Showing posts with label economy. Show all posts
Showing posts with label economy. Show all posts
Thursday, October 30, 2008
Fiscal Issues Week Focus of Senator Cornyn
With the current economic turmoil faced by our nation being prominent in the news, U.S. Senator John Cornyn has focused his website on fiscal issues for our nation. I am privileged to have a guest post on the Senator's site which can be viewed here. I appreciate the Senator's efforts to bring these vital issues to the public's attention during this election season. He has been a strong advocate for fiscal conservatism and I believe will continue to bring that message to the Senate as we send him back for a second term. Thank you Senator for your efforts!
Monday, July 28, 2008
Overseas Fuel Subsidy Impact on U.S. Economy
Fuel subsidies create an artificial intersection of the Supply and Demand curves in many foreign markets. Theoretically, they stimulate the Demand side of the equation. This means less fuel available for the U.S. market -- affecting our Supply side of the equation and thus pushing prices higher. I suspect that the impact to removing such subsidies would be negative to the U.S. economy -- not positive. The reason I believe this is that the subsidies help to stimulate economies of countries such as China and Indonesia. Their strong economies increase demand in areas other than fuel. Their growth can be our opportunity if we will take advantage of it.
Fuel Subsidies Overseas Take a Toll on U.S.
By KEITH BRADSHER
Published: July 28, 2008
JAKARTA, Indonesia — To understand why fuel prices in the United States have soared over the last year, it helps to talk to the captain of a battered wooden freighter here.
He pays just $2.30 a gallon for diesel, the same price Indonesian motorists pay for regular gasoline. His vessel burns diesel by the barrel, so when the government prepared for a limited price increase this spring, he took to the streets to protest.
“If the government increases the price...(complete article here).
Fuel Subsidies Overseas Take a Toll on U.S.
By KEITH BRADSHER
Published: July 28, 2008
JAKARTA, Indonesia — To understand why fuel prices in the United States have soared over the last year, it helps to talk to the captain of a battered wooden freighter here.
He pays just $2.30 a gallon for diesel, the same price Indonesian motorists pay for regular gasoline. His vessel burns diesel by the barrel, so when the government prepared for a limited price increase this spring, he took to the streets to protest.
“If the government increases the price...(complete article here).
Friday, July 25, 2008
We Can Do Better
We frequently see the debate between “environmentalists” and the rest of us as framed in an “us” vs. “them” manner. Business people feel that the environmental movement is nothing but a roadblock to progress. People in developing countries see environmental groups preventing them from experiencing the luxuries of the west because they hinder the utilization of the natural resources at hand.
Environmental groups often carry names like “Friends of the Earth” or “Save the Wildlife.” Those types of names carry with them a stigma that immediately sets on edge the typical businessman.
What if the debate became a completely economic one?
There is within the economic community the idea that when external costs are internalized into the price of a good or service, the decision to allocate resources to that good or service often changes. An example of internalizing these externalities would be the impact of a uranium mine on the Navajo Reservation. In order to avoid the potential complexities of the decision, let’s limit it to one possible issue – or, external cost -- the impact of the mining activity on the water supply of a community.
Suppose that the mine is located within the watershed of a Navajo community. To fully understand the cost to develop the mine, the potential pollution of the community’s water supply must be examined. Such examination would need to include preventative measures and possible remediation in the event of contamination. It also would need to look at long-term effects to wildlife residing in the watershed. Wildlife might provide hunting lease income to the reservation. It might also be of significant cultural value that would be difficult to price. It might affect tourist income from photography or viewing. It might impact local artisans who utilize specific clays located within the watershed.
With the exception of preventing and remediating potential contamination, none of the impacts mentioned are direct costs to the mine owner/operator. They are however, external costs to the community of locating the mine in their watershed.
How does one determine the value of natural resources? We can estimate the value of mineral deposits. We can value land based on the transactional market for similar properties. But, how do we value the less obvious things such as: filtering the water supply, tourism, hunting and fishing, recreation, moderating effects on climate, flood protection, erosion control and other items about which we don’t currently understand?
