Category Archives: drought

What is a Keyhole Garden?


Global Service Corps photo of Tanzanian keyhole garden.

A keyhole garden is a type of raised bed that contains compost and it is higher in the middle so that water flows into the growing bed area. These gardens are being taught to African farmers and they are becoming more popular in drier regions such as parts of Texas. They are popular among permaculturists, too. The following video explains how to make one.

A September Trip Through Nebraska in Drought Year 2012


Sunset on Willa Cather Memorial Prairie

From My Ántonia: “There was nothing but land; not a country at all, but the material out of which countries are made.”

One night of my recent trip through Nebraska was spent in Red Cloud, where Willa Cather grew up. While there, I spent time reading the writing of those who first settled this region. Back then, it was the land of new opportunity for overcrowded Europeans who could no longer make a living in Europe. It was man against nature for these new settlers, and unless man conquered the land, there would be no living to be made. It didn’t take long, however, for the White Man to drive out the Red Man, to kill the bison and the passenger pigeon, and to plow up the prairie sod for crop cultivation.

While some saw and others still see the prairie as nothingness, Cather said after moving from Virginia at age nine, “So the country and I had it out together and by the end of the first autumn the shaggy grass country had gripped me with a passion that I have never been able to shake. It has been the happiness and curse of my life.” She and her contemporaries didn’t know what nature-deficit-disorder was. They grew up wading in creeks, playing with frogs, running from snakes, and herding cattle.

Though seldom noted, Cather’s writings (I have read most of them) are interspersed with her concerns for conservation. Like Aldo Leopold, John Muir, and Robinson Jeffers, her thinking was far ahead of her time. She criticizes the draining of marshes for crop profit, as one example.


Downtown Red Cloud in 2012

Interestingly, today the town of Red Cloud at population 1,000 is about half the size that it was in 1890. Cather lived there during its most vibrant time.


Corn at railroad grain terminal near Central City

Fast forward to today and we have conquered Cather’s land. The most productive Nebraska farmland is now a giant industrial operation devoid of most life save for corn, soybeans, and cattle.

I always try to note what is changing in the state that I grew up in and spent most of my life in when I visit. One observation this year is that there is more irrigation everywhere. The county that I grew up in is not in Ogallala Aquifer country, yet irrigation pivots now surround my family’s farm. One was installed just last month. My family is worried because their own well will probably run dry eventually, as a result. High corn prices drive more irrigation installations.


Pile of bulldozed trees from a low-lying area in northeast Nebraska to make way for more cropland.

Ethanol policy and resulting high corn prices cause marginal land to be farmed. Corn is being grown between railroad tracks and highways. Piles of dead trees lay in fields which have been removed from low-lying pastures and waterways, to grow crops. Fences have been removed from fields to gain another row or two on the edges, and besides, if you don’t rotate the cattle through, you don’t need the fences. In one location, some very steep hillside pasture which had never been farmed before became a cornfield this year. There isn’t much CRP (conservation reserve program) land to be seen as compared to five years ago. Fields are ever-larger than the year before and there are always fewer farm places, something I’ve noted for decades.


DDGS by-product being spit out from the ADM Ethanol Plant in Columbus

I can’t drive by Columbus, Nebraska without turning in to see what’s going on at the second largest ethanol facility in the U.S. This wet and dry mill ADM ethanol plant was built a few years ago as a coal-fired co-generation plant which burns high and low sulfur coals, tire derived fuel, and biomass such as trees to produce steam and electric energy. Last year when I visited, I saw through clouds of dust, trucks filled with corn lined up more than twenty deep to deliver Ogallala Aquifer irrigated corn for distillation into ethanol at this plant. This year, there were only a couple of trucks delivering corn and the main activity seemed to be the DDGS production pictured in the above photograph.

These rural farming regions grow more dependent upon fossil-fuels each passing year. Farmers and their spouses work in off-farm jobs, often an hour’s drive from home. Little towns such as Oakland are now referred to as “bedroom communities” for Omaha, which is seventy miles away. The small towns are often food deserts and many farms don’t have gardens, either. The nearest Walmart provides groceries and about everything else. The farming operations rely upon diesel, fossil-fuel derived fertilizers, and chemicals, as do the roads, infrastructure, and trucks which move the commodities. It’s all about fuel and machinery substitution for human labor in industrial farm country. What it’s not about is aesthetics.

