*****Obvious USDA Nonsense And The War Against Grasshoppers*****

Over the weekend there was a pretty major news item, as Nogger explains.

(emphasis mine) [my comment]

Monday, 21 June 2010
Weekend News

Perhaps the biggest news for the grain markets emerging over the weekend was
the Chinese announcing that they were to allow the yuan to appreciate, rather than remain fixed against the dollar.

That saw the local currency appreciate to it's highest levels against the US unit since it was revalued back in July 2005.

That saw commodities rise across the board on ideas that a strengthening yuan will see Chinese import continue to rise. Copper rose the most in a month, zinc is up 4.3 percent and aluminum rose 3.6 percent. Crude oil is at its best levels in more than a month, whilst eCBOT wheat, corn and soybeans are also higher.

The PREDICTABLE response? An all-out Propaganda Offensive

The Wall Street Journal gives us the best example of USDA propaganda to date.

JUNE 21, 2010
Global Grain Surplus Sows Trouble
By SCOTT KILMAN

[REMEMBER THIS ARTICLE IS PURE PROPAGANDA!]

Two years after the global food crisis peaked, grain shortages are turning into surpluses that could create their own problems.

Some traders and economists are speculating that if the U.S. and world economies don't heat up soon, surpluses could turn into price-depressing gluts. While cheap grain is good news for consumers and livestock producers, excessive supplies increase a government's cost for farm subsidies and tend to ignite trade fights between the big farming powers.

This tension is growing partly because
many of the farmers in the U.S. Midwest who were plagued by rainy growing seasons in recent years are having few problems so far this year. [OUTRIGHT LIE! Farmers in Midwest are having MANY problems this year.]

Although the corn harvest is months away, farmer Clay Mitchell of Buckingham, Iowa, is preparing his storage bins for what's shaping up as a record-large crop. The corn plants are already as tall as his chest, helped by a warm spring that permitted early planting, followed by well-timed summer rains. [propaganda]

"So far,
this has been the best growing season ever," says the 37-year-old newlywed, who planted 1,600 acres of corn. [propaganda]

In some northern Texas towns, the unfolding wheat harvest is so big that farmers delivering grain to local elevators in recent weeks have had to wait all day in long lines of trucks.
Some elevators are so full that wheat is being stored in cotton warehouses. [propaganda]

"There's probably never been this much wheat in our county before," says Steven Sparkman, Texas A&M; agricultural extension agent in Hardeman County. "We've got a glut." [propaganda]

This is a big change from most of the last decade [propaganda], when farmers' inability to keep up with expanding global demand for grain set the stage for what became known as the food crisis of 2007 and 2008.

World grain stocks—what's left by the time new harvests can replenish supplies—shrank as the growing middle-class in emerging nations such as China demanded more meat from livestock fattened on grain. Industrialized nations, stung by soaring oil prices, were increasing support for fuels made from crops. In the U.S., the ethanol industry began consuming one-third of the nation's biggest crop, corn.


Grain prices skyrocketed as some panicked governments disrupted trade by husbanding domestic supplies, increasing the numbers of hungry people around the world by millions and fueling street protests and riots. It took a global recession to cool grain prices in late 2008.

Two years later, however, farmers world-wide are working harder than ever. Growers from Latin America to the former Soviet Union have expanded so quickly that the global acreage devoted to the 16 biggest grain and oilseed crops has climbed 82 million acres since 2006—akin to creating another U.S. corn belt, according to U.S. Department of Agriculture statistics.

[A never-ending series of record crops]

Grain traders in Chicago expect U.S. farmers to produce record-large corn and soybean crops for the second straight year. Farmers in Brazil and Argentina are wrapping up record-large soybean harvests. Asian farmers are poised to produce a huge rice crop. According to forecasts by the United Nations' Food and Agriculture Organization, this year's global cereal reserves—the buffer against shortages—will probably be 24% bigger than just two years ago, and the largest in eight years. [pure propaganda]

With world grain production this year expected to exceed demand for a third consecutive year,
many grain traders and farm economists are beginning to debate the prospects for two starkly different outlooks. [more propaganda]

Some farmers disagree with USDA

Agriculture.com reports that some farmers disagree with USDA.

USDA says corn, soybeans on schedule; some farmers disagree
Crops starting to face major challenges, farmers say
Jeff Caldwell
Agriculture Online Multimedia Editor
6/21/2010, 3:45 PM CDT

On paper, the 2010 corn and soybean crops are just about where they need to be: 93% of the soybeans are planted and 75% of the corn crop is in good to excellent shape, according to USDA's weekly Crop Progress report released Monday.

