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» Tuesday, May 16, 2006

The wheat crop is in trouble

You probably don't need to stock up on flour yet, but it's not good news that Oklahoma's wheat crop is now expected to be the worst since 1957. Extended drought combined with hailstorms (when it rains, it hurts) and plant diseases have left the crop weak and immature. This picture, from Agriculture Online, is explained by Oklahoma Wheat Commission executive director Mark Hodges:

As you can see there are no secondary roots at all and you can still see the red seed treatment, five months after planting.

We used to have an agriculture system in this country that stored food in times of plenty and released it in times of paucity, but the previous spy-on-Americans GOP administration managed to destroy it in the name of short-tem political gain, and because they could. Michael Pollan explained in this 2003 New York Times article on obesity that is now behind the firewall:

The rules of classical economics just don't seem to operate very well on the farm. When prices fall, for example, it would make sense for farmers to cut back on production, shrinking the supply of food to drive up its price. But in reality, farmers do precisely the opposite, planting and harvesting more food to keep their total income from falling, a practice that of course depresses prices even further. What's rational for the individual farmer is disastrous for farmers as a group. Add to this logic the constant stream of improvements in agricultural technology (mechanization, hybrid seed, agrochemicals and now genetically modified crops -- innovations all eagerly seized on by farmers hoping to stay one step ahead of falling prices by boosting yield), and you have a sure-fire recipe for overproduction -- another word for way too much food.

[…F]arm programs in America were originally created as a way to shrink the great mountain of grain, and for many years they helped to do just that. The Roosevelt administration established the nation's first program of farm support during the Depression, though not, as many people seem to think, to feed a hungry nation. Then, as now, the problem was too much food, not too little; New Deal farm policy was designed to help farmers reeling from a farm depression caused by what usually causes a farm depression: collapsing prices due to overproduction. [...]

New Deal farm policy, quite unlike our own, set out to solve the problem of overproduction. It established a system of price supports, backed by a grain reserve, that worked to keep surplus grain off the market, thereby breaking the vicious cycle in which farmers have to produce more every year to stay even.

It is worth recalling how this system worked, since it suggests one possible path out of the current subsidy morass. Basically, the federal government set and supported a target price (based on the actual cost of production) for storable commodities like corn. When the market price dropped below the target, a farmer was given an option: rather than sell his harvest at the low price, he could take out what was called a "nonrecourse loan," using his corn as collateral, for the full value of his crop. The farmer then stored his corn until the market improved, at which point he sold it and used the proceeds to repay the loan. If the market failed to improve that year, the farmer could discharge his debt simply by handing his corn over to the government, which would add it to something called, rather quaintly, the "ever-normal granary." This was a grain reserve managed by the U.S.D.A., which would sell from it whenever prices spiked (during a bad harvest, say), thereby smoothing out the vicissitudes of the market and keeping the cost of food more or less steady - or "ever normal."

This wasn't a perfect system by any means, but it did keep cheap grain from flooding the market and by doing so supported the prices farmers received. And it did this at a remarkably small cost to the government, since most of the loans were repaid. Even when they weren't, and the government was left holding the bag (i.e., all those bushels of collateral grain), the U.S.D.A. was eventually able to unload it, and often did so at a profit. The program actually made money in good years. Compare that with the current subsidy regime, which costs American taxpayers about $19 billion a year and does virtually nothing to control production.

So why did we ever abandon this comparatively sane sort of farm policy? Politics, in a word. The shift from an agricultural-support system designed to discourage overproduction to one that encourages it dates to the early 1970's - to the last time food prices in America climbed high enough to generate significant political heat. That happened after news of Nixon's 1972 grain deal with the Soviet Union broke, a disclosure that coincided with a spell of bad weather in the farm belt. Commodity prices soared, and before long so did supermarket prices for meat, milk, bread and other staple foods tied to the cost of grain. Angry consumers took to the streets to protest food prices and staged a nationwide meat boycott to protest the high cost of hamburger, that American birthright. Recognizing the political peril, Nixon ordered his secretary of agriculture, Earl Butz, to do whatever was necessary to drive down the price of food.

