Commodity Markets Look Bleak in 2014

WSJ:

Many investors expect commodities markets to struggle for a fourth consecutive year in 2014, as steady-but-unspectacular economic growth extends a rough patch for what had been one of the hottest investment niches of the past decade. In 2013, investors appeared to finally give up on hopes for the return of the "supercycle," the confluence of tight supplies and surging demand that propelled prices for commodities ranging from oil to aluminum to wheat to records in the past decade. Years of high prices persuaded farmers to boost crop output and metal producers to invest in new mines. In 2013, those efforts flooded many markets with more supply than a barely expanding global economy could consume. The Dow Jones-UBS Commodity Index, which tracks 22 U.S.- and London-traded commodities, fell 9.6% in 2013, the third consecutive annual loss. With the S&P 500-stock index climbing 30% this past year, the gap between commodities and stocks was the widest it has been since 1998. Investors and analysts expect more of the same. Analysts with Citigroup Inc. C +0.31% are bearish or neutral on 19 of the 23 commodities tracked by Citigroup, even as the bank forecasts that global economic growth is expected to accelerate to 3.2%, from 2.5% this year.
"There's going to have to be a huge shift in market psychology to have commodities bounce higher," said Ralph Preston, a market strategist with Heritage West Financial in San Diego. Growth in China, the world's largest consumer of raw materials, is widely expected to continue at a pace close to the state-targeted figure of 7.5% for 2013. But that expansion would remain a step below the frantic growth seen during the past decade's commodity boom. While the country will likely consume greater quantities of most commodities in 2014, analysts caution that a slower-expanding China may not be enough to absorb the increased global output of agricultural commodities, minerals and fuel. In industrial metals, aluminum and steel are locked in a chronic surplus, and iron ore and copper are set to join them as production ramps up from megaprojects in Peru, Mongolia, Australia and other countries. It is the same story for agricultural commodities such as corn, whose stockpiles are set to more than double next year in the U.S., and for sugar.

I wouldn't be surprised if grain markets just trend lower and lower all year.  I think this is going to be a very tough year.  Hopefully, I'll be wrong.  Where grain prices are right now, I can't see land prices remaining propped up where they've been.

Georgia Southern Runs Over Florida

ESPN:

Kevin Ellison ran for two touchdowns, Jerick McKinnon had a huge score late and four-touchdown underdog Georgia Southern stunned Florida 26-20 Saturday without completing a pass.
No lower-division team had ever beaten the Gators, who won their previous seven games against Football Championship Subdivision teams by an average of 45 points.
So this was a shocker, even though Florida (4-7) lost its sixth consecutive game and secured its first losing season since 1979.
"Very disappointed for our program, an embarrassment (to be) in this situation," Gators coach Will Muschamp said. "It's all disappointing. It's hard to measure it at this point."
Georgia Southern (7-4) ran for 429 yards -- all of the team's offense and the most against Florida since Nebraska rolled up 524 in the 1996 Fiesta Bowl. The Eagles also became the first team this season to beat an FBS team without completing a pass. They were 0 for 3.
McKinnon finished with 125 yards rushing, including a 14-yard touchdown with 2:57 remaining. Ellison added 118 yards on the ground, scoring on runs of 45 and 1. Fullback William Banks also gashed the Gators, getting 94 yards up the middle. His 53-yarder on a third-and-2 play set up the winning score.
Florida had a chance to win it, thanks partly to two missed extra points.
Skyler Mornhinweg, making his second consecutive start in place of Tyler Murphy (shoulder), got the Gators in scoring territory, but his final two throws fell incomplete. He had Quinton Dunbar open in the corner of the end zone on third down from the 17, but his pass floated high. He tried to force one to Solomon Patton on the final play, but two defenders broke it up.

Wow, a Division I-AA (soon to be I-A, I'm not going in for FCS and FBS) school comes into Gainesville and beats Florida without completing a pass.  That is amazing.  I knew Florida was bad this year, but I didn't realize they were that bad.

