From the "oh snap" department in today's report... "A friend of ours reported a farmer in southwestern Oklahoma had ranch operation with $2 million of debt on the land. He got notice of the loan forgiveness portion of the $1.9 trillion dollar giveaway package recently passed by Congress. He inquired of the local FSA office for details to help minorities and was told to come in and fill out a form. He did, and like many farmers and ranchers in Oklahoma, checked the box indicating he was a Native American. After all, the goverment has no right to verify the ethnicity check boxes due to privacy rules enacted by the Congress. He was reimbursed for 120% of the loan amount and he received $2.4 million." -------------- Well then! Check the right box, get more free money than you need!
This week's blurb is interesting on the cyber-side of the business... ------------- AN INTERCONNECTED WORLD "The Internet promised to connect the world and it delivered. The Internet of things (IoT) describes the network of physical objects—a.k.a. "things"—that are embedded with sensors, software, and other technologies for the purpose of connecting and exchanging data with other devices and systems over the Internet. This technology has brought us multiple technologies used in everyday life and business such as real time data, analytics, commodity sensors including RFID tags and readers and real time payment systems. It also has brought us the risks and dangers of connectivity. We all are within ONE click from an invasion from cyberattack that can leave our computer, our business, and/or all our communications disabled. The harmless link we clicked on, or file we downloaded or web site we logged into, can all be designed by expert hackers to enter and disable/destoy our digital world. If you think this doesn't apply to you, then think again. No business is more dependent on data than agriculture and especially beef production. The beef pipeline moves through sectors with each containing varying degrees of vulnerability. Business may continue at the front of the beef supply chain when a breeder's computer is infected with a virus but as you move forward to feedyards, the impact dramatically changes and a feedyard unable to post feed, make purchases of feed or cattle, record cattle movements in or out of the yard, is a dysfunctional business. As you move forward in the supply chain, the complexity and interconnectivity expands. Processing is more concentrated and, with four firms slaughtering 80% of the nation's cattle, the stakes rise and the damage is incremental. The bytes of data handled by computers is enormous and disabling those systems brings business to a halt. This event at JBS could easily have been another packer. Each firm is vulnerable to the innocent click of one employee enabling entrance to the firm's network where malware can start the preparations for a ransomware attack. No doubt some networks are stronger than others but no network is immune to attack. The Biden administration has communicated with Russian authorities the importance of holding those cyber-criminals accountable but there is little evidence to support the notion this will result in any helpful action. The Biden administration has said no options are off the table including retaliation. A cyberwar will not solve anything and will only escalate the problem and magnify the risks. The true solution is better surveillance software capable of detecting malware that has invaded any network. This is a problem that will continue and plague all business on the web."
Come to the dark side Luke, trade cows with technals... https://www.elitetrader.com/et/thre...or-cryin-out-loud.359596/page-10#post-5408273
Haven't visited the cow report for like a month, but this might be new...A double weekly-blurb? -------------- "SHAPE OF THE MARKET The day of only looking to fundamentals for the markets, for price guidance, is long gone. Technical traders have always been around relying on math and charts to provide liquidity and price theories for the market. The arrival of macro-investors and momentum traders is a more recent influence on futures prices. The macro-investors look at the big picture, including government policies, trade policies, and monetary policy. The momentum traders are only looking a micro-moves and sometimes in micro-seconds. The drift of cattle futures this past week was lower as some larger traders back off ideas that inflation will sharply raise the price of all commodities and government spending will propel the buying binge that is destined to push prices higher. Those traders exited long positions based on statements by Fed Chairman Powell and Treasury Secretary Yellen that inflationary pressures will be short lived and fall to the targeted 2% level in the near future. This view ignores the more obvious fundamental facts of the cattle numbers and market forces. The national cattle herd is in liquidation mode and recent data supports this notion. The numbers for the second quarter of the year are now in and cow slaughter was 17% over last year and 12% over a pre-Covid 2019. Some of the drought areas liquidated cows at a 25% higher rate. High feed costs and low cattle prices are driving the liquidation. Declining milk prices has now included larger culling in the dairy herd. Generous rains in the high plains has provided ideal grazing conditions for replacement cattle. Feeder futures prices have also encourage yearling owners to hold on to the current inventory for better prices down the line. The result has been a string of declining placement months resulting in lower cattle on feed numbers that will eventually be inadequate to service the healthy demand for beef. Continuing ASF problems with the pig population in China will assure a base demand for our beef. Bottlenecks in ocean freight and high cost will improve and, as buyers watch the decline in our box prices, there will be a entry point for renewed interest from our export partners. The export markets will remain an important component for price support for our beef industry. Domestic demand for goods and services, including beef, will continue strong as temporary government benefit packages turn into more long term government hand outs to the lower income population. The price levels at each transfer point along the beef chain will slowly return to a price level connected by supply/demand signals. Those price levels can reasonable be expected to rise above current levels that are unsustainable without herd size destruction. THE STATE POWER TO REGULATE Any cattle producer knows the care of the animals is critical and fundamental to production success. Animals that are well cared for are the ones that deliver healthy high-quality beef. Balanced feed and mineral requirements along with good clean water are the basics for good health and nutrition – just like humans. Identification of physical impairments like sickness can