But, on the land, the story's far from normal in parts of the nation's midsection and southeast, as weather extremes start to ratchet down crop progress, farmers say.

"From Peoria to Chicago, the beans do not look like a bin-buster. Not only do they look bleak, but 10% of my beans are under water and once we get into July, it might not be worth replanting," says Agriculture.com Marketing Talk member centralillinois. "I haven't been to western Illinois, but some have said that they are having an even tougher time with water."

Moisture concerns like these only deepen in Missouri. Adding up the planting and replanting numbers for his area in Missouri, Marketing Talk member mspencerfarms says it means there are still a lot of soybean acres left to sow before it's all said and done.


"There have been no beans planted now for 3 weeks, so whatever hasn't emerged is not going to emerge. That means that 30% of what is planted needs to be replanted. Do the math and you come up with at least 3.5 million acres still unplanted," mspencerfarms says. At 40 bushels per acre, that is 130 million bushels without taking in possible other areas like Kansas, Nebraska, Ohio, etc., that may not be completely planted or what needs to be replanted. A lot of frustration in our area."

There's some consolation ahead, with warmer temperatures expected in the areas where they're most needed. But, the moisture will likely continue to stress any planting operations moving forward.

"The crops in the central Corn Belt look the worst I have seen since '93. Those are, the ones that are planted. Many, many acres have not been touched. Many, many acres look absolutely horrible. Some crops planted on a select few days and on well-tiled ground look very good," adds Marketing Talk member Boarsnest1. "I believe the top end is off of this crop and it will struggle to come in at trend."

It isn' t going well in Canada either. Lac du Bonnet Leader reports that farmers face tough decisions as weird weather drags on.

Farmers face tough decisions as weird weather drags on
Friday, 18th June 2010

Eight to 12 million acres of wheat-producing farmland have gone unseeded this year, according to the Canadian Wheat Board (CWB), and North Eastman farmers are feeling the pinch.

"It's disastrous," Lac du Bonnet's Cam Neurenberg said. Although he managed to get all 600 acres of his wheat crops seeded, the soil is totally waterlogged.

"To be honest, I don't even want to think about it."

Bruce Burnett, the CWB's director of weather and market analysis, says many wheat farmers are seeing their hopes dashed this year.

"The excess rain has washed away the hope of seeding for many farmers," he said at the annual CWB grain industry briefing last week. "In many cases, these acres are just lost and will not see any crop."

But it's not just wheat that didn't get seeded. Lac du Bonnet farmers Tom Zarecki and Cindy Kellendonk have about 100 acres of canola and soybeans that didn't get seeded.

"There's not a hope in hell of it staying dry enough for six days so we can re-seed. I would call this a disaster, not only for farmers but Canadians, too," Kellendonk said this week.

In total, between 8.25 million and 12.5 million acres of farmland will go unseeded across the prairies. The CWB is projecting the western Canadian seeded area for all wheat at 19.15 million acres, the smallest area since 1971 and an 18 per cent reduction from 2009-10. The area seeded to durum is expected to be 3.4 million acres, the smallest area since 1980 and down 39 per cent from 2009-10. The barley crop is looking at its lowest acreage since 1965. About 6.6 million acres of barley will be seeded, down 20 per cent from last year.

"Many areas got off to an early seeding start, but the extraordinary rains halted progress. Significant amounts of farmland remain unseedable at this late date," Burnett said. "On the other hand, some previously dry regions where planting took place early have benefitted from the rains."

The situation is particularly bad in Saskatchewan, where 36 per cent of the crop remains unseeded and prospects for additional seeding are dim. Overall across the Prairies, seeding of major crops is about 78 per cent complete. Normally at this time of year, seeding is entirely complete.


Crop development is behind normal, raising some concern of frost damage late in the season.

Terry Buss, farm production adviser for Manitoba Agriculture, Food and Rural Initiatives in Beausejour, said the next few days represent the tipping point for farmers in the North Eastman region.

At press time Wednesday, Environment Canada was calling for two straight days of rain.

"A lot of people are having to make very tough decisions," he said. "Right now farmers are still deciding which crops they're going to try and save, but if we get what the weather man is saying we will, most farmers are going to say 'that's it, I'm done.'"

Buss has driven throughout the region he serves, from Lac du Bonnet to Beausejour and beyond, and said there's not a single field that's unaffected.

"I've yet to find a single oasis where people are fine. Everyone is really frustrated and worried. What we need right now is sunny skies. We don't need another rain storm until the end of July. All we can hope is that Mother Nature takes a break and lets us lick our wounds."

About that global wheat glut…

Nogger explains the situation with global wheat supplies.