The New Fear at the Bayou Corne Sinkhole

Fire:

A Louisiana sinkhole that has sucked in trees and swamps as it spread to the size of 20 football fields is now at risk of exploding.
Residents of Bayou Corne were evacuated a year ago when the sinkhole, which is emitting natural gases, opened up.
The gas exploration company that has been blamed for causing the problem after a mine collapsed, has resorted to digging relief wells to try to disperse the gas...While no homes have yet been sucked in, officials warn that the gases being emitted could ignite, which would leave the Louisiana swamp looking like 'the gates of Hell'.
In a similar case, a crater caused by Soviet geologists drilling in Turkmenistan in the 1970s has been a fiery pit for more than 40 years after the natural gases being released were lit.
The Louisiana sinkhole, which is expected to expand to 50 acres, is currently 25 acres wide and 350ft deep in some points. Methane bubbling up from it has also escaped into an aquifer.
Experts fear that if oil and gas rising to the surface became trapped it could build up in a crevice and then explode.

Check out this picture from Turkmenistan:

 If the natural gas ignited the sinkhole could become like the Door to Hell in Turkmenistan, which has been alight for 40 years

More on the Louisiana sinkhole here.

Terrible Day for a Local Horse Owner

Dayton Daily News:

Three people are injured and seven horses are dead after dozens of horses escaped an area farm.
An estimated 39 horses got away from a Miami County property on West Sugar Grove Road early Friday morning. Some were wrangled in the 8000 block of U.S. 36 on the western edge of Covington.
Others were found along U.S. 36, where at least three crashes were caused by the roaming horses.
The horses in those crashes died.
Two crashes occurred within minutes of each other around 3:30 a.m. on Ohio 41, east of Covington. Drivers in those crashes were taken to Upper Valley Medical Center for treatment of non-life threatening injuries.
Three horses were killed in the wrecks on Ohio 41.
An additional horse was injured, but later put down by a Miami County deputy with the permission of the owners. The horse's injuries were determined to be too severe to survive, according to deputies.
As of 5:50 a.m., deputies and wranglers still searched the widespread area, searching for more than a dozen horses still unaccounted for. By 8:30 a.m., it was believed all 39 horses were captured.

I've had a cow get hit by a car, and that is a really shitty situation.  Having 39 horses out and seven get hit by cars is a terrible day.  I am glad to see a deputy put one horse down.  When my cow needed shot, the deputy wouldn't do it.  I had to go back home and get a gun and shoot the cow myself.  That wasn't the best start to a morning.

Who's Taking it on the Chin in the Recession?

Rural folks:

Last week, the U.S. Department of Agriculture released its annual survey of rural America, which puts the divergence in stark relief. Non-metropolitan areas experienced their first recorded period of population loss, and a decline in the labor force participation rate pushed unemployment down slightly (though the jobless rate surpassed the urban unemployment rate earlier this year). But even as the rest of the country entered a tepid recovery, and some rural areas gained jobs from the natural gas boom, net employment didn't budge rural regions:

The bifurcation adds another dimension to the widening political and social urban-rural divide.
The Department of Agriculture has a whole division devoted to rural issues, which is aimed at fixing the jobs problem through initiatives such as farming cooperatives and infrastructure development. But the long-term problem might be more structural in nature, as the USDA suggests in its finding that suburbanization is slowing down:

The housing mortgage crisis slowed suburban development and contributed to an historic shift within metro regions, with outlying metro counties now growing at a slower rate than central counties. Similarly, nonmetro counties adjacent to metro areas that had been growing rapidly from suburban development for decades declined in population for the first time as a group during 2010-12. This period may simply be an interruption in suburbanization or it could turn out to be the end of a major demographic regime.

It's important to note, though, that not all cities have recovered equally from the recession.

As much as I love this part of the country, we are getting killed.  It just isn't good.

Hurricane Sandy Aftermath and Recovery Roundup

This:


The Rider And The Storm from RYOT on Vimeo.


and this:


A Year of Recovery After Hurricane Sandy from The New York Times - Video on Vimeo.


and this, from someone who was slated to run in the New York Marathon and ended up volunteering in the aftermath: 