The entire region looked horribly dry and the trees were suffering, like those you might see in West Texas. Alfalfa is a drought tolerant crop so fields of it are bright green, as compared to everything else. Though alfalfa quality has been good, the quantity was very low this drought year. Nebraska fared about the worst of all of the states in drought and heat conditions this year. My family farm has received about 65 percent of normal rainfall to date and had a corn yield of 43 bushels per acre. In agreement with other comments I’ve been seeing online, it was a mystery to this area’s farmers as to why yields were higher in one place, and lower in another, sometimes within the same field.


Glyphosate resistant marestail growing in soybeans on my family farm

Undermining industrial agriculture a huge problem is creeping up — superweeds. I witnessed it first hand in the above photograph. My family had problems with marestail in the soybeans this summer and had to hand-cultivate. Nature always wins.

Now, I will close this post with a final Cather quote from O Pioneers, which seems relevant for our time and for this summer of extreme drought and heat in Nebraska. “The air and the earth are curiously mated and intermingled, as if the one were the breath of the other.”

Agriculture News August 31 2012


Last Saturday the USA Pro Cycling Challenge raced through Boulder twice. It was fun to be a spectator and no event could have fit this town better. Our son took the above photo of the breakaway group entering Boulder canyon to begin their climb into the mountains to loop around Nederland to Lyons before returning through Boulder to finish on Flagstaff Mountain, just West of town.
~~~~~

On a personal note, my family farm in Northeastern Nebraska had a visit from the insurance adjuster a few days ago and their estimated corn yield is 45 bushels per acre. Thankfully, they had crop insurance. Now, their question is whether any of it is safe to store or feed to their cattle. Unfortunately, I won’t get there to visit until later in September, and though I’ve begged them to take photos, they have no desire to do so. I don’t think they want to remember this year. Last week continued to break heat records there (it was 100F yesterday) and rainfall continues to miss this region.
Kay

Next, is the Ag news for the week….

Eyes on planting in South America (DesMoines Register)

Wild rice gene gives yield boost (BBC)

A humble soil bacterium called Ralstonia eutropha has a natural tendency, whenever it is stressed, to stop growing and put all its energy into making complex carbon compounds. Now scientists at MIT have taught this microbe a new trick: They’ve tinkered with its genes to persuade it to make fuel — specifically, a kind of alcohol called isobutanol that can be directly substituted for, or blended with, gasoline. (MIT)

Compared to other harvest seasons, a 30 to 40 percent shortage of skilled harvesters this year has been confirmed by California farming organizations, which note that peaches, cherries and other premium crops are going unpicked. … Roughly 60 to 70 percent of all fresh produce eaten in the U.S. is grown in Mexico, but production and transportation of these fruits and vegetables can be easily disrupted by climatic disasters, social conflicts, or national policy shifts. By Gary Nabhan (Civil Eats)

The World Bank said that drought in the US and Eastern Europe crop centers sent global food prices soaring by 10 percent last month, raising a food security threat to the world’s poorest people. (AFP)

Wheat producers are concerned about the high cost of fertilizer and don’t see it going down in the future due to global demand. (Southeastfarmpress)

Pork Industry Faces Record Losses (Farmdocdaily)

Increased rainfall and temperature due to climate change could bring benefits to South-East Asian agriculture, a study suggests, contradicting more common expectations that a warmer planet will reduce agricultural productivity in the region. (Scidev)

● This FT article describes the thin profit margins many UK farmers are dealing with and that three strategies are emerging: using sustainable “back to nature” methods that rely less on expensive bought-in feed and inputs; co-operative structures; and a move up the value chain or into exports. (FT)

Nestlé Official says agriculture needs to solve water issues, and that GMO’s aren’t necessary (Takepart)

The world’s largest retailer Wal-Mart Stores Inc has joined an alliance of other Fortune 500 companies, including Cargill and Kellogg Co, seeking to make agriculture more sustainable. (Reuters)

● Alternative fuels – Difference Engine: Competition at the pump (The Economist)

President misses mark on livestock aid (Capital Press)

Cocoa Hits 9-Month High (WSJ)

Insurers face big agriculture losses (FT)

Hog operations are going belly-up in China due to high feed costs (NYT)

Sapphire completes construction of the Green Crude Farm: algae biofuels heads for the next level (Biofuels Digest)

Avista investment to help Matrix strike oil in algae; Seattle-based Matrix Genetics is spinning out of Targeted Growth and launching its business of developing biofuels made from algae. (Seattle Times)