Hopefully in the near future, we will see attention paid to such values. Such things must be part of an overall land use plan before disruptive activities are begun. We need oil, natural gas, wind energy, solar energy, coal and we need minerals that can only be obtained through extractive activities. Surely we have learned enough of the complex interactions of the environment to begin to make sound evaluations of our activities in a broader sense. We must learn to utilize our resources without destroying our surroundings. Let’s drill – but let’s do so in an environmentally informed manner. Let’s build windmills for electrical generation – but let’s situate them in a manner that retains the benefits of our wild lands. Let’s learn from the unintended consequences of our past mistakes – such as ruined lakes and streams from coal mining or oil and gas extraction. We can do better.
Environmental groups often carry names like “Friends of the Earth” or “Save the Wildlife.” Those types of names carry with them a stigma that immediately sets on edge the typical businessman.
What if the debate became a completely economic one?
There is within the economic community the idea that when external costs are internalized into the price of a good or service, the decision to allocate resources to that good or service often changes. An example of internalizing these externalities would be the impact of a uranium mine on the Navajo Reservation. In order to avoid the potential complexities of the decision, let’s limit it to one possible issue – or, external cost -- the impact of the mining activity on the water supply of a community.
Suppose that the mine is located within the watershed of a Navajo community. To fully understand the cost to develop the mine, the potential pollution of the community’s water supply must be examined. Such examination would need to include preventative measures and possible remediation in the event of contamination. It also would need to look at long-term effects to wildlife residing in the watershed. Wildlife might provide hunting lease income to the reservation. It might also be of significant cultural value that would be difficult to price. It might affect tourist income from photography or viewing. It might impact local artisans who utilize specific clays located within the watershed.
With the exception of preventing and remediating potential contamination, none of the impacts mentioned are direct costs to the mine owner/operator. They are however, external costs to the community of locating the mine in their watershed.
How does one determine the value of natural resources? We can estimate the value of mineral deposits. We can value land based on the transactional market for similar properties. But, how do we value the less obvious things such as: filtering the water supply, tourism, hunting and fishing, recreation, moderating effects on climate, flood protection, erosion control and other items about which we don’t currently understand?
Hopefully in the near future, we will see attention paid to such values. Such things must be part of an overall land use plan before disruptive activities are begun. We need oil, natural gas, wind energy, solar energy, coal and we need minerals that can only be obtained through extractive activities. Surely we have learned enough of the complex interactions of the environment to begin to make sound evaluations of our activities in a broader sense. We must learn to utilize our resources without destroying our surroundings. Let’s drill – but let’s do so in an environmentally informed manner. Let’s build windmills for electrical generation – but let’s situate them in a manner that retains the benefits of our wild lands. Let’s learn from the unintended consequences of our past mistakes – such as ruined lakes and streams from coal mining or oil and gas extraction. We can do better.
Wednesday, July 23, 2008
The Wind Boom in West Texas
New industry is an economic stimulus. In some areas, it may be economic salvation.
In Windy West Texas, An Economic Boom
by Ben Block on July 23, 2008
This is the first feature in a weekly, three-part series on green jobs in various sectors of the global economy.
Growing up in West Texas, Larry Martin became well accustomed to the challenges of living off the land. Raised on a cotton farm outside the small town of Sweetwater, he recalls defending his family's crops from sandstorms after a hard rain. More often, he hoped the region's brutal droughts would not burn the cotton to death.
Cotton farming in West Texas is...(complete article here).
In Windy West Texas, An Economic Boom
by Ben Block on July 23, 2008
This is the first feature in a weekly, three-part series on green jobs in various sectors of the global economy.
Growing up in West Texas, Larry Martin became well accustomed to the challenges of living off the land. Raised on a cotton farm outside the small town of Sweetwater, he recalls defending his family's crops from sandstorms after a hard rain. More often, he hoped the region's brutal droughts would not burn the cotton to death.
Cotton farming in West Texas is...(complete article here).
Saturday, June 21, 2008
South Korea and U.S. Finally Reach Beef Deal
This is good not only for the U.S. beef industry but for our balance of trade as well.
