~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Oklahoma's latest farm and ranch news
Your Update from Ron Hays of RON for Wednesday November 10, 2010A service of Producers Cooperative Oil Mill, Midwest Farm Shows and Big Iron OnLine Auctions!
-- Beans in the Teens
-- Fallin Administration Getting Organized
-- The Conservation Efforts in Oklahoma Continue to Yield a Bumper Crop of Success Stories- We Visit with Clay Pope
-- Feeder Price Signals Reflect Changing Feeder Market Conditions
-- Do we have a US- Korean Free Trade Deal (Again)?
-- Gray Land & Cattle Getting Ready for their Annual Production Sale This Friday
-- Let's Check the Markets!
Here's your morning farm news headlines from the Director of Farm Programming for the Radio Oklahoma Network, Ron Hays. We are proud to welcome Big Iron Unreserved Online Auctions as our newest sponsor of the daily Email. Their next auction is Wednesday, November 10 - featuring Low Hour, Farmer Owned Equipment. Click here for their website to learn more about their Online Farm Equipment Auctions.
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Beans in the Teens
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~It was a wild ride on Tuesday in the commodity markets in this country and globally as well. At the end of the US open outcry sessions, soybeans had jumped over 4% in value to $13.29 per bushel in the January contract- cotton had posted another big gain (ho-hum) which was the latest in a series of big gains- and corn and wheat suffered profit taking by the closing bell.
In the case of soybeans- it was all about the ending stocks being
reduced to 185 million bushels- Market Vereran Rich Feltes said that is
skinny enough that any hiccup in the South American crops would be
amplified many times over.
For corn- the USDA reduced the size of the US corn crop this fall to
12.54 billion bushels- in line with what a lot of traders were expecting.
The real story is about ethanol usage.
CLick on the link below for our coverage from yesterday morning as the reports came out- we have links in our story for both the Crop Production numbers as well as the ERS World Supply Demand story.
Fallin Administration Getting Organized
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Oklahoma Governor-elect Mary Fallin introduced key members of her economic team to the public on Tuesday during an event at Tulsa aerospace and aviation firm NORDAM. Speaking to reporters from the NORDAM factory floor, where she had previously joined workers on an assembly line during her "Working Across Oklahoma" campaign tour, Fallin named Tulsa businessman Robert Sullivan, Jr. to serve as Special Advisor to the Governor on Economic Development.
Sullivan is the owner of Sullivan and Company LLC, a 52-year old family owned independent oil and gas exploration and production company. He served as secretary of energy under both Governor Frank Keating and Governor Brad Henry and was a Republican candidate for governor in 2006.
The first two members of that taskforce that will serve with Sullivan were named by the Governor Elect on Tuesday as well- and one is well known to Oklahoma farmers and ranchers. Named by Fallin to this taskforce was Gary Sherrer and David Rainbolt of BancFirst- and current Chairman of the State Chamber of Commerce.
Gary Sherrer is a former Oklahoma state representative who served as secretary of agriculture under Governor David Walters and served as both the secretary of environment and the executive director of the Water Resources Board under Governor Frank Keating. He currently serves as the assistant vice president for external relations in OSU's Division of Agricultural Sciences and Natural Resources. He also serves on the board of directors at Rural Enterprises, Incorporated.
The Conservation Efforts in Oklahoma Continue to Yield a Bumper Crop of Success Stories- We Visit with Clay Pope
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Several positive stories about conservation efforts have surfaced in recent days- and we had the opportunity earlier this week to sit down with Clay Pope, Executive Director of the Oklahoma Association of Conservation Districts, and discuss the good news about conservation work in the state.
Among the things we talked about with Clay was the Natural resource Conservation Service Committment to a multi year investment through the EQIP program for the Eucha-Spavinaw and Illinois river Watersheds, as well as recent word from the EPA of Oklahoma having a substantial number of the success stories in the Clean Water Act efforts of the Federal- State- Private partnership. Clay gives us an in depth look at each of those stories- emphasizing how this voluntary approach has worked so well as landowners have stepped up and paid the cost share to improve water quality in watersheds across the state.
We also talked with Clay about Oklahoma Congressman Frank Lucas stepping up to the Chairmanship of the House Ag Committee- Pope says for both production agriculture and conservation interests in our state and region- and he believes nationally- this is great news to have someone who has a first hand understanding of both the ag programs and the conservation programs that are found in these titles of the Farm Law in this role. Pope says the conservation community is looking forward to helping any way they can when the 2012 Farm Bill is marked up- especially as it relates to the Conservation title.