be remedied with constant supervision and treatment. Now we are told that the government needs to regulate how cattle are raised and harvested. In Oregon, Petition 13 would make things like any injury to an animal arising from a rodeo a crime, it would force livestock to live to a certain age (defined by the initiative) before they can be processed, and it would redefine certain animal health and animal husbandry practices such as artificial insemination as sexual abuse. California wants to require the sale of meat products to conform to the State’s animal housing standards. This does not only pertain to animals raised in California but to any meat consumed from animals produced and harvested in other States. San Francisco goes a step further by requiring a passport for each animal showing the antibiotics received during their lifetime. Similar proposals have been introduced in Colorado and can be expected soon in other states across the nation. The regulatory initiatives are the product of people who have little to no understanding of how meat is produced and are paraded to the public as efforts to produce meat more humanely and make beef safer. The burden of responding to these legal challenges will rest with the meat industry. The risk of treating this matter too lightly or responding too quickly without adequate thought, is doing nothing or something wrongheaded will raise the economic cost of producing beef beyond the consumers ability to pay for it. Any issue that captures the imagination of the consumer must find an adequate response from the beef industry. Disregarding irrationally proposed legislation is a mistake. Each concern must be addressed with the facts that are valid and substantiated by science and expert testimony. The case for meat protein has been made for thousands of years and will continue if the interest and concerns of the consumer are addressed. The test is not what the beef producers know but what the consumers believe. The industry wants a regulatory environment that assures a healthy product delivered to the consumers plate and not legislative efforts intended to diminish the role of meat in the diet." --------------------------- As I glance at the Oct LE contract, I think, "Man, 129.x seems rather high." But based on what I have read here, especially in the bolded bits, there seem to be indications that live beef can continue higher.
Grass-fed/grain-finished. That's a new one to me. From the latest weekly... --------------- LOW CARBON BEEF "Marketeers of Beef are always quick to pick up on the latest marketing tool for any consumer product. The cholesterol scare of the 1980s produced "Lean Beef" and many retail stores spent a lot of dollars trimming the outside layer of fat from beef products but the actual product remained little changed. The past few years have seized on "grass fed" as a marketing term for a more healthful product. Cattle harvested off pasture lack the critically important marbling that makes beef tender so the "grass fed" promotions became "grass fed / grain finished". Of course, most of our cattle have eaten grass at one time or another but our consumers demand some marbling in the beef so the new labeling, found at health conscious temples such as Whole Foods, now sell beef marketed as "grass fed" but finished with grain. The new tool on the block will be "Low Carbon Beef". While it is unclear what claims might accompany this label, expect little change in the actual product. The change will be in the narrative supporting the marketing campaign for beef. Moreover, look for changes behind the scenes, of money flows directed towards beef producers from the government. Climate change is a theme present throughout all government programs and incentives to encourage behavior change. Carbon sequestration will earn carbon credits that can be sold on the open market. The carbon credits will be awarded to those producers demonstrating a change in operation that will result in reduction of green house gases and the capture of carbon from the atmosphere. Retail stores will be quick to jump on the bandwagon showing their effort to reduce the carbon imprint of the foods they sell. They will want to verify their beef producers utilize native grasslands, graze low tillage pastures, add seaweed to feed rations to reduce methane emissions from the cattle. These actions are now accompanied by the promise of a vaccine for cattle with the claim of reducing methane. This list will expand to meet the demand for carbon credits. At the same time, the marketing campaigns will also expand to make more elaborate claims about "Low Carbon Beef". There will consumer calls for audits and stories uncovering scams built around the marketing campaigns. Bottom line is the underlying product will remain little changed, offering and providing a safe, healthful protein that has earned center of the plate respect for thousands of years."
Something from the pig side of life... Bacon may disappear in California as pig rules take effect https://apnews.com/article/lifestyl...rus-pandemic-5ebe70407fcd94ef712c16410f32c4b1
Let's not let a "there goes California again" title get in the middle of the real story: "At the beginning of next year, California will begin enforcing an animal welfare proposition approved overwhelmingly by voters in 2018 that requires more space for breeding pigs, egg-laying chickens and veal calves....only 4% of hog operations now comply with the new rules." In the most transparent of ways, the California population voted that animals destined for slaughter ought to have better living conditions before their execution. Whatever. The hog industry was told in 2018 of the new rule, giving them almost 3 years to adjust their operations. But Iowa, land of pigs and hogs, being one of those states that make centrist Republicans look like rabid communists and continues to believe Trump is their president, essentially told their California customer to go f*** themselves. Now it's 2021 and hog producers are spending their hard earned money on spin media rather than adjusting their production processes to meet customer demand. In effect, they are bullying their customers into buying what they have to sell and to stop whining, in a marvelous Trumpian dictatorial way, reminiscent of communist era production of anything. There's thus a great business opportunity to produce and sell pork to California, meeting their standards, which I'm sure are closely aligned with Euro standards. In the meantime, hog producers in Iowa will be happy to continue producing and selling hogs like they've always done to an ever shrinking market, and complain that socialist California (and those states that follow their legislation) are killing their business, unaware that they are killing their own business.
Yes, this was touched upon a couple of posts above you. https://www.elitetrader.com/et/thre...hing-in-particular.354987/page-2#post-5427895