DeAngelis asked if we minded taking general care packages door-to-door. As for how to find the homes where the real need was, we were instructed to drive around sniffing out desperation.
“Look down a street and if it’s a disaster, go there.”
A short, friendly, high school senior advised me on the best approach: just thrust a bag at them and say, “This is for you.” Asking if they need it means they’ll say no, she said.
“Is it a pride thing?” I asked. She shrugged. “I think they just think other people probably need it more.”
It was just past 4:30 and already dark in the powerless section of the borough. The temperature was dropping fast, and not the healing, ice bath kind of cold. Harsh and getting harsher.
All we could see was what was illuminated by the headlights as we wound around trash, furniture, and mystery objects. It was hard to distinguish between what was dismantled during clean up and what the storm destroyed, and I didn’t try for long, because I was squinting for upward facing nails.
When we detected human-size movement, we hopped out. Christine mastered the art of getting people to accept the care packages: Beg them.
“We have a ton of food and supplies, will you please take some, for our sake?”
It wasn’t true. Garbage bags, diapers in the right sizes, and flashlights were scarce. But the residents kept claiming they weren’t the worst off. “Give it to those people over there. They need it more,” we heard from men and women standing in front of frames that used to hold up walls.
The exceptions were gloves and socks—no one turned those down. One woman shook her head at me, saying, “I’m fine,” but as I put the socks in her hand, it closed around them.
At one house where men were working below ground level, a tiny cloud of light from a lantern glowed up from the basement. I yelled, “Does anyone in there need socks?” They cheered.
Back at the car, I found a woman nodding as Christine listed what we had left. The woman didn’t say anything, she was just nodding. Christine handed me items and once my arms were full, she finally spoke. “I don’t know if I need it—I will need it—I just don’t need it now—I can’t think.” I asked if I could take the stuff inside and she nodded again. I walked in and set it in a corner of a dimly lit kitchen. Then I looked up to see four people at a table, a candle flickering between them, all watching me silently.

Wow.  It is hard to imagine such devastation, and yet people didn't want to take any assistance.

Not a Good Day

This:

I was getting over a little bit for a car when the combine started sliding down the ditch and into the worst wet hole you could imagine.  It was tipped far enough over that the front wheel was spinning and throwing some smoke about time I got the hydrostatic turned off.  We tried pulling on it with two tractors, but it was getting buried deeper.  Eventually, we got a wrecker out there, and working with a tractor and the wrecker, we got it out.  I tell you what, climbing up that ladder and then walking down a really steep slope into the cab felt really weird.

Hopefully tomorrow will be a better day than today.  I'd say the odds are in my favor that it will be.

Fallout From the South Dakota Blizzard

Scientific American:

Ranchers are both trying to bury animals and haul them to roadways where renderers will remove the bodies. But while the snow melt has allowed for roadways to be cleared, the pastures in many areas are flooded or too muddy to access, making it hard to collect carcasses and to care for surviving animals.
Silvia Christen, executive director of the South Dakota Stockgrowers Association, said most cattle ranchers do not carry private insurance policies because they are cost prohibitive and have exclusions that would have ruled out coverage in this situation anyway.
She said the ranchers' only financial assistance would be found in a disaster program that is part of a proposed U.S. farm bill. But the U.S. government shutdown and delays in passing a new farm bill have left ranchers with no assistance.
Ranchers are not able to even consult with their U.S. Farm Service Agency representatives on how to document their cattle losses, since the FSA workers are on furlough because of the shutdown, she said.
Christen said each calf lost has a market value of roughly $800-$900 and each cow is valued at about $1,800, so the total losses could easily be in the tens of millions of dollars.
"This is a major financial loss for these ranchers," she said. As well, she said, the emotional loss has been wrenching.

A Modern Farmer article has some gruesome pictures of dead cattle.  It is notable that there are things the federal government does for rural folks, even though a large percentage of Congressmen representing rural areas don't seem to realize that.  My prayers go out to all those ranchers.  I can't imagine how terrible that is.

Has Detroit Bottomed Out?

Bob Simon profiles the city and the people who are working to improve it:




I have to say, it made me smile to see that guy with the New Holland baler out baling hay off of vacant lots. It'd be awesome to see him fence in a city block or two and run some cattle. I'm amongst the folks hoping for the best for Detroit. In 10 years I'd like to see stories about the amazing renaissance of Detroit.