Tuesday, 15 June 2010
Wheat: Taking China Out Of The Equation

In 2008 global wheat supplies fell to a dramatic low sparking food rioting and the sharp spike in prices that we all remember so well. World supplies fell to below 2 1/2 months worth of consumption, and the ensuing panic pushed global prices to unprecedented highs.

Things have sure changed a lot since then, suddenly we are awash with wheat that nobody wants, we can hardly give the stuff away. World supplies have risen to a much more comfortable nigh on four months worth of demand, and global prices have fallen back accordingly.

Phew, what a relief that was then eh? We can all put our feet up and relax, the world isn't going to run out of wheat after all.

Just before I put the kids to bed to nod off in comfortable bliss, safe in the knowledge that Mrs N#3 isn't going to have to queue all night outside Tesco's to ensure we have a generous supply of extra thick sliced Warburtons for our breakkie in the morning. Where is all this wheat, I mean it is all there isn't it? We can get our hands on it, if we want it like? Just for our peace of mind.

We aren't doing anything daft like turning it all into biofuel because we think that we have so much of the blinking stuff, only to turn around and find that when push comes to shove and Mother Nature chucks us a googlie that toast is surprisingly indefinitely off then menu?


Just double check those numbers again for me will you old chap?

Right, look, here's the numbers. We'll use the USDA, they're pretty reliable aren't they?:
[no]

World Consumption(MMT)

World Stocks(MMT)

Stocks/Usage %

2006/07

615.77

130.64

21.22

2007/08

617.46

124.41

20.15

2008/09

642.52

165.05

25.69

2009/10

652.18

192.9

29.58

2010/11

667.49

193.93

29.05

There you go, little wobble around 2007/08, normal service resumed, job sorted night night sleep tight. Look if you're still worried I'll leave the landing light on, how's that?

What? You want me to take China out of the equation, just to put your mind at rest? Bloody hell, right here goes then, and don't ask me to do anything else, it's way past your bedtime now.

Chinese consumption has been very flat during this period at around 105 MMT, according to the USDA. China's share of world stocks however, has risen from 38.45 MMT in 2006/07 to a projected 62.89 MMT in 2010/11.

So although Chinese consumption is static, rest of the world consumption has grown steadily from 513.77 MMT in 2006/07 to a projected 562.69 MMT in 2010/11.

That means that world stocks to usage excluding China in 2010/11 is set to come in at 23.29%, or around 2 3/4 months supply. OK, that's tightish, but stop crying will you it's not that bad, we're not going back to the dark old worrisome days of 2007/08 here my lad.

What? I can't tell what you're saying why you cry like that, calm down lad, what is it? You've read on the Blog that
world wheat production in 2010/11 might be significantly lower than what the USDA reckon? Surely not.

Right listen, I will do the sums one more time just to put your mind at rest.
If we assume that the USDA are wrong, an absurd notion I know, but lets just assume it for now. They do still have Canada down to produce 24.5 MMT of wheat this year after all.

If Nogger's projections are correct and the world will only produce 646.9 MMT of wheat in 2010/11, where does that leave us? Well, even allowing for the fact that 4 MMT of the USDA's potential overstate is in China itself, that cuts the rest of the world stocks to usage to 20.16%.

Yikes!
That's right back to where we were in 2007/08. Get your dressing gown on son, we're off to Tesco's....

USDA fighting a losing battle this summer

Nogger explains that only very modest gains will be ‘tolerated' (by USDA).

Tuesday, 22 June 2010
Early Call On CBOT


The euphoria over China's weekend announcement that it would allow the yuan to appreciate has been short-lived [see Wall Street Journal' s propaganda above for why]. Most analysts are now saying that only very modest gains will be likely to be tolerated. [tolerated by whom? The USDA?]

Demand from China remains robust, even without any gains from it's local currency, as witnessed by further sales of old crop US soybeans yesterday. Unconfirmed rumours today suggest that they also bought more US corn overnight.

The first US corn cargo of the recent raft of Chinese purchases has however arrived and been cleared by customs without problems, according to media reports.


"Heavy rain and severe weather will continue to hit the Plains and Corn Belt this week. The latest mid-term outlook now shows a cool-down and soaking rains for the Ohio Valley and Upper Delta as July arrives," according to QT Weather.

The USDA last night said that 16% of soybeans in Ohio remain unplanted, the crop is normally 100% done by now.