South Korea and U.S. Reach Deal on American Beef
By CHOE SANG-HUN
Published: June 22, 2008
SEOUL — South Korea and the United States reached an agreement after a week of negotiations to restrict exports of American beef to South Korea, officials here said on Saturday, just hours before a large protest rally was scheduled to demand more concessions from the United States.
American trade envoys agreed to restrict beef exports to...(complete article here).
South Korea and U.S. Reach Deal on American Beef
By CHOE SANG-HUN
Published: June 22, 2008
SEOUL — South Korea and the United States reached an agreement after a week of negotiations to restrict exports of American beef to South Korea, officials here said on Saturday, just hours before a large protest rally was scheduled to demand more concessions from the United States.
American trade envoys agreed to restrict beef exports to...(complete article here).
Monday, June 16, 2008
UK Farm Labor Crisis
Agricultural labor is also an issue in the U.S. Few people are attracted to it because of the long hours and less-than-ideal working conditions.
UK 'facing farming labour crisis'
The UK is facing a labour crisis in the agriculture and horticulture industry, a trade union warns.
Unite says an ageing workforce, combined with migrant workers returning home, is leading to a labour gap which could affect food supplies.
It is calling on...(complete article here).
UK 'facing farming labour crisis'
The UK is facing a labour crisis in the agriculture and horticulture industry, a trade union warns.
Unite says an ageing workforce, combined with migrant workers returning home, is leading to a labour gap which could affect food supplies.
It is calling on...(complete article here).
Sunday, June 15, 2008
No Beef Exports to Korea Yet....
The "fear-mongers" strike again.
US, South Korean officials end beef talks
By FOSTER KLUG
Associated Press Writer
WASHINGTON (AP) -- The top U.S. and South Korean trade envoys broke off talks Sunday without resolving a crisis over the resumption of American beef shipments that has shaken South Korea's pro-U.S. government.
South Korean Trade Minister Kim Jong-hoon, who flew into Washington on Friday for discussions, was returning home, U.S. Trade Representative spokeswoman Gretchen Hamel said.
Kim and Susan Schwab, the U.S. trade envoy, held "frank and candid discussions" Friday and Saturday, Hamel said, but, "in order to...(complete article here).
US, South Korean officials end beef talks
By FOSTER KLUG
Associated Press Writer
WASHINGTON (AP) -- The top U.S. and South Korean trade envoys broke off talks Sunday without resolving a crisis over the resumption of American beef shipments that has shaken South Korea's pro-U.S. government.
South Korean Trade Minister Kim Jong-hoon, who flew into Washington on Friday for discussions, was returning home, U.S. Trade Representative spokeswoman Gretchen Hamel said.
Kim and Susan Schwab, the U.S. trade envoy, held "frank and candid discussions" Friday and Saturday, Hamel said, but, "in order to...(complete article here).
Friday, May 30, 2008
Record '08 Ag Exports Expected
It seems like we import everything else, but the agricultural sector is exporting at a healthy rate.
RECORD $108.5 BILLION AGRICULTURAL EXPORTS FORECAST FOR 2008
RECORD $108.5 BILLION AGRICULTURAL EXPORTS FORECAST FOR 2008
2007 Food Assistance Report From USDA
One of those things that tends to slip by us about the Farm Bill is that the bulk of it isn't about farming.
The Food Assistance Landscape: FY 2007 Annual Report
The Food Assistance Landscape: FY 2007 Annual Report
Thursday, May 22, 2008
Attitude
Our attitude determines our response to what life hands us. In many ways, it drives our behavior.
Last week a good friend related to me the story of a two-day trip calling on various beef producers. The trip was designed to include a variety of operations as an educational venture for an executive in his company that had little knowledge of the beef industry. His story illustrates the difference in attitude of each of the producers and how they are responding to the currently trying times in the beef industry. (Disclaimer: Note that either no names are given, or they are changed to protect the innocent and not-so-innocent!)