Terrible, Horrible, No Good, Very Bad Day

Well, I really fucked up today.  Last night, the head which connects the sickle bar to the wobble box broke.  So this morning, I got the replacement part put on and fired up the machine.  As I headed across the field to get started, there was a huge boom and really bad sounds started coming out.  I shut it down and went to investigate.  There were chunks of cast iron on the ground behind the combine.  Here I had left the four pound hammer on the platform, and it didn't feed through the machine well.  I found some ground up pieces of handle in the grass waterway beside the field, but I still haven't found the head.  It really worked over the rasp bars on the rotor and took out a couple of chopper knives.  Then, we found some other things that were screwed up previously, so we got absolutely nothing done.

I hadn't heard this song until these guys came to our county seat, but the chorus made me chuckle a bit because I can relate.  I'll send this out to my combine:

The Danger of Loneliness

Jessica Olien:

Loneliness is not just making us sick, it is killing us. Loneliness is a serious health risk. Studies of elderly people and social isolation concluded that those without adequate social interaction were twice as likely to die prematurely.

The increased mortality risk is comparable to that from smoking. And loneliness is about twice as dangerous as obesity.

Social isolation impairs immune function and boosts inflammation, which can lead to arthritis, type II diabetes, and heart disease. Loneliness is breaking our hearts, but as a culture we rarely talk about it.

Loneliness has doubled: 40 percent of adults in two recent surveys said they were lonely, up from 20 percent in the 1980s...In terms of human interactions, the number of people we know is not the best measure. In order to be socially satisfied, we don’t need all that many people. According to Cacioppo the key is in the quality, not the quantity of those people. We just need several on whom we can depend and who depend on us in return.

She quotes somebody who says that admitting we feel lonely marks us out as losers.  I know that when I get into a funk, I definitely feel like there is something seriously wrong with me.  But instead of avoiding people, I generally go find some bar to hang out in and drink beer.  After a while, somebody I know will come in, and I'll shoot the shit for a while.  Probably not the best idea, but at least I'm not totally avoiding people.  And when I am really down, I'll call some of those folks on whom I can depend, and unload some of that bile that's built up inside of me.  As it is, what I've found is that avoiding people is the worst thing I could do.  Being alone with my thoughts is scary enough, but being alone with my negative thoughts is terrifying.  I'm much better off making small talk with somebody and laughing than I am contemplating all my sad interpersonal thoughts along with all the work that has to get done at my job, all the things that need done in my dysfunctional cattle operation, and everything else that keeps me from sleeping.

When it Rains...

Actually, it probably ought to say, when it doesn't rain, because we're getting pretty dry right now.  The best year ever is starting to look like the best corn crop with an average bean crop.  But to go back to the title of the post, things have seemed to be falling apart the last few weeks.  Not only with the weather, but with work.  We've lost two folks in our engineering department, in which I do some work.  Then, today was the last day for my immediate boss in the environmental and safety side of things.  He handled all of the safety for three companies while I helped him out with the environmental side of things.  I've tried to let people know that I am not qualified to handle any of his duties, but I haven't really heard how they plan on taking care of things while they work to find a replacement.  Probably some of that work will devolve to me.  And I won't even get into where I really am killing myself.  Anyway, under normal circumstances I'd say that the sun will shine again, but right now, I'm looking for a rain cloud as a positive outcome.  Actually, for the vast swath of humanity, I'm still sitting pretty good.

Lightning Strikes Seven Times?

Tom Dunkel reports on the legendary park ranger who claimed to be struck by lightning SEVEN times:

I’ve come to talk with Dickey Baker about the legacy of Lightning Man. When Baker was a teenage employee, he crossed paths with Roy Sullivan, who died 30 years ago and undoubtedly is the most famous ranger in the history of Shenandoah National Park, if not every national park.
Baker saw the tan ranger hat that Sullivan kept in his truck as a souvenir. It had two scorched holes where a lightning bolt supposedly entered and exited. “He used to haul it around with him,” recalls Baker, who also saw Sullivan’s wristwatch that got toasted black by another bolt.
Forty-one years after his debut in the “Guinness Book of World Records,” Ranger Roy Sullivan continues to hold the dubious distinction of being struck by lightning more than any known person. Not twice. Not three times.
Seven times.
That’ll attract attention. In the early 1970s, Sullivan did an interview with expat British broadcaster David Frost and appeared on the quiz show “To Tell the Truth.” In 1980, Sullivan was featured in an episode of the TV series “That’s Incredible.” More recently, Discover magazine (2008) included him on its list of memorable survivors, along with the Soviet World War II pilot who bailed out of his plane at 22,000 feet without a parachute and the hapless sailor who endured being adrift at sea for 76 days in a five-foot raft. The Web site Cracked.com (2009) selected Sullivan as one of the seven “Most Bizarrely Unlucky People Who Ever Lived.” (Tsutomu Yamaguchi was named most unlucky, having been at ground zero when atomic bombs fell on both Hiroshima and Nagasaki.) In 2010 Sullivan’s misadventures were the basis of a humorous South African TV commercial for, of all things, energy-saving milk cartons. His birth-chart reading is posted on AstrologyWeekly .com in the heady company of Elvis Presley, Bill Clinton and Leonardo da Vinci.