My reaction: I am enjoying watching USDA propaganda get more and more insane. Any subtlety in USDA media campaign is gone. Now it is record crop after record crop, overflowing warehouses, outright lies, etc… Two good examples from article above:

“Some elevators are so full that wheat is being stored in cotton warehouses”
“There's probably never been this much wheat in our county before”

We' ve reached the point where it has gotten so bad that it doesn' t bother me anymore. It is just like the soviet era posters I see in Russia: so obvious you have to wonder what is wrong with the heads of anyone who accepts it.

Of course, at this point, any respect I might have had for the US mainstream media is gone, which is why I am enjoying publications like the Wall Street Journal degrading themselves by publishing such obvious nonsense.


On another note, the expected 2010 'Biblical' Grasshoppers infestation has arrived. Probably won' t help produce the USDA' s record harvest!

War Against Grasshoppers

Wmur.com reports that 'Biblical' Bug Invasion Hits California.

'Biblical' Bug Invasion Hits California
Grasshopers Chew Through Bushes, Other Plants
UPDATED: 3:21 pm EDT June 21, 2010

STANISLAUS COUNTY, Calif. -- Grasshoppers have descended upon a California town in biblical proportions, chewing through rose bushes and nearly any other plant they can find, KCRA-TV in Sacramento reported.

John Raley said clouds of the flying bugs billow up from the ground when he walks on his family's 3,500-acre cattle ranch, near Waterford.

The New York Times reports about War Against Grasshoppers.

Going to War Against Grasshoppers
By KIRK JOHNSON
Published: June 9, 2010


Bug wars have long punctuated life in the nation' s grassy midsection,
but this year is an exclamation point. At least $25 million in hay, wheat and alfalfa alone in this corner of Wyoming is up for grabs, state officials say, to be eaten by insects, or saved. Huge areas of Montana and South Dakota are also at risk, especially from sanguinipes, the migrator, one of the most feared of 100 grasshopper species on the plains because of its startling mobility. In Wyoming alone, about 7,800 square miles — an area the size of New Jersey — is infested and scheduled for aerial treatment.

The grasshopper fight of 2010 is different from past plagues in money, tactics and science. With low farm prices last year, many ranchers decided to forgo the $1-an-acre spraying fee for prophylactic grasshopper control. And the ample spring rains this year and last fell with a timing that failed to control the egg numbers, leaving more adults to lay more eggs.

“Largest project in my lifetime — nothing even close,” said Dean McClain, 56, owner of Ag Flyers, a Wyoming company that has assembled part of the 30 crop planes in 10 counties that have been flying, dawn to dusk, since last week. “Average year for me is about 2,000 acres,” he said, referring to his pesticide treatment work. “This year, I' ll do just short of a million.”


"We knew last year we were in trouble - then when hardly anybody sprayed, we knew we would be in big, big trouble," said Gail Mahnke, supervisor of Niobrara County Weed and Pest Control District, based here at the county seat in Lusk, in east-central Wyoming.

The federal government, which led the grasshopper counterattack during the last big outbreak, in 1985 - and before that in the early 1970s - has also retreated under financial pressure and is focusing its bug-killing firepower this year on federal and American Indian tribal lands. And the spring rains, which can sometimes drown tiny grasshopper nymphs, came with timing that only a grasshopper mother could love.

"The longer they're out of the ground, the bigger and stronger they are, and they can hang on in driving rain," said Scott P. Schell, an assistant extension entomologist at the University of Wyoming. "This year the rains were ether too early or too late in spring to hurt them."


The key to the spraying program, insect experts say, is curtailing the numbers while the grasshoppers are still tiny.
But the numbers of those tiny, vigorous, antenna-twitching insects are staggering.

On Wednesday afternoon, Ms. Mahnke from the county Weed and Pest office drove out to one particular hatching ground that she said
was without equal. In recent days, she said she easily counted 40 to 50 or more tiny grasshoppers, many still the size of a grain of rice, per square yard. If multiplied across five million affected acres, they would yield a trillion insects or more.

Walking through the calf-high grass in such a field feels like something out of primordial biology 101. Every step stirs a tiny, nervous crowd, jumping every which direction - up, down, away and onto one's
pants. Adult size in such numbers, vastly larger, jumping and flying - and by the adult phase, eating in volume - would do Alfred Hitchcock's best nightmare one better in a dozen paces.

"There's so many species in here I can't keep them all straight," she said, peering into the cloth bag she had used to sweep up a few minutes' worth of bugs. "But there are at least four of the dirty dozen in there," she added, referring to the dozen species most dreaded for their predation abilities, led by Melanoplus.

CBS4denver reports that Feds announces extra funding for grasshopper fight.

Jun 11, 2010 3:24 pm US/Mountain
Feds Announce Extra Funding For Grasshopper Fight

CHEYENNE, Wyo. (AP) —— The federal government is providing emergency funding to help suppress costly grasshopper outbreaks this summer in western rangeland states like Wyoming and Montana.