Ag commodity advisors like to say that it’s all about China. This article explains how a change in China’s policy of reduced taxes for farmers and increased subsidies have led to more prosperity and an eighth consecutive year of grain production growth last year. They have become nearly self-sufficient in rice and wheat. (xinhuanet)

● Syria’s rural economy adapts as conflict spreads (Reuters)

● Energy: 10 most expensive energy projects in the world (CNNMoney)

● Energy: The Real Reason Behind Oil Price Rises – An Interview with James Hamilton (Oilprice.com)

Weatherman predicts a wet fall in the corn belt. (Brownfield)

The costs of cheap water are far too high. (National Geographic)

Counting Your Cantaloupes – Amid volatile climate patterns, conversation at markets like the Mohawk Valley Produce Auction reveals the plight of regional farmers (Metroland)

● MACRO: The unintended consequences of QE: not what you think by Izabella Kaminska. (FT/Alphaville) What White seems to be saying is that if and when the QE ruse runs out and the time comes to influence markets through direct price level targeting, it could theoretically be too late. That’s to say there’s a good chance that the credibility of the central bank will have been damaged so much, that it will be impossible to sway markets through policy declaration alone. In short, the central bank will have lost control. And with the central bank not there to steer the economy, there’d be little stopping real-world deflationary forces — if they do exist — from running wild.

● MACRO: Finance is in need of a technological revolution (FT)

● MACRO: If Interest Rates Go Negative . . . Or, Be Careful What You Wish For by Kenneth Garbade and Jamie McAndrews. (Wonk Warning!) … The weak recovery has led some commentators to suggest that the Fed should push short-term rates even lower—below zero—so that borrowers receive, and creditors pay, interest. (Federal Reserve Bank of New York)

__________________________________________________________

Crop Year 2012 Map: Primary and Contiguous Counties Designated for 2012 Crop Disaster Losses


Impressive, eh? Note that Hawaii is also “red”.

Observations From an Iowa Farm by Walter Falcon


Fertility, 1939 by Grant Wood; Lithograph. Spencer Museum of Art, Univ. of Kansas.

Note that the following writing (August 4, 2012) is by Walter P. Falcon, Farnsworth Professor of International Agricultural Policy (Emeritus); Deputy Director, Center on Food Security and the Environment, Stanford University. I asked Dr. Falcon if I could publish this here since it is rare to see an accomplished academic (Harvard and Stanford) write first hand observations about living in the real world farm life this drought year.

Field Notes From An Iowa Farm

My wife and I are spending the summer of 2012 at our farm near Cedar Rapids, Iowa. It is a relatively small corn, soybean, and cow/calf operation in the east central part of the state. We are surrounded by other farmers, many of whom are getting on in years, who typically farm from 500-1000 acres. A few also feed cattle and there is one confined pork operation nearby.

For someone interested in agricultural price volatility, this summer has been a 3-month seminar in real time. There was an early spring in Iowa, and record acres of corn and beans were planted. Some of our neighbors even brought conservation-reserve land back into production. Plantings were fencerow to fencerow—although fewer fences line the landscape as farmers move out of the livestock business and fences are removed to accommodate the larger 12- and 16-row equipment that is now commonplace. Early commodity prices were good, but not spectacular in April and May, and with prospects for a large crop, many of our neighbors made forward contracts to deliver large quantities of corn and beans to local ethanol and bean-crushing plants.

The corn on sandy hills burned up first, but the crop on deeper, blacker soils soon followed. National corn prices followed the thermostat. Cash prices of corn went from about $6 per bushel in May to more than $8 in early August. And then came June and July. National reserve stocks of corn were very low, so price stability was dependent on average or better weather. Instead, extreme weather came in all forms. Average temperatures at the Cedar Rapids weather station for June, July and the first week of August were the highest in recorded history. Maximum temperatures for 22 of the past 70 days exceeded 90 degrees. Total rainfall was only 1.1 inch, compared to an historical average of 8.1 inches. It is the driest summer since 1936.

With the corn crop currently denting, and thus “fixed” (more rain would not now improve yields), all attention turned to soybeans. Beans have a resilient character to them, with the capacity to shed blossoms until growing conditions “are right.” Having lost much of the corn crop, our neighbors are busy reassuring each other that “the bean crop is made in August”—but only if rains arrive. Unfortunately, there is little moisture predicted in the medium-term forecasts.