The whole story is fascinating.  I had a close enough brush with lightning for my taste, and while this guy might have exaggerated a bit, I bet he got struck by lightning at least once or twice.  I'll pass.

I'm Gonna Be

Food Prices Set To Go Lower

Via Big Picture Agriculture , the UN gives a negative outlook for grain prices:

Global food prices could decline further in coming months after hitting their lowest level in more than a year in July, the United Nations' food agency said on Thursday, pointing to prospects of abundant grain supplies.
Food prices surged during the summer of 2012 due to a historic drought in the United States but improving prospects for cereal supplies in 2013/14 are fueling the opposite trend this year, the Food and Agriculture Organisation (FAO) said.

"Supplies are proving to be much better than anticipated a few months ago. The weather has been pretty good in many cases and is giving hope for higher production," FAO senior economist Abdolreza Abbassian said.

He said good prospects for maize output in the United States, Argentina and the Black Sea region meant corn prices could lead other markets down this season, reversing their supportive influence on higher prices last summer. Food prices could face further downward pressure if the U.S. dollar strengthens, he said. A stronger dollar weighs on dollar-traded commodities as it makes them more expensive to holders of other currencies.
"There is an extent to which prices could fall," Abbassian said. "But I'm not sure we are going to see as much of a decline in coming months as we saw in the past few months."

I can hear the farmers already, "but the corn out in Iowa and Minnesota is a lot worse than what people think."  I don't think it will matter.  The combination of funds moving from commodities to stocks and the increasing yield trend is pointing to lower prices for a fairly long time.  Some folks who've gotten fat and happy the last few years are going to be worse off going forward.  That includes me.

An Ecosystem at Risk

NYT:

Along 50 miles of northern estuary waters off Brevard County and the Kennedy space complex, about 280 manatees have died in the last 12 months, 109 of them in the same sudden manner as the Banana River victims. As the manatee deaths peaked this spring, hundreds of pelicans began dying along the same stretch of water, followed this summer by scores of bottlenose dolphins.

The cause continues to evade easy explanation. But a central question is whether the deaths are symptoms of something more ominous: the collapse of the natural balance that sustains the 156-mile estuary’s northern reaches.....

Mr. Rice’s fear, widely shared, is that an ecosystem that supports more than 4,300 species of wildlife — and commercial fisheries, tourism and other businesses generating nearly $4 billion annually — is buckling under the strain of decades of pollution generated by coastal Florida’s explosive development.

The evidence of decline is compelling. In 2011 and 2012, unprecedented blooms of algae blanketed the estuary’s northern reaches for months, killing vast fields of underwater sea grass that are the building blocks of the estuary ecosystem. The grasses are breeding grounds for fish, cover from predators, home to countless creatures at the bottom of the food chain and, not least of all, the favorite menu item of manatees.

The sea grass has largely been supplanted by macroalgae, fast-growing seaweeds that clump into huge mats that drift free in the waters. And the character of the estuary is changing: already, algae-eating fish like menhaden are significantly increasing, Mr. Rice said.

Leesa Souto, a conservation biologist who heads the Marine Resources Council, a nonprofit group devoted to protecting the estuary, quoted one expert as saying that the loss of grasses destroyed the habitat for 1.4 billion immature fish.

“We fear the fishery collapse may be forthcoming as these missing juveniles will never reach adulthood two or three years from now,” she wrote in an e-mail.

Scientists are blaming nitrogen loading.  Nitrogen and phosphorus are wreaking havoc in rivers, lakes and oceans, and these stories could be written almost anywhere.  One more thing on the list we're going to have to deal with if we don't want to end up like those manatees.