Agriculture Secretary Tom Vilsack said Friday that nearly $11 million will be available through the department's Animal and Plant Health Inspection Service. The department says the funding could protect up to 4 million acres of rangeland.

I explained about the looming Grasshopper disaster two months ago.


Potentially devastating scale of grasshopper outbreak

1) Grasshoppers infested about 15 million acres of western lands in 2009.

2) Forecast maps indicated that 160 million acres of western lands will be impacted by grasshoppers in 2010.

3) To put these numbers into context, in 2008/09 US farmers planted 55.7 million acres of wheat, 91.0 million acres of wheat, and 74.7 million acres of wheat.

4) If the weather is warm and dry, a large part of the Midwest won' t be growing anything.

Locust are Swarming grasshoppers

1) Locusts are actually a form of grasshopper that appears when grasshopper populations appear in high densities

2) When grasshoppers become part of a swarm; their bodies actually change. Their wings and jaws grow larger; enabling them to fly further and eat more.

3) In 1931, grasshopper swarms were reported to be so thick that they blocked out the sun. These swarming grasshoppers ate everything fenceposts, clothing hanging on clotheslines, and even the paint off buildings. Fields were left devastated, totally stripped of all vegetation.

Epic grasshopper outbreak is not a coincidence

Notice the timing of the last truly epic grasshopper infestation: 1931, right in the middle of the great depression. THIS IS NOT AN ACCIDENT. During economic downturns, farmers and governments cut corners in their preventative spending, allowing pest infestations to reach levels they normally never could. This inaction is the true cause behind spectacular pest outbreaks.

USDA inaction in face of obvious threat


1) The USDA doesn' t have any sense of urgency in the face of the pending grasshopper plague. This is probably because USDA officials are too busy predicting a record soybean harvest next fall (see record soybean harvest forecast) and spreading stories of an (imaginary) wheat glut (see biggest Wheat Glut Since 2002 Means Slump May Worsen).



Conclusion: When I was reporting on the harvest problems last year, I noted that many parts of the Midwest were seeing their worst outbreak in years and highlighted the potential for grasshopper trouble in 2010.

Note: Grasshopper infestations grow exponentially worse every year until some weather event breaks the cycle. If all the eggs being laid by grasshoppers right now survive the winter unharmed, there will be a grasshopper infestation of biblical proportion next year.

But don' t worry everyone, the USDA is already predicting record harvest next fall, especial soybeans, and there is no way the USDA could possibly be wrong. (extremely heavy sarcasm)

On that note, it will be interesting to see what the USDA will do with its crop predictions as grasshopper swarms travel the countryside devouring fields. Will they be forced to lower estimates in the face of such a visible problem?

In any case, unless farmers get lucky (and their luck hasn' t been good of late) and some weather event reduces the problem, 2010 already looks set to be an even more miserable year than 2009.

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8 Responses to *****Obvious USDA Nonsense And The War Against Grasshoppers*****

  1. Trader says:

    Hi Eric, why don't write some stuff on gulf oil spill? It's an armageddon for food supplies in those area. Longer term, it's armageddon for the whole world!

  2. riteturn says:

    A friend recently did a road trip in the western states (US) and reported she went through many small towns where many of the businesses - including the grain elevators were closed down.

  3. Gail says:

    Did you see this story about crops in Tennessee?

    http://witsendnj.blogspot.com/2010/06/oh-my-god.html

  4. Robert says:

    The gulf oil spill most likely didn't happen. It's yet another false flag media trick to panic the population and acheive various political goals.

  5. Hey Eric, great work.

    1)Open commodity price supression whether it be PMs (and by derivative oil) or food.

    2)The non-US problems being super hyped around the world (In Europe) and the US bad news totally off the mainstream media agenda, making the $ the safe haven.

    Both these factors are are almost at their zenith (like having a pegged currency that shud be allowed to decline in value) which is totally undervaluing what should be bought for a $.

    It looks like both the US economy and the commodities price supression fraud will come undone at the same time. This could give us hyper-inflationary collapse within weeks.

    A conspiracy is not a conspiracy until it's history.

  6. Trader says:

    @Robert, You are insane! How can they fake oil spill news!

  7. Robert says:

    kindof like how they faked the moon landings and planes crashing into the wtc i guess.

  8. sharonsj says:

    How is this affected by the Baltic Dry Index? I read it dropped by 40% this month. That means shipping is way, way down. Probably because demand for everything is way down (you can't buy stuff if you have no money).

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