The first stop on the tour was to an operation that consisted of a small pre-conditioning facility as well as a cow herd and some stocker cattle. This individual had experienced escalating feed costs and had been “burned” by a couple of his pre-conditioning customers. His view was that ethanol was killing the beef industry. To sum it up, he had a “woe is me, the sky is falling” attitude. All he could see was the downside created by escalating feed costs.
The second stop on the tour was to an operation that specialized in buying light weight calves and taking them through a stocker phase before selling them to someone else for finishing. This individual had tried numerous approaches to add value to his cattle but found that “it doesn’t matter what I do, someone else always gets ahead while I just try to survive.” His attitude was one of powerlessness in the face of market realities.
The third stop was to meet with a veterinarian. He felt that although we were currently in a “down” cycle, it would eventually pass. The focus of the conversation with him quickly turned to new technology. He wanted to know what was in development, when would it be available and whether they had considered looking at a list of other possibilities. His attitude was forward-looking and positive.
The fourth stop was to a large cattle feeding operation. The attitude there could be described as “it’s bad but it will be better and this is what we’re doing to make sure we are still in business when it does.” They had a “hunkered-down-in-the-bunker” mentality but saw an improving future. Their attitude was one of “dodging bullets” until it got better.
The fifth stop was to a small pre-conditioning and stocker operation. The owner had experienced a number of setbacks and recently taken a job in town to supplement his income from livestock. He was at the point of feeling “beat up” and not knowing what the future would hold. He realized that much of his predicament was due to decisions that he had made that cost him dearly. It will be a difficult road to recovery, but he was going to give it his best effort. His attitude was one of having been through a fight but not through fighting yet.
The sixth stop was to a small operation that primarily ran stocker cattle. He saw opportunity everywhere. To him, turmoil signaled opportunity. His attitude was one of innovation, forward-thinking and determination to exploit opportunity.
The seventh and final stop was to a large seed stock operation. They felt that things weren’t great right now but were preparing for the future. They were extremely knowledgeable of the global factors affecting their operation and had plans in place to adapt to every conceivable contingency. Their attitude was positive but cautious and designed for what they saw as an uncertain future.
All-in-all, the attitudes were more positive than would be expected given the difficulties the industry faces as it adjusts to the realities of a bio-fuel economy. The operations listed above will be profoundly affected by changes in the beef industry. Their individual attitudes will affect how well they do.
We become what we think – what our minds dwell upon. We react to our surroundings based on our attitude toward the things that we see, feel and experience. Some of the producers in the scenarios enumerated above will survive and thrive. Others will fail. Based on their attitudes, which ones do you think will be the survivors?
Last week a good friend related to me the story of a two-day trip calling on various beef producers. The trip was designed to include a variety of operations as an educational venture for an executive in his company that had little knowledge of the beef industry. His story illustrates the difference in attitude of each of the producers and how they are responding to the currently trying times in the beef industry. (Disclaimer: Note that either no names are given, or they are changed to protect the innocent and not-so-innocent!)
The first stop on the tour was to an operation that consisted of a small pre-conditioning facility as well as a cow herd and some stocker cattle. This individual had experienced escalating feed costs and had been “burned” by a couple of his pre-conditioning customers. His view was that ethanol was killing the beef industry. To sum it up, he had a “woe is me, the sky is falling” attitude. All he could see was the downside created by escalating feed costs.
The second stop on the tour was to an operation that specialized in buying light weight calves and taking them through a stocker phase before selling them to someone else for finishing. This individual had tried numerous approaches to add value to his cattle but found that “it doesn’t matter what I do, someone else always gets ahead while I just try to survive.” His attitude was one of powerlessness in the face of market realities.
The third stop was to meet with a veterinarian. He felt that although we were currently in a “down” cycle, it would eventually pass. The focus of the conversation with him quickly turned to new technology. He wanted to know what was in development, when would it be available and whether they had considered looking at a list of other possibilities. His attitude was forward-looking and positive.
The fourth stop was to a large cattle feeding operation. The attitude there could be described as “it’s bad but it will be better and this is what we’re doing to make sure we are still in business when it does.” They had a “hunkered-down-in-the-bunker” mentality but saw an improving future. Their attitude was one of “dodging bullets” until it got better.