Feeder Price Signals Reflect Changing Feeder Market Conditions
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~OSU Livestock Market Economist Dr. Derrell Peel says if you want to know price direction in the cattle market- you might want to pay attention to Feeder Cattle prices. Peel says that feeder cattle prices have the unenviable task of providing appropriate market signals to cow-calf, stocker and feedlot producers to coordinate cattle production. This coordination is embodied in both the overall level of prices but importantly, in the relationship between prices for different weights and classes of cattle. Feeder prices are usually lower per hundredweight for heavier animals which accounts for the normal "rollback" in price that is observed as weight is added to the animal. However, over a wide range of market conditions this rollback ranges from very severe, with large price discounts at heavier weights, to minimal rollback with little price decrease for additional weight. Historically, changes in price levels and price relationships reflected cyclically factors and markets shocks such a high feed prices.
Typically, a steep price rollback across feeder weights occurs when prices are cyclically high and numbers are low. The market is providing incentives to encourage more calf production and to speed animals into feedlots quickly. This is particularly the case when feed prices are low. The years 1991 and 2005 are good examples. Alternatively, a flat price rollback occurs when cattle numbers are large and prices are low, thus encouraging a slower movement of animals through the system. High corn prices also cause a flat price relationship to encourage more forage based gains and reduce expensive feedlot gains. 1996 was a prime example, when cyclically low cattle prices combined with high corn prices. In fact, in this rare example, there was not a price rollback but rather a price rollup as feeder cattle gained in value as they gained weight.
The current market situation is unusual but indicative of the situation now and generally what is expected for the foreseeable future: low cattle numbers and high corn prices at the same time. There result is an unusual looking feeder price-weight relationship. Instead of a smooth downward sloping line, the current feeder price graph is kinked, with an upper portion that is steep so as the provide signals to cow-calf producers to increase calf production and a flat portion for heavy weight feeder cattle that provides a high value of gain for stocker based production. Currently there is a price rollup at some weights as prices for 750 pounds steers, for example, are higher than prices for 600 pound steers. The feeder market is simultaneously sending signals to use forage for cow-calf production and to stocker producers for additional stocker production. Forage is more valuable and forage producers have more production alternatives than we have seen in many years. Unlike previous occasions when high corn prices were usually drought related shocks, the current demand driven higher corn prices are not likely to go away and cattle numbers will remain tight for the next two to four years. We can expect the current feeder price signals to remain much as they are now as long as these conditions persist.
Do we have a US- Korean Free Trade Deal (Again)?
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~The latest story we are seeing on this issue comes from the Korea Times- click here to jump to the full story- "Expectations are running high that Korean President Lee Myung-bak and U.S. President Barack Obama will announce a ``breakthrough'' in the two countries' bilateral free trade agreement (FTA) when they meet on Thursday. "
The negotiations are now at the senior level, as USTR Ron Kirk is at
the table for the US- Korean Trade Minister Kim Jong-hoon is across the
table for the South Korean government. . Another Korean website is
reporitng overnight that a deal has been struck- and that is very likely
that President Obama and Korean President Lee will publically agree to it
when they meet. According to the DongA website, "Korea agreed to further
open its market to U.S. auto imports as demanded by Congress. Seoul also
reportedly accepted Washington's requests to include eased safety and
environmental standards into an appendix, but refused revision of clauses
in the agreement.
The key for beef producers is beef going into Korea and the tariff
rate. The FTA should start the clock ticking on reducing the current 40%
tariff to zero over a fifteen year period.
Gray Land & Cattle Getting Ready for their Annual Production Sale This Friday
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Dr. Charles and Karen Gray are excited about the cattle offering they have assembled for their 15th Annual Sale at the Gray Land and Cattle Company- at the Ranch on the north side of Edmond, Oklahoma. To get to the ranch for sale day, Friday November 12, go north of Oklahoma City on Interstate 35 and take exit 146- Waterloo Road- and go east. The sale time is twelve noon.
The Grays will be offering 50 service age bulls, 20 Registered Hereford
Females and 25 Commercial Black and Red Baldy Females.
Call Charles or Karen right away to get a sale catalog- or to get last minute information about the sale- that number is 405-341-6861.
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Let's Check the Markets!
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~We've had requests to include Canola prices for your convenience here- and we will be doing so on a regular basis. Current cash price for Canola is $9.60 per bushel- as of the close of trade on Thursday, while the 2011 New Crop contracts for Canola are now available are $10.25 per bushel- delivered to local participating elevators that are working with PCOM.
Here are some links we will leave in place on an ongoing basis- Click
on the name of the report to go to that link:
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