Worst hit of all have been the livestock producers. Pastures are toast, and watering holes and rivers are drying up. The sizeable creek that runs through our farm is now the tiniest of trickles. The likelihood of having to move the cows and calves is growing daily, and the question of whether our farm well will have enough capacity to supply both the animals and us is now a critical issue. The problems of cattle feeders are even more dire. Prices for fed cattle are down, and the extreme heat is taking its toll—quite literally. Fat cattle weighing 1400-1500 pounds do not gain weight well, nor do they even breathe well. Farmers who own the two operations nearest us report that they dare not sort and ship steers to market because of the heat. They each report having lost two animals from heat-related respiration problems, each animal valued at about $1600. Moreover, even without heat losses, they are faced with extremely high feed costs. And high prices do not end with corn and soybean meal.

Forage and hay prices have been even more affected by climate variability. The large round bales that weigh upwards of a ton and typically sell for $60 are now selling for $250! The price is partly driven up by truckers from Missouri and Arkansas, locations hit earlier and even more severely, coming to eastern Iowa to purchase forage. So tight is the forage market that farmers are baling grass from the Conservation Reserve (recently permitted by the government), waterways, and even ditches. Plants with any sort of green tint to them are being mowed and baled.

The talk among farmers is, as always, most interesting. About four miles from home is the small town of Waubeek—a tiny berg in a part of Iowa made famous by Grant Wood. Each morning at about 8:30 am locals gather in a limestone building called (perhaps miscalled) a restaurant to have watery coffee and rolls, to trade stories, and to establish bragging rights on a variety of issues from yields, to prices, to number and sizes of tractors. Conversation over the years has always centered on the dreadful nature of weather, prices and the government, though this year there are nuances in the stories being told. They range from the very happy, “I sold a load of old-crop corn this morning for $8.14, the highest price in my whole life as a farmer;” to the “I walked my corn fields this morning. Where I got 220 bushels last year, I don’t think the crop will make 80 bushels this year.” No one at the table thought their corn crops would yield more than 120 bushels; and everyone noted that virtually all of those yields would be discounted in price because of low test weights.

Talk then turned to new seed varieties, mostly from Pioneer and Monsanto, which have transgenic drought resistance built into them. Bags (80,000 kernels) of seed—enough to plant about 2.5 aces—range in price from $300-400. There is hope, but not much confidence, that the new seeds will help compensate for the low rainfall. The farmers report that the companies, which are far from loved because their seed prices are perceived as being too high, are backing away from yield claims. The conversation also took up the pros and cons of “green” chopping the stalks and immature corn to make silage. It turns out that this strategy is fraught with nitrate problems arising mainly from this year’s weather. The laughing summary comment was “anyway, we have way too much standing corn and way too few cattle to make that solution work.” Laughter continued as they talked about those 10,000 “crazy folks” who were riding bicycles across Iowa in the heat as part of the annual ride across Iowa.

Most surprising to me is the fact that the conversations are not gloomier. What I had not realized was the increased role that crop insurance was playing in most farmers’ operations. Upon checking, I found that about 90 percent of the land is covered by a joint public/private insurance program, in which private companies offer insurance, with the government and farmers sharing in the premia. Many of these policies provide for both price and yield protection and cover losses in excess of 25 percent. For most crop farmers, therefore, the year 2012 will not be good, but it will be far from a disaster.

But there were also some truly downcast faces at morning coffee. Livestock producers curse the cost of corn and the fact that they are getting little program assistance from the government. They choose their words carefully, but the livestock producers would also be delighted if somehow the ethanol industry went away. Similarly, crop farmers who have no crop insurance, and /or who contracted forward to sell what they expected would be a large harvest at modest prices, now are facing the costly prospect of having to buy high priced corn on the market to fulfill their delivery contracts.