Butz implored America's farmers to plant their fields "fence row to fence row" and set about dismantling 40 years of farm policy designed to prevent overproduction. He shuttered the ever-normal granary, dropped the target price for grain and inaugurated a new subsidy system, which eventually replaced nonrecourse loans with direct payments to farmers. The distinction may sound technical, but in effect it was revolutionary. For instead of lending farmers money so they could keep their grain off the market, the government offered to simply cut them a check, freeing them to dump their harvests on the market no matter what the price.

The new system achieved exactly what it was intended to: the price of food hasn't been a political problem for the government since the Nixon era. Commodity prices have steadily declined, and in the perverse logic of agricultural economics, production has increased, as farmers struggle to stay solvent. As you can imagine, the shift from supporting agricultural prices to subsidizing much lower prices has been a boon to agribusiness companies because it slashes the cost of their raw materials. [...]

You would have thought that lower commodity prices would represent a boon to consumers, but it doesn't work out that way, not unless you believe a 32-ounce Big Gulp is a great deal. When the raw materials for food become so abundant and cheap, the clever strategy for a food company is not necessarily to lower prices - to do that would only lower its revenues. It makes much more sense to compete for the consumer's dollar by increasing portion sizes - and as Greg Critser points out in his recent book "Fat Land," the bigger the portion, the more food people will eat. […]

Such cheap raw materials also argue for devising more and more highly processed food, because the real money will never be in selling cheap corn (or soybeans or rice) but in "adding value" to that commodity. Which is one reason that in the years since the nation moved to a cheap-food farm policy, the number and variety of new snack foods in the supermarket have ballooned.

The abundance of corn, in particular, has led to thousands of products that use HFCS - high-fructose corn syrup - to make them more moist, more sweet, and more caloric. Now, thanks to all this, not only are we a nation of fat (present company included), but thanks to rock-bottom grain prices, farmers that have to produce all they can to eke by aren't even going to get halfway there:

Oklahoma's five-year wheat production average is 140 million bushels. On Friday, the USDA estimated the 2006 crop at 68.2 million bushels.

The price of pasta may not peak, but the farmers are in trouble again.

# - Posted to The argument for power, The Sooner State, The staff of life on 5/16/06; 11:56:37 PM - Discuss -

Special rights for East-coast coaches

I have noted before, in this space but more often in person, that sportswriters have an unexplainable thing for Florida State football coach Bobby Bowden. Yes, he's good; yes, he's one of the best of all time. But he's not infallible, and yet sportswriters continue to believe he must be, somehow.

When FSU went 7-4 one season, they were still ranked #15, ahead of several two-loss and three-loss teams, because the sportswriters and coaches would not believe that Bobby Bowden's team was really that bad. Admittedly, sometimes FSU does really well: in 2003, the team was 10-2 and finished ranked #7 in the BCS, although the 16-14 loss to Miami in the Orange Bowl (sponsored by "Hey, we don't need tourists here after all") that year was a bit of a downer.

But 2002 proves instructive. FSU, without a lot of experienced players or really much reason to believe in the team that year, started out as #5 in the pre-season polls. After winning games against Iowa State, Virginia, Maryland, and Duke, FSU was up to #4 i the polls (averaging the two together - sorry, that's all the data I have, so it's possible they were #3 in one poll and #5 in the other).

Then FSU lost to Louisville in overtime, and fell to #11, as any team would. The next week, FSU beat BCS #40 Clemson (48-31) and rose one notch in one poll. The following week, they lost to Miami by one point and fell to a consensus #13. Two weeks later, after a bye week, FSU lost at home to Notre Dame, 24-34, and fell to #19.

Three more wins over #55 Wake Forest, #42 Georgia Tech, and #70 North Carolina edged FSU back up to #14 in the polls, until a 17-7 loss on the road to #19 North Carolina State dropped the Seminoles to 8-4 (one win for every two losses) and a split between #21 and #22 in the polls.