The fifth stop was to a small pre-conditioning and stocker operation. The owner had experienced a number of setbacks and recently taken a job in town to supplement his income from livestock. He was at the point of feeling “beat up” and not knowing what the future would hold. He realized that much of his predicament was due to decisions that he had made that cost him dearly. It will be a difficult road to recovery, but he was going to give it his best effort. His attitude was one of having been through a fight but not through fighting yet.
The sixth stop was to a small operation that primarily ran stocker cattle. He saw opportunity everywhere. To him, turmoil signaled opportunity. His attitude was one of innovation, forward-thinking and determination to exploit opportunity.
The seventh and final stop was to a large seed stock operation. They felt that things weren’t great right now but were preparing for the future. They were extremely knowledgeable of the global factors affecting their operation and had plans in place to adapt to every conceivable contingency. Their attitude was positive but cautious and designed for what they saw as an uncertain future.
All-in-all, the attitudes were more positive than would be expected given the difficulties the industry faces as it adjusts to the realities of a bio-fuel economy. The operations listed above will be profoundly affected by changes in the beef industry. Their individual attitudes will affect how well they do.
We become what we think – what our minds dwell upon. We react to our surroundings based on our attitude toward the things that we see, feel and experience. Some of the producers in the scenarios enumerated above will survive and thrive. Others will fail. Based on their attitudes, which ones do you think will be the survivors?
Friday, May 16, 2008
Senator Cornyn Statement on Farm Bill
It still has to cross the President's desk but with enough votes for a veto override, it is likely this Farm Bill will become law.
Cornyn: Final Farm Bill Good For Texas Agriculture Community
Says Texas Farmers & Ranchers Will Benefit from Carefully-Crafted Compromise
Thursday, May 15, 2008WASHINGTON—U.S. Sen. John Cornyn expressed his support today for final Senate passage of The Food and Energy Security Act of 2007, H.R. 2419, more popularly known as the “Farm Bill.” With today’s approval vote by the Senate, and yesterday’s passage of this bill in the House, the legislation will now be sent to the President’s desk.
“Passage of this bill is an important and long-overdue step for Texas farmers and ranchers, providing them a stable policy moving forward. It’s not perfect but it represents a carefully-crafted compromise that will protect Texas agriculture, including family farms, strengthen key nutrition programs, and fight childhood obesity.
“One in every seven Texans can trace their employment to agriculture. In...(complete news release here).
Cornyn: Final Farm Bill Good For Texas Agriculture Community
Says Texas Farmers & Ranchers Will Benefit from Carefully-Crafted Compromise
Thursday, May 15, 2008WASHINGTON—U.S. Sen. John Cornyn expressed his support today for final Senate passage of The Food and Energy Security Act of 2007, H.R. 2419, more popularly known as the “Farm Bill.” With today’s approval vote by the Senate, and yesterday’s passage of this bill in the House, the legislation will now be sent to the President’s desk.
“Passage of this bill is an important and long-overdue step for Texas farmers and ranchers, providing them a stable policy moving forward. It’s not perfect but it represents a carefully-crafted compromise that will protect Texas agriculture, including family farms, strengthen key nutrition programs, and fight childhood obesity.
“One in every seven Texans can trace their employment to agriculture. In...(complete news release here).
Wednesday, May 7, 2008
Booming Texas Economy: What to do With the Surplus
Some good economic news is always welcome. My first reaction is "Yeehaw, I can't wait to get my rebate check!" Upon further reflection however, I think this money should be invested in infrastructure. We need to expand the power grid to get the wind-generated electricity from West Texas to the population centers like DFW, Houston and San Antonio. We also would benefit from a pipeline to move ethanol from plants in the Panhandle to the blenders in Corpus Christi and Houston. We could definitely use additional water resource development and the highways seem to always need upgrading (preferably not as tollways). Let's keep the Texas economy booming by investing the anticipated surplus in the infrastructure necessary to handle the growth.
