Good news for cattle farmers and bad news for those addicted to the “Quarter Pounder”
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Via Indiana Economic Digest –
Gov. Mike Pence and Sen. Joe Donnelly are seeking a disaster declaration to help farmers whose crops have been damaged from the summer’s high rain levels.
In 50 counties, reported crop damage and losses have met or exceeded 30 percent of a crop, and three counties have experienced a significant number of damages and losses to multiple crops, according to a news release. Under a disaster designation, low-interest emergency loans will be made available to all producers suffering losses in that county, as well as in counties contiguous to a disaster-designated county.
The National Weather Service reports rains set a statewide June rainfall record with a state average of 8.99 inches. The previous record was 8.13 inches set in June 1958.
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AustinHeraldDaily.com had an interesting article about $70,000 worth of bull semen being stolen in Minnesota. The fascinating aspect of it was the price of bull semen being sold on the market. Here is a snapshot of the pricing.
The canister was worth about $500, and the vials of semen were worth from $300 to $1,500 apiece.
Kokomo Tribune writer Josh Sigler provided a good investment piece about why farming is an excellent investment. I blog about farmers and farming because the lack of respect towards the industry by people is simply naive. Here’s a snippet of the article that should give the world pause in how exceptional farmers in the United States are:
In 1928, the world’s population was 1.2 billion people. The United States made up 10 percent of that population, and at the same time, provided 10 percent of the world’s agricultural output.
By 1968, the world’s population had ballooned to 3.5 billion. The U.S. made up 6 percent of the world’s population, but increased its agricultural output, providing 20 percent of the world’s crops, doubling the output in 40 years.
Those numbers continued along the same path, and by 2012, the world’s population rose to over 7 billion. The U.S. now makes up 3 percent of the world’s population, but in modern times, produces 30 percent of the world’s agricultural output.
The world has a long way to go in catching up to the United States.
H/T Indiana Economic Digest
One area of economic data I follow is where corn is being sold to. Recent data has pointed to farmers raising cattle which means an expanding beef market. I did some research and found this forecast at FarmandDairy.com:
U.S. Department of Agriculture semiannual report that cattle numbers have increased by slightly more than 1 percent following seven years of decline.
The most significant expansion has been in beef cows, which were up 2 percent from the previous year, the USDA said.
There were 610,000 new beef cows added nationally. Hurt said the expansion is likely to continue through most of this decade.
One reason for the expansion is prices farmers are getting for beef:
“These were led by record-high cattle prices in 2014 with finished cattle averaging near $155 per live hundredweight and Oklahoma 500-550 pound steer calves averaging $250,” Hurt said.
Harvest season is wrapping up across the nation. Here is some Indiana and national stats gathered up from various sources around the internet:
Corn for grain production will set a new record in 2014 at 14.5 billion bushels on fewer acres planted compared to 2013. World corn production is also setting new records.
Soybean farmers are now expected to harvest 3.96 billion bushels, up 31 million bushels from the October estimate. Fifteen states including Indiana, Missouri and South Dakota are expected to report records for the amount of soybeans grown per acre with the average yield at 47.5 bushels per acre. Area for harvest in the United States is forecast at a record 83.4 million acres, unchanged from last month.
(Indiana) Corn yield was unchanged from last month’s projection of 186 bushels per acre. This will be a record corn yield for Indiana if realized. Corn for grain harvested acres was 5.75 million acres. Total production is still expected to weigh in at a record-breaking 1.07 billion bushels. Soybean yield at 54.0 bushels per acre was unchanged from last month’s forecast. This yield if realized will be a record for soybean yield in Indiana. The soybean harvest is anticipated to rake in 296 million bushels, which would make 2014 a record production year.
H/T Hoosieragtoday.com for recent numbers
Bloomberg is out with a write up showing McDonald’s is facing rising costs which means prices have had to be raised. McDonald’s is a good inflation watch company since millions of people visit it everyday.
While the company still offers several items for $1, its menu is quietly getting more expensive. McDonald’s said its prices were up about 3 percent through the end of June compared with 12 months earlier. That’s more than the 2.5 percent gain in prices for food Americans purchased away from their homes in the year through August, according to the Bureau of Labor Statistics.
Prices being raised across the country are not done yet.
U.S. restaurants plan to boost prices 2 percent during the next six months, more than the 1.7 percent average increase from the prior 12 months, according to an October survey by restaurant researcher MillerPulse in Atlanta.
This follows the trend repeated often on this blog. Costs of goods are rising, yet many so called “experts” are saying inflation is tamed or barely nudging up. My most recent post, Consumer Price Index Shows Inflation on Many Items shows beef is up double digits. Do not think McDonald’s is the only restaurant in the burger chain feeling it. In September I showed Five Guys Burgers are also raising prices (Inflation Hits Five Guys Burgers)
The best indicator of inflation is the prices you pay for everyday goods. I have a saying, the best economist is the consumer. Most consumers will self monitor the prices paid on goods they frequent. The picture below is a 2012 menu from Five Guys Burgers. The address is listed on top of the store location and the date of print is lower right hand corner.
I decided to go to the store website of the same address online to compare prices. You can view it yourself here at this link. Here are the price comparisons of 2014 and 2012.
Hamburger $5.79/$5.19 14.4% increase
Cheeseburger $6.49/$5.89 10% increase
Bacon Burger $6.69/$5.99 11.6% increase
Bacon Cheeseburger $7.29/$6.49 12.3% increase
Not all price have gone up. Drinks and fries have stayed the same. Hot dogs and Sandwiches have also increased.
Local Indiana butchers have been informed pork prices will increase by Christmas. Ham will be up by almost $1/lb. More data has come out supporting the jump in price on beef. Beef herds at their lowest in decades going below 30 million. That is a 11.8% decline since 2007.