After more assurances to each other that “the bean crop is made in August,” conversations turned to the future. Will marketing be totally messed up because of low flows in the Mississippi River and disrupted barge traffic? What, they ask, will the heat and drought do to land prices? The local area has seen a rapid run-up in land prices, a 32 percent increase between 2011 and 2012, with land sales for the county now averaging $8000 per acre for medium quality land. And what will happen to cash rents for farmland now averaging $270 per acre? Most of all they ask, what will happen to weather in 2013? Most of them can see their way through one year of really difficult weather; their primary concern is what happens if there are two 2012s in a row. Opinion divides on whether next year will return to normal, or whether 2012 is a good predictor of many years to come.

One thing of course never changes: their views of the government that range from dismay to disgust. The fact that the current Congress seems unable to pass either a new farm bill or a special bill covering drought, especially for livestock producers, is the subject for special derision.

Meanwhile, everyone watches the markets, waits, and prays for rain.

The Highly Anticipated USDA Corn, Soybean, Wheat, and Cotton Crop Report Released August 10 2012

The USDA crop report has been released. This one is the first this year to include thousands of national field surveys. Both the lack of rainfall and excessive heat have greatly diminished production, even in irrigated areas. The last three monthly corn yield estimates from the USDA have gone from 166 bushels per acre to 146 bushels per acre to today’s 123.4 bushels per acre. Last year 2011/12 the average corn yield per acre was 147.2.

So much for our Secretary of Agriculture Vilsack’s July 18th White House speech statement, “Despite the drought, corn farmers are on track to having the third best corn crop in U.S. history.” According to today’s report the 2012/13 corn yield is the lowest since 1995/96 though acreage has increased in response to rising corn prices.

Here is today’s report:

  • Corn Production Down 13 Percent from 2011.
  • Soybean Production Down 12 Percent from 2011.
  • Cotton Production Up 13 Percent from 2011.
  • Winter Wheat Production Up 1 Percent from July Forecast.
  • Corn production is forecast at 10.8 billion bushels, down 13 percent from 2011 and the lowest production since 2006. Based on conditions as of August 1, yields are expected to average 123.4 bushels per acre, down 23.8 bushels from 2011. If realized, this will be the lowest average yield since 1995. Area harvested for grain is forecast at 87.4 million acres, down 2 percent from the June forecast but up 4 percent from 2011.
  • Soybean production is forecast at 2.69 billion bushels, down 12 percent from last year. Based on August 1 conditions, yields are expected to average 36.1 bushels per acre, down 5.4 bushels from last year. If realized, the average yield will be the lowest since 2003. Area for harvest is forecast at 74.6 million acres, down 1 percent from June but up 1 percent from 2011.
  • All cotton production is forecast at 17.7 million 480-pound bales, up 13 percent from last year. Yield is expected to average 784 pounds per harvested acre, down 6 pounds from last year. Upland cotton production is forecast at 17.0 million 480-pound bales, up 15 percent from 2011. Pima cotton production, forecast at 663,000 bales, is down 22 percent from last year. Producers expect to harvest 10.8 million acres of all cotton, up 14 percent from 2011. This harvested total includes 10.6 million acres of Upland cotton and 233,400 acres of Pima cotton.
  • All wheat production, at 2.27 billion bushels, is up 2 percent from the July forecast and up 13 percent from 2011. Based on August 1 conditions, the United States yield is forecast at 46.5 bushels per acre, up 0.9 bushel from last month and up 2.8 bushels from last year.

  • The President meets with his Rural Council to discuss drought response. August 7, 2012.

    Since the U.S. is the world’s grain exporting powerhouse, this severe drought is and will continue to affect food prices across the world. This week, the FAO Food Price Index climbed 6 percent after three months of decline, mainly due to grains and sugar. Corn prices rose 23 percent in July, and wheat 19 percent. Wheat stocks remain 42 percent larger than in 2008. Rice remained stable. The index is still below the February 2011 level.

    Photobucket
    Source: FAO

    Yesterday, the United Nations urged President Obama to slash mandated corn ethanol production, known to be a political project. More than 45 percent of this year’s U.S. corn crop would be necessary to fulfill our 2012 mandate, discounting RINS credits and ethanol in storage.

Agriculture News July 30 2012

This week The Colbert Report was on top of this drought story by interviewing Iowa Ag economist Bruce Babcock via satellite. Babcock told Colbert that “I’ve just been riding my bike through a bunch of corn fields in Iowa and the crop looks like it’s a disaster.” The two later moved on to the subject of “Obamacare for our corn.” I say Ag should be on The Colbert Report and The Daily Show more often as they are missing out on a lot of great material.