May 7, 2008, 12:20AM
Oil prices help Texas rake in $10.7 billion surplus
Sales tax revenue also aids projected overflow Perry hopes to share with you
By CLAY ROBISON
Copyright 2008 Houston Chronicle Austin Bureau
AUSTIN — The nation may be on the verge of a recession, but the Texas economy is doing well enough for Comptroller Susan Combs to predict Tuesday that the Legislature will have a $10.7 billion surplus when it convenes in January.
Much of the extra money can be attributed to...(complete article here).
May 7, 2008, 12:20AM
Oil prices help Texas rake in $10.7 billion surplus
Sales tax revenue also aids projected overflow Perry hopes to share with you
By CLAY ROBISON
Copyright 2008 Houston Chronicle Austin Bureau
AUSTIN — The nation may be on the verge of a recession, but the Texas economy is doing well enough for Comptroller Susan Combs to predict Tuesday that the Legislature will have a $10.7 billion surplus when it convenes in January.
Much of the extra money can be attributed to...(complete article here).
Monday, April 21, 2008
Trade, Texas, Security and Prosperity
Senator Cornyn speaks again about the political maneuvering by Nancy Pelosi regarding the Columbian Free Trade Agreement.
Trade boosts Texas prosperity, national security
Monday, April 21, 2008
By: Sen. John Cornyn
From its beginning as a state, Texas has prospered through trade. Texans work hard and efficiently, and what we produce is highly valued around the globe.
In the early days of Texas statehood, cotton was king, and most of it was exported to mills abroad. Then came the Texas cowboy and cattle drive era, the beginning of our international beef industry.
Today, Texas leads all states in exports of goods, ranging from...(complete article here).
Trade boosts Texas prosperity, national security
Monday, April 21, 2008
By: Sen. John Cornyn
From its beginning as a state, Texas has prospered through trade. Texans work hard and efficiently, and what we produce is highly valued around the globe.
In the early days of Texas statehood, cotton was king, and most of it was exported to mills abroad. Then came the Texas cowboy and cattle drive era, the beginning of our international beef industry.
Today, Texas leads all states in exports of goods, ranging from...(complete article here).
Friday, April 11, 2008
Thursday, April 10, 2008
Blowing in the Wind -- Mega-growth
Positive news.
Wind Power Growth Blows Past Projections
Washington, D.C.-Global wind power capacity rose 27 percent in 2007 to more than 94,100 megawatts, led by capacity additions in the European Union, the United States, and China, according to the latest Vital Sign Update from the Worldwatch Institute.
New wind installations were...(complete article here).
Wind Power Growth Blows Past Projections
Washington, D.C.-Global wind power capacity rose 27 percent in 2007 to more than 94,100 megawatts, led by capacity additions in the European Union, the United States, and China, according to the latest Vital Sign Update from the Worldwatch Institute.
New wind installations were...(complete article here).
New Competition for Beef
While traveling in Kansas this past week I had the opportunity to meet with several cattlemen and feedlot managers. The mood among them is somber to say the least. The market doesn’t seem to be adjusting to the realities of the new energy economy very quickly.
Transportation cost is one of the biggest factors impacting every industry across the country -- especially livestock feeding. When trucking companies are dealing with diesel prices in the neighborhood of $4.00/gallon, the cost of moving grain or animals or boxed beef becomes significant. If calves are being shipped from the Southeast to feedlots in the Plains, the cost of transportation must be figured into the price of those calves. The same issue affects corn – if it can be purchased at all.
On the other end of the supply chain we have the consumer. When gasoline prices are at record levels, groceries is one area where household costs are cut. We should be looking at ways to drive less or improve fuel efficiency but instead, we cut back on spending for higher priced food items such as beef. We don’t give up our gas guzzling habits very easily.
The result is that packing plants are looking at cold storage filled with boxes of unsold beef; the feedlots are looking at cattle that need to go to market but the packing plants aren’t willing to give them a price at which the feeder can make any money; cattle feeders are unwilling to buy calves to put on feed – and on and on. It all is driven by fuel in one form or another.
