relative to the local average temperatures in the mid-1900s. In the above global maps, red means warmer and blue means colder. On average, the display demonstrates that the temperature on Earth has increased by nearly one degree Celsius over the past 130 years, and many of the warmest years on record have occurred only recently. Global climate change is of more than passing interest -- it is linked to global weather severity and coastal sea water levels.

City Kids

Prize Winning Photos

National Geographic released its Travel Photo winners.  My favorite:

Second Place Winner: Thunderstorm at False Kiva. I hiked out to these ruins at night hoping to photograph them with the Milky Way, but instead a thunderstorm rolled through, creating this dramatic image. (© Max Seigal/National Geographic Traveler Photo Contest)

Honest Abe, In Butter

Abe Lincoln joins the butter cow at the Iowa State Fair:


News, Weather and Sports for Sioux City, IA: KCAU-TV.com

The Wall Street Casino

DealBook looks at the securitization involved in the Fabulous Fab trial:

The important thing to understand is that the securitization at issue in no way helped to create capital for anything. It was a pure gamble. One side bet that the mortgage market would collapse. The other bet it would not. I don’t see any difference between that and betting on a football game.
Consider the mortgage securitization market. First, there are mortgages, which help people buy homes. Those mortgages are packaged in a securitization and sold to investors. Some investors buy tranches that give them low yields with little chance of loss. Others get tranches with higher yields, but will lose their principal if enough borrowers default. The money put up by the investors helped to finance home buyers, which is the kind of thing a financial system should do. (It did it badly, but that is not the issue here.)
The next level of security packaged a bunch of tranches from different deals and sold securities based on those assets. By raising money to finance tranches in the first level of securitizations, it indirectly helped to finance home buyers.
Note that nobody needed to bet against either of those securitizations. The money put up by the buyers was going to homeowners, or at least to those who had previously lent to those buyers.
But the securitization that Mr. Tourre helped to create was “synthetic.” It did not raise money that went, directly or indirectly, to homeowners or to those who had lent money to them. Instead, it picked a bunch of tranches from previous securitizations — tranches that no one involved in this deal had to own — and fashioned a new securitization in which one set of investors bet those securities would work out and another set bet they would not.
It proved to be a wonderful bet for one side, and a horrid one for the other.

It also proved to be a rigged bet that was put together with the knowledge that almost all of the loans were the shittiest ones available.  And the guy betting that side got to pick what shit he wanted in there.  It is notable that Mr. Paulson has been struggling recently on his bets that weren't rigged ahead of time.  Some genius.  Maybe there is karmic justice.  Good thing he only had to pay 15% income tax (at most) on his "hard earned" money on this and other bets.

Fixing A Broken Bat Epidemic

All Things Considered:

A bat that simply cracks isn't too big a deal. But in 2008, maple bats kept breaking apart. Often, they'd break along the handle, sending the heavier upper barrel of the bat flying.
Bat shards struck players and coaches all season. A fan named Susan Rhodes was struck by a bat during a Los Angeles Dodgers game in April. Near the end of June, Brian O'Nora, a home plate umpire, was sent to the hospital after a bat left a gash on the back of his head.
That very day in June 2008, MLB's Safety and Health Advisory Committee had met to discuss the issue. The committee announced that it would consult with bat experts and conduct research with bats and their manufacturers.
One of the first phone calls went to the U.S. Forest Service, which operates a wood laboratory in Madison, Wis., where researchers study things like construction lumber, or ways to use underutilized woods, like the trees killed by pine beetles. The league called up Dave Kretschmann, a research engineer there.
"I have a sense of how wood breaks," he says. "I've broken a lot of wood over the years. So I certainly thought I'd be able to help them out."
Over the following months, MLB sent Kretschmann and his collaborators more than 2,200 broken bats, along with video footage of every break during the season. Other researchers visited bat companies to examine manufacturing techniques.
There was one main pattern to the bat breaks — they weren't splintering apart. Instead, the maple bats tended to break cleanly.
"If you looked at the handle, and the players still held onto the knob in his hand, and you looked at where it broke, there was an oval shape." Kretschmann explains.
That, he says, indicates a break along the grain of the wood. Wood doesn't hold up well to pressure applied perpendicular to the grain. Maple bats tended to have a "slope of grain" issue, where the grain sloped at an angle through the cylinder of the bat — and the pressure of hitting a fastball at just the right angle was enough to split the bat in two.
Kretschmann and the other researchers made , and the rate of bat breaks have continued to drop since then. This season, it's down by half.

Ash is pretty well known for splitting, so I wouldn't have thought that maple, assuming the same grain pattern, would have more issues with splitting.  Glad to know there's a government lab that has wood splitting issues covered.

Engineering-Rich Metros

A list that Dayton makes that isn't tremendously depressing:

America has always been a nation of tinkerers. Our Founding Fathers, notes author Alec Foege, were innovators in areas ranging from agriculture (George Washington, Thomas Jefferson) and electricity (Benjamin Franklin) to the swivel chair (Jefferson).
Engineering advances drove America’s quest for industrial supremacy in the 19th century, many of them borrowed (sometimes illegally) from the then very resourceful British Isles. By the early 19th century, the U.S. was producing its own major inventions, including the steamboat and cotton gin. By the end of that century, the U.S. was clearly on the way to industrial preeminence. The growth of engineering schools — MIT, the Case Institute, Stevens Institute of Technology, as well as departments at the great land grant universities — generated a steady supply of engineers. For much of the last 70 years, America, has been the world’s leading center of engineering excellence, dominating markets from steel and cars to energy and aerospace....Detroit’s bankruptcy has shed a bad light on rustbelt centers, but in reality the industrial Midwest has been on something of a roll in recent years, with many states, from Wisconsin and Ohio to Iowa, boasting lower unemployment than the national average. One key element has been the increasingly innovative nature of U.S. manufacturing, notably in the auto industry. Little-recognized Dayton, which ranks fourth, has attracted major investment for advanced manufacturing in autos and aerospace.

The write-up of San Jose mentions early research investment by the defense department and NASA.  The Houston part mentions the energy industry, but doesn't mention the massive NASA presence for most of the last 50 years.  Likewise, while Dayton has had a ton of engineers working in the auto industry and machine shops, Wright-Patterson has been the major driver for the last 40 years.  Apparently, government plays a pretty big part in employment of engineers.