The following week's win over #17 Florida, a big FSU rivalry, boosted FSU by four spots in the poll, ending at #17. A loss above them in the final week of the season, after FSU was done, let the team finish at #16 in the polls, and #14 in the BCS because the computer ranking was the equivalent of "#13.83" in a consensus computer ranking. The nine wins made FSU BCS-eligible, and they went to the Sugar Bowl, where they lost 26-13 to Georgia, finishing the season at 9-5.

Only one four-loss team was ahead of FSU: Colorado, partly because Colorado had beaten KSU early in the season, and KSU finished #8 in the BCS, having lost only to CU and Texas (KSU did not play OU that year, in case you're wondering). Colorado lost its first came to Colorado State, to eventual Pac 10 champs USC, and to Oklahoma twice, which the BCS formula at the time treated specially. Colorado lost the Big 12 title game to Oklahoma that year 29-7, but the loss only cost them one spot in the BCS rankings.

All the other southern 8-4 teams of that year did much worse despite schedules similar to FSU's: Auburn (8-4, finished #20 in the BCS), Arkansas (9-4, #21), Virginia Tech (9-4, #22), Tennessee (8-4, #25), LSU (8-4 just one year before winning the BCS championship, #27), and even Oklahoma State (8-5, #34). The best four-loss team other than CU and FSU was Florida, at 8-4 and finishing #17. South Florida was 9-2 and finished #23 - not because the computers didn't like USF (they got about a #20 rating from the computers) but because the polls put them at about #30.

Had FSU not started the year at #5, the team would likely not have been BCS-eligible at all. Yet they started at #5 even though they finished the previous season in 2001 at 8-4 also! The season before that, in 2000, lest we forget, was when FSU was so massively overranked that going into the BCS championship game against OU, the sportscasters couldn't even imagine FSU losing. The only discussion was whether or not Miami, the only team to beat FSU that year, should get a share of the national championship once FSU won the Orange Bowl. (OU won 13-2, and the 2 points came with 6 minutes left when the punter kicked a bad snap out of the back of his own end zone. FSU's Heisman-winning offense never scored.)

Sportswriters and other football deciders look at Bobby Bowden and see "success," both when he earns it and when he does not. His first one or two losses each season are mulligans - they just don't wind up counting against his team.

This is why it does not surprise me in the least to learn that the College Football Hall of Fame, stymied in its attempts to honor both Bowden and Joe Paterno because the rules only allow them to induct retired coaches, simply changed the rules to let them in. From now on, any active coach age 75 or older is also eligible. Bowden is 76; Paterno is 80. I don't think any other active Division I-A coaches are over 75.

Don't get me wrong - Bobby Bowden is very very good. Apparently, however, he's so good that even when he's not that good, no one seems to notice.

# - Posted to Rah! Rah! Rah! on 5/16/06; 11:31:59 PM - Discuss -

A little perspective, please

  1. There was no Social Security crisis last year, other than the GOP raiders who have wanted to end the program for 70 years realizing that President Bush's fake reelection "mandate" may have been their only chance to do it.

  2. There is no immigration crisis, other than the President's party realizing they need a wedge social issue as part of a desperate attempt to drive scared neo-racist "conservative" voters to the polls in November, and fear of Teh Mooslims and Teh Gays isn't working anymore.

Now, lest this encourage you somewhat, keep in mind:

  1. The Democrats put up a great resource for last year's Social Security debate at "thereisnocrisis.com". However, sometime this year, they let the domain name lapse. It's now owned by an Indian outsourcing software company using it as an Adsense magnet for job ads.

    The most successful progressive policy Web site of the last five years, and they let someone else hijack it.

Still, let's keep some perspective. We do not have to find a solution to the "immigration crisis" because there is no crisis. Thank yew.

# - Posted to The argument for power on 5/16/06; 2:47:31 PM - Discuss -

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