What is driving the fuel prices? I am amazed that our Congressional leaders in all of their wisdom feel compelled to bring the heads of multiple oil companies to Washington to berate them over the cost of fuel. Of course, most of the Congressmen and Senators don’t have much training in economics. In fact, I think they must be trained in anti-economics – or at least anti-free enterprise. Most of the laws coming out of Washington seem to hinder business rather than help. The cost of every regulation and every hair-brained pork-barrel scheme gets passed on to the consumer in some form or fashion. Sometimes it is a direct tax but more often than not, it as an indirect tax created through regulatory action on business.
It is the growing economies in India and China, domestic regulations concerning fuel additives, mandatory targets for bio-fuels, market uncertainty due to political unrest, burdensome regulation on building new refineries and infrastructure, the high cost of building refineries, environmental regulations, closure of certain areas to oil exploration, the devaluation of the dollar, and all of the other global factors that impact the energy business that are driving fuel prices. Why do we think we can solve the problem by making ethanol from corn? Oh, and did I mention the booming economies of India and China? A few hundred million individuals with the most disposable income at their finger tips that has been seen in those countries ever – want to spend it on some of the finer things in life – like automobiles and meat.
Our consumer spending habits are enabling those countries to build thriving economies that produce goods that must be transported to the U.S. by ships burning diesel. I’m happy their economies are growing. We just have to realize that we are paying for that growth.
The current ethanol mandates drive up the price of corn. That’s really all they do for our energy situation. Has the price of gasoline come down? The high price of corn was good for corn farmers – last year. The cost of farm inputs has now normalized (adjusted) due to the higher fuel costs and the margins for farmers will be much slimmer this year. Their business is extremely fuel intensive. Their input costs – such as for fertilizer and diesel – have gone through the roof.
The mandates are hurting cattle producers. They are suppressing demand for beef because now – put this in your pipe and smoke it – beef is competing against energy. The consumer dollar will choose energy over beef because of the need to heat and cool our homes and drive to and from work. In the past, beef competed with pork and poultry. Now it must also compete with energy because the primary cattle feed ingredient is being converted to fuel.
Isn’t it great what misguided regulations do for you?
Transportation cost is one of the biggest factors impacting every industry across the country -- especially livestock feeding. When trucking companies are dealing with diesel prices in the neighborhood of $4.00/gallon, the cost of moving grain or animals or boxed beef becomes significant. If calves are being shipped from the Southeast to feedlots in the Plains, the cost of transportation must be figured into the price of those calves. The same issue affects corn – if it can be purchased at all.
On the other end of the supply chain we have the consumer. When gasoline prices are at record levels, groceries is one area where household costs are cut. We should be looking at ways to drive less or improve fuel efficiency but instead, we cut back on spending for higher priced food items such as beef. We don’t give up our gas guzzling habits very easily.
The result is that packing plants are looking at cold storage filled with boxes of unsold beef; the feedlots are looking at cattle that need to go to market but the packing plants aren’t willing to give them a price at which the feeder can make any money; cattle feeders are unwilling to buy calves to put on feed – and on and on. It all is driven by fuel in one form or another.
What is driving the fuel prices? I am amazed that our Congressional leaders in all of their wisdom feel compelled to bring the heads of multiple oil companies to Washington to berate them over the cost of fuel. Of course, most of the Congressmen and Senators don’t have much training in economics. In fact, I think they must be trained in anti-economics – or at least anti-free enterprise. Most of the laws coming out of Washington seem to hinder business rather than help. The cost of every regulation and every hair-brained pork-barrel scheme gets passed on to the consumer in some form or fashion. Sometimes it is a direct tax but more often than not, it as an indirect tax created through regulatory action on business.
It is the growing economies in India and China, domestic regulations concerning fuel additives, mandatory targets for bio-fuels, market uncertainty due to political unrest, burdensome regulation on building new refineries and infrastructure, the high cost of building refineries, environmental regulations, closure of certain areas to oil exploration, the devaluation of the dollar, and all of the other global factors that impact the energy business that are driving fuel prices. Why do we think we can solve the problem by making ethanol from corn? Oh, and did I mention the booming economies of India and China? A few hundred million individuals with the most disposable income at their finger tips that has been seen in those countries ever – want to spend it on some of the finer things in life – like automobiles and meat.