Hot temperatures have continued across the corn belt. Springview, Nebraska reached 113 degrees on July 22nd setting a new record. On July 25th, Omaha set a record warm overnight low of 81 degrees. July wasn’t dry everywhere as here in Boulder we’ve received nearly three times our average rainfall at close to 5 inches.

The Chicago Tribune’s lede opinion piece today calls for the EPA to waive its requirements for corn-ethanol in motor fuels, after prayer, of course. Kudos.

Below you will find my updated crop condition pie graphs for corn and soybeans using today’s newly released numbers.
Kay

Here are my news picks for this week . . .

● NYT’s Room-for-Debate “How Can We Prevent Another Dust Bowl?” (NYTs)

Who are you calling ‘rich’? A small farmer shares some hard data. (KETKnbc)

3 min video of SD rancher, John Harter, whose property will be crossed by the XL Keystone pipeline, saying that “they have more rights to my property than I do.” (W-P)

Montgomery’s neighbors, with the turn of a tap, can still water their grass and wash their cars, thanks to the wells that killed the spring that feeds his acequia. But it’s only a matter of time, he told me, until they feel his pain. (HCN)

Excellent article about the interrelationships between Asian nations over water issues. (Reuters)

With Corn Prices Rising, Meat Prices Are Likely to Follow. (NYTs)

Smithfield Foods, Pilgrim’s Pride, and Tyson Foods are all looking to Brazil for corn imports. (Blackseagrain)

Ethanol curbs ‘unlikely to win political favour’. (Agrimoney)

Microbes that convert electricity into methane gas could become an important source of renewable energy, according to scientists from Stanford and Pennsylvania State universities. (Science Daily)

● TED talk by Noah Wilson-Rich: Every city needs healthy honey bees (TED)

As Americans embrace Ethio­pian cuisine, its farmers grow more teff. (W-P)

New breed of ranchers shapes a sustainable West – These green cowboys try to marry good stewardship of the land with making money. (CSM)

According to a recent report by Ventures Middle East, GCC (Cooperation Council for the Arab States of the Gulf) governments have earmarked more than US$100 billion in their water sectors between 2011 and 2016 to improve desalination technologies involving solar energy, and maximise on waste water treatments and recycling. … “Desalination currently provides two-thirds of the water requirements in MENA (Middle East and North Africa), and the new urgency and high priority assigned by governments to investments across the water desalination sector in the region is therefore not a surprise.” (bi-me)

This article provides an update on Jason Bradford’s Farmland LP organic farmland investment venture in Oregon and California. Jason has a PhD in Agriculture, is incredibly knowledgeable about sustainable methods, and is a long-time friend of this site. (Post Carbon Institute)

Center pivots are sprouting in Georgia. (The Augusta Chronicle)

● Politicians fail or do not wish to understand that both food and energy markets are caloric markets. The chairman of Nestle, the world’s largest food company, Peter Brabeck-Letmathe, notes, “The only difference is that with the food market you need 2,500 calories per person per day, whereas in the energy market you need 50,000 calories per person.” He adds: “Most of the world’s sugar production now goes into making biofuels. It takes about 4,600 liters of water to produce one liter of pure ethane oil if it comes from sugar.” (Washingtontimes)

Touchstone algae research project in Ohio names evaporation and unwanted bacterial growth as issues. (Farm & Dairy)

Algae for biofuel. (Business Insider)

● ENERGY – Webber: Will drought cause the next blackout? (DailyCamera)

Larry Pope of Smithfield Foods expects meat to go up 10% next year, and the corn yield to be 130 bu/ac. (FT) AND Smithfield Foods Inc. CEO C. Larry Pope received a pay package valued at $13.2 million in fiscal 2012, about 30 percent less than the previous year. (CNBC)

● This is interesting. NOAA central Illinois historical temps.

New Zealander Stuart Jeannne Bramhall writes about John Jeavons books and more on small-scale productive food growing. (Dissidentvoice)

1931′s Remote-Controlled Farm of the Future “If I hadn’t found it myself, I’d be extremely skeptical that this illustration was actually from 1931. That flat panel display is just too spot-on.” (Reality Zone)

__________________________________________________________

TWO MACRO PICKS

1) Rethinking Macro by R.A. (The Economist)

2) Hoisington Investment Management Second Quarter Outlook on Interest Rates and Over-Indebtedness. Keep in mind that about two years ago Van R. Hoisington and Lacy H. Hunt were advising buying ten year treasuries which were returning almost 4 percent and now they are advising buying 30 year treasury bonds which are returning less than 3 percent. Wow. (Today’s 10-year yield is 1.58 percent and the 30-year bond yield is 2.63 percent.)

__________________________________________________________

UPDATED CROP CONDITION PIE GRAPHS:

CORN

CORN PRICE (DEC)

SOYBEANS

SOYBEAN MEAL PRICE (DEC)