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China Outweighs Any Rival
When assessing world agriculture, especially North American grains, we look to China for the center of gravity. Literally, this giant is "eating our lunch". Their trading arm, Sinograin, roars and markets change. Asian influence, along with what South American crops look like in counter-cyclical seasons to North America, add up to a fair snapshot from week to week. Keep these pressures in mind when looking out a couple years or more for how assets are deployed to buy land, renew machinery lines, or just idea of how to retire or transition to a new generation. We used to advise clients in large corporations to not drive at high speed in bumper to bumper traffic if you want to stay unwrinkled. As a busienss metaphor this is clear rule, yet farm operators fail to heed it. They are mercurial in grain price influence, versus much evidence against that. Tight bank relationships are today's highest hurdle to farming. So be informed in all dimensions of this "world business" you operate, no longer just riding a trainm but a chief engineer. AgJournal will keep bringing you insight to help.
Oil Might Be Our Alternative Energy
We might find America's alternative to Middle East oil might be our own oil under Utah, Wyoming, and Colorado. Long known as "Oil Shale" or "Tar Sands", many attempts have been made to make economic sense of this giant reserve. Many estimate it is larger than all known Arabian reserves, but remains largely locked up from use. Read about this major oil "vault" an how price controls its future use. When we say "oil" and "energy" we usually mean "cheap gas" and "cheap heat and electricity". Tomorrow may find us rethinking this equation of entitlement.
WIND: Your Own Utility
Farms now can become their own utility with wind energy. Power companies will work with farmers to get their feeds directly into the grid or to feed in the excess energy as a credit to their electrical use billing. If you go to this link Energy Department you will get a look at maps of your state and estimates of average wind energy available.
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Get Port Bids For Better Picture Of Grain Prices
How do you get that snapshot of "world" from "home" grain prices that can give you a better feel for price trends? Marketing is any farm operator's biggest challenge, often shaping profit-loss by as much as a 30% price swing. Keep in mind you are always playing against the "house" of two biggest factors, supply and movement. Who owns either at any one time check is how the game dynamics make that P&L rise to top of your priority. Weather is not in our control, but most of the rest of the short list bears on choice.
Consider this--Four basic areas (East Coast, West Coastal, Gulf Ports, Interior to St. Lawrence) make U.S. markets weekly. Those can be thought of as "Four Zones" of Interior Great Lakes (Chicago, Toledo, Duluth to St. Lawrence); Ocean access (Atlantic and SE Ports, Gulf Ports, Pacific Ports such as Portland and Washington). Once you think of these four categories it is easier to see the price structure in terms of cost to move to "Deep Water". Here is a direct link you can go to to see the simple chart of weekly prices posted by USDA:
USDA Ocean-Interior Grain Prices
Ag Journal Staff Report
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