Our consumer spending habits are enabling those countries to build thriving economies that produce goods that must be transported to the U.S. by ships burning diesel. I’m happy their economies are growing. We just have to realize that we are paying for that growth.
The current ethanol mandates drive up the price of corn. That’s really all they do for our energy situation. Has the price of gasoline come down? The high price of corn was good for corn farmers – last year. The cost of farm inputs has now normalized (adjusted) due to the higher fuel costs and the margins for farmers will be much slimmer this year. Their business is extremely fuel intensive. Their input costs – such as for fertilizer and diesel – have gone through the roof.
The mandates are hurting cattle producers. They are suppressing demand for beef because now – put this in your pipe and smoke it – beef is competing against energy. The consumer dollar will choose energy over beef because of the need to heat and cool our homes and drive to and from work. In the past, beef competed with pork and poultry. Now it must also compete with energy because the primary cattle feed ingredient is being converted to fuel.
Isn’t it great what misguided regulations do for you?
Wednesday, April 9, 2008
Thursday, April 3, 2008
Border Enforcement
This is another issue that is important to all sectors of the economy. Senator Cornyn speaks some good common sense in this press release.
Cornyn: Federal Government Must Do More To Help Border Law Enforcement Personnel
Wednesday, April 2, 2008
WASHINGTON—At a hearing on Capitol Hill today, U.S. Sen. John Cornyn, a member of the Senate Judiciary Committee, pressed Department of Homeland Security Secretary Michael Chertoff on the need for the federal government to do more to aid border communities struggling with the costs of illegal immigration.
“I have heard from a number of...(complete press release here).
Cornyn: Federal Government Must Do More To Help Border Law Enforcement Personnel
Wednesday, April 2, 2008
WASHINGTON—At a hearing on Capitol Hill today, U.S. Sen. John Cornyn, a member of the Senate Judiciary Committee, pressed Department of Homeland Security Secretary Michael Chertoff on the need for the federal government to do more to aid border communities struggling with the costs of illegal immigration.
“I have heard from a number of...(complete press release here).
Cornyn Pushing for Farm Bill Action
It's time for the logjam to break on a Farm Bill. I hope Senator Cornyn can get it to rolling. It is very important to his constituents -- even those who don't realize how important agriculture is to the economy of the state of Texas.
Cornyn Seeks Action On Final Farm Bill
Provides Texas Farm Bureau Members with Legislative Update on Capitol Hill
Wednesday, April 2, 2008
WASHINGTON—U.S. Sen. John Cornyn met with members of the Texas Farm Bureau on Capitol Hill today and said that he continues to advocate...(complete news release here).
Cornyn Seeks Action On Final Farm Bill
Provides Texas Farm Bureau Members with Legislative Update on Capitol Hill
Wednesday, April 2, 2008
WASHINGTON—U.S. Sen. John Cornyn met with members of the Texas Farm Bureau on Capitol Hill today and said that he continues to advocate...(complete news release here).
The Cost of Infrastructure in the New Energy Economy
It takes infrastructure to make it all work. Otherwise the wind generators are just throwing money to the wind.
Texas sees higher costs to reap wind power
HOUSTON (Reuters) - The price tag to build new power lines to bring plentiful wind power to Texas' biggest cities could range from $3 billion to $9 billion, the state's electric grid operator said in a report filed with regulators on Wednesday.
Following legislation passed in 2005, the Texas Public Utility Commission began working to speed up construction of high-voltage transmission lines to tap into abundant supplies of renewable power.
Texas leads the nation by...(complete article here).
Texas sees higher costs to reap wind power
HOUSTON (Reuters) - The price tag to build new power lines to bring plentiful wind power to Texas' biggest cities could range from $3 billion to $9 billion, the state's electric grid operator said in a report filed with regulators on Wednesday.
Following legislation passed in 2005, the Texas Public Utility Commission began working to speed up construction of high-voltage transmission lines to tap into abundant supplies of renewable power.
Texas leads the nation by...(complete article here).
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